<PAGE> 1
REPORT TO SHAREHOLDERS:
Oppenheimer Multi-Sector Income Trust produced an annualized dividend yield of
9.84% for the month ended April 30, 1994.(1) During the past six months, the
Trust's total return at net asset value was -1.05%.(2)
The Trust primarily seeks high current income consistent with preservation of
capital and has a secondary objective of capital appreciation. In keeping with
its flexible investment strategy, the Trust's managers seek high yields in
different economic environments by shifting assets among the various fixed
income sectors described below. As of April 30, 1994, the Trust's portfolio was
allocated as follows:(3)
INVESTMENT BREAKDOWN:
OPPENHEIMER MULTI-SECTOR INCOME TRUST
[INVESTMENT BREAKDOWN GRAPH]
* Corporate bonds, notes and common stocks 39.4%
* Foreign fixed income securities 35.2%
* U.S. government obligations 13.6%
* Mortgage-backed securities 10.2%
* Convertible securities 1.5%
* Money market instruments .1%
The U.S. economy strengthened considerably in the last six months, as we
expected, and corporate fixed income securities continue to constitute the
largest sector in the Fund. We believe corporate bonds will rise in price as
the U.S. economic recovery continues, helping corporate earnings increase and
credit quality strengthen. We are focused on industries that do well in the
later stages of a recovery, such as forest products and construction.
The strengthening economy prompted the Federal Reserve to raise interest rates
several times as a pre-emptive strike against inflation. Because bond prices
fall when interest rates rise, prices of U.S. government securities have
correspondingly declined.
Your Fund's managers expected the rise in domestic interest rates and emphasized
shorter-term investments in U.S. government securities. We remain positioned
for the possibility of further increases in U.S. rates.
<PAGE> 2
As part of a defensive interest rate strategy, we have invested in high coupon
mortgage-backed securities. In a rising interest rate environment, these
mortgages provide high current yield and low sensitivity to interest rate
rises.
In the European markets, however, we believe continued economic weakness and
the German central bank's recent decision to cut interest rates will cause bond
prices to rise. Accordingly, we have added European fixed income securities to
the portfolio. We have also added positions in select Latin American markets,
which offer attractive investment opportunities.
Thank you for your confidence in Oppenheimer Multi-Sector Income Trust. We will
continue to monitor market conditions closely to seek out opportunities for
the Trust.
Sincerely,
/s/ DONALD W. SPIRO
- - --------------------
Donald W. Spiro
President--Oppenheimer
Multi-Sector Trust
May 20, 1994
1. Dividend yield was calculated by annualizing the April dividend of
$.083 per share and dividing that amount by the 4/29/94 closing price on The
New York Stock Exchange of $10.125 per share.
2. Based on the change in net asset value per share from 10/31/93 to 4/30/94,
with all dividends reinvested. Brokerage costs and taxes were not considered.
Past performance does not guarantee future results.
3. Portfolio allocations are subject to change.
<PAGE> 3
STATEMENT OF INVESTMENTS April 30, 1994 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
MONEY MARKET SECTOR -- 0.1%
Repurchase agreement with First Boston Corp., 3.55%, dated
4/29/94, to be repurchased at $200,059 on 5/2/94, collateralized
by U.S. Treasury Nts., 4.625%-7.875%, 12/31/94-1/15/98, with a
value of $204,340 (Cost $200,000)............................... $ 200,000 $ 200,000
-------------- ------------
U.S. GOVERNMENT SECTOR -- 13.4%
U.S. Treasury Bonds:
12.75%, 11/15/10................................................ 3,584,000 5,104,960
8.125%, 8/15/19................................................. 7,500,000 8,088,277
12%, 8/15/20.................................................... 5,540,000 7,783,700
U.S. Treasury Coupon Strip, 0%, 5/15/09......................... 5,390,000 1,749,755
U.S. Treasury Nts.:
12.625%, 8/15/94................................................ 7,800,000 7,987,683
11.25%, 5/15/19................................................. 9,000,000 9,562,500
------------
Total U.S. Government Sector (Cost $41,523,549)................... 40,276,875
------------
CONVERTIBLE SECTOR -- 1.4%
CORPORATE BONDS AND NOTES -- 0.3%
Delta Airlines, Inc., 3.23% Cv. Sub. Nts., 6/15/03................ 1,230,000 871,763
------------
</TABLE>
<TABLE>
<CAPTION>
Units
--------------
<S> <C> <C>
RIGHTS/WARRANTS AND CERTIFICATES -- 0.4%
