<PAGE> 1
REPORT TO SHAREHOLDERS:
Oppenheimer Multi-Sector Income Trust paid an annualized dividend yield of
9.85% for the month ended October 31, 1994.(1) During the past twelve months,
the Trust's total return at net asset value was 1.69%.(2)
The Trust primarily seeks high current income consistent with preservation of
capital and has a secondary objective of capital appreciation. The managers'
ability to shift assets strategically among major fixed income sectors played
an important role in the Trust's performance over the last year. As of October
31, 1994, the Trust's portfolio was allocated as follows.(3)
INVESTMENT BREAKDOWN:
OPPENHEIMER MULTI-SECTOR INCOME TRUST
[FIGURE 1]
* U.S. Government Obligations
Agency/13.1%
Treasury/6.9%
* Foreign Government Obligations/31.9%
* U.S. Corporate Bonds and Notes/35.0%
* Foreign Corporate Bonds and Notes/0.9%
* Equity Securities/2.6%
* Short-term Securities/3.6%
* Structured Notes/6.0%
Over the past year, the Federal Reserve and central banks worldwide moved
aggressively to raise short-term interest rates to fend off inflation. Your
managers sought to capture rising yields while seeking to limit the portfolio's
price volatility.
As U.S. interest rates began to rise, your managers shortened the maturities
of the bonds in the portfolio, with particular emphasis on reducing exposure to
long-term U.S. government bonds, adding to investments in mortgage-backed
securities issued by agencies or instrumentalities of the U.S. government.
Mortgage-backed securities offer significant yield advantages over Treasuries.
The managers have focused the Trust's holdings of foreign government bonds on
Latin America and other emerging markets. However, as interest rates rose
offshore and the dollar weakened against major currencies, more investments
were centered in Europe. The focus for the higher-yielding corporate bonds in
the portfolio was on those issued by larger industrial companies, notably in the
chemicals, mining, metals and forest products businesses. These companies'
earnings tend to rise in the middle to late stages of an economic expansion.
<PAGE> 2
Looking ahead, the Trust's allocations are subject to change and may, of course,
be adjusted should the economic expansion appear to be ending, but signs are
currently pointing to continued gradual growth -- and the Trust should be
well-positioned to provide attractive returns.
We appreciate the confidence you have placed in Oppenheimer Multi-Sector Income
Trust and we look forward to continuing to help you reach your investment
goals.
Sincerely,
/s/ DONALD W. SPIRO
- -----------------------------------------
Donald W. Spiro
President -- Oppenheimer Multi-Sector
Income Trust
November 21, 1994
(1) Dividend yield was calculated by annualizing the October dividend of $0.078
per share and dividing by the 10/31/94 closing price on The New York Stock
Exchange of $9.50 per share.
(2) Based on the change in net asset value per share from 10/31/93 to 10/31/94,
with all dividends reinvested. Your brokerage costs and taxes were not
considered. Past performance does not guarantee future results.
(3) Portfolio allocations are subject to change. Chart is based on total
investments at market value, rather than net assets.
<PAGE> 3
STATEMENT OF INVESTMENTS October 31, 1994
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
MONEY MARKET SECTOR -- 3.6%
Repurchase agreement with The First Boston Corp., 4.75%, dated
10/31/94, to be repurchased at $10,501,385 on 11/1/94,
collateralized by U.S. Treasury Nts., 4.75%, 2/15/97, with a
value of $10,717,578 (Cost $10,500,000).......................... $ 10,500,000 $ 10,500,000
-------------- ------------
U.S. GOVERNMENT SECTOR -- 6.9%
U.S. Treasury Bonds:
8.875%, 7/15/95.................................................. 3,500,000 3,571,092
12%, 8/15/13..................................................... 4,000,000 5,301,248
8.125%, 8/15/21.................................................. 5,000,000 5,020,309
U.S. Treasury Nts., 9.25%, 1/15/96................................. 6,300,000 6,506,715
------------
Total U.S. Government Sector (Cost $21,096,633).................... 20,399,364
------------
<CAPTION>
Units
--------------
<S> <C> <C>
CONVERTIBLE SECTOR -- 1.3%
RIGHTS, WARRANTS AND CERTIFICATES -- 0.2%
Ames Department Stores, Inc.:
Excess Cash Flow Payment Ctfs. .................................. 40,300 403
Litigation Trust................................................. 128,889 1,289
Becker Gaming, Inc. Wts., Exp. 11/00 (5)........................... 25,000 50,000
Eye Care Centers of America, Inc. Wts., Exp. 10/03................. 1,800 9,000
Gaylord Container Corp. Wts., Exp. 7/96............................ 90,000 630,000
Purity Supreme, Inc. Wts., Exp. 8/97 (5)........................... 7,797 156
Terex Corp. Rts., Exp. 7/96 (5).................................... 186 233
------------
691,081
<CAPTION>
Shares
--------------
<S> <C> <C>
PREFERRED STOCKS -- 1.1%
AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A (5).......... 20,000 842,500
First Nationwide Bank, FSB, 11.50%................................. 13,000 1,339,000
Southdown, Inc., Cv., Series D..................................... 25,000 931,250
------------
3,112,750
------------
Total Convertible Sector (Cost $3,664,045)......................... 3,803,831
------------
</TABLE>
3
<PAGE> 4
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
-------------- ------------
<S> <C> <C>
CORPORATE SECTOR -- 36.6%
COMMON STOCKS -- 1.3%
Capital Gaming, Inc. (6)........................................... 7,198 $ 51,286
Hollywood Casino Corp. ............................................ 63,333 383,956
Leaseway Transportation Corp. ..................................... 28,000 371,000
Petrolane, Inc., Cl. B. ........................................... 152,712 2,137,968
Triangle Wire & Cable, Inc. (5).................................... 84,444 759,996
------------
3,704,206
<CAPTION>
Face Amount
--------------
<S> <C> <C>
CORPORATE BONDS AND NOTES -- 34.8%
BASIC MATERIALS -- 7.8%
Chemicals -- 2.0%
Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03.............. $ 3,000,000 3,067,500
OSI Specialities Holdings Co., Units............................... 500,000 307,500
Rexene Corp., 10% 2nd Priority Nts., 11/15/02 (6).................. 2,743,000 2,593,660
