Dear Shareholder:
Oppenheimer Multi-Sector Income Trust has delivered relatively strong
performance during the six-month period ended April 30, 1998. Although our
conservative positioning of the fund caused performance to lag during October
and November, we successfully navigated the turbulence of the Asian crisis and
took advantage of the related sell-off in emerging markets in late 1997 and
early 1998. The Trust's six month cumulative total return, at market value, was
5.24%, and its dividend return was 8.20% as of April 30, 1998.(1)
The Trust benefited from strategic moves in three of our investment sectors:
U.S. government securities, high-yield domestic corporate bonds and foreign
fixed-income securities. Our disciplined strategy of sector diversification,
with a focus on relative value, enabled us to help limit risks while sharing in
the rewards of a benign U.S. economic environment, which was supportive of the
entire bond market.
In the U.S. government securities sector, we sought to take advantage of U.S.
economic conditions by actively managing our holdings' average duration.
Duration is a measure of a bond's sensitivity to changes in interest rates.
Generally, the longer a portfolio's average duration, the higher the returns
investors are likely to receive in an environment of falling interest rates. In
anticipation of continued low inflation, we extended our duration position
during the first few months of the period, which enabled us to benefit from
falling interest rates. Later in the period, we benefited from our holdings of
mortgage-backed securities issued by U.S. government agencies. As interest rates
stabilized during the second half of the period, homeowners became less likely
to prepay their loans and refinance at lower interest rates. Such prepayments
lower the value of mortgage-backed securities. With the risk of loan prepayment
held in check, the value of the Trust's mortgage-backed securities rose.(2)
Investment Breakdown:
Oppenheimer Multi-Sector Income
Trust as of 4/30/98:(4)
[pie chart]
U.S. corporate bonds & notes: 35.5%
U.S. Government obligations -- Agency: 17.8%
Foreign government obligations: 17.2%
U.S. Government obligations -- Treasury: 11.1%
Short-term securities: 6.0%
Structured notes: 6.0%
Foreign corporate bonds & notes: 3.6%
Equity securities: 2.8%
1. Total return is based on changes in market value per share from 10/31/97 to
4/30/98 without deducting any sales charges or brokerage costs. Such
performance is not annualized and would have been lower if sales charges and
brokerage costs were taken into account. Dividend return is determined by
annualizing the April 1998 dividend of $0.07 and dividing by the closing market
price on the New York Stock Exchange of $10.25 per share on 5/1/98 (payment
date). Past performance does not guarantee future results.
2. Mortgage-backed securities involve risks from early prepayment of underlying
mortgages that can affect the Trust's income and principal value.
3. Investors in high-yield bonds are subject to greater risk that the issuer
will default in its principal or interest payments.
4. Portfolio composition is subject to change. Chart is based on total
investments at market value.
<PAGE>
In the high-yield corporate sector, the Trust benefited from our relatively
large holdings in telecommunications bonds, which remained one of the strongest
performing areas in the high-yield market. Breakthroughs in technology and an
easing regulatory environment continued to fuel the advance of a new generation
of telecommunications companies in which we invested. At the same time, we
avoided investments in basic industry cyclicals, such as chemicals, paper and
metals, all of which underperformed the market. We correctly surmised that the
recent economic crisis in Asia would generally lead to excess production
capacity and weak pricing in these industries.(3)
The third sector in which the Trust focuses--foreign fixed-income securities--
offered the greatest challenges, and opportunities, during the period. In
October, as Asian markets and currencies declined sharply, we reacted strongly
to help preserve the Trust's capital. Although our actions caused us to suffer
some initial losses when these markets began to recover with unexpected speed,
we soon took advantage of the buying opportunity. At the end of November and in
early December, we staked out significant fixed-income positions in the emerging
markets of Latin America, Asia and Eastern Europe, with the exception of Russia,
where we believed political and economic risks outweighed the opportunities.
From December through the end of April, emerging markets were generally among
the best performing fixed-income classes. Our investments in this sector enabled
us to provide strong performance for the remainder of the six-month period.
Looking ahead, we remain optimistic about the prospects for the fixed-income
market. Although U.S. equities appear to be very highly valued at present,
economic fundamentals in our opinion remain solid. We believe moderate economic
growth, low inflation and low interest rates are likely to persist. As a
result, we anticipate a supportive environment for bonds. In the high-yield
sector, for example, low interest rates and strong economic performance
generally result in low rates of default, which is favorable for the Trust's
holdings. Likewise, we expect emerging market bonds to continue their recovery
in this generally favorable environment.
As always, diversification remains the key to a well-balanced investment
program, and diversification among asset classes remains the cornerstone of the
Trust's investment strategy. We place each asset class in which the Trust
invests under the management of its own sector specialist. In turn, we take
advantage of the expertise of these specialists to keep the overall portfolio
focused on our goals of returning high income to investors while helping to
minimize risks. We believe our disciplined strategy of sector diversification
continues to make Oppenheimer Multi-Sector Income Trust part of The Right Way
to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
President
Oppenheimer Multi-Sector Income Trust
May 21, 1998
2
<PAGE>
Statement of Investments April 30, 1998 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
U.S. Government Sector -- 12.5%
U.S. Treasury Bonds:
7.125%, 2/15/23(2) ...................................................... $ 3,297,000 $3,756,523
11.875%, 11/15/03 ....................................................... 2,130,000 2,744,373
STRIPS, 6.933%, 2/15/19(3) .............................................. 11,000,000 3,128,103
U.S. Treasury Nts.:
5.50%, 2/28/03 .......................................................... 10,000,000 9,931,260
5.75%, 11/30/02(2) ...................................................... 715,000 716,788
6%, 8/15/00 ............................................................. 4,155,000 4,190,060
6.125%, 8/31/98 ......................................................... 3,251,000 3,260,145
7%, 4/15/99 ............................................................. 10,955,000 11,105,642
----------
Total U.S. Government Sector (Cost $38,336,188)........................... 38,832,894
----------
Shares
-----------
Convertible Sector -- 3.1%
Preferred Stocks -- 2.9%
e.spire Communications, Inc., 12.75% Jr. Redeemable Preferred Stock ...... 415 486,587
American Radio Systems Corp., 11.375% Cum. Exchangeable Preferred,
Series B(4) ............................................................. 6,170 729,602
CGA Group Ltd., Preferred Stock, Series A(4)(5) .......................... 32,000 800,000
Crown American Realty Trust, 11% Cum. Non-Vtg. Preferred, Series A ....... 4,000 220,000
Dobson Communications Corp., 12.25% Preferred Stock(6) ................... 514 561,545
Eagle-Picher Holdings, Inc., 0%/11.75% Preferred Stock(4)(5) ............. 4,000 229,000
EchoStar Communications Corp., 12.125% Sr. Redeemable
Exchangeable Preferred Stock, Series B(4)(7) ............................ 91 103,057
Gothic Energy Corp., 7.50% Preferred Stock, Series A(4)(7) ............... 299,250 302,242
Hyperion Telecommunications, Inc., 12.875% Sr. Preferred Stock,
Series B(7) ............................................................. 309 349,943
Intermedia Communications, Inc.:
13.50% Exchangeable Preferred Stock, Series B(4)(7) ..................... 673 826,108
Depositary Shares Representing one one-hundredth 7% Cum. Cv. Jr.
