Western Asset Managed Municipals Fund Inc. – ‘POS AMI’ on 9/27/94

As of:  Tuesday, 9/27/94   ·   Accession #:  53798-94-476   ·   File #s:  33-47116, 811-06629

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Document/Exhibit                   Description                      Pages   Size 

 1: POS AMI     Mmu N-2 Filing 9/28/94                                74±   320K 
 2: EX-99.H     Drip for Mmu N-2 Filing                                4±    17K 
 3: EX-99.N     Consent of Auditors                                    1      6K 

POS AMI   —   Mmu N-2 Filing 9/28/94
Document Table of Contents

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON                     
SEPTEMBER 28, 1994.                                                             

                                                SECURITIES ACT FILE NO. 33-47116
                                        INVESTMENT COMPANY ACT FILE NO. 811-6629
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM N-2
REGISTRATION STATEMENT
UNDER 
               THE SECURITIES ACT OF 1933            /X/

Post-Effective Amendment No. 6

and/or

REGISTRATION STATEMENT
UNDER 
           THE INVESTMENT COMPANY ACT OF 1940        /X/
                    Amendment No. 7                  /X/
(check appropriate box or boxes)
------------------------

MANAGED MUNICIPALS
PORTFOLIO INC.
(Exact Name of Registrant as Specified in Charter)

Two World Trade Center, New York, New York 10048
(Address of Principal Executive Offices) (zip code) 

Registrant's Telephone Number, including Area Code: (212) 720-9218

MR. HEATH B. McLENDON 
Chairman of the Board 
Managed Municipals Portfolio Inc. 
Two World Trade Center, 100th Floor 
New York, New York 10048
(Name and Address of Agent for Service of Process)
------------------------

COPY TO:

BURTON M. LEIBERT, Esq. 
Willkie Farr & Gallagher
One Citicorp Center 
153 East 53rd Street
New York, New York 10022

------------------------

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: 
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS                         
REGISTRATION STATEMENT.                                                         

    If any of the securities being registered on this Form N-2 are to be offered
on  a delayed or continuous basis pursuant to  Rule 415 of the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/                    
------------------------

    This Registration Statement relates to the registration of an  indeterminate
number  of shares solely for market-making transactions.  A fee of $100 is being
paid at this time. Pursuant to Rule 429, this Registration Statement relates  to
shares previously registered on Form N-2 (Registration No. 33-47116).           

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MANAGED MUNICIPALS PORTFOLIO INC. 
FORM N-2

CROSS-REFERENCE SHEET 

                                                        [Enlarge/Download Table]

 PART A                                                                                                        
  ITEM                                                                                                         
 NUMBER                          CAPTION                                        PROSPECTUS                     
CAPTION                                                                                                        
---------  ---------------------------------------------------  -----------------------------------------------
----                                                                                                           
                                                                                                               
    1.     Outside Front Cover................................  Outside Front Cover of Prospectus              
    2.     Inside Front and Outside Back Cover Page...........  Inside   Front  and  Outside                   
Back  Cover  Page  of                                                                                          
                                                                 Prospectus                                    
    3.     Fee Table and Synopsis.............................  Prospectus Summary; Portfolio                  
Expenses                                                                                                       
    4.     Financial Highlights...............................  Financial Highlights                           
    5.     Plan of Distribution...............................  Prospectus Summary; The                        
Offering; Stock  Purchases                                                                                     
                                                                 and Tenders                                   
    6.     Selling Shareholders...............................  Not Applicable                                 
    7.     Use of Proceeds....................................  Use of Proceeds                                
    8.     General Description of the Registrant..............  Prospectus   Summary;  The                     
Portfolio;  Investment                                                                                         
                                                                 Objective  and  Policies;  Description  of    
Common                                                                                                         
                                                                 Stock;  Share Price Data; Net Asset Value;    
Certain                                                                                                        
                                                                 Provisions  of  the  Articles  of             
Incorporation;                                                                                                 
                                                                 Appendix                                      
    9.     Management.........................................  Management  of the Portfolio;                  
Description of Common                                                                                          
                                                                 Stock; Custodian, Transfer Agent,             
Dividend-Paying                                                                                                
                                                                 Agent, Registrar and Plan Agent               
   10.     Capital    Stock,   Long-Term    Debt   and   Other                                                 
            Securities........................................  Dividends and Distributions; Dividend          
Reinvestment                                                                                                   
                                                                 Plan;  Taxation; Description of  Common       
Stock; Net                                                                                                     
                                                                 Asset Value                                   
   11.     Defaults and Arrears on Senior Securities..........  Not Applicable                                 
   12.     Legal Proceedings..................................  Not Applicable                                 
   13.     Table of Contents  of the  Statement of  Additional                                                 
            Information.......................................  Further Information                            

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 PART B                                                                                                        
  ITEM                                                                                                         
 NUMBER                          CAPTION                            STATEMENT OF                               
ADDITIONAL INFORMATION CAPTION                                                                                 
---------  ---------------------------------------------------  -----------------------------------------------
----                                                                                                           
                                                                                                               
   14.     Cover Page.........................................  Cover Page of Statement of                     
Additional Information                                                                                         
   15.     Table of Contents..................................  Cover Page of Statement of                     
Additional Information                                                                                         
   16.     General Information and History....................  The Portfolio (see Prospectus)                 
   17.     Investment Objectives and Policies.................  Investment   Objective  and                    
Policies;  Investment                                                                                          
                                                                 Objective and Policies (see Prospectus)       
   18.     Management.........................................  Management of the Portfolio:                   
                                                                 Directors and Executive Officers of the       
Portfolio,                                                                                                     
                                                                 Investment Adviser                            
   19.     Control   Persons   and   Principal   Holders    of                                                 
            Securities........................................  Management of the Portfolio                    
   20.     Investment Advisory and Other Services.............  Management of the Portfolio:                   
Investment Adviser                                                                                             
   21.     Brokerage Allocation and Other Practices...........  Portfolio    Transactions:                     
Portfolio   Turnover;                                                                                          
                                                                 Management of the Portfolio                   
   22.     Tax Status.........................................  Taxes; Taxation (in Prospectus)                
   23.     Financial Statements...............................  Financial Statements                           

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PROSPECTUS                                                    SEPTEMBER 28, 1994

COMMON STOCK
MANAGED MUNICIPALS PORTFOLIO INC. 
--------------- 

    Managed  Municipals Portfolio  Inc. (the "Portfolio")  is a non-diversified,
closed-end management investment company that seeks  as high a level of  current
income  exempt from federal income tax as is consistent with the preservation of
principal.  Under  normal  conditions,  the  Portfolio  will,  in  seeking   its
investment  objective,  invest substantially  all  of its  assets  in long-term,
investment grade obligations  issued by state  and local governments,  political
subdivisions,  agencies and public authorities  ("Municipal Obligations"). For a
discussion of the risks associated with certain of the Portfolio's  investments,
see  "Investment Objective and  Policies." The Portfolio's  address is Two World
Trade Center, New York, New York  10048 and the Portfolio's telephone number  is
(212) 720-9218.                                                                 

    The  Portfolio seeks to invest substantially  all of its assets in Municipal
Obligations and, under normal conditions, at least 80% of the Portfolio's assets
will be  invested in  Municipal Obligations  rated investment  grade by  Moody's
Investors Service Inc. ("Moody's"), Standard & Poor's Corporation ("S&P"), Fitch
Investors  Service, Inc. ("Fitch")  or another nationally-recognized statistical
rating agency (that is, no lower than Baa, MIG or Prime-1 by Moody's, BBB,  SP-2
or  A-1 by S&P or BBB or F-1 by  Fitch). The Portfolio is intended to operate in
such a  manner that  dividends paid  by the  Portfolio may  be excluded  by  the
Portfolio's  shareholders  from  their  gross  incomes  for  federal  income tax
purposes. See "Investment Objective and Policies" and "Taxation."               

    This Prospectus  is to  be used  by Smith  Barney Inc.  ("Smith Barney")  in
connection  with offers and  sales of the Portfolio's  Common Stock (the "Common
Stock") in market-making activities in the over-the-counter market at negotiated
prices related to prevailing market prices at the time of sale. The Common Stock
is listed on the  New York Stock  Exchange, Inc. (the  "NYSE") under the  symbol
"MMU."                                                                          

    Smith  Barney intends to make  a market in the  Common Stock, although it is
not obligated to conduct market-making activities and any such activities may be
discontinued at any time without notice, at the sole discretion of Smith Barney.
The shares of Common  Stock that may  be offered from time  to time pursuant  to
this Prospectus were issued and sold by the Portfolio in a public offering which
commenced  June 18, 1992,  at a price of  $12.00 per share.  No assurance can be
given as to the liquidity of, or the  trading market for, the Common Stock as  a
result of any market-making activities undertaken by Smith Barney. The Portfolio
will not receive any proceeds from the sale of any Common Stock offered pursuant
to this Prospectus.                                                             

INVESTORS  ARE ADVISED TO  READ THIS PROSPECTUS,  WHICH SETS            
FORTH CONCISELY                                                                 
THE INFORMATION ABOUT THE  PORTFOLIO THAT A PROSPECTIVE                         
INVESTOR OUGHT TO  KNOW                                                         
BEFORE  INVESTING,  AND  TO  RETAIN  IT FOR  FUTURE  REFERENCE.  A              
STATEMENT OF                                                                    
ADDITIONAL INFORMATION ("SAI") DATED SEPTEMBER 28, 1994 HAS BEEN                
FILED WITH  THE                                                                 
SECURITIES  AND EXCHANGE COMMISSION ("SEC") AND  IS INCORPORATED                
BY REFERENCE IN                                                                 
ITS ENTIRETY INTO THIS PROSPECTUS. A TABLE OF CONTENTS FOR THE SAI              
IS SET  FORTH                                                                   
ON  PAGE 25 OF THIS PROSPECTUS. A COPY OF THE SAI CAN BE OBTAINED               
WITHOUT CHARGE                                                                  
BY CALLING OR WRITING TO  THE PORTFOLIO AT THE  TELEPHONE NUMBER                
OR ADDRESS  SET                                                                 
FORTH ABOVE OR BY CONTACTING ANY SMITH BARNEY FINANCIAL                         
CONSULTANT.                                                                     

--------------------------
THESE  SECURITIES  HAVE  NOT  BEEN APPROVED  OR  DISAPPROVED  BY                
THE SECURITIES                                                                  
AND EXCHANGE  COMMISSION  OR  ANY  STATE SECURITIES  COMMISSION               
NOR  HAS  THE                                                                   
SECURITIES  AND  EXCHANGE  COMMISSION  OR  ANY  STATE  SECURITIES           
COMMISSION                                                                      
PASSED  UPON  THE   ACCURACY  OR  ADEQUACY   OF  THIS                   
PROSPECTUS.   ANY                                                               
         REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

--------------------------

SMITH BARNEY INC. 

--------------- 

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ALL  DEALERS  EFFECTING  TRANSACTIONS IN  THE  COMMON STOCK,              
WHETHER  OR NOT                                                                 
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A                
PROSPECTUS.                                                                     
------------

TABLE OF CONTENTS 

                                                                [Download Table]

                                                                             PAGE
                                                                             ----
                                                                                 
Prospectus Summary..........................................................   3 
Portfolio Expenses..........................................................   7 
Financial Highlights........................................................   8 
The Portfolio...............................................................   9 
The Offering................................................................   9 
Use of Proceeds.............................................................   9 
Investment Objective and Policies...........................................   9 
Share Price Data............................................................  15 
Management of the Portfolio.................................................  16 
Dividends and Distributions; Dividend Reinvestment Plan.....................  17 
Net Asset Value.............................................................  19 
Taxation....................................................................  20 
Description of Common Stock.................................................  22 
Stock Purchases and Tenders.................................................  22 
Certain Provisions of the Articles of Incorporation.........................  23 
Custodian, Transfer Agent and Dividend-Paying Agent and Registrar...........  24 
Further Information.........................................................  25 
Appendix A.................................................................. A-1 
Appendix B.................................................................. B-1 

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PROSPECTUS SUMMARY

THE  FOLLOWING SUMMARY  IS QUALIFIED  IN ITS  ENTIRETY BY  THE          
MORE DETAILED                                                                   
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS AND IN THE                   
SAI.                                                                            

                                                        [Enlarge/Download Table]
                                                                                           
The Portfolio......... The Portfolio is a non-diversified, closed-end management investment
                         company. See "The Portfolio."                                     
Investment                                                                                 
  Objective........... The Portfolio seeks as  high a level of  current income exempt  from
                       federal  income  tax  as  is  consistent  with  the  preservation of
                         principal. See "Investment Objective and Policies."               
Tax-Exempt Income..... The Portfolio is intended to operate in such a manner that          
dividends                                                                                  
                       paid  by  the   Portfolio  may  be   excluded  by  the   Portfolio's
                         shareholders  from  their  gross incomes  for  federal  income tax
                         purposes. See "Investment Objective and Policies" and "Taxation." 
Investments........... The Portfolio  will  invest  substantially  all  of  its  assets  in
                       long-term  investment grade  Municipal Obligations. At  least 80% of
                         the Portfolio's total assets will be invested in securities  rated
                         investment    grade   by   Moody's,    S&P,   Fitch   or   another
                         nationally-recognized rating agency (that is, rated no lower  than
                         Baa,  MIG 3 or Prime-1 by Moody's, BBB,  SP-2 or A-1 by S&P or    
BBB                                                                                        
                         or F-1 by Fitch). Up to 20% of the Portfolio's total assets may be
                         invested in unrated securities that are deemed by the  Portfolio's
                         investment  adviser to  be of  a quality  comparable to investment
                         grade. See "Investment Objective and Policies."                   
The Offering.......... Smith Barney  intends  to make  a  market  in the  Common  Stock    
in                                                                                         
                       addition  to trading of the Common  Stock on the NYSE. Smith Barney,
                         however, is not obligated to conduct market-making activities  and
                         any  such  activities  may  be discontinued  at  any  time without
                         notice, at the sole discretion of Smith Barney.                   
Listing............... NYSE                                                                
Symbol................ MMU                                                                 
Investment Adviser.... The Greenwich Street  Advisors Division of  Mutual Management       
Corp.                                                                                      
                         ("Greenwich Street Advisors") serves as the Portfolio's investment
                         adviser.  Greenwich  Street  Advisors  is  a  division  of  Mutual
                         Management Corp. ("MMC"),  which is a  wholly-owned subsidiary  of
                         Smith  Barney  Holdings Inc.  ("Holdings").  Holdings is  a wholly
                         owned subsidiary  of The  Travelers Inc.  ("Travelers")  (formerly
                         known as Primerica Corporation). Greenwich Street Advisors renders
                         investment   advice   to  a   wide   variety  of   individual  and
                         institutional clients that had aggregate assets under  management,
                         as  of July  31, 1994, in  excess of $47.5  billion. The Portfolio
                         pays Greenwich Street Advisors a fee for services provided to  the
                         Portfolio  that is computed  daily and paid  monthly at the annual
                         rate of .70%  of the value  of the Portfolio's  average daily  net
                         assets. See "Management of the Portfolio -- Investment Adviser."  

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Administrator......... Smith,  Barney  Advisers,  Inc. ("SBA")  serves  as  the Portfolio's
                         administrator. The Portfolio pays SBA a fee for services  rendered
                         to  the Portfolio that  is computed daily and  paid monthly at the
                         annual rate of .20% of the value of the Portfolio's average  daily
                         net assets. See "Management of the Portfolio -- Administrator."   
Sub-Administrator..... The  Boston Company Advisors, Inc. ("Boston Advisors") serves as    
the                                                                                        
                         Portfolio's sub-administrator. Boston Advisors  is paid a  portion
                         of the fee paid by the Fund to SBA at a rate agreed upon from time
                         to  time between Boston  Advisors and SBA.  See "Management of the
                         Portfolio -- Sub-Administrator."                                  
Custodian, Transfer                                                                        
  Agent and Dividend-                                                                      
  Paying Agent and                                                                         
  Registrar........... Boston Safe Deposit and Trust Company ("Boston Safe") serves as  the
                         Portfolio's   custodian.  The  Shareholder  Services  Group,  Inc.
                         ("TSSG"), a subsidiary  of First Data  Corporation, serves as  the
                         Portfolio's  transfer agent, dividend-paying  agent and registrar.
                         See "Custodian,  Transfer  Agent  and  Dividend-Paying  Agent  and
                         Registrar."                                                       
Dividends and                                                                              
  Distributions;                                                                           
  Dividend                                                                                 
  Reinvestment Plan... The  Portfolio expects  to pay  monthly dividends  of net investment
                       income (that is, income other  than net realized capital gains)  and
                         to  distribute net realized  capital gains, if  any, annually. All
                         dividends or  distributions will  be reinvested  automatically  in
                         additional   shares  through  participation   in  the  Portfolio's
                         Dividend Reinvestment Plan, unless a shareholder elects to receive
                         cash. See  "Dividends  and  Distributions;  Dividend  Reinvestment
                         Plan."                                                            
Discount from Net                                                                          
  Asset Value......... The  shares of  closed-end investment companies  often, although not
                       always, trade  at a  discount from  their net  asset value.  Whether
                         investors  will realize  gains or losses  upon the  sale of Common
                         Stock will not depend  upon the Portfolio's  net asset value,  but
                         will  depend entirely  on whether the  market price  of the Common
                         Stock at the time of sale is above or below the original  purchase
                         price  of the shares.  Since the market price  of the Common Stock
                         will be  determined by  factors such  as relative  demand for  and
                         supply  of such shares in the  market, general market and economic
                         conditions and other factors beyond the control of the  Portfolio,
                         the  Portfolio  cannot  predict  whether  the  Common  Stock  will
                         continue to trade  at, below or  above net asset  value. For  that
                         reason,  shares  of  the  Portfolio's  Common  Stock  are designed
                         primarily  for   long-term  investors,   and  investors   in   the
                         Portfolio's Common Stock should                                   

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                         not  view the  Portfolio as  a vehicle  for trading  purposes. See
                         "Investment Objective  and Policies  -- Risk  Factors and  Special
                         Considerations" and "Share Price Data."                           
Risk Factors and                                                                           
  Special                                                                                  
  Considerations...... The Portfolio will not purchase securities that are rated lower than
                       Baa  by Moody's, BBB by S&P or BBB by Fitch at the time of purchase.
                         Although obligations rated Baa  by Moody's, BBB by  S&P or BBB  by
                         Fitch  are considered to be investment  grade, they may be subject
                         to  greater  risks  than  other  higher  rated  investment   grade
                         securities. See "Investment Objective and Policies."              
                       The  Portfolio may invest up  to 20% of its  total assets in unrated
                         securities that  Greenwich Street  Advisors  determines to  be  of
                         comparable  quality to  the securities  rated investment  grade in
                         which the Portfolio  may invest.  Dealers may  not maintain  daily
                         markets  in unrated  securities and  retail secondary  markets for
                         many of them may  not exist; this lack  of markets may affect  the
                         Portfolio's ability to sell these securities when Greenwich Street
                         Advisors  deems  it appropriate.  The Portfolio  has the  right to
                         invest without limitation in state and local obligations that  are
                         "private  activity bonds," the income from which may be taxable as
                         a specific preference item for purposes of the federal alternative
                         minimum tax. Thus, the Portfolio may not be a suitable  investment
                         for  investors who are subject to the alternative minimum tax. See
                         "Investment Objective and Policies" and "Taxation."               
                       Certain of the instruments held by the Portfolio, and certain of the
                         investment techniques that the Portfolio may employ, might  expose
                         the  Portfolio to  special risks.  The instruments  presenting the
                         Portfolio with risks are municipal leases, zero coupon securities,
                         custodial receipts, municipal obligation components, floating  and
                         variable rate demand notes and bonds, and participation interests.
                         Entering  into securities transactions on a when-issued or delayed
                         delivery  basis,  entering  into  repurchase  agreements,  lending
                         portfolio  securities,  and  engaging  in  financial  futures  and
                         options transactions, are investment techniques involving risks to
                         the Portfolio. As a non-diversified fund within the meaning of the
                         Investment Company Act of 1940,  as amended (the "1940 Act"),  the
                         Portfolio  may invest  a greater proportion  of its  assets in the
                         obligations of a smaller number of  issuers and, as a result,  may
                         be subject to greater risk than a diversified fund with respect to
                         its   holdings  of  securities.   See  "Investment  Objective  and
                         Policies" and "Risk Factors and Special Considerations."          
                       The combined annual rate of fees paid by the Portfolio for  advisory
                         and  administrative services, .90% of the value of the Portfolio's
                         average daily net  assets, is  higher than the  rates for  similar
                         services paid by other                                            

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                         publicly offered, closed-end, management investment companies that
                         have  investment objectives and  policies similar to  those of the
                         Portfolio. The Portfolio will  bear, in addition  to the costs  of
                         advisory  and administrative services, other expenses and costs in
                         connection with its operation. See "Management of the Portfolio." 
                       The Portfolio's Articles  of Incorporation  include provisions  that
                         could have the effect of limiting the ability of other entities or
                         persons  to  acquire control  of  the Portfolio  and  of depriving
                         shareholders of  an opportunity  to sell  their shares  of  Common
                         Stock  at a  premium over  prevailing market  prices. See "Certain
                         Provisions of the Articles of Incorporation."                     
Stock Purchases and                                                                        
  Tenders............. The Portfolio's Board of  Directors currently contemplates that  the
                         Portfolio  may from  time to time  consider the  repurchase of its
                         Common Stock  on the  open market  or make  tender offers  of  the
                         Common Stock. See "Stock Purchases and Tenders."                  

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PORTFOLIO EXPENSES

THE  FOLLOWING TABLES ARE INTENDED TO  ASSIST INVESTORS IN              
UNDERSTANDING THE                                                               
VARIOUS COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE                     
PORTFOLIO.                                                                      

                                                                [Download Table]

 SHAREHOLDER TRANSACTION EXPENSES                                                  
                                                                                   
   Sales Load (as a percentage of offering price).....................     None    
   Dividend Reinvestment and Cash Purchase Plan Fee...................     None    
 ANNUAL PORTFOLIO OPERATING EXPENSES (as a percentage of net assets)               
 (1)                                                                               
   Investment Advisory and Administration Fees........................         .90%
   Other Expenses.....................................................         .10%
 TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES............................             
1.00%                                                                              
<FN>                                                                               
------------------------                                                           
(1)  See "Management  of  the  Portfolio"  for  additional  information. "Other    
     Expenses" have been estimated for the current fiscal year.                    