------------
5,968,660
Metals -- 2.2%
Acme Metals, Inc.:
12.50% Sr. Sec. Nts., 8/1/02..................................... 1,500,000 1,511,250
0%/13.50% Sr. Sec. Disc. Nts., 8/1/04............................ 750,000 517,500
Kaiser Aluminum & Chemical Corp.:
9.875% Sr. Nts., 2/15/02......................................... 1,650,000 1,513,875
12.75% Sr. Sub. Nts., 2/1/03..................................... 200,000 199,500
NL Industries, Inc.:
11.75% Sr. Sec. Nts., 10/15/03................................... 500,000 511,250
0%/13% Sr. Sec. Disc. Nts., 10/15/05 (3)......................... 500,000 312,500
Republic Engineered Steels, Inc., 9.875% Fst. Mtg. Nts.,
12/15/01......................................................... 900,000 830,250
Weirton Steel Corp., 11.50% Sr. Nts., 3/1/98....................... 1,000,000 1,038,750
------------
6,434,875
Paper and Forest Products -- 3.6%
Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01.................. 2,000,000 2,085,000
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03........................ 1,000,000 925,000
Rainy River Forest Products, 10.75% Sr. Sec. Nts., 10/15/01........ 800,000 802,000
</TABLE>
4
<PAGE> 5
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
Paper and Forest Products (Continued)
Repap Wisconsin, Inc., 9.25% Fst. Priority Sr. Sec. Nts., 2/1/02... $ 1,000,000 $ 905,000
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00........... 1,100,000 1,080,750
Stone Container Corp.:
9.875% Sr. Nts., 2/1/01.......................................... 2,250,000 2,115,000
10.75% Fst. Mtg. Nts., 10/1/02................................... 1,720,000 1,702,800
Stone Savannah River Pulp & Paper Corp., 14.125% Sr. Sub Nts.,
12/15/00......................................................... 900,000 965,250
------------
10,580,800
CONSUMER CYCLICALS -- 11.2%
Automotive -- 1.4%
Envirotest Systems Corp.:
9.125% Sr. Nts., 3/15/01......................................... 700,000 635,250
9.625% Sr. Sub. Nts., 4/1/03..................................... 1,500,000 1,348,125
Foamex LP/JPS Automotive Corp., Units (5).......................... 1,750,000 953,750
JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01........... 1,000,000 1,000,000
SPX Corp., 11.75% Sr. Sub. Nts., 6/1/02............................ 250,000 256,250
------------
4,193,375
Construction Supplies and Development -- 2.5%
NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03.............................. 1,500,000 1,305,000
Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03.................... 2,000,000 1,970,000
USG Corp.:
10.25% Sr. Sec. Nts., 12/15/02................................... 1,900,000 1,945,125
8.75% Debs., 3/1/17.............................................. 2,450,000 2,137,625
------------
7,357,750
Consumer Goods and Services -- 3.1%
Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B,
5/27/98.......................................................... 3,000,000 2,021,250
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series B, 10/1/03... 2,500,000 2,337,500
Insilco Corp., 10.375% Sr. Sec. Nts., 7/1/97....................... 2,087,000 2,118,305
PT Polysindo Eka Perkasa, 13% Sr. Nts., 6/15/01.................... 1,000,000 990,000
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05........... 2,000,000 1,795,000
------------
9,262,055
Entertainment -- 0.6%
Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series A,
11/15/00 (5)..................................................... 550,000 464,750
Capitol Queen & Casino, Inc., 12% Fst. Mtg. Nts., Series A,
11/15/00 (5)..................................................... 400,000 340,000
Empress River Casino Finance Corp., 10.75% Gtd. Sr. Nts., 4/1/02... 750,000 652,500
</TABLE>
5
<PAGE> 6
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
Entertainment (Continued)
Lady Luck Gaming Finance Corp., 10.50% Fst. Mtg. Nts., Series B,
3/1/01........................................................... $ 500,000 $ 182,500
Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03................ 250,000 213,125
------------
1,852,875
Media -- 0.5%
Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01.... 1,300,000 1,365,000
------------
Real Estate Development -- 0.3%
Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts.,
4/1/02........................................................... 1,000,000 895,000
------------
Retail -- 2.8%
Brylane LP/Brylane Capital Corp., 10% Sr. Sub. Nts.,
Series B, 9/1/03................................................. 1,500,000 1,432,500
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01................ 2,000,000 1,970,000
Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03........... 1,800,000 1,449,000
Finlay Enterprises, Inc., 0%/12% Sr. Disc. Debs., 5/1/05 (3)....... 500,000 291,250
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03................ 1,250,000 1,187,500
Musicland Group, Inc. (The), 9% Sr. Sub. Nts., 6/15/03............. 700,000 622,125
R.H. Macy & Co., Inc., 14.50% Sr. Sub. Debs., 10/15/98 (2)......... 1,800,000 1,269,000
------------
8,221,375
CONSUMER NON-CYCLICALS -- 3.3%
Food -- 0.5%
Kash 'N Karry Food Stores, Inc., 14% Sub. Debs., 2/1/01 (2)........ 600,000 183,000
Royal Crown Corp., 9.75% Sr. Sec. Nts., 8/1/00..................... 1,500,000 1,380,000
------------
1,563,000
Food and Drug Distribution -- 2.3%
Di Giorgio Corp., 12% Sr. Nts., 2/15/03............................ 2,050,000 2,060,250
Grand Union Co.:
11.25% Sr. Nts., 7/15/00......................................... 400,000 360,000
12.25% Sr. Sub. Nts., 7/15/02.................................... 3,000,000 2,115,000
Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99....... 1,400,000 1,190,000
Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03.................... 1,000,000 992,500
------------
6,717,750
Healthcare -- 0.5%
American Medical International, Inc., 9.50% Sr. Sub. Nts.,
Series B, 4/15/06................................................ 800,000 808,000
Total Renal Care, Inc., Units...................................... 1,000,000 735,000
------------
1,543,000
</TABLE>
6
<PAGE> 7
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
ENERGY -- 2.6%
Aftermarket Technology Corp., 12% Sr. Sub. Nts., 8/1/04 (5)........ $ 1,100,000 $ 1,116,500
Ferrellgas LP/Ferrellgas Finance Corp., 10% Sr. Nts., 8/1/01....... 500,000 496,250
