<PAGE> 1
[PHOTO]
OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND (R)
Semiannual Report February 28, 1997
"We want
investment
income
that won't
add to
our taxes."
[OPPENHEIMERFUNDS LOGO]
<PAGE> 2
THIS FUND IS FOR CALIFORNIA RESIDENTS WHO NEED INCOME THAT'S EXEMPT FROM INCOME
TAX.
YIELD
STANDARDIZED YIELDS
For the 30 Days Ended 2/28/97:(4)
Class A
4.82%
Class B
4.03%
THE FUND'S CLASS A SHARES ARE RANKED **** AMONG 1,237 (3-YEAR) AND 601 (5-YEAR)
MUNICIPAL BOND FUNDS FOR THE COMBINED 3- AND 5-YEAR PERIODS ENDED 3/31/97 BY
MORNINGSTAR MUTUAL FUNDS.(5)
HOW YOUR FUND IS MANAGED
Oppenheimer Main Street California Municipal Fund invests in a portfolio with a
range of California municipal bonds. As a Fund shareholder, you receive income
that is free from federal and California income taxes.1 Your dividends don't
increase your taxable income the way taxable investments do, so you can keep
more of what you earn.
PERFORMANCE
Cumulative total returns for the six months ended 2/28/97 were 5.54% for Class
A shares and 5.10% for Class B shares, without deducting sales charges.(2)
Your Fund's average annual total returns for Class A shares for the 1-
and 5-year periods ended 3/31/97 and since inception on 5/18/90 were 1.11%,
6.20% and 7.05%, respectively. For Class B shares, average annual total returns
for the 1-year period ended 3/31/97 and since inception on 10/29/93 were 0.08%
and 2.81%, respectively.(3)
OUTLOOK
"We remain optimistic and, given current market conditions, we believe that
municipal bond investments offer a good value."
Jerry Webman, Portfolio Manager
February 28, 1997
Total returns include change in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. For more complete
information, please review the prospectus carefully before you invest.
1. A portion of the distributions paid by the Fund may be subject to federal
and state income taxes. For investors subject to federal and/or state
alternative minimum tax (AMT), the Fund's distributions may increase this tax.
Capital gains distributions, if any, are taxed as capital gains.
2. Include change in net asset value per share without deducting any sales
charges. Such performance is not annualized and would have been lower if sales
charges were taken into account.
3. Class A returns include the current maximum initial sales charge of 4.75%.
Class B returns include the contingent deferred sales charge of 5% (1-year) and
3% (since inception). An explanation of the different performance calculations
is in the Fund's prospectus. Class B shares are subject to an annual 0.75%
asset-based sales charge.
4. Standardized yield is based on net investment income calculated for the
30-day period ended 2/28/97. Falling net asset values will tend to artificially
raise yields.
5. Source: Morningstar Mutual Funds, 3/31/97. Morningstar, Inc., ranks mutual
funds in broad investment classes, based on risk-adjusted returns after
considering sales charges and expenses. Return and risk are measured as
performance above and below 90-day U.S. Treasury bill returns, respectively.
Current star rankings are based on the weighted average of 3-, 5- and 10-year
(if applicable) rankings for a fund or class and are subject to change monthly.
Top 10%: 5 stars. Next 22.5%: 4 stars. Middle 35%: 3 stars. Next 22.5%: 2
stars. Bottom 10%: 1 star. The Fund is ranked 4 stars (3-years), 4 stars
(5-years), weighted 40% and 60%, respectively, and 3 stars (1-year) among 1,751
funds.
2 Oppenheimer Main Street California Municipal Fund
<PAGE> 3
[PHOTO]
James C. Swain
Chairman
Oppenheimer
Main Street California
Municipal Fund
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Main Street California
Municipal Fund
DEAR SHAREHOLDER,
It's true that the stock market of 1996 received virtually all the recognition
this past year. While excitement during the second half of the year revolved
around equities, the bond market was experiencing a quiet, yet solid, rebound.
Some analysts anticipated that moderated economic growth and low
inflation would help stabilize interest rates, and even lower them--all factors
that would be beneficial for the bond market. During the second half of 1996,
that's exactly how events unfolded. In October, when the economy was
characterized by a firm dollar, low inflation and slow growth, the Federal
Reserve responded by maintaining its hands-off approach to interest rates. It
appeared that earlier concerns about rapid inflationary growth had been
overblown, and interest rates declined soon afterward. With continued,
sustainable, non-inflationary growth of around 2% to 2.5%, and no interest rate
raises expected from the Federal Reserve, the economy seemed to have settled
into a comfortable pattern of neither too little nor too much growth.
Moving ahead to 1997, President Clinton has pledged to focus on
balancing the federal budget during his second term. In fact, politicians from
every camp are discussing their intent to reduce the budget, perhaps through a
balanced budget amendment. Such a move should prove beneficial for the
municipal bond market. The other good news for municipal bond investors is that
President Clinton has no plans of initiating a flat tax, a proposal that would
have eliminated the tax advantages of municipal bonds.
On the other hand, investors may have experienced some volatility in
the income stream from municipal bond funds. This is primarily because the
availability of quality bonds paying high dividends has decreased over the past
few years, making it more difficult to find value bonds. However, we believe
that over the long term and on a tax-adjusted basis, our funds will continue to
offer value with the potential for higher total return.
When you consider the combination of these developments last year--a
sustained economic growth pattern, the assurance of a balanced federal budget
and the dissipated threat of a flat tax--the tax advantages of municipal bond
investing become much more attractive.
Your portfolio managers discuss the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment goals in
the future.
/s/ JAMES C. SWAIN /s/ BRIDGET A. MACASKILL
James C. Swain Bridget A. Macaskill
March 21, 1997
3 Oppenheimer Main Street California Municipal Fund
<PAGE> 4
Q WHAT AREAS ARE YOU CURRENTLY TARGETING?