Preferred Stock, Series E, Non-Vtg.(5)(6) .............................. 20,660 699,858
Nebco Evans Holdings Co., 11.25% Nts., 3/1/08(6)(7) ...................... 2,500 260,625
Nextel Communications, Inc., 11.125% Preferred Stock(5)(6) ............... 700 747,250
NEXTLINK Communications, Inc., 14% Sr. Exchangeable Preferred(7) ......... 7,631 464,537
</TABLE>
3
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
-------------- -------------
<S> <C> <C>
Preferred Stocks (Continued)
PRIMEDIA, Inc., 8.625% Preferred Stock(5)(6) ........................... 10,000 $ 992,500
SD Warren Co., 14% Cum. Exchangeable Preferred Stock, Series B,
Non-Vtg.(4)(5) ........................................................ 25,000 1,231,250
Spanish Broadcasting Systems, Inc., 14.25% Cum. Sr. Exchangeable
Preferred Stock, Non-Vtg.(4)(7) ....................................... 187 196,818
----------
9,200,922
----------
Units
----------
Rights, Warrants and Certificates -- 0.2%
e.spire Communications, Inc. Wts., Exp. 11/05(4) ....................... 700 130,987
American Telecasting, Inc. Wts., Exp. 6/99(4) .......................... 4,750 47
Ames Department Stores, Inc., Litigation Trust(4) ...................... 128,889 1,289
Becker Gaming, Inc. Wts., Exp. 11/00(4) ................................ 25,000 6,250
CellNet Data Systems, Inc. Wts., Exp. 10/07(4) ......................... 559 2,306
Cellular Communications International, Inc. Wts., Exp. 8/03(4) ......... 2,500 94,062
CGA Group Ltd. Wts., Exp. 12/49(4) ..................................... 32,000 16,000
Clearnet Communications, Inc. Wts., Exp. 9/05(4) ....................... 330 1,572
Concentric Network Corp. Wts., Exp. 6/98 ............................... 600 57,300
Foamex LP/JPS Automotive Corp. Wts., Exp. 7/99(4) ...................... 1,000 20,000
Gothic Energy Corp. Wts.:
Exp. 1/03(4) .......................................................... 9,509 95
Exp. 9/04(4) .......................................................... 10,150 21,569
ICG Communications, Inc. Wts., Exp. 9/05(4) ............................ 4,125 91,266
In-Flight Phone Corp. Wts., Exp. 8/02 .................................. 900 --
Orion Network Systems, Inc. Wts., Exp. 1/07(4) ......................... 975 12,919
Price Communications Corp. Wts., Exp. 8/07(4) .......................... 4,300 66,650
Protection One, Inc. Wts., Exp. 6/05(4) ................................ 6,400 64,000
Teletrac, Inc. Wts., Exp. 8/07(4) ...................................... 125 3,750
Wireless One, Inc. Wts., Exp. 10/00(4) ................................. 1,500 15
----------
590,077
----------
Total Convertible Sector (Cost $8,238,411).............................. 9,790,999
----------
</TABLE>
4
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
-------------- -------------
<S> <C> <C>
Corporate Sector -- 41.6%
Common Stocks -- 0.0%
Capital Gaming International, Inc.(5) ......... .......................... 18 $ --
Intermedia Communications, Inc.(5) ............ .......................... 258 18,830
Optel, Inc.(4)(5) ............................. .......................... 815 8
----------
18,838
----------
Face Amount(1)
----------------
Corporate Bonds and Notes -- 34.5%
Aerospace -- 1.5%
America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 ..................... $1,000,000 1,092,500
Amtran, Inc., 10.50% Sr. Nts., 8/1/04 .................................... 850,000 909,500
Atlas Air, Inc., 9.25% Sr. Nts., 4/15/08(6) .............................. 675,000 676,687
Constellation Finance LLC, 9.80% Airline Receivable Asset-Backed Nts.,
Series 1997-1, 1/1/01(4) ................................................ 500,000 514,219
Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts., Cl. B,
6/15/04(4) .............................................................. 476,348 492,116
Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 ............... 1,000,000 1,047,500
---------
4,732,522
---------
Chemicals -- 0.9%
ICO, Inc., 10.375% Sr. Nts., 6/1/07 ...................................... 475,000 496,375
Laroche Industries, Inc., 9.50% Sr. Sub. Nts., Series B, 9/15/07 ......... 500,000 500,000
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 .............. 600,000 603,000
Sovereign Specialty Chemicals, Inc., 9.50% Sr. Sub. Nts., 8/1/07(6) ...... 600,000 625,500
Sterling Chemicals, Inc., 11.75% Sr. Unsec. Sub. Nts., 8/15/06 ........... 685,000 691,850
---------
2,916,725
---------
Consumer Durables -- 0.1%
Holmes Products Corp., 9.875% Gtd. Nts., 11/15/07(6) ..................... 400,000 414,000
---------
</TABLE>
5
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Consumer Non-Durables -- 0.6%
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series B, 10/1/03(4) .......... $ 550,000 $ 580,250
Phillips-Van Heusen Corp., 9.50% Sr. Sub. Nts., 5/1/08(6) .................... 360,000 360,000
Revlon Consumer Products Corp., 8.625% Sr. Nts., 2/1/08(6) ................... 465,000 466,162
Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., 10.196%,
3/15/01(3) .................................................................. 700,000 540,750
----------
1,947,162
----------
Energy -- 2.6%
Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07 .......................... 400,000 399,000
Chesapeake Energy Corp.:
9.125% Sr. Unsec. Nts., 4/15/06 ............................................. 240,000 238,200
9.625% Sr. Nts., 5/1/05(6) .................................................. 2,000,000 2,022,500
Clark Refinancing & Marketing, Inc., 8.875% Sr. Sub. Nts., 11/15/07 .......... 845,000 857,675
Dailey International, Inc., 9.50% Sr. Unsec. Nts., 2/15/08(6) ................ 400,000 404,000
Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 ........................... 400,000 400,000
Grant Geophysical, Inc., 9.75% Sr. Nts., 2/15/08(6) .......................... 400,000 399,000
National Energy Group, Inc., 10.75% Sr. Nts., 11/1/06(8) ..................... 90,000 84,600
Parker Drilling Co., 9.75% Gtd. Nts., 11/15/06(6) ............................ 250,000 265,625
Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 .................. 500,000 442,500
Pogo Producing Co., 8.75% Sr. Sub. Nts., 5/15/07 ............................. 790,000 812,712
RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 ............................ 500,000 507,500
Statia Terminals International/Statia Terminals (Canada), Inc.,
11.75% First Mtg. Nts., Series B, 11/15/03 .................................. 200,000 213,000
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 ............................. 700,000 724,500
Universal Compression Holdings, Inc., 0%/9.875% Sr. Disc. Nts.,
2/15/08(6)(9) ............................................................... 700,000 442,750
----------
8,213,562
----------
Financial -- 0.5%
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., 4/1/08(6) ..... 800,000 804,000
Veritas Capital Trust, 10% Gtd. Debs., 1/1/28(6) ............................. 525,000 547,312
----------
1,351,312
----------
</TABLE>
6
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Food & Drug -- 0.6%
Fleming Cos., Inc., 10.625% Sr. Sub. Nts., Series B, 7/31/07 ............... $1,000,000 $1,057,500
Stater Brothers Holdings, Inc., 9% Sr. Unsec. Sub. Nts., 7/1/04 ............ 700,000 728,000
----------
1,785,500
----------
Food/Tobacco -- 0.8%
Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., 12/15/07(6)(9) .............. 500,000 323,750
International Home Foods, Inc., 10.375% Sr. Sub. Nts., 11/1/06 ............. 500,000 555,000
Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., 2/1/05(6) ....................... 390,000 397,800
Purina Mills, Inc., 9% Sr. Sub. Nts., 3/15/10(6) ........................... 240,000 248,400
SmithField Foods, Inc., 7.625% Sr. Sub. Nts., 2/15/08(6) ................... 400,000 398,000
Windy Hill Pet Food, Inc., 9.75% Sr. Sub. Nts., 5/15/07 .................... 700,000 745,500
----------
2,668,450
----------
Forest Products/Containers -- 0.4%
Four M Corp., 12% Sr. Nts., Series B, 6/1/06(4) ............................ 300,000 310,500
Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 ............. 500,000 528,750
U.S. Can Corp., 10.125% Sr. Sub. Nts., Series B, 10/15/06 .................. 250,000 267,500
----------
1,106,750
----------
Gaming/Leisure -- 2.2%
AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(6)(9) ................. 150,000 91,500
Apoca, Inc., 9.25% Sr. Sub. Nts., 3/15/08(6) ............................... 180,000 180,900
Arizona Charlie's, Inc., 12% First Mtg. Nts., Series B, 11/15/00(4)(10) .... 550,000 323,125
Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/95(10) ..... 5,500 --
Capitol Queen & Casino, Inc., 12% First Mtg. Nts., Series A,
11/15/00(4)(10) ........................................................... 200,000 32,500
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 ............................ 435,000 453,487
Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05(6) ...................... 550,000 555,500
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 ........................ 1,000,000 1,072,500
Majestic Star Casino LLC (The), 12.75% Sr. Sec. Nts., 5/15/03 .............. 250,000 273,750
Mohegan Tribal Gaming Authority (Connecticut), 13.50% Sr. Sec. Nts.,
Series B, 11/15/02 ........................................................ 900,000 1,147,500
Premier Parks, Inc.:
0%/10% Sr. Disc. Nts., 4/1/08(9) .......................................... 380,000 242,725
9.25% Sr. Nts., 4/1/06 .................................................... 200,000 204,000
Rio Hotel & Casino, Inc., 9.50% Gtd. Sr. Sub. Nts., 4/15/07 ................ 600,000 643,500
</TABLE>
7
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Gaming/Leisure (Continued)
Showboat Marina Casino Partnership/Showboat Marina Finance Corp.,
13.50% First Mtg. Nts., Series B, 3/15/03 ............................... $1,000,000 $1,177,500
Six Flags Entertainment Corp., 8.75% Sr. Nts., 4/1/06 .................... 440,000 446,600
----------
6,845,087
----------
Healthcare -- 0.8%
Fresenius Medical Care Capital Trust II, 7.875% Gtd. Nts., 2/1/08(6) ..... 500,000 496,250
Integrated Health Services, Inc.:
