Registration No. 33-23494
File No. 811-5584
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 [X]
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. 15 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
Amendment No. 17 [X]
CENTENNIAL NEW YORK TAX EXEMPT TRUST
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(Exact Name of Registrant as Specified in Charter)
6803 South Tucson Way, Englewood, Colorado 80112
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(Address of Principal Executive Offices) (Zip Code)
1-800-525-9310
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(Registrant's Telephone Number, including Area Code)
Andrew J. Donohue, Esq.
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b)
[X] On October 28, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On _______________ pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] On _______________ pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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Centennial New York Tax Exempt Trust
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Prospectus dated November 1, 1999
Centennial New York Tax Exempt Trust is
a money market mutual fund. It seeks
the maximum current income exempt from
federal, New York State and New York
City income taxes for individual
investors that is consistent with
preservation of capital. The Trust
invests in short-term, high-quality
"money market" instruments.
This Prospectus contains important
information about the Trust's
objective, its investment policies,
As with all mutual funds, the strategies and risks. It also
Securities and Exchange Commission has contains important information about
not approved or disapproved the Trust's how to buy and sell shares of the
securities nor has it determined that Trust and other account features.
this Prospectus is accurate or Please read this Prospectus carefully
complete. It is a criminal offense to before you invest and keep it for
represent otherwise. future reference about your account.
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<PAGE>
CONTENTS
A B O U T T H E T R U S T
The Trust's Investment Objective and Strategies
Main Risks of Investing in the Trust
The Trust's Past Performance
Fees and Expenses of the Trust
About the Trust's Investments
How the Trust is Managed
A B O U T Y O U R A C C O U N T
How to Buy Shares
Automatic Purchase and Redemption Programs
Direct Shareholders
How to Sell Shares
Automatic Purchase and Redemption Programs
Direct Shareholders
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends and Tax Information
Financial Highlights
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A B O U T T H E T R U S T
The Trust's Investment Objective and Strategies
WHAT IS THE TRUST'S INVESTMENT OBJECTIVE? The Trust seeks the maximum current
income exempt from federal, New York State and New York City income taxes for
individual investors as is consistent with the preservation of capital.
WHAT DOES THE TRUST INVEST IN? The Trust is a money market fund. It invests in a
variety of high-quality money market instruments to seek income. Money market
instruments are short-term, U.S. dollar-denominated debt instruments issued by
the U.S. government, domestic and foreign corporations and financial
institutions and other entities. They include, for example, bank obligations,
repurchase agreements, commercial paper, other corporate debt obligations and
government debt obligations. To be considered "high-quality," generally they
must be rated in one of the two highest credit-quality categories for short-term
securities by nationally recognized rating services. If unrated, a security must
be determined by the Trust's investment manager to be of comparable quality to
rated securities.
The Trust normally attempts to invest 100% of its assets and will invest at
least 80% of its assets in municipal securities. The Trust will invest at least
65% of its total assets in obligations of the State of New York and its
political subdivisions, agencies and instrumentalities or obligations of
commonwealths or territories of the United States, the interest from which is
not subject to New York State and New York City personal income tax in the
opinion of bond counsel to the respective issuer. As a fundamental policy, the
Trust will not make any investment that will reduce the portion of its total
assets that are invested in municipal securities to less than 80%. The Trust
will not invest more than 20% of its net assets in municipal securities the
income on which may be a tax preference item that would increase an individual
investor's alternative minimum tax.
WHO IS THE TRUST DESIGNED FOR? The Trust is designed for investors who want to
earn income at current money market rates while preserving the value of their
investment, because the Trust tries to keep its share price stable at $1.00.
Income on short-term money market instruments tends to be lower than income on
longer term debt securities, so the Trust's yield will likely be lower than the
yield on longer-term fixed income funds. The Trust does not invest for the
purpose of seeking capital appreciation or gains and is not a complete
investment program.
Main Risks of Investing in the Trust
All investments carry risks to some degree. Funds that invest in debt
obligations for income may be subject to credit risks and interest rate risks.
However, the Trust's investments must meet strict standards set by its Board of
Trustees following rules for money market funds under federal law. Those
standards include requirements for maintaining high credit quality in the
Trust's portfolio, a short average portfolio maturity to reduce the effects of
changes in interest rates on the value of the Trust's securities and investing
in a wide variety of issuers to reduce the effects of a default by any one
issuer on the Trust's overall portfolio and the value of the Trust's shares.
Even so, there are risks that any of the Trust's holdings could have its
credit rating downgraded, or the issuer could default, or that interest rates
could rise sharply, causing the value of the Trust's investments (and its share
price) to fall. As a result, there is a risk that the Trust's shares could fall
below $1.00 per share. If there is a high redemption demand for the Trust's
shares that was not anticipated, portfolio securities might have to be sold
prior to their maturity at a loss. Also, there is the risk that the value of
your investment could be eroded over time by the effects of inflation, and that
poor security selection could cause the Trust to underperform other funds with
similar objectives.
Risks of Non-Diversification -- Investments in New York Municipal Securities.
The Trust is "non-diversified." That means that compared to funds that are
diversified, it can invest a greater portion of its assets in the
securities of one issuer, such as municipal securities issued by the State
of New York. Having a higher percentage of its assets invested in the
securities of fewer issuers, particularly obligations of government
issuers of a single state, could result in greater credit risk exposure to
a smaller number of issuers due to economic, regulatory or political
problems in New York. However, the Trust is currently subject to certain
diversification requirements under rules for money market funds under
federal law.
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An investment in the Trust is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Trust seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Trust.
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The Trust's investment manager, Centennial Asset Management Corporation
(referred to in this Prospectus as the Manager) tries to reduce risks by
carefully researching investments before the Trust buys them. The rate of the
Trust's income will vary from day to day, generally reflecting changes in
overall short-term interest rates. There is no assurance that the Trust will
achieve its investment objective.
The Trust's Past Performance
The bar chart and table below show how the Trust's returns may vary over time,
by showing changes in the Trust's performance from year to year for the last ten
calendar years and average annual total returns for the 1-, 5- and 10- year
periods. Variability of returns is one measure of the risks of investing in a
money market fund. The Trust's past investment performance does not predict how
the Trust will perform in the future.
Annual Total Returns (as of 12/31 each year)
[See appendix to prospectus for annual total return data for bar chart.]
For the period from 1/1/99 through 9/30/99 the cumulative total return (not
annualized) was 1.76%. During the period shown in the bar chart, the highest
return (not annualized) for a calendar quarter was 1.34% (4th Q '90) and the
lowest return (not annualized) for a calendar quarter was 0.36% (1st Q '93).
Average Annual Total Returns
for the periods ended December 31, 1 Year 5 Years 10 Years
1998
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Centennial New York Tax Exempt Trust 2.66% 2.68% 3.16%
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The returns measure the performance of a hypothetical account and assume that
all dividends have been reinvested in additional shares.
The total returns are not the Trust's current yield. The Trust's yield more
closely reflects the Trust's current earnings. To obtain the Trust's current
7-day yield, please call the Transfer Agent toll-free at 1-800-525-9310.
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Fees and Expenses of the Trust
The Trust pays a variety of expenses directly for investment management,
administration and other services. Those expenses are subtracted from the
Trust's assets to calculate the Trust's net asset value per share. All
shareholders therefore pay those expenses indirectly. The following tables are
meant to help you understand the fees and expenses you may pay if you buy and
hold shares of the Trust. The numbers below are based upon the Trust's expenses
during its fiscal year ended June 30, 1999.
SHAREHOLDER FEES. The Trust does not charge any initial sales charge to buy
shares or to reinvest dividends. There are no exchange fees or redemption fees
and no contingent deferred sales charges (unless you buy Trust shares by
exchanging Class A shares of other eligible funds that were purchased subject to
a contingent deferred sales charge, as described in "How to Sell Shares").
Annual Trust Operating Expenses (deducted from Trust assets):
(% of average daily net assets)
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Management Fees 0.50%
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Distribution and/or Service (12b-1) Fees 0.20%
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Other Expenses 0.19%
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Total Annual Operating Expenses 0.89%
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"Other expenses" include transfer agent fees, custodial fees, and accounting and
legal expenses the Trust pays. The "Total Annual Operating Expenses" were
reduced by a voluntary expense assumption undertaken by the Manager. With that
expense assumption, the "Management Fees" and the "Total Annual Operating
Expenses" were 0.41% and 0.80%, respectively. The expense assumption is
described below in the "How the Trust is Managed" and may be amended or
withdrawn at any time.
EXAMPLE. The following example is intended to help you compare the cost of
investing in the Trust with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in shares of the Trust for the time
periods indicated and reinvest your dividends and distributions. The example
also assumes that your investment has a 5% return each year and that the Trust's
operating expenses remain the same. Your actual costs may be higher or lower,
because expenses will vary over time. Based on these assumptions your expenses
would be as follows, whether or not you redeem your investment at the end of
each period:
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1 year 3 years 5 years 10 years
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$91 $284 $493 $1,096
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About the Trust's Investments
THE TRUST'S PRINCIPAL INVESTMENT POLICIES. The Trust invests in short-term money
market securities meeting quality, maturity and diversification standards
established by its Board of Trustees as well as rules that apply to money market
funds under the Investment Company Act. The Statement of Additional Information
contains more detailed information about the Trust's investment policies and
risks.
What Types of Money Market Securities Does the Trust Invest In? Money market
instruments are high-quality, short-term debt instruments. They may have
fixed, variable or floating interest rates. All of the Trust's money
market investments must meet the special quality and maturity requirements
set under the Investment Company Act and the special standards set by the
Board described briefly below. The following is a brief description of the
types of money market securities the Trust may invest in.
o Municipal Securities. The Trust buys municipal bonds and notes, tax-exempt
commercial paper, certificates of participation in municipal leases and
other debt obligations. These are debt obligations issued by or on behalf
of the State of New York, other states and the District of Columbia, their
political subdivisions (such as cities, towns and counties), or by their
agencies, instrumentalities and authorities, if the interest paid on the
security is not subject to federal individual income tax in the opinion of
bond counsel to the issuer. All of these types of debt obligations are
referred to as "municipal securities" in this Prospectus. All municipal
securities in which the Trust invests must have, or, pursuant to
regulations adopted by the Securities and Exchange Commission, be deemed to
have, remaining maturities of one year or less at the date the Trust
purchases them.
OtherMoney Market Obligations. The balance of the Trust's assets may be
invested in investments, the income from which may be taxable. The Trust's
taxable investments include repurchase agreements, municipal securities
issued to benefit a private user and certain temporary investments. These
investments are described below under "Other Investment Strategies" or in
the Statement of Additional Information. Normally, the Trust will not
invest more than 20% of its total assets in taxable investments.
Additionally, the Trust may buy other money market instruments that the
Manager approves under procedures adopted by the Board of Trustees. They must be
U.S. dollar-denominated short-term investments that the Manager must determine
to have minimal credit risks.
What Standards Apply to the Trust's Investments? Money market instruments are
subject to credit risk, the risk that the issuer might not make timely
payments of interest on the security or repay principal when it is due.
The Trust may buy only those investments that meet standards set by the
Board of Trustees and in the Investment Company Act for money market
funds. The Trust's Board has adopted evaluation procedures for the Trust's
portfolio, and the Manager has the responsibility to implement those
procedures when selecting investments for the Trust.
In general, the Trust buys only high-quality investments that the Manager
believes present minimal credit risk at the time of purchase. "High-quality"
investments are:
o rated in one of the two highest short-term rating categories of two
national rating organizations, or
o rated by one rating organization in one of its two highest rating
categories (if only one rating organization has rated the investment),
or
o unrated investments that the Manager determines are comparable in
quality to the two highest rating categories.
The procedures also limit the amount of the Trust's assets that can be
invested in the securities of any one issuer (other than the U.S. government,
its agencies and instrumentalities), to spread the Trust's investment risks.
Some of the Trust's investment restrictions are more restrictive than the
standards that apply to all money market funds. For example, as a fundamental
policy, the Trust may not invest in any debt instrument having a maturity in
excess of one year from the date of the investment. Additionally, investments in
unrated municipal securities will not exceed 20% of the Trust's total assets.
Finally, the Trust must maintain a dollar-weighted average portfolio maturity of
not more than 90 days, to reduce interest rate risks.