Q & A
[PHOTO]
AN INTERVIEW WITH YOUR FUND'S MANAGERS.
HOW HAS THE FUND PERFORMED?
Our performance has been relatively strong. We attribute Oppenheimer Main
Street California Municipal Fund's success to our strategy of mixing
higher-yielding investment-grade municipal bonds with futures contracts that
act as a hedge against rising interest rates. As a result of this mixture,
Oppenheimer Main Street California Municipal Fund finished 14th out of 99
California municipal debt funds ranked by Lipper for the 1-year period ended
3/31/97.(1) This ranking placed the Fund in the first quartile of its peer group
for that period.
[PHOTO]
WHAT INVESTMENT STRATEGIES MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
Our concentration on high coupon municipal bonds worked well for us throughout
the period and provided the Fund with a steady income stream. In the second
quarter of 1996, we bought some attractive higher-yielding bonds in land
development and healthcare that enabled the Fund to capture some unusually high
income. When the market began to rally in the second half of 1996, these bonds
were in demand, and we were able to benefit. Because higher-yielding bonds
often have a lower rating or are unrated, they require careful analysis of the
risk of default.
[PHOTO]
In the second quarter, we also bought some discount and zero coupon
bonds that were out of favor. We reduced their volatility risk by hedging them
with combinations of futures contracts. When the bond market rallied in the
fall, these purchases worked out very well for us.
We have trimmed our position in prerefunded bonds. These bonds tend to
perform well because they have virtually no credit risk and have
1. Source: Lipper Analytical Services, 3/31/97. Oppenheimer Main Street
California Municipal Fund Class A shares were ranked 5th out of 50 funds in
its category for the 5-year period ended 3/31/97. Oppenheimer Main Street
California Municipal Fund is characterized by Lipper as a California municipal
debt fund. Lipper performance is based on total return and does not take sales
charges into consideration.
4 Oppenheimer Main Street California Municipal Fund
<PAGE> 5
FACING PAGE
Top left: Jerry Webman, Portfolio
Manager
Top right: Michael Maciolek,
Securities Analyst
Bottom: Len Darling, Executive VP,
Director of Fixed Income
Investments
THIS PAGE
Top: Robert Patterson, Member
of Tax-Exempt Fixed Income
Investments Team
Bottom:Caryn Halbrecht, Member
of Tax-Exempt Fixed Income
Investments Team, with Donna
Compert, Municipal Securities Trader
A WE'RE LOOKING AT THE SOUTHERN CALIFORNIA AREA.
a shorter known call date, usually five to six years. However, when the market
is rallying, as it did during the second half of 1996, these bonds are poor
performers. And finally, we were able to benefit from securities that had less
desirable credit but have improved over the period. Examples include an energy
generating plant in Sacramento and the holders of some leases on downtown Los
Angeles parking facilities.(2)
DID ANY INVESTMENTS PERFORM POORLY?
In the last six months, as interest rates have fallen, prerefunded bonds have
not performed as well as discount and zero coupon bonds. Fortunately, we
correctly anticipated the fourth quarter decline in interest rates and offset
our prerefunded bond exposure with long positions in Treasury futures that gave
the portfolio a boost when the market rallied.
WHAT AREAS ARE YOU CURRENTLY TARGETING?
We believe California development districts and infrastructure financing
projects will offer some interesting opportunities during 1997. We plan to
seek those opportunities in economically strong parts of the state where the
business growth and demographic growth seem appropriate. We're looking at the
Southern California area, in Orange County, where despite fiscal problems a few
years ago, the economics continue to appear very favorable.
[PHOTO]
WHAT IS YOUR OUTLOOK FOR THE FUND?
We continue to maintain a positive outlook. Currently, long-term interest rates
are attractive since there doesn't appear to be any real inflation on the
horizon, and we are continuing to see steady, moderate economic growth in the
U.S. and weak growth abroad. We will remain alert to significant changes in
these favorable conditions. In the meantime, we remain optimistic and, given
current market conditions, we believe that municipal bond investments offer a
good value.
[PHOTO]
2. The Fund's portfolio is subject to change.
5 Oppenheimer Main Street California Municipal Fund
<PAGE> 6
FINANCIALS
<TABLE>
<S> <C>
CONTENTS
STATEMENT OF INVESTMENTS 7
STATEMENT OF ASSETS AND LIABILITIES 11
STATEMENT OF OPERATIONS 12
STATEMENTS OF CHANGES IN NET ASSETS 13
FINANCIAL HIGHLIGHTS 14
NOTES TO FINANCIAL STATEMENTS 15
</TABLE>
6 Oppenheimer Main Street California Municipal Fund
<PAGE> 7
STATEMENT OF INVESTMENTS February 28, 1997 (Unaudited)
<TABLE>
<CAPTION>
RATINGS: MOODY'S/ FACE MARKET VALUE
S&P'S/FITCH'S AMOUNT SEE NOTE 1
=============================================================================================================================
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--98.7%
- -----------------------------------------------------------------------------------------------------------------------------
CALIFORNIA--92.0%
Anaheim, CA PFAU Lease RB,
Sr. Public Improvements Project,
Series A, FSA Insured, 5%, 3/1/37 Aaa/AAA $1,000,000 $ 888,010
----------------------------------------------------------------------------------------------------------------------
Anaheim, CA PFAU Tax Allocation RB,
MBIA Insured, 6.45%, 12/28/18 Aaa/AAA 2,000,000 2,159,420