Ames Department Stores, Inc.:
Excess Cash Flow Payment Ctfs. ................................. 40,300 403
Litigation Trust Units.......................................... 128,889 1,289
Becker Gaming, Inc. Wts., Exp. 11/00 (5).......................... 25,000 62,500
Capital Gaming International, Inc. Wts., Exp. 2/99 (5)............ 1,375 3,286
Gaylord Container Corp. Wts., Exp. 7/96........................... 206,158 773,093
Hollywood Casino Corp. Wts., Exp. 4/98............................ 3,809 491,428
Purity Supreme, Inc. Wts., Exp. 8/97 (5).......................... 7,797 156
Triangle Wire & Cable, Inc. Wts., Exp. 1/98 (5)................... 20,000 200
------------
1,332,355
</TABLE>
3
<PAGE> 4
STATEMENT OF INVESTMENTS April 30, 1994 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
-------------- ------------
<S> <C> <C>
PREFERRED STOCKS -- 0.7%
AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A (5)......... 48,602 $ 2,174,940
------------
Total Convertible Sector (Cost $4,119,911)........................ 4,379,058
------------
</TABLE>
<TABLE>
<CAPTION>
Face Amount
--------------
<S> <C> <C>
CORPORATE SECTOR -- 38.9%
COMMON STOCKS -- 0.8%
Insilco Corp. (2)................................................. $ 19,480 316,550
Leaseway Transportation Corp. (2)................................. 40,000 470,000
Petrolane, Inc., Cl. B............................................ 152,712 1,679,832
------------
2,466,382
CORPORATE BONDS AND NOTES -- 37.5%
BASIC MATERIALS -- 6.0%
Chemicals -- 1.8%
Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03............. 3,000,000 3,060,000
Rexene Corp.:
9% Fst. Priority Nts., 11/15/99 (7)............................. 300,000 288,000
10% 2nd Priority Nts., 11/15/02 (6)............................. 2,500,000 2,135,418
------------
5,483,418
Metals -- 1.2%
Kaiser Aluminum & Chemical Corp.:
9.875% Sr. Nts., 2/15/02........................................ 855,000 799,425
12.75% Sr. Sub. Nts., 2/1/03.................................... 1,860,000 1,887,900
Weirton Steel Corp., 11.50% Sr. Nts., 3/1/98...................... 1,000,000 1,035,000
------------
3,722,325
Paper and Forest Products -- 3.0%
Gaylord Container Corp.:
11.50% Sr. Nts., 5/15/01........................................ 1,750,000 1,785,000
0%/12.75% Sr. Sub. Disc. Debs., 5/15/05 (3)..................... 1,500,000 1,237,500
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03....................... 2,500,000 2,468,750
Stone Consolidated, Inc., 10.25% Sr. Sec. Nts., 12/15/00.......... 1,000,000 970,000
Stone Container Corp., 9.875% Sr. Nts., 2/1/01.................... 2,750,000 2,598,750
------------
9,060,000
</TABLE>
4
<PAGE> 5
STATEMENT OF INVESTMENTS April 30, 1994 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
CONSUMER CYCLICALS -- 14.9%
Automotive -- 0.8%
Envirotest Systems Corp., 9.625% Sr. Sub. Nts., 4/1/03............ $ 2,600,000 $ 2,463,500
------------
Construction Supplies and Development -- 2.8%
NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03............................. 2,250,000 2,233,125
Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 (2)............... 2,000,000 1,990,000
USG Corp:
10.25% Sr. Sec. Nts., 12/15/02.................................. 2,750,000 2,753,437
8.75% Debs., 3/1/17............................................. 1,500,000 1,357,500
------------
8,334,062
Consumer Goods and Services -- 3.8%
Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B,
5/27/98......................................................... 3,000,000 1,897,500
Collins & Aikman Group, Inc., 11.875% Sr. Sub. Debs., 6/1/01...... 2,500,000 2,518,750
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series A, 10/1/03
(5)............................................................. 2,750,000 2,763,750
Insilco Corp., 10.375% Sr. Sec. Nts., 7/1/97...................... 2,632,000 2,539,880
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05.......... 2,000,000 1,835,000
------------
11,554,880
Entertainment -- 2.9%
Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00
(5)............................................................. 550,000 552,750
Capital Gaming International, Inc., Units (5)..................... 550,000 639,314
Capital Queen & Casino, Inc., 12% Fst. Mtg. Nts.,
Series A, 11/15/00 (5).......................................... 400,000 344,000
Casino America, Inc., Units....................................... 500,000 492,500
Empress River Casino Finance Corp., 10.75% Gtd. Sr. Nts.,
4/1/02.......................................................... 1,300,000 1,293,500