Mesa Capital Corp., 0%/12.75% Sec. Disc. Nts., 6/30/98 (3)......... 1,411,000 1,213,460
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02............ 1,000,000 1,135,000
Presidio Oil Co.:
11.50% Sr. Sec. Nts., Series B, 9/15/00.......................... 1,000,000 950,000
13.90% Sr. Sub. Gas Indexed Nts., Series B, 7/15/02 (4).......... 1,800,000 1,611,000
Wainoco Oil Corp., 12% Sr. Nts., 8/1/02............................ 1,000,000 1,035,000
------------
7,557,210
FINANCIAL -- 1.1%
American Life Holding Co., 11.25% Sr. Sub. Nts., 9/15/04........... 940,000 944,700
Card Establishment Services, Inc., 10% Sr. Sub. Nts.,
Series B, 10/1/03................................................ 2,500,000 2,325,000
------------
3,269,700
INDUSTRIAL -- 4.2%
Containers -- 0.9%
Calmar, Inc., 12% Sr. Sec. Nts., 12/15/97.......................... 1,500,000 1,500,000
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04.......... 1,300,000 1,267,500
------------
2,767,500
General Industrial -- 2.5%
American Standard, Inc.:
9.875% Sr. Sub. Nts., 6/1/01..................................... 1,650,000 1,637,625
0%/10.50% Sr. Sub. Disc. Debs., 6/1/05 (3)....................... 300,000 199,500
Farley, Inc., 0% Sub. Debs., 12/30/12.............................. 115,000 12,075
Imo Industries, Inc., 12.25% Sr. Sub. Debs., 8/15/97............... 2,600,000 2,629,250
Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01............. 2,650,000 2,994,500
------------
7,472,950
Transportation -- 0.8%
Kloster Cruise Ltd., 13% Sr. Sec. Nts., 5/1/03..................... 500,000 485,000
Tiphook Financial Corp.:
7.125% Gtd. Nts., 5/1/98......................................... 1,000,000 697,500
8% Gtd. Nts., 3/15/00............................................ 200,000 136,000
Transtar Holdings LP/Transtar Capital Corp.,
0%/13.375% Sr. Disc. Nts., Series B, 12/15/03 (3)................ 2,000,000 1,095,000
------------
2,413,500
</TABLE>
7
<PAGE> 8
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
TECHNOLOGY -- 4.6%
Aerospace/Defense -- 0.6%
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98...................... $ 1,750,000 $ 1,443,750
Interlake Corp., 12.125% Sr. Sub. Debs., 3/1/02.................... 200,000 193,000
------------
1,636,750
Cable Television -- 1.0%
Echostar Communications Corp., Units............................... 1,350,000 644,625
Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts.,
Series B, 11/1/03 (4)............................................ 1,500,000 1,357,500
International CableTel, Inc., 0%/10.875% Sr. Def. Cpn. Nts.,
10/15/03 (3)..................................................... 1,500,000 828,750
------------
2,830,875
Communications -- 2.2%
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (3).......... 2,250,000 1,518,750
GS Technologies Operating Co., Inc., 12% Sr. Gtd. Nts., 9/1/04..... 900,000 920,250
Horizon Cellular Telephone LP/Horizon Finance Corp., 0%/11.375%
Sr. Sub. Disc. Nts., 10/1/00 (3)................................. 2,500,000 1,812,500
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr.
Sub. Disc. Nts., 8/1/03 (3)...................................... 3,500,000 2,362,500
------------
6,614,000
Technology -- 0.8%
Bell & Howell Holdings Co., 0%/11.5% Sr. Disc. Debs.,
Series B, 3/1/05 (3)............................................. 4,700,000 2,373,500
------------
STRUCTURED INSTRUMENTS -- 0.5%
Lehman Brothers Holdings, Inc., 5.225% Standard & Poor's 500
Index-Linked Nts., 12/8/94 (5)................................... 500,000 526,650
Salomon Brothers, Inc., Standard & Poor's 500 Index-Linked Nts.:
5.3125%, 12/13/94 (5)............................................ 500,000 545,000
5.625%, 1/12/95 (5).............................................. 500,000 585,000
------------
1,656,650
------------
Total Corporate Sector (Cost $111,074,393)......................... 108,252,356
------------
</TABLE>
8
<PAGE> 9
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
INTERNATIONAL SECTOR -- 38.1%
FOREIGN GOVERNMENT OBLIGATIONS -- 31.8%
Argentina (Republic of):
Bonds, 8.375%, 12/20/03.......................................... $ 5,000,000 $ 4,062,540
Bonds, 4.25%, 3/31/23............................................ 1,000,000 465,625
Past Due Interest Bonds, 5%, 3/31/05 (4)(6)...................... 3,000,000 2,172,187
Brazil (Federal Republic of):
Interest Due and Unpaid Bonds, 6.606%, 1/1/01 (4)................ 980,000 801,150
Nts., Banco Estado Minas Gerais:
10%, 1/15/96................................................... 750,000 728,437
8.25%, 2/10/00................................................. 1,000,000 812,500
Par Bonds, 4%, 4/15/24........................................... 4,000,000 1,612,000
Canada (Government of) Debs., 10.50%, 7/1/00 (CAD) (1)............. 4,140,000 3,310,450
Denmark (Kingdom of) Bonds:
9%, 11/15/98 (DKK)(1)............................................ 4,880,000 837,753
6%, 12/10/99 (DKK) (1)........................................... 13,000,000 1,965,807
Ecuador (Republic of) Bonds, 0%, 12/29/49 (5)(7)................... 2,500,000 1,471,875
First Australia National Mortgage Acceptance Corp. Ltd. Bonds,
Series 22, 11.40%, 12/15/01 (AUD) (1)............................ 4,834,380 3,624,050
International Bank for Reconstruction and Development Bonds,
12.50%, 7/25/97 (NZD)(1)......................................... 10,730,000 7,139,831
International Finance Corp., Sr. Nts., 10.65%, 4/26/99 (ITL) (1)... 1,000,000,000 639,352
Morocco (Kingdom of):
Loan Participation Agreement:
Tranche A, 5.934%, 1/1/09 (4)(5)............................... 4,000,000 2,835,000
Tranche B, 5.938%, 1/1/04 (4)(5)............................... 1,000,000 754,375
New South Wales Treasury Corp., 7% Gtd. Exch. Bonds, 4/1/04........ 3,740,000 2,170,234
New Zealand (Government of) Bonds, 10%, 7/15/97 (NZD) (1).......... 1,560,000 985,959
Nobra Euro Brazil (Federal Republic of) Sr. Debs.,
Banco Do Nordeste, 9%, 11/12/96.................................. 5,430,000 5,178,862
Oesterreich Kontrollbank Sr. Gtd. Nts., 10%, 8/10/99 (ITL) (1)..... 1,000,000,000 624,766
Repackaged Argentina Domestic Securities Trust I, 14.75%,
9/1/02 (5)....................................................... 3,000,000 2,842,500
South African (Republic of) Loan Participation Agreement,