9.50% Sr. Sub. Nts., 9/15/07 ............................................ 600,000 625,500
10.25% Sr. Sub. Nts., 4/30/06 ........................................... 15,000 16,237
Magellan Health Services, Inc., 9% Sr. Sub. Nts., 2/15/08(6) ............. 630,000 633,150
Sun Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 7/1/07(6) ............... 800,000 832,000
----------
2,603,137
----------
Housing -- 0.5%
Engle Homes, Inc., 9.25% Sr. Nts., 2/1/08 ................................ 400,000 404,000
Nortek, Inc.:
9.125% Sr. Nts., Series B, 9/1/07 ....................................... 420,000 430,500
9.25% Sr. Nts., Series B, 3/15/07 ....................................... 600,000 618,000
----------
1,452,500
----------
Information Technology -- 2.6%
Bell Technology Group Ltd., Units (each unit consists of $1,000
principal amount of 13% sr. nts., 5/1/05 and one warrant to purchase
one share of common stock)(6)(11) ....................................... 600,000 618,000
Concentric Network Corp., 12.75% Sr. Nts., 12/15/07(6) ................... 600,000 663,000
Covad Communications Group, Inc., Units (each unit consists of $1,000
principal amount of 0%/13.50% sr. disc. nts., 3/15/08 and one warrant
to purchase 6.4792 common shares)(6)(9) ................................. 745,000 411,612
Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 ..................... 600,000 618,000
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 ............................... 600,000 618,000
ICG Services, Inc., 0%/10% Sr. Disc. Nts., 2/15/08(6)(9) ................. 500,000 317,500
PSINet, Inc., 10% Sr. Nts., 2/15/05(6) ................................... 1,200,000 1,236,000
Tracor, Inc., 8.50% Sr. Sub. Nts., 3/1/07 ................................ 750,000 821,250
Unisys Corp.:
7.875% Sr. Nts., 4/1/08 ................................................. 575,000 576,437
11.75% Sr. Nts., 10/15/04 ............................................... 500,000 579,375
</TABLE>
8
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Information Technology (Continued)
Verio, Inc., 10.375% Sr. Nts., 4/1/05(6) ................................... $405,000 $ 421,200
WAM!Net, Inc., Units (each unit consists of $1,000 principal amount of
0%/13.25% sr. disc. nts., 3/1/05 and three warrants to purchase 6.03
shares of common stock)(6)(9)(11) ......................................... 500,000 322,500
Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 .............................. 800,000 832,000
----------
8,034,874
----------
Manufacturing -- 2.4%
Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07 ......................... 700,000 738,500
Clark-Schwebel, Inc.:
10.50% Sr. Nts., 4/15/06 .................................................. 250,000 277,500
12.50% Debs., Series B, 7/15/07(7) ........................................ 689,910 734,754
Eagle-Picher Industries, Inc., 9.375% Sr. Sub. Nts., 3/1/08(6) ............. 350,000 355,250
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08(6) ........................ 315,000 315,000
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 ......... 950,000 992,750
Indesco International, Inc., 9.75% Sr. Sub. Nts., 4/15/08(6) ............... 200,000 201,000
Insilco Corp., 10.25% Sr. Unsec. Sub. Nts., 8/15/07 ........................ 800,000 844,000
International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 ..... 700,000 773,500
Maxxam Group, Inc., 0%/12.25% Sr. Sec. Disc. Nts., 8/1/03(9) ............... 250,000 255,625
Paragon Corp. Holdings, Inc., 9.625% Sr. Nts., 4/1/08(6) ................... 185,000 183,150
Polymer Group, Inc., 8.75% Sr. Sub. Nts., 3/1/08(6) ........................ 500,000 510,000
Roller Bearing Co. of America, Inc., 9.625% Gtd. Sr. Sub. Nts.,
Series B, 6/15/07(4) ...................................................... 500,000 513,750
Terex Corp., 8.875% Sr. Sub. Nts., 4/1/08(6) ............................... 210,000 208,425
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03(4) ...................... 525,000 548,625
----------
7,451,829
----------
Media/Entertainment: Broadcasting -- 1.3%
Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 ........... 900,000 942,750
Chancellor Media Corp., 8.75% Sr. Sub. Nts., Series B, 6/15/07 ............. 700,000 728,000
Jacor Communications Co.:
8% Sr. Sub. Nts., 2/15/10 ................................................. 400,000 398,000
8.75% Gtd. Sr. Sub. Nts., Series B, 6/15/07 ............................... 220,000 227,700
Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(12) ................... 700,000 717,500
Sinclair Broadcast Group, Inc., 8.75% Sr. Sub. Nts., 12/15/07 .............. 500,000 508,750
Spanish Broadcasting Systems, Inc., 11% Sr. Nts., 3/15/04 .................. 475,000 517,750
----------
4,040,450
----------
</TABLE>
9
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Media/Entertainment: Cable/Wireless Video -- 2.2%
Adelphia Communications Corp.:
8.375% Sr. Nts., Series B, 2/1/08 ........................................... $ 250,000 $ 248,750
9.25% Sr. Nts., 10/1/02 ..................................................... 435,000 451,312
9.875% Sr. Nts., Series B, 3/1/07 ........................................... 565,000 608,788
Cablevision Systems Corp. Holdings, Inc.:
9.875% Sr. Sub. Debs., 4/1/23 ............................................... 350,000 387,625
9.875% Sr. Sub. Nts., 5/15/06 ............................................... 1,000,000 1,095,000
EchoStar DBS Corp., 12.50% Gtd. Nts., 7/1/02 ................................. 615,000 691,875
EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec. Disc. Nts.,
3/15/04(9) .................................................................. 1,000,000 920,000
Falcon Holding Group LP:
0%/9.285% Sr. Disc. Debs., 4/15/10(6)(9) .................................... 250,000 159,375
8.375% Sr. Debs., 4/15/10(6) ................................................ 975,000 964,031
Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B,
11/1/03(13) ................................................................. 250,000 266,875
Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 ................................. 480,000 538,800
TCI Satellite Entertainment, Inc., 0%/12.25% Sr. Sub. Disc. Nts.,
2/15/07(9) .................................................................. 145,000 103,675
United International Holdings, Inc., 0%/10.75% Sr. Disc. Nts., 2/15/08(9) .... 600,000 380,250
----------
6,816,356
----------
Media/Entertainment: Diversified Media -- 1.1%
Ascent Entertainment Group, Inc., 0%/11.875% Sr. Sec. Disc. Nts.,
12/15/04(9) ................................................................. 290,000 185,600
Chancellor Media Corp., 10.50% Sr. Sub. Nts., Series B, 1/15/07 .............. 735,000 828,713
Hollinger International Publishing, Inc., 9.25% Gtd. Sr. Sub. Nts., 2/1/06.... 250,000 261,563
Hollywood Theaters, Inc., 10.625% Sr. Sub. Nts., 8/1/07 ...................... 475,000 513,000
Lamar Advertising Co., 8.625% Sr. Sub. Nts., 9/15/07 ......................... 875,000 892,500
SFX Entertainment, Inc., 9.125% Sr. Sub. Nts., 2/1/08(6) ..................... 600,000 585,000
----------
3,266,376
----------
Media/Entertainment-Telecommunications -- 3.5%
e.spire Communications, Inc., 13.75% Sr. Nts., 7/15/07 ....................... 205,000 242,925
DTI Holdings, Inc., Units (each unit consists of $1,000 principal amount
of 0%/12.50% sr. disc. nts., 3/1/08 and five warrants to purchase 7.76
ordinary shares)(6)(9)(11) .................................................. 500,000 286,250
Facilicom International, Inc., 10.50% Sr. Nts., 1/15/08(6) ................... 450,000 465,750
</TABLE>
10
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Media/Entertainment: Telecommunications (Continued)
Firstworld Communications, Inc., Units (each unit consists of $1,000
principal amount of 0%/13% sr. disc. nts., 4/15/08 and one warrant
to purchase 7.9002 shares of series B common stock)(6)(9)(11) ............ $1,160,000 $ 591,600
Focal Communications Corp., 0%/12.125% Sr. Disc. Nts., 2/15/08(6)(9) ...... 600,000 357,750
GST Telecommunications, Inc., 12.75% Sr. Sub. Nts., 11/15/07(13) .......... 250,000 281,906
ICG Holdings, Inc., 0%/13.50% Sr. Disc. Nts., 9/15/05(9) .................. 430,000 366,575
Intermedia Communications, Inc.:
0%/11.25% Sr. Disc. Nts., Series B, 7/15/07(9) ........................... 880,000 651,200
8.50% Sr. Nts., Series B, 1/15/08 ........................................ 640,000 659,200
8.875% Sr. Nts., 11/1/07 ................................................. 300,000 312,000
ITC Deltacom, Inc.:
11% Sr. Nts., 6/1/07 ..................................................... 250,000 285,000
8.875% Sr. Nts., 3/1/08(6) ............................................... 500,000 522,500
IXC Communications, Inc., 9% Sr. Sub. Nts., 4/15/08(6) .................... 120,000 120,900
KMC Telecom Holdings, Inc., Units (each unit consists of $1,000
principal amount of 0%/12.50% sr. disc. nts., 2/15/08 and one
warrant to purchase .21875 ordinary shares)(6)(9)(11) .................... 920,000 561,200
Level 3 Communications, Inc., 9.125% Sr. Nts., 5/1/08(6) .................. 750,000 742,031
Long Distance International, Inc., Units (each unit consists of $1,000
principal amount of 12.25% sr. nts., 4/15/08 and one warrant to
purchase 15.0875 shares of common stock)(6)(11) .......................... 600,000 603,000
McLeodUSA, Inc.:
0%/10.50% Sr. Disc. Nts., 3/1/07(9) ...................................... 255,000 190,613
8.375% Sr. Nts., 3/15/08(6) .............................................. 260,000 265,200
NEXTLINK Communications, Inc.:
0%/9.45% Sr. Disc. Nts., 4/15/08(6)(9) ................................... 1,000,000 625,000
9% Sr. Nts., 3/15/08(6) .................................................. 450,000 461,250
9.625% Sr. Nts., 10/1/07 ................................................. 500,000 526,250
NTL, Inc., 10% Sr. Nts., 2/15/07 .......................................... 250,000 268,125
Qwest Communications International, Inc., 0%/9.47% Sr. Disc. Nts.,
10/15/07(9) .............................................................. 1,125,000 810,000
Viatel, Inc., Units:
(each unit consists of $1,000 principal amount of 0%/12.50% sr. disc.
