<PAGE> 1
REPORT TO SHAREHOLDERS:
The bond market has improved substantially since our last report, issued in
November 1994 at the close of one of the worst periods for bonds on record. In
November, the U.S. markets began a rally which continues through this writing,
with the U.S. corporate bond sector performing especially well. And although
many foreign markets were affected by the devaluation of the Mexican peso in
December, they are starting to show signs of recovery this year.
During the past six months, the Trust's total return at net asset value was
1.78%, with a dividend yield of 9.85% for the month ended April 30, 1995.(1)
INVESTMENT BREAKDOWN:(2)
OPPENHEIMER MULTI-SECTOR TRUST
AS OF 4/30/95
[Chart]
U.S. corporate bonds & notes: 42.0%
Foreign government obligations: 20.8%
U.S. government obligations:
Agency: 12.7%
Treasury: 19.3%
Foreign corporate bonds & notes: 2.4%
- - - Equity securities: 2.2%
- - - Short-term securities: 0.4%
- - - Structured notes: 0.2%
The Trust's current focus is on three major fixed income sectors -- U.S.
government bonds, U.S. corporate bonds, and foreign government debt securities.2
This approach to fixed income investing allows the managers the flexibility to
take advantage of opportunities in different areas of the bond market, while
diversifying the portfolio to try to reduce exposure to the risks of any single
sector.
In 1994, this diversification helped to protect against the volatility of U.S.
government bonds, which were especially hard hit in the sharply rising interest
rate environment. This year, while the U.S. government and corporate sectors
have performed well, the foreign fixed income sector, as a whole, has not
rebounded as quickly. Again, diversification has proved an excellent benefit.
Early in 1995, we increased the weighting in U.S. corporate securities, while
upgrading the relative credit quality of this sector as the economy continued to
show signs of a slow-down. And we increased our commitment in U.S. government
obligations, shifting some assets out of the more volatile foreign markets.
While we have reduced our holdings in the foreign fixed income sector for the
near term, our long-term outlook remains positive. We have added to positions in
some of the more developed European bond markets, like Great Britain, while
continuing to look for opportunities in some of the emerging markets -- other
than Mexico -- where prices were affected by the Mexican peso devaluation, but
where other favorable conditions may exist.
<PAGE> 2
By most indicators -- consumer spending, inventory levels, and housing starts,
to name a few -- U.S. economic growth is slowing to a sustainable pace and, at
this point, we do not anticipate a substantial threat from inflation. With
inflation currently running at a low rate of around 3%, income investors are
clearly being rewarded.
Looking back over this period -- from the fluctuations experienced in 1994 to
the quickly rising U.S. market in 1995 -- we expect many investors will be
happy to see calmer weather and earn their dividend for the near term. As
demonstrated last year, the bond markets are subject to fluctuations, and these
shifts may sometimes be sharp. For the long term, however, we believe the
outlook is excellent.
Again, we thank you for your trust in allowing us to manage a portion of your
investments.
Sincerely,
/s/ Donald W. Spiro
Donald W. Spiro
President -- Oppenheimer Multi-Sector Trust
May 19, 1995
(1) Total return is based on the change in net asset value per share from
10/31/94 through 4/30/95 assuming all dividends are reinvested. Your brokerage
costs and taxes were not considered. Dividend yield is determined by
annualizing the April 1995 dividend of $0.078 and dividing by the closing price
on the New York Stock Exchange of $9.50 per share on 4/30/95. Past performance
does not guarantee future results.
(2) Portfolio composition is subject to change.
<PAGE> 3
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
U.S. GOVERNMENT SECTOR -- 19.1%
U.S. Treasury Bonds:
8.125%, 8/15/19.................................................. $ 3,093,000 $ 3,319,176
8.875%, 8/15/17.................................................. 13,720,000 15,799,429
U.S. Treasury Nts.:
8.75%, 10/15/97.................................................. 17,135,000 17,927,494
9.375%, 4/15/96.................................................. 17,515,000 18,013,072
------------
Total U.S. Government Sector (Cost $55,100,439).................... 55,059,171
------------
</TABLE>
<TABLE>
<CAPTION>
Units
--------------
<S> <C> <C>
CONVERTIBLE SECTOR -- 1.5%
RIGHTS, WARRANTS AND CERTIFICATES -- 0.4%
American Telecasting, Inc. Wts., Exp. 6/99......................... 3,750 7,500
Ames Department Stores, Inc.:
Excess Cash Flow Payment Certificates, Series AG-7A.............. 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
Federated Department Stores, Inc. Wts.,
Cl. C, Exp. 12/99................................................ 26,963 121,334
Cl. D, Exp. 12/01................................................ 26,963 134,815
Foamex LP/JPS Automotive Corp. Wts., Exp. 7/99..................... 1,000 15,000
Gaylord Container Corp. Wts., Exp. 7/96............................ 90,000 815,625
OSI Specialties Corp. Wts., Exp. 4/99 (7).......................... 500 1,000
Purity Supreme, Inc. Wts., Exp. 8/97 (5)........................... 7,797 156
Terex Corp. Rts., Exp. 7/96 (7).................................... 186 93
------------
1,156,215
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
--------------
<S> <C> <C>
PREFERRED STOCKS -- 1.1%
California Federal Bank, 10.625% Non-Cum., Series B................ 1,995 207,480
First Nationwide Bank, 11.50% Non-Cum.............................. 10,000 1,050,000
Panamsat Corp., 12.75% Sr. Exchangeable Preferred Stock............ 1,200 1,218,000