Electricity Supply Commission, 7.25%, 10/14/98 (4)(5)............ 8,025,158 7,583,774
Spain (Kingdom of):
Bonds, 11.45%, 8/30/98 (ESP) (1)................................. 1,073,500,000 8,677,604
Gtd. Bonds, Bonos y Obligacion del Estadi, 12.25%, 3/25/00 (ESP)
(1)............................................................ 200,000,000 1,655,756
Treasury Corp. of Victoria Gtd. Nts., 12.50%, 7/15/00 (AUD) (1).... 2,700,000 2,170,111
</TABLE>
9
<PAGE> 10
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
United Kingdom Treasury Nts.:
12%, 11/20/98 (GBP)(1)........................................... $ 2,465,000 $ 4,466,592
12.25%, 3/26/99 (GBP)(1)......................................... 1,500,000 2,753,167
United Mexican States:
Gtd. Petroleos Mexicanos, 7.60%, 6/15/00......................... 1,000,000 893,300
Mexico UMS Combined Facility 3, Loan Participation Agreement,
5.6875%, 3/20/00 (4)(5)........................................ 583,617 513,583
New New Money Loan Participation Agreement, Tranche A, 6.0625%,
3/25/05 (4)(5)................................................. 6,480,050 5,301,491
Petacalco Topolobampo Trust:
8.125% Sr. Nts., 12/15/03 (5).................................. 600,000 504,000
8.125% Sr. Sec. Unsub. Nts., 12/15/03.......................... 2,000,000 1,680,000
Treasury Bills:
0%, 1/19/95 (MXP) (1).......................................... 12,385,490 3,494,438
0%, 4/6/95 (MXP) (1)........................................... 7,278,440 1,994,809
0%, 5/4/95 (MXP) (1)........................................... 3,685,070 999,735
Venezuela (Republic of):
Debs., 6.75%, 9/20/95 (5)........................................ 3,500,000 3,338,125
Debs., 9%, 5/27/96............................................... 3,000,000 2,823,750
------------
93,885,488
FOREIGN CORPORATE BONDS AND NOTES -- 0.9%
Bayerische Landesanstalt Sr. Nts., 10.625%, 5/12/00 (ITL) (1)(9)... 1,000,000,000 628,818
General Electric Capital Corp., 10.375% Nts., 6/14/00 (ITL) (1).... 2,440,000,000 1,518,497
PT Polysindo Eka Perkasa Promissory Note, 0%, 10/23/96 (IDR) (1)... 2,000,000,000 650,374
------------
2,797,689
PUT OPTIONS PURCHASED -- 0.0% Date/Price
European OTC Deutsche Mark/U.S. Dollar.............Nov.2/1.60DEM 21,930,474 1,455
European OTC Deutsche Mark/U.S. Dollar Put.........Nov.8/1.60DEM 10,965,237 727
------------
2,182
</TABLE>
10
<PAGE> 11
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
STRUCTURED INSTRUMENTS -- 5.4%
Argentina Local Market Securities Trust, Series 1994-II, 11.30%,
4/1/00 (5)....................................................... $ 2,869,565 $ 2,865,978
Bayerische Landesbank, N.Y. Branch, Mexican Peso Linked
Confidence Nts., Girozentrale Branch, 35.50%, 12/30/94 (5)....... 1,500,000 1,470,000
Citibank CD:
17.20%, 12/2/94 (CLP) (1)(9)..................................... 2,074,000,000 5,047,611
16.75%, 12/27/94 (CLP) (1)(9).................................... 1,279,661,812 3,109,518
16.25%, 5/30/95 (CLP) (1)(9)..................................... 462,456,598 1,125,507
10.50%, 7/14/95 (ARA) (1)(9)..................................... 1,500,000 1,500,276
Morgan Guaranty Trust Co. of New York (Singapore Branch) CD,
12.15%, 2/3/95 (9)............................................. 2,113,250,000 899,629
------------
Total Structured Instruments....................................... 16,018,519
------------
Total International Sector (Cost $114,000,901)..................... 112,703,878
------------
MORTGAGE-BACKED SECTOR -- 13.0%
AGENCY-FULL FAITH AND CREDIT -- 5.3%
Government National Mortgage Assn.:
12%, 11/20/13.................................................... 427,220 473,381
12%, 2/20/15..................................................... 332,119 369,492
12%, 9/20/15..................................................... 350,271 388,812
8%, 5/15/24...................................................... 2,480,667 2,383,746
8%, 5/15/24...................................................... 627,061 602,560
8%, 8/15/24...................................................... 891,209 856,388
8%, 9/15/24...................................................... 11,211,871 10,773,824
------------
15,848,203
AGENCY-GOVERNMENT SPONSORED -- 7.7%
Federal Home Loan Mortgage Corp:
Certificates of Participation:
12%, 5/1/10.................................................... 1,002,360 1,099,779
12%, 10/1/11................................................... 675,390 741,639
12%, 8/1/13.................................................... 46,282 50,823
12%, 8/1/14.................................................... 1,113,976 1,225,540
12%, 10/1/14................................................... 312,237 342,865
12%, 6/1/15.................................................... 468,437 515,617
13%, 6/1/15.................................................... 2,218,916 2,492,930
6.65%, 4/15/21................................................. 4,700,000 4,170,873
</TABLE>
11
<PAGE> 12
STATEMENT OF INVESTMENTS October 31, 1994 (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
MORTGAGE-BACKED SECTOR (CONTINUED)
AGENCY GOVERNMENT SPONSORED (CONTINUED)
Interest-Only Stripped Mtg.-Backed Security:
Trust 221, 7.50%, 5/25/23 (8).................................. $ 29,195,033 $ 11,249,211
Trust 240, 7%, 9/25/23 (8)..................................... 2,113,469 807,411
------------
22,696,688
------------
Total Mortgage-Backed Sector (Cost $38,158,057).................... 38,544,891
------------
Total Investments, at Value (Cost $298,494,029).................... 99.5% 294,204,320
Other Assets Net of Liabilities.................................... 0.5 1,453,809
------ ------------
Net Assets......................................................... 100.0% $295,658,129
====== ============
</TABLE>
(1) Face amount is reported in foreign currency. Currency abbreviations are as
follows:
<TABLE>
<S> <C> <C>
ARA -- Argentine Austral
AUD -- Australian Dollar
CAD -- Canadian Dollar
CLP -- Chilean Peso
DKK -- Danish Krone
ESP -- Spanish Peseta
GBP -- British Pound
IDR -- Indonesian Rupiah
ITL -- Italian Lira
MXP -- Mexican Peso
NZD -- New Zealand Dollar
</TABLE>
(2) Non-Income producing security.
(3) Represents a zero coupon bond that converts to a fixed rate of interest at a
designated date in the future.
(4) Represents the current interest rate for a variable rate security.