Can the Trust's Investment Objective and Policies Change? The Board of
Trustees of the Trust can change non-fundamental policies without
shareholder approval, although significant changes will be described in
amendments to this Prospectus. Fundamental policies cannot be changed
without the approval of a majority of the Trust's outstanding voting
shares. The Trust's investment objective is a fundamental policy. Some
investment restrictions that are fundamental polices are listed in the
Statement of Additional Information. An investment policy is not
fundamental unless this Prospectus or the Statement of Additional
Information says that it is.
OTHER INVESTMENT STRATEGIES. To seek its objective, the Trust can also use the
investment techniques and strategies described below. The Trust might not always
use all of these techniques and strategies. These techniques involve certain
risks. The Statement of Additional Information contains more information about
some of these practices, including limitations on their use that are designed to
reduce some of the risks.
Floating Rate/Variable Rate Notes. The Trust can purchase investments with
floating or variable interest rates. Variable rates are adjustable at
stated periodic intervals. Floating rates are adjusted automatically
according to a specified market rate or benchmark, such as the prime rate
of a bank. If the maturity of an investment is greater than one year, it
may be purchased only if it has a demand feature. That feature must permit
the Trust to recover the principal amount of the investment on not more
than thirty days' notice at any time, or at specified times not exceeding
one year from purchase.
"When-Issued" and "Delayed-Delivery" Transactions. The Trust can purchase
municipal securities on a "when-issued" basis and may purchase or sell
such securities on a "delayed- delivery" basis. These terms refer to
securities that have been created and for which a market exists, but which
are not available for immediate delivery. The Trust does not intend to
make such purchases for speculative purposes. During the period between
the purchase and settlement, no payment is made for the security and no
interest accrues to the buyer from the investment. There is a risk of loss
to the Trust if the value of the security declines prior to the settlement
date.
Municipal Lease Obligations. Municipal leases are used by state and local
government authorities to obtain funds to acquire land, equipment or
facilities. The Trust may invest in certificates of participation that
represent a proportionate interest in payments made under municipal lease
obligations. Some municipal lease obligations have a special risk that the
municipal government might not make lease or installment payments unless
money is appropriated for that purpose annually. If the government stops
making payments or transfers its payment obligations to a private entity,
the obligation could lose value or become taxable. Some of these
obligations might not have an active trading market and would be subject
to the fund's limits on "illiquid" securities described below. From time
to time the Trust may invest more than 5% of its net assets in municipal
lease obligations that the Manager has determined to be liquid under
guidelines set by the Trust's Board of Trustees.
Illiquid and Restricted Securities. Investments may be illiquid because they
have no active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted security is
one that has a contractual limit on resale or which cannot be sold
publicly until it is registered under federal securities laws. The Trust
will not invest more than 10% of its net assets in illiquid or restricted
securities. That limit does not apply to certain restricted securities
that are eligible for resale to qualified institutional purchasers. The
Manager monitors holdings of illiquid securities on an ongoing basis to
determine whether to sell any holdings to maintain adequate liquidity.
Difficulty in selling a security may result in a loss to the Trust or
additional costs.
DemandFeatures and Guarantees. The Trust may invest a significant percentage of
its assets in municipal securities that have demand features, guarantees
or similar credit and liquidity enhancements. A demand feature permits the
holder of the security to sell the security within a specified period of
time at a stated price and entitles the holder of the security to receive
an amount equal to the approximate amortized cost of the security plus
accrued interest. A guarantee permits the holder of the security to
receive, upon presentment to the guarantor, the principal amount of the
underlying security plus accrued interest when due or upon default. A
guarantee is the unconditional obligation of an entity other than the
issuer of the security. Demand features and guarantees can effectively:
o shorten the maturity of a variable or floating rate security,
o enhance the security's credit quality and
o enhance the ability to sell the security.
The aggregate price for a security subject to a demand feature or a
guarantee may be higher than the price that would otherwise be paid for the
security without the guarantee or the demand feature. When the Trust purchases
securities subject to guarantees or demand features, there is an increase in the
cost of the underlying security and a corresponding reduction in its yield.
Because the Trust invests in securities backed by banks and other financial
institutions, changes in the credit quality of these institutions could cause
losses to the Trust. Therefore, an investment in the Trust may be riskier than
an investment in other types of money market funds.
Repurchase Agreements. The Trust may enter into repurchase agreements. In a
repurchase transaction, the Trust buys a security and simultaneously sells
it to the vendor for delivery at a future date. Repurchase agreements must
be fully collateralized. However, if the vendor fails to pay the resale
price on the delivery date, the Trust may incur costs in disposing of the
collateral and may experience losses if there is any delay in its ability
to do so. The Trust will not enter into repurchase transactions that will
cause more than 10% of the Trusts net assets to be subject to repurchase
agreements having a maturity beyond seven days. There is no limit on the
amount of the Trust's net assets that may be subject to repurchase
agreements of 7 days or less. Income earned on repurchase transactions is
not tax exempt and accordingly, under normal market conditions, the Trust
will limit its investments in repurchase transactions to 20% of its total
assets.
Temporary Investments. In times of unstable or adverse market or economic
conditions, the Trust can invest up to 100% of its assets in temporary
defensive investments. These temporary investments can include:
o obligations issued or guaranteed by the U.S. government or its agencies
or instrumentalities,
o bankers' acceptances; taxable commercial paper rated in the highest
category by a Rating Organization,
o short-term taxable debt obligations rated in one of the two highest
rating categories of a Rating Organization,
o certificates of deposit of domestic banks, and
o repurchase agreements
To the extent the Trust assumes a temporary defensive position, a
significant portion of the Trust's distributions may be subject to federal and
New York State and local income taxes.
How the Trust is Managed
THE MANAGER. The investment adviser for the Trust is the Manager, Centennial
Asset Management Corporation. The Manager chooses the Trust's investments and
handles its day-to-day business. The Manager carries out its duties subject to
the policies established by the Board of Trustees, under an Investment Advisory
Agreement which states the Manager's responsibilities. The Agreement sets the
fees paid by the Trust to the Manager and describes the expenses that the Trust
is responsible to pay to conduct its business.
The Manager, a wholly-owned subsidiary of OppenheimerFunds, Inc., has
operated as an investment advisor since 1978. As of June 30, 1999, the Manager
and its affiliates managed assets of more than $110 billion, including private
accounts and investment companies having more than 5 million shareholder
accounts. The Manager is located at 6803 South Tucson Way, Englewood, Colorado
80112.
Portfolio Manager. Michael Carbuto is the portfolio manager of the Trust.
He is the person principally responsible for the day-to-day management
of the Trust's portfolio. Mr. Carbuto has had this responsibility
since June 1990. Mr. Carbuto is a Vice President of the Manager and
OppenheimerFunds, Inc. and is an officer and portfolio manager of other
funds for which the Manager serves as investment adviser.
Advisory Fees. Under the Investment Advisory Agreement, the Trust pays the
Manager an advisory fee at an annual rate that declines on additional
assets as the Trust grows. That fee is computed on the average annual net
assets of the Trust as of the close of each business day. The annual rates
are: 0.500% of the first $250 million of the Trust's net assets; 0.475% of
the next $250 million; 0.450% of the next $250 million; 0.425% of the next
$250 million and; 0.400% of net assets in excess of $1 billion. The Manager
has voluntarily undertaken to assume any expenses of the Trust in any
fiscal year they exceed 0.80% of the Trust's average annual net assets. The
Manager reserves the right to amend or terminate that expense assumption at
any time. The Trust's management fee for its fiscal year ended June 30,
1999 was 0.50% of the Trust's average annual net assets.
YEAR 2000 ISSUES. Because many computer software systems in use today cannot
distinguish the year 2000 from the year 1900, the markets for securities in
which the Trust invests could be detrimentally affected by computer failures
beginning January 1, 2000. Failure of computer systems used for securities
trading could result in settlement and liquidity problems for the Trust and
other investors. That failure could have a negative impact on the handling of
securities trades, pricing and accounting services. Data processing errors by
government issuers of securities could result in economic uncertainties. Issuers
might incur substantial costs in attempting to prevent or fix such errors, all
of which could have a negative effect on the Trust's investments and returns.
The Manager, the Distributor and the Transfer Agent have been working on
necessary changes to their computer systems to deal with the year 2000 and
expect that their systems will be adapted in time for that event, although there
cannot be assurance of success. Additionally, the services they provide depend
on the interaction of their computer systems with those of brokers, information
services, the Trust's custodian bank and other parties. Therefore, any failure
of the computer systems of those parties to deal with the year 2000 might also
have a negative effect on the services they provide to the Trust. The extent of
that risk cannot be ascertained at this time.
A B O U T Y O U R A C C O U N T
How to Buy Shares
HOW ARE SHARE PRICES DETERMINED? Shares of the Trust are sold at their offering
price, which is the net asset value per share without any sales charge. The net
asset value per share will normally remain fixed at $1.00 per share. However,
there is no guarantee that the Trust will be able to maintain a stable net asset
value of $1.00 per share.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the
Sub-Distributor (OppenheimerFunds Distributor, Inc. is the Sub-Distributor for
the Trust) receives the purchase order at its offices in Denver, Colorado, or
after any agent appointed by the Sub-Distributor receives the order and sends it
to the Sub-Distributor as described below.
How is the Trust's Net Asset Value Determined? The net asset value of shares
of the Trust is determined twice each day, at 12:00 Noon and at 4:00 P.M.,
on each day The New York Stock Exchange is open for trading (referred to
in this Prospectus as a "regular business day"). All references to time in
this Prospectus mean "New York time."
The net asset value per share is determined by dividing the value of the
Trust's net assets by the number of shares that are outstanding. Under a policy
adopted by the Board of Trustees, the Trust uses the amortized cost method to
value its securities to determine net asset value.
The shares of the Trust offered by this Prospectus are considered to be
Class A shares for the purposes of exchanging them or reinvesting distributions
among other eligible funds that offer more than one class of shares.
IS THERE A MINIMUM INVESTMENT? There is a minimum initial investment described
below depending on how you buy and pay for your shares. You can make additional
investments at any time with as little as $25. The minimum investment
requirements do not apply to reinvesting distributions from the Trust or other
eligible funds (a list of them appears in the Statement of Additional
Information, or you can ask your dealer or call the Transfer Agent) or
reinvesting distributions from unit investment trusts that have made
arrangements with the Distributor.
HOW ARE SHARES PURCHASED? You can buy shares in one of several ways:
Buying Shares Through a Dealer's Automatic Purchase and Redemption Program. You
can buy shares of the Trust through a broker-dealer that has a sales
agreement with the Trust's Sub-Distributor that allows shares to be
purchased through the dealer's Automatic Purchase and Redemption Program.
Shares of the Trust are sold mainly to customers of participating dealers
that offer the Trust's shares under these special purchase programs. If you
participate in an Automatic Purchase and Redemption Program established by
your dealer, your dealer buys shares of the Trust for your account with the
dealer. Program participants should also read the description of the
program provided by their dealer.
BuyingShares Through Your Dealer. If you do not participate in an Automatic
Purchase and Redemption Program, you may buy shares of the Trust through
any broker-dealer that has a sales agreement with the Sub-Distributor.
Your dealer will place your order with the Sub-Distributor on your behalf.
BuyingShares Directly Through the Sub-Distributor. You can also purchase shares
directly through the Sub-Distributor. Shareholders who make purchases
directly and hold shares in their own names are referred to as "direct
shareholders" in this Prospectus.
The Sub-Distributor may appoint servicing agents to accept purchase (and
redemption) orders, including broker-dealers that have established Automatic
Purchase and Redemption Programs. The Sub-Distributor, in its sole discretion,
may reject any purchase order for shares of the Trust.
AUTOMATIC PURCHASE AND REDEMPTION PROGRAMS? If you buy shares of the Trust
through your broker-dealer's Automatic Purchase and Redemption Program, your
broker-dealer will buy your shares for your Program Account and will hold your
shares in your broker-dealer's name. These purchases will be made under the
procedures described in "Guaranteed Payment" below. Your Automatic Purchase and
Redemption Program Account may have minimum investment requirements established
by your broker-dealer. You should direct all questions about your Automatic
Purchase and Redemption Program to your broker-dealer, because the Trust's
transfer agent does not have access to information about your account under that
Program.
