<PAGE>
<PAGE>
Dear Shareholder:
Continued U.S. economic growth and low inflation meant modest to strong returns
across Oppenheimer Multi-Sector Income Trust's three investment sectors--U.S.
government securities, high yield domestic corporate bonds and foreign fixed
income securities. The diversification among these sectors worked well, and the
Trust's six-month return was 3.48%, without deducting sales charges. Its
dividend return was 8.99% as of April 30, 1997.(1)
Of course, there were some strategic moves, in response to economic changes,
that helped the Trust's performance. Because the yield on U.S. government bonds
fell during the period, we reduced the duration of our U.S. Treasury holdings to
protect the Trust from excess interest-rate exposure. We've also increased the
Trust's holdings of foreign government bonds.
Investment Breakdown:
Oppenheimer Multi-Sector Income
Trust as of 4/30/97(4)
[GRAPH]
U.S. corporate bonds & notes: 31.0%
U.S. government obligations -- Agency: 20.2%
Foreign government obligations: 17.1%
U.S. government obligations -- Treasury: 13.1%
Structured notes: 6.8%
Foreign corporate bonds & notes: 6.6%
Short-term securities: 3.6%
Equity securities: 1.6%
Another factor that benefited the Trust during the period was that we were
heavily exposed to high yield corporate bonds in the telecommunications sector.
The break-up of monopolies, both in the United States and abroad, has been
beneficial for new companies in the high yield sector.(2)
In addition, our investments in dollar-denominated emerging market bonds,
particularly in Latin America, returned exceptional performance. Although yields
remain attractive, we are beginning to see high valuations and are looking to
diversify into other foreign debt instruments, such as those found in the
developing economies of Eastern Europe. Of course, any foreign investment,
especially emerging markets investment, entails greater expenses and risks, such
as adverse market changes due to currency fluctuations. But, by diversifying the
portfolio by country and industry, we aim to reduce those risks.
Finally, as the real estate market improved and strong economic growth helped to
lower office vacancy rates, we increased our exposure to a new source of
mortgage-backed bonds called commercial mortgage-backed securities. These bonds
are attractive because they provide higher yield for the same credit risk as a
comparable industrial corporate bond. In addition, the Trust's exposure to the
government sector was concentrated in mortgage-backed bonds, which maintained a
positive spread to Treasuries and provided respectable return.(3)
<PAGE>
<PAGE>
On the other hand, oversupply and regulatory changes hurt the performance of our
gaming sector holdings. Returns for these holdings were respectable but
disappointing when compared with some of the Trust's best performers. Also,
weaker growth in Asia and Europe dampened demand for our holdings in the metal/
mining and paper product industries. Although our investments in these three
industries underperformed our expectations, the Trust's low exposure minimized
the impact on performance.
Looking to the months ahead, we expect continued, modest economic growth, but
are cautious about too much inflation. Employment rates are reaching levels that
historically have begun applying upward pressure on wages. Although the Federal
Reserve didn't raise interest rates at its last meeting, rising wage
pressure--which is a key component of inflation--could tempt the Federal Reserve
to raise rates in the near future. Since we believe that the first rate hike by
the Fed will not be the last, we are taking steps to diversify the portfolio
away from interest-rate-sensitive investments. We remain confident that
opportunities exist both domestically and internationally to provide solid
performance in 1997.
Thank you for your confidence in OppenheimerFunds, The Right Way to Invest. We
look forward to helping you meet your financial goals in the future.
Sincerely,
/s/ BRIDGET A. MACASKILL
Bridget A. Macaskill
President
Oppenheimer Multi-Sector Income Trust
May 21, 1997
1. Total return is based on the change in net asset value per share from
10/31/96 to 4/30/97, without deducting any brokerage costs. Dividend return is
determined by annualizing the April 1997 dividend of $0.074 and dividing by the
closing market price on the New York Stock Exchange of $9.875 per share on
4/25/97 (payment date). Past performance does not guarantee future results.
2. Investors in high yield bonds are subject to greater risk that the issuer
will default in its principal or interest payments.
3. Mortgage-backed securities involve risks from early prepayment of underlying
mortgages that can affect the Fund's income and principal value.
4. Portfolio composition is subject to change. Chart is based on total
investments at market value rather than net assets.
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
U.S. GOVERNMENT SECTOR -- 14.0%
TREASURY -- 14.0%
U.S. Treasury Bonds:
7.125%, 2/15/23 (2)..................................................... $ 3,827,000 $ 3,853,314
STRIPS, Zero Coupon, 6.90%, 2/15/19 (3)................................. 11,000,000 2,364,580
U.S. Treasury Nts.:
6%, 8/31/97............................................................. 801,000 801,751
6.25%, 2/15/03.......................................................... 10,387,000 10,205,237
6.25%, 2/28/02.......................................................... 475,000 468,618
7%, 4/15/99 (4)......................................................... 24,500,000 24,829,230
------------
42,522,730
------------
</TABLE>
<TABLE>
<CAPTION>
Date Strike Contracts
----- ------------ --------------
<S> <C> <C> <C> <C>
PUT OPTIONS PURCHASED -- 0.0%
U.S. Treasury Bonds, 10-Yr. Futures Put Opt.,
5/97........................................ 6/97 105% 40 1,875
------------
Total U.S. Government Sector
(Cost $43,153,722).......................... 42,524,605
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
--------------
<S> <C> <C>
CONVERTIBLE SECTOR -- 1.7%
PREFERRED STOCKS -- 1.5%
American Radio Systems Corp., 11.375% Cum. Exchangeable Preferred
(5)(6).................................................................. 6,000 589,500
Fresenius Medical Care Trust, 9% Preferred Securities..................... 2,340,000 2,322,450
NEXTLINK Communications, Inc., 14% Cum., Units (each unit consists of one
sr. exchangeable preferred share and one warrant) (5)(7)(8)............. 15,000 697,500
SD Warren Co., 14% Cum. Exchangeable, Series B (7)........................ 20,000 785,000
------------
4,394,450
------------
<CAPTION>
Units
--------------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES -- 0.2%
American Communications Services, Inc. Wts., Exp. 11/05................... 700 24,500
American Telecasting, Inc. Wts., Exp. 6/99................................ 4,750 3,859
Ames Department Stores, Inc., Litigation Trust (9)........................ 128,889 1,289
Becker Gaming, Inc. Wts., Exp. 11/00 (9).................................. 25,000 6,250
Cellular Communications International, Inc. Wts., Exp. 8/03 (9)........... 2,500 42,500
Foamex LP/JPS Automotive Corp. Wts., Exp. 7/99 (9)........................ 1,000 25,000
Gaylord Container Corp. Wts., Exp. 11/02.................................. 50,625 291,094
ICG Communications, Inc. Wts., Exp. 9/05.................................. 4,125 17,449
In-Flight Phone Corp. Wts., Exp. 8/02..................................... 900 --
</TABLE>
3
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Units See Note 1
-------------- ------------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES (CONTINUED)
Protection One, Inc. Wts., Exp. 6/05 (9).................................. 6,400 $ 39,744
SD Warren Co. Wts., Exp. 12/06 (9)........................................ 20,000 85,000
SDW Holdings Corp., Cl. B Wts., Exp. 12/06 (9)............................ 1,875 22,500
Wireless One, Inc. Wts., Exp. 10/00 (9)................................... 1,500 15
------------
Total Convertible Sector (Cost $4,370,096)................................ 559,200
------------
4,953,650
------------
<CAPTION>
Shares
--------------
<S> <C> <C>
CORPORATE SECTOR -- 33.2%
COMMON STOCKS -- 0.0%
Capital Gaming International, Inc. (7).................................... 7,198 90
Triangle Wire & Cable, Inc. (7)(9)........................................ 84,444 84,444
------------
84,534
------------
<CAPTION>
Face Amount(1)
--------------
<S> <C> <C>
CORPORATE BONDS AND NOTES -- 33.2%
BASIC INDUSTRY -- 3.8%
Chemicals -- 1.0%
ISP Holdings, Inc., 9% Sr. Nts., 10/15/03................................. $ 770,000 781,550
NL Industries, Inc.:
0%/13% Sr. Sec. Disc. Nts., 10/15/05 (10)............................... 670,000 624,775
11.75% Sr. Sec. Nts., 10/15/03.......................................... 120,000 128,700
Sterling Chemicals, Inc., 11.75% Sr. Unsec. Sub. Nts., 8/15/06............ 690,000 729,675
Terra Industries, Inc., 10.50% Sr. Nts., Series B, 6/15/05................ 730,000 771,975
------------
3,036,675
------------
Containers -- 1.8%
Consumers International, Inc., 10.25% Sr. Sec. Nts., 4/1/05 (5)........... 750,000 781,875