(5) Restricted security -- see Note 6 of Notes to Financial Statements.
(6) Interest or dividend is paid in kind.
(7) When-issued security to be delivered and settled after October 31, 1994.
(8) Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed-income
securities increase in price when interest rates decline. The principal
amount of the underlying pool represents the notional amount on which
current interest is calculated. The price of these securities is typically
more sensitive to changes in prepayment rates than traditional
mortgage-backed securities (for example, GNMA pass-throughs).
(9) Indexed instrument for which the principal amount due at maturity is
affected by the relative value of a foreign currency.
See accompanying Notes to Financial Statements.
12
<PAGE> 13
STATEMENT OF ASSETS AND LIABILITIES October 31, 1994
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $298,494,029) -- see accompanying statement................. $294,204,320
Cash.................................................................................... 2,237,788
Receivables:
Investments sold...................................................................... 2,793,040
Interest and dividends................................................................ 7,511,808
Other................................................................................... 213,820
------------
Total assets........................................................................ 306,960,776
------------
LIABILITIES:
Payables and other liabilities:
Investments purchased................................................................. 10,077,634
Currency payable...................................................................... 664,138
Dividend payable...................................................................... 245,882
Management and administrative fees -- Note 5.......................................... 92,320
Other................................................................................. 222,673
------------
Total liabilities................................................................... 11,302,647
------------
NET ASSETS.............................................................................. $295,658,129
============
COMPOSITION OF NET ASSETS:
Par value of shares of beneficial interest.............................................. $ 290,648
Additional paid-in capital.............................................................. 318,777,657
Overdistributed net investment income................................................... (3,324,611)
Accumulated net realized loss from investment, written option and foreign currency
transactions.......................................................................... (15,862,506)
Net unrealized depreciation on investments and translation of assets and liabilities
denominated in foreign currencies..................................................... (4,223,059)
------------
NET ASSETS -- Applicable to 29,064,849 shares of beneficial interest outstanding........ $295,658,129
============
NET ASSET VALUE PER SHARE............................................................... $10.17
======
</TABLE>
See accompanying Notes to Financial Statements.
13
<PAGE> 14
STATEMENT OF OPERATIONS For the Year Ended October 31, 1994
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (net of withholding tax of $234,664)........................................... $ 30,828,264
Dividends............................................................................... 410,652
------------
Total income................................................................... 31,238,916
------------
EXPENSES:
Management fees -- Note 5............................................................... 1,995,015
Administrative fees -- Note 5........................................................... 613,851
Custodian fees and expenses............................................................. 158,933
Shareholder reports..................................................................... 93,870
Transfer agent and accounting services fees -- Note 5................................... 62,252
Trustees' fees and expenses............................................................. 49,963
Legal and auditing fees................................................................. 40,854
Registration and filing fees............................................................ 30,377
Other................................................................................... 70,449
------------
Total expenses................................................................. 3,115,564
------------
NET INVESTMENT INCOME................................................................... 28,123,352
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized loss from:
Investments........................................................................... (4,799,403)
Closing of option contracts written -- Note 4......................................... (473,712)
Foreign currency transactions......................................................... (2,420,098)
------------
Net realized loss.............................................................. (7,693,213)
------------
Net change in unrealized appreciation or depreciation on:
Investments and options written....................................................... (20,087,086)
Translation of assets and liabilities denominated in foreign currencies............... 5,018,614
------------
Net change..................................................................... (15,068,472)
------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY
TRANSACTIONS.......................................................................... (22,761,685)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................... $ 5,361,667
============
</TABLE>
See accompanying Notes to Financial Statements.
14
<PAGE> 15
STATEMENTS OF CHANGES IN NET ASSETS
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Year Ended October 31,
1994 1993
------------ ---------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................. $ 28,123,352 $ 31,130,734
Net realized gain (loss) on investments, options written and foreign
currency transactions................................................ (7,693,213) 3,643,426
Net change in unrealized appreciation or depreciation on investments,
options written and translation of assets and liabilities denominated
in foreign currencies................................................ (15,068,472) 8,632,776
------------ ---------------
Net increase in net assets resulting from operations............... 5,361,667 43,406,936
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($.845 and $1.01 per share,
respectively)........................................................ (24,512,388) (29,034,475)
Tax return of capital distribution ($.126 per share)................... (3,638,975) --
BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued to shareholders in reinvestment of
dividends -- Note 2.................................................. 1,801,323 2,906,011
------------ ---------------
Total increase (decrease) in net assets ........................... (20,988,373) 17,278,472
NET ASSETS:
Beginning of year...................................................... 316,646,502 299,368,030
------------ ---------------
End of year (including undistributed (overdistributed) net investment
income of $(3,324,611) and $2,722,769, respectively)................. $295,658,129 $316,646,502
============ ===============
</TABLE>
See accompanying Notes to Financial Statements.
15
<PAGE> 16
FINANCIAL HIGHLIGHTS
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988(1)
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period...... $ 10.96 $ 10.46 $ 10.64 $ 9.88 $ 10.63 $ 11.17 $ 11.16
-------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income.................... 1.00 1.08 1.06 1.11 1.15 1.12 .64
Net realized and unrealized gain (loss)
on investments, options written and
foreign currency transactions.......... (.82) .43 (.08) .82 (.78) (.52) .05
-------- -------- -------- -------- -------- -------- --------
Total income from investment
operations........................... .18 1.51 .98 1.93 .37 .60 .69
-------- -------- -------- -------- -------- -------- --------
Dividends and distributions to
shareholders:
Dividends from net investment income..... (.84) (1.01) (1.16) (1.07) (1.10) (1.13) (.59)
Distributions from net realized gain on
investments, options written and
foreign currency transactions.......... -- -- -- (.10) (.02) (.01) (.06)
Tax return of capital.................... (.13) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total dividends and distributions to
shareholders......................... (.97) (1.01) (1.16) (1.17) (1.12) (1.14) (.65)
Offering costs........................... -- -- -- -- -- -- (.03)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period............ $ 10.17 $ 10.96 $ 10.46 $ 10.64 $ 9.88 $ 10.63 $ 11.17
======== ======== ======== ======== ======== ======== ========
Market value, end of period............... $ 9.50 $ 11.25 $ 11.13 $ 11.13 $ 9.38 $ 10.13 $ 11.50
TOTAL RETURN, AT MARKET VALUE(2).......... (7.46)% 11.10% 11.48% 33.05% 4.09% (1.86)% 6.08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)............................... $295,658 $316,647 $299,368 $301,568 $278,511 $299,673 $314,656
Average net assets (in thousands)......... $306,686 $307,244 $303,773 $289,681 $290,533 $307,735 $311,254
Number of shares outstanding at end of
period (in thousands).................... 29,065 28,896 28,625 28,347 28,194 28,194 28,162
Ratios to average net assets:
Net investment income.................... 9.17% 10.13% 9.95% 10.80% 11.16% 10.28% 9.80%(3)
Expenses................................. 1.02% 1.00% 1.11% 1.16%(4) 1.03% 1.03% 1.01%(3)
Portfolio turnover rate(5)................ 187.6% 131.3% 95.9% 59.7% 85.7% 162.0% 60.1%
</TABLE>
(1) For the period from March 24, 1988 (commencement of operations) to October
31, 1988.