Guaranteed Payment Procedures. Some broker-dealers may have arrangements with
the Sub-Distributor to enable them to place purchase orders for shares of
the Trust and to guarantee that the Trust's custodian bank will receive
Federal Funds to pay for the shares prior to specified times.
Broker-dealers whose clients participate in Automatic Purchase and
Redemption Programs may use these guaranteed payment procedures to pay for
purchases of shares of the Trust.
If the Distributor receives a purchase order before 12:00 Noon on a regular
business day with the broker-dealer's guarantee that the Trust's custodian
bank will receive payment for those shares in Federal Funds by 2:00 P.M.
on that same day, the order will be effected at the net asset value
determined at 12:00 Noon that day. Distributions will begin to accrue on
the shares on that day if the Federal Funds are received by the required
time.
If the Distributor receives a purchase order after 12:00 Noon on a regular
business day with the broker-dealer's guarantee that the Trust's custodian
bank will receive payment for those shares in Federal Funds by 2:00 P.M.
on that same day, the order will be effected at the net asset value
determined at 4:00 P.M. that day. Distributions will begin to accrue on
the shares on that day if the Federal Funds are received by the required
time.
If the Distributor receives a purchase order between 12:00 Noon and 4:00 P.M.
on a regular business day with the broker-dealer's guarantee that the
Trust's custodian bank will receive payment for those shares in Federal
Funds by 4:00 P.M. the next regular business day, the order will be
effected at the net asset value determined at 4:00 P.M. on the day the
order is received and distributions will begin to accrue on the shares
purchased on the next regular business day if the Federal Funds are
received by the required time.
HOW CAN DIRECT SHAREHOLDERS BUY SHARES? Direct shareholders may buy shares of
the Trust by completing a Centennial Funds New Account Application (enclosed
with this Prospectus) and sending it to the Sub-Distributor, OppenheimerFunds
Distributor, Inc., P.O. Box 5143, Denver, Colorado 80217. Payment must be made
by check or by Federal Funds wire as described below. If you don't list a dealer
on the application, OppenheimerFunds Distributor, Inc., the Sub-Distributor,
will act as your agent in buying the shares. However, we recommend that you
discuss your investment with a financial advisor before you make a purchase to
be sure that the Trust is appropriate for you.
The Trust intends to be as fully invested as possible to maximize its
yield. Therefore, newly-purchased shares normally will begin to accrue
distributions after the Sub-Distributor or its agent accepts your purchase
order, starting on the business day after the Trust receives Federal Funds from
the purchase payment.
Payment by Check. Direct shareholders may pay for purchases of shares of the
Trust by check. Send your check, payable to "OppenheimerFunds Distributor,
Inc.," along with your Application to the address listed above. For
initial purchases, your check should be payable in U.S. dollars and drawn
on a U.S. bank so that distributions will begin to accrue on the next
regular business day after the Distributor accepts your purchase order. If
your check is not drawn on a U.S. bank and is not payable in U.S. dollars,
the shares will not be purchased until the Distributor is able to convert
the purchase payment to Federal Funds. In that case distributions will
begin to accrue on the purchased shares on the next regular business day
after the purchase is made. The minimum initial investment for direct
shareholders by check is $500.
Payment by Federal Funds Wire. Direct shareholders may pay for purchases of
shares of the Trust by Federal Funds wire. You must also forward your
Application to the Sub-Distributor's address listed above. Before sending
a wire, call the Sub-Distributor's Wire Department at 1-800-525-9310
(toll-free from within the U.S.) or 303-768-3200 (from outside the U.S.)
to notify the Sub-Distributor of the wire, and to receive further
instructions.
Distributions will begin to accrue on the purchased shares on the purchase
date that is a regular business day if the Federal Funds from your wire and the
Application are received by the Sub-Distributor and accepted by 12:00 Noon. If
the Distributor receives the Federal Funds from your wire and accepts the
purchase order between 12:00 Noon and 4:00 P.M on the purchase date,
distributions will begin to accrue on the shares on the next regular business
day. The minimum investment by Federal Funds Wire is $2,500.
Buying Shares Through Automatic Investment Plans. Direct shareholders can
purchase shares of the Trust automatically each month by authorizing the
Trust's Transfer Agent to debit your account at a U.S. domestic bank or
other financial institution. Details are in the Automatic Investment Plan
Application and the Statement of Additional Information. The minimum
monthly purchase is $25.
Service (12b-1) Plans. The Trust has adopted a service plan. It reimburses the
Distributor for a portion of its costs incurred for services provided to
accounts that hold shares of the Trust. Reimbursement is made quarterly at
an annual rate of up to 0.20% of the average annual net assets of the
Trust. The Distributor currently uses all of those fees to pay dealers,
brokers, banks and other financial institutions quarterly for providing
personal services and maintenance of accounts of their customers that hold
shares of the Trust.
How to Sell Shares
You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your order
is received in proper form (which means that it must comply with the procedures
described below) and is accepted by the Transfer Agent.
HOW CAN PROGRAM PARTICIPANTS SELL SHARES? If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker-dealer, you must redeem
shares held in your Program Account by contacting your broker-dealer firm, or
you can redeem shares by writing checks as described below. You should not
contact the Trust or its Transfer Agent directly to redeem shares held in your
Program Account. You may also arrange (but only through your broker-dealer) to
have the proceeds of redeemed Trust shares sent by Federal Funds wire, as
described below in "Sending Redemption Proceeds by Wire."
HOW CAN DIRECT SHAREHOLDERS REDEEM SHARES? Direct shareholders can redeem their
shares by writing a letter to the Transfer Agent, Shareholder Services, Inc., by
using checkwriting privileges, or by telephone. You can also set up Automatic
Withdrawal Plans to redeem shares on a regular basis. If you have questions
about any of these procedures, and especially if you are redeeming shares in a
special situation, such as due to the death of the owner or from a retirement
plan account, please call the Transfer Agent for assistance first, at
1-800-525-9310.
Certain Requests Require a Signature Guarantee. To protect you and the Trust
from fraud, the following redemption requests for accounts of direct
shareholders must be in writing and must include a signature guarantee
(although there may be other situations that also require a signature
guarantee):
o You wish to redeem $100,000 or more and receive a check
o The redemption check is not payable to all shareholders listed on the
account statement
o The redemption check is not sent to the address of record on your
account statement
o Shares are being transferred to an account with a different owner or
name
o Shares are being redeemed by someone (such as an Executor) other than the
owners listed in the account registration
Where Can Direct Shareholders Have Their Signatures Guaranteed? The Transfer
Agent will accept a guarantee of your signature by a number of financial
institutions, including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal securities
or government securities, or
o a U.S. national securities exchange, a registered securities
association or a clearing agency.
If you are signing on behalf of a corporation, partnership or other
business or as a fiduciary, you must also include your title in the signature.
How Can Direct Shareholders Sell Shares by Mail? Write a letter to the
Transfer Agent that includes:
o Your name
o The Trust's name
o Your account number (from your account statement)
o The dollar amount or number of shares to be redeemed
o Any special payment instructions
o Any share certificates for the shares you are selling
o The signatures of all registered owners exactly as listed in the
account statement, and
o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares (such as Letters
Testamentary of an Executor).
- ---------------------------------------- ---------------------------------------
Use the following address for Send courier or express mail
requests to: requests to:
Shareholder Services, Inc. Shareholder Services, Inc.
P.O. Box 5143 10200 E. Girard Avenue, Building D
Denver, Colorado 80217-5270 Denver, Colorado 80231
- --------------------------------------------------------------------------------
How Can Direct Shareholders Sell Shares by Telephone? Direct shareholders and
their dealer representative of record may also sell shares by telephone.
To enable you to receive the redemption price on a regular business day,
the Transfer Agent must receive the request by 4:00 P.M. on that day. You
may not redeem shares held under a share certificate or in a retirement
account by telephone. To redeem shares through a service representative,
call 1-800-525-9310. The check for proceeds of telephone redemptions will
be payable to the shareholder(s) of record and will be sent to the address
of record for the account. Up to $100,000 may be redeemed by telephone in
any 7-day period. Telephone redemptions are not available within 30 days
of changing the address on an account.
Sending Redemption Proceeds By Wire. While the Transfer Agent normally sends
direct shareholders their money by check, you can arrange to have the
proceeds of the shares you sell sent by Federal Funds wire to a bank
account you designate. It must be a commercial bank that is a member of
the Federal Reserve wire system. The minimum redemption you can have sent
by wire is $2,500. There is a $10 fee for each wire. To find out how to
set up this feature on an account or to arrange a wire, direct
shareholders should call the Transfer Agent at 1-800-525-9310. If you hold
your shares through your dealer's Automatic Purchase and Redemption
Program, you must contact your dealer to arrange a Federal Funds wire.
Can Direct Shareholders Submit Requests by Fax? Direct shareholders may send
requests for certain types of account transactions to the Transfer Agent
by fax (telecopier). Please call 1-800-525-9310 for information about
which transactions may be handled this way. Transaction requests submitted
by fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.
HOW DO I WRITE CHECKS AGAINST MY ACCOUNT? Automatic Purchase and Redemption
Program participants may write checks against an account held under their
Program, but must arrange for checkwriting privileges through their dealers.
Direct shareholders may write checks against their account by requesting that
privilege on the account Application or by contacting the Transfer Agent for
signature cards. They must be signed (with a signature guarantee) by all owners
of the account and returned to the Transfer Agent so that checks can be sent to
you to use. Shareholders with joint accounts can elect in writing to have checks
paid over the signature of one owner.
o Checks can be written to the order of whomever you wish, but may not be
cashed at the bank the checks are payable through or the Trust's custodian
bank
o Checkwriting privileges are not available for accounts holding shares that
are subject to a contingent deferred sales charge.
o Checks must be written for at least $250.
o Checks cannot be paid if they are written for more than your account
value.
o You may not write a check that would require the redemption of shares that
were purchased by check or Automatic Investment Plan payments within the
prior 10 days.
o Don't use your checks if you changed your account number, until you
receive new checks.
WILL I PAY A SALES CHARGE WHEN I SELL MY SHARES? The Trust does not charge a
fee to redeem shares that were bought directly or by reinvesting
distributions from the Trust or another Centennial Trust or eligible fund.
Generally, there is no fee to redeem shares of the Trust bought by exchange
of shares of another Centennial Trust or eligible fund. However,
if you acquired shares of the Trust by exchanging Class A shares of another
eligible fund that you bought subject to the Class A contingent deferred
sales charge, and
those shares are still subject to the Class A contingent deferred sales
charge when you exchange them into the Trust, then
you will pay the contingent deferred sales charge if you redeem those shares
from the Trust within 18 months of the purchase date of the shares of the
fund you exchanged.
How to Exchange Shares
Shares of the Trust can be exchanged for shares of certain other Centennial
Trusts or other eligible funds, depending on whether you own your shares through
your dealer's Automatic Purchase and Redemption Program or as a direct
shareholder.
HOW CAN PROGRAM PARTICIPANTS EXCHANGE SHARES? If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker-dealer, you may
exchange shares held in your Program Account for shares of Centennial Money
Market Trust, Centennial Government Trust, Centennial Tax Exempt Trust,
Centennial California Tax Exempt Trust and Centennial New York Tax Exempt Trust
(referred to in this Prospectus as the "Centennial Trusts"), if available for
sale in your state of residence, by contacting your broker-dealer and obtaining
a Prospectus of the selected Centennial Trust.
HOW CAN DIRECT SHAREHOLDERS EXCHANGE SHARES? Direct shareholders can exchange
shares of the Trust for Class A shares of certain eligible funds listed in the
Statement of Additional Information. To exchange shares, you must meet several
conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of the Trust and the fund whose shares you want to buy
must offer the exchange privilege.
o You must hold the shares you buy when you establish your account for at
least 7 days before you can exchange them. After the account is open 7
days, you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund you purchase
by exchange.
o Before exchanging into a fund, you must obtain and read its prospectus.
Shares of a particular class of an eligible fund may be exchanged only for
shares of the same class in other eligible funds. For example, you can exchange
shares of the Trust only for Class A shares of another fund, and you can
exchange only Class A shares of another eligible fund for shares of the Trust.