Owens-Illinois, Inc., 11% Sr. Debs., 12/1/03.............................. 4,000,000 4,460,000
U.S. Can Corp., 10.125% Sr. Sub. Nts., 10/15/06........................... 250,000 261,250
------------
5,503,125
------------
Paper -- 0.4%
Buckeye Cellulose Corp., 9.25% Sr. Sub. Nts., 9/15/08..................... 500,000 505,000
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03............................... 500,000 508,750
Repap Wisconsin, Inc., 9.25% First Priority Sr. Sec. Nts., 2/1/02......... 300,000 298,500
------------
1,312,250
------------
Steel -- 0.6%
AK Steel Corp., 9.125% Sr. Nts., 12/15/06................................. 1,500,000 1,494,375
</TABLE>
4
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Steel (Continued)
Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01...................... $ 250,000 $ 246,250
------------
1,740,625
------------
CONSUMER RELATED -- 7.6%
Consumer Products -- 1.1%
Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B, 10.62%,
5/27/98 (3)............................................................. 1,000,000 902,500
E & S Holdings Corp., 10.375% Sr. Sub. Nts., 10/1/06...................... 750,000 774,375
Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., 13.37%, 3/15/01
(3)(5).................................................................. 1,250,000 825,000
Samsonite Corp., 11.125% Sr. Sub. Nts., 7/15/05 (9)....................... 735,000 815,850
------------
3,317,725
------------
Food/Beverages/Tobacco -- 0.5%
CFP Holdings, Inc., 11.625% Gtd. Sr. Nts., 1/15/04 (9).................... 380,000 387,600
Foodbrands America, Inc., 10.75% Sr. Sub. Nts., 5/15/06................... 500,000 570,000
International Home Foods, Inc., 10.375% Sr. Sub. Nts., 11/1/06............ 500,000 511,250
------------
1,468,850
------------
Healthcare -- 2.1%
Genesis Health Ventures, Inc., 9.25% Sr. Sub. Nts., 10/1/06............... 250,000 249,375
Magellan Health Services, Inc., 11.25% Sr. Sub. Nts., Series A, 4/15/04... 1,500,000 1,659,375
Tenet Healthcare Corp.:
10.125% Sr. Sub. Nts., 3/1/05........................................... 3,200,000 3,448,000
8.625% Sr. Sub. Nts., 1/15/07........................................... 1,000,000 995,000
------------
6,351,750
------------
Hotel/Gaming -- 2.1%
Arizona Charlie's, Inc., 12% First Mtg. Nts., Series A, 11/15/00
(9)(11)................................................................. 550,000 286,000
Boyd Gaming Corp., 9.25% Sr. Nts., 10/1/03................................ 500,000 485,625
Capital Gaming International, Inc., Promissory Nts., 8/1/95 (12).......... 5,500 --
Capitol Queen & Casino, Inc., 12% First Mtg. Nts., Series A, 11/15/00
(9)(12)................................................................. 200,000 34,000
Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03................ 750,000 766,875
HMH Properties, Inc., 9.50% Sr. Sec. Nts., Series B, 5/15/05.............. 1,750,000 1,793,750
Mohegan Tribal Gaming Authority, 13.50% Sr. Sec. Nts., Series B,
11/15/02................................................................ 750,000 986,250
Rio Hotel & Casino, Inc., 9.50% Gtd. Sr. Sub. Nts., 4/15/07 (5)........... 500,000 492,500
Showboat Marina Casino Partnership/Showboat Marina Finance Corp., 13.50%
First Mtg. Nts., Series B, 3/15/03...................................... 1,000,000 1,145,000
</TABLE>
5
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Hotel/Gaming (Continued)
Trump Atlantic City Associates/Trump Atlantic City Funding, Inc., 11.25%
First Mtg. Nts., 5/1/06................................................. $ 400,000 $ 390,000
------------
6,380,000
------------
Restaurants -- 0.1%
Ameriking, Inc., 10.75% Sr. Nts., 12/1/06................................. 230,000 238,050
------------
Textile/Apparel -- 1.7%
CMI Industries, Inc., 9.50% Sr. Sub. Nts., 10/1/03........................ 475,000 463,125
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series B, 10/1/03.......... 500,000 512,500
Dan River, Inc., 10.125% Sr. Sub. Nts., 12/15/03.......................... 500,000 516,250
GFSI, Inc., 9.625% Sr. Sub. Nts., 3/1/07 (5).............................. 1,000,000 985,000
Tultex Corp., 9.625% Sr. Nts., 4/15/07 (5)................................ 600,000 618,750
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05.................. 1,500,000 1,541,250
William Carter Co., 10.375% Sr. Sub. Nts., 12/1/06 (5).................... 550,000 555,500
------------
5,192,375
------------
ENERGY -- 4.2%
Chesapeake Energy Corp.:
12% Gtd. Sr. Exchangeable Nts., 3/1/01.................................. 1,000,000 1,082,500
9.125% Sr. Nts., 4/15/06................................................ 2,340,000 2,375,100
J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06....................... 100,000 97,000
Mariner Energy, Inc., 10.50% Sr. Sub. Nts., 8/1/06........................ 1,500,000 1,511,250
Mesa Operating Co., 0%/11.625% Gtd. Sr. Sub. Disc. Nts., 7/1/06 (10)...... 3,600,000 2,623,500
Panda Global Energy Co., 12.50% Sr. Nts., 4/15/04 (5)..................... 450,000 427,500
Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 (9)........... 2,635,000 2,358,325
TransTexas Gas Corp., 11.50% Gtd. Sr. Sec. Nts., 6/15/02.................. 2,000,000 2,230,000
------------
12,705,175
------------
FINANCIAL SERVICES -- 1.5%
Banks & Thrifts -- 0.4%
First Nationwide Holdings, Inc.:
10.625% Sr. Sub. Nts., 10/1/03.......................................... 1,000,000 1,060,000
9.125% Sr. Sub. Nts., 1/15/03........................................... 250,000 251,250
------------
1,311,250
------------
Diversified Financial -- 0.7%
Amresco, Inc., 10% Sr. Sub. Nts., Series 97-A, 3/15/04.................... 250,000 247,500
Neodata Services, Inc., 12% Sr. Nts., Series B, 5/1/03.................... 900,000 963,000
Olympic Financial Ltd., Units (each unit consists of $1,000 principal
amount of 11.50% sr. nts., 3/15/07 and one warrant to purchase 6.84
shares of common stock) (8)............................................. 250,000 236,250
</TABLE>
6
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Diversified Financial (Continued)
Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec. Nts., Series B,
4/1/02.................................................................. $ 750,000 $ 802,500
------------
2,249,250
------------
Insurance -- 0.4%
Americredit Corp., 9.25% Sr. Nts., 2/1/04 (5)............................. 1,135,000 1,078,250
------------
HOUSING RELATED -- 0.8%
Building Materials -- 0.3%
Building Materials Corp. of America, 8.625% Sr. Nts., 12/15/06............ 500,000 490,000
Nortek, Inc., 9.25% Sr. Nts., 3/15/07 (5)................................. 475,000 473,812
------------
963,812
------------
Homebuilders/Real Estate -- 0.5%
Continental Homes Holding Corp., 10% Gtd. Unsec. Bonds, 4/15/06........... 180,000 180,900
Greystone Homes, Inc., 10.75% Sr. Nts., 3/1/04............................ 500,000 515,625
NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03..................................... 500,000 522,500
U.S. Home Corp., 9.75% Sr. Nts., 6/15/03.................................. 300,000 309,000
------------
1,528,025
------------
MANUFACTURING -- 3.4%
Aerospace -- 0.7%
America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05...................... 1,360,000 1,366,800
Atlas Air, Inc., 12.25% Pass-Through Certificates, 12/1/02 (9)............ 500,000 547,500
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98............................. 300,000 304,500
------------
2,218,800
------------
Automotive -- 0.8%
Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06......... 600,000 660,000
Harvard Industries, Inc., 12% Sr. Nts., 7/15/04........................... 250,000 116,250
Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06.............. 500,000 541,875
Lear Corp., 9.50% Sub. Nts., 7/15/06...................................... 1,000,000 1,045,000
------------
2,363,125
------------
Capital Goods -- 1.9%
Clark-Schwebel, Inc., 10.50% Sr. Nts., 4/15/06............................ 750,000 795,000
Farley, Inc., Zero Coupon Sub. Debs., 14.15%, 12/30/12 (3)(9)............. 198,000 23,575
Foamex LP/Foamex Capital Corp.:
11.875% Sr. Sub. Debs., 10/1/04......................................... 2,000,000 2,155,000
0%/14% Sr. Disc. Nts., Series B, 7/1/04 (10)............................ 750,000 660,000
Mettler Toledo, Inc., 9.75% Gtd. Sr. Sub. Nts., 10/1/06................... 1,000,000 1,035,000
Synthetic Industries, Inc., 9.25% Sr. Sub. Nts., 2/15/07 (5).............. 250,000 253,125
</TABLE>
7
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Capital Goods (Continued)
Titan Wheel International, Inc., 8.75% Sr. Sub. Nts., 4/1/07.............. $ 425,000 $ 423,542
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03 (9).................... 525,000 539,437
------------
5,884,679
------------
MEDIA -- 2.4%
Broadcasting -- 0.6%
American Radio Systems Corp., 9% Sr. Sub. Nts., 2/1/06.................... 200,000 199,000
SFX Broadcasting, Inc., 10.75% Sr. Sub. Nts., Series B, 5/15/06........... 750,000 787,500
Sinclair Broadcast Group, Inc., 10% Sr. Sub. Nts., 9/30/05................ 500,000 506,875