(2) Assumes a hypothetical purchase at the current market price on the business
day before the first day of the fiscal period, with all dividends and
distributions reinvested in additional shares on the reinvestment date, and
a sale at the current market price on the last business day of the period.
Total return does not reflect sales charges or brokerage commissions.
(3) Annualized.
(4) Includes $.01 per share of federal excise tax expense. The expense ratio,
exclusive of federal excise tax expense, was 1.10%.
(5) 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 year ended October 31, 1994 were $552,455,453
and $528,484,242, respectively.
See accompanying Notes to Financial Statements.
16
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS
Oppenheimer Multi-Sector Income Trust
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Multi-Sector Income Trust (the Trust) is registered under the
Investment Company Act of 1940, as amended, as a diversified, closed-end
management investment company. The Trust's investment advisor is Oppenheimer
Management Corporation (the Manager). The following is a summary of significant
accounting policies consistently followed by the Trust.
Investment Valuation -- Portfolio securities are valued at 4:00 p.m. (New York
time) on the last day of each week on which day the New York Stock Exchange is
open. 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 asked price or the last sale price
on the prior trading day. Long-term debt securities are valued by a portfolio
pricing service approved by the Board of Trustees. Long-term debt 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 under consistently applied procedures established by the Board of
Trustees to determine fair value in good faith. Short-term 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. Forward foreign currency contracts are valued at the closing price on
the London foreign exchange market on a daily basis. Options are valued based
upon the last sale price on the principal exchange on which the option is traded
or, in the absence of any transactions that day, the value is based upon the
last sale on the prior trading date if it is within the spread between the
closing bid and asked prices. If the last sale price is outside the spread, the
closing bid or asked price closest to the last reported sale price is used.
Security Credit Risk -- The Trust invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Trust
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. At October 31, 1994, securities with an
aggregate market value of $1,452,000, representing .47% of the Trust's total
assets, were in default.
Foreign Currency Translation -- The accounting records of the Trust are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of exchange.
Amounts related to the purchase and sale of securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The Trust generally enters into forward foreign currency exchange contracts as a
hedge, upon the purchase or sale of a security denominated in a foreign
currency. In addition, the Trust may enter into such contracts as a hedge
against changes in foreign currency exchange rates on portfolio positions. A
forward exchange contract is a commitment to purchase or sell a foreign currency
at a future date, at a negotiated rate. Risks may arise from the potential
inability of the counterparty to meet the terms of the contract and from
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Trust's results of operations.
17
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (Continued)
Oppenheimer Multi-Sector Income Trust
Call Options Written -- The Trust may write covered call options. When an option
is written, the Trust receives a premium and becomes obligated to sell the
underlying security at a fixed price, upon exercise of the option. In writing an
option, the Trust bears the market risk of an unfavorable change in the price of
the security underlying the written option. Exercise of an option written by the
Trust could result in the Trust selling a security at a price different from the
current market value. All securities covering call options written are held in
escrow by the custodian bank.
Repurchase Agreements -- The Trust requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. If the seller of the agreement defaults and the value of
the collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Trust may be delayed or
limited.
Federal Income Taxes -- The Trust 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 tax provision is required. At October 31, 1994, the Trust had
available for federal income tax purposes an unused capital loss carryover of
approximately $13,700,000, $6,700,000 of which will expire in 1998, $2,500,000
in 1999, and $4,500,000 in 2002.
Trustees' Fees and Expenses -- The Trust has adopted a nonfunded retirement plan
for the Trust's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. The accumulated liability
for the Trust's projected benefit obligations was $117,741 at October 31, 1994.
No payments have been made under the plan.
Distributions to Shareholders -- The Trust intends to declare and pay dividends
from net investment income monthly. Distributions from net realized gains on
investments, if any, will be made at least once each year.
Change in Accounting Classification of Distributions to
Shareholders -- Effective November 1, 1993, the Trust adopted Statement of
Position 93-2: Determination, Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies. As a result, the Trust changed the classification of distributions to
shareholders to better disclose the differences between financial statement
amounts and distributions determined in accordance with income tax regulations.
Accordingly, subsequent to October 31, 1993, amounts have been reclassified to
reflect a decrease in paid-in capital of $202,055, a decrease in undistributed
net investment income of $6,782,917, and a decrease in undistributed capital
loss on investments of $6,984,972. During the year ended October 31, 1994, in
accordance with Statement of Position 93-2, paid-in capital was decreased by
$3,880,475, undistributed net investment loss was decreased by $763,547 and
undistributed capital loss was decreased by $3,116,928.
Other -- Investment transactions are accounted for on the date the investments
are purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
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. Dividends in kind are recognized as income
on the ex-dividend date, at the current market value of the underlying security.
Interest on payment-in-kind debt instruments is accrued as
18
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS (Continued)
Oppenheimer Multi-Sector Income Trust
income at the coupon rate and a market adjustment is made on the ex-date.
2. SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of $.01 par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended October Year Ended October
31, 1994 31, 1993
--------------------- ---------------------
Shares Amount Shares Amount
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Net increase from
dividends
reinvested........ 168,788 $1,801,323 271,391 $2,906,011
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At October 31, 1994, net unrealized depreciation on investments and options
written of $4,289,709 was composed of gross appreciation of $4,685,873, and
gross depreciation of $8,975,582.
4. CALL OPTION ACTIVITY
Call option activity for the year ended October 31, 1994 was as follows:
<TABLE>
<CAPTION>
Number Amount
of Options of Premiums
---------- -----------
<S> <C> <C>
Options outstanding at
October 31, 1993................ -- --
Options written.................. 415 $ 416,379
Options closed................... (415) (416,379)
--- ---------
Options outstanding at
October 31, 1994................ -- --
=== =========
</TABLE>
The cost of cancelling options in closing purchase transactions was $890,091
resulting in a net short-term loss of $473,712.
5. MANAGEMENT AND ADMINISTRATIVE FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Trust which provides for an annual fee of .65% on
the Trust's average annual net assets.