You may pay a sales charge when you exchange shares of the Trust. Because
shares of the Trust are sold without sales charge, in some cases you may pay a
sales charge when you exchange shares of the Trust for shares of other eligible
funds that are sold subject to a sales charge. You will not pay a sales charge
when you exchange shares of the Trust purchased by reinvesting distributions
from the Trust or other eligible funds (except Oppenheimer Cash Reserves), or
when you exchange shares of the Trust purchased by exchange of shares of an
eligible fund on which you paid a sales charge.
For tax purposes, exchanges of shares involve a sale of the shares of the
fund you own and a purchase of the shares of the other fund, which may result in
a capital gain or loss. Since shares of the Trust normally maintain a $1.00 net
asset value, in most cases you should not realize a capital gain or loss when
you sell or exchange your shares.
Direct shareholders can find a list of eligible funds currently available
for exchanges in the Statement of Additional Information or you can obtain one
by calling a service representative at 1-800-525-9310. The list of eligible
funds can change from time to time.
How Do Direct Shareholders Submit Exchange Requests? Direct shareholders may
request exchanges in writing or by telephone:
o Written Exchange Requests. Complete an Exchange Authorization Form, signed
by all owners of the account. Send it to the Transfer Agent at the address
on the back cover.
o Telephone Exchange Requests. Telephone exchange requests may be made by
calling a service representative at 1-800-525-9310. Telephone exchanges
may be made only between accounts that are registered with the same
name(s) and address. Shares held under certificates may not be exchanged
by telephone.
ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o Shares are normally redeemed from one fund and purchased from the other
fund in the exchange transaction on the same regular business day on
which the Transfer Agent receives an exchange request that conforms to
the policies described above. Requests for exchanges to any of the
Centennial Trusts must be received by the Transfer Agent by 4:00 P.M.
on a regular business day to be effected that day. The Transfer Agent
must receive requests to exchange shares of the Trust to funds other
than the Centennial Trusts on a regular business day by the close of
The New York Stock Exchange that day. The close is normally 4:00 P.M.
but may be earlier on some days.
o Either fund may delay the purchase of shares of the fund you are
exchanging into up to seven days if it determines it would be
disadvantaged by a same-day exchange. For example, the receipt of the
multiple exchange requests from a "market timer" might require a fund to
sell securities at a disadvantageous time and/or price.
o Because excessive trading can hurt fund performance and harm shareholders,
the Trust reserves the right to refuse any exchange request that may, in
the opinion of the Trust, be disadvantageous, or to refuse multiple
exchange requests submitted by a shareholder or dealer.
o The Trust may amend, suspend or terminate the exchange privilege at any
time. The Trust will provide you notice whenever it is required to do so
by applicable law, but it may impose these changes at any time for
emergency purposes.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will
be exchanged.
Shareholder Account Rules and Policies
More information about the Trust's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
The offering of shares of the Trust may be suspended during any period in
which the Trust's determination of net asset value is suspended, and the
offering may be suspended by the Board of Trustees at any time it believes
it is in the Trust's best interest to do so.
Telephone Transaction Privileges for purchases, redemptions or exchanges may be
modified, suspended or terminated by the Trust at any time. If an account
has more than one owner, the Trust and the Transfer Agent may rely on the
instructions of any one owner. Telephone privileges apply to each owner of
the account and the dealer representative of record for the account unless
the Transfer Agent receives cancellation instructions from an owner of the
account.
The Transfer Agent will record any telephone calls to verify data concerning
transactions. It has adopted other procedures to confirm that telephone
instructions are genuine, by requiring callers to provide tax
identification numbers and other account data and by confirming such
transactions in writing. The Transfer Agent and the Trust will not be
liable for losses or expenses arising out of telephone instructions
reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
receives all required documents in proper form. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements for
redemptions stated in this Prospectus.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by check
or by Federal Funds wire (as elected by the shareholder) within seven days
after the Transfer Agent receives redemption instructions in proper form.
However, under unusual circumstances determined by the Securities and
Exchange Commission, payment may be delayed or suspended. For accounts
registered in the name of a broker-dealer, payment will normally be
forwarded within three business days after redemption.
The Transfer Agent may delay forwarding a check or making a payment via
Federal Funds wire for recently purchased shares, but only until the
purchase payment has cleared. That delay may be as much as 10 days from
the date the shares were purchased. That delay may be avoided if you
purchase shares by Federal Funds wire or certified check, or arrange with
your bank to provide telephone or written assurance to the Transfer Agent
that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Trust if the
account value has fallen below $200 for reasons other than the fact that
the market value of shares has dropped. In some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
"Backup Withholding" of Federal income tax may be applied against taxable
dividends, distributions and redemption proceeds (including exchanges) if
you fail to furnish the Trust your correct, certified Social Security or
Employer Identification Number when you sign your application, or if you
under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Trust will
mail only one copy of each annual and semi-annual report to shareholders
having the same last name and address on the Trust's records. However,
each shareholder may call the Transfer Agent at 1-800-525-9310 to ask that
copies of those materials be sent personally to that shareholder.
Dividends and Tax Information
DIVIDENDS. The Trust intends to declare dividends from net investment income
each regular business day and to pay those dividends to shareholders monthly on
a date selected by the Board of Trustees. To maintain a net asset value of $1.00
per share, the Trust might withhold dividends or make distributions from capital
or capital gains. Daily dividends will not be declared or paid on newly
purchased shares until Federal Funds are available to the Trust from the
purchase payment for such shares.
CAPITAL GAINS. The Trust normally holds its securities to maturity and therefore
will not usually pay capital gains. Although the Trusts do not seek capital
gains, the Trust could realize capital gains on the sale of its portfolio
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains in December of each year. The Trust may make
supplemental distributions of dividends and capital gains following the end of
its fiscal year.
What Choices Do I Have for Receiving Distributions? For Automatic Purchase and
Redemption Programs, dividends and distributions are automatically
reinvested in additional shares of the selected Trust. For direct
shareholders, when you open your account, you should specify on your
application how you want to receive your dividends and distributions.
You have four options:
o Reinvest All Distributions in the Trust. You can elect to reinvest all
dividends and capital gains distributions in additional shares of the
Trust.
o Reinvest Capital Gains Only. You can elect to reinvest capital gains
distributions in the Trust while receiving dividends by check or having
them sent to your bank account.
o Receive All Distributions in Cash. You can elect to receive a check
for all dividends and capital gains distributions or have them sent to
your bank.
o Reinvest Your Distributions in Another Account. You can reinvest all
distributions in the same class of shares of another eligible fund
account you have established.
Under the terms of Automatic Purchase and Redemption Programs, your
broker-dealer can redeem shares to satisfy debit balances arising in your
Program Account. If that occurs, you will be entitled to dividends on those
shares as described in your Program Agreements.
TAXES. Exempt Interest dividends paid from net investment income earned by the
Trust on municipal securities will be excludable from gross income for Federal
income tax purposes. A portion of a dividend that is derived from interest paid
on certain "private activity bonds" may be an item of tax preference if you are
subject to the alternative minimum tax. If the Trust earns interest on taxable
investments, any dividends derived from those earnings will be taxable as
ordinary income to shareholders.
Dividends paid by the Trust from interest it receives from New York
municipal securities will be exempt from New York State and New York City
personal income taxes. Dividends paid from municipal securities of other issuers
normally will be treated as taxable ordinary income subject to New York State
and New York City personal income taxes. Distributions of any net long-term
capital gains distribution will be taxable as ordinary income for New York State
and New York City personal income tax purposes.
Dividends and capital gains distributions may be subject to state or local
taxes. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you have held your
shares. Dividends paid from short-term capital gains are taxable as ordinary
income. Whether you reinvest your distributions in additional shares or take
them in cash, the tax treatment is the same. Every year the Trust will send you
and the IRS a statement showing the amount of any taxable distribution you
received in the previous year as well as the amount of your tax-exempt income.
Remember, There May be Taxes on Transactions. Because the Trust seeks to
maintain a stable $1.00 per share net asset value, it is unlikely that you
will have a capital gain or loss when you sell or exchange your shares. A
capital gain or loss is the difference between the price you paid for the
shares and the price you received when you sold them. Any capital gain is
subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by the Trust
may be considered a non-taxable return of capital to shareholders. If that
occurs, it will be identified in notices to shareholders.
This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax adviser
about the effect of an investment in the Trust on your particular tax situation.
<PAGE>
Financial Highlights
The Financial Highlights Table is presented to help you understand the Trust's
financial performance for the past 5 fiscal years. Certain information reflects
financial results for a single Trust share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Trust (assuming reinvestment of all dividends and distributions). This
information for the past 5 fiscal years ended June 30, 1999 has been audited by
Deloitte & Touche LLP, the Trust's independent auditors, whose report, along
with the Trust's financial statements, is included in the Statement of
Additional Information, which is available on request.
<PAGE>
<TABLE>
<CAPTION>
Year Ended June 30,
1999 1998 1997 1996 1995
==========================================================================================================================
PER SHARE OPERATING DATA
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Income from investment operations - net
investment income and net realized gain .02 .03 .03 .03 .03
Dividends and distributions to shareholders (.02) (.03) (.03) (.03) (.03)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======================================================================
==========================================================================================================================
TOTAL RETURN(1) 2.42% 2.87% 2.76% 2.79% 2.85%
==========================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $61,792 $56,807 $48,896 $39,807 $35,846
- --------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $59,345 $53,923 $45,363 $42,351 $29,590
- --------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 2.38% 2.85% 2.73% 2.76% 2.84%
Expenses, before voluntary assumption by the
Manager(3) 0.89% 0.89% 0.88% 0.93% 0.95%
Expenses, net of voluntary assumption by the Manager 0.80% 0.80% 0.80% 0.80% 0.80%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns reflect
changes in net investment income only. Total returns are not annualized for
periods of less than one full year.
2. Annualized for periods less than one full
year.
3. The expense ratio reflects the effect of gross expenses paid indirectly by
the Trust.
<PAGE>
INFORMATION AND SERVICES
For More Information On Centennial New York Tax Exempt Trust:
The following additional information about the Trust is available without charge
upon request:
STATEMENT OF ADDITIONAL INFORMATION This document includes additional
information about the Trust's investment policies, risks, and operations. It is
incorporated by reference into this Prospectus (which means it is legally part
of this Prospectus).
ANNUAL AND SEMI-ANNUAL REPORTS Additional information about the Trust's
investments and performance is available in the Trust's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Trust's
performance during its last fiscal year.
How to Get More Information:
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, and other information about the Trust or your account:
- --------------------------------------------------------------------------------
By Telephone: Call Shareholder Services, Inc.
toll-free:
1-800-525-9310
- --------------------------------------------------------------------------------
By Mail: Write to:
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
- --------------------------------------------------------------------------------
You can also obtain copies of the Statement of Additional Information and other
Trust documents and reports by visiting the SEC's Public Reference Room in
Washington, D.C. (Phone 1-800-SEC-0330) or the SEC's Internet web site at
http://www.sec.gov. Copies may be obtained upon payment of a duplicating fee by
writing to the SEC's Public Reference Section, Washington, D.C. 20549-6009.
No one has been authorized to provide any information about the Trust or to make
any representations about the Trust other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Trust, nor a
solicitation of an offer to buy shares of the Trust, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.
The Trust's shares are distributed by:
SEC File No. 811-5584 Centennial Asset Management Corporation
PR0780.001.1199
Printed on recycled paper
<PAGE>
APPENDIX TO THE PROSPECTUS OF
CENTENNIAL NEW YORK TAX EXEMPT TRUST
Graphic material included in Prospectus of the Centennial New York Tax
Exempt Trust (the "Trust") under the heading: "Annual Total Returns (as of 12/31
each year)."
A bar chart will be included in the Prospectus of the Trust depicting the
annual total returns of a hypothetical investment in shares of the Trust for
each of the ten most recent calendar years. Set forth below are the relevant
data points that will appear on the bar chart.
- --------------------------------------------------------------------
Calendar Year Ended: Annual Total Returns
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/89 N/A
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/90 5.22%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/91 3.88%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/92 2.19%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/93 1.62%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/94 2.03%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/95 3.14%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/96 2.67%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/97 2.88%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
12/31/98 2.66%
- --------------------------------------------------------------------
<PAGE>
- ------------------------------------------------------------------------------
Centennial New York Tax Exempt Trust
- ------------------------------------------------------------------------------
6803 South Tucson Way, Englewood, Colorado 80112
1-800-525-9310
Statement of Additional Information dated November 1, 1999
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Trust and supplements
information in the Prospectus dated November 1, 1999. It should be read together
with the Prospectus, which may be obtained by writing to the Trust's Transfer
Agent, Shareholder Services, Inc., at P.O. Box 5143, Denver, Colorado 80217, or
by calling the Transfer Agent at the toll-free number shown above.