Lady Luck Gaming Finance Corp., 10.50% Fst. Mtg. Nts., 3/1/01
(5)............................................................. 1,000,000 945,000
Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03............... 2,750,000 2,585,000
Treasure Bay Gaming & Resorts, Inc., Units (5).................... 1,825,000 1,815,875
------------
8,667,939
Media -- 0.8%
Argyle Television Operations, 9.875% Sr. Sub. Nts., 12/30/03...... 1,000,000 937,500
Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01... 1,300,000 1,371,500
------------
2,309,000
Real Estate Development -- 0.5%
Casino Magic Finance Corp., 11.50% Fst. Mtg. Nts., 10/15/01....... 640,000 604,800
Saul (B.F.) Real Estate Investment Trust, 11.625%
Sr. Nts., 4/1/02 (5)............................................ 1,000,000 955,000
------------
1,559,800
</TABLE>
5
<PAGE> 6
STATEMENT OF INVESTMENTS April 30, 1994 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
Retail -- 3.3%
Brylane LP/Brylane Capital Corp., 10% Sr. Sub. Nts.,
Series B, 9/1/03................................................ $ 1,750,000 $ 1,697,500
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01............... 2,500,000 2,543,750
Eye Care Centers of America, Inc., Units (5)...................... 1,800,000 1,773,000
Finlay Enterprises, Inc., 0%/12% Sr. Disc. Debs., 5/1/05 (3)...... 900,000 544,500
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03............... 1,450,000 1,457,250
Musicland Group, Inc. (The), 9% Sr. Sub. Nts., 6/15/03............ 2,000,000 1,900,000
------------
9,916,000
CONSUMER NON-CYCLICALS -- 3.2%
Food -- 0.6%
Royal Crown Corp., 9.75% Sr. Sec. Nts., 8/1/00.................... 2,000,000 1,930,000
------------
Food and Drug Distribution -- 2.6%
Di Giorgio Corp., 12% Sr. Nts., 2/15/03........................... 2,500,000 2,512,500
Grand Union Co., 11.25% Sr. Nts., 7/15/00......................... 1,000,000 998,750
Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99...... 2,900,000 2,711,500
Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03................... 1,500,000 1,548,750
------------
7,771,500
ENERGY -- 2.5%
Mesa Capital Corp., 0%/12.75% Disc. Nts., 6/30/96 (3)............. 2,894,000 2,546,720
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02........... 1,000,000 1,152,500
Presidio Oil Co.:
11.50% Sr. Sec. Nts., Series B, 9/15/00......................... 1,000,000 1,000,000
14.36% Sr. Sub. Gas Indexed Nts., 7/15/02 (4)................... 1,800,000 1,818,000
Wainoco Oil Corp., 12% Sr. Nts., 8/1/02........................... 1,000,000 1,035,000
------------
7,552,220
FINANCIAL -- 0.8%
Card Establishment Services, Inc., 10% Sr. Sub. Nts., 10/1/03
(5)............................................................. 2,500,000 2,450,000
------------
INDUSTRIAL -- 5.4%
Containers -- 1.9%
Calmar, Inc., 12% Sr. Sec. Nts., 12/15/97......................... 3,000,000 2,940,000
Hoover Group, Inc., 13% Sr. Sub. Debs., 11/15/98.................. 1,500,000 1,552,500
Terex Corp., Units (5)............................................ 1,185,000 1,119,825
------------
5,612,325
</TABLE>
6
<PAGE> 7
STATEMENT OF INVESTMENTS April 30, 1994 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
General Industrial -- 3.1%
American Standard, Inc., 9.875% Sr. Sub. Nts., 6/1/01............. $ 2,300,000 $ 2,182,125
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 2,593,500
Mosler, Inc., 11% Sr. Nts., Series B, 4/15/03..................... 800,000 716,000
Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01............ 2,650,000 2,987,875
Triangle Wire & Cable, Inc., 13.50% Sr. Nts., 1/15/02 (2)(5)...... 2,000,000 1,000,000
------------
9,491,575
Transportation -- 0.4%
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc.
Nts., Series A, 12/15/03 (3).................................... 2,000,000 1,090,000
------------
TECHNOLOGY -- 4.7%
Aerospace/Defense -- 0.6%
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98..................... 2,000,000 1,670,000
------------
Cable Television -- 0.5%
Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts.,
11/1/03 (4)(5).................................................. 1,500,000 1,357,500
------------
Communications -- 2.4%
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (3)......... 2,250,000 1,383,750
Horizon Cellular Telephone LP/Horizon Finance Corp., 0%/11.375%
Sr. Sub. Disc. Nts., 10/1/00 (3)................................ 2,500,000 1,687,500
Nextel Communications, Inc., 0%/9.75% Sr. Disc. Nts., 8/15/04
(3)............................................................. 2,500,000 1,481,250
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc.