SD Warren Co., 14% Sr. Exchangeable Preferred Stock (7)............ 20,000 670,000
------------
3,145,480
------------
Total Convertible Sector (Cost $3,537,714)......................... 4,301,695
------------
</TABLE>
3
<PAGE> 4
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
-------------- ------------
<S> <C> <C>
CORPORATE SECTOR -- 42.4%
COMMON STOCKS -- 0.7%
Capital Gaming, Inc. (2)........................................... 7,198 $ 38,689
Federated Department Stores, Inc. (2).............................. 40,479 855,119
Hollywood Casino Corp. (2)......................................... 63,333 546,247
Kash 'N Karry Food Stores, Inc. (2)................................ 15,057 287,965
Triangle Wire & Cable, Inc. (2)(5)................................. 84,444 168,888
------------
1,896,908
------------
</TABLE>
<TABLE>
<CAPTION>
Face
Amount(1)
--------------
<S> <C> <C>
CORPORATE BONDS AND NOTES -- 41.7%
BASIC INDUSTRY -- 7.3%
Chemicals -- 2.0%
Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03.............. $ 1,000,000 1,055,000
NL Industries, Inc.:
0%/13% Sr. Sec. Disc. Nts., 10/15/05 (3)......................... 650,000 455,000
11.75% Sr. Sec. Nts., 10/15/03................................... 500,000 532,500
OSI Specialties Holding Co., 0%/11.50% Sr. Sec. Disc. Debs.,
Series B, 4/15/04 (3)............................................ 500,000 347,500
Rexene Corp., 11.75% Sr. Nts., 12/1/04............................. 2,000,000 2,150,000
UCAR Global Enterprises, Inc., 12% Sr. Sub. Nts.,
1/15/05 (7)...................................................... 1,000,000 1,078,125
------------
5,618,125
------------
Containers -- 0.4%
Calmar, Inc., 12% Sr. Sec. Nts., 12/15/97.......................... 1,000,000 1,025,000
------------
Metals/Mining -- 0.5%
Kaiser Aluminum & Chemical Corp., 9.875% Sr. Nts.,
2/15/02.......................................................... 1,500,000 1,468,125
------------
</TABLE>
4
<PAGE> 5
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
BASIC INDUSTRY (CONTINUED)
Paper -- 2.9%
Gaylord Container Corp.:
0%/12.75% Sr. Sub. Disc. Debs., 5/15/05 (3)...................... $ 700,000 $ 675,500
11.50% Sr. Nts., 5/15/01......................................... 1,500,000 1,597,500
Repap Wisconsin, Inc., 9.25% Fst. Priority Sr. Sec. Nts., 2/1/02... 1,250,000 1,225,000
Riverwood International Corp.:
10.75% Sr. Nts., 6/15/00......................................... 750,000 795,000
11.25% Sr. Sub. Nts., 6/15/02.................................... 650,000 702,000
SD Warren Co., 12% Sr. Sub. Nts., 12/15/04 (7)..................... 900,000 981,000
Stone Container Corp.:
10.75% Fst. Mtg. Nts., 10/1/02................................... 1,320,000 1,397,550
9.875% Sr. Nts., 2/1/01.......................................... 1,000,000 998,750
------------
8,372,300
------------
Steel -- 1.5%
Acme Metals, Inc., 12.50% Sr. Sec. Nts., 8/1/02.................... 1,000,000 1,035,000
AK Steel Corp., 10.75% Gtd. Sr. Nts., 4/1/04....................... 400,000 419,000
Gulf States Steel Acquisition Corp., Units (7)..................... 1,400,000 1,433,250
Republic Engineered Steels, Inc., 9.875% Fst. Mtg. Nts.,
12/15/01......................................................... 1,600,000 1,496,000
------------
4,383,250
------------
CONSUMER RELATED -- 8.7%
Consumer Products -- 0.2%
Revlon Consumer Products Corp., 10.50% Sr. Sub. Nts.,
Series B, 2/15/03................................................ 500,000 485,000
------------
Food/Beverages/Tobacco -- 1.1%
Consolidated Cigar Corp., 10.50% Sr. Sub. Nts., 3/1/03............. 1,000,000 965,000
Di Giorgio Corp., 12% Sr. Nts., 2/15/03............................ 1,750,000 1,513,750
Royal Crown Corp., 9.75% Sr. Sec. Nts., 8/1/00..................... 750,000 718,125
------------
3,196,875
------------
</TABLE>
5
<PAGE> 6
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
CONSUMER RELATED (CONTINUED)
Healthcare -- 2.7%
Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04............... 1,100,000 1,155,000
Healthsouth Rehabilitation Corp., 9.50% Sr. Sub. Nts., 4/1/01...... 600,000 613,500
National Medical Enterprises, Inc., 10.125% Sr. Sub. Nts.,
3/1/05........................................................... 2,500,000 2,612,500
Quorum Health Group, Inc., 11.875% Sr. Sub. Nts., 12/15/02......... 1,500,000 1,642,500
Surgical Health Corp., 11.50% Sr. Sub. Nts., 7/15/04............... 750,000 821,250
Total Renal Care, Inc., Units (3).................................. 1,000,000 875,000
------------
7,719,750
------------
Hotel/Gaming -- 2.7%
Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00
(5).............................................................. 550,000 448,250
Aztar Corp., 13.75% Sr. Sub. Nts., 10/1/04......................... 500,000 555,000
Bally's Park Place Funding, Inc., 9.25% Gtd. Fst. Mtg. Nts.,
3/15/04.......................................................... 700,000 638,750
Boyd Gaming Corp., 10.75% Sr. Sub. Nts., 9/1/03.................... 500,000 505,000
Capital Gaming International, Inc. Promissory Nts.................. 5,500 --
Capitol Queen & Casino, Inc., 12% Fst. Mtg. Nts., Series A,
11/15/00 (5)..................................................... 200,000 183,000
Casino America, Inc., Zero Coupon Fst. Mtg. Nts., 11/15/01......... 750,000 746,250
Empress River Casino Finance Corp., 10.75% Gtd. Sr. Nts., 4/1/02... 1,250,000 1,243,750
GB Property Funding Corp., 10.875% Fst. Mtg. Nts., 1/15/04......... 700,000 602,000
Hollywood Casino Corp., 14% Sr. Sec. Nts., 4/1/98.................. 100,000 108,750
MGM Grand Hotel Finance Corp., 12% Fst. Mtg. Nts., 5/1/02.......... 300,000 333,750
Players International, Inc., 10.875% Sr. Nts., 4/15/05 (7)......... 700,000 708,750
Showboat, Inc.:
13% Sr. Sub. Nts., 8/1/09........................................ 750,000 787,500
9.25% Fst. Mtg. Bonds, 5/1/08.................................... 250,000 223,750
Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03................ 750,000 671,250
------------
7,755,750
------------
Leisure -- 0.6%
Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B,
5/27/98.......................................................... 2,300,000 1,690,500
------------
</TABLE>
6
<PAGE> 7
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
CONSUMER RELATED (CONTINUED)
Textile/Apparel -- 1.4%
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series B, 10/1/03... 2,500,000 2,237,500
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05........... 2,000,000 1,910,000
------------
4,147,500
------------
ENERGY -- 3.3%
AmeriGas Partners, LP, 10.125% Sr. Nts., 4/15/07 (7)............... 500,000 511,250
Clark R&M Holdings, Inc., Zero Coupon Sr. Sec. Nts., Series A,
2/15/00.......................................................... 500,000 293,750
Crown Central Petroleum Corp., 10.875% Sr. Nts., 2/1/05............ 1,000,000 1,005,000
Ferrellgas LP/Ferrellgas Finance Corp., 10% Sr. Nts., 8/1/01....... 1,000,000 1,045,000
Mesa Capital Corp., 0%/12.75% Sec. Disc. Nts., 6/30/98 (3)......... 1,000,000 965,050
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02............ 1,000,000 1,105,000
Petroleum Heat & Power Co., Inc.:
12.25% Sub. Debs., 2/1/05........................................ 750,000 795,000
9.375% Sub. Debs., 2/1/06........................................ 400,000 356,000
Presidio Oil Co., 13.30% Sr. Sub. Gas Indexed Nts., Series B,
7/15/02 (4)...................................................... 180,000 105,300
Sante Fe Energy Resources, Inc., 11% Sr. Sub. Debs., 5/15/04....... 1,800,000 1,894,500
Triton Energy Corp., Zero Coupon Sr. Sub. Disc. Nts., 11/1/97...... 500,000 398,750
Wainoco Oil Corp., 12% Sr. Nts., 8/1/02............................ 1,100,000 1,122,000
------------
9,596,600
------------
FINANCIAL SERVICES -- 1.2%
Diversified Financial -- 0.9%
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98...................... 1,000,000 795,000
Olympic Financial Ltd., 13% Sr. Nts., 5/1/00....................... 1,800,000 1,818,000
------------
2,613,000
------------
Insurance -- 0.3%
American Life Holding Co., 11.25% Sr. Sub. Nts., 9/15/04........... 940,000 963,500
------------
</TABLE>
7
<PAGE> 8
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
HOUSING RELATED -- 4.3%
Building Materials -- 3.7%
American Standard, Inc.:
10.875% Sr. Nts., 5/15/99........................................ 400,000 423,000
9.875% Sr. Sub. Nts., 6/1/01..................................... 850,000 875,500
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03........................ 1,500,000 1,425,000
Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01............. 2,650,000 2,961,375
Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03.................... 1,600,000 1,600,000
USG Corp.:
10.25% Sr. Sec. Nts., 12/15/02................................... 1,900,000 1,938,000
8.75% Debs., 3/1/17.............................................. 1,600,000 1,452,000
------------
10,674,875
------------
Homebuilders/Real Estate -- 0.6%
NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03.............................. 750,000 697,500
Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts.,
4/1/02........................................................... 1,000,000 960,000
------------
1,657,500
------------
MANUFACTURING -- 2.4%
Aerospace/Electronics/Computers -- 0.2%
Tracor, Inc., 10.875% Sr. Sub. Nts., 8/15/01....................... 500,000 513,750
------------
Automotive -- 1.7%
Aftermarket Technology Corp., 12% Sr. Sub. Nts., 8/1/04............ 1,250,000 1,318,750
Foamex LP/JPS Automotive Corp., 0%/14% Sr. Disc. Nts., Series B,
7/1/04 (3)....................................................... 1,000,000 570,000
JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01........... 1,000,000 995,000
SPX Corp., 11.75% Sr. Sub. Nts., 6/1/02............................ 1,000,000 1,060,000
Talley Manufacturing & Technology, Inc., 10.75% Sr. Nts.,
10/15/03......................................................... 1,000,000 982,500
------------
4,926,250
------------
Capital Goods -- 0.5%
Farley, Inc., Zero Coupon Sub. Debs., 12/30/12..................... 198,000 20,790
Imo Industries, Inc., 12.25% Sr. Sub. Debs., 8/15/97............... 1,439,000 1,451,591
------------
1,472,381
------------
</TABLE>
8
<PAGE> 9
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
MEDIA -- 4.0%
Broadcasting -- 0.5%
Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01.... 1,300,000 1,384,500
------------
Cable Television -- 2.9%
Adelphia Communications Corp., 12.50% Sr. Nts., 5/15/02............ 1,400,000 1,372,000
American Telecasting, Inc., 0%/12.50% Sr. Disc. Nts., 6/15/04
(3).............................................................. 750,000 412,500
Cablevision Industries Corp., 10.75% Sr. Nts., 1/30/02............. 1,000,000 1,071,250
Cablevision Systems Corp., 9.875% Sr. Sub. Debs., 4/1/23........... 500,000 487,500
Century Communications Corp., 9.50% Sr. Nts., 3/1/05............... 1,000,000 977,500
Comcast Corp., 10.625% Sr. Sub. Debs., 7/15/12..................... 500,000 521,250
Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13............. 900,000 897,750
Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts., Series B,
11/1/03 (4)...................................................... 1,500,000 1,323,750
International CableTel, Inc.:
0%/10.875% Sr. Def. Cpn. Nts., 10/15/03 (3)...................... 1,000,000 622,500
0%/12.75% Sr. Def. Cpn. Nts., 4/15/05 (3)(7)..................... 1,000,000 555,000
------------
8,241,000
------------