Young Broadcasting, Inc., 9% Sr. Sub. Nts., Series B, 1/15/06............. 500,000 477,500
------------
1,970,875
------------
Cable Television -- 0.7%
Cablevision Systems Corp., 9.875% Sr. Sub. Nts., 5/15/06.................. 500,000 498,750
EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec. Disc. Nts.,
3/15/04 (10)............................................................ 800,000 594,000
Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B,
11/1/03 (11)............................................................ 250,000 255,000
TCI Satellite Entertainment, Inc., 10.875% Sr. Sub. Nts., 2/15/07 (5)..... 765,000 730,575
------------
2,078,325
------------
Diversified Media -- 0.8%
Jacor Communications Co., 9.75% Gtd. Unsec. Sr. Sub. Nts., 12/15/06....... 250,000 255,625
Katz Media Corp., 10.50% Sr. Sub. Nts., 1/15/07 (5)....................... 750,000 708,750
Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06...................... 750,000 750,000
Universal Outdoor, Inc.:
9.75% Sr. Sub. Nts., 10/15/06........................................... 590,000 588,525
9.75% Sr. Sub. Nts., Series B, 10/15/06 (5)............................. 70,000 69,300
------------
2,372,200
------------
Publishing/Printing -- 0.3%
Hollinger International Publishing, Inc.:
9.25% Gtd. Sr. Sub. Nts., 2/1/06........................................ 500,000 496,250
9.25% Gtd. Sr. Sub. Nts., 3/15/07....................................... 500,000 498,750
------------
995,000
------------
OTHER -- 1.1%
Environmental -- 0.1%
Allied Waste North America, Inc., 10.25% Sr. Sub. Nts., 12/1/06 (5)....... 250,000 263,437
------------
Services -- 1.0%
Borg-Warner Security Corp., 9.625% Sr. Sub. Nts., 3/15/07 (5)............. 650,000 638,625
</TABLE>
8
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Services (Continued)
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 (5)....... $ 500,000 $ 475,625
Protection One Alarm Monitoring, Inc., 0%/13.625% Sr. Disc. Nts., 6/30/05
(10).................................................................... 2,000,000 1,950,000
------------
3,064,250
------------
RETAIL -- 1.2%
Specialty Retailing -- 0.3%
Brylane LP/Brylane Capital Corp., 10% Sr. Sub. Nts., Series B, 9/1/03..... 250,000 261,875
Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03.................. 165,000 174,900
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03....................... 250,000 262,500
------------
699,275
------------
Supermarkets -- 0.9%
Grand Union Co., 12% Sr. Nts., 9/1/04..................................... 200,000 190,500
Jitney-Jungle Stores of America, Inc., 12% Gtd. Sr. Nts., 3/1/06.......... 750,000 815,625
Ralph's Grocery Co.:
(New), 11% Sr. Sub. Nts., 6/15/05 (5)................................... 625,000 667,188
10.45% Sr. Nts., 6/15/04................................................ 625,000 665,625
Smith's Food & Drug Centers, Inc., 11.25% Sr. Unsec. Sub. Nts., 5/15/07... 420,000 470,400
------------
2,809,338
------------
TECHNOLOGY -- 5.6%
Information Technology -- 4.0%
Bell & Howell Co. (New), 0%/11.50% Sr. Disc. Debs., Series B, 3/1/05
(10).................................................................... 500,000 390,000
CellNet Data Systems, Inc., 0%/13% Sr. Disc. Nts., 6/15/05 (9)(10)........ 400,000 256,000
Cellular Communications International, Inc., Zero Coupon Sr. Disc. Nts.,
24.03%, 8/15/00 (3)..................................................... 2,000,000 1,440,000
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (10)................ 2,000,000 1,850,000
Dobson Communications Corp., 11.75% Sr. Nts., 4/15/07 (5)................. 650,000 620,750
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 (5)............................ 550,000 533,500
Geotek Communications, Inc., 0%/15% Sr. Sec. Disc. Nts., 7/15/05 (10)..... 200,000 119,000
Globalstar LP/Globalstar Capital Corp., Units (each unit consists of
$1,000 principal amount of 11.375% sr. nts., 2/15/04 and one warrant to
purchase 2.0645 ordinary shares) (5)(8)................................. 410,000 407,950
McCaw International Ltd., Units (each unit consists of $1,000 principal
amount of 0%/13% sr. disc. nts., 4/15/07 and one warrant to purchase
0.10616 share of common stock) (5)(8)(10)............................... 500,000 248,750
Metrocall, Inc., 10.375% Sr. Sub. Nts., 10/1/07........................... 500,000 415,000
</TABLE>
9
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Information Technology (Continued)
Omnipoint Corp.:
11.625% Sr. Nts., 8/15/06............................................... $ 200,000 $ 159,000
11.625% Sr. Nts., Series A, 8/15/06..................................... 500,000 397,500
Pierce Leahy Corp., 11.125% Sr. Sub. Nts., 7/15/06........................ 1,000,000 1,092,500
PriCellular Wireless Corp., 0%/12.25% Sr. Sub. Disc. Nts., 10/1/03 (10)... 1,250,000 1,112,500
Sprint Spectrum LP/Sprint Spectrum Finance Corp.:
0%/12.50% Sr. Disc. Nts., 8/15/06 (10).................................. 1,000,000 695,000
11% Sr. Nts., 8/15/06................................................... 500,000 547,500
Tracor, Inc., 8.50% Sr. Sub. Nts., 3/1/07 (5)............................. 750,000 735,000
Unisys Corp., 11.75% Sr. Nts., 10/15/04................................... 500,000 528,750
USA Mobile Communications, Inc. II, 14% Sr. Nts., 11/1/04................. 450,000 459,000
------------
12,007,700
------------
Telecommunications/Technology -- 1.6%
Brooks Fiber Properties, Inc., 0%/11.875% Sr. Disc. Nts., 11/1/06 (10).... 1,000,000 625,000
ICG Holdings, Inc.:
0%/12.50% Gtd. Sr. Disc. Nts., 5/1/06 (10).............................. 600,000 366,000
0%/13.50% Sr. Disc. Nts., 9/15/05 (10).................................. 300,000 205,500
McLeod, Inc., 0%/10.50% Sr. Disc. Nts., 3/1/07 (5)(10).................... 250,000 142,188
MFS Communications Co., Inc.:
0%/8.875% Sr. Disc. Nts., 1/15/06 (10).................................. 500,000 374,375
0%/9.375% Sr. Disc. Nts., 1/15/04 (10).................................. 1,400,000 1,272,250
NTL, Inc., 10% Sr. Nts., 2/15/07 (5)...................................... 250,000 244,375
Teleport Communications Group, Inc., 0%/11.125% Sr. Disc. Nts., 7/1/07
(10).................................................................... 1,000,000 692,500
UNIFI Communications, Inc., Units (each unit consists of $1,000 principal
amount of 14% sr. nts., 3/1/04 and one warrant to purchase 27.52
ordinary shares) (5)(8)................................................. 1,000,000 990,000
------------
4,912,188
------------
TRANSPORTATION -- 0.4%
Railroads -- 0.4%
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts.,
Series B, 12/15/03 (10)................................................. 1,500,000 1,245,000
------------
UTILITIES -- 1.2%
Electric Utilities -- 1.2%
CalEnergy, Inc., 9.50% Sr. Nts., 9/15/06.................................. 135,000 140,400
California Energy, Inc., 10.25% Sr. Disc. Nts., 1/15/04................... 750,000 798,750
</TABLE>
10
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Electric Utilities (Continued)
Calpine Corp.:
10.50% Sr. Nts., 5/15/06................................................ $ 1,005,000 $ 1,065,300
9.25% Sr. Nts., 2/1/04.................................................. 185,000 185,000
El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11............ 1,250,000 1,331,250
------------
3,520,700
------------
100,782,079
------------
Total Corporate Sector (Cost $100,706,862)................................ 100,866,613
------------
INTERNATIONAL SECTOR -- 33.6%
FOREIGN CERTIFICATES OF DEPOSIT -- 0.8%
Bank Dagang Nasional Indonesia, Zero Coupon Negotiable CD, 13.37%,
11/20/97 (3)(13) IDR.................................................... 1,500,000,000 572,491
Citibank Malaysia Banker's Acceptance, Zero Coupon Negotiable CD:
7.12%, 5/12/97 (3)(13) MYR.............................................. 2,600,000 1,034,630
7.16%, 7/18/97 (3)(13) MYR.............................................. 736,000 288,967
Deutsche Bank Malaysia, Zero Coupon Negotiable CD, 6.94%, 7/18/97 (3)(13)
MYR..................................................................... 1,500,000 589,073
------------
2,485,161
------------
FOREIGN SHORT-TERM NOTES -- 0.2%
Bakrie Investindo, Zero Coupon Indonesian Commercial Paper, 16.63%,
7/30/97 (3) IDR......................................................... 1,263,000,000 502,614
------------
CORPORATE BONDS AND NOTES -- 7.1%
BASIC INDUSTRY -- 0.9%
Metals/Mining -- 0.2%
Royal Oak Mines, Inc., 11% Sr. Sub. Nts., 8/15/06......................... 500,000 500,000
------------
Paper -- 0.6%
APP International Finance Co. BV, 11.75% Gtd. Sec. Nts., 10/1/05.......... 750,000 787,500
Indah Kiat International Finance Co. BV, 11.375% Gtd. Sec. Nts.,
6/15/99................................................................. 487,000 514,394
QUNO Corp., 9.125% Sr. Nts., 5/15/05...................................... 500,000 526,250
------------
1,828,144
------------
Steel -- 0.1%
Algoma Steel, Inc., 12.375% First Mtg. Nts., 7/15/05...................... 400,000 444,000
------------
CONSUMER RELATED -- 0.3%
Consumer Products -- 0.0%
International Semi-Tech Microelectronics, Inc., 0%/11.50% Sr. Sec. Disc.