Nts. 8/1/03 (3)................................................. 4,000,000 2,520,000
------------
7,072,500
Technology -- 1.2%
Bell & Howell Holdings Co., 10.75% Sr. Sub. Nts., Series B,
10/1/02......................................................... 6,850,000 3,664,750
------------
112,733,294
DERIVATIVE SECURITIES -- 0.6%
Lehman Brothers Holdings, Inc., 3.788% S & P 500 Index-Linked
Nts., 7/5/94 (5)................................................ 1,500,000 1,909,500
------------
Total Corporate Sector (Cost $118,978,414)........................ 117,109,176
------------
</TABLE>
7
<PAGE> 8
STATEMENT OF INVESTMENTS April 30, 1994 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
INTERNATIONAL SECTOR -- 34.8%
FOREIGN GOVERNMENT OBLIGATIONS -- 28.8%
Argentina (Republic of):
Bonds, Bonos de Consolidacion de Deudas, Series I, 3.50%,
4/1/07 (4)(6)................................................. $ 2,263,200 $ 1,323,721
Past Due Interest Bonds, 5%, 3/31/05 (4)(6)..................... 4,750,000 3,464,531
Brazil (Federal Republic of):
Interest Due and Unpaid Bonds, 4.133%, 1/1/01 (4)............... 1,980,000 1,441,687
Nts., Banco Estado Minas Geraos, 10%, 1/15/96................... 750,000 725,625
Nts., Empresa Colobiana de Petroleos, 7.25%, 7/8/98 (5)......... 3,000,000 2,902,500
European Investment Bank Debs., 12.75%, 2/15/00................... 8,000,000,000(1) 5,838,130
First Australia National Mortgage Acceptance Corp. Ltd. Bonds,
Series 22, 11.40%, 12/15/01..................................... 5,331,315 4,104,904
Italy (Republic of) Treasury Bonds:
12.50%, 1/1/98.................................................. 1,000,000,000 686,672
11.50%, 3/1/98 (9).............................................. 2,000,000,000(1) 1,342,204
Buoni Pollennali del Tes, 12%, 1/17/99.......................... 2,000,000,000(1) 1,374,603
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 4.446%, 1/1/09 (4)(5)................................ 4,000,000 2,674,500
Nobra Euro Brazil (Federal Republic of) Sr. Debs., Banco Do
Nordeste, 9%, 11/12/96.......................................... 5,430,000 5,063,475
Polish People's Republic Loan Participation Agreement:
5.063%, 2/3/24 (2).............................................. 2,500,000 803,125
7.938%, 2/8/24 (2).............................................. 1,000,000(1) 217,584
Queensland (Government of) Development Authority Global
Transferrable Registered Nts., 10.50%, 5/15/03.................. 6,080,000 4,839,323
South Africa (Republic of) Loan Participation Agreements,
Electricity Supply Commission, 4.803%, 10/14/98 (4)............. 10,031,477 8,712,549
Spain (Kingdom of) Gtd. Bonds:
Bonos y Obligacion del Estado: 11%, 6/15/97..................... 40,000,000(1) 314,904
11.45%, 8/30/98................................................. 75,000,000 605,444
10.25%, 11/30/98................................................ 600,000,000 4,664,444
12.25%, 3/25/00................................................. 1,175,000,000(1) 9,938,759
United Kingdom Treasury Nts. (Gilt):
12%, 11/20/98 (9)............................................... 1,000,000(1) 1,757,961
12.25%, 3/26/99 (9)............................................. 1,500,000(1) 2,665,371
United Mexican States:
1990 Combined Multi-Year Restructured Agreement, Restructured
Sovereign Loan, 4.28%, 12/23/06 (4)........................... 5,000,000 3,978,480
</TABLE>
8
<PAGE> 9
STATEMENT OF INVESTMENTS April 30, 1994 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount See Note 1
-------------- ------------
<S> <C> <C>
INTERNATIONAL SECTOR (CONTINUED)
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
Gtd. Petroleos Mexicanos Bonds, 7.60%, 6/15/00.................. $ 1,000,000 $ 915,000
New New Money Loan Participation Agreement, Tranche A,
4.125%, 3/25/05............................................... 6,480,050 5,157,660
Venezuela (Republic of):
Bonds, Series DL, 6%, 3/31/07 (4)............................... 18,500,000 9,839,688