HYPOTHETICAL EXAMPLE                                                            

    An  investor would  directly or indirectly  pay the following  expenses on a
$1,000 investment in the Portfolio, assuming a 5% annual return:                

                                                                [Download Table]

  ONE YEAR        THREE YEARS       FIVE YEARS       TEN YEARS  
-------------  -----------------  ---------------  -------------
                                                                
  $      10        $      32         $      55       $     122  

   This Hypothetical Example assumes that all dividends and other  distributions
are  reinvested at net asset value and  that the percentage amounts listed under
Annual Portfolio Operating  Expenses remain  the same  in the  years shown.  The
above  tables and assumptions in the Hypothetical  Example of a 5% annual return
and reinvestment  at net  asset value  are required  by regulations  of the  SEC
applicable  to  all  investment  companies;  the  assumed  5%  return  is  not a
prediction of, and does  not represent, the projected  or actual performance  of
the Common Stock.                                                               

THIS  HYPOTHETICAL EXAMPLE SHOULD NOT BE  CONSIDERED A                    
REPRESENTATION OF PAST                                                          
OR FUTURE EXPENSES, AND THE PORTFOLIO'S ACTUAL EXPENSES MAY BE                  
MORE OR LESS THAN                                                               
THOSE SHOWN.                                                                    

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FINANCIAL HIGHLIGHTS

THE TABLE BELOW SETS FORTH SELECTED FINANCIAL DATA FOR AN               
OUTSTANDING  SHARE                                                              
OF  COMMON  STOCK  THROUGHOUT THE  PERIODS  PRESENTED. THE  PER                 
SHARE OPERATING                                                                 
PERFORMANCE AND RATIOS  FOR THE  PERIODS SHOWN HAVE  BEEN                       
AUDITED  BY COOPERS  &                                                          
LYBRAND,  THE  PORTFOLIO'S INDEPENDENT  ACCOUNTANTS, AS  STATED                 
IN  THEIR REPORT                                                                
DATED JULY 13,  1994, THAT  IS CONTAINED IN  THE PORTFOLIO'S  ANNUAL            
REPORT  (AS                                                                     
REFERENCED  IN  THE SAI)  AND  CAN BE  OBTAINED  BY SHAREHOLDERS.               
THE FOLLOWING                                                                   
INFORMATION SHOULD  BE  READ  IN  CONJUNCTION  WITH  THE                        
PORTFOLIO'S  FINANCIAL                                                          
STATEMENTS DATED MAY 31, 1994 AND NOTES TO THOSE FINANCIAL                      
STATEMENTS, WHICH ARE                                                           
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.                                 

PER SHARE OPERATING PERFORMANCE FOR A SHARE OF THE
PORTFOLIO'S COMMON STOCK OUTSTANDING THROUGHOUT EACH        
PERIOD                                                                          

                                                        [Enlarge/Download Table]

                                                                       YEAR           PERIOD    
                                                                      ENDED           ENDED     
                                                                     5/31/94         5/31/93*   
                                                                   ------------   --------------
                                                                                                
Operating performance:                                                                          
  Net asset value, beginning of period..........................   $     13.00    $     12.00   
  Net investment income.........................................          0.67           0.63   
  Net realized and unrealized gain/(loss) on investments........         (0.23)          0.97   
  Net increase in net assets resulting from operations..........          0.44           1.60   
                                                                   ------------   --------------
Offering cost charged to paid-in capital........................       --               (0.02)  
                                                                   ------------   --------------
Distributions:                                                                                  
  Dividends from net investment income..........................         (0.67)         (0.55)  
  Distributions from net realized capital gains.................         (0.51)         (0.03)  
                                                                   ------------   --------------
Total distributions.............................................         (1.18)         (0.58)  
                                                                   ------------   --------------
Net asset value, end of period..................................   $     12.26    $     13.00   
Market value, end of period.....................................   $     11.50    $     12.25   
                                                                   ------------   --------------
Total investment return***......................................          2.27%          7.02%  
                                                                   ------------   --------------
                                                                   ------------   --------------
Ratios/Supplemental Data:                                                                       
Net assets, end of period (in 000's)............................   $   422,792    $   443,938   
Ratio of operating expenses to average net assets...............          1.00%          0.98%**
Ratio of net investment income to average net assets............          5.15%                 
5.48%**                                                                                         
                                                                   ------------   --------------
Portfolio turnover rate.........................................            72%           169%  
                                                                   ------------   --------------
                                                                   ------------   --------------
<FN>                                                                                            
------------------------                                                                        
  *The Portfolio commenced operations on June 26, 1992.                                         
 **Annualized.                                                                                  
***Total return represents aggregate return based on market value for the period                
indicated.                                                                                      

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THE PORTFOLIO 

    The Portfolio is a non-diversified, closed-end management investment company
that  seeks as high a level of current  income exempt from federal income tax as
is consistent  with the  preservation  of principal.  The Portfolio,  which  was
incorporated  under  the laws  of the  State of  Maryland on  April 9,  1992, is
registered under the 1940 Act, and has  its principal office at Two World  Trade
Center,  New York,  New York  10048. The  Portfolio's telephone  number is (212)
720-9218.                                                                       

THE OFFERING

    Smith Barney intends to make  a market in the  Common Stock, although it  is
not obligated to conduct market-making activities and any such activities may be
discontinued  at any time without notice at the sole discretion of Smith Barney.
No assurance can be given as to the liquidity of, or the trading market for, the
Common Stock as  a result of  any market-making activities  undertaken by  Smith
Barney.  This Prospectus is to be used by Smith Barney in connection with offers
and  sales  of   the  Common   Stock  in  market-making   transactions  in   the
over-the-counter market at negotiated prices related to prevailing market prices
at the time of sale.                                                            

USE OF PROCEEDS 

    The  Portfolio will  not receive  any proceeds from  the sale  of any Common
Stock offered pursuant to this Prospectus. Proceeds received by Smith Barney  as
a  result of  its market-making in  the Common  Stock will be  utilized by Smith
Barney in  connection  with its  secondary  market operations  and  for  general
corporate purposes.                                                             

INVESTMENT OBJECTIVE AND POLICIES 

    The  Portfolio's investment objective is to seek  as high a level of current
income exempt from federal income taxes  as is consistent with the  preservation
of  principal. The Portfolio's  investment objective may  not be changed without
the affirmative vote of the holders of  a majority (as defined in the 1940  Act)
of  the Portfolio's outstanding shares. In  seeking its objective, the Portfolio
will invest  in  long-term Municipal  Obligations.  The Portfolio  will  operate
subject  to  a  fundamental  investment  policy  providing  that,  under  normal
conditions, the  Portfolio will  invest at  least  80% of  its total  assets  in
investment  grade  Municipal Obligations.  No assurance  can  be given  that the
Portfolio's investment objective will be achieved.                              

   The Portfolio  will invest  at least  80% of  its total  assets in  Municipal
Obligations  rated investment grade, that is, rated  no lower than Baa, MIG 3 or
Prime-1 by Moody's, BBB, SP-2 or A-1 by S&P or BBB or F-1 by Fitch. Up to 20% of
the Portfolio's total  assets may  be invested  in unrated  securities that  are
deemed  by Greenwich Street Advisors to be of a quality comparable to investment
grade. The Portfolio  will not invest  in Municipal Obligations  that are  rated
lower  than Baa by Moody's, BBB by S&P or BBB by Fitch, at the time of purchase.
A description of relevant  Moody's, S&P and  Fitch ratings is  set forth in  the
Appendix to the SAI. Although Municipal Obligations rated Baa by Moody's, BBB by
S&P  or BBB by Fitch are considered to  be investment grade, they may be subject
to greater risks than other higher rated investment grade securities.  Municipal
Obligations  rated  Baa by  Moody's, for  example,  are considered  medium grade
obligations that lack outstanding investment                                    

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characteristics  and  have  speculative   characteristics  as  well.   Municipal
Obligations  rated BBB by S&P are regarded as having an adequate capacity to pay
principal and interest. Municipal Obligations rated  BBB by Fitch are deemed  to
be  subject to a higher likelihood that  their rating will fall below investment
grade than higher rated bonds.                                                  

   The Portfolio is  classified as a  non-diversified fund under  the 1940  Act,
which  means that the Portfolio is not limited by the 1940 Act in the proportion
of its assets  that it may  invest in the  obligations of a  single issuer.  The
Portfolio  intends to  conduct its  operations, however, so  as to  qualify as a
"regulated investment  company" for  purposes of  the Internal  Revenue Code  of
1986, as amended (the "Code"), which will relieve the Portfolio of any liability
for  federal  income tax  to the  extent  that its  earnings are  distributed to
shareholders. To qualify as a regulated investment company, the Portfolio  will,
among  other things, limit its investments so that, at the close of each quarter
of its taxable year (1) not more than 25% of the market value of the Portfolio's
total assets will be invested in the securities of a single issuer and (2)  with
respect  to 50% of the market value of its total assets, not more than 5% of the
market value of its total assets will be invested in the securities of a  single
issuer. See "Taxation."                                                         

   The  Portfolio generally will not invest more than 25% of its total assets in
any industry. Governmental issuers of  Municipal Obligations are not  considered
part  of any  "industry." Municipal  Obligations backed  only by  the assets and
revenues  of  non-governmental  users  may  be  deemed  to  be  issued  by   the
non-governmental  users, and  would be subject  to the  Portfolio's 25% industry
limitation. The Portfolio  may invest more  than 25%  of its total  assets in  a
broad  segment of the Municipal Obligations market, if Greenwich Street Advisors
determines that the yields available from obligations in a particular segment of
the market justify the  additional risks associated with  a large investment  in
the  segment. The Portfolio  reserves the right  to invest more  than 25% of its
assets in industrial development bonds or in issuers located in the same  state,
although it has no current intention of investing more than 25% of its assets in
issuers located in the same state. If the Portfolio were to invest more than 25%
of  its total  assets in  issuers located in  the same  state, it  would be more
susceptible to  adverse  economic, business  or  regulatory conditions  in  that
state.                                                                          

   Municipal  Obligations are  classified as  general obligation  bonds, revenue
bonds and notes. General obligation bonds are secured by the issuer's pledge  of
its  full  faith, credit  and  taxing power  for  the payment  of  principal and
interest. Revenue bonds are payable from  the revenue derived from a  particular
facility  or  class of  facilities or,  in some  cases, from  the proceeds  of a
special excise tax or  other specific revenue source,  but not from the  general
taxing  power.  Notes are  short-term obligations  of issuing  municipalities or
agencies and are sold  in anticipation of  a bond sale,  collection of taxes  or
receipt  of  other  revenues.  Municipal Obligations  bear  fixed,  floating and
variable rates of interest,  and variations exist in  the security of  Municipal
Obligations,    both   within   a    particular   classification   and   between
classifications. The types of Municipal  Obligations in which the Portfolio  may
invest are described in Appendix A to this Prospectus.                          

   The  yields  on, and  values  of, Municipal  Obligations  are dependent  on a
variety of factors,  including general economic  and monetary conditions,  money
market  factors,  conditions  in the  Municipal  Obligation markets,  size  of a
particular offering,  maturity  of  the  obligation and  rating  of  the  issue.

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Consequently,  Municipal Obligations with  the same maturity,  coupon and rating
may have different yields  or values, whereas obligations  of the same  maturity
and coupon with different ratings may have the same yield or value.             

   Opinions  relating  to  the  validity of  Municipal  Obligations  and  to the
exemption of interest  on them from  federal income taxes  are rendered by  bond
counsel to the respective issuers at the time of issuance. Neither the Portfolio
nor  Greenwich  Street  Advisors  will review  the  procedures  relating  to the
issuance of Municipal Obligations or the basis for opinions of counsel.  Issuers
of  Municipal  Obligations  may  be subject  to  the  provisions  of bankruptcy,
insolvency and other laws,  such as the Federal  Bankruptcy Reform Act of  1978,
affecting  the rights and remedies of creditors. In addition, the obligations of
those issuers may  become subject  to laws enacted  in the  future by  Congress,
state  legislatures or  referenda extending  the time  for payment  of principal
and/or  interest,  or  imposing  other  constraints  upon  enforcement  of   the
obligations or upon the ability of municipalities to levy taxes. The possibility
also  exists that, as a  result of litigation or  other conditions, the power or
ability of any issuer to pay, when  due, the principal of, and interest on,  its
obligations may be materially affected.                                         

   Under normal conditions, the Portfolio may hold up to 20% of its total assets
in  cash or money market instruments, including taxable money market instruments
(collectively, "Taxable Investments").  In addition,  the Portfolio  may take  a
temporary   defensive  posture  and  invest  without  limitation  in  short-term
Municipal Obligations and Taxable Investments, upon a determination by Greenwich
Street Advisors that market conditions warrant such a posture. To the extent the
Portfolio holds Taxable Investments,  the Portfolio may  not be fully  achieving
its investment objective.                                                       

INVESTMENT TECHNIQUES                                                           

    The  Portfolio may employ, among others, the investment techniques described
below, which may give rise to taxable income:                                   

WHEN-ISSUED AND DELAYED  DELIVERY SECURITIES.   The  Portfolio may      
purchase                                                                        
securities  on  a when-issued  basis,  or may  purchase  or sell  securities for
delayed delivery. In when-issued or  delayed delivery transactions, delivery  of
the  securities  occurs  beyond normal  settlement  periods, but  no  payment or
delivery will be made by the Portfolio  prior to the actual delivery or  payment
by the other party to the transaction. The Portfolio will not accrue income with
respect  to  a when-issued  or  delayed delivery  security  prior to  its stated
delivery date.  The  Portfolio will  establish  with Boston  Safe  a  segregated
account  consisting of  cash, U.S. government  securities, or  other liquid high
grade debt obligations,  in an  amount equal to  the amount  of the  Portfolio's
when-issued and delayed delivery purchase commitments. Placing securities rather
than  cash  in  the segregated  account  may  have a  leveraging  effect  on the
Portfolio's net asset value per share; that is, to the extent that the Portfolio
remains substantially fully invested in securities at the same time that it  has
committed  to purchase  securities on a  when-issued or  delayed delivery basis,
greater fluctuations in its net asset value  per share may occur than if it  had
set aside cash to satisfy its purchase commitments.                             

STAND-BY COMMITMENTS.  The Portfolio may acquire "stand-by commitments" 
with                                                                            
respect  to Municipal Obligations  it holds. Under  a stand-by commitment, which
resembles a put option, a broker, dealer  or bank is obligated to repurchase  at
the Portfolio's option specified securities at a                                

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specified  price. Each exercise of a  stand-by commitment, therefore, is subject
to the ability  of the  seller to  make payment  on demand.  The Portfolio  will
acquire  stand-by commitments solely to facilitate liquidity and does not intend
to exercise the rights afforded by the commitments for trading purposes.        

FINANCIAL FUTURES AND OPTIONS TRANSACTIONS.   To hedge against a        
decline  in                                                                     
the  value  of Municipal  Obligations it  owns or  an increase  in the  price of
Municipal Obligations  it proposes  to purchase,  the Portfolio  may enter  into
financial futures contracts and invest in options on financial futures contracts
that  are traded on a U.S. exchange or  board of trade. The futures contracts or
options on futures contracts that may be  entered into by the Portfolio will  be
restricted  to those that are either based  on an index of Municipal Obligations
or relate to debt  securities the prices of  which are anticipated by  Greenwich
Street  Advisors to correlate with the prices of the Municipal Obligations owned
or to  be purchased  by  the Portfolio.  Regulations  of the  Commodity  Futures
Trading  Commission  ("CFTC")  applicable  to  the  Portfolio  require  that its
transactions in  futures and  options  be engaged  in  for "bona  fide  hedging"
purposes  or other  permitted purposes,  provided that  aggregate initial margin
deposits  and  premiums  required  to  establish  positions  other  than   those
considered  by the  CFTC to  be "bona fide  hedging" will  not exceed  5% of the
Portfolio's net asset value,  after taking into  account unrealized profits  and
unrealized losses on such contracts.                                            

   A  financial futures contract provides  for the future sale  by one party and
the purchase by the other party of a certain amount of a specified property at a
specified price, date, time and place. Unlike the direct investment in a futures
contract, an option  on a  financial futures  contract gives  the purchaser  the
right,  in return for  the premium paid,  to assume a  position in the financial
futures contract  at  a  specified exercise  price  at  any time  prior  to  the
expiration  date of the option. Upon exercise  of an option, the delivery of the
futures position by the writer of the option to the holder of the option will be
accompanied by  delivery of  the  accumulated balance  in the  writer's  futures
margin  account, which represents  the amount by  which the market  price of the
futures contract exceeds, in the case of a call, or is less than, in the case of
a put, the exercise price of the  option on the futures contract. The  potential
loss  related to  the purchase  of an option  on financial  futures contracts is
limited to the premium paid for  the option (plus transaction costs). The  value
of  the option may  change daily and that  change would be  reflected in the net
asset value of the Portfolio.                                                   

    LENDING SECURITIES.  The Portfolio is authorized to lend securities it holds
to brokers, dealers  and other  financial organizations,  but it  will not  lend
securities  to any affiliate  of Greenwich Street  Advisors unless the Portfolio
applies for and receives specific authority to do so from the SEC. Loans of  the
Portfolio's securities, if and when made, may not exceed 33 1/3% of the value of
the  Portfolio's  total  assets. The  Portfolio's  loans of  securities  will be
collateralized by cash,  letters of  credit or U.S.  government securities  that
will  be maintained at all times in a  segregated account with Boston Safe in an
amount equal to the current market value of the loaned securities.              

    REPURCHASE AGREEMENTS.   The Portfolio may  enter into repurchase  agreement
transactions with banks which are issuers of instruments acceptable for purchase
by  the Fund or with  certain dealers listed on the  Federal Reserve Bank of New
York's list of  reporting dealers. A  repurchase agreement is  a contract  under
which  the buyer of a security simultaneously  commits to resell the security to
the seller at an agreed-upon price on an agreed-upon date. Under the terms of  a
typical  repurchase agreement,  the Portfolio  would acquire  an underlying debt
obligation for a relatively short period subject to an obligation of the  seller
to  repurchase, and  the Portfolio to  resell, the obligation  at an agreed-upon
price                                                                           

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and time, thereby determining the  yield during the Portfolio's holding  period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations  during  the  Portfolio's  holding  period.  Under  each repurchase
agreement, the selling institution will be required to maintain the value of the
securities subject to the repurchase agreement at not less than their repurchase
price.                                                                          

RISK FACTORS AND SPECIAL CONSIDERATIONS                                         

    Investment  in   the   Portfolio   involves   risk   factors   and   special
considerations, such as those described below:                                  

    MUNICIPAL  OBLIGATIONS.  Market rates of  interest available with respect to
Municipal Obligations generally may be  lower than those available with  respect
to  taxable  securities, although  the differences  may  be wholly  or partially
offset by  the effects  of federal  income tax  on income  derived from  taxable
securities. The amount of available information about the financial condition of
issuers  of Municipal Obligations may be  less extensive than that for corporate
issuers  with  publicly  traded  securities,   and  the  market  for   Municipal
Obligations  may be less liquid than  the market for corporate debt obligations.
Although the Portfolio's policy will generally be to hold Municipal  Obligations
until  their  maturity,  the relative  illiquidity  of some  of  the Portfolio's
securities may adversely affect the ability  of the Portfolio to dispose of  the
securities  in a timely manner  and at a fair price.  The market for less liquid
securities tends to be more volatile than the market for more liquid  securities
and  market values of relatively illiquid  securities may be more susceptible to
change as a result  of adverse publicity and  investor perceptions than are  the
market  values  of  more  liquid  securities.  Although  the  issuer  of certain
Municipal Obligations may be obligated to redeem the obligations at face  value,
redemption  could result in capital  losses to the Portfolio  to the extent that
the Municipal Obligations were purchased by  the Portfolio at a premium to  face
value.                                                                          

   Although the Municipal Obligations in which the Portfolio may invest will be,
at  the time of  investment, rated investment  grade, municipal securities, like
other debt obligations, are subject to the risk of non-payment by their issuers.
The ability  of issuers  of Municipal  Obligations to  make timely  payments  of
interest  and principal may be adversely  affected in general economic downturns
and as relative governmental  cost burdens are  allocated and reallocated  among
federal,  state and  local governmental  units. Non-payment  by an  issuer would
result in  a  reduction of  income  to the  Portfolio,  and could  result  in  a
reduction in the value of the Municipal Obligations experiencing non-payment and
a potential decrease in the net asset value of the Portfolio.                   

    UNRATED  SECURITIES.   The Portfolio may  invest in  unrated securities that
Greenwich Street Advisors determines  to be of comparable  quality to the  rated
securities  in which  the Portfolio may  invest. Dealers may  not maintain daily
markets in unrated securities and retail secondary markets for many of them  may
not  exist. As a result,  the Portfolio's ability to  sell these securities when
Greenwich Street Advisors deems it appropriate may be diminished.               

    MUNICIPAL LEASES.  Municipal leases in  which the Portfolio may invest  have
special   risks  not  normally  associated  with  Municipal  Obligations.  These
obligations frequently contain non-appropriation  clauses that provide that  the
governmental  issuer of the  obligation need not make  future payments under the
lease or contract unless money is appropriated for that purpose by a legislative

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body annually or on another periodic basis. Moreover, although a municipal lease
typically  will be secured by financed  equipment or facilities, the disposition
of the  equipment  or  facilities  in  the  event  of  foreclosure  might  prove
difficult.                                                                      

NON-PUBLICLY TRADED SECURITIES.  As suggested above, the Portfolio may, 
from                                                                            
time  to time, invest a  portion of its assets  in non-publicly traded Municipal
Obligations. Non-publicly traded  securities may  be less  liquid than  publicly
traded  securities.  Although non-publicly  traded securities  may be  resold in
privately negotiated transactions, the prices realized from these sales could be
less than those originally paid by the Portfolio.                               

WHEN-ISSUED AND DELAYED  DELIVERY TRANSACTIONS.   Securities            
purchased on  a                                                                 
when-issued  or delayed delivery basis may  expose the Portfolio to risk because
the securities may  experience fluctuations  in value prior  to their  delivery.
Purchasing securities on a when-issued or delayed delivery basis can involve the
additional  risk that the yield available in  the market when the delivery takes
place may be higher than that obtained in the transaction itself.               

    LENDING SECURITIES.  The risks associated with lending portfolio securities,
as with other extensions of  credit, consist of possible  loss of rights in  the
collateral should the borrower fail financially.                                