Contents
Page
About the Trust
Additional Information about the Trust's Investment Policies and Risks.....
The Trust's Investment Policies.......................................
Other Investment Strategies...........................................
Investment Restrictions...............................................
How the Trust is Managed...................................................
Organization and History..............................................
Trustees and Officers of the Trust....................................
The Manager...........................................................
Performance of the Trust...................................................
About Your Account
How To Buy Shares..........................................................
How To Sell Shares............................................................
How To Exchange Shares.....................................................
Dividends and Taxes........................................................
Additional Information About the Trust.....................................
Financial Information About the Trust
Independent Auditors' Report...............................................
Financial Statements.......................................................
Appendix A: Securities Ratings..........................................A-1
Appendix B: Industry Classifications....................................B-1
Appendix C: Tax Equivalent Yield Tables.................................C-1
<PAGE>
A B O U T T H E T R U S T
Additional Information About the Trust's Investment Policies and Risks
The investment objective and the principal investment policies of the Trust are
described in the Prospectus. This Statement of Additional Information contains
supplemental information about those policies and the types of securities that
the Trust's investment manager, Centennial Asset Management Corporation, will
select for the Trust. Additional explanations are also provided about the
strategies the Trust may use to try to achieve its objective.
The Trust's Investment Policies. The composition of the Trust's portfolio and
the techniques and strategies that the Trust's Manager uses in selecting
portfolio securities will vary over time. The Trust is not required to use all
of the investment techniques and strategies described below at all times in
seeking its goal. It may use some of the special investment techniques and
strategies at some times or not at all.
The Trust will not make investments with the objective of seeking capital
growth. However, the value of the securities held by the Trust may be affected
by changes in general interest rates. Because the current value of debt
securities varies inversely with changes in prevailing interest rates, if
interest rates increase after a security is purchased, that security would
normally decline in value. Conversely, if interest rates decrease after a
security is purchased, its value would rise. However, those fluctuations in
value will not generally result in realized gains or losses to the Trust since
the Trust does not usually intend to dispose of securities prior to their
maturity. A debt security held to maturity is redeemable by its issuer at full
principal value plus accrued interest.
The Trust may sell securities prior to their maturity, to attempt to take
advantage of short-term market variations, or because of a revised credit
evaluation of the issuer or other considerations. The Trust may also do so to
generate cash to satisfy redemptions of Trust shares. In such cases, the Trust
may realize a capital gain or loss on the security.
There are variations in the credit quality of municipal securities, both
within a particular rating classification and between classifications. These
variations depend on numerous factors. The yields of municipal securities depend
on a number of factors, including general conditions in the municipal securities
market, the size of a particular offering, the maturity of the obligation and
rating (if any) of the issue. These factors are discussed in greater detail
below.
Municipal Securities. The types of municipal securities in which the Trust may
invest are described in the Prospectus under "About the Trust's Investments."
Municipal securities are generally classified as general obligation bonds,
revenue bonds and notes. A discussion of the general characteristics of these
principal types of municipal securities follows below.
|X| Municipal Bonds. We have classified municipal securities having a
maturity (when the security is issued) of more than one year as "municipal
bonds." The principal classifications of long-term municipal bonds are "general
obligation" and "revenue" (including "industrial development") bonds. They may
have fixed, variable or floating rates of interest, as described below.
Some bonds may be "callable," allowing the issuer to redeem them before
their maturity date. To protect bondholders, callable bonds may be issued with
provisions that prevent them from being called for a period of time. Typically,
that is 5 to 10 years from the issuance date. When interest rates decline, if
the call protection on a bond has expired, it is more likely that the issuer may
call the bond. If that occurs, the Trust might have to reinvest the proceeds of
the called bond in bonds that pay a lower rate of return.
|_| General Obligation Bonds. The basic security behind general
obligation bonds is the issuer's pledge of its full faith and credit and taxing
power, if any, for the repayment of principal and the payment of interest.
Issuers of general obligation bonds include states, counties, cities, towns, and
regional districts. The proceeds of these obligations are used to fund a wide
range of public projects, including construction or improvement of schools,
highways and roads, and water and sewer systems. The rate of taxes that can be
levied for the payment of debt service on these bonds may be limited or
unlimited. Additionally, there may be limits as to the rate or amount of special
assessments that can be levied to meet these obligations.
|_| Revenue Bonds. The principal security for a revenue bond is
generally the net revenues derived from a particular facility, group of
facilities, or, in some cases, the proceeds of a special excise tax or other
specific revenue source. Revenue bonds are issued to finance a wide variety of
capital projects. Examples include electric, gas, water and sewer systems;
highways, bridges, and tunnels; port and airport facilities; colleges and
universities; and hospitals.
Although the principal security for these types of bonds may vary from
bond to bond, many provide additional security in the form of a debt service
reserve fund that may be used to make principal and interest payments on the
issuer's obligations. Housing finance authorities have a wide range of security,
including partially or fully insured mortgages, rent subsidized and/or
collateralized mortgages, and/or the net revenues from housing or other public
projects. Some authorities provide further security in the form of a state's
ability (without obligation) to make up deficiencies in the debt service reserve
fund.
|_| Industrial Development Bonds. Industrial development bonds are
considered municipal bonds if the interest paid is exempt from federal income
tax. They are issued by or on behalf of public authorities to raise money to
finance various privately operated facilities for business and manufacturing,
housing, sports, and pollution control. These bonds may also be used to finance
public facilities such as airports, mass transit systems, ports, and parking.
The payment of the principal and interest on such bonds is dependent solely on
the ability of the facility's user to meet its financial obligations and the
pledge, if any, of real and personal property financed by the bond as security
for those payments.
|_| Private Activity Municipal Securities. The Tax Reform Act of 1986
(the "Tax Reform Act") reorganized, as well as amended, the rules governing tax
exemption for interest on certain types of municipal securities. The Tax Reform
Act generally did not change the tax treatment of bonds issued in order to
finance governmental operations. Thus, interest on general obligation bonds
issued by or on behalf of state or local governments, the proceeds of which are
used to finance the operations of such governments, continues to be tax-exempt.
However, the Tax Reform Act limited the use of tax-exempt bonds for
non-governmental (private) purposes. More stringent restrictions were placed on
the use of proceeds of such bonds. Interest on certain private activity bonds is
taxable under the revised rules. There is an exception for "qualified"
tax-exempt private activity bonds, for example, exempt facility bonds including
certain industrial development bonds, qualified mortgage bonds, qualified
Section 501(c)(3) bonds, and qualified student loan bonds. Normally, the Trust
will not invest more than 20% of its total assets in private activity municipal
securities or other taxable investments.
In addition, limitations as to the amount of private activity bonds which
each state may issue were revised downward by the Tax Reform Act, which will
reduce the supply of such bonds. The value of the Trust's portfolio could be
affected if there is a reduction in the availability of such bonds.
Interest on certain private activity bonds issued after August 7, 1986,
which continues to be tax-exempt, will be treated as a tax preference item
subject to the alternative minimum tax (discussed below) to which certain
taxpayers are subject. The Trust may hold municipal securities the interest on
which (and thus a proportionate share of the exempt-interest dividends paid by
the Trust) will be subject to the federal alternative minimum tax on individuals
and corporations.
The federal alternative minimum tax is designed to ensure that all persons
who receive income pay some tax, even if their regular tax is zero. This is
accomplished in part by including in taxable income certain tax preference items
that are used to calculate alternative minimum taxable income. The Tax Reform
Act made tax-exempt interest from certain private activity bonds a tax
preference item for purposes of the alternative minimum tax on individuals and
corporations. Any exempt-interest dividend paid by a regulated investment
company will be treated as interest on a specific private activity bond to the
extent of the proportionate relationship the interest the investment company
receives on such bonds bears to all its exempt interest dividends.
In addition, corporate taxpayers subject to the alternative minimum tax
may, under some circumstances, have to include exempt-interest dividends in
calculating their alternative minimum taxable income. That could occur in
situations where the "adjusted current earnings" of the corporation exceeds its
alternative minimum taxable income.
To determine whether a municipal security is treated as a taxable private
activity bond, it is subject to a test for: (a) a trade or business use and
security interest, or (b) a private loan restriction. Under the trade or
business use and security interest test, an obligation is a private activity
bond if: (i) more than 10% of the bond proceeds are used for private business
purposes and (ii) 10% or more of the payment of principal or interest on the
issue is directly or indirectly derived from such private use or is secured by
the privately used property or the payments related to the use of the property.
For certain types of uses, a 5% threshold is substituted for this 10% threshold.
The term "private business use" means any direct or indirect use in a
trade or business carried on by an individual or entity other than a state or
municipal governmental unit. Under the private loan restriction, the amount of
bond proceeds that may be used to make private loans is limited to the lesser of
5% or $5.0 million of the proceeds. Thus, certain issues of municipal securities
could lose their tax-exempt status retroactively if the issuer fails to meet
certain requirements as to the expenditure of the proceeds of that issue or the
use of the bond-financed facility. The Trust makes no independent investigation
of the users of such bonds or their use of proceeds of the bonds. If the Trust
should hold a bond that loses its tax-exempt status retroactively, there might
be an adjustment to the tax-exempt income previously distributed to
shareholders.
Additionally, a private activity bond that would otherwise be a qualified
tax-exempt private activity bond will not, under Internal Revenue Code Section
147(a), be a qualified bond for any period during which it is held by a person
who is a "substantial user" of the facilities or by a "related person" of such a
substantial user. This "substantial user" provision applies primarily to exempt
facility bonds, including industrial development bonds. The Trust may invest in
industrial development bonds and other private activity bonds. Therefore, the
Trust may not be an appropriate investment for entities which are "substantial
users" (or persons related to "substantial users") of such exempt facilities.
Those entities and persons should consult their tax advisers before purchasing
shares of the Trust.
A "substantial user" of such facilities is defined generally as a
"non-exempt person who regularly uses part of a facility" financed from the
proceeds of exempt facility bonds. Generally, an individual will not be a
"related person" under the Internal Revenue Code unless such individual or the
individual's immediate family (spouse, brothers, sisters and immediate
descendants) own directly or indirectly in the aggregate more than 50% in value
of the equity of a corporation or partnership which is a "substantial user" of a
facility financed from the proceeds of exempt facility bonds.
|X| Municipal Notes. Municipal securities having a maturity (when the
security is issued) of less than one year are generally known as municipal
notes. Municipal notes generally are used to provide for short-term working
capital needs. Some of the types of municipal notes the Trust can invest in are
described below.
|_| Tax Anticipation Notes. These are issued to finance working capital
needs of municipalities. Generally, they are issued in anticipation of various
seasonal tax revenue, such as income, sales, use or other business taxes, and
are payable from these specific future taxes.
|_| Revenue Anticipation Notes. These are notes issued in
expectation of receipt of other types of revenue, such as federal revenues
available under federal revenue-sharing programs.
|_| Bond Anticipation Notes. Bond anticipation notes are issued to
provide interim financing until long-term financing can be arranged. The
long-term bonds that are issued typically also provide the money for the
repayment of the notes.
|_| Construction Loan Notes. These are sold to provide project
construction financing until permanent financing can be secured. After
successful completion and acceptance of the project, it may receive permanent
financing through public agencies, such as the Federal Housing Administration.
|X| Tax Exempt Commercial Paper. This type of short-term obligation
(usually having a maturity of 270 days or less) is issued by a municipality
to meet current working capital needs.
|X| Municipal Lease Obligations. The Trust's investments in municipal
lease obligations may be through certificates of participation that are offered
to investors by public entities. Municipal leases may take the form of a lease
or an installment purchase contract issued by a state or local government
authority to obtain funds to acquire a wide variety of equipment and facilities.
Some municipal lease securities may be deemed to be "illiquid" securities.
Their purchase by the Trust would be limited as described below in "Illiquid
Securities." From time to time the Trust may invest more than 5% of its net
assets in municipal lease obligations that the Manager has determined to be
liquid under guidelines set by the Board of Trustees. Those guidelines require
the Manager to evaluate:
|_| the frequency of trades and price quotations for such securities;
|_| the number of dealers or other potential buyers willing to purchase or
sell such securities;
|_| the availability of market-makers; and
|_| the nature of the trades for such securities.