nts., 4/15/08 and .49 shares of series A preferred stock)(6)(9)(11) ..... 500,000 305,000
(each unit consists of $1,000 principal amount of 11.25% sr. nts.,
and .483 shares of series A preferred stock)(6)(11) ..................... 195,000 206,700
----------
10,707,925
----------
</TABLE>
11
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Media/Entertainment: Wireless Communications -- 3.2%
American Mobile Radio Corp., Units (each unit consists of $1,000
principal amount of 12.25% sr. nts., 12/15/07 and one warrant to
purchase 3.75749 shares of common stock)(6)(11) ............................ $ 390,000 $ 397,800
CellNet Data Systems, Inc., 0%/14% Sr. Disc. Nts., 10/1/07(9) ............... 709,000 402,358
Crown Castle International Corp., 0%/10.625% Sr. Disc. Nts.,
11/15/07(6)(9) ............................................................. 800,000 550,000
Iridium LLC/Iridium Capital Corp., 11.25% Sr. Nts., 7/15/05(6) .............. 250,000 259,375
Microcell Telecommunications, Inc., 0%/14% Sr. Disc. Nts., Series B,
6/1/06(9) .................................................................. 500,000 373,750
Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(9) ..... 355,000 279,563
Nextel Communications, Inc.:
0%/9.75% Sr. Disc. Nts., 10/31/07(9) ....................................... 1,425,000 933,375
0%/9.95% Sr. Disc. Nts., 2/15/08(6)(9) ..................................... 500,000 321,250
Omnipoint Corp.:
11.625% Sr. Nts., 8/15/06 .................................................. 490,000 535,325
11.625% Sr. Nts., Series A, 8/15/06 ........................................ 1,250,000 1,365,625
ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 .............. 200,000 234,000
Orbital Imaging Corp., Units (each unit consists of $1,000 principal
amount of 11.625% sr. nts., 3/1/05 and one warrant to purchase
8.7516 ordinary shares)(6)(11) ............................................. 240,000 258,600
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(9) ........... 1,275,000 988,125
Pinnacle Holdings, Inc., 0%/10% Sr. Disc. Nts., 3/15/08(6)(9) ............... 800,000 508,000
Price Communications Cellular Holdings, Inc., 0%/13.50% Sr. Disc. Nts.,
Series B, 8/1/07(9) ........................................................ 1,250,000 868,750
Price Communications Wireless, Inc., 11.75% Sr. Sub. Nts., 7/15/07 .......... 100,000 112,750
SBA Communications Corp., 0%/12% Sr. Disc. Nts., 3/1/08(6)(9) ............... 1,200,000 720,000
Sprint Spectrum LP/Sprint Spectrum Finance Corp., 11% Sr. Nts.,
8/15/06 .................................................................... 500,000 575,000
Teletrac, Inc., 14% Sr. Nts., Series B, 8/1/07 .............................. 125,000 120,625
Winstar Equipment Corp., 12.50% Gtd. Sr. Sec. Exchangeable Nts.,
3/15/04 .................................................................... 200,000 225,500
----------
10,029,771
----------
</TABLE>
12
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Metals/Minerals -- 0.9%
AK Steel Corp., 9.125% Sr. Nts., 12/15/06 ................................ $ 700,000 $ 742,000
Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 ..................... 250,000 270,000
Keystone Consolidated Industries, Inc., 9.625% Sr. Sec. Nts., 8/1/07 ..... 900,000 933,750
Metallurg, Inc., 11% Sr. Nts., 12/1/07(6) ................................ 675,000 707,063
----------
2,652,813
----------
Retail -- 0.8%
Boyds Collection Ltd., 9% Sr. Sub. Nts., 5/15/08(6) ...................... 360,000 363,600
Eye Care Centers of America, Inc.:
9.125% Sr. Sub. Nts., 5/1/08(6) ......................................... 360,000 362,700
12% Sr. Nts., 10/1/03 ................................................... 185,000 199,800
Finlay Enterprises, Inc., 9% Debs., 5/1/08 ............................... 240,000 242,700
Finlay Fine Jewelry Corp.:
8.375% Sr. Nts., 5/1/08 ................................................. 300,000 301,875
10.625% Sr. Nts., 5/1/03(4) ............................................. 250,000 261,875
Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 ....................... 775,000 798,250
----------
2,530,800
----------
Service -- 1.6%
Allied Waste Industries, Inc., 0%/11.30% Sr. Disc. Nts., 6/1/07(9) ....... 500,000 371,250
Borg-Warner Security Corp., 9.625% Sr. Sub. Nts., 3/15/07 ................ 700,000 780,500
Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(9) ........................ 500,000 406,250
Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07 ................ 200,000 216,000
Fisher Scientific International, Inc., 9% Sr. Sub. Nts., 2/1/08(6) ....... 1,000,000 1,010,000
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 .......... 400,000 404,000
Newcor, Inc., 9.875% Sr. Sub. Nts., 3/1/08(6) ............................ 500,000 505,000
Protection One Alarm Monitoring, Inc., 0%/13.625% Sr. Disc. Nts.,
6/30/05(9) .............................................................. 1,100,000 1,237,500
----------
4,930,500
----------
Transportation -- 2.7%
Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07 ...... 800,000 832,000
Coach USA, Inc., 9.375% Gtd. Sr. Sub. Nts., Series B, 7/1/07 ............. 925,000 971,250
Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06 ........ 700,000 787,500
Hvide Marine, Inc., 8.375% Sr. Nts., 2/15/08(6) .......................... 320,000 313,600
Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07 .............. 775,000 825,375
</TABLE>
13
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- --------------
<S> <C> <C>
Transportation (Continued)
Navigator Gas Transport plc:
10.50% First Priority Ship Mtg. Nts., 6/30/07(6) ......................... $ 1,250,000 $ 1,309,375
Units (each unit consists of $1,000 principal amount of 12%
second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(6)(11) ....... 250,000 286,250
Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts., 6/15/07 ............ 600,000 636,000
Sea Containers Ltd., 7.875% Sr. Nts., 2/15/08(6) .......................... 500,000 489,375
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts.,
Series B, 12/15/03(9) .................................................... 1,500,000 1,385,625
Trico Marine Services, Inc., 8.50% Gtd. Sr. Nts., Series D, 8/1/05 ........ 475,000 477,375
-----------
8,313,725
-----------
Utility -- 0.7%
Calpine Corp., 10.50% Sr. Nts., 5/15/06(4) ................................ 565,000 625,738
El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11 ............ 570,000 652,650
ESI Tractebel Acquisition Corp., 7.99% Bonds, 12/30/11(6) ................. 1,000,000 999,301
-----------
2,277,689
-----------
107,089,815
-----------
Structured Instruments -- 7.1%
Bear Stearns High Yield Composite Index Linked Nts., 9%,
6/5/98-10/13/98 .......................................................... 10,500,000 10,667,400
Lehman High Yield Index Nts.:
7.988%, 7/6/98 ........................................................... 3,000,000 3,007,200
9%, 7/8/98 ............................................................... 3,000,000 2,947,500
Shoshone Partners Loan Trust Sr. Nts.:
5/31/02 (representing a basket of reference loans and a total return
swap between Chase Manhattan Bank and the Trust)(4)(14) ................. 500,000 500,000
7.379%, 4/28/02 (representing a basket of reference loans and a total
return swap between Chase Manhattan Bank and the Trust)(4)(13) .......... 4,500,000 4,913,253
-----------
22,035,353
-----------
Total Corporate Sector (Cost $125,202,541)................................. 129,144,006
-----------
</TABLE>
14
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
International Sector -- 25.0%
Corporate Bonds and Notes -- 4.4%
Financial -- 2.0%
Bakrie Investindo, Zero Coupon Promissory Nts., 3/16/99(4)(15)IDR ........ 3,160,000,000 $ 98,137
Export-Import Bank of Japan, 4.375% Unsec. Nts., 10/1/03JPY .............. 294,000,000 2,585,266
Hypothekenbank in Essen AG:
4.50% Sec. Nts., Series 478, 5/2/03DEM .................................. 830,000 455,680
5.75% Sec. Nts., Series 447, 10/2/03DEM ................................. 4,960,000 2,874,566
KFW International Finance, Inc., 6.75% Gtd. Bank Nts., 6/20/05DEM ........ 250,000 153,420
PT Polysindo Eka Perkasa, Zero Coupon:
Nts., Series 2, 7/15/98(4)(15)IDR ....................................... 1,314,400,000 32,656
Promissory Nts., 3/16/99(4)(15)IDR ...................................... 3,000,000,000 93,168
----------
6,292,893
----------
Food/Tobacco -- 0.2%
Sparkling Spring Water Group Ltd., 11.50% Sr. Sub. Nts., 11/15/07(6) ..... 475,000 498,750
----------
Media/Entertainment: Cable/Wireless Video -- 0.2%
Rogers Communications, Inc., 8.875% Sr. Nts., 7/15/07 .................... 675,000 683,438