Diversified Media -- 0.1%
Echostar Communications Corp., Units (3)........................... 700,000 367,500
------------
Publishing/Printing -- 0.5%
Bell & Howell Holdings Co., 0%/11.50% Sr. Disc. Debs., Series B,
3/1/05 (3)....................................................... 2,800,000 1,561,000
------------
OTHER -- 1.4%
Environmental -- 0.5%
Envirotest Systems Corp.:
9.125% Sr. Nts., 3/15/01......................................... 500,000 397,500
9.625% Sr. Sub. Nts., 4/1/03..................................... 1,350,000 911,250
------------
1,308,750
------------
Services -- 0.9%
Protection One Alarm Monitoring, Inc., 12% Sr. Sub. Nts., Series B,
11/1/03.......................................................... 2,500,000 2,625,000
------------
</TABLE>
9
<PAGE> 10
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
RETAIL -- 5.3%
Drug Stores -- 0.5%
Duane Reade, 12% Sr. Nts., Series B, 9/15/02....................... 500,000 437,500
Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03.................... 1,000,000 1,065,000
------------
1,502,500
------------
Specialty Retailing -- 2.4%
Brylane LP/Brylane Capital Corp., 10% Sr. Sub. Nts., Series B,
9/1/03........................................................... 1,500,000 1,455,000
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01................ 1,000,000 966,250
Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03........... 1,800,000 1,404,000
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03................ 1,250,000 1,193,750
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05 (7)..... 1,900,000 1,921,375
------------
6,940,375
------------
Supermarkets -- 2.4%
Dominick's Finer Foods, Inc., 10.875% Sr. Sub. Nts., 5/1/05 (7).... 600,000 608,250
Grand Union Co., 12.25% Sr. Sub. Nts., 7/15/02 (11)................ 2,750,000 928,125
Kash 'N Karry Food Stores, Inc., 11.50% Sr. Nts., 2/1/03 (6)....... 200,000 198,750
Kroger Co., 9.875% Sr. Sub. Debs., 8/1/02.......................... 400,000 425,000
Penn Traffic Co., 9.625% Sr. Sub. Nts., 4/15/05.................... 1,100,000 1,045,000
Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99....... 2,000,000 2,150,000
Safeway, Inc., 10% Debs., 12/1/01.................................. 1,205,000 1,307,425
------------
6,662,550
------------
TRANSPORTATION -- 1.1%
Air Transportation -- 0.3%
AMR Corp., 6.125% Cv. Sub. Debs., 11/1/24.......................... 1,000,000 970,000
------------
Railroads -- 0.5%
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc.
Nts., Series B, 12/15/03 (3)..................................... 2,500,000 1,462,500
------------
Shipping -- 0.3%
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04.......... 900,000 886,500
------------
</TABLE>
10
<PAGE> 11
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
UTILITIES -- 2.7%
Electric Utilities -- 0.1%
California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04 (3)....... 500,000 402,500
------------
Telecommunications -- 2.6%
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (3).......... 2,000,000 1,410,000
Horizon Cellular Telephone LP/Horizon Finance Corp., 0%/11.375% Sr.
Sub. Disc. Nts., 10/1/00 (3)..................................... 2,000,000 1,530,000
In Flight Phone Corp., Units (3)(7)................................ 1,000,000 667,500
MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (3).... 200,000 132,500
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts.,
8/1/03 (3)....................................................... 3,000,000 2,070,000
PriCellular Wireless Corp., 0%/14% Sr. Sub. Disc. Nts., 11/15/01
(3).............................................................. 2,000,000 1,540,000
------------
7,350,000
------------
Total Corporate Sector (Cost $121,812,600)......................... 121,841,614
------------
INTERNATIONAL SECTOR -- 23.3%
FOREIGN CERTIFICATES OF DEPOSIT -- 3.2%
Citibank CD:
10.50%, 7/14/95 (ARA)(8)......................................... 1,500,000 1,500,653
11.75%, 11/8/95 (CLP)(8)......................................... 2,483,246,287 6,407,749
16.25%, 5/30/95 (CLP)(8)......................................... 462,456,598 1,193,319
------------
9,101,721
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
--------------
<S> <C> <C>
FOREIGN COMMON STOCKS -- 0.0%
Gulfstream Holding Corp. (2)....................................... 357,150 --
------------
</TABLE>
11
<PAGE> 12
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
INTERNATIONAL SECTOR (CONTINUED)
FOREIGN CORPORATE BONDS AND NOTES -- 2.4%
BASIC INDUSTRY -- 1.5%
Paper -- 1.5%
Domtar, Inc., 11.75% Sr. Nts., 3/15/99............................. $ 650,000 $ 706,875
Rainy River Forest Products, 10.75% Sr. Sec. Nts., 10/15/01........ 800,000 828,000
Repap New Brunswick, Inc.:
10.625% 2nd Priority Sr. Sec. Nts., 4/15/05...................... 500,000 510,000
9.50% Fst. Priority Sr. Sec. Nts., 7/15/00....................... 600,000 606,000
9.875% Fst. Priority Sr. Sec. Nts., 7/15/00...................... 500,000 506,250
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00........... 1,100,000 1,127,500
------------
4,284,625
------------
CONSUMER RELATED -- 0.6%
Textile/Apparel -- 0.6%
PT Polysindo Eka Perkasa:
13% Sr. Nts., 6/15/01............................................ 1,000,000 985,000
Zero Coupon Promissory Nts., 10/23/96 (IDR)........................ 2,000,000,000 620,261
------------
1,605,261
------------
MEDIA -- 0.3%
Entertainment/Film -- 0.3%
Imax Corp., 7% Sr. Nts., 3/1/01.................................... 1,000,000 900,000
------------
6,789,886
------------
FOREIGN GOVERNMENT OBLIGATIONS -- 17.4%
Argentina (Republic of):
Treasury Bills, Zero Coupon, 5/19/95............................. 1,500,000 1,491,021
Treasury Bills, Zero Coupon, 5/26/95............................. 1,000,000 993,006