Nts., 8/15/03 (10)...................................................... 250,000 139,375
------------
</TABLE>
11
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Hotel/Gaming -- 0.2%
Grupo Posadas SA de CV, 10.375% Bonds, 2/13/02 (5)........................ $ 475,000 $ 478,414
------------
Textile/Apparel -- 0.1%
Polysindo International Finance Co. BV, 11.375% Gtd. Sec. Nts., 6/15/06... 250,000 265,312
------------
FINANCIAL SERVICES -- 1.9%
Banks & Thrifts -- 0.4%
Banco de Colombia, 5.20% Cv. Jr. Unsec. Sub. Nts., 2/1/99 (9)............. 850,000 786,250
Ongko International Finance Co. BV, 10.50% Gtd. Nts., 3/29/04 (5)......... 400,000 405,125
------------
1,191,375
------------
Diversified Financial -- 1.2%
Bakrie Investindo, Zero Coupon Promissory Nts., 17.25%, 3/16/98 (3) IDR... 3,160,000,000 1,127,898
PT Polysindo Eka Perkasa, Zero Coupon Promissory Nts., 16.37%, 3/16/98 (3)
IDR..................................................................... 3,200,000,000 1,144,500
Snap Ltd., 11.50% Sec. Bonds, 1/29/09 DEM................................. 2,200,000 1,338,740
------------
3,611,138
------------
Insurance -- 0.3%
Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03 (5)..................... 1,000,000 1,013,750
------------
MANUFACTURING -- 0.3%
Capital Goods -- 0.3%
Consorcio Ecuatoriano Nts., 14%, 5/1/02 (9)(14)........................... 855,000 855,000
------------
MEDIA -- 0.5%
Entertainment/Film -- 0.3%
Imax Corp., 10% Sr. Nts., 3/1/01.......................................... 1,000,000 1,015,000
------------
Publishing/Printing -- 0.2%
Sun Media Corp., 9.50% Sr. Sub. Nts., 2/15/07 (5)......................... 645,000 632,100
------------
OTHER -- 0.4%
Conglomerates -- 0.4%
Empresas ICA Sociedad Controladora SA de CV, 5% Cv. Sub. Debs., 3/15/04... 400,000 297,000
Mechala Group Jamaica Ltd.:
12% Bonds, 2/15/02 (5).................................................. 200,000 205,875
12.75% Bonds, 12/30/99 (5).............................................. 600,000 627,000
------------
1,129,875
------------
</TABLE>
12
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
RETAIL -- 0.2%
Specialty Retailing -- 0.2%
Central Termica Guemes, 12% Bonds, 11/26/01 (9)........................... $ 598,000 $ 624,910
------------
TECHNOLOGY -- 2.0%
Information Technology -- 0.4%
Comunicacion Celular SA, 0%/13.125% Sr. Deferred Coupon Bonds, 11/15/03
(10).................................................................... 1,250,000 875,000
Rogers Cantel, Inc., 9.375% Sr. Sec. Debs., 6/1/08........................ 500,000 518,750
------------
1,393,750
------------
Telecommunications/Technology -- 1.6%
Bell Cablemedia plc, 0%/11.95% Sr. Disc. Nts., 7/15/04 (10)............... 2,000,000 1,775,000
Colt Telecom Group plc, Units (each unit consists of $1,000 principal
amount of 0%/12% sr. disc. nts., 12/15/06 and one warrant to purchase
7.8 ordinary shares) (8)(10)............................................ 800,000 468,000
Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs., 11/15/07 (10)... 735,000 510,825
Diamond Cable Communications plc, 0%/11.75% Sr. Disc. Nts., 12/15/05
(10).................................................................... 1,250,000 868,750
TeleWest plc:
0%/11% Sr. Disc. Debs., 10/1/07 (10).................................... 1,250,000 851,563
9.625% Sr. Debs., 10/1/06............................................... 250,000 247,500
------------
4,721,638
------------
TRANSPORTATION -- 0.4%
Shipping -- 0.3%
Gearbulk Holding Ltd., 11.25% Sr. Nts., 12/1/04........................... 750,000 821,250
------------
Trucking -- 0.1%
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (5).......... 500,000 417,500
------------
UTILITIES -- 0.2%
Gas Utilities -- 0.2%
CE Casecnan Water & Energy, Inc., 11.45% Sr. Nts., Series A, 11/15/05..... 500,000 537,188
------------
21,619,719
------------
FOREIGN GOVERNMENT OBLIGATIONS -- 15.6%
Argentina -- 0.4%
Argentina (Republic of) Bonds, Bonos de Consolidacion de Deudas, Series I,
3.308%, 4/1/01 (6)(11) ARP.............................................. 621,897 560,419
Banco Hipotecario Nacional (Argentina) Medium-Term Nts., 10.625%,
8/7/06.................................................................. 700,000 732,812
------------
1,293,231
------------
</TABLE>
13
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Australia -- 1.1%
South Australia Government Finance Authority Bonds, 10%, 1/15/03 AUD...... 2,280,000 $ 1,976,902
Western Australia Treasury Corp.:
Bonds, 9%, Series 99, 4/15/99 AUD....................................... 485,000 396,176
Gtd. Bonds, 12%, 8/1/01 AUD............................................. 1,010,000 925,295
------------
3,298,373
------------
Brazil -- 0.2%
Brazil (Federal Republic of) Multi-Year Discount Facility Agreement Trust
Certificates, Series REGS, 6.563%, 9/15/07 (5)(11)...................... 611,370 544,120
------------
Canada -- 1.5%
Canada (Government of) Debs., 10.50%, 7/1/00 CAD.......................... 5,530,000 4,522,810
------------
Costa Rica -- 0.3%
Central Bank of Costa Rica Interest Claim Bonds, Series B, 6.312%, 5/21/05
(11).................................................................... 872,492 811,418
------------
Ecuador -- 0.7%
Ecuador (Republic of):
Bonds, 10.75%, 4/25/04 (5)(11)(14)...................................... 750,000 760,313
Disc. Bonds, 6.437%, 2/28/25 (11)....................................... 2,000,000 1,340,100
------------
2,100,413
------------
Finland -- 0.8%
Finland (Republic of) Treasury Bills, Zero Coupon, 2.89%, 5/15/97 (3)
FIM..................................................................... 13,100,000 2,516,596
------------
Great Britain -- 1.5%
United Kingdom Treasury Nts., 12.50%, 11/21/05 GBP........................ 2,200,000 4,502,315
------------
Hong Kong -- 0.2%
Hong Kong & Shanghai Bank Banker's Acceptance, Zero Coupon:
6.92%, 7/25/97 (3) MYR.................................................. 925,000 362,604
7.03%, 7/3/97 (3) MYR................................................... 530,000 208,679
------------
571,283
------------
Italy -- 1.4%
Italy (Republic of):
Sr. Unsec. Unsub. Global Bonds, 0.633%, 7/26/99 (11) JPY................ 305,000,000 2,416,015
Treasury Bonds, Buoni del Tesoro Poliennali, 10.50%, 11/1/98 ITL........ 2,905,000,000 1,784,024
------------
4,200,039
------------
</TABLE>
14
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Jordan -- 0.2%
Hashemite (Kingdom of) Jordan Disc. Bonds, 6.50%, 12/23/23 (11)........... $ 750,000 $ 596,250
------------
Mexico -- 1.6%
Bonos de la Tesoreria de la Federacion, Zero Coupon:
24.43%, 12/31/97 (3) MXP................................................ 9,617,060 1,046,412
24.60%, 12/4/97 (3) MXP................................................. 9,915,000 1,095,163
22.90%, 2/4/98 (3) MXP.................................................. 2,887,000 308,030
28.59%, 7/31/97 (3) MXP................................................. 6,200,000 739,903
27.80%, 9/4/97 (3) MXP.................................................. 9,750,000 1,138,730
Petroleos Mexicanos Debs., 14.50%, 3/31/06 GBP............................ 280,000 538,379
------------
4,866,617
------------
New Zealand -- 0.9%
New Zealand (Government of):
Bonds, 10%, 3/15/02 NZD................................................. 2,080,000 1,563,762
Index Linked Bonds, 4.60%, 2/15/16 NZD.................................. 1,665,000 1,077,092
------------
2,640,854
------------
Norway -- 0.3%
Norway (Government of) Bills, 3.50%, 5/20/97 NOK.......................... 7,000,000 983,037
------------
Panama -- 0.2%
Panama (Government of) Past Due Interest Debs., 6.098%, 7/17/16 (11)...... 760,545 645,039
------------
Peru -- 0.3%
Peru (Republic of) Past Due Interest Bonds, 4%, 3/7/17 (11)............... 1,580,000 949,975
------------
Poland -- 1.3%
Poland (Republic of) Bonds:
12%, 6/12/01 PLZ........................................................ 4,800,000 1,223,272
16%, 10/12/98 PLZ....................................................... 3,000,000 885,579
16%, 2/12/99 PLZ........................................................ 3,000,000 885,199
21%, 6/5/97 PLZ......................................................... 3,075,000 971,084
------------
3,965,134
------------
Portugal -- 0.7%