----------
Media/Entertainment: Diversified Media -- 0.3%
Imax Corp., 10% Sr. Nts., 3/1/01 ......................................... 1,000,000 1,042,500
----------
Media/Entertainment: Telecommunications -- 1.0%
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)(9)(11) .................................... 900,000 819,000
Diamond Cable Communications plc, 0%/11.75% Sr. Disc. Nts.,
12/15/05(9) ............................................................. 1,600,000 1,280,000
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08(6) ......................... 200,000 204,500
RSL Communications plc, 9.125% Sr. Nts., 3/1/08(6) ....................... 500,000 505,000
TeleWest Communications plc, 0%/11% Sr. Disc. Debs.,
10/1/07(9) .............................................................. 500,000 405,000
----------
3,213,500
----------
</TABLE>
15
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Media/Entertainment: Wireless Communications -- 0.4%
Cellular Communications International, Inc., 0%/9.50% Bonds,
4/1/05(6)(9)XEU ............................................................ 1,525,000 $1,167,028
----------
Metals/Minerals -- 0.3%
Algoma Steel, Inc., 12.375% First Mtg. Nts., 7/15/05 ........................ 700,000 829,500
International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08(6) ..... 200,000 208,000
----------
1,037,500
----------
13,935,609
----------
Foreign Government Obligations -- 18.4%
Argentina -- 1.5%
Argentina (Republic of) Sr. Unsec. Unsub. Bonds, 11%, 10/9/06 ............... 3,570,000 3,900,225
Banco Hipotecario Nacional (Argentina) Medium-Term Nts., 10.625%,
8/7/06(16) ................................................................. 700,000 727,562
----------
4,627,787
----------
Australia -- 0.4%
New South Wales Treasury Corp. Gtd. Bonds, 7%, 4/1/04AUD .................... 1,570,000 1,076,322
Queensland Treasury Corp. Exchangeable Gtd. Nts., 8%, 5/14/03AUD ............ 200,000 143,333
----------
1,219,655
----------
Brazil -- 1.9%
Brazil (Federal Republic of) Bonds, Series RG, 6.688%, 4/15/12(13) .......... 820,000 652,925
Brazil (Federal Republic of) Debt Conversion Bonds, 6.688%,
4/15/12(13) ................................................................ 6,650,000 5,295,062
----------
5,947,987
----------
Bulgaria -- 0.3%
Bulgaria (Republic of) Disc. Bonds, Tranche A, 6.563%, 7/28/24(13) .......... 991,000 810,142
----------
Canada -- 0.4%
Canada (Government of) Bonds, 10.25%, 12/1/98CAD ............................ 1,800,000 1,298,548
----------
</TABLE>
16
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Ecuador -- 0.8%
Ecuador (Republic of) Debs., 6.625%, 2/27/15(13) ......................... $ 400,560 $ 252,854
Ecuador (Republic of) Disc. Bonds, 6.625%, 2/28/25(13) ................... 1,910,000 1,401,462
Ecuador (Republic of) Par Bonds, 3.50%, 2/28/25(13) ...................... 945,000 517,388
Ecuador (Republic of) Past Due Interest Bonds, 6.625%,
2/27/15(13) ............................................................. 639,784 403,864
----------
2,575,568
----------
Germany -- 1.7%
Germany (Republic of) Bonds:
6.50%, 7/15/03DEM ....................................................... 2,300,000 1,383,335
8.25%, 9/20/01DEM ....................................................... 1,610,000 999,377
Series 98, 5.25%, 1/4/08DEM ............................................. 4,500,000 2,545,031
Series JA07, Zero Coupon, 5.748%, 1/4/07(3)DEM .......................... 95,000 34,623
Series JL07, Zero Coupon, 5.66%, 7/4/07(3)DEM ........................... 510,000 179,900
----------
5,142,266
----------
Great Britain -- 1.2%
United Kingdom Treasury Bonds:
8%, 9/25/09GBP .......................................................... 985,000 1,933,587
9%, 10/13/08GBP ......................................................... 915,000 1,902,789
----------
3,836,376
----------
Italy -- 0.8%
Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali,
8.50%, 1/1/04ITL ........................................................ 3,835,000,000 2,533,725
----------
Ivory Coast -- 0.4%
Ivory Coast (Government of) Past Due Interest Bonds, 2%,
12/29/49(12) ............................................................ 2,630,000 1,111,175
----------
Jordan -- 0.1%
Hashemite (Kingdom of Jordan) Bonds, Series DEF, 5%, 12/23/23(12) ........ 500,000 358,750
----------
Korea, Republic of (South) -- 0.3%
Korea (Republic of) Bonds, 8.875%, 4/15/08 ............................... 850,000 835,948
----------
</TABLE>
17
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Mexico -- 2.7%
Bonos de la Tesoreria de la Federacion, Zero Coupon, 20.342%,
3/11/99(3)MXP .................................................. 15,293,610 $1,532,111
Petroleos Mexicanos Debs., 14.50%, 3/31/06GBP ................... 280,000 599,245
United Mexican States Bonds, 11.50%, 5/15/26 .................... 5,120,000 6,188,800
----------
8,320,156
----------
New Zealand -- 0.3%
New Zealand (Government of) Bonds:
8%, 11/15/06NZD ................................................ 450,000 267,254
10%, 3/15/02NZD ................................................ 1,295,000 781,263
----------
1,048,517
----------
Nigeria -- 0.2%
Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%,
1/5/10 ......................................................... 898,476 644,433
----------
Norway -- 0.9%
Norway (Government of) Bonds:
5.75%, 11/30/04NOK ............................................. 17,015,000 2,334,349
9.50%, 10/31/02NOK ............................................. 2,955,000 463,571
----------
2,797,920
----------
Panama -- 0.6%
Panama (Government of) Bonds, 8.875%, 9/30/27 ................... 545,000 530,694
Panama (Government of) Past Due Interest Debs., 6.563%,
7/17/16(13) .................................................... 1,702,802 1,417,583
----------
1,948,277
----------
Peru -- 0.6%
Peru (Republic of) Front-Loaded Interest Reduction Bonds, 3.25%,
3/7/17(13) ..................................................... 3,115,000 1,942,981
----------
Philippines -- 0.1%
Philippines (Republic of) Bonds, 8.75%, 10/7/16 ................. 310,000 295,275
----------
Poland -- 0.4%
Poland (Republic of) Par Bonds, 3%, 10/27/24(12) ................ 1,655,000 1,064,372
----------
</TABLE>
18
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
------------------ -------------
<S> <C> <C>
Russia -- 1.0%
Russia (Government of) Debs., Series 19 yr., 6.719%, 12/15/15(13) ........ $ 3,025,000 $2,136,709
Russia (Government of) Interest Nts., 6.719%, 12/15/15(13) ............... 1,260,000 904,050
----------
3,040,759
----------
Turkey -- 0.5%
Turkey (Republic of) Treasury Bills, Zero Coupon, 96.514%,
9/2/98(3)TRL ............................................................ 511,000,000,000 1,582,337
----------
Venezuela -- 0.9%
Venezuela (Republic of) Bonds, 9.25%, 9/15/27 ............................ 750,000 661,875
Venezuela (Republic of) Front-Loaded Interest Reduction Bonds,
Series A, 6.625%, 3/31/07(13) ........................................... 2,357,138 2,150,889
----------
2,812,764
----------
Sweden -- 0.4%
Sweden (Kingdom of) Bonds:
Series 1033, 10.25%, 5/5/03SEK .......................................... 6,400,000 1,010,073
Series 1037, 8%, 8/15/07SEK ............................................. 2,200,000 338,596
----------
1,348,669
----------
57,144,387
----------
Loan Participations -- 1.0%
Algeria (Republic of) Reprofiled Debt Loan Participation:
Tranche 1, 6.688%, 9/4/06(13) ........................................... 1,065,272 840,900
Tranche A, 7.375%, 3/4/00(13) ........................................... 710,181 673,119
Morocco (Kingdom of) Loan Participation Agreement:
Tranche A, 6.656%, 1/1/09(4)(13) ........................................ 527,000 473,641
Tranche B, 6.656%, 1/1/04(4)(13) ........................................ 705,882 650,735
Trinidad & Tobago Loan Participation Agreement, Tranche B, 1.807%,
9/30/00(4)(13)JPY ....................................................... 71,999,999 506,774
----------
3,145,169
----------
</TABLE>
19
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Units See Note 1
------------------ -------------
<S> <C> <C>
Rights, Warrants and Certificates -- 0.0%
Australis Media Ltd. Wts., Exp. 5/00(4) .................................. 80 $ 1
Microcell Telecommunications, Inc. Wts., Exp. 6/06(4) .................... 2,800 73,150
-------
73,151
-------
Face Amount(1)
----------------
Structured Instruments -- 1.2%
Lehman Brothers Holdings, Inc.:
Greek Drachma/Swiss Franc Linked Nts., Zero Coupon, 3/31/99 ............. $ 1,490,000 1,529,187