Par Bonds, 5%, 3/31/23........................................... 5,000,000 2,209,375
Bonos de la Tesoreria de la Federacion, Zero Coupon,
5/4/95........................................................... 200,000 199,599
Brazil (Federal Republic of) Nts., Banco Estado Minas Gerais,
8.25%, 2/10/00................................................... 1,000,000 690,000
Corporacion Andina de Fomento Sr. Unsec. Debs., 6.625%,
10/14/98......................................................... 1,265,000 1,163,800
</TABLE>
12
<PAGE> 13
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
INTERNATIONAL SECTOR (CONTINUED)
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
Denmark (Kingdom of) Bonds, 7%, 11/10/24 (DKK)(12)................. $ 5,000,000 $ 724,223
Ecuador (Republic of) Par Bonds, 3%, 2/28/25 (9)................... 7,750,000 2,247,500
Financiera Energetica Nacional SA, 9% Medium-Term Nts.,
11/8/99.......................................................... 500,000 480,000
First Australia National Mortgage Acceptance Corp. Ltd. Bonds,
Series 22, 11.40%, 12/15/01 (AUD)................................ 4,331,310 3,305,199
International Bank for Reconstruction and Development Bonds,
12.50%, 7/25/97 (NZD)(12)........................................ 10,730,000 7,845,875
Morocco (Kingdom of) Loan Participation Agreement:
Tranche A, 7.375%, 1/1/09 (4).................................... 9,500,000 5,860,313
Tranche B, 7.375%, 1/1/04 (4).................................... 1,000,000 670,000
New South Wales Treasury Corp. Gtd. Exch. Bonds, 12%, 12/1/01
(AUD)(12)........................................................ 2,450,000 1,979,393
New Zealand (Republic of) Bonds, 10%, 7/15/97 (NZD)................ 1,560,000 1,088,096
Norwegian Government Bonds, 5.75%, 11/30/04 (NOK)(12).............. 3,600,000 505,413
Poland (Republic of) Past Due Interest Bonds, 3.25%,
10/27/14......................................................... 12,250,000 5,803,438
Queensland Treasury Corp. Gtd. Nts., 8%, 8/14/01 (AUD)............. 2,763,000 1,856,285
United Kingdom Treasury Nts.:
13%, 7/14/00 (GBP)(13)........................................... 1,502,000 2,876,431
12%, 11/20/98 (GBP).............................................. 2,465,000 4,408,246
12.25%, 3/26/99 (GBP)............................................ 1,500,000 2,720,975
United Mexican States:
Combined Facility 3, Loan Participation Agreement, Tranche A,
7.625%, 9/20/97 (4)(5)......................................... 528,056 322,115
Petroleos Mexicanos Gtd. Medium-Term Nts., 7.60%, 6/15/00.......... 1,000,000 750,000
------------
50,190,303
------------
STRUCTURED INSTRUMENTS -- 0.3%
Canadian Imperial Bank, 10% Certificate of Deposit,
British Pound Sterling Maximum Rate Linked Nts.,
11/8/96 (indexed to the 3-month GBP LIBOR,
multiplied by 9) (5)............................................. 750,000 750,000
------------
Total International Sector (Cost $65,003,855)...................... 66,831,910
------------
</TABLE>
13
<PAGE> 14
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
MORTGAGE-BACKED SECTOR -- 12.6%
GOVERNMENT AGENCY -- 12.6%
FHLMC/FNMA/Sponsored -- 7.3%
Federal Home Loan Mortgage Corp.:
Certificates of Participation, 12%, 5/1/10-6/1/15................ $ 3,296,912 $ 3,644,680
Collateralized Mtg. Obligations, Gtd. Multiclass Mtg.
Participation Certificates, 6.65%, 4/15/21..................... 4,700,000 4,396,803
Federal National Mortgage Assn.:
Certificates of Participation, 13%, 6/1/15....................... 1,957,313 2,209,866
Interest-Only Stripped Mtg.-Backed Security, Trust 222, Cl. 2,
7%, 6/25/23 (10)............................................... 28,415,473 10,003,135
Interest-Only Stripped Mtg.-Backed Security, Trust 240, Cl. 2,
7%, 9/25/23 (10)............................................... 2,068,376 741,707
------------
20,996,191
------------
GNMA/Guaranteed -- 5.3%
Government National Mortgage Assn.:
12%, 11/20/13-9/20/15............................................ 1,006,398 1,125,116
8%, 5/15/24-9/15/24.............................................. 14,116,636 14,131,036
------------
15,256,152
------------
Total Mortgage-Backed Sector (Cost $35,755,078).................... 36,252,343
------------
MONEY MARKET SECTOR -- 0.4%
Repurchase agreement with The First Boston Corp., 5.90%, dated
4/28/95, to be repurchased at $1,100,541 on 5/1/95,
collateralized by U.S. Treasury Bills, 0%, 3/7/96, with a value
of $923,054 and U.S. Treasury Nts., 7.50%, 1/31/97, with a value
of $199,892
(Cost $1,100,000)................................................ 1,100,000 1,100,000
------------
Total Investments, at Value (Cost $282,309,686).................... 99.3% 285,386,733
Other Assets Net of Liabilities.................................... 0.7 2,106,183
------------ ------------
Net Assets......................................................... 100.0% $287,492,916
============ ============
</TABLE>
(1) Face amount is reported in local currency. Foreign currency abbreviations
are as follows:
<TABLE>
<S> <C> <C>
ARA -- Argentine Austral
AUD -- Australian Dollar
CLP -- Chilean Peso
DKK -- Danish Krone
GBP -- British Pound Sterling
IDR -- Indonesian Rupiah
NOK -- Norwegian Krone
NZD -- New Zealand Dollar
USD -- U.S. Dollar
</TABLE>
(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.
14
<PAGE> 15
STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
(5) Identifies issues considered to be illiquid -- See Note 7 of Notes to
Financial Statements.
(6) Interest or dividend is paid in kind.
(7) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $9,135,593 or 3.18% of the Fund's
net assets, at April 30, 1995.
(8) Indexed instrument for which the principal amount and/or interest due at
maturity is affected by the relative value of a foreign currency.