----------------------------------------------------------------------------------------------------------------------
Berkeley, CA HF RRB, Alta Bates Medical Center,
Series A, 6.50%, 12/1/11 Baa/BBB+ 1,500,000 1,543,740
----------------------------------------------------------------------------------------------------------------------
CA HFA Home Mtg. RB, Series C, 6.75%, 2/1/25 Aa2/AA- 4,985,000 5,225,277
----------------------------------------------------------------------------------------------------------------------
CA HFA SFM Purchase RB, Series A-2, 6.45%, 8/1/25 Aaa/AAA 2,500,000 2,598,000
----------------------------------------------------------------------------------------------------------------------
CA HFFAU RB, Episcopal Homes Project,
Series A, 7.80%, 7/1/15 NR/A+ 1,000,000 1,063,620
----------------------------------------------------------------------------------------------------------------------
CA PCFAU RB, Pacific Gas & Electric Co. Project,
Series B, 6.35%, 6/1/09 A2/A 2,000,000 2,082,160
----------------------------------------------------------------------------------------------------------------------
CA PWBL RB, Department of Corrections--Madera
State Prison, Series E, 5.50%, 6/1/15 A1/A/A- 2,000,000 1,982,760
----------------------------------------------------------------------------------------------------------------------
CA Statewide CDAU Revenue COP,
Cedars-Sinai Medical Center, 5.40%, 11/1/15 A1/NR 1,000,000 928,860
----------------------------------------------------------------------------------------------------------------------
Capistrano, CA Unified School District
CFD Special Tax Bonds, No. 87-1, 7.60%, 9/1/14 Aaa/NR 1,000,000 1,104,100
----------------------------------------------------------------------------------------------------------------------
Central CA Joint Powers Health FAU COP,
Community Hospitals of Central California Project,
5%, 2/1/23 Baa1/NR/A- 2,050,000 1,717,306
----------------------------------------------------------------------------------------------------------------------
Contra Costa Cnty., CA Refunding COP,
Merrithew Memorial Hospital Project,
MBIA Insured, 5.50%, 11/1/12 Aaa/AAA 1,875,000 1,870,931
----------------------------------------------------------------------------------------------------------------------
Corona, CA COP, Vista Hospital Project,
Prerefunded, Series B, 10%, 11/1/20 Aaa/AAA 3,250,000 4,200,853
----------------------------------------------------------------------------------------------------------------------
Corona, CA SFM RB, Sub-Lien, Series B, 6.30%, 11/1/28 A/NR 800,000 817,832
----------------------------------------------------------------------------------------------------------------------
Duarte, CA COP, City of Hope National
Medical Center, 6.25%, 4/1/23 Baa1/NR 500,000 505,495
----------------------------------------------------------------------------------------------------------------------
Escondido, CA Union High School District
CAP Bonds, Zero Coupon, 6.20%, 11/1/19(1) Aaa/AAA 2,000,000 543,400
----------------------------------------------------------------------------------------------------------------------
Foothill/Eastern Transportation Corridor Agency
CA Toll Road RB, Sr. Lien, Series A, 6.50%, 1/1/32 Baa/BBB-/BBB 1,400,000 1,464,554
----------------------------------------------------------------------------------------------------------------------
Long Beach, CA Harbor RB:
5.125%, 5/15/18 Aa/AA- 1,000,000 911,880
MBIA Insured, 9%, 5/15/02 Aaa/AAA 1,110,000 1,329,447
----------------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA COP, Disney Parking Project,
Zero Coupon, 6.95%, 9/1/11(1) Baa1/BBB/A- 2,340,000 958,160
----------------------------------------------------------------------------------------------------------------------
Los Angeles Cnty., CA Sanitation Districts FAU RB,
Series A, 5.25%, 10/1/19 Aa/AA 2,305,000 2,164,280
----------------------------------------------------------------------------------------------------------------------
Los Angeles, CA Wastewater System RRB,
Series D, FGIC Insured, 8.70%, 11/1/03 Aaa/AAA/AAA 5,115,000 6,304,135
----------------------------------------------------------------------------------------------------------------------
Metropolitan Water District of Southern CA
Waterworks RB, 5.55%, 10/30/20 Aa/AA 2,400,000 2,329,104
</TABLE>
7 Oppenheimer Main Street California Municipal Fund
<PAGE> 8
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
RATINGS: MOODY'S/ FACE MARKET VALUE
S&P'S/FITCH'S AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CALIFORNIA
(CONTINUED)
Newport Mesa, CA Unified School District
Special Tax Bonds, CFD No. 90-1, 6.625%, 9/1/14 NR/NR $2,000,000 $ 2,060,120
----------------------------------------------------------------------------------------------------------------------
Orange Cnty., CA CFD Special Tax Bonds:
No. 87-3, Mission Viejo, Prerefunded,
Series A, 8.05%, 8/15/08 NR/NR 1,480,000 1,597,142
No. 88-1, Aliso Viejo, Prerefunded,
Series A, 7.35%, 8/15/18 NR/AAA 1,750,000 2,032,835
----------------------------------------------------------------------------------------------------------------------
Pittsburgh, CA Improvement Bond Act of 1915 Bonds,
Assessment District 1990-01, 7.75%, 9/2/20 NR/NR 95,000 98,586
----------------------------------------------------------------------------------------------------------------------
Pittsburgh, CA RA Tax Allocation Sub. Bonds,
Los Medanos Community Development Project,
6.20%, 8/1/19 NR/BBB 1,000,000 1,003,810
----------------------------------------------------------------------------------------------------------------------
Pomona, CA SFM RRB, Escrowed to Maturity,
