Oppenheimer Intermediate Municipal Fund
Supplement dated April 29, 1998
to the Prospectus dated January 26, 1998
The Prospectus is amended as follows:
1. The following is added at the end of the paragraph captioned "A Brief
Overview of the Fund - What Does the Fund Invest In?" on page 5:
As a matter of non-fundamental policy, the Fund anticipates that under
normal market circumstances (when the financial markets are not in an
unstable or volatile period), it will maintain a portfolio duration of more
than 4.5 but no more than 8.0. Duration is a volatility measure that
differs from maturity. Portfolio duration is explained in "Investment
Policies and Strategies - What Does the Duration of the Fund's Portfolio
Mean?".
2. The paragraph captioned "A Brief Overview of the Fund - How Risky is the
Fund?" on page 6 is deleted and replaced with the following:
o HOW RISKY IS THE FUND? All investments carry risks to some degree. The
Fund's investments in Municipal Securities are subject to changes in their
value from a number of factors such as changes in general bond market
movements, the change in value of particular securities because of an event
affecting the issuer, or changes in interest rates. The magnitude of these
fluctuations will often be greater for longer-duration debt securities. See
"Investment Policies and Strategies - What Does the Duration of the Fund's
Portfolio Mean?" These changes affect the value of the Fund's investments
and its price per share. In the OppenheimerFunds spectrum, the Fund is
generally more conservative than high yield bond funds, but more risky than
money market funds. While the Manager tries to reduce risks by seeking to
limit the Fund's duration, by diversifying investments, by carefully
researching securities before they are purchased for the portfolio, and in
some cases by using hedging techniques, there is no guarantee of success in
achieving the Fund's objectives and your shares may be worth more or less
than their original cost when you redeem them. Please refer to "Investment
Risks" starting on page 12 for a more complete discussion.
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3. The second paragraph under the caption "Investment Policies and Strategies"
on page 11 is deleted and replaced with the following:
Under normal market conditions, at least 80% of the Fund's total
assets will be invested in investment-grade Municipal Securities,with no
more than 20% of the Fund's total assets invested in taxable investments.
However, for temporary defensive purposes, the Fund may invest up to 100%
of its total assets in taxable certificates of deposit and commercial paper
and taxable or tax-exempt money market instruments. The Fund may purchase
Municipal Securities on a "when-issued" basis and may purchase or sell
Municipal Securities on a "delayed delivery" basis.
4. The following is inserted immediately preceding the caption "Can the Fund's
Investment
Objective and Policies Change?" on page 11:
o WHAT DOES THE "DURATION" OF THE FUND'S PORTFOLIO MEAN? The Fund
anticipates that under normal market conditions, it will maintain a
duration of more than 4.5 but not more than 8.0. The Fund measures its
portfolio duration on a "dollar-weighted" basis. Duration refers to the
expected percentage change in the value of a bond resulting from a change
in general interest rates (measured by each 1% change in the rates on U.S.
Treasury securities). For example, if a bond has a duration of 3, a 1%
increase in general interest rates would be expected to cause the bond to
decline in value by about 3%. Duration is a measure of portfolio
volatility, and is one of the basic tools used by the Manager in selecting
securities for the Fund's portfolio. The Fund may invest in individual debt
securities of any duration.
HOWEVER, THE CALCULATION OF A BOND'S DURATION (OR THE DURATION OF THE
ENTIRE PORTFOLIO OF BONDS, IN THE CASE OF THE FUND) CANNOT BE RELIED ON AS
AN EXACT PREDICTION OF FUTURE VOLATILITY. Duration is calculated by using a
number of variables, including a bond's coupon interest payments, final
maturity and call features and assumptions based on the historical call
activity of similar bonds. All other factors being equal, the lower the
stated or coupon rate of interest of a debt security, the longer the
duration of the security; conversely, the higher the stated or coupon rate
of interest of a debt security, the shorter the duration of the security.
In addition, generally securities of longer duration are subject to greater
price fluctuations due to changes in interest rates.
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5. The second paragraph under "Interest Rate Risk" on page 13 is deleted and
replaced with the following:
Generally, securities of longer duration are subject to greater price
fluctuations due to changes in interest rates. There are no restrictions on
the duration of individual debt securities in which the Fund may invest. The
Fund will seek to invest in Municipal Securities that, in the judgment of the
Manager, will provide a high level of current income consistent with the
Fund's liquidity requirements and conditions affecting the Municipal
Securities market.
April 29, 1998 PS0860.008
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