    FINANCIAL FUTURES AND OPTIONS.  Although the Portfolio intends to enter into
financial  futures contracts and options on financial futures contracts that are
traded on a U.S. exchange or board of trade only if an active market exists  for
those  instruments, no assurance can  be given that an  active market will exist
for them at any particular time.  If closing a futures position in  anticipation
of  adverse price movements is not possible,  the Portfolio would be required to
make daily  cash  payments  of  variation margin.  In  those  circumstances,  an
increase  in  the value  of  the portion  of  the Portfolio's  investments being
hedged, if  any,  may offset  partially  or  completely losses  on  the  futures
contract.  No assurance can be given, however,  that the price of the securities
being hedged will correlate with the price movements in a futures contract  and,
thus,  provide an  offset to  losses on  the futures  contract or  option on the
futures contract. In addition, in light of the risk of an imperfect  correlation
between  securities held  by the  Portfolio that  are the  subject of  a hedging
transaction and the futures or options used  as a hedging device, the hedge  may
not  be fully effective because,  for example, losses on  the securities held by
the Portfolio may be in excess of gains on the futures contract or losses on the
futures contract  may be  in  excess of  gains on  the  securities held  by  the
Portfolio  that  were the  subject of  the  hedge. If  the Portfolio  has hedged
against the possibility of an increase in interest rates adversely affecting the
value of securities it holds and rates decrease instead, the Portfolio will lose
part or all  of the benefit  of the increased  value of securities  that it  has
hedged  because  it  will  have  offsetting losses  in  its  futures  or options
positions.                                                                      

    NON-DIVERSIFIED CLASSIFICATION.    Investment  in the  Portfolio,  which  is
classified  as a  non-diversified fund under  the 1940 Act,  may present greater
risks to investors  than an  investment in  a diversified  fund. The  investment
return  on a non-diversified fund typically is dependent upon the performance of
a smaller number of securities  relative to the number  of securities held in  a
diversified   fund.  The  Portfolio's  assumption  of  large  positions  in  the
obligations of a small number of issuers will affect the value of the securities
it holds to a  greater extent than that  of a diversified fund  in the event  of
changes  in  the financial  condition,  or in  the  market's assessment,  of the
issuers.                                                                        

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INVESTMENT RESTRICTIONS                                                         

    The Portfolio has adopted  certain fundamental investment restrictions  that
may  not be changed without  the prior approval of the  holders of a majority of
the Portfolio's outstanding  voting securities. A  "majority of the  Portfolio's
outstanding  voting securities" for this purpose means  the lesser of (1) 67% or
more of the  shares of  the Portfolio's  Common Stock  present at  a meeting  of
shareholders,  if the holders  of 50% of  the outstanding shares  are present or
represented by proxy  at the meeting  or (2)  more than 50%  of the  outstanding
shares.  Among the investment  restrictions applicable to  the Portfolio is that
the Portfolio  is  prohibited from  borrowing  money, except  for  temporary  or
emergency  purposes, or for clearance of  transactions, in amounts not exceeding
15% of its  total assets (not  including the amount  borrowed) and as  otherwise
described in this Prospectus -- when the Portfolio's borrowings exceed 5% of the
value  of  its  total  assets,  the  Portfolio  will  not  make  any  additional
investments. In addition,  the Portfolio will  not invest more  than 25% of  its
total  assets in the securities  of issuers in any  single industry, except that
this limitation  will not  be  applicable to  the  purchase of  U.S.  government
securities. Also, the Portfolio may not purchase securities other than Municipal
Obligations  and Taxable Investments.  For a complete  listing of the investment
restrictions applicable to the Portfolio,  see "Investment Restrictions" in  the
SAI.  All percentage limitations  included in the  investment restrictions apply
immediately after a purchase or initial investment, and any subsequent change in
any applicable percentage  resulting from market  fluctuations will not  require
the Portfolio to dispose of any security that it holds.                         

SHARE PRICE DATA

    The  Common Stock is traded on the NYSE under the symbol "MMU." Smith Barney
also intends to make a market in the Portfolio's Common Stock.                  

   The following table sets forth the high  and low sales prices for the  Common
Stock,  the net asset value  per share and the discount  or premium to net asset
value  represented  by  the  quotation  for  each  quarterly  period  since  the
Portfolio's commencement of operations.                                         

                                                                [Download Table]

                       QUARTERLY HIGH PRICE            QUARTERLY LOW PRICE       
                  ------------------------------  ------------------------------ 
                                      PREMIUM                         PREMIUM    
                  NET ASSET  NYSE     (DISCOUNT)  NET ASSET  NYSE     (DISCOUNT) 
                  VALUE      PRICE    TO NAV      VALUE      PRICE    TO NAV     
                  ---------  -------  ----------  ---------  -------  ---------- 
                                                                                 
 8/31/92*         $   12.66  $ 12.500    -1.26  % $   12.04  $ 11.870    -1.41  %
 11/30/92             12.45    12.250    -1.61        11.79    11.250    -4.58   
 2/28/93              12.41    12.370    -0.32        12.21    11.370    -6.88   
 5/31/93              13.22    12.620    -4.54        12.79    12.120    -5.24   
 8/31/93              13.42    12.875    -4.06        13.04    12.250    -6.06   
 11/30/93             13.61    13.000    -4.48        13.32    12.125    -8.97   
 2/28/94              13.54    12.875    -4.91        12.85    12.125    -5.64   
 5/31/94              12.61    12.375    -1.86        12.11    11.250    -7.10   
 8/31/94              12.53    12.125    -3.23        12.11    11.250    -7.10   
 <FN>                                                                            
------------------------                                                         
*The Portfolio commenced operations on June 26, 1992.                            

   As  of August 31, 1994, the  price of Common Stock as  quoted on the NYSE was
$11.375, representing  a  discount  from  the Common  Stock's  net  asset  value
calculated on that day.                                                         

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MANAGEMENT OF THE PORTFOLIO 

BOARD OF DIRECTORS                                                              

    Overall responsibility for management and supervision of the Portfolio rests
with  the Portfolio's Board of Directors.  The Directors approve all significant
agreements   with   the    Portfolio's   investment   adviser,    administrator,
sub-administrator,  custodian and  transfer agent. The  day-to-day operations of
the Portfolio are delegated to the Portfolio's investment adviser, administrator
and sub-administrator. The  SAI contains background  information regarding  each
Director and executive officer of the Portfolio.                                

INVESTMENT ADVISER                                                              

    Greenwich  Street Advisors, located at Two World Trade Center, New York, New
York 10048,  serves  as the  Portfolio's  investment adviser.  Greenwich  Street
Advisors,  through  its  predecessors,  has been  in  the  investment counseling
business since  1934  and  renders  investment  advice  to  a  wide  variety  of
individual,  institutional and investment company  clients with aggregate assets
under management as of July 31, 1994  in excess of $50 billion. MMC, located  at
1345  Avenue  of  the Americas,  New  York,  New York  10105,  is  controlled by
Holdings.                                                                       

   Subject to  the  supervision  and  direction  of  the  Portfolio's  Board  of
Directors,  Greenwich  Street  Advisors  manages  the  securities  held  by  the
Portfolio in accordance  with the  Portfolio's stated  investment objective  and
policies,  makes  investment  decisions  for  the  Portfolio,  places  orders to
purchase and sell securities on behalf of the Portfolio and employs managers and
securities  analysts  who  provide  research  services  to  the  Portfolio.  The
Portfolio  pays Greenwich  Street Advisors  a fee  for services  provided to the
Portfolio that is computed daily and paid monthly at the annual rate of .70%  of
the value of the Portfolio's average daily net assets.                          

   Transactions  on behalf of the Portfolio  are allocated to various dealers by
Greenwich Street Advisors  in its  best judgment. The  primary consideration  is
prompt and effective execution of orders at the most favorable price. Subject to
that  primary  consideration,  dealers  may  be  selected  for  their  research,
statistical or other services to enable Greenwich Street Advisors to  supplement
its own research and analysis with the views and information of other securities
firms. The Portfolio may use Smith Barney or a Smith Barney-affiliated broker in
connection  with  the  purchase  or sale  of  securities  when  Greenwich Street
Advisors believes that the broker's charge  for the transaction does not  exceed
usual and customary levels. The same standard applies to the use of Smith Barney
as  a broker in connection with entering into options and futures contracts. The
Portfolio paid no brokerage commissions in the last fiscal year.                

PORTFOLIO MANAGEMENT                                                            

    Joseph P. Deane, Vice President and Investment Officer of the Portfolio,  is
primarily  responsible for the  management of the  Portfolio's assets. Mr. Deane
has served  the  Portfolio  in  this  capacity  since  the  Portfolio  commenced
operations  in 1992  and manages  the day  to day  operations of  the Portfolio,
including making all investment decisions. Mr. Deane is a Senior Vice  President
and  Managing Director of Greenwich Street Advisors  and, as such, is the senior
asset  manager  for  investment  companies  and  other  accounts  investing   in
tax-exempt securities.                                                          

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ADMINISTRATOR                                                                   

    SBA,  located at  1345 Avenue  of the  Americas, New  York, New  York 10105,
serves as the Portfolio's administrator. As administrator, SBA generally assists
in all aspects of the Fund's administration  and operation. The Fund pays SBA  a
fee  for services provided to the Fund that is accrued daily and paid monthly at
the annual rate of .20% of the value of the Fund's average daily net assets. The
combined  annual  rate  of  fees  paid   by  the  Portfolio  for  advisory   and
administrative  services is higher  than the rates for  similar services paid by
other publicly  offered, closed-end  management investment  companies that  have
investment objectives and policies similar to those of the Portfolio.           

   SBA is a wholly owned subsidiary of Holdings, which is in turn a wholly owned
subsidiary  of Travelers. SBA provides  investment management and administrative
services to investment  companies with  total assets, as  of July  31, 1994,  in
excess of $9.2 billion.                                                         

SUB-ADMINISTRATOR                                                               

    Boston  Advisors, located at One  Boston Place, Boston, Massachusetts 02108,
serves   as   the    Portfolio's   sub-administrator.    As   the    Portfolio's
sub-administrator,  Boston  Advisors  calculates  the  net  asset  value  of the
Portfolio's shares of Common Stock and  generally assists SBA in all aspects  of
the  Portfolio's administration and operation. Boston Advisors is paid a portion
of the fee  paid by the  Fund to SBA  at a rate  agreed upon from  time to  time
between Boston Advisors and SBA.                                                

   Boston  Advisors is  a wholly  owned subsidiary  of The  Boston Company, Inc.
("TBC"), a financial  services holding company,  which is in  turn an  indirect,
wholly  owned subsidiary of Mellon  Bank Corporation ("Mellon"). Boston Advisors
provides  investment  management,  investment  advisory  and/or   administrative
services  to investment companies that had  aggregate assets under management as
of July 31, 1994, in excess of $88.3 billion.                                   

   Greenwich Street Advisors, SBA and Boston Advisors each bears all expenses in
connection with the performance  of the services it  provides to the  Portfolio.
The  Portfolio will  bear all  other expenses to  be incurred  in its operation,
including, but  not  limited to:  the  costs  incurred in  connection  with  the
Portfolio's  organization; investment advisory and administration fees; fees for
necessary professional and brokerage services; fees for any pricing service; the
costs of  regulatory  compliance;  the costs  associated  with  maintaining  the
Portfolio's corporate existence; and costs of corresponding with the Portfolio's
shareholders.                                                                   

   Smith  Barney is located at  388 Greenwich Street, New  York, New York 10013.
Smith Barney is also a wholly owned  subsidiary of Holdings, which in turn is  a
wholly  owned  subsidiary of  The Travelers  Inc.  (formerly known  as Primerica
Corporation), a financial  services holding company  which provides through  its
subsidiaries investment, consumer finance and insurance services.               

DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN 

    The  Portfolio expects  to pay  monthly dividends  of net  investment income
(that is, income (including its tax-exempt income and its accrued original issue
discount income) other than  net realized capital gains)  to the holders of  the
Common  Stock. Under the Portfolio's current policy, which may be changed at any
time by its Board of Directors,  the Portfolio's monthly dividends will be  made
at a level                                                                      

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that  reflects the past and projected performance of the Portfolio, which policy
over time will result in  the distribution of all  net investment income of  the
Portfolio.  Expenses of the Portfolio are accrued each day. Net realized capital
gains, if any, will be distributed to the shareholders at least once a year.    

   Under the Portfolio's Dividend Reinvestment Plan (the "Plan"), a  shareholder
whose  shares  of Common  Stock are  registered in  his own  name will  have all
distributions from the Portfolio reinvested automatically by TSSG as agent under
the Plan,  unless the  shareholder elects  to receive  cash. Distributions  with
respect  to shares registered  in the name  of a broker-dealer  or other nominee
(that is, in  "Street Name")  will be  reinvested by  the broker  or nominee  in
additional  shares under  the Plan,  unless the service  is not  provided by the
broker or nominee or  the shareholder elects to  receive distributions in  cash.
Investors  who own Common  Stock registered in Street  Name should consult their
broker-dealers  for  details  regarding   reinvestment.  All  distributions   to
Portfolio  shareholders who do not participate in the Plan will be paid by check
mailed directly  to the  record holder  by or  under the  direction of  TSSG  as
dividend-paying agent.                                                          

   The  number of shares of Common Stock distributed to participants in the Plan
in lieu of a cash dividend is  determined in the following manner. Whenever  the
market  price of the Common Stock is equal to or exceeds the net asset value per
share at the time shares  are valued for purposes  of determining the number  of
shares  equivalent  to the  cash dividend  or  capital gains  distribution, Plan
participants will be issued shares of Common Stock valued at the greater of  (1)
the  net asset value per share most recently determined as described below under
"Net Asset Value" or (2) 95% of the then current market value. To the extent the
Portfolio issues shares to participants in the  Plan at a discount to net  asset
value,  the remaining shareholders' interests in the Portfolio's net assets will
be proportionately diluted.                                                     

   If the net asset  value per share  of Common Stock at  the time of  valuation
exceeds  the market  price of the  Common Stock  or if the  Portfolio declares a
dividend or  capital gains  distribution payable  only in  cash, TSSG  will  buy
Common Stock in the open market, on the NYSE or elsewhere, for the participants'
accounts.  If, following the  commencement of the purchases  and before TSSG has
completed its purchases,  the market price  exceeds the net  asset value of  the
Common  Stock, TSSG will attempt  to terminate purchases in  the open market and
cause the Portfolio to issue the remaining dividend or distribution in shares at
net asset value per share.  In this case, the number  of shares of Common  Stock
received  by a Plan participant will be  based on the weighted average of prices
paid for  shares  purchased in  the  open market  and  the price  at  which  the
Portfolio issues the remaining shares. To the extent TSSG is unable to stop open
market  purchases and  cause the  Portfolio to  issue the  remaining shares, the
average per share purchase price paid by TSSG may exceed the net asset value  of
the  Common Stock,  resulting in  the acquisition  of fewer  shares than  if the
dividend or capital gains distribution had  been paid in Common Stock issued  by
the  Portfolio at net asset  value. TSSG will begin  to purchase Common Stock on
the open market as soon as practicable after the record date of the dividend  or
capital gains distribution, but in no event later than 30 days after the payment
date therefor, except when necessary to comply with applicable provisions of the
federal securities laws.                                                        

   TSSG  maintains all  shareholder accounts in  the Plan  and furnishes written
confirmations of all transactions in each account, including information  needed
by  a shareholder  for personal and  tax records. The  automatic reinvestment of
dividends and capital gains distributions will not relieve Plan participants  of
any  income  tax  that  may  be  payable  on  the  dividends  or  capital  gains
distributions.                                                                  

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Common Stock in the  account of each  Plan participant will be  held by TSSG  in
uncertificated  form in the name of the Plan participant, and each shareholder's
proxy will include those shares purchased pursuant to the Plan.                 

   Plan participants  are subject  to no  charge for  reinvesting dividends  and
capital  gains  distributions.  TSSG's  fees for  handling  the  reinvestment of
dividends and capital  gains distributions  will be  paid by  the Portfolio.  No
brokerage  charges apply with respect to  shares of Common Stock issued directly
by the Portfolio as a result of dividends or capital gains distributions payable
either in Common Stock or in cash.  Each Plan participant will, however, bear  a
proportionate  share  of brokerage  commissions  incurred with  respect  to open
market purchases  made  in connection  with  the reinvestment  of  dividends  or
capital gains distributions.                                                    

   Experience  under the Plan may indicate that changes to it are desirable. The
Portfolio reserves the right to  amend or terminate the  Plan as applied to  any
dividend  or capital gains distribution paid subsequent to written notice of the
change sent to  participants at least  30 days  before the record  date for  the
dividend  or  capital  gains  distribution.  The Plan  also  may  be  amended or
terminated by TSSG, with the Portfolio's  prior written consent, on at least  30
days'  written notice  to Plan  participants. All  correspondence concerning the
Plan should be directed  by mail to The  Shareholders Services Group, Inc.,  One
Exchange Place, Boston, Massachusetts 02109 or by telephone at (617) 573-9300.  

NET ASSET VALUE 

    The  net asset value of  shares of the Common Stock  is calculated as of the
close of regular trading  on the NYSE,  currently 4:00 p.m.,  New York time,  on
each day on which the NYSE is open for trading. The Portfolio reserves the right
to  cause its  net asset  value to  be calculated  on a  less frequent  basis as
determined by the Portfolio's  Board of Directors.  For purposes of  determining
net  asset value,  futures contracts  and options  on futures  contracts will be
valued 15 minutes after the close of regular trading on the NYSE.               

   Net asset value per share of Common Stock is calculated by dividing the value
of the Portfolio's total  assets less liabilities by  the number of  outstanding
shares.  In general, the Portfolio's investments will be valued at market value,
or in the absence of market value, at  fair value as determined by or under  the
direction  of the  Portfolio's Board  of Directors.  Short-term investments that
mature in 60  days or  less are  valued on the  basis of  amortized cost  (which
involves  valuing an investment at its cost and, thereafter, assuming a constant
amortization to maturity of any discount or premium, regardless of the effect of
fluctuating interest  rates on  the market  value of  the investment)  when  the
Portfolio's Board of Directors has determined that amortized cost is fair value.

   The  valuation of  the Portfolio's  assets is  made by  Boston Advisors after
consultation with an independent pricing service (the "Service") approved by the
Portfolio's Board of Directors. When, in the judgment of the Service, quoted bid
prices for investments are readily available  and are representative of the  bid
side  of the market, these investments are valued at the mean between the quoted
bid prices  and asked  prices. Investments  for which,  in the  judgment of  the
Service, no readily obtainable market quotation is available are carried at fair
value  as determined by the Service, based on methods that include consideration
of: yields or  prices of  Municipal Obligations of  comparable quality,  coupon,
maturity  and type;  indications as to  values from dealers;  and general market
conditions. The Service                                                         

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may use  electronic  data  processing  techniques  and/or  a  matrix  system  to
determine valuations. The procedures of the Service are reviewed periodically by
the  officers of the Portfolio under  the general supervision and responsibility
of the Board  of Directors,  which may  replace the Service  at any  time if  it
determines it to be in the best interests of the Portfolio to do so.            

TAXATION

    The  following  is  a summary  of  the material  federal  tax considerations
affecting the  Portfolio  and  its  shareholders; see  the  SAI  for  a  further
discussion.  In addition to  the considerations described below  and in the SAI,
which are applicable  to any  investment in the  Portfolio, there  may be  other
federal,  state, local  or foreign  tax considerations  applicable to particular
investors. Prospective shareholders  are therefore  urged to  consult their  tax
advisors  with  respect to  the consequences  to  them of  an investment  in the
Portfolio.                                                                      

   The Portfolio  has  qualified,  and  intends  to  qualify  each  year,  as  a
"regulated  investment company" under Subchapter M  of the Code. In each taxable
year that the Portfolio so qualifies, the Portfolio will be relieved of  federal
income  tax on  that part of  its investment company  taxable income (consisting
generally of taxable net investment income, net short-term capital gain and  net
realized  gains from  certain hedging  transactions) and  long-term capital gain
that is distributed to its shareholders.  In addition, the Portfolio intends  to
satisfy  conditions  contained  in  the  Code  that  will  enable  interest from
Municipal Obligations,  excluded  from  gross  income  for  federal  income  tax
purposes  with respect to  the Portfolio, to retain  that tax-exempt status when
distributed to the shareholders of the  Portfolio (that is, to be classified  as
"exempt-interest" dividends of the Portfolio).                                  

   Interest  on  indebtedness incurred  by a  shareholder  to purchase  or carry
shares of  Common Stock  is  not deductible  for  federal income  tax  purposes.
Although   the  Portfolio's   exempt-interest  dividends  may   be  excluded  by
shareholders from their gross income for federal income tax purposes (1) some or
all of the Portfolio's  exempt-interest dividends may  be a specific  preference
item,  or  a  component of  an  adjustment  item, for  purposes  of  the federal
individual and  corporate  alternative minimum  taxes  and (2)  the  receipt  of
dividends   and  distributions  from  the   Portfolio  may  affect  a  corporate
shareholder's federal "environmental"  tax liability. The  receipt of  dividends
and   distributions  from   the  Portfolio   may  affect   a  foreign  corporate
shareholder's  federal   "branch  profits"   tax  liability   and  a   corporate
shareholder's federal "excess net passive income" tax liability.                

   The  portion  of  any exempt-interest  dividend  paid by  the  Portfolio that
represents income derived from private activity bonds held by the Portfolio  may
not  retain  its  tax-exempt status  in  the hands  of  a shareholder  who  is a
"substantial user" of a facility financed by the bonds, or a "related person" of
the substantial  user. Shareholders  should consult  their own  tax advisors  to
determine whether they are (1) "substantial users" with respect to a facility or
"related"  to those  users within the  meaning of the  Code or (2)  subject to a
federal alternative minimum  tax, the federal  "environmental" tax, the  federal
"branch profits" tax, or the federal "excess net passive income" tax.           

   The tables set out in Appendix B to this Prospectus show individual taxpayers
how  to translate the tax savings from investments such as the Portfolio into an
equivalent return from a taxable investment.  The yields used in the tables  are
for illustration only and are not intended to represent current or future yields
for the Portfolio, which may be higher or lower than those shown.               

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   A  shareholder  of  the  Portfolio receiving  dividends  or  distributions in
additional shares pursuant to the Plan should be treated for federal income  tax
purposes  as receiving a distribution in an  amount equal to the amount of money
that a  shareholder  receiving cash  dividends  or distributions  receives,  and
should  have  a cost  basis in  the shares  received equal  to that  amount. The
Portfolio will notify its shareholders following  the end of each calendar  year
of  the amounts of exempt-interest dividends, taxable dividends and capital gain
distributions paid (or deemed paid) that year and of any portion thereof that is
subject to the alternative minimum tax for individuals.                         