Municipal leases have special risk considerations. Although lease
obligations do not constitute general obligations of the municipality for which
the municipality's taxing power is pledged, a lease obligation is ordinarily
backed by the municipality's covenant to budget for, appropriate and make the
payments due under the lease obligation. However, certain lease obligations
contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in future years unless
money is appropriated for that purpose on a yearly basis. While the obligation
might be secured by the lease, it might be difficult to dispose of that property
in case of a default.
Projects financed with certificates of participation generally are not
subject to state constitutional debt limitations or other statutory requirements
that may apply to other municipal securities. Payments by the public entity on
the obligation underlying the certificates are derived from available revenue
sources. That revenue might be diverted to the funding of other municipal
service projects. Payments of interest and/or principal with respect to the
certificates are not guaranteed and do not constitute an obligation of a state
or any of its political subdivisions.
In addition to the risk of "non-appropriation," municipal lease securities
do not have as highly liquid a market as conventional municipal bonds. Municipal
leases, like other municipal debt obligations, are subject to the risk of
non-payment of interest or repayment of principal by the issuer. The ability of
issuers of municipal leases to make timely lease payments may be adversely
affected in general economic downturns and as relative governmental cost burdens
are reallocated among federal, state and local governmental units. A default in
payment of income would result in a reduction of income to the Trust. It could
also result in a reduction in the value of the municipal lease and that, as well
as a default in repayment of principal, could result in a decrease in the net
asset value of the Trust. While the Trust holds such securities, the Manager
will also evaluate the likelihood of a continuing market for these securities
and their credit quality.
Ratings of Securities - Portfolio Quality and Diversification. Under Rule 2a-7
of the Investment Company Act, the Trust uses the amortized cost method to value
its portfolio securities to determine the Trust's net asset value per share.
Rule 2a-7 imposes requirements for the maturity, quality and diversification of
the securities which the Trust buys. The Trust may purchase only those
securities that the Manager, under procedures approved by the Board of Trustees,
has determined have minimal credit risk and, as such, are "eligible securities".
|_| Quality. Eligible securities are securities that have received a
rating in one of the two highest short-term rating categories by a rating
organization. Rating organizations are designated by the SEC. Eligible
securities may be "first tier" or "second tier" securities. First tier
securities are those that have received a rating in the highest category for
short term debt obligations by at least two rating organizations. If only one
rating organization has rated the security, it must be rated in the highest
category for that rating organization. U.S. government securities and securities
issued by a registered money market mutual fund are also first tier securities.
The Trust may also buy second tier "conduit securities". These eligible
securities are securities rated by rating organizations but are not first tier
securities. Conduit securities are municipal securities such as industrial
development or revenue bonds issued to finance non-government projects. The
payment of the principal and interest on a conduit security is not the
obligation of the municipal issuer, but is the obligation of another person who
is ultimately responsible for the payment of principal and interest, such as the
user of the facility. The Trust may not invest more than 5% of its total assets
in second tier conduit securities.
The Trust may also buy unrated securities that the Manager determines are
comparable in quality to a first or second tier security by applying certain
criteria established by the board to determine its creditworthiness. These
criteria require a high quality short term or long-term rating (depending on the
security) from a rating organization. Unrated securities the Trust may buy
include asset backed securities and securities subject to "demand features" or
"guarantees".
The Trust may purchase a security subject to a guarantee if the guarantee
is an eligible security or a first tier security. The trust may also purchase a
security subject to a "conditional" demand feature if the demand feature is an
eligible security and the Manager has decided that the conditional demand
feature meets the requirements imposed by Rule 2a-7.
If a security's rating is downgraded, the Manager and/or the Board of
Trustees may have to reassess the security's credit risk. If a security has
ceased to be a First Tier Security, the Manager will promptly reassess whether
the security continues to present minimal credit risk. If the Manager becomes
aware that any Rating Organization has downgraded its rating of a Second Tier
Security or rated an unrated security below its second highest rating category,
the Trust's Board of Trustees shall promptly reassess whether the security
presents minimal credit risk and whether it is in the best interests of the
Trust to dispose of it. If the Trust disposes of the security within five days
of the Manager learning of the downgrade, the Manager will provide the Board of
Trustees with subsequent notice of such downgrade. If a security is in default,
or ceases to be an Eligible Security, or is determined no longer to present
minimal credit risks, the Board of Trustees must determine whether it would be
in the best interests of the Trust to dispose of the security.
|_| Diversification. With respect to 75% of its total assets, the Trust
cannot invest more than 5% of its total assets in securities issued by one
issuer. It cannot invest more than 5% of its total assets in securities of one
issuer unless the security is a first tier security. The Trust also cannot
invest more than 1% of its total assets or $1.0 million, whichever is greater,
in second tier securities of one issuer. For diversification purposes, the Trust
is considered to have purchased the security underlying a repurchase agreement
if the repurchase agreement is fully collateralized. For a refunded security,
the Trust is considered to have the U.S. government securities underlying the
refunded security. For conduit securities, the Trust considers the issuer to be
the person ultimately responsible for payment of the obligation. If the Trust
buys an asset backed security, the issuer of the security is deemed to be the
"special purpose" entity which issued the security. A special purpose entity is
an entity which is organized solely for the purpose of issuing asset backed
securities. If the asset backed securities issued by the special purpose entity
include the obligations of another person or another special purpose entity and
those obligations amount to 10% or more of the asset backed securities the Trust
buys, that other person or entity is considered to be the issuer of a pro rata
percentage of the asset backed security.
The Trust may buy a security subject to a demand feature or guarantee. In
this case, with respect to 75% of its total assets, the Trust may not invest
more than 10% of its total assets in securities issued by or subject to demand
features or guarantees issued by the same issuer. If the demand feature or
guarantee is a second tier security, the Trust may not invest more than 5% of
its total assets in securities subject to demand features or guarantees from the
same issuer. And, the Trust may not invest more than 10% of its total assets in
securities issued by or subject to demand features or guarantees from the same
issuer. However, if the demand feature or guarantee is issued by a person who is
a non-controlled person, the Trust does not have to limit its investments to no
more than 10% of its total assets in securities issued by or subject to demand
features or guarantees from the same issuer.
|_| Maturity. The Trust must maintain a dollar-weighted average portfolio
maturity of not more than 90 days, and the maturity of any single security must
not be in excess of one year from the date of the investment unless that debt
instrument is purchased subject to a demand feature which may not exceed one
year and requires payment on not more than 30 days' notice. This one year limit
is more restrictive than the maturity limitation imposed by Rule 2a-7. The Trust
also may buy adjustable and floating rate securities, enter into repurchase
agreements and lend portfolio securities. Rule 2a-7 defines how the maturities
of these securities are determined. The Trust may buy these securities if their
maturities do not exceed one year from the date of the investment.
|_| Demand Features and Guarantees. Demand features and gurantees and some
of their uses are described in the Prospectus. The Trust also uses demand
features and guarantees to satisfy the maturity, quality and diversifications
requirements described above. The Trust considers the person which issues the
demand feature as the person to whom the Trust will look for payment. An
unconditional demand feature is considered a guarantee and the Trust looks to
the person making the guarantee for payment of the obligation of the underlying
security.
When the Trust buys municipal securities, it may obtain a demand feature
from the seller to repurchase the securities that entitles the Trust to achieve
same day settlement from the repurchaser and to receive an exercise price equal
to the amortized cost of the underlying security plus accrued interest, if any,
at the time of exercise. Another type of demand feature purchased in conjunction
with a Municipal Security enables the Trust to sell the underlying security
within a specified period of time at a fixed exercise price. The Trust may pay
for demand features either separately in cash or by paying a higher price for
the securities acquired subject to the demand features. The Trust will enter
into these transactions only with banks and dealers which, in the Manager's
opinion, present minimal credit risks. The Trust's purchases of demand features
are subject to the provisions of Rule 2a-7 under the Investment Company Act
because the Trust uses the amortized cost method to value its portfolio
securities.
The Trust's ability to exercise a demand feature or guarantee will depend
on the ability of the bank or dealer to pay for the securities if the demand
feature or guarantee is exercised. If the bank or dealer should default on its
obligation, the Trust might not be able to recover all or a portion of any loss
sustained from having to sell the security elsewhere. Demand features and
guarantees are not transferrable by the Trust, and therefore terminate if the
Trust sells the underlying security to a third party. The Trust intends to enter
into these arrangements to facilitate portfolio liquidity, although such
arrangements may enable the Trust to sell a security at a pre-arranged price
which may be higher than the prevailing market price at the time the demand
feature or guarantee is exercised. Any considerations paid by the Trust for the
demand feature (which increases the cost of the security and reduces the yield
otherwise available for the security) will be reflected on the Trust's books as
unrealized depreciation while the demand feature or guarantee is held, and a
realized gain or loss when demand feature is exercised or expires.
Other Investment Strategies
Floating Rate/Variable Rate Obligations. Floating rate and variable rate demand
notes are tax-exempt obligations which may have a stated maturity in excess of
one year, but may include features that permit the holder to recover the
principal amount of the underlying security at specified intervals not exceeding
one year on not more than thirty days' notice at any time. The issuer of such
notes normally has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the note plus accrued interest
upon a specified number of days notice to the holder. The interest rate on a
floating rate demand note is based on a stated prevailing market rate and is
adjusted automatically each time such rate is adjusted. The interest rate on a
variable rate demand note is also based on a stated prevailing market rate but
is adjusted automatically at specified intervals of no more than one year.
Generally, the changes in the interest rate on such securities reduce the
fluctuation in their market value. There is no limit on the amount of the
Trust's assets that may be invested in floating rate and variable rate
obligations that meet the requirements of Rule 2a-7. Floating rate or variable
rate obligations which do not provide for recovery of principal and interest
within seven days may be subject to the limitations applicable to illiquid
securities described in "Investment Objective and Policies - Illiquid and
Restricted Securities" in the Prospectus.
When-Issued and Delayed Delivery Transactions. As stated in the Prospectus, the
Trust may invest in municipal securities on a "when-issued" or "delayed
delivery" basis. Payment for and delivery of the securities shall not exceed 120
days from the date the offer is accepted. The purchase price and yield are fixed
at the time the buyer enters into the commitment. During the period between the
time of commitment and settlement, no payment is made by the Trust to the issuer
and no interest accrues to the Trust from the investment. However, the Trust
intends to be as fully invested as possible and will not invest in when-issued
securities if its income or net asset value will be materially adversely
affected. At the time the Trust makes the commitment to purchase a municipal
security on a when-issued basis, it will record the transaction on its books and
reflect the value of the security in determining its net asset value. It will
also identify on its books liquid assets equal in value to the commitment for
the when-issued securities. While when-issued securities may be sold prior to
settlement date, the Trust intends to acquire the securities upon settlement
unless a prior sale appears desirable for investment reasons. There is a risk
that the yield available in the market when delivery occurs may be higher than
the yield on the security acquired.
Loans of Portfolio Securities. To attempt to increase its income, the Trust may
lend its portfolio securities to brokers, dealers and other financial
institutions. These loans are limited to not more than 10% of the value of the
Trust's total assets and are subject to other conditions described below. The
Trust will not enter into any securities lending agreements having a maturity of
greater than one year. The Trust presently does not intend to lend its
securities, but if it does, the value of securities loaned is not expected to
exceed 5% of the value of the Trust's total assets. There are some risks in
lending securities. The Trust could experience a delay in receiving additional
collateral to secure a loan, or a delay in recovering the loaned securities.
The Trust must receive collateral for a loan. Any securities received as
collateral for a loan must mature in twelve months or less. Under current
applicable regulatory requirements (which are subject to change), on each
business day the loan collateral must be at least equal to the market value of
the loaned securities. The collateral must consist of cash, bank letters of
credit, U.S. government securities or other cash equivalents in which the Trust
is permitted to invest. To be acceptable as collateral, letters of credit must
obligate a bank to pay amounts demanded by the Trust if the demand meets the
terms of the letter. Such terms and the issuing bank must be satisfactory to the
Trust.