Portugal (Republic of) Bonds, Obrigicion do tes Medio Prazo, 11.875%,
2/23/00 PTE............................................................. 309,500,000 2,057,454
------------
Romania -- 0.6%
Romanian Commercial Bank:
Bonds, 9.125%, 3/10/00 (9).............................................. 950,000 938,125
SA Bonds, 9.125%, 3/10/00............................................... 800,000 790,000
------------
1,728,125
------------
</TABLE>
15
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
South Africa -- 0.5%
South Africa (Republic of) Bonds, Series 162, 12.50%, 1/15/02 ZAR......... 6,832,000 $ 1,424,974
Telkom SA Ltd. Bonds, Series TK05, 12%, 3/31/98 ZAR....................... 1,346,000 293,318
------------
1,718,292
------------
Spain -- 0.6%
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado, 12.25%,
3/25/00 ESP............................................................. 225,000,000 1,806,007
------------
Venezuela -- 0.3%
Venezuela Synthetic Sovereign Sec. Bonds, 10.125%, 12/29/03 DEM........... 1,750,000 1,030,800
------------
47,348,182
------------
LOAN PARTICIPATIONS -- 2.6%
Algeria (Republic of) Reprofiled Debt Loan Participation, Tranche A,
6.977%, 9/4/06 (11)..................................................... 4,370,000 3,490,538
AO Rostelecom Loan Facility Nts., 9.50%, 2/15/00 (14)..................... 1,000,000 1,000,000
Colombia (Republic of) Concorde Loan Participation, 8.625%, 1/31/98
(9)(11)................................................................. 338,941 333,010
Jamaica (Government of) 1990 Refinancing Agreement Nts.:
Tranche A, 6.625%, 10/16/00 (9)(11)..................................... 500,000 482,500
Tranche B, 6.312%, 11/15/04 (9)(11)..................................... 678,957 614,456
Morocco (Kingdom of) Loan Participation Agreement, Tranche B, 6.375%,
1/1/04 (11)............................................................. 823,529 811,177
Trinidad & Tobago Loan Participation Agreement:
Tranche A, 1.625%, 9/30/00 (9)(11) JPY.................................. 84,000,000 608,935
Tranche B, 1.625%, 9/30/00 (9)(11) JPY.................................. 84,000,000 608,935
United Mexican States, Combined Facility 3, Loan Participation Agreement,
Tranche A, 6.463%, 9/20/97 (9)(11)...................................... 82,929 77,125
------------
8,026,676
------------
<CAPTION>
Units
--------------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES -- 0.0%
Australis Media Ltd. Wts., Exp. 5/00 (9).................................. 80 --
Comunicacion Celular SA Wts., Exp. 11/03 (9).............................. 1,250 93,750
------------
93,750
------------
<CAPTION>
Face Amount(1)
--------------
<S> <C> <C>
STRUCTURED INSTRUMENTS -- 7.3%
Bayerische Landesbank (New York Branch) CD, 13.75%, 8/18/97 (indexed to
the cross currency rates of Greek Drachma & Chilean Peso)............... $ 1,000,000 971,700
</TABLE>
16
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
STRUCTURED INSTRUMENTS (CONTINUED)
Bayerische Landesbank Girozentrale (New York Branch):
Deutsche Mark Currency Protected Yield Curve CD, 6.28%, 7/25/97......... $ 1,000,000 $ 1,023,350
Lehman Brothers High Yield Bond Index Nts., 12.50%, 7/8/97.............. 2,000,000 1,938,000
Nikkei 225 Equity-Linked Nts., 6.03%, 4/23/98........................... 1,500,000 1,569,450
Business Development Bank of Canada, Goldman Sachs Commodity Index Non
Energy Excess Return Index Linked Commercial Paper, 5.556%, 8/22/97..... 1,000,000 1,056,030
Canadian Imperial Bank of Commerce (New York Branch):
Canadian Dollar Three Month Banker's Acceptance Linked Maximum Rate
Nts., 8.66%, 4/13/98................................................. 1,000,000 996,900
CD, 11.25%, 9/4/97 (indexed to the Russian Federation GKO, Zero Coupon,
8/27/97) (9)......................................................... 600,000 595,854
U.S. Dollar CD Linked to South African Rand, 17%, 1/21/98............... 350,000 367,220
First of Boston Corp. (The), Russian GKO Linked Nts., Zero Coupon, 10.79%,
6/30/97 (3)............................................................. 2,300,000 2,251,093
German Bank (New York Branch) 2x High Yield Index Nts., 11.95%, 8/5/97
(9)..................................................................... 1,500,000 1,447,500
ING (U.S.) Financial Holdings Corp.:
Korean Won/U.S. Dollar Linked Nts., Zero Coupon, 10.88%, 6/9/97 (3)..... 400,000 365,068
South African Rand/U.S. Dollar Linked Nts., Zero Coupon, 16.10%, 2/25/98
(3).................................................................. 600,000 535,860
Lehman Brothers Holdings plc, U.S. Dollar Nts. Linked to South African
Rand, 16%, 7/23/97...................................................... 2,000,000 1,997,600
Lehman Brothers Holdings, Inc., U.S. Dollar Nts. Linked to Greek
Drachma/Swiss Franc, Zero Coupon:
15.64%, 12/23/97 (3).................................................... 1,000,000 1,049,500
15.06%, 12/26/97 (3).................................................... 1,000,000 1,048,500
15.24%, 12/30/97 (3).................................................... 1,000,000 1,042,500
Morgan Guaranty Trust of New York, Japanese Government Bond 193 Currency
Protected Bank Nts., 8.14%, 4/29/98..................................... 330,000 360,525
Salomon, Inc., Russian S-Account Credit Linked Nts., Zero Coupon:
11.40%, 7/17/97 (3)..................................................... 1,000,000 974,400
11.51%, 8/7/97 (3)...................................................... 420,000 406,140
11.40%, 8/8/97 (3)...................................................... 1,000,000 966,500
Swiss Bank Corp. (New York Branch) CD, 6.05%, 6/20/97 (indexed to the
closing Nikkei 225 Index on 1/23/97, 5 yr. & 3 mos. Japanese Yen Swap
rate & New Zealand Dollar).............................................. 1,000,000 1,053,650
------------
22,017,340
------------
</TABLE>
17
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Date Strike Contracts See Note 1
---- ---------- -------------- ------------
<S> <C> <C> <C> <C>
PUT OPTIONS PURCHASED -- 0.0%
Italy (Republic of) Treasury Bonds, Buoni del
Tesoro Poliennali, 9.50%, 2/1/06 Put
Opt........................................ 7/97 99.96% ITL 2,548 $ 255
New Zealand Dollar Put Opt................... 6/97 1.432 NZD 574,000 5,987
New Zealand Dollar Put Opt................... 6/97 1.44 NZD 314,500 2,572
New Zealand Dollar Put Opt................... 6/97 1.447 NZD 1,910,000 12,052
New Zealand Dollar Put Opt................... 6/97 1.463 NZD 1,155,000 3,962
------------
24,828
------------
Total International Sector (Cost
$102,885,582).............................. 102,118,270
------------
</TABLE>
<TABLE>
<CAPTION>
Face Amount(1)
--------------
<S> <C> <C>
MORTGAGE-BACKED SECTOR -- 21.6%
GOVERNMENT AGENCY -- 18.8%
FHLMC/FNMA/Sponsored -- 14.3%
Federal Home Loan Mortgage Corp., Certificates of Participation:
12%, 10/1/11............................................................ $ 353,198 399,962
12%, 10/1/14............................................................ 189,361 211,515
12%, 5/1/10............................................................. 593,490 669,427
12%, 6/1/15............................................................. 247,424 281,984
12%, 8/1/13............................................................. 44,483 50,697
12%, 8/1/14............................................................. 556,449 634,174
Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation
Certificates, Series 1343, Cl. LA, 8%, 8/15/22....................... 1,000,000 1,025,700
Interest-Only Stripped Mtg.-Backed Security, Series 177, Cl. B,
13.428%-13.793%, 7/1/26 (15)......................................... 24,632,510 8,983,168
Federal National Mortgage Assn.:
11%, 7/1/16............................................................. 902,130 1,025,046
7%, 11/1/25............................................................. 4,031,989 3,916,312
7.50%, 5/25/07 (14)..................................................... 17,100,000 16,971,750
7.50%, 5/25/12 (14)..................................................... 3,900,000 3,929,250
7.50%, 6/1/10........................................................... 1,772,290 1,790,014
Gtd. Mtg. Pass-Through Certificates, 13%, 6/1/15........................ 1,154,835 1,352,093
Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates,
Series 1995-4, Cl. PC, 8%, 5/25/25................................... 664,690 683,175
Principal-Only Stripped Mtg.-Backed Security, Series 267, Cl. 1, 7.757%,
10/1/24 (16)......................................................... 1,975,538 1,406,336
------------
43,330,603
------------
</TABLE>
18
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
GNMA/Guaranteed -- 4.5%
Government National Mortgage Assn.:
11%, 10/20/19........................................................... $ 711,326 $ 800,903
12%, 11/20/13-9/20/15................................................... 750,253 863,684
6%, 5/20/27 (14)........................................................ 7,550,000 7,535,844
7.50%, 6/1/27 (14)...................................................... 3,642,028 3,603,350
Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates, Series 1994-5, Cl. PQ, 7.493%,
7/16/24.............................................................. 750,000 742,350
------------
13,546,131
------------
PRIVATE -- 2.8%
Commercial -- 2.2%
Asset Securitization Corp., Commercial Mtg. Pass Through Certificates:
Series 1996-D3, Cl. A5, 8.351%, 10/13/26 (9)(11)........................ 500,000 507,031
Series 1996-MD6, Cl. A-5, 7.225%, 11/13/26 (11)......................... 800,000 785,250
Series 1997-MD7, Cl. A-6, 7.976%, 1/13/30 (11).......................... 150,000 148,922
BKB Commercial Mortgage Trust, Commercial Mtg. Obligations, Series
1997-C1, Cl. C, 7.45%, 10/25/00......................................... 250,000 250,625
Capital Lease Funding Securitization LP, Interest-Only Stripped
Mtg.-Backed Security, Series 1997-CT1, 5.49%, 6/22/24 (9)(15)........... 11,575,522 522,056
Commercial Mortgage Acceptance Corp., Interest-Only Stripped Mtg.-Backed
Security, Series 1996-C1, Cl. X-2, 9.81%, 12/25/20 (9)(15).............. 12,416,600 434,581
Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates,
Series 1996-C1, 7.42%, 4/25/28.......................................... 800,000 788,250
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates,
Series 1996-C1, Cl. D-1, 7.51%, 2/15/28 (9)(11)......................... 1,000,000 986,875
NationsCommercial Corp., NB Commercial Mtg. Pass-Through Certificates,
Series-DMC:
Cl. B, 8.562%, 8/12/11 (9).............................................. 400,000 401,219
Cl. C, 8.921%, 8/12/11 (9).............................................. 400,000 406,625
Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates,
Series 1994-MD1, Cl. B2, 8.418%, 3/15/18 (5)(11)........................ 500,000 449,648
Potomac Gurnee Financial Corp., Commercial Mtg. Pass-Through Certificates,
Cl. D, 7.68%, 12/21/26 (9).............................................. 500,000 495,938
Structured Asset Securities Corp., Multiclass Pass-Through Certificates,
Series 1996-C3, Cl. D, 8%, 6/1/30 (9)................................... 650,000 643,094
------------
6,820,114
------------
</TABLE>
19
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
-------------- ------------
<S> <C> <C>
Other -- 0.1%
Mortgage Securities Corp. I, Collateralized Mtg. Obligations,
Interest-Only Stripped Mtg.-Backed Security, Cl. 1, 7.42%, 2/15/17
(15).................................................................... $ 4,000,000 $ 318,400
------------
Residential -- 0.5%
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates,
Series 1997-CHL1, 8.11%, 4/30/39........................................ 800,000 806,000
Salomon Brothers Mortgage Securities VII, Series 1996-B, Cl. 1, 7.136%,
4/25/26................................................................. 1,337,079 883,726
------------
1,689,726
------------
Total Mortgage-Backed Sector (Cost $65,196,767)........................... 65,704,974
------------
MONEY MARKET SECTOR -- 2.8%
Repurchase agreement with PaineWebber, Inc., 5.43%, dated 4/30/97, to be
repurchased at $8,601,297 on 5/1/97, collateralized by U.S. Treasury
Nts., 5.875%-8.25%, 7/15/98-11/15/05, with a value of $7,450,031 and
U.S. Treasury Bonds, 7.625%, 2/15/25, with a value of $1,349,144 (Cost
$8,600,000)............................................................. 8,600,000 8,600,000
------------
Total Investments, at Value (Cost $324,913,029)........................... 106.9% 324,768,112
Liabilities in Excess of Other Assets..................................... (6.9) (20,864,769)
-------------- ------------
Net Assets................................................................ 100.0% $303,903,343
-------------- ------------
-------------- ------------
</TABLE>
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
<TABLE>
<S> <C> <C> <C>
ARP -- Argentine Peso JPY -- Japanese Yen
AUD -- Australian Dollar MXP -- Mexican Peso
CAD -- Canadian Dollar MYR -- Malaysian Ringgit
DEM -- German Deutsche Mark NOK -- Norwegian Krone
ESP -- Spanish Peseta NZD -- New Zealand Dollar
FIM -- Finnish Markka PLZ -- Polish Zloty
GBP -- British Pound Sterling PTE -- Portuguese Escudo
IDR -- Indonesian Rupiah ZAR -- South African Rand
ITL -- Italian Lira
</TABLE>
2. Securities with an aggregate market value of $1,107,563 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
3. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
20
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1997 (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
4. A sufficient amount of securities has been designated to cover outstanding
written call and put options, as follows:
<TABLE>
<CAPTION>
Face/Contracts Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
--------------- ---------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Australia (Commonwealth of) Bonds, 10%, 10/15/07
Call Opt. 450 7/15/97 114.159% AUD $ 6,014 $ 5,183
Australia (Commonwealth of) Bonds, 10%, 10/15/07
Put Opt. 270 6/23/97 111.966% AUD 3,393 1,305
Banco Hipotecario Nacional (Argentina) Medium-Term
Nts., 10.625%, 8/7/06 Call Opt. $ 700 8/7/00 100.00% 6,440 38,500
British Pound Sterling Call Opt. 1,470,000 5/15/97 0.611 GBP 13,377 8,232
Canadian Dollar Put Opt. 550,000 5/27/97 1.375 CAD 1,600 5,516
Mexican Peso Call Opt. 3,500,000 5/8/97 8.017 MXP 24,850 24,605
Mexican Peso Call Opt. 300,000 5/12/97 8.043 MXP 2,325 2,970
New Zealand Dollar Call Opt. 574,000 6/17/97 1.416 NZD 4,161 1,096
New Zealand Dollar Call Opt. 314,500 6/17/97 1.421 NZD 2,217 796
New Zealand Dollar Call Opt. 1,910,000 6/17/97 1.432 NZD 14,325 7,602
New Zealand Dollar Call Opt. 1,155,000 6/17/97 1.449 NZD 8,201 8,928
New Zealand (Government of) Bonds, 10%, 3/15/02 Put
Opt. 540 7/15/97 106.639% NZD 4,125 1,080
South African Rand Call Opt. 1,702,780 5/8/97 4.479 ZAR 12,005 13,452
South African Rand Call Opt. 1,000,000 5/22/97 4.65 ZAR 35,000 40,000
-------- ----------
$138,033 $159,265
-------- ----------
-------- ----------
</TABLE>
5. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities
have been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $20,788,170 or 6.84% of the Trust's
net assets, at April 30, 1997.
6. Interest or dividend is paid in kind.
7. Non-income producing security.
8. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, face amount disclosed represents total underlying
principal.
9. Identifies issues considered to be illiquid or restricted -- See Note 8 of
Notes to Financial Statements.
10. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
11. Represents the current interest rate for a variable rate security.
12. Non-income producing -- issuer is in default of interest payment.
13. Indexed instrument for which the prinicipal amount and/or interest due at
maturity is affected by the relative value of a foreign index.
14. When-issued security to be delivered and settled after April 30, 1997.
15. 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). Interest rates
disclosed represent current yields based upon the current cost basis and
estimated timing and amount of future cash flows.
16. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these
securities generally increases as interest rates decline and prepayment
rates rise. The price of these securities is typically more volatile than
that of coupon-bearing bonds of the same maturity. Interest rates disclosed
represent current yields based upon the current cost basis and estimated
timing of future cash flows.
See accompanying Notes to Financial Statements.