Series A, 7.60%, 5/1/23 NR/AAA 2,500,000 3,182,625
----------------------------------------------------------------------------------------------------------------------
Pomona, CA Unified School District GORB,
Series A, MBIA Insured, 6.15%, 8/1/15 Aaa/AAA 1,000,000 1,082,180
----------------------------------------------------------------------------------------------------------------------
Redding, CA Electric System Revenue COP:
FGIC Insured, Inverse Floater, 7.586%, 6/1/19(2) Aaa/AAA/AAA 1,150,000 1,093,938
MBIA Insured, Inverse Floater, 9.03%, 7/8/22(2) Aaa/AAA 500,000 604,375
----------------------------------------------------------------------------------------------------------------------
Riverside Cnty., CA CFD Special Tax Bonds,
No. 88-12, 7.55%, 9/1/17 NR/NR 1,500,000 1,571,595
----------------------------------------------------------------------------------------------------------------------
Sacramento Cnty., CA SFM RB,
Escrowed to Maturity, 8.125%, 7/1/16(3) Aaa/AAA 2,810,000 3,632,206
----------------------------------------------------------------------------------------------------------------------
Sacramento, CA MUD Electric RRB,
FGIC Insured, Inverse Floater, 8.868%, 8/15/18(2) Aaa/AAA/AAA 1,500,000 1,687,500
----------------------------------------------------------------------------------------------------------------------
San Bernardino Cnty., CA COP, Medical Center
Financing Project, MBIA Insured, 5.50%, 8/1/17 Aaa/AAA 1,750,000 1,750,980
----------------------------------------------------------------------------------------------------------------------
San Diego Cnty., CA Water Authority
Revenue COP, Series 91-B, MBIA Insured,
Inverse Floater, 8.82%, 4/8/21(2) Aaa/AAA 1,000,000 1,111,250
----------------------------------------------------------------------------------------------------------------------
San Francisco, CA Bay Area Rapid Transit District
Sales Tax RRB, AMBAC Insured, 6.75%, 7/1/11 Aaa/AAA/AAA 1,000,000 1,160,200
----------------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. Airport
Commission, International Airport RB:
Second Series Issue 13-B, MBIA Insured, 8%, 5/1/07 Aaa/AAA 1,140,000 1,389,728
Second Series Issue 14-A, MBIA Insured, 8%, 5/1/07 Aaa/AAA 1,290,000 1,572,587
----------------------------------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor
Agency Toll Road RB, Sr. Lien, 6.75%, 1/1/32 NR/NR/BBB 3,500,000 3,696,630
----------------------------------------------------------------------------------------------------------------------
Southern CA Home FAU SFM RB, Series A, 7.35%, 9/1/24 NR/AAA 285,000 300,729
----------------------------------------------------------------------------------------------------------------------
Southern CA Public PAU Transmission Project RB,
Inverse Floater, 7.812%, 7/1/12(2) Aa/A+ 2,500,000 2,665,625
----------------------------------------------------------------------------------------------------------------------
Stanislaus, CA Waste-To-Energy Financing Agency
Solid Waste Facilities RRB, Ogden Martin System, Inc.
Project, 7.50%, 1/1/05 NR/BBB+ 1,600,000 1,695,920
-----------
79,683,885
</TABLE>
8 Oppenheimer Main Street California Municipal Fund
<PAGE> 9
<TABLE>
<CAPTION>
RATINGS: MOODY'S/ FACE MARKET VALUE
S&P'S/FITCH'S AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. POSSESSIONS--6.7%
PR Commonwealth GOB, MBIA Insured,
Inverse Floater, 7.984%, 7/1/08(2) Aaa/AAA $1,500,000 $ 1,612,500
----------------------------------------------------------------------------------------------------------------------
PR Commonwealth Highway Authority RB,
Prerefunded, Series P, 8.125%, 7/1/13 Aaa/AAA 2,000,000 2,155,540
----------------------------------------------------------------------------------------------------------------------
PR Commonwealth Public Improvement GOB,
Prerefunded, Series A, 7.75%, 7/1/17 NR/AAA 1,000,000 1,099,580
----------------------------------------------------------------------------------------------------------------------
PR Housing Finance Corp. SFM RB,
Portfolio 1, Series B, 7.65%, 10/15/22 Aaa/AAA 260,000 273,751
----------------------------------------------------------------------------------------------------------------------
PR Industrial, Medical & Environmental PC
Facilities Tourist RB, Mennonite General Hospital
Project, Series A, 6.50%, 7/1/12 NR/BBB-/BBB 600,000 616,656
-----------
5,758,027
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $83,657,784) 98.7% 85,441,912
- -----------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.3 1,135,029
---------- -----------
NET ASSETS 100.0% $86,576,941
========== ===========
</TABLE>
1. For zero coupon bonds, the interest rate shown is the effective yield
on the date of purchase.
2. Represents the current interest rate for a variable rate bond. These
bonds known as "inverse floaters" pay interest at a rate that varies
inversely with short-term interest rates. As interest rates rise,
inverse floaters produce less current income. Their price may be more
volatile than the price of a comparable fixed-rate security. Inverse
floaters amount to $8,775,188 or 10.14% of the Fund's net assets at
February 28, 1997.
3. Securities with an aggregate market value of $207,973 are held in
collateralized accounts to cover initial margin requirements on open
futures sales contracts. See Note 5 of Notes to Financial Statements.
9 Oppenheimer Main Street California Municipal Fund
<PAGE> 10
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
As of February 28, 1997, securities subject to the alternative minimum
tax amounted to $19,042,015 or 21.99% of the Fund's net assets.