   Upon a sale or exchange of shares of Common Stock, a shareholder will realize
a taxable gain or loss  equal to the difference  between his adjusted basis  for
the  shares and the amount realized. Any such  gain or loss will be treated as a
capital gain or loss if the shares are capital assets in the shareholder's hands
and will be a long-term  capital gain or loss if  the shares have been held  for
more  than one year. Any loss realized on a sale or exchange of shares of Common
Stock that were held for six months or less will be disallowed to the extent  of
any exempt-interest dividends received on those shares and (to the extent not so
allowed)  will be treated as  a long-term, rather than  as a short-term, capital
loss to the extent  of any capital gain  distributions received thereon. A  loss
realized on a sale or exchange of shares of Common Stock also will be disallowed
to the extent those shares are replaced by other shares of Common Stock within a
period  of 61 days beginning 30 days before and ending 30 days after the date of
the disposition  of shares  (which could  occur,  for example,  as a  result  of
participation  in the Plan). In that event, the basis for the replacement shares
will be adjusted to reflect the disallowed loss.                                

   Investors also should be aware that  if shares of Common Stock are  purchased
shortly  before the record date for any distribution, the investor will pay full
price for the  shares and could  receive some portion  of the price  back as  an
exempt-interest dividend, a taxable dividend or capital gain distribution.      

   If  a shareholder fails to furnish  a correct taxpayer identification number,
fails to report fully dividend or interest  income, or fails to certify that  he
has provided a correct taxpayer identification number and that he is not subject
to  "backup  withholding,"  the shareholder  may  be  subject to  a  20% "backup
withholding" tax with respect to (1) taxable dividends and distributions and (2)
the proceeds  of  any  sales  or  repurchases of  shares  of  Common  Stock.  An
individual's taxpayer identification number is his social security number.      

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DESCRIPTION OF COMMON STOCK 

                                                                [Download Table]

                                                          AMOUNT OUTSTANDING  
                                                          EXCLUSIVE OF SHARES 
                                        AMOUNT HELD      HELD BY PORTFOLIO FOR
                       AMOUNT         BY PORTFOLIO FOR   ITS OWN ACCOUNT AS OF
TITLE OF CLASS       AUTHORIZED       ITS OWN ACCOUNT       AUGUST 31,        
1994                                                                          
--------------   ------------------   ----------------   ---------------------
                                                                              
Common Stock     500,000,000 Shares            0                34,498,420    

   No  shares,  other than  those currently  outstanding,  are offered  for sale
pursuant  to  this   Prospectus.  All   shares  of  Common   Stock  have   equal
non-cumulative  voting rights and equal rights with respect to dividends, assets
and liquidation. Shares of  Common Stock will be  fully paid and  non-assessable
when issued and have no preemptive, conversion or exchange rights. A majority of
the votes cast at any meeting of shareholders is sufficient to take or authorize
action,  except  for  election of  Directors  or  as otherwise  provided  in the
Portfolio's Articles of Incorporation as described under "Certain Provisions  of
the Articles of Incorporation."                                                 

   Under  the rules  of the NYSE  applicable to listed  companies, the Portfolio
will be required to hold an annual meeting of shareholders in each year. If  the
Portfolio's  shares are  no longer  listed on  the NYSE  (or any  other national
securities exchange the rules of which require annual meetings of shareholders),
the Portfolio may decide not to hold annual meetings of shareholders. See "Stock
Purchases and Tenders."                                                         

   The Portfolio has no current intention of offering additional shares,  except
that  additional  shares  may  be  issued under  the  Plan.  See  "Dividends and
Distributions; Dividend Reinvestment Plan." Other offerings of shares, if  made,
will  require approval of the Portfolio's Board of Directors and will be subject
to the requirement of the 1940 Act that shares may not be sold at a price  below
the  then  current  net asset  value  (exclusive of  underwriting  discounts and
commissions) except in connection with  an offering to existing shareholders  or
with the consent of a majority of the Portfolio's outstanding shares.           

STOCK PURCHASES AND TENDERS 

    Although  shares  of  closed-end  investment  companies  sometimes  trade at
premiums over net  asset value, they  frequently trade at  discounts. Since  the
Portfolio's commencement of operations, the Common Stock has periodically traded
at  a slight discount from  its net asset value  per share. The Portfolio cannot
predict whether the Common Stock will continue  to trade above, at or below  net
asset  value.  The Portfolio  believes that,  if  the Common  Stock trades  at a
discount to net  asset value, the  share price will  not adequately reflect  the
value of the Portfolio to investors and that investors' financial interests will
be  furthered if  the price of  the Common  Stock more closely  reflects its net
asset value. For  these reasons,  the Portfolio's Board  of Directors  currently
intends  to consider from time  to time repurchases of  Common Stock on the open
market or in  private transactions  or the making  of tender  offers for  Common
Stock.                                                                          

   The Portfolio may repurchase shares of its Common Stock in the open market or
in  privately negotiated  transactions when  the Portfolio  can do  so at prices
below their then current net  asset value per share on  terms that the Board  of
Directors    believes    represent   a    favorable    investment   opportunity.

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In addition, the Portfolio's Board  of Directors currently intends to  consider,
at least once a year, making an offer to each Common Stock shareholder of record
to purchase at net asset value shares of Common Stock owned by the shareholder. 

   Before  authorizing any  repurchase of  Common Stock  or tender  offer to the
Common Stock shareholders, the Portfolio's Board of Directors would consider all
relevant factors, including the market price of the Common Stock, its net  asset
value  per share,  the liquidity  of the  Portfolio's securities  positions, the
effect an offer or  repurchase might have on  the Portfolio or its  shareholders
and  relevant market conditions. Any offer would  be made in accordance with the
requirements of the 1940 Act and  the Securities Exchange Act of 1934.  Although
the  matter will be subject  to Board of Directors review  at the time, a tender
offer is not expected to be made if the anticipated benefit to shareholders  and
the  Portfolio  would  not be  commensurate  with  the anticipated  cost  to the
Portfolio, or if  the number  of shares  expected to  be tendered  would not  be
material.                                                                       

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION 

    The Portfolio's Articles of Incorporation include provisions that could have
the  effect of  limiting the  ability of  other entities  or persons  to acquire
control of the Portfolio or to change the composition of its Board of  Directors
and  could have the effect  of depriving shareholders of  an opportunity to sell
their shares  of Common  Stock at  a premium  over prevailing  market prices  by
discouraging  a third party from seeking to obtain control of the Portfolio. The
Board of  Directors is  divided into  three classes.  At the  annual meeting  of
shareholders in each year following the first annual meeting of the shareholders
of the Portfolio, the term of one class expires and each Director elected to the
class  will hold  office for a  term of  three years. The  classification of the
Board of  Directors  in  this  manner  could delay  for  up  to  two  years  the
replacement  of a majority  of the Board. The  Articles of Incorporation provide
that the maximum number of Directors that may constitute the Portfolio's  entire
board  is 12. A  Director may be removed  from office, or  the maximum number of
Directors increased, only by vote of the  holders of at least 75% of the  shares
of Common Stock entitled to be voted on the matter.                             

   The  Portfolio's Articles of Incorporation require  the favorable vote of the
holders of at least two-thirds of the shares of Common Stock then entitled to be
voted to  authorize the  conversion of  the Portfolio  from a  closed-end to  an
open-end investment company as defined in the 1940 Act, unless two-thirds of the
Continuing  Directors (as defined below) approve such a conversion. In the later
case, the  affirmative vote  of a  majority of  the shares  outstanding will  be
required  to approve the amendment to  the Portfolio's Articles of Incorporation
providing for the conversion of the Portfolio.                                  

   The affirmative votes of at least 75% of the Directors and the holders of  at
least  75% of the shares  of the Portfolio are required  to authorize any of the
following transactions (referred to  individually as a "Business  Combination"):
(1)  a merger, consolidation or share exchange of the Portfolio with or into any
other person (referred to individually  as a "Reorganization Transaction");  (2)
the issuance or transfer by the Portfolio (in one or a series of transactions in
any  12-month period) of any securities of  the Portfolio to any other person or
entity for cash, securities or other property (or combination thereof) having an
aggregate fair market value of $1,000,000 or more, excluding sales of securities
of the Portfolio in connection with  a public offering, issuances of  securities
of  the  Portfolio  pursuant to  a  dividend  reinvestment plan  adopted  by the
Portfolio and issuances of securities of the Portfolio upon the exercise of  any
stock  subscription  rights distributed  by the  Portfolio;  (3) a  sale, lease,
exchange,                                                                       

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mortgage, pledge, transfer or  other disposition by the  Portfolio (in one or  a
series  of transactions  in any 12-month  period) to  or with any  person of any
assets of the Portfolio having an  aggregate fair market value of $1,000,000  or
more,  except for  transactions in securities  effected by the  Portfolio in the
ordinary course  of its  business (each  such sale,  lease, exchange,  mortgage,
pledge,  transfer  or  other disposition  being  referred to  individually  as a
"Transfer Transaction"). The  same affirmative votes  are required with  respect
to: any proposal as to the voluntary liquidation or dissolution of the Portfolio
or  any amendment to the Portfolio's  Articles of Incorporation to terminate its
existence (referred to  individually as  a "Termination  Transaction"); and  any
shareholder proposal as to specific investment decisions made or to be made with
respect to the Portfolio's assets.                                              

   A  75%  shareholder vote  will not  be  required with  respect to  a Business
Combination if the  transaction is approved  by a vote  of at least  75% of  the
Continuing  Directors (as defined below) or  if certain conditions regarding the
consideration paid by the  person entering into, or  proposing to enter into,  a
Business  Combination  with the  Portfolio  and various  other  requirements are
satisfied. In  such  case, a  majority  of the  votes  entitled to  be  cast  by
shareholders  of the Portfolio will be required to approve the transaction if it
is  a  Reorganization  Transaction  or  a  Transfer  Transaction  that  involves
substantially  all of  the Portfolio's  assets and  no shareholder  vote will be
required to approve the transaction if it is any other Business Combination.  In
addition,  a  75%  shareholder vote  will  not  be required  with  respect  to a
Termination Transaction if  it is  approved by  a vote of  at least  75% of  the
Continuing  Directors, in which case a majority of the votes entitled to be cast
by shareholders of the Portfolio will be required to approve the transaction.   

   A "Continuing Director," as  used in the discussion  above, is any member  of
the  Portfolio's Board of  Directors (1) who is  not a person  or affiliate of a
person who enters  or proposes  to enter into  a Business  Combination with  the
Portfolio  (such  a person  or affiliate  being referred  to individually  as an
"Interested Party") and (2) who has been a member of the Board of Directors  for
a  period of at least 12 months, or  is a successor of a Continuing Director who
is unaffiliated  with  an Interested  Party  and  is recommended  to  succeed  a
Continuing  Director by a  majority of the Continuing  Directors then members of
the Board of Directors.                                                         

   The Portfolio's  Board  of  Directors  has determined  that  the  75%  voting
requirements  described  above, which  are  generally greater  than  the minimum
requirements under Maryland law and the 1940  Act, are in the best interests  of
shareholders   generally.  Reference   should  be   made  to   the  Articles  of
Incorporation on file with the SEC for the full text of their provisions.       

CUSTODIAN, TRANSFER AGENT AND DIVIDEND-PAYING AGENT AND           
REGISTRAR                                                                       

    Boston Safe, an indirect, wholly owned  subsidiary of TBC, which is in  turn
an  indirect, wholly  owned subsidiary of  Mellon, located at  One Boston Place,
Boston, Massachusetts 02108, acts as  custodian of the Portfolio's  investments.
Boston   Safe  is  also  an  affiliate   of  Boston  Advisors,  the  Portfolio's
sub-administrator. TSSG, located  at One Exchange  Place, Boston,  Massachusetts
02109,  serves  as the  Portfolio's  transfer agent,  dividend-paying  agent and
registrar. TSSG, a subsidiary of First Data Corporation, also serves as agent in
connection with  the  Plan.  Neither Boston  Safe  nor  TSSG assists  in  or  is
responsible for investment decisions involving assets of the Portfolio.         

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   Under  the Custody  Agreement, Boston  Safe holds  the Portfolio's  assets in
accordance with the provisions  of the 1940 Act.  Under the Transfer Agency  and
Registrar  Agreement,  TSSG maintains  the shareholder  account records  for the
Portfolio, distributes dividends and distributions payable by the Portfolio  and
produces  statements with respect to account  activity for the Portfolio and its
shareholders. The services to be  provided by TSSG as  agent under the Plan  are
described under "Dividends and Distributions; Dividend Reinvestment Plan."      

FURTHER INFORMATION 

    Further  information concerning  the Common Stock  and the  Portfolio may be
found in  the Registration  Statement,  of which  this  Prospectus and  the  SAI
constitute a part, on file with the SEC.                                        

The Table of Contents for the SAI is as follows:                          

                                                                [Download Table]

                                                                           PAGE
                                                                           ----
                                                                               
Investment Objective and Policies.....................................        2
Management of the Portfolio...........................................       14
Taxes.................................................................       19
Stock Purchases and Tenders...........................................       23
Additional Information................................................       24
Financial Statements..................................................       25
Appendix--Description of Moody's, S&P and Fitch Ratings...............       26

NO   PERSON  HAS  BEEN  AUTHORIZED  TO  GIVE  ANY  INFORMATION  OR        
MAKE  ANY                                                                       
REPRESENTATIONS NOT CONTAINED  IN THIS PROSPECTUS  AND, IF GIVEN                
OR MADE,  SUCH                                                                  
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS                       
HAVING BEEN AUTHORIZED                                                          
BY THE PORTFOLIO OR THE PORTFOLIO'S INVESTMENT ADVISER. THIS                    
PROSPECTUS DOES NOT                                                             
CONSTITUTE  AN OFFER TO SELL OR A SOLICITATION  OF ANY OFFER TO                 
BUY ANY SECURITY                                                                
OTHER THAN THE SHARES OF COMMON STOCK,  NOR DOES IT CONSTITUTE                  
AN OFFER TO  SELL                                                               
OR  A SOLICITATION OF ANY OFFER  TO BUY THE SHARES OF  COMMON                   
STOCK BY ANYONE IN                                                              
ANY JURISDICTION IN WHICH THE OFFER  OR SOLICITATION WOULD BE                   
UNLAWFUL.  NEITHER                                                              
THE  DELIVERY OF THIS  PROSPECTUS NOR ANY  SALE MADE HEREUNDER                  
SHALL, UNDER ANY                                                                
CIRCUMSTANCES, CREATE  ANY IMPLICATION  THAT THERE  HAS BEEN  NO                
CHANGE  IN  THE                                                                 
AFFAIRS  OF THE PORTFOLIO SINCE  THE DATE HEREOF. IF  ANY MATERIAL              
CHANGE OCCURS                                                                   
WHILE THIS  PROSPECTUS  IS  REQUIRED  BY LAW  TO  BE  DELIVERED,                
HOWEVER,  THIS                                                                  
PROSPECTUS WILL BE SUPPLEMENTED OR AMENDED ACCORDINGLY.                         

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                                                                      APPENDIX A

TYPES OF MUNICIPAL OBLIGATIONS

    The Portfolio may invest in the following types of Municipal Obligations and
in such other types of Municipal Obligations.                                   

MUNICIPAL BONDS                                                                 

    Municipal  bonds are  debt obligations  issued to  obtain funds  for various
public purposes.  The  two  principal classifications  of  municipal  bonds  are
"general  obligation" and "revenue" bonds.  General obligation bonds are secured
by the  issuer's pledge  of its  full faith,  credit and  taxing power  for  the
payment  of  principal and  interest. Revenue  bonds are  payable only  from the
revenues derived from a particular facility  or class of facilities or, in  some
cases,  from  the proceeds  of a  special  excise tax  or from  another specific
source, such as the user of the facility being financed. Certain municipal bonds
are "moral  obligation" issues,  which normally  are issued  by special  purpose
public  authorities. In the  case of such  issues, an express  or implied "moral
obligation" of a related government unit is  pledged to the payment of the  debt
service but is usually subject to annual budget appropriations.                 

INDUSTRIAL DEVELOPMENT BONDS AND PRIVATE ACTIVITY BONDS                         

    Industrial  development bonds  ("IDBs") and private  activity bonds ("PABs")
are municipal bonds  issued by  or on behalf  of public  authorities to  finance
various  privately operated  facilities, such  as airports  or pollution control
facilities. IDBs and PABs generally do not carry the pledge of the credit of the
issuing municipality, but are guaranteed by the corporate entity on whose behalf
they are issued.  IDBs and PABs  are generally  revenue bonds and  thus are  not
payable  from the unrestricted revenue of the issuer. The credit quality of IDBs
and PABs is usually directly related to  the credit standing of the user of  the
facilities being financed.                                                      

MUNICIPAL LEASE OBLIGATIONS                                                     

    Municipal lease obligations are Municipal Obligations that may take the form
of  leases, installment  purchase contracts  or conditional  sales contracts, or
certificates  of  participation  with  respect  to  such  contracts  or  leases.
Municipal  lease  obligations  are issued  by  state and  local  governments and
authorities to  purchase land  or  various types  of equipment  and  facilities.
Although  municipal lease obligations  do not constitute  general obligations of
the municipality for which the municipality's taxing authority is pledged,  they
ordinarily  are backed by the municipality's covenant to budget for, appropriate
and make the  payments due  under the  lease obligation.  The leases  underlying
certain  Municipal Obligations, however, provide that lease payments are subject
to partial or full  abatement if, because of  material damage or destruction  of
the  leased property, there is substantial interference with the lessee's use or
occupancy of  such  property.  This  "abatement risk"  may  be  reduced  by  the
existence  of insurance  covering the  leased property,  the maintenance  by the
lessee of reserve funds or the provision of credit enhancements such as  letters
of credit.                                                                      

   The liquidity of municipal lease obligations varies. Municipal leases held by
the  Portfolio  will be  considered illiquid  securities unless  the Portfolio's
Board of Directors determines on an on-going basis                              

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that the  leases are  readily marketable.  Certain municipal  lease  obligations
contain  "non-appropriation" clauses which provide  that the municipality has no
obligation to make lease or installment purchase payments in future years unless
money is appropriated  for such  purpose on  a yearly basis.  In the  case of  a
"non-appropriation" lease, the Portfolio's ability to recover under the lease in
the  event  of  non-appropriation  or  default will  be  limited  solely  to the
repossession of the leased property, without  recourse to the general credit  of
the lessee, and disposition of the property in the event of foreclosure might be
difficult.  The Portfolio  will not invest  more than  5% of its  assets in such
"non-appropriation" municipal lease obligations.                                

ZERO COUPON OBLIGATIONS                                                         

    The Portfolio  may invest  up to  10% of  its total  assets in  zero  coupon
Municipal  Obligations. Such obligations include  "pure zero" obligations, which
pay no interest for their entire life  (either because they bear no stated  rate
of  interest  or because  their stated  rate  of interest  is not  payable until
maturity), and "zero/fixed" obligations,  which pay no  interest for an  initial
period  and  thereafter pay  interest  currently. Zero  coupon  obligations also
include securities  representing  the  principal-only  components  of  Municipal
Obligations  from  which the  interest components  have  been stripped  and sold
separately by the holders of  the underlying Municipal Obligations. Zero  coupon
securities  usually trade at  a deep discount  from their face  or par value and
will be subject to greater fluctuations in market value in response to  changing
rates than obligations of comparable maturity that make current distributions of
interest.  While zero  coupon Municipal Obligations  will not  contribute to the
cash available to the Portfolio, Greenwich Street Advisors believes that limited
investments in  such  securities  may  facilitate  the  Portfolio's  ability  to
preserve  capital  while generating  tax-exempt  income through  the  accrual of
original interest  discount. Zero  coupon  Municipal Obligations  generally  are
liquid, although such liquidity may be reduced from time to time due to interest
rate volatility and other factors.                                              

FLOATING RATE OBLIGATIONS                                                       

    The  Portfolio may purchase  floating and variable  rate municipal notes and
bonds, which frequently permit the holder to demand payment of principal at  any
time, or at specified intervals, and permit the issuer to prepay principal, plus
accrued  interest,  at  its  discretion after  a  specified  notice  period. The
issuer's obligations under the demand feature of such notes and bonds  generally
are  secured by  bank letters  of credit  or other  credit support arrangements.
There frequently will  be no  secondary market  for variable  and floating  rate
obligations  held by the Portfolio, although the Portfolio may be able to obtain
payment of  principal at  face value  by exercising  the demand  feature of  the
obligation.                                                                     

PARTICIPATION INTERESTS                                                         

    The  Portfolio may  invest up  to 5%  of its  total assets  in participation
interests in municipal  bonds, including  IDBs, PABs and  floating and  variable
rate  securities.  A participation  interest  gives the  Portfolio  an undivided
interest in a municipal  bond owned by  a bank. The Portfolio  has the right  to
sell  the instrument back to the bank. If the participation interest is unrated,
it will be backed by an irrevocable letter of credit or guarantee of a bank that
the Portfolio's Board of Directors  has determined meets certain credit  quality
standards  or the  payment obligation will  otherwise be  collateralized by U.S.
government securities.  The  Portfolio will  have  the right,  with  respect  to
certain                                                                         

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participation  interests,  to draw  on  the letter  of  credit on  demand, after
specified notice for all or any part of the principal amount of the  Portfolio's
participation  interest, plus accrued interest. Generally, the Portfolio intends
to exercise the demand under the letters of credit or other guarantees only upon
a default under the terms of the underlying bond, or to maintain the Portfolio's
assets in accordance with its investment objective and policies. The ability  of
a bank to fulfill its obligations under a letter of credit or guarantee might be
affected  by possible financial difficulties  of its borrowers, adverse interest
rate or economic conditions, regulatory limitations or other factors.  Greenwich
Street  Advisors  will  monitor  the  pricing,  quality  and  liquidity  of  the
participation interests held by  the Portfolio, and the  credit standing of  the
banks  issuing  letters of  credit or  guarantees supporting  such participation
interests on  the basis  of published  financial information  reports of  rating
services and bank analytical services.                                          

CUSTODIAL RECEIPTS                                                              

    The Portfolio may acquire custodial receipts or certificates underwritten by
securities dealers or banks that evidence ownership of future interest payments,
principal  payments or both on certain Municipal Obligations. The underwriter of
these certificates  or receipts  typically purchases  Municipal Obligations  and
deposits  the obligations  in an irrevocable  trust or custodial  account with a
custodian bank,  which  then  issues  receipts  or  certificates  that  evidence
ownership  of the  periodic unmatured  coupon payments  and the  final principal
payment on the  obligations. Custodial  receipts evidencing  specific coupon  or
principal  payments have the  same economic attributes  as zero coupon Municipal
Obligations described above. Although under the terms of a custodial receipt the
Portfolio would be typically  authorized to assert  its rights directly  against
the  issuer of  the underlying  obligation, the  Portfolio could  be required to
assert through  the custodian  bank  those rights  that  may exist  against  the
underlying  issuer.  Thus,  in the  event  the  underlying issuer  fails  to pay
principal or interest when due, the Portfolio may be subject to delays, expenses
and risks that  are greater  than those  that would  have been  involved if  the
Portfolio  had purchased a direct obligation of  the issuer. In addition, in the
event that the trust or custodial  account in which the underlying security  has
been  deposited is  determined to  be an  association taxable  as a corporation,
instead of a non-taxable entity, the  yield on the underlying security would  be
reduced in recognition of any taxes paid.                                       