21
<PAGE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES April 30, 1997 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $324,913,029) -- see accompanying statement................. $324,768,112
Cash...................................................................................... 3,336,991
Unrealized appreciation on forward foreign currency exchange contracts -- Note 5........ 44,915
Receivables:
Investments sold and options written.................................................... 19,116,293
Interest, dividends and principal paydowns.............................................. 4,862,960
Closed forward foreign currency exchange contracts...................................... 268,598
Daily variation on futures contracts -- Note 6........................................ 59,877
Other..................................................................................... 14,308
------------
Total assets......................................................................... 352,472,054
------------
LIABILITIES:
Unrealized depreciation on forward foreign currency exchange contracts -- Note 5........ 1,457
Options written, at value (premiums received $138,033) -- see accompanying
statement -- Note 7................................................................... 159,265
Payables and other liabilities:
Investments purchased (including $42,041,615 purchased on a when-issued basis) -- Note
1.................................................................................... 47,417,474
Closed forward foreign currency exchange contracts...................................... 325,151
Trustees' fees -- Note 1.............................................................. 142,606
Management and administrative fees...................................................... 102,913
Daily variation on futures contracts -- Note 6........................................ 3,438
Other................................................................................... 416,407
------------
Total liabilities.................................................................... 48,568,711
------------
NET ASSETS................................................................................ $303,903,343
------------
------------
COMPOSITION OF NET ASSETS:
Par value of shares of beneficial interest................................................ $ 291,161
Additional paid-in capital................................................................ 315,440,767
Undistributed net investment income....................................................... 786,828
Accumulated net realized loss on investments, options written and foreign currency
transactions............................................................................ (12,546,264)
Net unrealized depreciation on investments and translation of assets and liabilities
denominated in foreign currencies....................................................... (69,149)
------------
NET ASSETS -- applicable to 29,116,068 shares of beneficial interest outstanding........ $303,903,343
------------
------------
NET ASSET VALUE PER SHARE................................................................. $10.44
------
------
</TABLE>
See accompanying Notes to Financial Statements.
22
<PAGE>
<PAGE>
STATEMENT OF OPERATIONS For the Six Months Ended April 30, 1997 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding taxes of $710)......................................... $14,686,740
Dividends................................................................................... 11,843
-----------
Total income...................................................................... 14,698,583
-----------
EXPENSES:
Management fees -- Note 4................................................................. 990,100
Administrative fees -- Note 4............................................................. 304,614
Shareholder reports......................................................................... 104,911
Transfer agent and accounting service fees -- Note 4...................................... 40,540
Trustees' fees and expenses -- Note 1..................................................... 34,145
Legal and auditing fees..................................................................... 33,010
Registration and filing fees................................................................ 10,339
Custodian fees and expenses................................................................. 6,414
Other....................................................................................... 17,114
-----------
Total expenses.................................................................... 1,541,187
-----------
NET INVESTMENT INCOME....................................................................... 13,157,396
-----------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments (including premiums on options exercised)..................................... 6,988,044
Closing of futures contracts -- Note 6.................................................. (236,381)
Closing and expiration of options written -- Note 7..................................... (174,237)
Foreign currency transactions............................................................. (1,615,171)
-----------
Net realized gain................................................................. 4,962,255
-----------
Net change in unrealized appreciation or depreciation on:
Investments............................................................................... (5,685,150)
Translation of assets and liabilities denominated in foreign currencies................... (1,784,949)
-----------
Net change........................................................................ (7,470,099)
-----------
NET REALIZED AND UNREALIZED LOSS............................................................ (2,507,844)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................ $10,649,552
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
23
<PAGE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1997 October 31,
(Unaudited) 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income....................................................... $ 13,157,396 $ 26,471,497
Net realized gain........................................................... 4,962,255 7,876,133
Net change in unrealized appreciation or depreciation....................... (7,470,099) 3,026,272
---------------- ----------------
Net increase in net assets resulting from operations........................ 10,649,552 37,373,902
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income........................................ (12,927,529) (26,320,905)
Total increase (decrease)................................................... (2,277,977) 11,052,997
---------------- ----------------
NET ASSETS:
Beginning of period......................................................... 306,181,320 295,128,323
---------------- ----------------
End of period (including undistributed net investment income of $786,828 and
$556,961, respectively)................................................... $303,903,343 $306,181,320
---------------- ----------------
---------------- ----------------
</TABLE>
See accompanying Notes to Financial Statements.
24
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Year Ended October 31,
1997 ------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period... $ 10.52 $ 10.14 $ 10.17 $ 10.96 $ 10.46 $ 10.64
----------- -------- -------- -------- -------- --------
Income (loss) from investment
operations:
Net investment income................ .45 .91 .94 1.00 1.08 1.06
Net realized and unrealized gain
(loss)............................. (.09) .37 (.04) (.82) .43 (.08)
----------- -------- -------- -------- -------- --------
Total income from investment
operations....................... .36 1.28 .90 .18 1.51 .98
----------- -------- -------- -------- -------- --------
Dividends and distributions to
shareholders:
Dividends from net investment
income............................. (.44) (.90) (.91) (.84) (1.01) (1.16)
Tax return of capital distribution... -- -- (.02) (.13) -- --
----------- -------- -------- -------- -------- --------
Total dividends and distributions
to shareholders.................. (.44) (.90) (.93) (.97) (1.01) (1.16)
----------- -------- -------- -------- -------- --------
Net asset value, end of period......... $ 10.44 $ 10.52 $ 10.14 $ 10.17 $ 10.96 $ 10.46
----------- -------- -------- -------- -------- --------
----------- -------- -------- -------- -------- --------
Market value, end of period............ $ 10.13 $ 9.88 $ 10.00 $ 9.50 $ 11.25 $ 11.13
TOTAL RETURN, AT MARKET VALUE(1)....... 6.91% 7.85% 15.62% (7.46)% 11.10% 11.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)........................... $ 303,903 $306,181 $295,128 $295,658 $316,647 $299,368
Average net assets (in thousands)...... $ 307,512 $298,496 $288,884 $306,686 $307,244 $303,773
Ratios to average net assets:
Net investment income................ 8.63%(2) 8.87% 9.51% 9.17% 10.13% 9.95%
Expenses............................. 1.01%(2) 1.04% 1.05% 1.02% 1.00% 1.11%
Portfolio turnover rate(3)............. 126.5% 225.4% 240.1% 187.6% 131.3% 95.9%
</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) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding
short-term securities) for the period ended April 30, 1997 were $388,698,434
and $359,491,149, respectively. For the years ended October 31, 1995 and
1994, purchases and sales of investment securities included mortgage
'dollar-rolls.'
See accompanying Notes to Financial Statements.
25
<PAGE>
<PAGE>
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 objective is to seek high
current income consistent with preservation of capital by investments among
seven sectors of the fixed income securities market. The Trust's investment
adviser is OppenheimerFunds, Inc. (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 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 are valued under consistently applied
procedures established by the Board of Trustees to determine fair value in good
faith. Short-term 'money market type' debt securities having a remaining
maturity of 60 days or less are valued at cost (or last determined market value)
adjusted for amortization to maturity of any premium or discount. Forward
foreign currency 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 is used.
Securities Purchased on a When-Issued Basis -- Delivery and payment for
securities that have been purchased by the Trust on a forward commitment or
when-issued basis can take place a month or more after the transaction date.
During this period, such securities do not earn interest, are subject to market
fluctuation and may increase or decrease in value prior to their delivery. The
Trust maintains, in a segregated account with its custodian, assets with a
market value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Trust's net asset value to the extent the Trust makes such
purchases while remaining substantially fully invested. As of April 30, 1997,
the Trust had entered into outstanding when-issued or forward commitments of
$42,041,615.
In connection with its ability to purchase securities on a when-issued or
forward commitment basis, the Trust may enter into mortgage 'dollar-rolls' in
which the Trust sells securities for delivery in the current month and
simultaneously contracts with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The Trust records each dollar-roll as a sale and a new purchase
transaction.
26
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
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, 1997, securities with an
aggregate market value of $34,000, representing 0.01% 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 Statement 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 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.
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, 1997, a reduction of $2,505 was made for the Trust's
projected benefit obligations and payments of $5,021 were made to retired
trustees, resulting in an accumulated liability of $142,606 at April 30, 1997.
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 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
27
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
the income or realized gain 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 periodically.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of $.01 par value shares of
beneficial interest. There were no transactions in shares of beneficial interest
for the six months ended April 30, 1997 and the year ended October 31, 1996.
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At April 30, 1997 net unrealized depreciation on investments and options written
of $166,149 was composed of gross appreciation of $5,469,502, and gross
depreciation of $5,635,651.
4. 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 0.65% 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 0.20% 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.
5. FORWARD 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
28
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income 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.
Securities held in segregated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains 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, 1997, the Trust had outstanding forward contracts to purchase and
sell currencies as follows:
<TABLE>
<CAPTION>
Valuation
Contract as of
Expiration Amount April 30, Unrealized Unrealized
Contracts to Purchase Dates (000s) 1997 Appreciation Depreciation
- ----------------------------------------- ----------- ------------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Japanese Yen (JPY)....................... 5/6/97 127,716 JPY $ 1,006,926 $ 96 $ --
Spanish Peseta (ESP)..................... 5/7/97 266,924 ESP 1,827,312 -- --
--------------- ------------ ------
$ 2,834,238 96 --
--------------- ------------ ------
---------------
<CAPTION>
Contracts to Sell
- -----------------------------------------
<S> <C> <C> <C> <C> <C>
Indonesian Rupiah (IDR).................. 5/15/97 1,263,000 IDR $ 519,347 $ -- $1,087
Italian Lira (ITL)....................... 5/7/97 3,105,499 ITL 1,813 -- 112
Malaysian Ringgit (MYR).................. 5/13/97 2,600 MYR 1,035,414 -- 258
Swiss Franc (CHF)........................ 7/24/97 8,150 CHF 5,584,178 44,819 --
--------------- ------------ ------
$ 7,140,752 44,819 1,457
--------------- ------------ ------
---------------
Total Unrealized Appreciation and Depreciation......................................... $ 44,915 $1,457
------------ ------
------------ ------
</TABLE>
6. FUTURES CONTRACTS
The Trust may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Trust may also buy
or write put or call options on these futures contracts.