Distribution of investments by industry, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
INDUSTRY MARKET VALUE PERCENT
-------------------------------------------------------------------------
<S> <C> <C>
Single Family Housing $16,030,420 18.8%
Hospital/Healthcare 12,447,460 14.6
Special Assessment 11,627,608 13.6
Sewer Utilities 8,468,415 9.9
Highways 7,316,724 8.6
Electric Utilities 6,051,437 7.1
Lease Rental 5,579,910 6.5
Marine/Aviation Facilities 5,203,643 6.1
General Obligation 4,337,660 5.1
Water Utilities 3,440,354 4.0
Pollution Control 2,082,160 2.4
Resource Recovery 1,695,920 2.0
Other 1,160,200 1.3
----------- -----
$85,441,912 100.0%
=========== =====
</TABLE>
To simplify the listings of the Oppenheimer Main Street California
Municipal Fund holdings in the Statement of Investments, we have
abbreviated the descriptions of many of the securities per the table
below:
<TABLE>
<S> <C>
CAP --Capital Appreciation MUD --Municipal Utility District
CDAU --Communities Development Authority PAU --Power Authority
CFD --Community Facilities District PC --Pollution Control
COP --Certificates of Participation PCFAU--Pollution Control Finance Authority
FAU --Finance Authority PFAU --Public Finance Authority
GOB --General Obligation Bonds PWBL --Public Works Board Lease
GORB --General Obligation Refunding Bonds RA --Redevelopment Agency
HF --Health Facilities RB --Revenue Bonds
HFA --Housing Finance Agency RRB --Revenue Refunding Bonds
HFFAU--Health Facilities Finance Authority SFM --Single Family Mortgage
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Main Street California Municipal Fund
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES February 28, 1997 (unaudited)
<TABLE>
<S> <C>
====================================================================================================================
ASSETS
Investments, at value (cost $83,657,784)--see accompanying statement $85,441,912
-------------------------------------------------------------------------------------------------------------
Cash 480,840
-------------------------------------------------------------------------------------------------------------
Receivables:
Interest 1,150,027
Shares of capital stock sold 96,824
Daily variation on futures contracts--Note 5 1,375
-------------------------------------------------------------------------------------------------------------
Other 21,248
-----------
Total assets 87,192,226
====================================================================================================================
LIABILITIES
Payables and other liabilities:
Dividends 296,040
Shares of capital stock redeemed 282,637
Transfer and shareholder servicing agent fees 3,476
Daily variation on futures contracts--Note 5 3,442
Distribution and service plan fees 2,945
Other 26,745
-----------
Total liabilities 615,285
====================================================================================================================
NET ASSETS $86,576,941
===========
====================================================================================================================
COMPOSITION OF
NET ASSETS
Par value of shares of capital stock $ 69,465
-------------------------------------------------------------------------------------------------------------
Additional paid-in capital 83,780,771
-------------------------------------------------------------------------------------------------------------
Undistributed net investment income 612,402
-------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 310,269
-------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Notes 3 and 5 1,804,034
-----------
Net assets $86,576,941
===========
====================================================================================================================
NET ASSET VALUE
PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on
net assets of $78,903,746 and 6,330,176 shares of capital stock outstanding) $12.46
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $13.08
-------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $7,673,195 and 616,319 shares of capital stock outstanding) $12.45
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Main Street California Municipal Fund
<PAGE> 12
STATEMENT OF OPERATIONS For the Six Months Ended February 28, 1997 (Unaudited)
<TABLE>
<S> <C>
====================================================================================================================
INVESTMENT INCOME
Interest $2,776,342
====================================================================================================================
EXPENSES
Management fees--Note 4 169,482
-------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class B 33,593
-------------------------------------------------------------------------------------------------------------
Shareholder reports 29,351
-------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 26,540
-------------------------------------------------------------------------------------------------------------
Legal and auditing fees 5,257
-------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 3,406
Class B 760
-------------------------------------------------------------------------------------------------------------
Insurance expenses 1,560
-------------------------------------------------------------------------------------------------------------
Directors' fees and expenses 1,346
-------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 499
-------------------------------------------------------------------------------------------------------------
Other 42
----------
Total expenses 271,836
====================================================================================================================
NET INVESTMENT INCOME 2,504,506
====================================================================================================================
REALIZED AND UNREALIZED
GAIN (LOSS)
Net realized gain (loss) on:
Investments 394,747
Closing of futures contracts (75,195)
----------
Net realized gain 319,552
-------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 1,796,688
----------
Net realized and unrealized gain 2,116,240
====================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,620,746
==========
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Main Street California Municipal Fund
<PAGE> 13
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 28, 1997 PERIOD ENDED YEAR ENDED
(UNAUDITED) AUGUST 31, 1996(1) JUNE 30, 1996
===============================================================================================================================
<S> <C> <C> <C>
OPERATIONS
Net investment income $ 2,504,506 $ 839,019 $ 4,904,243
------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 319,552 (42,708) 13,058
------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 1,796,688 52,839 446,150
----------- ----------- -----------
Net increase in net assets resulting from operations 4,620,746 849,150 5,363,451
===============================================================================================================================
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income:
Class A (2,325,256) (773,949) (4,694,006)
Class B (165,793) (47,009) (189,244)
------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (9,643) -- (11,115)
Class B (827) -- (475)
------------------------------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain:
Class A -- -- (60,043)
Class B -- -- (2,568)
===============================================================================================================================
CAPITAL STOCK
TRANSACTIONS
Net increase (decrease) in net assets resulting from
capital stock transactions--Note 2:
Class A 129,928 (125,718) (1,651,052)
Class B 1,582,717 487,540 2,817,402
===============================================================================================================================
NET ASSETS
Total increase 3,831,872 390,014 1,572,350
------------------------------------------------------------------------------------------------------------------------
Beginning of period 82,745,069 82,355,055 80,782,705
----------- ----------- -----------
End of period [including undistributed (overdistributed)
net investment income of $612,402, $598,945 and
$(132,853), respectively] $86,576,941 $82,745,069 $82,355,055
=========== =========== ===========
</TABLE>
1. The Fund changed its fiscal year end from June 30 to August 31.
See accompanying Notes to Financial Statements.