(9) Represents the current interest rate for an increasing rate security.
(10) 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).
(11) Non-income producing -- issuer is in default of interest payment.
(12) A sufficient amount of securities has been designated to cover outstanding
forward foreign currency exchange contracts. See Note 5 of Notes to
Financial Statements.
(13) A sufficient amount of liquid assets has been designated to cover
outstanding call options, as follows:
<TABLE>
<CAPTION>
FACE/SHARES MARKET
SUBJECT EXPIRATION EXERCISE PREMIUM VALUE
TO CALL DATE PRICE RECEIVED SEE NOTE 1
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------------------
Call Option on British Pound Sterling.......... 3,000,000 GBP 5/8/95 1.60 USD/GBP $29,640 $53,760
======= =======
</TABLE>
See accompanying Notes to Financial Statements.
15
<PAGE> 16
STATEMENT OF ASSETS AND LIABILITIES April 30, 1995 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $282,309,686) -- see accompanying statement................. $285,386,733
Cash.................................................................................... 142,248
Unrealized appreciation on forward foreign currency exchange contracts -- Note 5........ 32,889
Receivables:
Investments sold...................................................................... 7,857,891
Interest and principal paydowns....................................................... 5,672,002
Other................................................................................... 105,330
------------
Total assets........................................................................ 299,197,093
------------
LIABILITIES:
Options written, at value (premiums received $29,640) -- see accompanying statement --
Note 4................................................................................ 53,760
Payables and other liabilities:
Investments purchased................................................................. 10,972,876
Dividends............................................................................. 251,177
Deferred trustee fees -- Note 1....................................................... 109,775
Management and administrative fees -- Note 6.......................................... 82,344
Trustees' fees........................................................................ 8,133
Transfer agent and accounting services fees........................................... 6,905
Other................................................................................. 219,207
------------
Total liabilities................................................................... 11,704,177
------------
NET ASSETS.............................................................................. $287,492,916
============
COMPOSITION OF NET ASSETS:
Par value of shares of beneficial interest.............................................. $ 291,161
Additional paid-in capital.............................................................. 319,273,443
Overdistributed net investment income................................................... (3,353,886)
Accumulated net realized loss from investment, written option and foreign currency
transactions.......................................................................... (31,838,225)
Net unrealized appreciation on investments, written options and translation of assets
and liabilities denominated in foreign currencies..................................... 3,120,423
------------
NET ASSETS -- Applicable to 29,116,068 shares of beneficial interest outstanding........ $287,492,916
============
NET ASSET VALUE PER SHARE............................................................... $9.87
=====
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE> 17
STATEMENT OF OPERATIONS For the Six Months Ended April 30, 1995 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest (net of foreign withholding taxes of $149,227)................................ $ 15,092,065
Dividends.............................................................................. 92,596
------------
Total income.................................................................. 15,184,661
------------
EXPENSES:
Management fees -- Note 6.............................................................. 918,374
Administrative fees -- Note 6.......................................................... 282,576
Custodian fees and expenses............................................................ 149,294
Shareholder reports.................................................................... 104,908
Transfer agent and accounting services fees -- Note 6.................................. 48,344
Legal and auditing fees................................................................ 28,980
Trustees' fees and expenses............................................................ 28,588
Registration and filing fees........................................................... 21,696
Other.................................................................................. 22,848
------------
Total expenses................................................................ 1,605,608
------------
NET INVESTMENT INCOME.................................................................. 13,579,053
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments and options written (including premiums on options exercised)............ (14,815,282)
Closing and expiration of options written -- Note 4.................................. 41,248
Foreign currency transactions........................................................ (1,201,685)
------------
Net realized loss............................................................. (15,975,719)
------------
Net change in unrealized appreciation or depreciation on:
Investments and options written...................................................... 8,257,237
Translation of assets and liabilities denominated in foreign currencies.............. (913,755)
------------
Net change.................................................................... 7,343,482
------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY
TRANSACTIONS......................................................................... (8,632,237)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................... $ 4,946,816
============
</TABLE>
See accompanying Notes to Financial Statements.
17
<PAGE> 18
STATEMENTS OF CHANGES IN NET ASSETS
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Year Ended
1995 October 31,
(Unaudited) 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income................................................. $ 13,579,053 $ 28,123,352
Net realized loss on investments, options written and foreign currency
transactions........................................................ (15,975,719) (7,693,213)
Net change in unrealized appreciation or depreciation on investments,
options written and translation of assets and liabilities
denominated in foreign currencies................................... 7,343,482 (15,068,472)
------------ ------------
Net increase in net assets resulting from operations.............. 4,946,816 5,361,667
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($.468 and $.845 per share,
respectively)....................................................... (13,608,328) (24,512,388)
Tax return of capital distribution ($.126 per share).................. -- (3,638,975)
BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued to shareholders in reinvestment of
dividends -- Note 2................................................. 496,299 1,801,323
------------ ------------
Total decrease in net assets.......................................... (8,165,213) (20,988,373)
NET ASSETS:
Beginning of period................................................... 295,658,129 316,646,502
------------ ------------
End of period (including overdistributed net investment income of
$3,353,886 and $3,324,611, respectively)............................ $287,492,916 $295,658,129
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
18
<PAGE> 19
FINANCIAL HIGHLIGHTS
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Six
Months
Ended
April 30, Year Ended October 31,
1995 ----------------------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of
period............................ $ 10.17 $ 10.96 $ 10.46 $ 10.64 $ 9.88 $ 10.63
-------- -------- -------- -------- -------- --------
Income (loss) from investment
operations:
Net investment income............. .47 1.00 1.08 1.06 1.11 1.15
Net realized and unrealized gain
(loss) on investments, options
written and foreign currency
transactions.................... (.30) (.82) .43 (.08) .82 (.78)
-------- -------- -------- -------- -------- --------
Total income from investment
operations.................... .17 .18 1.51 .98 1.93 .37
-------- -------- -------- -------- -------- --------
Dividends and distributions to
shareholders:
Dividends from net investment
income.......................... (.47) (.84) (1.01) (1.16) (1.07) (1.10)
Distributions from net realized
gain on investments, options
written and foreign currency
transactions.................... -- -- -- -- (.10) (.02)
Tax return of capital............. -- (.13) -- -- -- --
-------- -------- -------- -------- -------- --------
Total dividends and
distributions to
shareholders.................. (.47) (.97) (1.01) (1.16) (1.17) (1.12)
-------- -------- -------- -------- -------- --------
Net asset value, end of period...... $ 9.87 $ 10.17 $ 10.96 $ 10.46 $ 10.64 $ 9.88
======== ======== ======== ======== ======== ========
Market value, end of period......... $ 9.50 $ 9.50 $ 11.25 $ 11.13 $ 11.13 $ 9.38
TOTAL RETURN, AT MARKET VALUE(1).... 4.88% (7.46)% 11.10% 11.48% 33.05% 4.09%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)........................ $287,493 $295,658 $316,647 $299,368 $301,568 $278,511
Average net assets (in thousands)... $285,815 $306,686 $307,244 $303,773 $289,681 $290,533
Number of shares outstanding at end
of period (in thousands).......... 29,116 29,065 28,896 28,625 28,347 28,194
Ratios to average net assets:
Net investment income............... 9.58%(2) 9.17% 10.13% 9.95% 10.80% 11.16%
Expenses............................ 1.13%(2) 1.02% 1.00% 1.11% 1.16%(3) 1.03%
Portfolio turnover rate(4).......... 126.5% 187.6% 131.3% 95.9% 59.7% 85.7%
</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.