Debs., 6.75%, 9/20/95........................................... 500,000 477,500
Disc. Bonds, Series DL, 4.313%, 12/18/07........................ 500,000 242,500
Front-Loaded Interest Reduction Bonds, Series A,
6%, 3/31/07 (4)............................................... 1,000,000 531,875
------------
86,604,719
FOREIGN CORPORATE BONDS AND NOTES -- 6.0%
Citibank:
17.50% CD, 5/27/94 (8).......................................... 426,200,000(1) 999,883
17.35% CD, 7/28/94 (8).......................................... 1,429,400,000(1) 3,353,431
17% CD, 8/10/94 (8)............................................. 1,228,200,000(1) 2,881,408
17.20% CD, 12/2/94 (8).......................................... 2,074,000,000(1) 4,865,689
16.75% CD, 12/27/94 (8)......................................... 1,277,661,812(1) 2,997,447
International CableTel, Inc., 0%/10.875% Sr. Def. Cpn. Nts.,
10/15/03 (3).................................................... 3,015,000(1) 1,824,075
Morgan Guaranty Trust Co. of New York (Singapore Branch) 12.15%
CD, 2/3/95 (8).................................................. 2,113,250,000(1) 979,944
------------
17,901,877
------------
Total International Sector (Cost $112,044,265).................... 104,506,596
------------
MORTGAGE-BACKED SECTOR -- 10.1%
AGENCY-FULL FAITH AND CREDIT -- 3.1%
Government National Mortgage Assn:
12%, 11/20/13................................................... 545,206 618,068
12%, 2/20/15.................................................... 498,619 567,478
12%, 9/20/15.................................................... 426,684 484,543
7.50%, 2/15/24.................................................. 2,984,713 2,897,918
7.50%, 3/15/24.................................................. 5,044,497 4,890,010
------------
9,458,017
</TABLE>
9
<PAGE> 10
STATEMENT OF INVESTMENTS April 30, 1994 (Unaudited) (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 -- 7.0%
Federal Home Loan Mortgage Corp:
Certificates of Participation:
12%, 5/1/10................................................... $ 1,223,462 $ 1,367,647
12%, 10/1/11.................................................. 764,921 855,289
12%, 8/1/13................................................... 46,580 52,083
12%, 8/1/14................................................... 1,357,386 1,518,441
12%, 10/1/14.................................................. 469,119 524,541
12%, 6/1/15................................................... 555,784 621,823
13%, 6/1/15................................................... 2,562,615 2,916,692
Interest-Only Stripped Mtg.-Backed Security, Trust 240, Class
2, 7%, 9/25/23.............................................. 37,224,821 13,075,219
-------------
20,931,735
-------------
Total Mortgage-Backed Sector (Cost $28,505,643)................... 30,389,752
-------------
Total Investments, at Value (Cost $305,371,782)................... 98.7% 296,861,457
Other Assets Net of Liabilities................................... 1.3 3,800,880
------ -------------
Net Assets........................................................ 100.0% $300,662,337
======= =============
</TABLE>
(1) Face amount is reported in foreign currency.
(2) Non-income producing security.
(3) Represents a zero coupon bond that converts to a fixed rate of interest at a
designated future date.
(4) Represents the current interest rate for a variable rate security.
(5) Restricted security -- See Note 6 of Notes to Financial Statements.
(6) Interest is paid in kind.
(7) Represents the current interest rate for an increasing rate security.
(8) Indexed instrument for which the principal amount due at maturity is
affected by the relative value of a foreign currency.
(9) Securities with an aggregate market value of $5,765,536 have been segregated
to cover outstanding forward foreign currency exchange contracts. See Note 7
of Notes to Financial Statements.
See accompanying Notes to Financial Statements.