13 Oppenheimer Main Street California Municipal Fund
<PAGE> 14
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
SIX MONTHS PERIOD
ENDED ENDED
FEB. 28, 1997 AUGUST 31, YEAR ENDED JUNE 30,
(UNAUDITED) 1996(2) 1996 1995 1994 1993 1992
============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $12.16 $12.15 $12.09 $11.82 $12.66 $12.05 $11.61
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .37 .12 .73 .73 .75 .80 .82
Net realized and unrealized
gain (loss) .30 .01 .07 .27 (.80) .64 .45
------ ------ ------ ------ ------ ------ ------
Total income (loss)
from investment operations .67 .13 .80 1.00 (.05) 1.44 1.27
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.37) (.12) (.73) (.69) (.73) (.81) (.82)
Dividends in excess of net
investment income -- -- -- (.04) (.03) -- --
Distributions from net realized gain --(3) -- --(3) -- -- (.02) (.01)
Distributions in excess of net
realized gain -- -- (.01) -- (.03) -- --
------ ------ ------ ------ ------ ------ ------
Total dividends and
distributions to shareholders (.37) (.12) (.74) (.73) (.79) (.83) (.83)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.46 $12.16 $12.15 $12.09 $11.82 $12.66 $12.05
====== ====== ====== ====== ====== ======= ======
===========================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 5.54% 1.12% 6.73% 8.93% (0.60)% 12.53% 11.21%
===========================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $78,904 $76,817 $76,913 $78,134 $79,555 $72,387 $40,055
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $78,818 $77,584 $78,676 $76,148 $81,741 $54,840 $26,304
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.98%(5) 6.00%(5) 5.99% 6.27% 6.09% 6.46% 6.74%
Expenses(6) 0.56%(5) 0.57%(5) 0.58% 0.57% 0.53% 0.39% 0.32%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 20.2% 1.4% 33.1% 14.2% 20.2% 5.8% 25.7%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------------------------
SIX MONTHS PERIOD
ENDED ENDED
FEB. 28, 1997 AUGUST 31, YEAR ENDED JUNE 30,
(UNAUDITED) 1996(2) 1996 1995 1994(1)
==================================================================================================================
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $12.14 $12.14 $12.08 $11.80 $12.90
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .30 .10 .61 .62 .38
Net realized and unrealized
gain (loss) .31 -- .07 .27 (1.07)
------ ------ ------ ------ ------
Total income (loss)
from investment operations .61 .10 .68 .89 (.69)
- ------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.30) (.10) (.61) (.57) (.37)
Dividends in excess of net
investment income -- -- -- (.04) (.01)
Distributions from net realized gain --(3) -- --(3) -- --
Distributions in excess of net
realized gain -- -- (.01) -- (.03)
------ ------ ------ ------ ------
Total dividends and
distributions to shareholders (.30) (.10) (.62) (.61) (.41)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.45 $12.14 $12.14 $12.08 $11.80
====== ====== ====== ====== ======
==================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 5.10% 0.85% 5.66% 7.90% (5.42)%
==================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $7,673 $5,928 $5,442 $2,648 $1,203
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $6,797 $5,767 $3,848 $1,904 $649
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.94%(5) 4.92%(5) 4.94% 5.17% 4.91%(5)
Expenses(6) 1.57%(5) 1.62%(5) 1.60% 1.55% 1.62%(5)
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 20.2% 1.4% 33.1% 14.2% 20.2%
</TABLE>
1. For the period from October 29, 1993 (inception of offering) to
June 30, 1994.
2. The Fund changed its fiscal year end from June 30 to August 31.
3. Less than $.005 per share.
4. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for
periods of less than one full year.
5. Annualized.
6. Beginning in fiscal 1995, the expense ratio reflects the effect of
gross expenses paid indirectly by the Fund. Prior year expense ratios
have not been adjusted.
7. The lesser of purchases or sales of portfolio securities for a
period, divided by the monthly average of the market value of portfolio
securities owned during the period. Securities with a maturity or
expiration date at the time of acquisition of one year or less are
excluded from the calculation. Purchases and sales of investment
securities (excluding short-term securities) for the period ended
February 28, 1997 were $18,374,308 and $17,194,307, respectively.
See accompanying Notes to Financial Statements.
14 Oppenheimer Main Street California Municipal Fund
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (Unaudited)
================================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
Oppenheimer Main Street California Municipal Fund (the Fund) is a
separate series of Oppenheimer Main Street Funds, Inc., an open-end
management investment company registered under the Investment Company
Act of 1940, as amended. The Fund's investment objective is to seek as
high a level of current income which is exempt from Federal and
California personal income taxes for individual investors as is
available from municipal securities and consistent with preservation of
capital. The Fund's investment adviser is OppenheimerFunds, Inc. (the
Manager). The Fund offers Class A and Class B shares. Class A shares are
sold with a front-end sales charge. Class B shares may be subject to a
contingent deferred sales charge. Both classes of shares have identical
rights to earnings, assets and voting privileges, except that each class
has its own distribution and/or service plan, expenses directly
attributable to a particular class and exclusive voting rights with
respect to matters affecting a single class. Class B shares will
automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
-------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of
the New York Stock Exchange on each trading day. Listed and unlisted
securities for which such information is regularly reported are valued at
the last sale price of the day or, in the absence of sales, at values
based on the closing bid or the last sale price on the prior trading day.
Long-term and short-term "non-money market" debt securities are valued by
a portfolio pricing service approved by the Board of Directors. Such
securities which cannot be valued by the approved portfolio pricing
service are valued using dealer-supplied valuations provided the Manager
is satisfied that the firm rendering the quotes is reliable and that the
quotes reflect current market value, or are valued under consistently
applied procedures established by the Board of Directors to determine
fair value in good faith. Short-term "money market type" debt securities
having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of
any premium or discount.
-------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses
(other than those attributable to a specific class) and gains and losses
are allocated daily to each class of shares based upon the relative
proportion of net assets represented by such class. Operating expenses
directly attributable to a specific class are charged against the
operations of that class.
-------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income, including any net realized
gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required.
-------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends
separately for Class A and Class B shares from net investment income
each day the New York Stock Exchange is open for business and pay such
dividends monthly. Distributions from net realized gains on investments,
if any, will be declared at least once each year.
-------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income
(loss) and net realized gain (loss) may differ for financial statement
and tax purposes primarily because of premium amortization for tax
purposes. The character of the distributions made during the year from
net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gain
(loss) was recorded by the Fund.