The Trust generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Trust may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Trust is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are
29
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
made or received by the Trust each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Trust recognizes a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
At April 30, 1997, the Trust had outstanding futures contracts to purchase and
sell debt securities as follows:
<TABLE>
<CAPTION>
Valuation
Number of as of Unrealized
Expiration Futures April 30, Appreciation
Contract to Purchase Dates Contracts 1997 (Depreciation)
- --------------------------------------------------------- ---------- --------- ----------- --------------
<S> <C> <C> <C> <C>
U.S. Treasury Bonds...................................... 6/97 180 $19,254,375 $102,188
<CAPTION>
Contract to Sell
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Bonds...................................... 6/97 10 1,092,813 (12,170)
--------------
$ 90,018
--------------
--------------
</TABLE>
7. OPTION ACTIVITY
The Trust may buy and sell put and call options, or write put and 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 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.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. 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
30
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<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
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, 1997 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, 1996............ 9,277,500 $ 107,323 -- $ --
Options written.................................... 137,092,335 373,955 12,845,500 96,569
Options closed or expired.......................... (128,288,405) (302,955) (594,250) (21,917)
Options exercised.................................. (6,154,000) (49,408) (11,700,440) (65,534)
------------ ----------- ----------- -----------
Options outstanding at April 30, 1997.............. 11,927,430 $ 128,915 550,810 $ 9,118
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
</TABLE>
8. ILLIQUID AND RESTRICTED SECURITIES
At April 30, 1997, investments in securities included issues that are illiquid
or restricted. Restricted 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. A security may be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Trust intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed from time
to time) in illiquid or restricted securities. Certain restricted securities,
eligible for resale to qualified institutional investors, are not subject to
that limit. The aggregate value of illiquid or restricted securities subject to
this limitation at April 30, 1997 was $18,018,798, which represents 5.93% of the
Trust's net assets. Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation Per
Acquisition Cost Unit as of
Security Dates Per Unit April 30, 1997
- ------------------------------------------------------------------- ------------ --------- --------------
<S> <C> <C> <C>
Bonds:
Arizona Charlie's, Inc., 12% First Mtg. Nts., Series A,
11/15/00..................................................... 11/18/93 100.00% 52.00%
Capitol Queen & Casino, Inc., 12% First Mtg. Nts., Series A,
11/15/00..................................................... 11/18/93 87.50 17.00
Stocks and Warrants:
Becker Gaming, Inc. Wts., Exp. 11/00........................... 11/18/93 $2.00 $ .25
Triangle Wire & Cable, Inc..................................... 5/2/94 9.50 1.00
</TABLE>
31
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<PAGE>
OPPENHEIMER MULTI-SECTOR INCOME TRUST
GENERAL INFORMATION CONCERNING THE TRUST
Oppenheimer Multi-Sector Income Trust (the Trust) is a closed-end diversified
management investment company with a primary investment objective of seeking
high current income. In seeking its objectives, the Trust may invest any
percentage of its assets in at least three of the following seven fixed-income
sectors: U.S. Government, Corporate, International, Asset-Backed, Municipal,
Convertible and Money Market. Current income, preservation of capital and,
secondarily, possible capital appreciation will be considerations in the
allocation of assets among such sectors. The Trust may invest in a number of
different kinds of 'derivative investments' and may also engage in certain
special investment techniques, including repurchase transactions, when-issued
and delayed delivery transactions and hedging. The investment adviser to the
Trust is OppenheimerFunds, Inc. (the Manager).
The Portfolio Managers of the Trust are Robert E. Patterson, Thomas P. Reedy,
David A. Rosenberg, Ashwin K. Vasan, Carol E. Wolf and Arthur J. Zimmer and who
also serve as Vice Presidents of the Trust and of the Manager, and are officers
of certain mutual funds managed by the Manager (Oppenheimer funds). Messrs.
Reedy, Rosenberg and Vasan have been the persons principally responsible for the
day-to-day management of the Trust's portfolio since August 1993, June 1994 and
August 1993, respectively. During the past five years, Mr. Reedy served as a
securities analyst for the Manager, and, prior to joining the Manager, Mr.
Rosenberg served as an officer and portfolio manager for Delaware Investment
Advisers and one of its mutual funds, Mr. Vasan served as a securities analyst
for Citibank, N.A. and Mr. Zimmer served as a Vice President of Hanifen Imhoff
Management Company.
Dividend Reinvestment and Cash Purchase Plan -- Pursuant to the Trust's
Dividend Reinvestment and Cash Purchase Plan (the Plan), as to shares of the
Trust (Shares) not registered in nominee name, all dividends and capital gains
distributions (Distributions) declared by the Trust will be automatically
reinvested in additional full and fractional Shares unless a shareholder elects
to receive cash. If Shares are registered in nominee name, the shareholder
should consult the nominee if the shareholder desires to participate in the
Plan. Shareholders that participate in the Plan (Participants) may, at their
option, make additional cash investments in Shares, semiannually in amounts of
at least $100, through payment to Shareholder Financial Services, Inc., the
agent for the Plan (the Agent), accompanied by a service fee of $0.75.
Depending upon the circumstances hereinafter described, Plan Shares will be
acquired by the Agent for the Participant's account through receipt of newly
issued Shares or the purchase of outstanding Shares on the open market. If the
market price of Shares on the relevant date (normally the payment date) equals
or exceeds their net asset value, the Agent will ask the Trust for payment of
the Distribution in additional Shares at the greater of the Trust's net asset
value determined as of the date of purchase or 95% of the then-current market
price. If the market price is lower than net asset value, the Distribution will
be paid in cash, which the Agent will use to buy Shares on The New York Stock
Exchange (the NYSE), or otherwise on the open market to the extent available. If
the market price exceeds the net asset value before the Agent has completed its
purchases, the average purchase price per Share paid by the Agent may exceed the
net asset value, resulting in fewer Shares being
32
<PAGE>
<PAGE>
acquired than if the Distribution had been paid in Shares issued by the Trust.
Participants may elect to withdraw from the Plan at any time and thereby receive
cash in lieu of Shares by sending appropriate written instructions to the Agent.
Elections received by the Agent will be effective only if received more than ten
days prior to the record date for any Distribution; otherwise, such termination
will be effective shortly after the investment of such Distribution with respect
to any subsequent Distribution. Upon withdrawal from or termination of the Plan,
all Shares acquired under the Plan will remain in the Participant's account
unless otherwise requested. For full Shares, the Participant may either: (1)
receive without charge a share certificate for such Shares; or (2) request the
Agent (after receipt by the Agent of signature guaranteed instructions by all
registered owners) to sell the Shares acquired under the Plan and remit the
proceeds less any brokerage commissions and a $2.50 service fee. Fractional
Shares may either remain in the Participant's account or be reduced to cash by
the Agent at the current market price with the proceeds remitted to the
Participant.
Shareholders who have previously withdrawn from the Plan may rejoin at any time
by sending written instructions signed by all registered owners to the Agent.
There is no direct charge for participation in the Plan; all fees of the Agent
are paid by the Trust. There are no brokerage charges for Shares issued directly
by the Trust. However, each Participant will pay a pro rata share of brokerage
commissions incurred with respect to open market purchases of Shares to be
issued under the Plan. Participants will receive tax information annually for
their personal records and to assist in federal income tax return preparation.
The automatic reinvestment of Distributions does not relieve Participants of any
income tax that may be payable on Distributions.
The Plan may be terminated or amended at any time upon 30 days' prior written
notice to Participants which, with respect to a Plan termination, must precede
the record date of any Distribution by the Trust. Additional information
concerning the Plan may be obtained by shareholders holding Shares registered
directly in their names by writing the Agent, Shareholder Financial Services,
Inc., P.O. Box 173673, Denver, CO 80217-3673 or by calling 1-800-647-7374.
Shareholders holding Shares in nominee name should contact their brokerage firm
or other nominee for more information.
Shareholder Information -- The Shares are traded on the NYSE. Daily market
prices for the Trust's shares are published in the New York Stock Exchange
Composite Transaction section of newspapers under the designation 'OppenMlti.'
The Trust's NYSE trading symbol is OMS. Weekly net asset value (NAV) and market
price information about the Trust is published each Monday in The Wall Street
Journal, each Sunday in The New York Times and each Saturday in Barron's, and
other newspapers in a table called 'Closed-End Bond Funds.'
33
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OPPENHEIMER MULTI-SECTOR INCOME TRUST
Officers and Trustees
Leon Levy, Chairman of the
Board of Trustees
Donald W. Spiro, Vice Chairman of the
Board of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Robert E. Patterson, Vice President
Thomas P. Reedy, Vice President
David A. Rosenberg, 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 T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
Investment Adviser
OppenheimerFunds, Inc.
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.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, and are not insured by the FDIC or any
other agency, and involve investment risks, including possible loss of the
principal amount invested.
RS0680.001.0697 [Logo] Printed on recycled paper
1997 SEMIANNUAL REPORT
OPPENHEIMER
MULTI-SECTOR
INCOME TRUST
APRIL 30, 1997
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