10
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES April 30, 1994 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $305,371,782) -- see accompanying statement................. $296,861,457
Receivables:
Investments sold...................................................................... 20,151,552
Interest and dividends................................................................ 8,156,145
Other................................................................................... 54,852
------------
Total assets........................................................................ 325,224,006
------------
LIABILITIES:
Bank overdraft.......................................................................... 4,015,379
Unrealized depreciation on forward foreign currency exchange contracts -- Note 7........ 418,538
Payables and other liabilities:
Investments purchased................................................................. 19,223,174
Management and administrative fees -- Note 5.......................................... 81,712
Other................................................................................. 822,866
------------
Total liabilities................................................................... 24,561,669
------------
NET ASSETS.............................................................................. $300,662,337
============
COMPOSITION OF NET ASSETS:
Par value of shares of beneficial interest.............................................. $ 290,153
Additional paid-in capital.............................................................. 322,347,883
Undistributed net investment income..................................................... 2,587,488
Accumulated net realized loss from investment, written option and foreign currency
transactions.......................................................................... (15,652,585)
Net unrealized depreciation on investments and translation of assets and liabilities
denominated in foreign currencies..................................................... (8,910,602)
------------
NET ASSETS -- Applicable to 29,015,261 shares of beneficial interest outstanding........ $300,662,337
============
NET ASSET VALUE PER SHARE............................................................... $ 10.36
=====
</TABLE>
See accompanying Notes to Financial Statements.
11
<PAGE> 12
STATEMENT OF OPERATIONS For the Six Months Ended April 30, 1994 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest................................................................................ $ 15,509,291
Dividends............................................................................... 305,743
------------
Total income................................................................... 15,815,034
------------
EXPENSES:
Management fees -- Note 5............................................................... 1,015,793
Administrative fees -- Note 5........................................................... 312,485
Transfer agent and accounting services fees -- Note 5................................... 50,248
Shareholder reports..................................................................... 44,698
Custodian fees and expenses............................................................. 43,462
Trustees' fees and expenses............................................................. 26,941
Legal and auditing fees................................................................. 24,289
Other................................................................................... 20,775
------------
Total expenses................................................................. 1,538,691
------------
NET INVESTMENT INCOME................................................................... 14,276,343
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from:
Investments........................................................................... 3,572,078
Closing of options written............................................................ 63,609
Foreign currency transactions......................................................... (1,017,079)
------------
Net realized gain.............................................................. 2,618,608
------------
Net change in unrealized appreciation or depreciation on:
Investments........................................................................... (22,575,321)
Translation of assets and liabilities denominated in foreign currencies............... 2,819,306
------------
Net change..................................................................... (19,756,015)
------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY
TRANSACTIONS.......................................................................... (17,137,407)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................... $ (2,861,064)
=============
</TABLE>
See accompanying Notes to Financial Statements.
12
<PAGE> 13
STATEMENTS OF CHANGES IN NET ASSETS
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Six Months
Ended
April 30,
1994 Year Ended
(Unaudited) October 31, 1993
------------ ------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................. $ 14,276,343 $ 31,130,734
Net realized gain on investments, options written and foreign currency
transactions......................................................... 2,618,608 3,643,426
Net change in unrealized appreciation or depreciation on investments,
options written and translation of assets and liabilities denominated
in foreign currencies................................................ (19,756,015) 8,632,776
------------ ---------------
Net increase (decrease) in net assets resulting from operations.... (2,861,064) 43,406,936
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME ($.498 and $1.01
per share, respectively)............................................. (14,411,624) (29,034,475)
BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued to shareholders in reinvestment of
dividends............................................................ 1,288,523 2,906,011
------------ ---------------
Total increase (decrease) in net assets............................ (15,984,165) 17,278,472
NET ASSETS:
Beginning of period.................................................... 316,646,502 299,368,030
------------ ---------------
End of period (including undistributed net investment income of
$2,587,488 and $2,722,769, respectively)............................. $300,662,337 $316,646,502
============ ===============
</TABLE>
See accompanying Notes to Financial Statements.
13
<PAGE> 14
FINANCIAL HIGHLIGHTS
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Year Ended October 31,
1994 --------------------------------------------------------
(Unaudited) 1993 1992 1991 1990 1989
----------- -------- -------- -------- -------- --------
<S> <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
---------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... .49 1.08 1.06 1.11 1.15 1.12
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions................... (.59) .43 (.08) .82 (.78) (.52)
---------- -------- -------- -------- -------- --------
Total income (loss) from investment
operations............................ (.10) 1.51 .98 1.93 .37 .60
---------- -------- -------- -------- -------- --------
Dividends and distributions to shareholders:
Dividends from net investment income...... (.50) (1.01) (1.16) (1.07) (1.10) (1.13)
Distributions from net realized gain on
investments, options written and foreign
currency transactions................... -- -- -- (.10) (.02) (.01)
---------- -------- -------- -------- -------- --------
Total dividends and distributions to
shareholders.......................... (.50) (1.01) (1.16) (1.17) (1.12) (1.14)
---------- -------- -------- -------- -------- --------
Net asset value, end of period.............. $ 10.36 $ 10.96 $ 10.46 $ 10.64 $ 9.88 $ 10.63
========== ======== ======== ======== ======== ========
Market value, end of period................. $ 10.13 $ 11.25 $ 11.13 $ 11.13 $ 9.38 $ 10.13
TOTAL RETURN, AT MARKET VALUE(1)............ (5.79)% 11.10% 11.48% 33.05% 4.09% (1.86)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).... $ 300,662 $316,647 $299,368 $301,568 $278,511 $299,673
Average net assets (in thousands)........... $ 314,688 $307,244 $303,773 $289,681 $290,533 $307,735
Number of shares outstanding at end of
period (in thousands)..................... 29,015 28,896 28,625 28,347 28,194 28,194
Ratios to average net assets:
Net investment income..................... 9.15%(2) 10.13% 9.95% 10.80% 11.16% 10.28%
Expenses.................................. .99%(2) 1.00% 1.11% 1.16%(3) 1.03% 1.03%
Portfolio turnover rate(4).................. 94.9% 131.3% 95.9% 59.7% 85.7% 162.0%
</TABLE>
(1) 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.