MUNICIPAL OBLIGATION COMPONENTS                                                 

    The  Portfolio may  invest in  Municipal Obligations,  the interest  rate on
which has been divided by the issuer into two different and variable components,
which together result  in a  fixed interest rate.  Typically, the  first of  the
components  (the  "Auction  Component")  pays an  interest  rate  that  is reset
periodically through an auction  process, whereas the  second of the  components
(the "Residual Component") pays a residual interest rate based on the difference
between  the total interest paid  by the issuer on  the Municipal Obligation and
the auction rate paid on the Auction Component. The Portfolio may purchase  both
Auction and Residual Components.                                                

   Because the interest rate paid to holders of Residual Components is generally
determined  by  subtracting the  interest rate  paid to  the holders  of Auction
Components from a  fixed amount, the  interest rate paid  to Residual  Component
holders  will decrease as the Auction Component's rate increases and increase as
the Auction Component's rate  decreases. Moreover, the  extent of the  increases
and  decreases  in  market  value  of Residual  Components  may  be  larger than
comparable changes in the market value of  an equal principal amount of a  fixed
rate  Municipal Obligation having similar  credit quality, redemption provisions
and maturity.                                                                   

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                                                                      APPENDIX B

TAX-EXEMPT INCOME COMPARED TO TAXABLE INCOME

    The tables below show individual taxpayers how to translate the tax  savings
from  investments such as the Portfolio into an equivalent return from a taxable
investment. The yields used below are for illustration only and are not intended
to represent current or future yields for the Portfolio, which may be higher  or
lower than those shown.                                                         

                                                        [Enlarge/Download Table]

                SAMPLE                                                                            
            TAXABLE INCOME                                                                        
 -------------------------------------   FEDERAL                  TAX-EXEMPT YIELDS               
      SINGLE                             MARGINAL   ----------------------------------------------
      RETURN           JOINT RETURN       RATE*     2.00%   3.00%   4.00%   5.00%                 
6.00%   7.00%                                                                                     
 -----------------   -----------------   --------   -----   -----   -----   -----   -----   ------
                                                               EQUIVALENT TAXABLE YIELD           
                                                    ----------------------------------------------
                                                                                                  
                                                                                                  
    $0 - 22,100         $0 - 36,900       15.00  %  2.35 %  3.53 %  4.71 %  5.88 %  7.06 %        
8.24 %                                                                                            
  22,101 - 53,500     36,901 - 89,150     28.00  %  2.78 %  4.17 %  5.56 %  6.94 %  8.33          
%   9.72 %                                                                                        
 53,501 - 115,000    89,151 - 140,000     31.00  %  2.90 %  4.35 %  5.80 %  7.25 %                
8.70 %  10.14 %                                                                                   
 115,001 - 250,000   140,001 - 250,000    36.00  %  3.13 %  4.69 %  6.25 %  7.81 %                
9.38 %  10.94 %                                                                                   
  250,000 and up      250,000 and up      39.60  %  3.31 %  4.97 %  6.62 %  8.28 %  9.93          
%  11.59 %                                                                                        
<FN>                                                                                              
-------------                                                                                     
*    The  federal tax rates  shown are those  currently in effect  for 1994. The                  
     calculations reflected in the table assume  that no income will be  subject                  
     to any federal, state or local individual alternative minimum taxes.                         

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-------------------------------------------------------                         
MANAGED MUNICIPALS
PORTFOLIO INC.

                                                              PROSPECTUS

                                                September 28, 1994

[LOGO]

[LOGO]        

-------------------------------------------------------                         
C    O   M    M   O    N                    S    T   O   C    K         
Managed Municipals Portfolio Inc.                                               

Two World Trade Center                                                          
New York, New York 10048                                                        
(212)    720-9218                                                               

STATEMENT OF ADDITIONAL INFORMATION                                             

September 28, 1994                                                        

Managed Municipals Portfolio Inc. (the "Portfolio") is a        
non-diversified, closed-end management investment company that                  
seeks as high a level of current income exempt from federal                     
income tax as is consistent with the preservation of principal.                 
Under normal conditions, the Portfolio will, in seeking its                     
investment objective, invest substantially all of its assets in                 
long-term, investment grade obligations issued by state and                     
local governments, political subdivisions, agencies and public                  
authorities ("Municipal Obligations").  No assurance can be                     
given that the Portfolio will be able to achieve its investment                 
objective.                                                                      

This Statement of Additional Information ("SAI") expands        
upon and supplements the information contained in the current                   
Prospectus of the Portfolio, dated    September 28, 1994,                       
as amended or supplemented from time to time (the                       
"Prospectus"), and should be read in conjunction with the                       
Prospectus.  The Prospectus may be obtained from any Smith                      
Barney        Financial Consultant or by writing or calling the                 
Portfolio at the address or telephone number set forth above.                   
This Statement of Additional Information, although not itself a                 
prospectus, is incorporated by reference into the Prospectus in                 
its entirety.                                                                   

No person has been authorized to give any information or        
to make any representations not contained in the Prospectus or                  
this Statement of Additional Information and, if given or made,                 
such information must not be relied upon as having been                         
authorized by the Portfolio or the Portfolio's investment                       
adviser.  The Prospectus and this Statement of Additional                       
Information do not constitute an offer to sell or a                             
solicitation of any offer to buy any security other than the                    
shares of Common Stock.  The Prospectus and this Statement of                   
Additional Information do not constitute an offer to sell or a                  
solicitation of an offer to buy the shares of Common Stock by                   
anyone in any jurisdiction in which such offer or solicitation                  
would be unlawful.  Neither the delivery of the Prospectus nor                  
any sale made hereunder shall, under any circumstances, create                  
any implication that there has been no change in the affairs of                 
the Portfolio since the date hereof.  If any material change                    
occurs while the Prospectus is required by law to be delivered,                 
however, the Prospectus or this Statement of Additional                         
Information will be supplemented or amended accordingly                         

TABLE OF CONTENTS                                                               

                                                                            Page

Investment Objective and Policies (see in the                                   
Prospectus "Investment Objective and Policies"                  
and "Appendix A") . . . . . . . . . . . . . . . . . . . .       
2       
Management of the Portfolio (see in the Prospectus                              
"Management of the Portfolio"). . . . . . . . . . . . . .       
.                                  14                                           
Taxes (see in the Prospectus "Taxation")  . . . . . . . . .                     
19                        
Stock Purchases and Tenders (see in the Prospectus                              
"Stock Purchases and Tenders" and                               
"Description of Common Stock") . . . . . . . . . . . .          
23                        
Additional Information (see in the Prospectus                                   
"Custodian, Transfer Agent and Dividend-Paying                  
Agent and Registrar")  . . . . . . . . . .                      
24                      
Financial Statements  . . . . . . . . . . . . . . . . . . .                     
  25
Appendix -- Description of Moody's, S&P and Fitch Ratings  . .                  
. .                             26                                              

INVESTMENT OBJECTIVE AND POLICIES                                               

The Prospectus discusses the Portfolio's investment             
objective and the policies it employs to achieve that                           
objective.  The following discussion supplements the                            
description of the Portfolio's investment policies in the                       
Prospectus.  The Portfolio's investment objective is high tax-                  
exempt current income by investing substantially all of its                     
assets in a variety of obligations issued by or on behalf of                    
states, territories and possessions of the United States and                    
the District of Columbia and their political subdivisions,                      
agencies and instrumentalities or multistate agencies or                        
authorities ("Municipal Obligations").  The Portfolio's                         
investment objective may not be changed without the affirmative                 
vote of the holders of a majority (as defined in the Investment                 
Company Act of 1940, as amended (the "1940 Act")) of the                        
Portfolio's outstanding voting shares.  No assurance can be                     
given that the Portfolio's investment objective will be                         
achieved.                                                                       

Use of Ratings as Investment Criteria                                           

In general, the ratings of Moody's Investors Service, Inc.      
("Moody's"), Standard & Poor's Corporation ("S&P") and Fitch                    
Investors Service, Inc. ("Fitch") represent the opinions of                     
those agencies as to the quality of the Municipal Obligations                   
and long-term investments which they rate.  It should be                        
emphasized, however, that such ratings are relative and                         
subjective, are not absolute standards of quality and do not                    
evaluate the market risk of securities.  These ratings will be                  
used as initial criteria for the selection of securities, but                   
the Portfolio also will rely upon the independent advice of its                 
investment adviser, The Greenwich Street Advisors Division of                   
Mutual Management Corp. ("Greenwich Street Advisors").  Among                   
the factors that will also be considered by Greenwich Street                    
Advisors in evaluating potential Municipal Obligations to be                    
held by the Portfolio are the price, coupon and yield to                        
maturity of the obligations, Greenwich Street Advisors'                         
assessment of the credit quality of the issuer of the                           
obligations, the issuer's available cash flow and the related                   
coverage ratios, the property, if any, securing the                             
obligations, and the terms of the obligations, including                        
subordination, default, sinking fund and early redemption                       
provisions.  To the extent the Portfolio invests in lower-rated                 
and comparable unrated securities, the Portfolio's achievement                  
of its investment objective may be more dependent on Greenwich                  
Street Advisors' credit analysis of such securities than would                  
be the case for a portfolio consisting entirely of higher-rated                 
securities.  The Appendix to this SAI contains information                      
concerning the ratings of Moody's, S&P and Fitch and their                      
significance.                                                                   

Subsequent to its purchase by the Portfolio, an issue of        
Municipal Obligations may cease to be rated or its rating may                   
be reduced below the rating given at the time the securities                    
were acquired by the Portfolio.  Neither event will require the                 
sale of such Municipal Obligations by the Portfolio, but                        
Greenwich Street Advisors will consider such event in its                       
determination of whether the Portfolio should continue to hold                  
the Municipal Obligations.  In addition, to the extent the                      
ratings change as a result of changes in the rating systems or                  
due to a corporate restructuring of Moody's, S&P or Fitch, the                  
Portfolio will attempt to use comparable ratings as standards                   
for its investments in accordance with its investment objective                 
and policies.                                                                   

The Portfolio will seek to invest substantially all of its      
assets in Municipal Obligations, and under normal conditions,                   
at least 80% of the Portfolio's total assets will be invested                   
in investment grade Municipal Obligations.                                      

The Portfolio may invest in Municipal Obligations rated as      
low as Baa by Moody's, BBB by S&P or BBB by Fitch or in unrated                 
Municipal Obligations deemed to be of comparable quality.                       
Although such securities are considered investment grade, they                  
may be subject to greater risks than other higher-rated                         
investment grade securities.                                                    

While the market for Municipal Obligations is considered        
to be generally adequate, the existence of limited markets for                  
particular lower-rated and comparable unrated securities may                    
diminish the Portfolio's ability to (1) obtain accurate market                  
quotations for purposes of valuing such securities and                          
calculating its net asset value and (2) sell the securities at                  
fair value to respond to changes in the economy or in the                       
financial markets.  The market for certain lower-rated and                      
comparable unrated securities is relatively new and has not                     
fully weathered a major economic recession.  Any such economic                  
downturn could adversely affect the ability of the issuers of                   
such securities to repay principal and pay interest thereon.                    

Taxable Investments                                                             

Under normal conditions, the Portfolio may hold up to 20%       
of its assets in cash or money market instruments, including                    
taxable money market instruments (collectively, "Taxable                        
Investments").                                                                  

Money market instruments in which the Portfolio may invest      
include:  U.S. government securities; tax-exempt notes of                       
municipal issuers rated, at the time of purchase, no lower than                 
MIG1 by Moody's, SP-1 by S&P or F-1 by Fitch or, if not rated,                  
by issuers having outstanding unsecured debt then rated within                  
the three highest rating categories; bank obligations                           
(including certificates of deposit, time deposits and bankers'                  
acceptances of domestic banks, domestic savings and loan                        
associations and similar institutions); commercial paper rated                  
no lower than P-1 by Moody's, A-1 by S&P or F-1 by Fitch or the                 
equivalent from another nationally recognized rating service                    
or, if unrated, of an issuer having an outstanding, unsecured                   
debt issue then rated within the three highest rating                           
categories; and repurchase agreements  At no time will the                      
Portfolio's investments in bank obligations, including time                     
deposits, exceed 25% of the value of its assets.                                

U.S. government securities in which the Portfolio may           
invest include direct obligations of the United States and                      
obligations issued by U.S. government agencies and                              
instrumentalities.  Included among direct obligations of the                    
United States are Treasury bills, Treasury notes and Treasury                   
bonds, which differ principally in terms of their maturities.                   
Included among the securities issued by U.S. government                         
agencies and instrumentalities are:  securities that are                        
supported by the full faith and credit of the United States                     
(such as Government National Mortgage Association                               
certificates); securities that are supported by the right of                    
the issuer to borrow from the U.S. Treasury (such as securities                 
of Federal Home Loan Banks); and securities that are supported                  
by the credit of the instrumentality (such as Federal National                  
Mortgage Association and Federal Home Loan Mortgage Corporation                 
bonds).                                                                         

Lending  Securities                                                             

By lending its securities, the Portfolio can increase its       
income by continuing to receive interest on the loaned                          
securities, by investing the cash collateral in short-term                      
instruments or by obtaining yield in the form of interest paid                  
by the borrower when U.S. government securities are used as                     
collateral.  The Portfolio will adhere to the following                         
conditions whenever it lends its securities: (1) the Portfolio                  
must receive at least 100% cash collateral or equivalent                        
securities from the borrower, which will be maintained by daily                 
marking-to-market; (2) the borrower must increase the                           
collateral whenever the market value of the securities loaned                   
rises above the level of the collateral; (3) the Portfolio must                 
be able to terminate the loan at any time; (4) the Portfolio                    
must receive reasonable interest on the loan, as well as any                    
dividends, interest or other distributions on the loaned                        
securities, and any increase in market value; (5) the Portfolio                 
may pay only reasonable custodian fees in connection with the                   
loan; and (6) voting rights on the loaned securities may pass                   
to the borrower, except that, if a material event adversely                     
affecting the investment in the loaned securities occurs, the                   
Portfolio's Board of Directors must terminate the loan and                      
retain the Portfolio's right to vote the securities.  From time                 
to time, the Portfolio may pay a part of the interest earned                    
from the investment of collateral received for securities                       
loaned to the borrower and/or a third party that is                             
unaffiliated with the Portfolio and that is acting as a                         
"finder."                                                                       

Repurchase Agreements                                                           

The Portfolio may enter into repurchase agreements with         
certain member banks of the Federal Reserve System and certain                  
dealers on the Federal Reserve Bank of New York's list of                       
reporting dealers.  Under the terms of a typical repurchase                     
agreement, the Portfolio would acquire an underlying debt                       
obligation for a relatively short period (usually not more than                 
one week) subject to an obligation of the seller to repurchase,                 
and the Portfolio to resell, the obligation at an agreed-upon                   
price and time, thereby determining the yield during the                        
Portfolio's holding period.  Under each repurchase agreement,                   
the selling institution will be required to maintain the value                  
of the securities subject to the repurchase agreement at not                    
less than their repurchase price.  Greenwich Street Advisors,                   
acting under the supervision of the    Portfolio's     Board of                 
Directors, reviews on an ongoing basis the value of the                         
collateral and the creditworthiness of those banks and dealers                  
with which the Portfolio enters into repurchase agreements to                   
evaluate potential risks.  In entering into a repurchase                        
agreement, the Portfolio will bear a risk of loss in the event                  
that the other party to the transaction defaults on its                         
obligations and the Portfolio is delayed or prevented from                      
exercising its rights to dispose of the underlying securities,                  
including the risk of a possible decline in the value of the                    
underlying securities during the period in which the Portfolio                  
seeks to assert its rights to them, the risk of incurring                       
expenses associated with asserting those rights and the risk of                 
losing all or a part of the income from the agreement.                          

Investments in Municipal Obligation Index and Interest Rate                     
Futures Contracts and Options on Interest Rate Futures                          
Contracts                                                                       

The Portfolio may invest in Municipal Obligation index and      
interest rate futures contracts and options on interest rate                    
futures contracts that are traded on a domestic exchange or                     
board of trade.  Such investments may be made by the Portfolio                  
solely for the purpose of hedging against changes in the value                  
of its portfolio securities due to anticipated changes in                       
interest rates and market conditions, and not for purposes of                   
speculation.  Further, such investments will be made only in                    
unusual circumstances, such as when Greenwich Street Advisors                   
anticipates an extreme change in interest rates or market                       
conditions.                                                                     

Municipal Obligation Index and Interest Rate Futures            
Contracts.  A Municipal Obligation index futures contract is an                 
agreement to take or make delivery of an amount of cash equal                   
to a specific dollar amount times the difference between the                    
value of the index at the close of the last trading day of the                  
contract and the price at which the index contract is                           
originally written.  No physical delivery of the underlying                     
Municipal Obligations in the index is made.  Interest rate                      
futures contracts are contracts for the future purchase or sale                 
of specified interest rate sensitive debt securities of the                     
U.S. Treasury, such as U.S. Treasury bills, bonds and notes,                    
obligations of the Government National Mortgage Association and                 
bank certificates of deposit.  Although most interest rate                      
futures contracts require the delivery of the underlying                        
securities, some settle in cash.  Each contract designates the                  
price, date, time and place of delivery.                                        

The purpose of the Portfolio's entering into a Municipal        
Obligation index or interest rate futures contract, as the                      
holder of long-term Municipal Obligations, is to protect the                    
Portfolio from fluctuation in interest rates on tax-exempt                      
securities without actually buying or selling Municipal                         
Obligations.  The Portfolio will, with respect to its purchases                 
of financial futures contracts, establish a segregated account                  
consisting of cash or cash equivalents in an amount equal to                    
the total market value of the futures contracts, less the                       
amount of initial margin on deposit for the contracts.                          

Unlike the purchase or sale of a Municipal Obligation, no       
consideration is paid or received by the Portfolio upon the                     
purchase or sale of a futures contract.  Initially, the                         
Portfolio will be required to deposit with the futures                          
commission merchant an amount of cash or cash equivalents equal                 
to approximately 5% of the contract amount (this amount is                      
subject to change by the board of trade on which the contract                   
is traded and members of such board of trade may charge a                       
higher amount).  This amount is known as "initial margin" and                   
is in the nature of a performance bond or good faith deposit on                 
the contract which is returned to the Portfolio upon                            
termination of the futures contract, assuming that all                          
contractual obligations have been satisfied.  Subsequent                        
payments, known as "variation margin", to and from the futures                  
commission merchant, will be made on a daily basis as the price                 
of the index or securities fluctuates making the long and short                 
positions in the futures contract more or less valuable, a                      
process known as marking-to-market.  At any time prior to the                   
expiration of the contract, the Portfolio may elect to close                    
the position by taking an opposite position, which will operate                 
to terminate the Portfolio's existing position in the futures                   
contract.                                                                       

There are several risks in connection with the use of           
Municipal Obligation index and interest rate futures contracts                  
as a hedging device.  Successful use of these futures contracts                 
by the Portfolio is subject to Greenwich Street Advisors'                       
ability to predict correctly movements in the direction of                      
interest rates.  Such predictions involve skills and techniques                 
which may be different from those involved in the management of                 
a long-term Municipal Obligation portfolio.  In addition, there                 
can be no assurance that a correlation would exist between                      
movements in the price of the Municipal Obligation index or the                 
debt security underlying the futures contract and movement in                   
the price of the Municipal Obligations which are the subject of                 
the hedge.  The degree of imperfection of correlation depends                   
upon various circumstances, such as variations in speculative                   
market demand for futures contracts and Municipal Obligations                   
and technical influences on futures trading.  The Portfolio's                   
Municipal Obligations and the Municipal Obligations in the                      
index may also differ in such respects as interest rate levels,                 
maturities and creditworthiness of issuers.  A decision of                      
whether, when and how to hedge involves the exercise of skill                   
and judgment and even a well-conceived hedge may be                             
unsuccessful to some degree because of market behavior or                       
unexpected trends in interest rates.                                            

Although the Portfolio intends to enter into futures            
contracts only if an active market exists for such contracts,                   
there can be no assurance that an active market will exist for                  
a contract at any particular time.  Most domestic futures                       
exchanges and boards of trade limit the amount of fluctuation                   
permitted in futures contract prices during a single trading                    
day.  The daily limit establishes the maximum amount the price                  
of a futures contract may vary either up or down from the                       
previous day's settlement price at the end of a trading                         
session.  Once the daily limit has been reached in a particular                 
contract, no trades may be made that day at a price beyond that                 
limit.  The daily limit governs only price movement during a                    
particular trading day and therefore does not limit potential                   
losses because the limit may prevent the liquidation of                         
unfavorable positions.  It is possible that futures contract                    
prices could move to the daily limit for several consecutive                    
trading days with little or no trading, thereby preventing                      
prompt liquidation of futures positions and subjecting some                     
futures traders to substantial losses.  In such event, it will                  
not be possible to close a futures position and, in the event                   
of adverse price movements, the Portfolio would be required to                  
make daily cash payments of variation margin.  In such                          
circumstances, an increase in the value of the portion of the                   
portfolio being hedged, if any, may partially or completely                     
offset losses on the futures contract.  As described above,                     
however, there is no guarantee the price of Municipal                           
Obligations will, in fact, correlate with the price movements                   
in a futures contract and thus provide an offset to losses on a                 
futures contract.                                                               

If the Portfolio has hedged against the possibility of an       
increase in interest rates adversely affecting the value of                     
Municipal Obligations it holds and rates decrease instead, the                  
Portfolio will lose part or all of the benefit of the increased                 
value of the Municipal Obligations it has hedged because it                     
will have offsetting losses in its futures positions.  In                       
addition, in such situations, if the Portfolio has insufficient                 
cash, it may have to sell securities to meet daily variation                    
margin requirements.  Such sales of securities may, but will                    
not necessarily, be at increased prices which reflect the                       
decline in interest rates.  The Portfolio may have to sell                      
securities at a time when it may be disadvantageous to do so.                   