Chilean Peso/Japanese Yen Linked Nts., 18%, 7/28/98 ..................... 350,000 350,000
Chilean Peso/Japanese Yen Linked Nts., 17.50%, 7/28/98 .................. 350,000 350,000
Standard Chartered Bank, Korean Won/Japanese Yen Linked Nts.,
28.50%, 4/30/99 ......................................................... 1,500,000 1,495,650
----------
3,724,837
----------
Total International Sector (Cost $78,026,655) ............................ 78,023,153
----------
Mortgage-Backed Sector -- 23.4%
Government Agency -- 20.0%
FHLMC/FNMA/Sponsored -- 16.2%
Federal Home Loan Mortgage Corp., Certificates of Participation, 12%,
5/1/10-6/1/15 ........................................................... 1,659,523 1,907,245
Federal Home Loan Mortgage Corp., Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation Certificates, Series 1343, Cl. LA, 8%,
8/15/22 ................................................................. 1,000,000 1,087,081
Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed
Security, Series 177, C1. B, 6.90%-7.32%, 7/1/26(17) .................... 10,445,830 2,859,547
Federal National Mortgage Assn.:
6.50%, 5/1/13-5/1/28(14) ................................................ 11,700,000 11,682,498
7%, 5/1/13-5/25/27(14) .................................................. 21,970,000 22,236,752
7.50%, 6/1/10 ........................................................... 1,341,625 1,383,847
11%, 7/1/16 ............................................................. 724,360 822,149
</TABLE>
20
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
FHLMC/FNMA/Sponsored (Continued)
Federal National Mortgage Assn., Gtd. Mtg. Pass-Through Certificates,
13%, 6/1/15 ............................................................. $ 905,573 $1,079,326
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates:
Trust 1992-162, Cl. C, 7%, 10/25/21 ..................................... 5,400,000 5,477,598
Trust 1995-4, Cl. PC, 8%, 5/25/25 ....................................... 664,690 719,882
Trust 1997-25, Cl. B, 7%, 12/18/22 ...................................... 340,000 343,416
Trust 1997-27, Cl. J, 7.50%, 4/18/27 .................................... 534,881 557,272
Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed
Security, Trust 277-C1, 10.418%, 4/1/27(18) ............................. 212,515 171,872
----------
50,328,485
----------
GNMA/Guaranteed -- 3.8%
Government National Mortgage Assn.:
6%, 7/20/27 ............................................................. 715,950 731,165
7%, 5/1/28(14) .......................................................... 6,400,000 6,476,032
7.50%, 2/15/27 .......................................................... 3,478,558 3,574,740
11%, 10/20/19 ........................................................... 530,557 596,044
12%, 11/20/13-9/20/15 ................................................... 563,134 650,012
----------
12,027,993
----------
Private -- 3.4%
Commercial -- 2.5%
Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates:
Series 1996-D3, Cl. A5, 7.224%, 10/13/26(4)(13) ......................... 500,000 533,359
Series 1996-MD6, Cl. A5, 7.224%, 11/13/26(13) ........................... 800,000 821,375
Series 1997-MD7, Cl. A6, 8.243%, 1/13/30(13) ............................ 150,000 157,852
BKB Commercial Mortgage Trust, Commercial Mtg. Obligations, Series
1997-C1, Cl. C, 7.45%, 10/25/00(4) ...................................... 250,000 250,391
Capital Lease Funding Securitization LP, Interest-Only Stripped Mtg.-
Backed Security, Series 1997-CT L1, 0.549%, 6/22/24(4)(17) .............. 11,502,462 544,066
Commercial Mortgage Acceptance Corp., Interest-Only Stripped Mtg.-
Backed Security, Series 1996-C1, C1. X-2, 0.981%, 12/25/20(4)(17) ....... 12,416,600 322,056
</TABLE>
21
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- -------------
<S> <C> <C>
Commercial (Continued)
First Union-Lehman Brothers Commercial Mortgage Trust, Interest-Only
Stripped Mtg.-Backed Security, Series 1997-C1, 6.89%, 4/18/27(17) ........ $4,717,186 $ 353,605
General Motors Acceptance Corp., Interest-Only Stripped Mtg.-Backed
Security, Series 1997-C1, C1. X, 8.55%, 7/15/27(17) ...................... 3,573,330 343,933
Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates,
Series 1996-C1, Cl. D, 7.42%, 4/25/28 .................................... 800,000 815,766
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1996-C1, Cl. D-1, 7.438%, 2/15/28(4)(13) ............ 1,000,000 1,026,562
NationsCommercial Corp., NB Commercial Mtg. Pass-Through
Certificates, Series-DMC:
Cl. B, 8.562%, 8/12/11(4) ................................................ 400,000 419,187
Cl. C, 8.921%, 8/12/11(4) ................................................ 400,000 423,375
Potomac Gurnee Financial Corp., Commercial Mtg. Pass-Through
Certificates, Series 1, Cl. D, 7.683%, 12/21/26(4) ....................... 500,000 517,200
Structured Asset Securities Corp.:
Commercial Mtg. Pass-Through Certificates, Series 1997-LLI,
Cl. E, 7.30%, 10/20/34 .................................................. 500,000 503,281
Multiclass Pass-Through Certificates, Series 1996-C3, Cl. D, 8%,
6/25/30(4) .............................................................. 650,000 661,578
----------
7,693,586
----------
Residential -- 0.9%
CS First Boston Mortgage Securities Corp., Mtg. Pass-Through
Certificates, Series 1997-C1, Cl. E, 7.50%, 3/1/11(4) .................... 710,000 747,133
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1, 8.035%, 7/25/06(4)(13) ................... 800,000 843,360
Salomon Brothers Mortgage Securities VII, Series 1996-B,
Cl. 1, 7.132%, 4/25/26 ................................................... 1,320,681 968,225
Salomon Brothers, Inc., Series 1997-TZH, Cl. D, 7.902%, 3/25/22(4) ........ 250,000 265,625
----------
2,824,343
----------
Total Mortgage-Backed Sector (Cost $72,210,784) ........................... 72,874,407
----------
</TABLE>
22
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Market Value
Face Amount(1) See Note 1
---------------- ----------------
<S> <C> <C>
Money Market Sector -- 6.7%
Repurchase agreement with Zion First National Bank, 5.52%, dated
4/30/98, to be repurchased at $21,003,220 on 5/1/98, collateralized
by U.S. Treasury Nts., 7.25%, 8/15/07, with a value of $20,526,660,
and U.S. Treasury Bills maturing 10/8/98, with a value of $922,348
(Cost $21,000,000) ................................................ $ 21,000,000 $ 21,000,000
------------ -------------
Total Investments, at Value (Cost $343,014,579) .................... 112.3% 349,665,459
Liabilities in Excess of Other Assets .............................. (12.3) (38,420,478)
------------ -------------
Net Assets ......................................................... 100.0% $ 311,244,981
============ =============
</TABLE>
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
AUD--Australian Dollar MXP--Mexican Peso
CAD--Canadian Dollar NOK--Norwegian Krone
DEM--German Mark NZD--New Zealand Dollar
GBP--British Pound Sterling SEK--Swedish Krona
IDR--Indonesian Rupiah TRL--Turkish Lira
ITL--Italian Lira XEU--European Currency Units
JPY--Japanese Yen
2. Securities with an aggregate market value of $91,145 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.
4. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
5. Non-income producing security.
6. 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 $40,376,307 or 12.97% of the Trust's
net assets as of April 30, 1998.
7. Interest or dividend is paid in kind.
8. A sufficient amount of securities has been designated to cover outstanding
forward foreign currency exchange contracts. See Note 5 of Notes to
Financial Statements.
9. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
10. Non-income producing--issuer is in default of interest payment.
11. 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.
12. Represents the current interest rate for an increasing rate security.
13. Represents the current interest rate for a variable rate security.
14. When-issued security to be delivered and settled after April 30, 1998.
15. Issuer is in default.
23
<PAGE>
Statement of Investments (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
16. A sufficient amount of securities have been designated to cover outstanding
written options, as follows:
<TABLE>
<CAPTION>
Contracts Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
----------------- ------------ ------------ ---------- -------------
<S> <C> <C> <C> <C> <C>
Banco Hipotecario Nacional (Argentina) Medium-Term
Nts., 10.625%, 8/7/06 Call Opt. $700 8/7/00 100.00% $6,440 $28,000
</TABLE>
17. 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.
18. 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.