(2) Annualized.
(3) Includes $.01 per share of federal excise tax expense. The expense ratio,
exclusive of federal excise tax expense, was 1.10%.
(4) 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 six months ended April 30, 1994 were
$293,457,273 and $266,101,221, respectively.
See accompanying Notes to Financial Statements.
14
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 by
averaging the mean between the bid and asked prices obtained from two active
market makers in such securities. 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. Securities for
which market quotes are not readily available are valued under procedures
established by the Board of Trustees to determine fair value in good faith.
Forward foreign currency contracts are valued at the forward rate on a daily
basis. A call option is valued based upon the last sales 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 April 30, 1994, securities with an
aggregate market value of $4,010,709, representing 1.23% 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
15
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
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.
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 April 30, 1994, the Trust had
available for federal income tax purposes an unused capital loss carryover of
approximately $9,200,000, $6,700,000 of which will expire in 1998 and $2,500,000
in 1999.
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 April 30, 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.
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 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>
Six Months Ended Year Ended
April 30, 1994 October 31, 1993
------------------- --------------------
Shares Amount Shares Amount
------ ---------- ------- ----------
<S> <C> <C> <C> <C>
Net increase from
dividends
reinvested....... 119,200 $1,288,523 271,391 $2,906,011
</TABLE>
16
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At April 30, 1994, net unrealized depreciation of investments of $8,510,325 was
composed of gross appreciation of $6,180,015, and gross depreciation of
$14,690,340.
4. CALL OPTION ACTIVITY
Call option activity for the six months ended April 30, 1994 was as follows:
<TABLE>
<CAPTION>
Number Amount
of Options of Premiums
---------- -----------
<S> <C> <C>
Options written................ 138 $ 64,687
Options closed................. (138) (64,687)
---- ---------
Options outstanding at April
30, 1994...................... -- --
==== =========
</TABLE>
The cost of cancelling options in closing purchase transactions was $1,078,
resulting in a net short-term gain of $63,609.
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 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 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.
17
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 amount to $8,131,207, or 2.70% of the Trust's net
assets, at April 30, 1994.
<TABLE>
<CAPTION>
Valuation Per Unit as
Security Acquisition Date Cost Per Unit of April 30, 1994
--------------------------------------------------- ---------------- ------------- ---------------------
<S> <C> <C> <C>
AMR Corp., $3.00 Cum., Cv. Depositary Shares,
Series A(1)....................................... 12/2/93-4/21/94 $ 52.03 $ 44.75
Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series
A, 11/15/00....................................... 11/18/93 $100.00 $100.50
Becker Gaming, Inc. Wts., Exp. 11/00............... 11/18/93 $ 2.00 $ 2.50
Brazil (Federal Republic of) Nts., Empresa
Colobiana de Petroleos, 7.25%, 7/8/98(1).......... 4/25/94 $ 93.25 $ 96.75
Capital Gaming International, Inc.:
Units........................................... 1/21/94 $113.34 $116.24
Wts., Exp. 2/99................................. 2/4/94-2/18/94 $ -- $ 2.39
Capital Queen & Casino, Inc., 12% Fst. Mtg. Nts.,
Series A, 11/15/00................................ 11/13/94 $ 87.50 $ 86.00
Card Establishment Services, Inc., 10% Sr. Sub.
Nts., 10/1/03(1).................................. 10/5/93-11/3/93 $102.20 $ 98.00
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts.,
Series A, 10/1/03(1).............................. 9/23/93 $100.00 $100.50
Eye Care Centers of America, Inc., Units(1)........ 9/28/93 $100.00 $ 98.50
Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec.