Mitchell Hutchins Asset Management Inc. serves as the Trust's Administrator. The
Trust pays the Administrator an annual fee of .20% of the Trust's average annual
net assets.
The Manager acts as the accounting agent for the Trust at an annual fee of
$24,000, plus out-of-pocket costs and expenses reasonably incurred.
Shareholder Financial Services, Inc. (SFSI), a wholly-owned subsidiary
of the Manager, is the transfer agent and registrar for the Trust. Fees paid to
SFSI are based on the number of accounts and the number of shareholder
transactions, plus out-of-pocket costs and expenses.
19
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (Continued)
Oppenheimer Multi-Sector Income Trust
6. RESTRICTED SECURITIES
The Trust owns securities purchased in private placement transactions,
without registration under the Securities Act of 1933 (the Act). The
securities are valued under methods approved by the Board of Trustees as
reflecting fair value. The Trust intends to invest no more than 10% of
its net assets (determined at the time of purchase) in restricted and
illiquid securities, excluding securities eligible for resale pursuant to
Rule 144A of the Act that are determined to be liquid by the Board of
Trustees or by the Manager under Board-approved guidelines. Restricted
and illiquid securities, excluding securities eligible for resale
pursuant to Rule 144A of the Act amount to $21,729,775 or 7.35% of the
Trust's net assets at October 31, 1994. Illiquid and/or restricted
securities, including those restricted securities eligible for resale
pursuant to Rule 144A of the Act are listed below.
<TABLE>
<CAPTION>
Valuation Per Unit as
Security Acquisition Date Cost Per Unit of October 31, 1994
--------------------------------------------------- ---------------- ------------- ---------------------
<S> <C> <C> <C>
Aftermarket Technology Corp., 12% Sr. Sub. Nts.,
8/1/04(1)......................................... 7/25/94 $100.41 $101.50
AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series
A(1).............................................. 12/2/93-4/21/94 $ 50.57 $ 42.13
Argentina Local Market Securities Trust, Series
1994-II, 11.30%, 4/1/00(1)........................ 8/25/94 $100.00 $ 99.88
Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series
A, 11/15/00....................................... 11/18/93 $100.00 $ 84.50
Bayerische Landesbank, N.Y. Branch, Mexican Peso
Linked Confidence Nts., Girozentrale Branch,
35.50%, 12/30/94.................................. 9/26/94 $100.00 $ 98.00
Becker Gaming, Inc. Wts., Exp. 11/00............... 11/18/93 $ 2.00 $ 2.00
Capitol Queen & Casino, Inc., 12% Fst. Mtg. Nts.,
Series A, 11/15/00................................ 11/13/94 $ 87.50 $ 85.00
Ecuador (Republic of) Bonds, 0%, 12/29/49(1)....... 10/10/94 $ 60.50 $ 58.88
Foamex LP/JPS Automotive Corp., Units(1)........... 6/22/94 $ 51.39 $ 54.50
Lehman Brothers Holdings, Inc., 5.225% Standard &
Poor's 500 Index-Linked Nts., 12/8/94............. 3/30/94 $144.80 $105.33
Morocco (Kingdom of) Loan Participation Agreement:
Tranche A, 5.934%, 1/1/09....................... 2/23/94-4/21/94 $ 70.44 $ 70.88
Tranche B, 5.938%, 1/1/04....................... 5/25/94 $ 80.00 $ 75.44
Purity Supreme, Inc. Wts., Exp 8/97................ 7/29/92 $ -- $ .02
Repackaged Argentina Domestic Securities Trust I,
14.75%, 9/1/02(1)................................. 9/19/94-10/19/94 $ 99.86 $ 94.75
Salomon Brothers, Inc., Standard & Poor's 500
Index-Linked Nts.:
5.3125%, 12/13/94............................... 10/7/94 $144.80 $109.00
5.625%, 1/12/95................................. 10/7/94 $155.40 $117.00
South African (Republic of) Loan Participation
Agreement, Electricity Supply Commission, 7.25%,
10/14/98.......................................... 9/26/94-9/30/94 $ 94.62 $ 94.50
Terex Corp. Rts., Exp. 7/96(1)..................... 6/29/94 $ 1.49 $ 1.25
Triangle Wire & Cable, Inc. Common Stock........... 1/13/92 $ 9.50 $ 9.00
United Mexican States:
Mexico UMS Combined Facility 3, Loan
Participation Agreement, 5.6875%, 3/20/00..... 10/25/94 $ 89.00 $ 88.00
New New Money Loan Participation Agreement,
Tranche A, 6.0625%, 3/25/05................... 1/13/94 $ 91.75 $ 81.81
Petacalco Topolobampo Trust, 8.125% Sr. Nts.,
12/15/03(1)................................... 8/22/94 $ 89.06 $ 84.00
Venezuela (Republic of) Debs., 6.75%, 9/20/95(1)... 4/7/94-5/20/94 $ 94.96 $ 95.38
</TABLE>
(1) Transferable under Rule 144A of the Act.
20
<PAGE> 21
INDEPENDENT AUDITORS' REPORT
Oppenheimer Multi-Sector Income Trust
The Board of Trustees and Shareholders of
Oppenheimer Multi-Sector Income Trust:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Multi-Sector Income Trust as of October 31, 1994, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year period then ended
and the financial highlights for each of the years in the six-year period then
ended and the period from March 24, 1988 (commencement of operations) to October
31, 1988. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1994 by correspondence with the custodian and brokers; and where
confirmations were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Oppenheimer Multi-Sector Income Trust as of October 31, 1994, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the six-year period then ended and the period from March
24, 1988 (commencement of operations) to October 31, 1988, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
November 21, 1994
21
<PAGE> 22
FEDERAL INCOME TAX INFORMATION (Unaudited)
Oppenheimer Multi-Sector Income Trust
In early 1995, shareholders will receive information regarding all dividends and
distributions paid to them by the Trust during calendar year 1994. Regulations
of the U.S. Treasury Department require the Trust to report this information to
the Internal Revenue Service.
Dividends paid by the Trust during the fiscal year ended October 31, 1994 which
are not designated as capital gain distributions should be multiplied by 1.57%
to arrive at the net amount eligible for the corporate dividend received
deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Trust to the Internal Revenue Service. Because
of the complexity of the federal regulations which may affect your individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax advisor for specific guidance.