24
<PAGE>
Statement of Assets and Liabilities April 30, 1998 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $343,014,579) -- see accompanying statement............. $349,665,459
Receivables:
Interest, dividends and principal paydowns ........................................ 4,671,908
Investments sold and options written .............................................. 3,250,202
Daily variation on futures contracts -- Note 6 .................................... 311,848
Closed forward foreign currency exchange contracts ................................ 157,994
Other .............................................................................. 40,062
------------
Total assets ..................................................................... 358,097,473
------------
LIABILITIES:
Bank overdraft ..................................................................... 1,472,906
Unrealized depreciation on forward foreign currency exchange contracts -- Note 5 ... 44,369
Options written, at value (premiums received $6,440) --
see accompanying statement -- Note 7 .............................................. 28,000
Payables and other liabilities:
Investments purchased (including $40,812,801 purchased on a when-issued basis) --
Note 1 ........................................................................... 44,434,427
Daily variation on futures contracts -- Note 6 .................................... 304,159
Dividends ......................................................................... 168,568
Trustees' fees -- Note 1 .......................................................... 160,862
Management and administrative fees ................................................ 69,922
Closed forward foreign currency exchange contracts ................................ 53,208
Transfer agent and accounting services fees ....................................... 1,343
Other .............................................................................. 114,728
------------
Total liabilities ................................................................ 46,852,492
------------
NET ASSETS ......................................................................... $311,244,981
============
COMPOSITION OF NET ASSETS:
Par value of shares of beneficial interest ......................................... $ 291,161
Additional paid-in capital ......................................................... 313,688,210
Overdistributed net investment income .............................................. (1,151,658)
Accumulated net realized loss on investments and foreign currency transactions ..... (8,002,960)
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies ................................................. 6,420,228
------------
NET ASSETS -- applicable to 29,116,068 shares of beneficial interest outstanding ... $311,244,981
============
NET ASSET VALUE PER SHARE .......................................................... $ 10.69
============
</TABLE>
See accompanying Notes to Financial Statements.
25
<PAGE>
Statement of Operations For the Six Months Ended April 30, 1998 (Unaudited)
Oppenheimer Multi-Sector Income Trust
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding taxes of $63,621)...................... $ 12,693,581
Dividends .................................................................. 201,497
------------
Total income ............................................................. 12,895,078
------------
EXPENSES:
Management fees -- Note 4 .................................................. 998,961
Administrative fees -- Note 4 .............................................. 307,270
Shareholder reports ........................................................ 89,999
Trustees' fees and expenses -- Note 1 ...................................... 43,662
Custodian fees and expenses ................................................ 42,996
Transfer agent and accounting services fees -- Note 4 ...................... 42,205
Legal and auditing fees .................................................... 23,212
Registration and filing fees ............................................... 12,837
Other ...................................................................... 7,368
------------
Total expenses ........................................................... 1,568,510
------------
NET INVESTMENT INCOME ...................................................... 11,326,568
------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments ............................................................... 1,431,074
Closing of futures contracts .............................................. (1,084,144)
Closing and expiration of options written -- Note 7 ....................... 240,090
Foreign currency transactions ............................................. (94,724)
------------
Net realized gain ........................................................ 492,296
------------
Net change in unrealized appreciation or depreciation on:
Investments ............................................................... 3,715,762
Translation of assets and liabilities denominated in foreign currencies ... (1,033,044)
------------
Net change ............................................................... 2,682,718
------------
NET REALIZED AND UNREALIZED GAIN ........................................... 3,175,014
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....................... $ 14,501,582
============
</TABLE>
See accompanying Notes to Financial Statements.
26
<PAGE>
Statements of Changes in Net Assets
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
April 30, 1998 October 31,
(Unaudited) 1997
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income ........................................... $ 11,326,568 $ 26,006,984
Net realized gain ............................................... 492,296 6,185,833
Net change in unrealized appreciation or depreciation ........... 2,682,718 (3,663,440)
------------- -------------
Net increase in net assets resulting from operations ........... 14,501,582 28,529,377
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
NET INVESTMENT INCOME (12,228,747) (25,738,551)
------------- -------------
NET ASSETS:
Total increase .................................................. 2,272,835 2,790,826
Beginning of period ............................................. 308,972,146 306,181,320
------------- -------------
End of period (including overdistributed net investment income of
$1,151,658 and $249,479, respectively).......................... $ 311,244,981 $ 308,972,146
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
27
<PAGE>
Financial Highlights
Oppenheimer Multi-Sector Income Trust
<TABLE>
<CAPTION>
Six Months
Ended April 30,
1998 (Unaudited)
------------------
<S> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period .............. $ 10.61
---------
Income (loss) from investment operations:
Net investment income ............................ .39
Net realized and unrealized gain (loss) .......... .11
---------
Total income from investment operations ......... .50
---------
Dividends and distributions to shareholders:
Dividends from net investment income ............. (.42)
Tax return of capital distribution ............... --
---------
Total dividends and distributions to
shareholders ................................... (.42)
---------
Net asset value, end of period .................... $ 10.69
=========
Market value, end of period ....................... $ 10.25
TOTAL RETURN, AT MARKET VALUE(1) 5.24%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) ................................... $ 311,245
Average net assets
(in thousands) ................................... $ 310,523
Ratios to average net assets:
Net investment income ............................ 7.36%(2)
Expenses ......................................... 1.02%(2)
Portfolio turnover rate(3) ........................ 206.9%
<CAPTION>
Year Ended October 31,
----------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------- -----------
<S> <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
-------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ............................ .89 .91 .94 1.00 1.08
Net realized and unrealized gain (loss) .......... .08 .37 (.04) (.82) .43
-------- -------- -------- -------- --------
Total income from investment operations ......... .97 1.28 .90 .18 1.51
-------- -------- -------- -------- --------
Dividends and distributions to shareholders:
Dividends from net investment income ............. (.88) (.90) (.91) (.84) (1.01)
Tax return of capital distribution ............... -- -- (.02) (.13) --
-------- -------- -------- -------- --------
Total dividends and distributions to
shareholders ................................... (.88) (.90) (.93) (.97) (1.01)
-------- -------- -------- -------- --------
Net asset value, end of period .................... $ 10.61 $ 10.52 $ 10.14 $ 10.17 $ 10.96
======== ======== ======== ======= ========
Market value, end of period ....................... $ 10.13 $ 9.88 $ 10.00 $ 9.50 $ 11.25
TOTAL RETURN, AT MARKET VALUE(1) 11.40% 7.85% 15.62% (7.46)% 11.10%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) ................................... $308,972 $306,181 $295,128 $295,658 $316,647
Average net assets
(in thousands) ................................... $308,712 $298,496 $288,884 $306,686 $307,244
Ratios to average net assets:
Net investment income ............................ 8.42% 8.87% 9.51% 9.17% 10.13%
Expenses ......................................... 0.99% 1.04% 1.05% 1.02% 1.00%
Portfolio turnover rate(3) ........................ 258.9% 225.4% 240.1% 187.6% 131.3%
</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 and mortgage dollar-rolls) for the period ended
April 30, 1998 were $607,000,011 and $722,155,196, respectively. Prior to
the period ended October 31, 1996, purchases and sales of investment
securities included mortgage dollar-rolls.
See accompanying Notes to Financial Statements.
28
<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. The Trust's investment
advisor 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 in which 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.
Structured Notes -- The Trust invests in foreign currency-linked structured
notes whereby the market value and redemption price are linked to foreign
currency exchange rates. The structured notes may be leveraged, which increases
the notes' volatility relative to the face of the security. Fluctuations in
values of the securities are recorded as unrealized gains and losses in the
accompanying financial statements. During the six months ended April 30, 1998,
the market value of these securities comprised an average of 8.35% of the
Trust's net assets, and resulted in realized and unrealized losses of
$1,008,624.
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
29
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
1. Significant Accounting Policies (continued)
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, 1998, the Trust had entered into
outstanding when-issued or forward commitments of $40,812,801.
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.
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, 1998, securities
with an aggregate market value of $579,585, representing 0.18% 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 foreign 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, 1998, a provision of $20,577 was made for the
Trust's
30
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
projected benefit obligations and payments of $7,543 were made to retired
trustees, resulting in an accumulated liability of $155,807 at April 30, 1998.
The Board of Trustees has adopted a Deferred Compensation plan for independent
Trustees that enables Trustees to elect to defer receipt of all or a portion of
annual fees they are entitled to receive from the Fund. Under the plan, the
compensation deferred is periodically adjusted as though an equivalent amount
had been invested for the Trustee in shares of one or more Oppenheimer funds
selected by the Trustee. The amount paid to the Trustee under the plan will be
determined based upon the performance of the selected funds. Deferral of
Trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially, affect the Fund's assets, liabilities or net income per
share.
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 its 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 fiscal year in which 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, 1998 and the year ended October 31,
1997.
31
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
3. Unrealized Gains and Losses on Investments
At April 30, 1998 net unrealized appreciation on investments and options
written of $6,629,320 was composed of gross appreciation of $10,905,255, and
gross depreciation of $4,275,935.
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
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.