Options on Interest Rate Futures Contracts.  The Portfolio      
may purchase put and call options on interest rate futures                      
contracts which are traded on a domestic exchange or board of                   
trade as a hedge against changes in interest rates, and may                     
enter into closing transactions with respect to such options to                 
terminate existing positions.  The Portfolio will sell put and                  
call options on interest rate futures contracts only as part of                 
closing sale transactions to terminate its options positions.                   
There is no guarantee such closing transactions can be                          
effected.                                                                       

Options on interest rate futures contracts, as contrasted       
with the direct investment in such contracts, give the                          
purchaser the right, in return for the premium paid, to assume                  
a position in interest rate futures contracts at a specified                    
exercise price at any time prior to the expiration date of the                  
options.  Upon exercise of an option, the delivery of the                       
futures position by the writer of the option to the holder of                   
the option will be accompanied by delivery of the accumulated                   
balance in the writer's futures margin account, which                           
represents the amount by which the market price of the futures                  
contract exceeds, in the case of a call, or is less than, in                    
the case of a put, the exercise price of the option on the                      
futures contract.  The potential loss related to the purchase                   
of an option on interest rate futures contracts is limited to                   
the premium paid for the option (plus transaction costs).                       
Because the value of the option is fixed at the point of sale,                  
there are no daily cash payments to reflect changes in the                      
value of the underlying contract; however, the value of the                     
option does change daily and that change would be reflected in                  
the net asset value of the Portfolio.                                           

There are several risks relating to options on interest         
rate futures contracts.  The ability to establish and close out                 
positions on such options will be subject to the existence of a                 
liquid market.  In addition, the Portfolio's purchase of put or                 
call options will be based upon predictions as to anticipated                   
interest rate trends by Greenwich Street Advisors, which could                  
prove to be inaccurate.  Even if Greenwich Street Advisors'                     
expectations are correct, there may be an imperfect correlation                 
between the change in the value of the options and of the                       
Portfolio's securities.                                                         

Municipal Obligations                                                           

General Information.  Municipal Obligations generally are       
understood to include debt obligations issued to obtain funds                   
for various public purposes, including the construction of a                    
wide range of public facilities, refunding of outstanding                       
obligations, payment of general operating expenses and                          
extensions of loans to public institutions and facilities.                      
Private activity bonds that are issued by or on behalf of                       
public authorities to obtain funds to provide privately                         
operated facilities are included within the term Municipal                      
Obligations if the interest paid thereon qualifies as                           
excludable from gross income (but not necessarily from                          
alternative minimum taxable income) for federal income tax                      
purposes in the opinion of bond counsel to the issuer.                          

The yields on Municipal Obligations are dependent upon a        
variety of factors, including general economic and monetary                     
conditions, general money market conditions, general conditions                 
of the Municipal Obligations market, the financial condition of                 
the issuer, the size of a particular offering, the maturity of                  
the obligation offered and the rating of the issue.  Municipal                  
Obligations are also subject to the provisions of bankruptcy,                   
insolvency and other laws affecting the rights and remedies of                  
creditors, such as the Federal Bankruptcy Code, and laws, if                    
any, that may be enacted by Congress or state legislatures                      
extending the time for payment of principal or interest, or                     
both, or imposing other constraints upon enforcement of the                     
obligations or upon the ability of municipalities to levy                       
taxes.  There is also the possibility that as a result of                       
litigation or other conditions, the power or ability of any one                 
or more issuer to pay, when due, principal of and interest on                   
its, or their, Municipal Obligations may be materially                          
affected.                                                                       

The net asset value of the Common Stock will change with        
changes in the value of the Portfolio's securities.  Because                    
the Portfolio will invest primarily in fixed-income securities,                 
the net asset value of the Common Stock can be expected to                      
change as levels of interest rates fluctuate; generally, when                   
prevailing interest rates increase, the value of fixed-income                   
securities held by the Portfolio can be expected to decrease                    
and when prevailing interest rates decrease, the value of the                   
fixed-income securities held by the Portfolio can be expected                   
to increase.  The value of the fixed-income securities held by                  
the Portfolio, and thus the Portfolio's net asset value, may                    
also be affected by other economic, market and credit factors.                  

From time to time, the Portfolio's investments may include      
securities as to which the Portfolio, by itself or together                     
with other funds or accounts managed by Greenwich Street                        
Advisors, holds a major portion or all of an issue of Municipal                 
Obligations.  Because relatively few potential purchasers may                   
be available for these investments and, in some cases,                          
contractual restrictions may apply on resales, the Portfolio                    
may find it more difficult to sell these securities at a time                   
when Greenwich Street Advisors believes it is advisable to do                   
so.                                                                             

When-Issued Securities.  The Portfolio may purchase             
Municipal Obligations on a "when-issued" basis (i.e., for                       
delivery beyond the normal settlement date at a stated price                    
and yield).  The payment obligation and the interest rate that                  
will be received on the Municipal Obligations purchased on a                    
when-issued basis are each fixed at the time the buyer enters                   
into the commitment.  Although the Portfolio will purchase                      
Municipal Obligations on a when-issued basis only with the                      
intention of actually acquiring the securities, the Portfolio                   
may sell these securities before the settlement date if it is                   
deemed advisable as a matter of investment strategy.                            

Municipal Obligations are subject to changes in value           
based upon the public's perception of the creditworthiness of                   
the issuers and changes, real or anticipated, in the level of                   
interest rates.  In general, Municipal Obligations tend to                      
appreciate when interest rates decline and depreciate when                      
interest rates rise.  Purchasing Municipal Obligations on a                     
when-issued basis, therefore, can involve the risk that the                     
yields available in the market when the delivery takes place                    
actually may be higher than those obtained in the transaction                   
itself.  To account for this risk, a separate account of the                    
Portfolio consisting of cash or liquid debt securities equal to                 
the amount of the when-issued commitments will be established                   
at the Portfolio's custodian bank.  For the purpose of                          
determining the adequacy of the securities in the account, the                  
deposited securities will be valued at market or fair value.                    
If the market or fair value of such securities declines,                        
additional cash or securities will be placed in the account on                  
a daily basis so that the value of the account will equal the                   
amount of such commitments by the Portfolio.  Placing                           
securities rather than cash in the segregated account may have                  
a leveraging effect on the Portfolio's net assets.  That is, to                 
the extent the Portfolio remains substantially fully invested                   
in securities at the same time it has committed to purchase                     
securities on a when-issued basis, there will be greater                        
fluctuations in its net assets than if it had set aside cash to                 
satisfy its purchase commitment.  Upon the settlement date of                   
the when-issued securities, the Portfolio will meet its                         
obligations from then-available cash flow, sale of securities                   
held in the segregated account, sale of other securities or,                    
although it would not normally expect to do so, from the sale                   
of the when-issued securities themselves (which may have a                      
value greater or less than the Portfolio's payment                              
obligations).  Sales of securities to meet such obligations may                 
involve the realization of capital gains, which are not exempt                  
from federal income taxes.                                                      

When the Portfolio engages in when-issued transactions, it      
relies on the seller to consummate the trade.  Failure of the                   
seller to do so may result in the Portfolio's incurring a loss                  
or missing an opportunity to obtain a price considered to be                    
advantageous.                                                                   

Municipal Leases.  Municipal leases may take the form of a      
lease or an installment purchase contract issued by state and                   
local government authorities to obtain funds to acquire a wide                  
variety of  equipment and facilities such as fire and                           
sanitation vehicles, computer equipment and other capital                       
assets.  These obligations have evolved to make it possible for                 
state and local government authorities to acquire property and                  
equipment without meeting constitutional and statutory                          
requirements for the issuance of debt.  Thus, municipal leases                  
have special risks not normally associated with Municipal                       
Obligations.  These obligations frequently contain "non-                        
appropriation" clauses providing that the governmental issuer                   
of the obligation has no obligation to make future payments                     
under the lease or contract unless money is appropriated for                    
such purposes by the legislative body on a yearly or other                      
periodic basis.  In addition to the "non-appropriation" risk,                   
municipal leases represent a type of financing that has not yet                 
developed the depth of marketability associated with Municipal                  
Obligations; moreover, although the obligations will be secured                 
by the leased equipment, the disposition of the equipment in                    
the event of foreclosure might prove difficult.                                 

To limit the risks associated with municipal leases, the        
Portfolio will invest no more than 5% of its total assets in                    
lease obligations that contain non-appropriation clauses and                    
will only purchase a non-appropriation lease obligation with                    
respect to which (1) the nature of the leased equipment or                      
other property is such that its ownership or use is reasonably                  
essential to a governmental function of the issuing                             
municipality, (2) the lease payments will begin to amortize the                 
principal balance due at an early date, resulting in an average                 
life of five years or less for the lease obligation, (3)                        
appropriate covenants will be obtained from the municipal                       
obligor prohibiting the substitution or purchase of similar                     
equipment or other property if lease payments are not                           
appropriated, (4) the lease obligor has maintained good market                  
acceptability in the past, (5) the investment is of a size that                 
will be attractive to institutional investors and (6) the                       
underlying leased equipment or other property has elements of                   
portability and/or use that enhance its marketability in the                    
event that foreclosure on the underlying equipment or other                     
property were ever required.                                                    

Municipal leases that the Portfolio may acquire will be         
both rated and unrated.  Rated leases that may be held by the                   
Portfolio include those rated investment grade at the time of                   
investment (that is, rated no lower than Baa by Moody's, BBB by                 
S&P or BBB by Fitch).  The Portfolio may acquire unrated issues                 
that Greenwich Street Advisors deems to be comparable in                        
quality to rated issues in which the Portfolio is authorized to                 
invest.  A determination by Greenwich Street Advisors that an                   
unrated lease obligation is comparable in quality to a rated                    
lease obligation will be made on the basis of, among other                      
things, a consideration of whether the nature of the leased                     
equipment or other property is such that its ownership or use                   
is reasonably essential to a governmental function of the                       
issuing municipality.  In addition, all such determinations                     
made by Greenwich Street Advisors will be subject to oversight                  
and approval by the Portfolio's Board of Directors.                             

Municipal leases held by the Portfolio will be considered       
illiquid securities unless the Portfolio's Board of Directors                   
determines on an ongoing basis that the leases are readily                      
marketable.  An unrated municipal lease with a non-                             
appropriation risk that is backed by an irrevocable bank letter                 
of credit or an insurance policy issued by a bank or insurer                    
deemed by Greenwich Street Advisors to be of high quality and                   
minimal credit risk will not be deemed to be illiquid solely                    
because the underlying municipal lease is unrated, if Greenwich                 
Street Advisors determines that the lease is readily marketable                 
because it is backed by the letter of credit or insurance                       
policy.                                                                         

Investment Restrictions                                                         

The Portfolio has adopted certain fundamental investment        
restrictions that may not be changed without the prior approval                 
of the holders of a majority of the Portfolio's outstanding                     
voting securities.  A "majority of the Portfolio's outstanding                  
voting securities" for this purpose means the lesser of (1) 67%                 
or more of the shares of the Portfolio's Common Stock present                   
at a meeting of shareholders, if the holders of 50% of the                      
outstanding shares are present or represented by proxy at the                   
meeting or (2) more than 50% of the outstanding shares.  For                    
purposes of the restrictions listed below, all percentage                       
limitations apply immediately after a purchase or initial                       
investment, and any subsequent change in applicable percentage                  
resulting from market fluctuations will not require elimination                 
of any security from the portfolio.  Under its fundamental                      
restrictions, the Portfolio may not:                                            

1.      Purchase securities other than Municipal Obligations    
and Taxable Investments as those terms are described in the                     
Prospectus and this SAI.                                                        

2.      Borrow money, except for temporary or emergency         
purposes, or for clearance of transactions, and then only in                    
amounts not exceeding 15% of its total assets (not including                    
the amount borrowed) and as otherwise described in the                          
Prospectus and this SAI.  When the Portfolio's borrowings                       
exceed 5% of the value of its total assets, the Portfolio will                  
not make any additional investments.                                            

3.      Sell securities short or purchase securities on         
margin, except for such short-term credits as are necessary for                 
the clearance of transactions, but the Portfolio may make                       
margin deposits in connection with transactions in options,                     
futures and options on futures.                                                 

4.      Underwrite any issue of securities, except to the       
extent that the purchase of Municipal Obligations may be deemed                 
to be an underwriting.                                                          

5.      Purchase, hold or deal in real estate or oil and gas    
interests, except that the Portfolio may invest in Municipal                    
Obligations secured by real estate or interests in real estate.                 

6.      Invest in commodities, except that the Portfolio may    
enter into futures contracts, including those relating to                       
indexes, and options on futures contracts or indexes, as                        
described in the Prospectus and this SAI.                                       

7.      Lend any funds or other assets except through           
purchasing Municipal Obligations or Taxable Investments,                        
lending portfolio securities and entering into repurchase                       
agreements consistent with the Portfolio's investment                           
objective.                                                                      

8.      Issue senior securities.                                

9.      Invest more than 25% of its total assets in the         
securities of issuers in any single industry, except that this                  
limitation will not be applicable to the purchase of Municipal                  
Obligations and U.S. government securities.                                     

10.     Make any investments for the purpose of exercising      
control or management of any company.                                           

Portfolio Transactions                                                          

Newly issued securities normally are purchased directly         
from the issuer or from an underwriter acting as principal.                     
Other purchases and sales usually are placed with those dealers                 
from which it appears the best price or execution will be                       
obtained; those dealers may be acting as either agents or                       
principals.  The purchase price paid by the Portfolio to                        
underwriters of newly issued securities usually includes a                      
concession paid by the issuer to the underwriter, and purchases                 
of after-market securities from dealers normally are executed                   
at a price between the bid and asked prices.  The Portfolio has                 
paid no brokerage commissions since its commencement of                         
operations.                                                                     

Allocation of transactions, including their frequency, to       
various dealers is determined by Greenwich Street Advisors in                   
its best judgment and in a manner deemed fair and reasonable to                 
shareholders.  The primary considerations are availability of                   
the desired security and the prompt execution of orders in an                   
effective manner at the most favorable prices.  Subject to                      
these considerations, dealers that provide supplemental                         
investment research and statistical or other services to                        
Greenwich Street Advisors may receive orders for portfolio                      
transactions by the Portfolio.  Information so received is in                   
addition to, and not in lieu of, services required to be                        
performed by Greenwich Street Advisors, and the fees of                         
Greenwich Street Advisors are not reduced as a consequence of                   
their receipt of such supplemental information.  Such                           
information may be useful to Greenwich Street Advisors in                       
serving both the Portfolio and other clients and, conversely,                   
supplemental information obtained by the placement of business                  
of other clients may be useful to Greenwich Street Advisors in                  
carrying out its obligations to the Portfolio.                                  

The Portfolio will not purchase Municipal Obligations           
during the existence of any underwriting or selling group                       
relating thereto of which Smith Barney    Inc. ("Smith                          
Barney")     or its affiliates are members except to the extent                 
permitted by the Securities and Exchange Commission (the                        
"SEC").  Under certain circumstances, the Portfolio may be at a                 
disadvantage because of this limitation in comparison with                      
other investment companies which have a similar investment                      
objective but which are not subject to such limitation.                         

While investment decisions for the Portfolio are made           
independently from those of the other accounts managed by                       
Greenwich Street Advisors, investments of the type the                          
Portfolio may make also may be made by those other accounts.                    
When the Portfolio and one or more other accounts managed by                    
Greenwich Street Advisors are prepared to invest in, or desire                  
to dispose of, the same security, available investments or                      
opportunities for sales will be allocated in a manner believed                  
by Greenwich Street Advisors to be equitable to each.  In some                  
cases, this procedure may adversely affect the price paid or                    
received by the Portfolio or the size of the position obtained                  
or disposed of by the Portfolio.                                                

The Portfolio's Board of Directors will review                  
periodically the commissions paid by the Portfolio to determine                 
if the commissions paid over representative periods of time                     
were reasonable in relation to the benefits inuring to the                      
Portfolio.                                                                      

Portfolio Turnover                                                              

The Portfolio's portfolio turnover rate (the lesser of          
purchases or sales of portfolio securities during the last                      
fiscal year, excluding purchases or sales of short-term                         
securities, divided by the monthly average value of portfolio                   
securities) generally is not expected to exceed 100%, but the                   
portfolio turnover rate will not be a limiting factor whenever                  
the Portfolio deems it desirable to sell or purchase                            
securities.  Securities may be sold in anticipation of a rise                   
in interest rates (market decline) or purchased in anticipation                 
of a decline in interest rates (market rise) and later sold.                    
In addition, a security may be sold and another security of                     
comparable quality may be purchased at approximately the same                   
time in order to take advantage of what the Portfolio believes                  
to be a temporary disparity in the normal yield relationship                    
between the two securities.  These yield disparities may occur                  
for reasons not directly related to the investment quality of                   
particular issues or the general movement of interest rates,                    
such as changes in the overall demand for or supply of various                  
types of tax-exempt securities.  For the fiscal years ended                     
May 31, 1994     and 1993, the Portfolio's portfolio                      
turnover rate was    72%     and 169%, respectively.                            

MANAGEMENT OF THE PORTFOLIO                                                     

The executive officers of the Portfolio are employees of        
certain of the organizations that provide services to the                       
Portfolio.  These organizations are as follows:                                 

Name                                                            Service         

Greenwich Street Advisors                                                       
Division of                                                                     
Mutual Management Corp.                                 Investment Adviser      

Smith, Barney Advisers, Inc.                                                    
("SBA")                                                 Administrator           

The Boston Company Advisors, Inc.                                               
("Boston Advisors")                                                Sub-         
Administrator                                                                   

Smith Barney        Inc.                                             Distributor

Boston Safe Deposit and Trust Company                                           
("Boston Safe")                                         Custodian               

The Shareholder Services Group, Inc.                                            
("TSSG")                                                        Transfer Agent  

These organizations and the functions they perform for the      
Portfolio are discussed in the Prospectus and this SAI.                         

Directors and Executive Officers of the Portfolio                               

The overall management of the business and affairs of the       
Portfolio is vested with its Board of Directors.  The Board of                  
Directors approves all significant agreements between the                       
Portfolio and persons or companies furnishing services to it,                   
including the Portfolio's agreements with its investment                        
adviser, administrator,    sub-administrator,     custodian and                 
transfer agent, dividend paying agent, registrar and plan                       
agent.  The day-to-day operations of the Portfolio are                          
delegated to its officers and to Greenwich Street Advisors,                     
subject always to the investment objective and policies of the                  
Portfolio and to general supervision by the Portfolio's Board                   
of Directors.                                                                   

The Directors and executive officers of the Portfolio,          
their addresses together with information as to their principal                 
business occupations during the past five years, are shown                      
below:                                                                          

Name and Address                                                                
Positions Held                                                                  
With the Fund                                                                   
Principal                                         
Occupations                                                                     
During Past 5                                 
Years                                                                           

* Heath B. McLendon                                                             
Two World Trade                                                           
Center                                                                          
New York, NY                                                              
10048                                                                           
Chairman of the                                                                 
Board                                                                           
of Directors,                                                                   
Chief                                                                           
Executive                                                                       
Officer and                                                                     
Director                                                                        
Executive Vice President of Smith                                               
Barney                                                                          
,Chairman of Smith Barney                                               
Strategy Advisers                                                               
Inc.; prior to July 1993, Senior                                                
Executive Vice President of                                                     
Shearson Lehman Brothers; Vice                                                  
Chairman of Shearson Asset                                                      
Management, a                                                                   
member of the Asset Management                                                  
Group of                                                                        
Shearson Lehman Brothers; a                                                     
Director of                                                                     
PanAgora Asset Management, Inc.                                                 
and                                                                             
PanAgora Asset Management Limited,                                              
investment advisory affiliates of                                               
Shearson                                                                        
Lehman Brothers.                                                                

Charles Barber                                                                
66 Glenwood Drive                                                         
Greenwich, CT                                                             
06830                                                                           
Director                                                                        
Consultant; formerly Chairman of                                                
the                                                                             
Board, ASARCO Incorporated.                                                     

Martin Brody                                                                  
HMK                                                                 
Associates                                                                      
Three ADP                                                                 
Boulevard                                                                       
Roseland, NJ                                                              
07068                                                                           
Director                                                                        
Vice Chairman of the Board of                                                   
Restaurant                                                                      
Associates Corp.; Director of                                                   
Jaclyn, Inc.                                                                    

Allan J. Bloostein                                                            
27 West 67th                                                              
Street                                                                          
Apt. 5FW                                                                  
New York, NY                                                              
10023                                                                           
Director                                                                        
Consultant; formerly Vice Chairman                                              
of the                                                                          
Board of Directors of May                                                       
Department                                                                      
Stores Company; Director of                                                     
Crystal                                                                         
Brands, Inc., Melville Corp., R.G.                                              
Barry                                                                           
Corp. and Hechinger Co.                                                         

Dwight B. Crane                                                               
Graduate School                                                           
of                                                                              
Business                                                                  
Administration                                                                  
Harvard                                                                   
University                                                                      
Soldiers Field                                                            
Road                                                                            
Boston, MA 02163                                                          

Director                                                                        

Professor, Graduate School of                                                   
Business                                                                        
Administration, Harvard                                                         
University; Director                                                            
of    Peer Review Analysis,                                                     
Inc.                                                                            

Robert A. Frankel                                                             
102 Grand Street                                                          
Croton-on-Hudson,                                                         
NY                                                                              
10520                                                                     

Director                                                                        

Management Consultant; formerly                                                 
Vice                                                                            
President of The Reader's Digest                                                
Association, Inc.                                                               

Name and Address                                                                
Positions Held                                                                  
With the Fund                                                                   
Principal Occupations                                                           
During Past 5 Years                                                             

Stephen J. Treadway                                                             
1345 Avenue of                                                            
the       Americas                                                              
New York, NY                                                              
10105                                                                           

President                                                                       

Executive Vice President and                                                    
Director of Smith                                                               
Barney; Director and President                                                  
of Mutual Management Corp. and                                                  
SBA; Trustee of Corporate Realty                                                
Income Trust Inc.                                                               

Richard P. Roelofs                                                              
Two World Trade                                                           
Center                                                                          
New York, NY                                                              
10048                                                                           
Executive                                                                 
Vice                                                                            
President                                                                       
Managing Director of Smith                                                      
Barney                                                                          
and President of Smith Barney                                                   
Strategy Advisers Inc.; prior to                                                
July 1993, Senior Vice President                                                
of Shearson Lehman Brothers;                                                    
Vice President of Shearson                                                      
Lehman Strategy Advisors Inc.,                                                  
an investment advisory affiliate                                                
of Shearson Lehman Brothers.                                                    

Joseph P. Deane                                                                 
Two World Trade                                                           
Center                                                                          
New York, NY                                                              
10048                                                                           
Vice President                                                                  
and                                                                             
Investment                                                                      
Officer                                                                         
Managing Director of                                              
Greenwich Street Advisors;                                                      
prior to July 1993, Senior Vice                                                 
President                                                                       
and Managing Director of                                                        
Shearson                                                                        
Lehman Advisors.                                                                

David Fare                                                                      
Two World Trade                                                           
Center                                                                          
New York, NY                                                              
10048                                                                           
Investment                                                                      
Officer                                                                         
Vice President of Greenwich                                                     
Street Advisors;                                                                
prior to July 1993, Vice                                                        
President of Shearson                                                           
Lehman Advisors.                                                                

Lewis E. Daidone                                                          
1345 Avenue of                                                            
the       Americas                                                              
New York, NY                                                              
10105                                                                           
Chief Financial                                                                 
and                                                                             
Accounting                                                                      
Officer                                                                         
and Treasurer                                                                   
Managing Director and Chief                                                     
Financial Officer of Smith                                                      
Barney; Director and Senior Vice                                                
President of Mutual Management                                                  
Corp.                                                                           

Christina T.                                                              
Sydor                                                                           
1345 Avenue of                                                            
the       Americas                                                              
New York, NY                                                              
10105                                                                           
Secretary                                                                       
Managing Director of Smith                                                      
Barney; General Counsel and                                                     
Secretary of Mutual Management                                                  
Corp.                                                                           

*   Directors who are     "Interested persons" of the Portfolio                 
(as defined in the 1940 Act)                                                    
Director and/or trustee of other registered investment                        
companies with which Smith Barney        is affiliated.                         