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GENERAL INFORMATION CONCERNING THE TRUST
Oppenheimer Multi-Sector Income Trust (the Trust) is a closed-end diversified
management investment company with a primary investment objective of seeking
high current income consistent with preservation of capital. The Trust's
secondary investment objective is capital appreciation. In seeking its
objectives, the Trust may invest any percentage of its assets in at least three
of the following seven fixed-income sectors: U.S. Government, Corporate,
International, Asset-Backed, Municipal, Convertible and Money Market. Current
income, preservation of capital and, secondarily, possible capital appreciation
will be considerations in the allocation of assets among such sectors. The Trust
may invest in a number of different kinds of "derivative investments" and may
also engage in certain special investment techniques, including repurchase
transactions, when-issued and delayed delivery transactions and hedging. The
investment advisor to the Trust is Oppenheimer Management Corporation (the
Manager).
The Portfolio Managers of the Trust are Thomas Reedy, David Rosenberg and Ashwin
Vasan, who also serve as Vice Presidents of the Trust and of the Manager, and
are officers of certain mutual funds managed by the Manager (OppenheimerFunds).
Messrs. Reedy, Rosenberg and Vasan have been the persons principally responsible
for the day-to-day management of the Trust's portfolio since August 1993, June
1994 and August 1993, respectively. During the past five years, Mr. Reedy served
as a securities analyst for the Manager, and, prior to joining the Manager, Mr.
Rosenberg served as an officer and portfolio manager for Delaware Investment
Advisors and one of its mutual funds and Mr. Vasan served as a securities
analyst for Citibank, N.A.
Dividend Reinvestment and Cash Purchase Plan -- Pursuant to the Trust's Dividend
Reinvestment and Cash Purchase Plan (the Plan), as to shares of the Trust
(Shares) not registered in nominee name, all dividends and capital gains
distributions (Distributions) declared by the Trust will be automatically
reinvested in additional full and fractional Shares unless a shareholder elects
to receive cash. If Shares are registered in nominee name, the shareholder
should consult the nominee if the shareholder desires to participate in the
Plan. Shareholders that participate in the Plan (Participants) may, at their
option, make additional cash investments in Shares, semi-annually in amounts of
at least $100, through payment to Shareholder Financial Services, Inc., the
agent for the Plan (the Agent), accompanied by a service fee of $0.75.
Depending upon the circumstances hereinafter described, Plan Shares will be
acquired by the Agent for the Participant's account through receipt of newly
issued Shares or the purchase of outstanding Shares on the open market. If the
market price of Shares on the relevant date (normally the payment date) equals
or exceeds their net asset value, the Agent will ask the Trust for payment of
the Distribution in additional Shares at the greater of the Trust's net asset
value determined as of the date of purchase or 95% of the then-current market
price. If the market price is lower than net asset value, the Distribution will
be paid in cash, which the Agent will use to buy Shares on The New York Stock
Exchange (the NYSE), or otherwise on the open market to the extent available. If
the market price exceeds the net asset value before the Agent has completed its
purchases, the average purchase price per Share paid by the Agent may exceed the
net asset value, resulting in fewer Shares being acquired
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than if the Distribution had been paid in Shares issued by the Trust.
Participants may elect to withdraw from the Plan at any time and thereby receive
cash in lieu of Shares by sending appropriate written instructions to the Agent.
Elections received by the Agent will be effective only if received more than ten
days prior to the record date for any Distribution; otherwise, such termination
will be effective shortly after the investment of such Distribution with respect
to any subsequent Distribution. Upon withdrawal from or termination of the Plan,
all Shares acquired under the Plan will remain in the Participant's account
unless otherwise requested. For full Shares, the Participant may either: (1)
receive without charge a share certificate for such Shares; or (2) request the
Agent (after receipt by the Agent of signature guaranteed instructions by all
registered owners) to sell the Shares acquired under the Plan and remit the
proceeds less any brokerage commissions and a $2.50 service fee. Fractional
Shares may either remain in the Participant's account or be reduced to cash by
the Agent at the current market price with the proceeds remitted to the
Participant. Shareholders who have previously withdrawn from the Plan may rejoin
at any time by sending written instructions signed by all registered owners to
the Agent.
There is no direct charge for participation in the Plan; all fees of the Agent
are paid by the Trust. There are no brokerage charges for Shares issued directly
by the Trust. However, each Participant will pay a pro rata share of brokerage
commissions incurred with respect to open market purchases of Shares to be
issued under the Plan. Participants will receive tax information annually for
their personal records and to assist in federal income tax return preparation.
The automatic reinvestment of Distributions does not relieve Participants of any
income tax that may be payable on Distributions.
The Plan may be terminated or amended at any time upon 30 days' prior written
notice to Participants which, with respect to a Plan termination, must precede
the record date of any Distribution by the Trust. Additional information
concerning the Plan may be obtained by shareholders holding Shares registered
directly in their names by writing the Agent, Shareholder Financial Services,
Inc., P.O. Box 173673, Denver, CO 80217-3673 or by calling 1-800-647-7374.
Shareholders holding Shares in nominee name should contact their brokerage firm
or other nominee for more information.
Shareholder Information -- The Shares are traded on the NYSE. Daily market
prices for the Trust's shares are published in the New York Stock Exchange
Composite Transaction section of newspapers under the designation "OppenMlti."
The Trust's NYSE trading symbol is OMS. Weekly net asset value (NAV) and market
price information about the Trust is published each Monday in The Wall Street
Journal and The New York Times and each Saturday in Barron's, and other
newspapers in a table called "Closed-End Bond Funds."
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OPPENHEIMER MULTI-SECTOR INCOME TRUST
Officers and Trustees
Leon Levy, Chairman of the Board
of Trustees
Leo Cherne, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Thomas P. Reedy, Vice President
David Rosenberg, Vice President
Ashwin K. Vasan, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
Investment Advisor
Oppenheimer Management Corporation
Administrator
Mitchell Hutchins Asset Management Inc.
Transfer Agent and Registrar
Shareholder Financial Services, Inc.
Custodian of Portfolio Securities
The Bank of New York
Independent Auditors
KPMG Peat Marwick LLP
Legal Counsel
Gordon Altman Butowsky Weitzen Shalov
& Wein
This is a copy of a report to shareholders of
Oppenheimer Multi-Sector Income Trust. It does not
offer for sale or solicit orders to buy any securities.
Notice is hereby given in accordance with Section 23(c)
of the Investment Company Act of 1940 that periodically
the Trust may purchase its shares of beneficial
interest in the open market at prevailing market
prices.
RA680.1294.R(LOGO) Printed on recycled paper
1994 ANNUAL REPORT
- -------------------------------------------------------------
OPPENHEIMER
MULTI-SECTOR
INCOME TRUST
OCTOBER 31, 1994
[LOGO] OppenheimerFunds