Nts., 11/1/03(1).................................. 10/20/93 $ 95.01 $ 90.50
Lehman Brothers Holdings, Inc., 3.7875% S & P 500
Index-Linked Nts., 7/5/94......................... 3/30/94 $138.00 $127.30
Lady Luck Gaming Finance Corp., 10.50% Fst. Mtg.
Nts., 3/1/01...................................... 2/10/94-3/8/94 $100.31 $ 94.50
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 4.4456%, 1/1/09........................ 2/23/94-4/21/94 $ 70.44 $ 66.86
Purity Supreme, Inc. Wts., Exp 8/97................ 7/29/92 $ -- $ 0.02
Saul (B.F.) Real Estate Investment Trust, 11.625%
Sr. Nts., 4/1/02(1)............................... 3/23/94-4/14/94 $ 96.20 $ 95.50
Terex Corp., Units(1).............................. 3/23/94-4/5/94 $ 93.18 $ 94.50
Treasure Bay Gaming & Resorts, Inc., Units(1)...... 11/10/93-2/9/94 $101.11 $ 99.50
Triangle Wire & Cable, Inc.:
Wts., Exp 1/98.................................. 1/13/92 $ -- $ 0.01
13.50% Sr. Nts., 1/15/02........................ 1/13/92 $100.00 $ 50.00
</TABLE>
(1) Transferable under Rule 144A of the Act.
7. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
At April 30, 1994, the Trust had outstanding forward currency exchange
contracts to purchase and sell foreign currencies as follows:
<TABLE>
<CAPTION>
Valuation as of Unrealized
Contracts to Purchase Expiration Date Contract Amount April 30, 1994 Depreciation
----------------------------------------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C>
German Deutsche Mark..................... 5/9/94 $ 6,636,701 $ 6,635,694 $ (1,007)
=========== ===========
Contracts to Sell
-------------
German Deutsche Mark..................... 5/9/94 $12,250,613 $12,668,144 (417,531)
=========== =========== ----------
$ (418,538)
==========
</TABLE>
18
<PAGE> 19
GENERAL INFORMATION CONCERNING THE TRUST
THE TRUST
Oppenheimer Multi-Sector Income Trust is a closed-end investment company whose
shares trade on the New York Stock Exchange. The Trust seeks to provide high
current income through a flexible strategy which allows investments in seven
different fixed income sectors. The Trust also seeks capital appreciation by
allocating assets to sectors which appear to have growth potential. The
investment advisor of the Trust is Oppenheimer Management Corporation.
SHAREHOLDER INFORMATION
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 New York Stock Exchange trading symbol is OMS. Weekly
net asset value (NAV) and market price information about Oppenheimer Multi-
Sector Income 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".
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
A Dividend Reinvestment and Cash Purchase Plan is available to Trust
shareholders, which provides automatic reinvestment of dividends and capital
gains distributions in additional Trust shares. The Plan also allows optional
cash investments in Trust shares through the Plan Agent. For a brochure
describing the Plan, call the Plan Agent, Shareholder Financial Services, Inc.,
at 1-800-647-7374. Or contact them in writing at P.O. Box 173673, Denver, CO
80217-3673. The Plan is described in the Trust's Annual Report sent to
shareholders.
If you wish to participate in the Plan and your shares are held in your name,
simply complete and mail the enrollment form in the brochure. If your shares are
held in the name of your brokerage firm, bank or other nominee, you should ask
them whether or how you can participate in the Plan.
19
<PAGE> 20
OPPENHEIMER MULTI-SECTOR INCOME TRUST
Officers and Trustees
Leon Levy, Chairman of the Board
of Trustees
Leo Cherne, Trustee
Edmund T. Delaney, 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
Robert E. Patterson, Vice President
Thomas P. Reedy, Vice President
Ashwin K. Vasan, Vice President
Carol E. Wolf, Vice President
Arthur J. Zimmer, 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
Legal Counsel
Gordon Altman Butowsky Weitzen Shalov
& Wein
The financial statements included herein have been
taken from the records of the Trust without examination
by the independent auditors.
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.
RS680.0694.R(LOGO) Printed on recycled paper
1994 SEMI-ANNUAL REPORT
- - -------------------------------------------------------------
OPPENHEIMER
MULTI-SECTOR
INCOME TRUST
APRIL 30, 1994
20
<PAGE> 21
EDGAR APPENDIX
A pie chart representing the Investment Breakdown as of April 30, 1994 of the
Oppenheimer Multi-Sector Income Trust appears on page 1 of the printed version
of this document.