Total return does not reflect sales charges or brokerage commissions. Total
returns are not annualized for periods of less than one full year.
(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, 1995 were
$334,548,600 and $333,883,105, respectively.
See accompanying Notes to Financial Statements.
19
<PAGE> 20
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 the close of the New
York Stock Exchange 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 and short-term "non-money market"
debt securities are valued by a portfolio pricing service approved by the Board
of Trustees. Such securities which cannot be valued by the approved portfolio
pricing service are valued using dealer-supplied valuations provided the Manager
is satisfied that the firm rendering the quotes is reliable and that the quotes
reflect current market value, or under consistently applied procedures
established by the Board of Trustees to determine fair value in good faith.
"Money-market" instruments 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 contracts are valued based on the
closing prices of the forward currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
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 price 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, 1995, securities with an
aggregate market value of $928,125, representing .32% of the Trust's net 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 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.
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. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. 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 Taxes -- The Trust intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment
20
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
companies and to distribute all of its taxable income, including any net
realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income or excise tax provision is required. At April 30,
1995, 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. During the six months
ended April 30, 1995, the Trust's projected benefit obligations were reduced by
$5,940. In addition, one retired trustee is eligible for payments under the
Trust's retirement plan and a payment of $2,026 was made. The accumulated
liability for the Trust's projected benefit obligations was $109,775 at April
30, 1995.
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.
Classification of Distributions to Shareholders -- Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of premium amortization, paydown gains and losses and the
recognition of certain foreign currency gains (losses) as ordinary income (loss)
for tax purposes. The character of the distributions made during the year from
net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gain (loss) was recorded by the
Trust.
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, 1995 October 31, 1994
------------------ ---------------------
Shares Amount Shares Amount
------ -------- ------- ----------
<S> <C> <C> <C> <C>
Net increase from
dividends
reinvested....... 51,219 $496,299 168,788 $1,801,323
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON
INVESTMENTS
At April 30, 1995, net unrealized appreciation on investments, options written
and foreign currency transactions of $3,052,927 was composed of gross
appreciation of $7,941,852, and gross depreciation of $4,888,925.
4. OPTION ACTIVITY
The Trust may buy and sell put and call options, or write covered call options
on portfolio securities in order to produce incremental earnings or protect
against changes in the value of portfolio securities.
The Trust generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Trust receives a premium and becomes obligated to sell
21
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
or purchase the underlying security at a fixed price, upon exercise of the
option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Trust will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
In this report, securities designated to cover outstanding call options are
noted in the Statement of Investments. Shares subject to call, expiration date,
exercise price, premium received and market value are detailed in a footnote to
the Statement of Investments. Options written are reported as a liability in the
Statement of Assets and Liabilities. Gains and losses are reported in the
Statement of Operations.
The risk in writing a call option is that the Trust gives up the opportunity for
profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Trust may incur a loss
if the market price of the security decreases and the option is exercised. The
risk in buying an option is that the Trust pays a premium whether or not the
option is exercised. The Trust also has the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not exist.
Written option activity for the six months ended April 30, 1995 was as follows:
<TABLE>
<CAPTION>
Call Options Put Options
-------------------- ----------------------
Number Amount Number Amount
of of of of
Options Premiums Options Premiums
------ -------- -------- --------
<S> <C> <C> <C> <C>
Options outstanding at October 31,
1994.............................. -- $ -- -- $ --
Options written.................... 21,511 117,914 856,164 8,850
Options canceled in closing
purchase transactions............. (6,653) (34,203) (856,164) (8,850)
Options expired prior to
exercise.......................... (6,874) (22,375) -- --
Options exercised.................. (3,184) (31,696) -- --
------ -------- -------- -------
Options outstanding at April 30,
1995.............................. 4,800 $ 29,640 -- $ --
====== ======== ========= =======
</TABLE>
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Trust uses forward contracts to seek to manage foreign currency risks. They
may also be used to tactically shift portfolio currency risk. The Trust
generally enters into forward 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.
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Trust will realize a gain or loss
upon the closing or settlement of the forward transaction.
In this report, securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of Investments where
applicable. Gains and losses on outstanding contracts (unrealized appreciation
or depreciation on forward contracts) are reported in the Statement of Assets
and Liabilities. Realized gains and losses are reported with all other foreign
currency gains
22
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
and losses in the Trust's Statement of Operations.