When it lends securities, the Trust receives from the borrower an amount
equal to the interest paid or the dividends declared on the loaned securities
during the term of the loan. It may also receive negotiated loan fees and the
interest on the collateral securities, less any finders', custodian,
administrative or other fees the Trust pays in connection with the loan. The
Trust may share the interest it receives on the collateral securities with the
borrower as long as it realizes at least a minimum amount of interest required
by the lending guidelines established by its Board of Trustees.
The Trust will not lend its portfolio securities to any officer, Trustee,
employee or affiliate of the Trust or its Manager. The terms of the Trust's
loans must meet certain tests under the Internal Revenue Code and permit the
Trust to reacquire loaned securities on five business days notice or in time to
vote on any important matter.
Repurchase Agreements. In a repurchase transaction, the Trust acquires a
security from, and simultaneously resells it to, an approved vendor (a U.S.
commercial bank or the U.S. branch of a foreign bank having total domestic
assets of at least $1 billion or a broker-dealer with a net capital of at least
$50 million and which has been designated a primary dealer in government
securities). The resale price exceeds the purchase price by an amount that
reflects an agreed-upon interest rate effective for the period during which the
repurchase agreement is in effect. The majority of these transactions run from
day to day, and delivery pursuant to the resale typically will occur within one
to five days of the purchase. Repurchase agreements are considered "loans" under
the Investment Company Act of 1940, as amended (the "Investment Company Act")
collateralized by the underlying security. The Trust's repurchase agreements
require that at all times while the repurchase agreement is in effect, the value
of the collateral must equal or exceed the repurchase price to fully
collateralize the repayment obligation. Additionally, the Manager will monitor
the vendor's creditworthiness to confirm that the vendor is financially sound
and will continuously monitor the collateral's value.
Special Investment Considerations - New York Municipal Securities. As explained
in the Prospectus, the Trust's investments are highly sensitive to the fiscal
stability of New York State (referred to in the section as the "State") and its
subdivisions, agencies, instrumentalities or authorities, including New York
City, which issue the municipal securities in which the Trust invests. The
following information on risk factors in concentrating in New York municipal
securities is only a summary, based on publicly-available official statements
relating to offerings by issuers of New York municipal securities on or prior to
June 15, 1999 with respect to offerings of New York State, and on or prior to
June 18, 1999 with respect to offerings by New York City. No representation is
made as to the accuracy of this information.
During the mid-1970's the State, some of its agencies, instrumentalities
and public benefit corporations (the "Authorities"), and certain of its
municipalities faced serious financial difficulties. To address many of these
financial problems, the State developed various programs, many of which were
successful in reducing the financial crisis. Any further financial problems
experienced by these Authorities or municipalities could have a direct adverse
effect on the New York municipal securities in which the Trust invests.
|X| Factors Affecting Investments in New York State Securities. The
forecast of the State's economy shows continued expansion during the 1999 and
2000 calendar years, with employment growth gradually slowing from the 1998
calendar year. The financial and business service sectors are expected to
continue to do well, while employment in the manufacturing and government
sectors are expected to post only small, if any, declines. On an average annual
basis, the employment growth rate in the State is expected to be lower than in
1998. Personal income is expected to have recorded moderate gains in 1999. Wage
growth in 1999 and 2000 is expected to have been slower than in the 1998
calendar year, because the recent robust growth in bonus payments has moderated.
The forecast for continued growth, and any resultant impact on the State
Plan, contains some uncertainties. Stronger-than-expected gains in employment
and wages could lead to surprisingly strong growth in consumer spending.
Investments could also remain robust. Conversely, net exports could plunge even
more sharply than expected, with adverse impacts on the growth of both consumer
spending and investment. The inflation rate may differ significantly from
expectations due to the upward pressure of a tight labor market and the downward
pressure of price reductions emanating from the current economic weakness in
Asia. In addition, the State economic forecast could over- or under-estimate the
level of future bonus payments or inflation growth, resulting in forecasted
average wage growth that could differ significantly from actual growth.
Similarly, the State forecast could fail to correctly account for declines in
banking employment and the direction of employment change that is likely to
accompany telecommunications and energy deregulation.
The national economy has maintained a robust rate of growth with over 16.9
million jobs added nationally since early 1992. The State economy has continued
to expand, but growth remains somewhat slower than in the nation. Although the
State has added over 400,000 jobs since late 1992, employment growth in the
State has been hindered during recent years by significant cutbacks in the
computer and instrument manufacturing, utility, defense and banking industries.
Government downsizing has also moderated these job gains.
The State's General Fund (the major operating Fund of the State) was
projected in the 1999-2000 New York State Financial Plan (referred to in this
section as the "State Plan") to be balanced on a cash basis for the 1999-2000
fiscal year. Total receipts and transfers from other funds are projected to
reach $38.81 billion an increase of over $2.03 billion from the prior fiscal
year, and disbursements and transfers to other funds are projected to be $37.14
billion, an increase of $524 million from the total disbursed in the prior
fiscal year.
Projections of total State receipts in the State Plan are based on the
State tax structure in effect during the fiscal year and on assumptions relating
to basic economic factors and their historical relationships to State tax
receipts. In preparing projections of State receipts, economic forecasts
relating to personal income, wages, consumption, profits and employment have
been particularly important. The projection of receipts from most tax or revenue
sources is generally made by estimating the change in yield of such tax or
revenue source caused by economic and other factors, rather than by estimating
the total yield of such tax or revenue source from its estimated tax base. The
forecasting methodology, however, ensures that State fiscal year collection
estimates for taxes that are based on a computation of annual liability, such as
the business and personal income taxes, are consistent with estimates of total
liability under those taxes.
Projections of total State disbursements are based on assumptions relating
to economic and demographic factors, levels of disbursements for various
services provided by local governments (where the cost is partially reimbursed
by the State), and the results of various administrative and statutory
mechanisms in controlling disbursements for State operations. Factors that may
affect the level of disbursements in the fiscal year include uncertainties
relating to the economy of the nation and the State, the policies of the federal
government, and changes in the demand for and use of State services.
In recent years, State actions affecting the level of receipts and
disbursements, the relative strength of the State and regional economy, and
actions of the federal government have help to create projected structural
budget gaps for the State. These gaps result from a significant disparity
between recurring revenues and the costs of maintaining or increasing the level
of support for State programs. To address a potential imbalance in any given
fiscal year, the State would be required to take actions to increase receipts
and/or reduce disbursements as it enacts the budget for that year, and under the
State Constitution, the Governor is required to propose a balanced budget each
year. There can be no assurance, however, that the legislature will enact the
Governor's proposals or that the State's actions will be sufficient to preserve
budgetary balance in a given fiscal year or to align recurring receipts and
disbursements in future fiscal years.
|_| State Governmental Funds Group. Substantially all State
non-pension financial operations are accounted for in the State's
governmental funds group.
Governmental funds include:
o the General Fund, which receives all income not required by law to
be deposited in another fund;
o Special Revenue Funds, which receive most of the money the State gets
from the Federal government and other income the use of which is
legally restricted to certain purposes;
o Capital Projects Funds, used to finance the acquisition and
construction of major capital facilities by the State and to aid in
certain projects conducted by local governments or public authorities;
and
o Debt Service Funds, which are used for the accumulation of money for
the payment of principal of and interest on long-term debt and to meet
lease-purchase and other contractual-obligation commitments.
|_| Local Government Assistance Corporation. In 1990, as part of a State
fiscal reform program, legislation was enacted creating Local Government
Assistance Corporation, a public benefit corporation empowered to issue
long-term obligations to fund payments to local governments that had been
traditionally funded through the State's annual seasonal borrowing. The
legislation authorized the corporation to issue its bonds and notes in an amount
not in excess of $4.7 billion (exclusive of certain refunding bonds). Over a
period of years, the issuance of these long-term obligations, which are to be
amortized over no more than 30 years, was expected to eliminate the need for
continued short-term seasonal borrowing.
The legislation also dedicated revenues equal to one-quarter of the
four-cent State sales and use tax to pay debt service on these bonds. The
legislation also imposed a cap on the annual seasonal borrowing of the State at
$4.7 billion, less net proceeds of bonds issued by the corporation and bonds
issued to provide for capitalized interest. An exception is in cases where the
Governor and the legislative leaders have certified the need for additional
borrowing and have provided a schedule for reducing it to the cap. If borrowing
above the cap is thus permitted in any fiscal year, it is required by law to be
reduced to the cap by the fourth fiscal year after the limit was first exceeded.
This provision capping the seasonal borrowing was included as a covenant with
the corporation's bondholders in the resolution authorizing such bonds.
As of June 1995, the corporation had issued bonds and notes to provide net
proceeds of $4.7 billion completing the program. The impact of its borrowing, as
well as other changes in revenue and spending patterns, is that the State has
been able to meet its cash flow needs throughout the fiscal year without relying
on short-term seasonal borrowings.
|X| Authorities. The fiscal stability of the State is related to the
fiscal stability of its public Authorities. Authorities have various
responsibilities, including those which finance, construct and/or operate
revenue-producing public facilities. Authorities are not subject to the
constitutional restrictions on the incurrence of debt which apply to the State
itself, and may issue bonds and notes within the amounts, and restrictions set
forth in their legislative authorization.
Authorities are generally supported by revenues generated by the projects
financed or operated, such as tolls charged for use of highways, bridges or
tunnels, charges for electric power, electric and gas utility services, rentals
charged for and housing units and charges for occupancy at medical care
facilities. In addition, State legislation authorizes several financing
techniques for Authorities. There are statutory arrangements providing for State
local assistance payments otherwise payable to localities to be made under
certain circumstances to Authorities. Although the State has no obligation to
provide additional assistance to localities whose local assistance payments have
been paid to Authorities under these arrangements, if local assistance payments
are diverted, the affected localities could seek additional State assistance.
Some Authorities also receive moneys from State appropriations to pay for the
operating costs of certain of their programs.
|X| Ratings of the State's Securities. On January 13, 1992, Standard &
Poor's reduced its ratings on the State's general obligation bonds from "A" to
"A-" and, in addition, reduced its ratings on the State's moral obligation,
lease purchase, guaranteed and contractual obligation debt. Standard & Poor's
also continued its negative rating outlook assessment on State general
obligation debt. On April 26, 1993, Standard & Poor's revised its rating outlook
assessment to "stable." On February 14, 1994, Standard & Poor's raised its
outlook to "positive" and, on October 3, 1995, confirmed its A-rating. On August
28, 1997, Standard & Poor's revised its ratings on the State's general
obligation bonds from A- to A and, in addition, revised its ratings on the
State's moral obligation, lease purchase, guaranteed and contractual obligation
debt.
On January 6, 1992, Moody's reduced its ratings on outstanding
limited-liability State lease purchase and contractual obligations from "A" to
"Baa1." On October 2, 1995, Moody's reconfirmed its "A" rating of the State's
general obligation long-term indebtedness. On February 10, 1997, Moody's
confirmed its "A2" rating of the State's general obligation long-term
indebtedness.
Ratings reflect only the views of the ratings organizations, and an
explanation of the significance of a rating may be obtained from the rating
agency furnishing the rating. There is no assurance that a particular rating
will continue for any given period of time or that a rating will not be revised
downward or withdrawn entirely, if, in the judgment of the agency originally
establishing the rating, circumstances warrant. A downward revision or
withdrawal of a ratings, could have an effect on the market price of the State
municipal securities in which the Trust invests.
|X| The State's General Obligation Debt. As of March 31, 1998, the State
had approximately $4.74 billion in general obligation bonds outstanding.
Principal and interest due on general obligation bonds were $742.1 million for
the 1998-99 fiscal year and are estimated to be $695 million for the State's
1999-2000 fiscal year.
|X| Pending Litigation. The State is a defendant in numerous legal
proceedings pertaining to matters incidental to the performance of routine
governmental operations. That litigation includes, but is not limited to, claims
asserted against the State arising from alleged torts, alleged breaches of
contracts, condemnation proceedings and other alleged violations of State and
Federal laws. These proceedings could affect adversely the financial condition
of the State in the 1999-2000 fiscal year or thereafter.
The State believes that the State Plan includes sufficient reserves for
the payment of judgments that may be required during the 1999-2000 fiscal year.
There can be no assurance, however, that an adverse decision in any of these
proceedings would not exceed the amount the State Plan reserves for the payment
of judgments and, therefore, could affect the ability of the State to maintain a
balanced 1999-2000 Financial Plan.