The Portfolio pays each of its directors who is not a           
director, officer or employee of Greenwich Street Advisors, or                  
any of its affiliates, an annual fee of $5,000 plus $500 for                    
each Board of Directors meeting attended.  In addition, the                     
Portfolio will reimburse these directors for travel and out-of-                 
pocket expenses incurred in connection with Board of Directors                  
meetings.  For the fiscal year ended May 31,    1994    , such                  
fees and expenses totaled $   35,775    .                                       

Principal Stockholders                                                          

There are no persons known to the Portfolio to be control       
persons of the Portfolio, as such term is defined in Section                    
2(a)(9) of the 1940 Act.  There is no person known to the                       
Portfolio to hold beneficially more than 5% of the outstanding                  
shares of Common Stock.  The following person is the only                       
person holding more than 5% of the    34,498,420                                
outstanding shares of Common Stock as of    August 31,                          
1994    :                                                                       

Name and Address                                                                
of Record Owner                                                                 
Amount of                                                                       
Record                                                                          
Ownership                                                                       
Percent of                                                                      
Common                                                                          
Stock                                                                           
Outstandin                                                                      
g                                                                               

Cede & Co., as Nominee for The                                                  
Depository Trust     Company                                                    
P.O. Box 20                                                                     
Bowling Green Station                                                           
New York, New York 10004                                                        
33,470,6                                                                  
65                                                                              

97%                                                                             

Approximately    30,380,499     of the shares held of           
record by Cede & Co., representing    88    % of the                            
outstanding shares of Common Stock, were held by The Depository                 
Trust Company as nominee for Smith Barney       , representing                  
accounts for which Smith Barney has discretionary and non-                      
discretionary authority.                                                        

As of    August 31, 1994    , the Directors and officers        
of the Portfolio, as a group, beneficially owned less than 1%                   
of the Portfolio's outstanding shares of Common Stock.                          

Investment Adviser -- Greenwich Street Advisors                                 
Administrator --    SBA                                                         
Sub-Administrator -- Boston Advisors                              

Greenwich Street Advisors serves as investment adviser to       
the Portfolio pursuant to a written agreement dated July 30,                    
1993 (the "Advisory Agreement"), a form of which was most                       
recently approved by the Board of Directors, including a                        
majority of those Directors who are not "interested persons" of                 
the Portfolio or Greenwich Street Advisors ("Non-Interested                     
Directors") on    September 7, 1994     and by the shareholders                 
at an Annual Meeting of the Portfolio on June 9, 1993.  Unless                  
terminated sooner, the Advisory Agreement will continue for                     
successive annual periods thereafter provided that such                         
continuance is specifically approved at least annually:  (1) by                 
a majority vote of the Non-Interested Directors cast in person                  
at a meeting called for the purpose of voting on such approval;                 
and (2)  by the Board of Directors or by a vote of a majority                   
of the outstanding shares of Common Stock.  Greenwich Street                    
Advisors is a division of Mutual Management Corp., which is in                  
turn a wholly owned subsidiary of Smith Barney    Holdings Inc.                 
("Holdings"), which is in turn a wholly owned subsidiary of The                 
Travelers Inc.      Greenwich Street Advisors pays the salary                   
of any officer or employee who is employed by both it and the                   
Portfolio. Greenwich Street Advisors bears all expenses in                      
connection with the performance of its services as investment                   
adviser.                                                                        

For services rendered to the Portfolio, Greenwich Street        
Advisors receives from the Portfolio a fee, computed and paid                   
monthly at the annual rate of .70% of the value of the                          
Portfolio's average    daily    net assets.  For the fiscal                     
years ended May 31,    1994     and 1993, such fees amounted to                 
$3,122,879     and $2,752,164, respectively.                              

Under the Advisory Agreement, Greenwich Street Advisors         
will not be liable for any error of judgment or mistake of law                  
or for any loss suffered by the Portfolio in connection with                    
the Advisory Agreement, except a loss resulting from willful                    
misfeasance, bad faith or gross negligence on the part of                       
Greenwich Street Advisors in the performance of its duties or                   
from reckless disregard of its duties and obligations under the                 
Advisory Agreement.  The Advisory Agreement is terminable by                    
vote of the Board of Directors or by the holders of a majority                  
of Common Stock, at any time without penalty, on 60 days'                       
written notice to Greenwich Street Advisors.  The Advisory                      
Agreement may also be terminated by Greenwich Street Advisors                   
on 90 days' written notice to the Portfolio.  The Advisory                      
Agreement terminates automatically upon its assignment.                         

SBA serves as administrator to the Portfolio pursuant     
to a written agreement dated June 1, 1994 (the "Administration                  
Agreement").  The services provided by SBA under the                            
Administration Agreement are described in the Prospects under                   
"Management of the Portfolio."  SBA is a  wholly owned                          
subsidiary of Holdings.                                                         

For services rendered to the Portfolio, SBA receives from       
the Portfolio a fee computed and paid monthly at the annual                     
rate of .20% of the value of the Portfolio's average daily                      
assets.  Prior to June 1, 1994, Boston Advisers served as                       
administrator to the Portfolio.  For the fiscal year ended May                  
31, 1994, SBA and/or its predecessor received $892,251 in                       
administration fees from the Portfolio.     For the fiscal year                 
ended May 31, 1993 such fees amounted to $786,333.                              

Pursuant to the Administration Agreement,    SBA     will       
exercise its best judgment in rendering its services to the                     
Portfolio.     SBA     will not be liable for any error of                      
judgment or mistake of law or for any loss suffered by the                      
Portfolio in connection with the matters to which the                           
Administration Agreement relates, except by reason of                           
SBA's     reckless disregard of its obligations and duties                
under the Administration Agreement.                                             

Boston Advisors serves as    sub-administrator     to the       
Portfolio pursuant to a written agreement dated    June 1, 1994                 
(the "Sub-Administration Agreement")    .  Boston Advisors is                   
an indirect wholly owned subsidiary of Mellon Bank Corporation.                 

Certain of the services provided to the Portfolio by            
Boston Advisors pursuant to the    Sub-Administration                           
Agreement     are described in the Prospectus under "Management                 
of the Portfolio." In addition to those services, Boston                        
Advisors pays the salaries of all officers and employees who                    
are employed by both it and the Portfolio, maintains office                     
facilities for the Portfolio, furnishes the Portfolio with                      
statistical and research data, clerical help and accounting,                    
data processing, bookkeeping, internal auditing and legal                       
services and certain other services required by the Portfolio,                  
prepares reports to the Portfolio's shareholders, and prepares                  
tax returns and reports to and filings with the SEC and state                   
blue sky authorities.  Boston Advisors bears all expenses in                    
connection with the performance of its services.                                

Boston Advisors is paid a portion of the fee paid by      
the Fund to SBA at a rate agreed upon from time to time between                 
Boston Advisors and SBA.                                                        

Each of the     Administration    and Sub-                
Administration Agreements (the "Agreements")    will continue                   
automatically for successive annual periods provided that such                  
continuance is approved at least annually by the Board of                       
Directors of the Portfolio including a majority of the Non-                     
Interested Directors, by vote cast in person at a meeting                       
called for the purpose of voting such approval.  The Agreements                 
are terminable, without penalty, upon 60 days' written notice,                  
by the Board of Directors of the Portfolio or by vote of                        
holders of a majority of the Portfolio's shares of Common                       
Stock, or upon 90 days' written notice, by    SBA and                           
Boston Advisors, respectively.                                                  

The Portfolio bears expenses incurred in its operation          
including: fees of the investment adviser and administrator;                    
taxes, interest, brokerage fees and commissions, if any; fees                   
of Directors who are not officers, directors, shareholders or                   
employees of Smith Barney        ; SEC fees and state blue sky                  
qualification fees; charges of the custodian; transfer and                      
dividend disbursing agent's fees; certain insurance premiums;                   
outside auditing and legal expenses; costs of any independent                   
pricing service; costs of maintaining corporate existence;                      
costs attributable to investor services (including allocated                    
telephone and personnel expenses); costs of preparation and                     
printing of prospectuses and statements of additional                           
information for regulatory purposes and for distribution to                     
shareholders; shareholders' reports and corporate meetings of                   
the officers, Board of Directors and shareholders of the                        
Portfolio.                                                                      

TAXES                                                                           

As described above and in the Prospectus, the Portfolio is      
designed to provide investors with current income which is                      
excluded from gross income for federal income tax purposes.                     
The Portfolio is not intended to constitute a balanced                          
investment program and is not designed for investors seeking                    
capital gains or maximum tax-exempt income irrespective of                      
fluctuations in principal.  Investment in the Portfolio would                   
not be suitable for tax-exempt institutions, qualified                          
retirement plans, H.R. 10 plans and individual retirement                       
accounts because such investors would not gain any additional                   
tax benefit from the receipt of tax-exempt income.                              

The following is a summary of selected federal income tax       
considerations that may affect the Portfolio and its                            
shareholders.  The summary is not intended as a substitute for                  
individual tax advice and investors are urged to consult their                  
own tax advisors as to the tax consequences of an investment in                 
the Portfolio.                                                                  

Taxation of the Portfolio and its Investments                                   

The Portfolio has qualified and intends to qualify as a         
"regulated investment company" under Subchapter M of the                        
Internal Revenue Code of 1986, as amended (the "Code").  In                     
addition, the Portfolio intends to satisfy conditions contained                 
in the Code that will enable interest from Municipal                            
Obligations, excluded from gross income for federal income tax                  
purposes with respect to the Portfolio, to retain that tax-                     
exempt status when distributed to the shareholders of the                       
Portfolio (that is, to be classified as "exempt-interest"                       
dividends of the Portfolio).                                                    

If it qualifies as a regulated investment company, the          
Portfolio will pay no federal income taxes on its taxable net                   
investment income (that is, taxable income other than net                       
realized capital gains) and its net realized capital gains that                 
are distributed to shareholders.  To qualify under Subchapter M                 
of the Code, the Portfolio must, among other things: (1)                        
distribute to its shareholders at least 90% of its taxable net                  
investment income (for this purpose consisting of taxable net                   
investment income and net realized short-term capital gains)                    
and 90% of its tax-exempt net investment income (reduced by                     
certain expenses); (2) derive at least 90% of its gross income                  
from dividends, interest, payments with respect to loans of                     
securities, gains from the sale or other disposition of                         
securities, or other income (including, but not limited to,                     
gains from options, futures, and forward contracts) derived                     
with respect to the Portfolio's business of investing in                        
securities; (3) derive less than 30% of its annual gross income                 
from the sale or other disposition of securities, options,                      
futures or forward contracts held for less than three months;                   
and (4) diversify its holdings so that, at the end of each                      
fiscal quarter of the Portfolio (a) at least 50% of the market                  
value of the Portfolio's assets is represented by cash, U.S.                    
government securities and other securities, with those other                    
securities limited, with respect to any one issuer, to an                       
amount no greater than 5% of the Portfolio's assets and (b) not                 
more than 25% of the market value of the Portfolio's assets is                  
invested in the securities of any one issuer (other than U.S.                   
government securities or securities of other regulated                          
investment companies) or of two or more issuers that the                        
Portfolio controls and that are determined to be in the same or                 
similar trades or businesses or related trades or businesses.                   
In meeting these requirements, the Portfolio may be restricted                  
in the selling of securities held by the Portfolio for less                     
than three months and in the utilization of certain of the                      
investment techniques described above under "Investment                         
Objective and Policies".  As a regulated investment company,                    
the Portfolio will be subject to a 4% non-deductible excise tax                 
measured with respect to certain undistributed amounts of                       
ordinary income and capital gain.  The Portfolio expects to pay                 
dividends and distributions necessary to avoid the application                  
of this excise tax.                                                             

As described above in this Statement of Additional              
Information and in the Prospectus, the Portfolio may invest in                  
financial futures contracts and options on financial futures                    
contracts that are traded on a U.S. exchange or board of trade.                 
The Portfolio anticipates that these investment activities will                 
not prevent the Portfolio from qualifying as a regulated                        
investment company.  As a general rule, these investment                        
activities will increase or decrease the amount of long-term                    
and short-term capital gains or losses realized by the                          
Portfolio and thus will affect the amount of capital gains                      
distributed to the Portfolio's shareholders.                                    

For federal income tax purposes, gain or loss on the            
futures and options described above (collectively referred to                   
as "Section 1256 Contracts") would, as a general rule, be taxed                 
pursuant to a special "mark-to-market system."  Under the mark-                 
to-market system, the Portfolio may be treated as realizing a                   
greater or lesser amount of gains or losses than actually                       
realized.  As a general rule, gain or loss on Section 1256                      
Contracts is treated as 60% long-term capital gain or loss and                  
40% short-term capital gain or loss, and as a result, the mark-                 
to-market system will generally affect the amount of capital                    
gains or losses taxable to the Portfolio and the amount of                      
distributions taxable to a shareholder.  Moreover, if the                       
Portfolio invests in both Section 1256 Contracts and offsetting                 
positions in those contracts, then the Portfolio might not be                   
able to receive the benefit of certain realized losses for an                   
indeterminate period of time.  The Portfolio expects that its                   
activities with respect to Section 1256 Contracts and                           
offsetting positions in those Contracts (1) will not cause it                   
or its shareholders to be treated as receiving a materially                     
greater amount of capital gains or distributions than actually                  
realized or received and (2) will permit it to use                              
substantially all of its losses for the fiscal years in which                   
the losses actually occur.                                                      

Taxation of the Portfolio's Shareholders                                        

The Portfolio anticipates that all dividends it pays,           
other than dividends from Taxable Investments and from income                   
or gain derived from securities transactions and from the use                   
of certain of the investment techniques described under                         
"Investment Objective and Policies" will be derived from                        
interest on Municipal Obligations and thus will be exempt-                      
interest dividends that may be excluded by shareholders from                    
their gross income for federal income tax purposes if the                       
Portfolio satisfies certain asset percentage requirements.                      
Dividends paid from the Portfolio's net investment income and                   
distributions of the Portfolio's net realized short-term                        
capital gains are taxable to shareholders of the Portfolio as                   
ordinary income, regardless of the length of time shareholders                  
have held shares of Common Stock and whether the dividends or                   
distributions are received in cash or reinvested in additional                  
shares.  As a general rule, a shareholder's gain or loss on a                   
sale of his or her shares of Common Stock will be a long-term                   
gain or loss if he or she has held his or her shares for more                   
than one year and will be a short-term capital gain or loss if                  
he or she has held his or her shares for one year or less.                      
Dividends and distributions paid by the Portfolio will not                      
qualify for the federal dividends-received deduction for                        
corporations.                                                                   

Exempt-Interest Dividends                                                       

Interest on indebtedness incurred by a shareholder to           
purchase or carry shares of Common Stock is not deductible for                  
federal income tax purposes.  If a shareholder receives exempt-                 
interest dividends with respect to any share of Common Stock                    
and if the share is held by the shareholder for six months or                   
less, then any loss on the sale of the share may, to the extent                 
of the exempt-interest dividends, be disallowed. The code may                   
also require a shareholder if he or she receives exempt-                        
interest dividends to treat as taxable income a portion of                      
certain otherwise non-taxable social security and railroad                      
retirement benefit payments.  In addition, the portion of any                   
exempt-interest dividend paid by the Portfolio that represents                  
income derived from private activity bonds held by the                          
Portfolio may not retain its tax-exempt status in the hands of                  
a shareholder who is a "substantial user" of a facility                         
financed by the bonds, or a "related person" of the substantial                 
user.  Although the Portfolio's exempt-interest dividends may                   
be excluded by shareholders from their gross income for federal                 
income tax purposes (1) some or all of the Portfolio's exempt-                  
interest dividends may be a specific preference item, or a                      
component of an adjustment item, for purposes of the federal                    
individual and corporate alternative minimum taxes and (2) the                  
receipt of dividends and distributions from the Portfolio may                   
affect a corporate shareholder's federal "environmental" tax                    
liability.  The receipt of dividends and distributions from the                 
Portfolio may affect a foreign corporate shareholder's federal                  
"branch profits" tax liability and a corporate shareholder's                    
federal "excess net passive income" tax liability.                              
Shareholders should consult their own tax advisors to determine                 
whether they are (1) "substantial users" with respect to a                      
facility or "related" to those users within the meaning of the                  
Code or (2) subject to a federal alternative minimum tax, the                   
federal "environmental" tax, the federal "branch profits" tax,                  
or the federal "excess net passive income" tax.                                 

Dividend Reinvestment Plan                                                      

A shareholder of the Portfolio receiving dividends or           
distributions in additional shares pursuant to the Plan should                  
be treated for federal income tax purposes as receiving a                       
distribution in an amount equal to the amount of money that a                   
shareholder receiving cash dividends or distributions receives,                 
and should have a cost basis in the shares received equal to                    
that amount.                                                                    

Statements and Notices                                                          

Statements as to the tax status of the dividends and            
distributions received by shareholders of the Portfolio are                     
mailed annually.  These statements show the dollar amount of                    
income excluded from federal income taxes and the dollar                        
amount, if any, subject to federal income taxes.  The                           
statements will also designate the amount of exempt-interest                    
dividends that are a specific preference item for purposes of                   
the federal individual and corporate alternative minimum taxes                  
and will indicate the shareholder's share of the investment                     
expenses of the Portfolio.  The Portfolio will notify                           
shareholders annually as to the interest excluded from federal                  
income taxes earned by the Portfolio with respect to those                      
states and possessions in which the Portfolio has or had                        
investments.  The dollar amount of dividends paid by the                        
Portfolio that is excluded from federal income taxation and the                 
dollar amount of dividends paid by the Portfolio that is                        
subject to federal income taxation, if any, will vary for each                  
shareholder depending upon the size and duration of the                         
shareholder's investment in the Portfolio.  To the extent that                  
the Portfolio earns taxable net investment income, it intends                   
to designate as taxable dividends the same percentage of each                   
day's dividend as its taxable net investment income bears to                    
its total net investment income earned on that day.  Therefore,                 
the percentage of each day's dividend designated as taxable, if                 
any, may vary from day to day.                                                  

Backup Withholding                                                              

If a shareholder fails to furnish a correct taxpayer            
identification number, fails to report fully dividend or                        
interest income, or fails to certify that he has provided a                     
correct taxpayer identification number and that he is not                       
subject to "backup withholding," the shareholder may be subject                 
to a 20% "backup withholding" tax with respect to (1) taxable                   
dividends and distributions and (2) the proceeds of any sales                   
or repurchases of shares of Common Stock.  An individual's                      
taxpayer identification number is his social security number.                   
The 20% backup withholding tax is not an additional tax and may                 
be credited against a taxpayer's federal income tax liability.                  

STOCK PURCHASES AND TENDERS                                                     

The Portfolio may repurchase shares of its Common Stock in      
the open market or in privately negotiated transactions when                    
the Portfolio can do so at prices below their then current net                  
asset value per share on terms that the Portfolio's Board of                    
Directors believes represent a favorable investment                             
opportunity.  In addition, the Board of Directors currently                     
intends to consider, at least once a year, making an offer to                   
each shareholder of record to purchase at net asset value                       
shares of Common Stock owned by the shareholder.                                

No assurance can be given that repurchases and/or tenders       
will result in the Portfolio's shares trading at a price that                   
is equal to their net asset value.  The market prices of the                    
Portfolio shares will, among other things, be determined by the                 
relative demand for and supply of the shares in the market, the                 
Portfolio's investment performance, the Portfolio's dividends                   
and yield and investor perception of the Portfolio's overall                    
attractiveness as an investment as compared with other                          
investment alternatives.  The Portfolio's acquisition of Common                 
Stock will decrease the total assets of the Portfolio and                       
therefore have the effect of increasing the Portfolio's expense                 
ratio.  The Portfolio may borrow money to finance the                           
repurchase of shares subject to the limitations described in                    
the Prospectus.  Any interest on the borrowings will reduce the                 
Portfolio's net income.  Because of the nature of the                           
Portfolio's investment objective, policies and securities                       
holdings, Greenwich Street Advisors does not anticipate that                    
repurchases and tenders will have an adverse effect on the                      
Portfolio's investment performance and does not anticipate any                  
material difficulty in disposing of  securities to consummate                   
Common Stock repurchases and tenders.                                           

When a tender offer is authorized to be made by the             
Portfolio's Board of Directors, it will be an offer to purchase                 
at a price equal to the net asset value of all (but not less                    
than all) of the shares owned by the shareholder (or attributed                 
to him for federal income tax purposes under Section 38 of the                  
Code).  A shareholder who tenders all shares owned or                           
considered owned by him or her, as required, will realize a                     
taxable gain or loss depending upon his or her basis in his or                  
her shares.                                                                     

If the Portfolio liquidates  securities in order to             
repurchase shares of Common Stock, the Portfolio may realize                    
gains and losses.  These gains, if any, may be realized on                      
securities held for less than three months.  Because the                        
Portfolio must derive less that 30% of its gross income for any                 
taxable year from the sale or disposition of stock and                          
securities held less than three months (in order to retain the                  
Portfolio's regulated investment company status under the                       
Code), gains realized by the Portfolio due to a liquidation of                  
securities held for less than three months would reduce the                     
amount of gain on sale of other securities held for less than                   
three months that the Portfolio could realize in the ordinary                   
course of its portfolio management, which may adversely affect                  
the Portfolio's performance.  The portfolio turnover rate of                    
the Portfolio may or may not be affected by the Portfolio's                     
repurchases of shares of Common Stock pursuant to a tender                      
offer.                                                                          

ADDITIONAL INFORMATION                                                          

Legal Matters                                                                   

Willkie Farr & Gallagher serves as legal counsel to the         
Portfolio.  The Directors who are not "interested persons" of                   
the Portfolio have selected Stroock & Stroock & Lavan as their                  
counsel.                                                                        

Independent Public Accountants                                                  

Coopers & Lybrand    L.L.P.    , independent accountants,       
One Post Office Square, Boston, Massachusetts 02110, serve as                   
auditors of the Portfolio and render an opinion on the                          
Portfolio's financial statements annually.                                      

Custodian and Transfer Agent                                                    

Boston Safe, an indirect wholly owned subsidiary of Mellon      
and an affiliate of Boston Advisors, is located at One Boston                   
Place, Boston, Massachusetts 02108, and serves as the                           
Portfolio's custodian pursuant to a custody agreement.  Under                   
the custody agreement, Boston Safe holds the Portfolio's                        
securities and keeps all necessary accounts and records.  The                   
assets of the Portfolio are held under bank custodianship in                    
compliance with the 1940 Act.                                                   

TSSG, a subsidiary of First Data Corporation, is located        
at Exchange Place, Boston, Massachusetts 02109, and pursuant to                 
a transfer agency agreement serves as the Portfolio's transfer                  
agent.   Under the transfer agency agreement, TSSG maintains                    
the shareholder account records for the Portfolio, handles                      
certain communications between shareholders and the Portfolio,                  
and distributes dividends and distributions payable by the                      
Portfolio.                                                                      

FINANCIAL STATEMENTS                                                            

The Portfolio sends unaudited semi-annual and audited           
annual financial statements of the Portfolio to shareholders,                   
including a list of the investments held by the Portfolio.                      