Risks include the potential inability of the counterparty to meet the terms of
the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
At April 30, 1995, the Trust had outstanding forward contracts to purchase and
sell foreign currencies as follows:
<TABLE>
<CAPTION>
Valuation
Contract as of Unrealized
Contracts Expiration Amount April 30, Appreciation
to Purchase Date (000s) 1995 (Depreciation)
- - --------------- -------- ----- ---------- -------
<S> <C> <C> <C> <C>
Danish Krone... 5/4/95 4,103 $ 757,690 $(1,841)
New Zealand
Dollar........ 5/4/95 1,401 943,345 27,095
---------- -------
$1,701,035 $25,254
-------
Contracts
to Sell
- - ---------------
Australian 5/4/95-
Dollar........ 5/5/95 1,535 $1,117,498 $ 6,120
Norwegian 7/7/95-
Krone......... 7/20/95 3,189 512,824 1,515
---------- -------
$1,630,322 $ 7,635
-------
$32,889
=======
</TABLE>
6. 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.
7. ILLIQUID AND RESTRICTED SECURITIES
At April 30, 1995, investments in securities included issues that are illiquid
or restricted. The securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and 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 illiquid or
restricted securities. The aggregate value of these securities subject to this
limitation at April 30, 1995 was $1,922,409 which represents .67% of the Trust's
net assets. Information concerning these securities is as follows:
<TABLE>
<CAPTION>
Valuation
Per Unit
Cost as of
Acquisition Per April 30,
Security Date Unit 1995
- - -------------------------- --------- ------- -------
<S> <C> <C> <C>
Arizona Charlie's, Inc.,
12% Fst. Mtg. Nts.,
Series A, 11/15/00....... 11/18/93 $100.00 $ 81.50
Becker Gaming, Inc. Wts.,
Exp. 11/00............... 11/18/93 $ 2.00 $ 2.00
Canadian Imperial Bank,
10% Certificate of
Deposit, British Pound
Sterling Maximum Rate
Linked Nts., 11/8/96
(indexed to the 3-month
GBP LIBOR, multiplied by
9)....................... 4/28/95 $100.00 $100.00
Capitol Queen & Casino,
Inc., 12% Fst. Mtg. Nts.,
Series A, 11/15/00....... 11/13/94 $ 87.50 $ 91.50
Purity Supreme, Inc. Wts.,
Exp. 8/97................ 7/29/92 $ -- $ .02
Triangle Wire & Cable,
Inc. Common Stock........ 1/13/92 $ 9.50 $ 2.00
United Mexican States
Combined Facility 3, Loan
Participation Agreement,
Tranche A, 7.625%,
9/20/97.................. 10/25/94 $ 89.00 $ 61.00
</TABLE>
Pursuant to guidelines adopted by the Board of Trustees, certain unregistered
securities are determined to be liquid and are not included within the 10%
limitation specified above.
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
8. QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
Net Realized and
Unrealized Gain (Loss) Net Increase
on Investments, (Decrease) in Net
Options and Foreign Assets Resulting from
Net Investment Income Currency Transactions Operations Market Price
---------------------- ---------------------- ---------------------- on NYSE
Quarter Total Per Total Per Total Per -------------------
ended (000) Share (000) Share (000) Share High Low
------- ------- ----- -------- ----- -------- ----- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January
31,
1995... $ 7,063 $ .24 $(13,660) $(.47) $ (6,597) $(.23) $ 10.00 $ 8.875
April
30,
1995... 6,516 .23 5,028 .17 11,544 .40 10.00 9.25
------- ----- -------- ----- -------- -----
Totals... $13,579 $ .47 $ (8,632) $(.30) $ 4,947 $ .17
======= ====== ======== ====== ========= ======
January
31,
1994... $ 7,203 $ .26 $ 7,561 $ .25 $ 14,764 $ .51 11.375 10.625
April
30,
1994... 7,073 .26 (24,698) (.87) (17,625) (.61) 11.375 10.00
July
31,
1994... 7,104 .25 (2,081) (.08) 5,023 .17 10.625 10.00
October
31,
1994... 6,743 .23 (3,543) (.12) 3,200 .11 10.375 9.125
------- ----- -------- ----- -------- -----
Totals... $28,123 $1.00 $(22,761) $(.82) $ 5,362 $ .18
======= ====== ======== ===== ======== =====
January
31,
1993... $ 8,200 $ .29 $ (1,263) $(.04) $ 6,937 $ .25 11.00 10.00
April
30,
1993... 7,782 .27 9,342 .31 17,124 .58 11.25 10.75
July
31,
1993... 7,175 .25 4,200 .16 11,375 .41 11.375 11.00
October
31,
1993... 7,974 .27 (3) .00 7,971 .27 11.375 11.00
------- ----- -------- ----- -------- -----
Totals... $31,131 $1.08 $ 12,276 $ .43 $ 43,407 $1.51
======= ===== ======== ===== ======== =====
</TABLE>
24
<PAGE> 25
GENERAL INFORMATION CONCERNING THE TRUST
Oppenheimer Multi-Sector Income Trust (the "Trust") is a closed-end diversified
management investment company whose shares trade on the New York Stock Exchange
(the "NYSE"). The Trust seeks to provide high current income consistent with
preservation of capital. The Trust's secondary investment objective is capital
appreciation. The investment advisor to the Trust is Oppenheimer Management
Corporation (the "Manager").
Dividend Reinvestment and Cash Purchase
Plan -- A Dividend Reinvestment and Cash Purchase Plan (the "Plan") is available
to shareholders in the Trust, 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 registered directly
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.
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 "OppenGvt." The Trust's NYSE trading symbol is
OGT. 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."
25
<PAGE> 26
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<PAGE> 27
(This Page Intentionally Left Blank)
<PAGE> 28
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
Carol Wolf, Vice President
Robert E. Patterson, Vice President
Arthur 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 LLP
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.
RS0680.001.0695 [Recycled logo] Printed on recycled paper
1995 SEMIANNUAL REPORT
OPPENHEIMER
MULTI-SECTOR
INCOME TRUST
APRIL 30, 1995
[LOGO OPPENHEIMERFUNDS(R)]