32
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
At April 30, 1998, the Trust had outstanding forward contracts as follows:
<TABLE>
<CAPTION>
Contract
Expiration Amount Valuation as of Unrealized
Date (000s) April 30, 1998 Depreciation
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Sell
- -----------------
Indonesian Rupiah (IDR) ......... 5/12/98 1,771,200 IDR $217,169 $44,369
</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 (initial margin) in an amount equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are 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, 1998, the Trust had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
Unrealized
Expiration Number of Valuation as of Appreciation
Date Contracts April 30, 1998 (Depreciation)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
- ---------------------
U.S. Treasury Bonds, 30 yr. ......... 6/98 214 $25,726,813 $ (72,875)
----------
Contracts to Sell
- -----------------
German Treasury, 10 yr. ............. 6/98 4 331,561 5,350
Standard & Poor's 500 ............... 6/98 24 6,715,200 (41,400)
U.S. Treasury Nts., 2 yr. ........... 6/98 200 41,593,750 (4,689)
U.S. Treasury Nts., 5 yr. ........... 6/98 128 13,938,000 (41,802)
U.S. Treasury Nts., 10 yr. .......... 6/98 98 11,006,625 (8,125)
----------
(90,666)
----------
$ (163,541)
==========
</TABLE>
33
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
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 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, 1998 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, 1997 ......... 720 $ 82,320 705 $ 63,450
Options written ................................. 1,935 217,116 21,210,800 474,150
Options closed or expired ....................... (945) (263,946) (1,505) (535,944)
Options exercised ............................... (1,010) (29,050) (21,210,000) (1,656)
------ ---------- ----------- ----------
Options outstanding at April 30, 1998 ........... 700 $ 6,440 -- $ --
====== ========== =========== ==========
</TABLE>
34
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
Oppenheimer Multi-Sector Income Trust
8. Illiquid and Restricted Securities
At April 30, 1998, 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
periodically) 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, 1998 was $23,048,967, which represents
7.40% of the Trust's net assets, of which $1,177,875 is considered restricted.
Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation Per
Acquisition Cost Unit as of
Security Date Per Unit April 30, 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bonds
- -----
Arizona Charlie's, Inc., 12% First Mtg. Nts., Series B, 11/15/00 11/18/93 100.00% 58.75%
Capitol Queen & Casino, Inc., 12% First Mtg. Nts.,
Series A, 11/15/00 11/18/93 87.50 16.25
Stocks and Warrants
- -------------------
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93 $ 2.00 $ .25
CGA Group Ltd., Preferred, Series A 6/17/97 25.00 25.00
CGA Group Ltd. Wts., Exp. 12/49 6/17/97 -- .50
</TABLE>
9. Shareholder Meeting
On April 16, 1998, a special shareholder meeting was held at which the five
Trustees identified below were elected and the selection of KPMG Peat Marwick
LLP as the independent certified public accountants and auditors of the Trust
for the fiscal year beginning November 1, 1997 was ratified (Proposal No. 1) as
described in the Trust's proxy statement for that meeting. The following is a
report of the votes cast:
<TABLE>
<CAPTION>
Withheld/ Broker
Nominee/Proposal For Against Abstain Total Non-Votes
- --------------------- ------------------- --------------- ---------------- ------------------- ----------
<S> <C> <C> <C> <C> <C>
Trustees
- --------
Robert G. Galli 24,869,009.762 0 220,364.347 25,089,374.109 2,261,840
Benjamin Lipstein 24,869,009.762 0 220,364.347 25,089,374.109 2,261,840
Kenneth A. Randall 24,869,009.762 0 220,364.347 25,089,374.109 2,261,840
Edward V. Regan 24,869,009.762 0 220,364.347 25,089,374.109 2,261,840
Russell S. Reynolds 24,869,009.762 0 220,364.347 25,089,374.109 2,261,840
Proposal No. 1 24,756,395.153 78,775.407 254,203.549 25,089,374.109 2,261,840
</TABLE>
35
<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 consistent with preservation of capital. The Trust's
secondary investment objective is capital appreciation. In seeking its
objectives, the Trust may invest any percentage of its assets in at least three
of the following seven fixed-income sectors: U.S. Government, Corporate,
International, Asset-Backed, Municipal, Convertible and Money Market. Current
income, preservation of capital and, secondarily, possible capital appreciation
will be considerations in the allocation of assets among such sectors. The
Trust may invest in a number of different kinds of "derivative investments" and
may also engage in certain special investment techniques, including repurchase
transactions, when-issued and delayed delivery transactions and hedging. The
investment advisor to the Trust is OppenheimerFunds, Inc. (the Manager).
The Portfolio Managers of the Trust are Robert E. Patterson, Thomas P. Reedy,
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. Messrs. Reedy and Vasan have been the persons
principally responsible for the day-to-day management of the Trust's portfolio
since June 1993. Prior to that, Mr. Reedy served as a securities analyst for
the Manager and Mr. Vasan served as a securities analyst for Citibank, N.A.
Dividend Reinvestment and Cash Purchase Plan -- Pursuant to the Trust's
Dividend Reinvestment and Cash Purchase Plan (the Plan), as to shares of the
Trust (Shares) not registered in nominee name, all dividends and capital gains
distributions (Distributions) declared by the Trust will be automatically
reinvested in additional full and fractional Shares unless a shareholder elects
to receive cash. If Shares are registered in nominee name, the shareholder
should consult the nominee if the shareholder desires to participate in the
Plan. Shareholders that participate in the Plan (Participants) may, at their
option, make additional cash investments in Shares, semi-annually in amounts of
at least $100, through payment to Shareholder Financial Services, Inc., the
agent for the Plan (the Agent), accompanied by a service fee of $0.75.
Depending upon the circumstances hereinafter described, Plan Shares will be
acquired by the Agent for the Participant's account through receipt of newly
issued Shares or the purchase of outstanding Shares on the open market. If the
market price of Shares on the relevant date (normally the payment date) equals
or exceeds their net asset value, the Agent will ask the Trust for payment of
the Distribution in additional Shares at the greater of the Trust's net asset
value determined as of the date of purchase or 95% of the then-current market
price. If the market price is lower than net asset value, the Distribution will
be paid in cash, which the Agent will use to buy Shares on The New York Stock
Exchange (the NYSE), or otherwise on the open market to the
36
<PAGE>
Oppenheimer Multi-Sector Income Trust
extent available. If the market price exceeds the net asset value before the
Agent has completed its purchases, the average purchase price per Share paid by
the Agent may exceed the net asset value, resulting in fewer Shares being
acquired than if the Distribution had been paid in Shares issued by the Trust.
Participants may elect to withdraw from the Plan at any time and thereby
receive cash in lieu of Shares by sending appropriate written instructions to
the Agent. Elections received by the Agent will be effective only if received
more than ten days prior to the record date for any Distribution; otherwise,
such termination will be effective shortly after the investment of such
Distribution with respect to any subsequent Distribution. Upon withdrawal from
or termination of the Plan, all Shares acquired under the Plan will remain in
the Participant's account unless otherwise requested. For full Shares, the
Participant may either: (1) receive without charge a share certificate for such
Shares; or (2) request the Agent (after receipt by the Agent of signature
guaranteed instructions by all registered owners) to sell the Shares acquired
under the Plan and remit the proceeds less any brokerage commissions and a
$2.50 service fee.
Fractional Shares may either remain in the Participant's account or be reduced
to cash by the Agent at the current market price with the proceeds remitted to
the Participant. Shareholders who have previously withdrawn from the Plan may
rejoin at any time by sending written instructions signed by all registered
owners to the Agent.
There is no direct charge for participation in the Plan; all fees of the Agent
are paid by the Trust. There are no brokerage charges for Shares issued
directly by the Trust. However, each Participant will pay a pro rata share of
brokerage commissions incurred with respect to open market purchases of Shares
to be issued under the Plan. Participants will receive tax information annually
for their personal records and to assist in federal income tax return
preparation. The automatic reinvestment of Distributions does not relieve
Participants of any income tax that may be payable on Distributions.
The Plan may be terminated or amended at any time upon 30 days' prior written
notice to Participants which, with respect to a Plan termination, must precede
the record date of any Distribution by the Trust. Additional information
concerning the Plan may be obtained by shareholders holding Shares registered
directly in their names by writing the Agent, Shareholder Financial Services,
Inc., P.O. Box 173673, Denver, CO 80217-3673 or by calling 1-800-647-7374.
Shareholders holding Shares in nominee name should contact their brokerage firm
or other nominee for more information.
Shareholder Information -- The Shares are traded on the NYSE. Daily market
prices for the Trust's shares are published in the New York Stock Exchange
Composite Transaction section of newspapers under the designation "OppenMlti."
The Trust's NYSE trading symbol is OMS. Weekly net asset value (NAV) and market
price information about the Trust is published each Monday in The Wall Street
Journal and each Sunday in The New York Times and each Saturday in Barron's,
and other newspapers in a table called "Closed-End Bond Funds."
37
<PAGE>
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38
<PAGE>
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39
<PAGE>
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
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 Advisor
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 of 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.
RS0680.001.0498 June 29, 1998 [recycle symbol] Printed on recycled paper
1998 Semiannual Report
- ----------------------------------------
O P P E N H E I M E R
Multi-Sector
Income Trust
April 30, 1998
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