15 Oppenheimer Main Street California Municipal Fund
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
================================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Original issue discount
on securities purchased is amortized over the life of the respective
securities, in accordance with federal income tax requirements. For
bonds acquired after April 30, 1993, on disposition or maturity, taxable
ordinary income is recognized to the extent of the lesser of gain or
market discount that would have accrued over the holding period.
Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the
same basis used for federal income tax purposes. The Fund concentrates
its investments in California and, therefore, may have more credit risks
related to the economic conditions of California than a portfolio with a
broader geographical diversification.
The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
================================================================================
2. CAPITAL STOCK
The Fund has authorized 16,250,000 shares of $.01 par value capital
stock of each class. Transactions in shares of capital stock were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED FEBRUARY 28, 1997 PERIOD ENDED AUGUST 31, 1996(1) YEAR ENDED JUNE 30, 1996
---------------------------------- ------------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A:
Sold 298,256 $ 3,677,471 67,135 $ 819,316 387,788 $ 4,767,548
Dividends and distributions
reinvested 116,685 1,441,111 39,490 483,642 243,712 2,993,646
Redeemed (403,006) (4,988,654) (116,433) (1,428,676) (765,193) (9,412,246)
-------- ----------- -------- ----------- -------- -----------
Net increase (decrease) 11,935 $ 129,928 (9,808) $ (125,718) (133,693) $(1,651,052)
======== =========== ======== =========== ======== ===========
- -----------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 130,287 $ 1,609,387 44,022 $ 538,404 247,941 $ 3,048,438
Dividends and distributions
reinvested 8,795 108,536 2,450 29,980 9,629 117,946
Redeemed (10,889) (135,206) (6,620) (80,844) (28,549) (348,982)
-------- ----------- -------- ----------- -------- -----------
Net increase 128,193 $ 1,582,717 39,852 $ 487,540 229,021 $ 2,817,402
======== =========== ======== =========== ======== ===========
</TABLE>
1. The Fund changed its fiscal year end from June 30 to August 31.
================================================================================
3. UNREALIZED GAINS AND
LOSSES ON INVESTMENTS
At February 28, 1997, net unrealized appreciation on investments of
$1,784,128 was composed of gross appreciation of $2,919,222, and gross
depreciation of $1,135,094.
================================================================================
4. MANAGEMENT FEES
AND OTHER TRANSACTIONS
WITH AFFILIATES
Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of
0.55% of average annual net assets, with a contractual waiver when net
assets are less than $100 million. Annual fees, reflecting this waiver,
are 0.40% of net assets of $75 million or more but less than $100
million, 0.25% of net assets of $50 million or more but less than $75
million, 0.15% of net assets of $25 million or more but less than $50
million, and 0% of net assets less than $25 million. The Manager has
agreed to assume Fund expenses (with specified exceptions) in excess of
the regulatory limitation of the state of California.
For the six months ended February 28, 1997,
commissions (sales charges paid by investors) on sales of Class A shares
totaled $87,961, of which $21,437 was retained by OppenheimerFunds
Distributor, Inc. (OFDI), a subsidiary of the Manager, as general
distributor, and by an affiliated broker/dealer. Sales charges advanced
to broker/dealers by OFDI on sales of the Fund's Class B shares totaled
$60,951. During the six months ended February 28, 1997, OFDI received
contingent deferred sales charges of $1,404 upon redemption of Class B
shares.
16 Oppenheimer Main Street California Municipal Fund
<PAGE> 17
================================================================================
4. MANAGEMENT FEES
AND OTHER TRANSACTIONS
WITH AFFILIATES
(CONTINUED)
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OFS's total costs of providing such
services are allocated ratably to these companies.
The Fund has adopted a reimbursement type
Distribution and Service Plan for Class B shares to reimburse OFDI for
its services and costs in distributing Class B shares and servicing
accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales
charge of 0.75% per year on Class B shares. OFDI also receives a service
fee of 0.25% per year to reimburse dealers for providing personal
services for accounts that hold Class B shares. Both fees are computed
on the average annual net assets of Class B shares, determined as of the
close of each regular business day. During the six months ended February
28, 1997, OFDI retained $29,511 as reimbursement for Class B sales
commissions and service fee advances, as well as financing costs. If the
Plan is terminated by the Fund, the Board of Directors may allow the
Fund to continue payments of the asset-based sales charge to OFDI for
certain expenses it incurred before the Plan was terminated. As of
February 28, 1997, OFDI had incurred unreimbursed expenses of $253,980
for Class B.
================================================================================
5. FUTURES CONTRACTS
The Fund may buy and sell interest rate futures contracts in order to
gain exposure to or protect against changes in interest rates. The Fund
may also buy or write put or call options on these futures contracts.
The Fund generally sells futures contracts to
hedge against increases in interest rates and the resulting negative
effect on the value of fixed rate portfolio securities. The Fund may
also purchase futures contracts to gain exposure to changes in interest
rates as it may be more efficient or cost effective than actually buying
fixed income securities.
Upon entering into a futures contract, the Fund
is required to deposit either cash or securities in an amount (initial
margin) equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the Fund each day.
The variation margin payments are equal to the daily changes in the
contract value and are recorded as unrealized gains and losses. The Fund
recognizes a realized gain or loss when the contract is closed or
expires.
Securities held in collateralized accounts to
cover initial margin requirements on open futures contracts are noted in
the Statement of Investments. The Statement of Assets and Liabilities
reflects a receivable or payable for the daily mark to market for
variation margin.
Risks of entering into futures contracts (and
related options) include the possibility that there may be an illiquid
market and that a change in the value of the contract or option may not
correlate with changes in the value of the underlying securities.