The Portfolio's Annual Report for the fiscal year ended         
May 31,    1994     is incorporated into this Statement of                      
Additional Information by reference in its entirety.  A copy of                 
the Annual Report may be obtained from any Smith Barney                         
Financial Consultant or by calling or writing to the              
Portfolio at the telephone number or address set forth on the                   
cover page of this Statement of Additional Information.                         

APPENDIX                                                                        

DESCRIPTION OF MOODY'S, S&P AND FITCH RATINGS                                   

Description of Moody's Municipal Bond Ratings:                                  

Aaa  -  Bonds that are rated Aaa are judged to be of the        
best quality, carry the smallest degree of investment risk and                  
are generally referred to as "gilt edge."  Interest payments                    
with respect to these bonds are protected by a large or by an                   
exceptionally stable margin, and principal is secure.  Although                 
the various protective elements applicable to these bonds are                   
likely to change, those changes are most unlikely to impair the                 
fundamentally strong position of these bonds.                                   

Aa  -  Bonds that are rated Aa are judged to be of high         
quality by all standards and together with the Aaa group                        
comprise what are generally known as high grade bonds.  They                    
are rated lower than the best bonds because margins of                          
protection may not be as large as in Aaa securities, or                         
fluctuation of protective elements may be of greater amplitude,                 
or other elements may be present that make the long-term risks                  
appear somewhat larger than in Aaa securities.                                  

A  -  Bonds that are rated A possess many favorable             
investment attributes and are to be considered as upper medium                  
grade obligations.  Factors giving security to principal and                    
interest with respect to these bonds are considered adequate,                   
but elements may be present that suggest a susceptibility to                    
impairment sometime in the future.                                              

Baa  -  Bonds rated Baa are considered to be medium grade       
obligations, that is they are neither highly protected nor                      
poorly secured.  Interest payment and principal security appear                 
adequate for the present but certain protective elements may be                 
lacking or may be characteristically unreliable over any great                  
length of time.  These bonds lack outstanding investment                        
characteristics and may have speculative characteristics as                     
well.                                                                           

Moody's applies the numerical modifiers 1, 2 and 3 in each      
generic rating classification from Aa through B.  The modifier                  
1 indicates that the security ranks in the higher end of its                    
generic rating category; the modifier 2 indicates a mid-range                   
ranking; and the modifier 3 indicates that the issue ranks in                   
the lower end of its generic rating category.                                   

Description of Moody's Municipal Note Ratings:                                  

Moody's ratings for state and municipal notes and other         
short-term loans are designated Moody's Investment Grade (MIG)                  
and for variable demand obligations are designated Variable                     
Moody's Investment Grade (VMIG).  This distinction recognizes                   
the differences between short- and long-term credit risk.                       
Loans bearing the designation MIG 1/VMIG 1 are of the best                      
quality, enjoying strong protection from established cash flows                 
of funds for their servicing or from established and broad-                     
based access to the market for refinancing, or both.  Loans                     
bearing the designation MIG 2/VMIG 2 are of high quality, with                  
margins of protection ample, although not as large as the                       
preceding group.  Loans bearing the designation MIG3/VMIG 3 are                 
of favorable quality, with all security elements accounted for                  
but lacking the undeniable strength of the preceding grades.                    
Market access for refinancing, in particular, is likely to be                   
less well established.                                                          

Description of Moody's Commercial Paper Ratings:                                

The rating Prime-1 is the highest commercial paper rating       
assigned by Moody's.  Issuers rated Prime-1 (or related                         
supporting institutions) are considered to have a superior                      
capacity for repayment of short-term promissory obligations.                    
Issuers rated Prime-2 (or related supporting institutions) are                  
considered to have a strong capacity for repayment of short-                    
term promissory obligations, normally evidenced by many of the                  
characteristics of issuers rated Prime-1 but to a lesser                        
degree.  Earnings trends and coverage ratios, while sound, will                 
be more subject to variation.  Capitalization characteristics,                  
while still appropriate, may be more affected by external                       
conditions.  Ample alternative liquidity is maintained.                         

Description of S&P Municipal Bond Ratings:                                      

AAA  -  These bonds are the obligations of the highest          
quality and have the strongest capacity for timely payment of                   
debt service.                                                                   

General Obligation Bonds Rated AAA  -  In a period of           
economic stress, the issuers of these bonds will suffer the                     
smallest declines in income and will be least susceptible to                    
autonomous decline.  Debt burden is moderate.  A strong revenue                 
structure appears more than adequate to meet future expenditure                 
requirements.  Quality of management appears superior.                          

Revenue Bonds Rated A  -  Debt service coverage with            
respect to these bonds has been, and is expected to remain,                     
substantial.  Stability of the pledged revenues is also                         
exceptionally strong due to the competitive position of the                     
municipal enterprise or to the nature of the revenues.  Basic                   
security provisions (including rate covenant, earnings test for                 
issuance of additional bonds, debt service reserve                              
requirements) are rigorous.  There is evidence of superior                      
management.                                                                     

AA  -  The investment characteristics of bonds in this          
group are only slightly less marked than those of the prime                     
quality issues.  Bonds rated AA have the second strongest                       
capacity for payment of debt service.                                           

A  -  Principal and interest payments on bonds in this          
category are regarded as safe although the bonds are somewhat                   
more susceptible to the adverse effects of changes in                           
circumstances and economic conditions than bonds in high rated                  
categories.  This rating describes the third strongest capacity                 
for payment of debt service.                                                    

General Obligation Bonds Rated A  -  There is some              
weakness, either in the local economic base, in debt burden, in                 
the balance between revenues and expenditures, or in quality of                 
management.  Under certain adverse circumstances, any one such                  
weakness might impair the ability of the issuer to meet debt                    
obligations at some future date.                                                

Revenue Bonds Rated A  -  Debt service coverage is good,        
but not exceptional.  Stability of the pledged revenues could                   
show some variations because of increased competition or                        
economic influences on revenues.  Basic security provisions,                    
while satisfactory, are less stringent.  Management performance                 
appears adequate.                                                               

BBB  -  The bonds in this group are regarded as having an       
adequate capacity to pay interest and repay principal.  Whereas                 
bonds in this group normally exhibit adequate protection                        
parameters, adverse economic conditions or changing                             
circumstances are more likely to lead to a weakened capacity to                 
pay interest and repay principal for debt in this category than                 
in higher rated categories.  Bonds rated BBB have the fourth                    
strongest capacity for payment of debt service.                                 

S&P's letter ratings may be modified by the addition of a       
plus or a minus sign, which is used to show relative standing                   
within the major rating categories, except in the AAA category.                 

Description of S&P Municipal Note Ratings:                                      

Municipal notes with maturities of three years or less are      
usually given note ratings (designated SP-1, -2 or -3) to                       
distinguish more clearly the credit quality of notes as                         
compared to bonds.   Notes rated SP-1 have a very strong or                     
strong capacity to pay principal and interest.  Those issues                    
determined to possess overwhelming safety characteristics are                   
given the designation of SP-1+.  Notes rated SP-2 have a                        
satisfactory capacity to pay principal and interest.                            

Description of S&P Commercial Paper Ratings:                                    

Commercial paper rated A-1 by S&P indicates that the            
degree of safety regarding timely payment is either                             
overwhelming or very strong.  Those issues determined to                        
possess overwhelming safety characteristics are denoted A-1+.                   
Capacity for timely payment on commercial paper rated A-2 is                    
strong, but the relative degree of safety is not as high as                     
issues designated A-1.                                                          

Description of Fitch Municipal Bond Ratings:                                    

AAA  -  Bonds rated AAA by Fitch are considered to be           
investment grade and of the highest credit quality.  The                        
obligor has an exceptionally strong ability to pay interest and                 
repay principal, which is unlikely to be affected by reasonably                 
foreseeable events.                                                             

AA  -  Bonds rated AA by Fitch are considered to be             
investment grade and of very high credit quality.  The                          
obligor's ability to pay interest and repay principal is very                   
strong, although not quite as strong as bonds rated AAA.                        
Because bonds rated in the AAA and AA categories are not                        
significantly vulnerable to foreseeable future developments,                    
short-term debt of these issues is generally rated F1+ by                       
Fitch.                                                                          

A  -  Bonds rated A by Fitch are considered to be               
investment grade and of high credit quality.  The obligor's                     
ability to pay interest and repay principal is considered to be                 
strong, but may be more vulnerable to adverse changes in                        
economic conditions and circumstances than bonds with higher                    
ratings.                                                                        

BBB  -  Bonds rated BBB by Fitch are considered to be           
investment grade and of satisfactory credit quality.  The                       
obligor's ability to pay interest and repay principal is                        
considered to be adequate.  Adverse changes in economic                         
conditions and circumstances, however, are more likely to have                  
adverse consequences on these bonds, and therefore impair                       
timely payment.  The likelihood that the ratings of these bonds                 
will fall below investment grade is higher than for bonds with                  
higher ratings.                                                                 

Plus and minus signs are used by Fitch to indicate the          
relative position of a credit within a rating category.  Plus                   
and minus signs, however, are not used in the AAA category.                     

Description of Fitch Short-Term Ratings                                         

Fitch's short-term ratings apply to debt obligations that       
are payable on demand or have original maturities of generally                  
up to three years, including commercial paper, certificates of                  
deposit, medium-term notes, and municipal and investment notes.                 

The short-term rating places greater emphasis than a long-      
term rating on the existence of liquidity necessary to meet the                 
issuer's obligations in a timely manner.                                        

Fitch's short-term ratings are as follows:                      

F-1+  -  Issues assigned this rating are regarded as            
having the strongest degree of assurance for timely payment.                    

F-1  -  Issues assigned this rating reflect an assurance        
of timely payment only slightly less in degree than issues                      
rated F-1+.                                                                     

F-2  -  Issues assigned this rating have a satisfactory         
degree of assurance for timely payment but the margin of safety                 
is not as great as for issues assigned F-1+ and F-1 ratings.                    

F-3  -  Issues assigned this rating have characteristics        
suggesting that the degree of assurance for timely payment is                   
adequate, although near-term adverse changes could cause these                  
securities to be rated below investment grade.                                  

LOC  -  The symbol LOC indicates that the rating is based       
on a letter of credit issued by a commercial bank.                              

PART C - OTHER INFORMATION                                                      

Item 24. Financial Statements and Exhibits                                      

(1)     Financial Statements:                                   

- Included in Part A:                           

          *     Financial Highlights

- Included in Part B:           

                               *        The Registrant's Annual Report for the
fiscal year ended May                           31, 1994 and Report of          
Independent Accountants dated July 13,                                  1994 are
incorporated by reference to the Definitive 30(b)2-1                            
filed on August 2, 1994 as Accession # 0000053798-94-           
000381.                         

(2)     Exhibits:                               

          (a)     (i)     Articles of Incorporation*

                            (ii)    Articles of Amendment to Articles of
Incorporation*                                                                  

     (b)     (i)     Bylaws of Registrant*

                     (ii)    Amended Bylaws of Registrant*

(c)     Not Applicable          

                       (d)     Specimen Certificate of Common Stock, par value
$.01 per share*                                                                 

                   (e)     Dividend Reinvestment Plan is filed herein.

(f)     Not Applicable          

(g)     (i)     Form of Investment Advisory Agreement between Registrant and    
Shearson Lehman Advisors*                                       

    (ii)    Form of Investment Advisory Agreement between Registrant and
Greenwich Street Advisors   ****                                

(h)     Form of Underwriting Agreement between Registrant and Shearson Lehman   
Brothers Inc.**                                                                 

(i)     Not Applicable                                                          

(j)     Form of Custody Agreement between Registrant and Boston Safe Deposit    
and Trust  Company*                                                             

(k)     (i)     Transfer Agency and Registrar Agreement between Registrant   and
TSSG***                                                                         

(ii)    Administration Agreement between Registrant and         
SBA to be filed by Amendment            

(iii)      Sub-administration Agreement between Registrant and  
Boston Advisors to be filed by Amendment                        

(l)         Not Applicable                                                      

(m)     Not Applicable                                                          

(n)     Consent of Independent Auditors is filed herein.                        

(o)     Not Applicable                                                          

(p)     Purchase Agreement between Registrant and Shearson Lehman               
Brothers Inc.*                                                  

(q)     Not Applicable                                                          

(r)     Not Applicable                                                          

________________________________________                                        
*    Incorporated by reference to the Registrant's Pre-Effective Amendment No. 1
to its initial Registration Statement on Form N-2, Registration No. 33-47116,   
filed with the SEC on May 14, 1992.                                             

**   Incorporated by reference to the Registrant's Pre-Effective Amendment No. 3
to its Registration Statement on Form N-2, Registration No. 33-47116, filed with
the SEC on June 18, 1992.                                                       

***   Incorporated by reference to the Registrant's Post-Effective Amendment No.
4 to its Registration Statement on Form N-2, Registration No. 33-47116,         
filed with the SEC on August 4, 1993.                                         

**** Incorporated by reference to the Registrant's Post-Effective         
Amendment No. 5 to its Registration Statement on Form N-2, Registration No. 33- 
47116, filed with the SEC on October 14, 1993.                                  

Item 25.        Marketing Arrangements                                          

None                                                            

Item 26.        Other Expenses of Issuance and Distribution                     

The following table sets forth the expenses to be incurred in   
connection with the offering described in this Registration Statement:          

Securities and Exchange Commission Fees               $100                      
Printing and Engraving Expenses      45,000                                     
Legal Fees                 0                                                    
Accounting Expenses                0                                            
Miscellaneous Expenses             0                                            

Item 27.        Persons Controlled by or Under Common Control                   

None                            

Item 28.        Number of Holders of Securities                                 

                                                                       Number of
                                                                      Record
                                                                    Stockholders
                                                                     as of
Title of Class                                                     September 16,
1994                                                                            

Shares of Common Stock, par value                                               
$0.01 per share                 723                                       

Item 29.        Indemnification                                                 

     Under Article VII of Registrant's Articles of Incorporation, any past
or present director or officer of Registrant is indemnified to the fullest      
extent permitted by law against liability and all expenses reasonably           
incurred by him in connection with any action, suit or proceeding to which      
he may be a party or otherwise involved by reason or his being or having        
been a director or officer of Registrant.  This provision does not              
authorize indemnification when it is determined that the director or            
officer would otherwise be liable to Registrant or its shareholders by          
reason of willful misfeasance, bad faith, gross negligence or reckless          
disregard of his duties.  Expenses may be paid by Registrant in advance of      
the final disposition of any action, suit or proceeding upon receipt of an      
undertaking by a director or officer to repay those expenses to Registrant      
in the event that it is ultimately determined that indemnification of the       
expenses is not authorized under Registrant's Articles of Incorporation.        

     Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to             
directors, officers and controlling persons of Registrant pursuant to the       
foregoing provisions, or otherwise, Registrant has been advised that in the     
opinion of the Securities and Exchange Commission, such indemnification is      
against policy as expressed in the Securities Act and is, therefore,            
unenforceable.  In the event that a claim for indemnification against such      
liabilities (other than the payment by Registrant of expenses incurred or       
paid by a director, officer or controlling person of Registrant in the          
successful defense of any action, suit or proceeding) is asserted by such       
director, officer or controlling person in connection with the securities       
being registered, Registrant will, unless in the opinion of its counsel the     
matter has been settled by controlling precedent, submit to a court of          
appropriate jurisdiction the question whether such indemnification by it is     
against public policy as expressed in the Securities Act and will be            
governed by the final adjudication of such issue.                               

Item 30.        Business and Other Connections of Investment Adviser            

See "Management of the Portfolio" in the Prospectus.            

Mutual Management Corp. ("MMC"), a New York corporation, is a   
registered investment adviser and is wholly owned by Smith Barney Inc.,         
which in turn is wholly owned by     The Travelers Inc.     .  MMC is           
primarily engaged in the investment advisory business.  Information as to       
executive officers and directors of MMC is included in its Form ADV filed       
with the SEC (Registration number 801-14437) and is incorporated herein by      
reference.                                                                      

Item 31.        Location of Accounts and Records                                

Greenwich Street Advisors                                 
Two World Trade Center                                          
New York, New York 10048                                        

Smith, Barney Advisers, Inc.                                    
1345 Avenue of the Americas                                     
New York, New York 10105                                        

The Boston Company Advisors, Inc.                               
One Exchange Place                                              
Boston, Massachusetts 02109.                                    

The Shareholder Services Group, Inc.                            
One Exchange Place                                              
Boston, Massachusetts 02109                                     

Boston Safe Deposit and Trust Company                           
Wellington Business Center                                      
One Cabot Road                                                  
Medford, Massachusetts 02155                                    

Managed Municipals Portfolio Inc.                               
Two World Trade Center                                          
New York, New York  10048                                       

Item 32.        Management Services                                             

None                                            

Item    33.     Undertakings                                                    

1.      Not Applicable                                          

2.      Not Applicable                                          

3.      Not Applicable                                          

4.      The Portfolio hereby undertakes:                                        

(a)     To file, during any period in which offers or sales are being made, a   
post-effective amendment to this Registration Statement:                        

(1)     to include any prospectus required by Section 10(a)(3) of the           
Securities Act of 1933 (the "Act");                                             

(2)     to reflect in the Prospectus any facts or events arising after the      
effective date of the Registration Statement (or the most recent post-          
effective amendment thereof) which, individually or in the aggregate,           
represent a fundamental change in the information set forth in the              
Registration Statement; and                                                     

(3)     to include any material information with respect to the plan of         
distribution not previously disclosed in the Registration Statement or any      
material change to such information in the Registration Statement.              

(b)     For the purpose of determining any liability under the Act, each        
post-effective amendment shall be deemed to be a new Registration Statement     
relating to the securities offered therein, and the offering of such            
securities at that time shall be deemed to be the initial bona fide             
offering thereof.                                                               

(c)     Not Applicable                                                          

5.      The Fund hereby undertakes:                                             

(a)        Not Applicable                                                       

(b)     for the purposes of determining any liability under the Act, each       
post-effective amendment that contains a form of Prospectus shall be deemed     
to be a new Registration Statement relating to the securities offered           
therein and the offering of the securities at that time shall be deemed to      
be the initial bona fide offering thereof.                                      

6.      The Portfolio undertakes to send by first class mail or other means     
designed to ensure equally prompt delivery, within two business days of         
receipt of a written or oral request, any Statement of Additional               
Information.                                                                    

SIGNATURES                                                                      

Pursuant to the requirements of the Securities Act of 1933, as  
amended, and the Investment Company Act of 1940, as amended, the                
Registrant, MANAGED MUNICIPALS PORTFOLIO INC., has duly caused this             
Amendment to the Registration Statement on Form N-2 to be signed on its         
behalf by the undersigned, thereunto duly authorized, all in the City of        
New York, State of New York on the 23rd day of September, 1994.                 

                                 MANAGED MUNICIPALS PORTFOLIO INC.

                         By: /s/ Heath B. McLendon
                             Heath B. McLendon
                                   Chief Executive Officer

     We, the undersigned, hereby severally constitute and appoint Heath B.
McLendon, Francis J. McNamara, III and Lee D. Augsburger, and each of them      
singly, our true and lawful attorneys, with full power to them, to sign for     
us, and in our hands and in the capacities indicated below, any and all         
Post-Effective Amendments to this Registration Statement and to file the        
same, with all exhibits thereto, and other documents therewith, with the        
Securities and Exchange Commission, granting unto said attorneys, and each      
of them, acting alone, full power to do and perform each and every act and      
thing requisite or necessary to be done in the premises, as fully to all        
intents and purposes as he might or could do in person, hereby ratifying        
and confirming all that said attorneys or any of them may lawfully do or        
cause to be done by virtue thereof.                                             

WITNESS our hands on the date set forth below.                                  

Pursuant to the requirements of the Securities Act of 1933, as  
amended, this Amendment to the Registration Statement and the above Power       
of Attorney has been signed below by the following persons in the               
capacities and on the dates indicated.                                          

Signature                               Title                               Date

/s/ Heath B. McLendon                                                         
Heath B. McLendon                        Chairman of the Board          9/23/94 
                         Chief Executive Officer

Signature                                       Title                       Date

/s/ Lewis E. Daidone                                                            
Lewis E. Daidone                              Treasurer (Chief Financial 9/23/94
                                                       and Accounting Officer)

/s/ Charles F. Barber                                                           
Charles F. Barber                               Director                 9/23/94

/s/ Allan J. Bloostein                                                          
Allan J. Bloostein                              Director                 9/23/94

/s/ Martin Brody                                                                
Martin Brody                                    Director                 9/23/94

/s/ Dwight B. Crane                                                             
Dwight B. Crane                         Director                        9/23/94 

/s/ Robert A. Frankel                                                           
Robert A. Frankel                               Director                 9/23/94

C-6                                                                             
Shearson/Funds/mmu/partc.doc                                                    

g:/shared/domestic/clients/shearson/funds/mmu/partc.doc                         

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘POS AMI’ Filing		Date		First		Last			Other Filings
		9/28/94		1		33
Filed on:		9/27/94
		9/16/94		33
		9/7/94		33
		8/31/94		18		33			N-30B-2
		8/2/94		33					N-30B-2
		7/31/94		6		20
		7/13/94		11		33
		6/1/94		33
		5/31/94		11		33			DEF 14A,  N-30B-2,  NSAR-B
		10/14/93		33
		8/4/93		33
		7/30/93		33
		6/9/93		33
		5/31/93		33
		6/26/92		11		18
		6/18/92		4		33
		5/14/92		33
		4/9/92		12
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