At February 28, 1997, the Fund had outstanding futures contracts to buy
and sell debt securities as follows:
<TABLE>
<CAPTION>
UNREALIZED
NUMBER OF VALUATION AS OF APPRECIATION
CONTRACTS TO BUY EXPIRATION DATE FUTURES CONTRACTS FEBRUARY 28, 1997 (DEPRECIATION)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Municipal Bonds 3/97 5 $ 580,156 $(5,469)
CONTRACTS TO SELL
----------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds 3/97 17 1,885,406 25,094
U.S. Treasury Bonds 6/97 3 331,313 281
-------
Total Unrealized Appreciation $19,906
=======
</TABLE>
17 Oppenheimer Main Street California Municipal Fund
<PAGE> 18
OPPENHEIMER MAIN STREET CALIFORNIA MUNICIPAL FUND
A Series of Oppenheimer Main Street Funds, Inc.
================================================================================
OFFICERS AND DIRECTORS
James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Director and President
Robert G. Avis, Director
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
George C. Bowen, Vice President, Treasurer and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Jerry A. Webman, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
INVESTMENT ADVISER
OppenheimerFunds, Inc.
================================================================================
DISTRIBUTOR
OppenheimerFunds Distributor, Inc.
================================================================================
TRANSFER AND SHAREHOLDER
SERVICING AGENT
OppenheimerFunds Services
================================================================================
CUSTODIAN OF PORTFOLIO
SECURITIES
The Bank of New York
================================================================================
INDEPENDENT AUDITORS
Deloitte & Touche LLP
================================================================================
LEGAL COUNSEL
Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been taken from the
records of the Fund without examination by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Main Street
California Municipal Fund. This report must be preceded or accompanied
by a Prospectus of Oppenheimer Main Street California Municipal Fund.
For material information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, are not insured by the FDIC or any other
agency, and involve investment risks, including possible loss of the
principal amount invested.
18 Oppenheimer Main Street California Municipal Fund
<PAGE> 19
OPPENHEIMERFUNDS FAMILY
================================================================================
OppenheimerFunds offers over 50 funds designed to fit virtually every
investment goal. Whether you're investing for retirement, your
children's education or tax-free income, we have the funds to help you
seek your objective.
When you invest with OppenheimerFunds, you can
feel comfortable knowing that you are investing with a respected
financial institution with over 35 years of experience in helping people
just like you reach their financial goals. And you're investing with a
leader in global, growth stock and flexible fixed-income
investments--with over 3 million shareholder accounts and more than $60
billion under OppenheimerFunds' management and that of our affiliates.
At OppenheimerFunds we don't charge a fee to
exchange shares. And you can exchange shares easily by mail or by
telephone.(1) For more information on Oppenheimer funds, please contact
your financial adviser or call us at 1-800-525-7048 for a prospectus.
You may also write us at the address shown on the back cover. As always,
please read the prospectus carefully before you invest.
<TABLE>
<S> <C>
===================================================================================================================
STOCK FUNDS
Developing Markets Fund Quest Capital Value Fund
Global Emerging Growth Fund Growth Fund
Enterprise Fund(2) Global Fund
International Growth Fund Quest Global Value Fund
Discovery Fund Disciplined Value Fund
Quest Small Cap Value Fund Oppenheimer Fund
Gold & Special Minerals Fund Value Stock Fund
Capital Appreciation Fund(3) Quest Value Fund
===================================================================================================================
STOCK & BOND FUNDS
Main Street Income & Growth Fund Equity Income Fund
Quest Opportunity Value Fund Disciplined Allocation Fund
Total Return Fund Multiple Strategies Fund(4)
Quest Growth & Income Value Fund Strategic Income & Growth Fund
Global Growth & Income Fund Bond Fund for Growth
===================================================================================================================
BOND FUNDS
International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Champion Income Fund Limited-Term Government Fund
Strategic Income Fund
===================================================================================================================
MUNICIPAL FUNDS
California Municipal Fund(5) Insured Municipal Fund
Florida Municipal Fund(5) Intermediate Municipal Fund
New Jersey Municipal Fund(5)
New York Municipal Fund(5) Rochester Division
Pennsylvania Municipal Fund(5) Rochester Fund Municipals
Municipal Bond Fund Limited Term New York Municipal Fund
===================================================================================================================
MONEY MARKET FUNDS(6)
Money Market Fund Cash Reserves
===================================================================================================================
LIFESPAN
Growth Fund Income Fund
Balanced Fund
</TABLE>
1. Exchange privileges are subject to change or termination. Shares may
be exchanged only for shares of the same class of eligible funds.
2. Effective 4/1/96, the Fund is closed to new investors.
3. On 12/18/96, the Fund's name was changed from "Target Fund."
4. On 3/6/97, the Fund's name was changed from "Asset Allocation Fund."
5. Available only to investors in certain states.
6. An investment in money market funds is neither insured nor guaranteed
by the U.S. government and there can be no assurance that a money market
fund will be able to maintain a stable net asset value of $1.00 per
share. Oppenheimer funds are distributed by OppenheimerFunds
Distributor, Inc., Two World Trade Center, New York, NY 10048-0203.
(C) Copyright 1997 OppenheimerFunds, Inc. All rights reserved.
19 Oppenheimer Main Street California Municipal Fund
<PAGE> 20
INFORMATION
GENERAL INFORMATION
Monday-Friday 8:30 a.m.-9 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
TELEPHONE TRANSACTIONS
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
PHONELINK
24 hours a day, automated
information and transactions
1-800-533-3310
TELECOMMUNICATIONS DEVICE
FOR THE DEAF (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OPPENHEIMERFUNDS
INFORMATION HOTLINE
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
1-800-835-3104
RS0725.001.0297 April 30, 1997
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And when you need help, our Customer Service Representatives are only a
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When you want to make a transaction, you can do it easily by calling our
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For added convenience, you can get automated information with
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PhoneLink gives you access to a variety of fund, account, and market
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You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
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from around the country, honored the Oppenheimer funds' transfer agent,
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So call us today--we're here to help.
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- -----------------
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U.S. Postage
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