In addition, the State is party to other claims and litigations that its
legal counsel has advised are not probable of adverse court decisions or are not
deemed to be materially adverse. Although, the amounts of potential losses, if
any, are not presently determinable, it is the State's opinion that its ultimate
liability in these cases is not expected to have a material adverse effect on
the State's financial position in the 1999-2000 fiscal year or thereafter.
|X| Other Functions. Certain localities in addition to the City could have
financial problems leading to requests for additional State assistance during
the State's current fiscal year and thereafter. The potential impact on the
State of such actions by localities is not included in the projections of the
State receipts and disbursements in the State's 1999-2000 fiscal year.
|X| Factors Affecting Investments in New York City Municipal Securities.
The fiscal health of New York City (the "City") has a more significant effect on
the fiscal health of the State than any other municipality. The national
economic downturn which began in July 1990 adversely affected the local economy
which had been declining since late 1989. As a result, the City experienced job
losses in 1990 and 1991 and real Gross City Product fell in those two years.
Beginning in 1992, the improvement in the national economy helped stabilize
conditions in the City. Employment losses moderated toward year-end and real
Gross City Product increased, boosted by strong wage gains. After noticeable
improvements in the City's economy during 1994, economic growth slowed in 1995.
It improved commencing in calendar year 1996, reflecting improved securities
industry earnings and employment in other sectors. Overall, the City's economic
improvement accelerated significantly in 1997 and 1998. The City's current
financial plan assumes that, after strong growth in 1993-1998 moderate economic
growth will occur through calendar year 2003, with moderating job growth and
wage increases.
For each of the 1981 through 1998 fiscal years, the City had an operating
surplus, before discretionary and other transfers, and achieved balanced
operating results as reported in accordance with generally accepted accounting
principles. The City has been required to close substantial gaps between
forecast revenues and forecast expenditures in order to maintain balanced
operating results. There can be no assurance that the City will continue to
maintain balanced operating results as required by State law without tax or
other revenue increases or reductions in City services or entitlement programs,
which could adversely affect the City's economic base.
The Mayor is responsible for preparing the City's financial plan,
including the City's current financial plan for the 2000 through 2003 fiscal
years (referred to below as the "2000-2003 Financial Plan", or "Financial
Plan").
The City's projections set forth in the Financial Plan are based on various
assumptions and contingencies which are uncertain and which may not materialize.
Implementation of the Financial Plan is dependent upon the City's ability to
market its securities successfully. The City's financing program for fiscal
years 1999 through 2003 contemplates the issuance of $10.091 billion of general
obligation bonds and $5.34 billion of bonds to be issued by the New York City
Transitional Finance Authority (the "Finance Authority") to finance City capital
projects. In addition, it is currently expected that approximately $2.8 billion
of bonds will be issued by the Tobacco Settlement Asset Securitization
Corporation ("TSASC") and paid from revenues received from a settlement with
leading tobacco companies. The Finance Authority and TSASC were created to
assist the City in financing its capital program while keeping the City's
indebtedness within the forecast level of the constitutional restrictions on the
amount of debt the City is authorized to incur. If TSASC is unable to issue
bonds in the amount expected, the City will need to find another source of
financing or substantially curtail or halt its capital program.
In addition, the City issues revenue and tax anticipation notes to finance
its seasonal working capital requirements. The success of projected public sales
of City bonds and notes, New York City Municipal Water Finance Authority ("Water
Authority") bonds and Finance Authority bonds will be subject to prevailing
market conditions. The City's planned capital and operating expenditures are
dependent upon the sale of its general obligation bonds and notes, and the Water
Authority, Finance Authority and TSASC bonds. Future developments concerning the
City and public discussion of such developments, as well as prevailing market
conditions, may affect the market for outstanding City general obligation bonds
and notes.
The City Comptroller and other agencies and public officials issue reports
and make public statements which, among other things, state that projected
revenues and expenditures may be different from those forecasted in the City's
Financial Plan. It is reasonable to expect that such reports and statements will
continue to be issued and to engender public comment.
|X| 1999 Modification and 2000-2003 Financial Plan. The June 14, 1999
quarterly modification to the City's financial plan for fiscal year 1999
(referred to as the "1999 Modification") projects revenues and expenditures for
the 1999 fiscal year balanced in accordance with GAAP. The Financial Plan for
the 2000 through 2003 fiscal years, released on June 14, 1999, also projects
revenues and expenditures for the 2000 fiscal year balanced in accordance with
GAAP. The Financial Plan takes into account a projected decrease in tax revenues
in fiscal years 2000 and 2001 and a projected increase in tax revenues in fiscal
years 2002 and 2003, an increase in planned expenditures for health insurance
and other agency spending increases. In addition, the Financial Plan includes
proposed discretionary transfers in the fiscal year 1999 for debt service due in
fiscal year 2000, in fiscal year 2000 for debt service due in fiscal year 2001,
and in fiscal year 2001 for debt service due in fiscal year 2002. The Financial
Plan also sets forth projections for the 2001 through 2003 fiscal years and
projects gaps of $1.8 billion, $1.9 billion and $1.8 billion for the 2001
through 2003 fiscal years, respectively.
The Financial Plan assumes that the Governor and the State Legislature
approve extension of the 14% personal income tax surcharge, which is scheduled
to expire on December 31, 1999, and which is projected to provide revenue of
$572 million, $585 million, $600 million and $638 million in 2000, 2001, 2002
and 2003 fiscal years, respectively. It assumes collection of the projected rent
payments for the City's airports, totaling $365 million, $185 million and $155
million in the 2001 through 2003 fiscal years, respectively. A substantial
portion of those collections may depend on the successful completion of
negotiations with The Port Authority of New York and New Jersey or on the
enforcement of the City's rights under the existing leases through pending legal
actions. It also assumes State and Federal approval of State and Federal
gap-closing actions proposed by the City and receipt of tobacco settlement funds
providing revenues or expenditure offsets in annual amounts ranging between $250
million and $300 million. The Financial Plan provides no additional wage
increases for City employees after their contracts expire in fiscal years 2000
and 2001. In addition, the economic and financial condition of the City may be
affected by various financial, social, economic and political factors that could
have a material effect on the City.
Various actions proposed in the City's Financial Plan are uncertain. If
these measures cannot be implemented, the City will be required to take other
actions to decrease expenditures or increase revenues to maintain a balanced
financial plan.
|X| Ratings of the City's Bonds. Moody's Investors Service, Inc. has rated
the City's general obligation bonds "A3." Standard & Poor's Ratings Group has
rated those bonds "A-." Fitch IBCA, Inc. has rated these bonds "A." Those
ratings reflect only the views of Moody's, Standard & Poor's and Fitch from
which an explanation of the significance of such ratings may be obtained. There
is no assurance that those ratings will continue for any given period of time or
that they will not be revised downward or withdrawn entirely. Any downward
revision or withdrawal could have an adverse effect on the market prices of the
City's bonds. On July 10, 1995, Standard & Poor's revised its rating of City
bonds downward to "BBB+." On July 16, 1998, Standard & Poor's revised its rating
of City bonds upward to "A-." Moody's rating of City bonds was revised in
February 1998 to "A3" from "Baal." On March 8, 1999, Fitch revised its rating of
City bonds upward to "A."
|X| The City's Outstanding Indebtedness. As of March 31, 1999, the City
and the Municipal Assistance Corporation for the City of New York had,
respectively, $26.817 billion and $3.194 billion of outstanding net long-term
debt.
The City depends on the State for State aid both to enable the City to
balance its budget and to meet its cash requirements. There can be no assurance
that there will not be reductions in State aid to the City from amounts
currently projected; that State budgets in future fiscal years will be adopted
by the April 1 statutory deadline, or interim appropriations enacted; or that
any such reductions or delays will not have adverse effects on the City's cash
flow or expenditures.
|X| Pending Litigation. The City is a defendant in lawsuits pertaining to
material matters, including claims asserted that are incidental to performing
routine governmental and other functions. That litigation includes, but is not
limited to, actions commenced and claims asserted against the City arising out
of alleged torts, alleged breaches of contracts, alleged violations of law and
condemnation proceedings. For the fiscal year ended on June 30, 1998, the City
paid $386 million for judgments and claims. The 1999 Modification and 2000-2003
Financial Plan include provision for the payment of claims of $391 million, $393
million, $407 million, $429 million and $448 million for the 1999 through 2003
fiscal years, respectively. As of June 30, 1998, the City estimates its
potential future liability for outstanding claims against it to be $3.5 billion.
Investment Restrictions
|X| What Are "Fundamental Policies?" Fundamental policies are those
policies that the Trust has adopted to govern its investments that can be
changed only by the vote of a "majority" of the Trust's outstanding voting
securities. Under the Investment Company Act, a "majority" vote is defined as
the vote of the holders of the lesser of:
|_| 67% or more of the shares present or represented by proxy at a
shareholder meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or
|_| more than 50% of the outstanding shares.
The Trust's investment objective is a fundamental policy. Other policies
described in the Prospectus or this Statement of Additional Information are
"fundamental" only if they are identified as such. The Trust's Board of Trustees
can change non-fundamental policies without shareholder approval. However,
significant changes to investment policies will be described in supplements or
updates to the Prospectus or this Statement of Additional Information, as
appropriate. The Trust's most significant investment policies are described in
the Prospectus.
n Does the Trust Have Additional Fundamental Policies? The following
investment restrictions are fundamental policies of the Trust:
|_| The Trust cannot make loans, except that the Trust may purchase debt
securities described in "Investment Objective and Policies" and repurchase
agreements, and the Trust may lend its portfolio securities as described in the
Statement of Additional Information;
|_| The Trust cannot borrow money in excess of 10% of the value of its
total assets or make any investment when borrowings exceed 5% of the value of
its total assets; it may borrow only as a temporary measure for extraordinary or
emergency purposes; no assets of the Trust may be pledged, mortgaged or assigned
to secure a debt;
o The Trust cannot invest more than 25% of its total assets in any one industry;
however, for the purposes of this restriction municipal securities and U.S.
government obligations are not considered to be part of any single industry;
|_| The Trust cannot invest in any debt instrument having a maturity in
excess of one year from the date of purchase, unless purchased subject to a
demand feature which may not exceed one year and requires payment on not more
than 30 days' notice;
|_| The Trust cannot enter into a repurchase agreement or purchase a
security subject to a call if the scheduled repurchase or redemption date is
greater than one year;
|_| The Trust cannot invest in commodities or commodity contracts, or
invest in interests in oil, gas, or other mineral exploration or development
programs;
|_| The Trust cannot invest in real estate; however, the Trust may
purchase debt securities issued by companies which invest in real estate or
interests therein;
|_| The Trust cannot purchase securities on margin or make short
sales of securities;
|_| The Trust cannot invest in or hold securities of any issuer if those
officers and trustees or directors of the Trust or its advisor who beneficially
own individually more than 0.5% of the securities of such issuer together own
more than 5% of the securities of such issuer;
|_| The Trust cannot underwrite securities of other companies except
insofar as the Trust may be deemed an underwriter under the Securities Act of
1933 in connection with the disposition of portfolio securities;
|_| The Trust cannot invest more than 5% of the value of its total assets
in securities of companies that have operated less than three years, including
the operations of predecessors; or
o The Trust cannot purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization.
|_| The Trust cannot issue "senior securities," but this does not prohibit
certain investment activities for which assets of the Trust are designated as
segregated, or margin, collateral or escrow arrangements are established, to
cover the related obligations.
For purposes of the investment restrictions listed above, the
identification of the "issuer" of a municipal security depends on the terms and
conditions of the security. When the assets and revenues of an agency,
authority, instrumentality or other political subdivision are separate from
those of the government creating the subdivision and the security is backed only
by the assets and revenues of the subdivision, such subdivision would be deemed
to be the sole issuer. Similarly, in the case of an industrial development bond,
if that bond is backed only by the assets and revenues of the nongovernmental
user, then such nongovernmental user would be deemed to be the sole issuer.
However, if in either case the creating government or some other entity
guarantees the security, such guarantee would be considered a separate security
and would be treated as an issue of such government or other agency. Conduit
securities are deemed to be issued by the person ultimately responsible for
payments of interest and principal on the security.
In applying the restrictions as to the Trust's investments, the Manager
will consider a nongovernmental user of facilities financed by industrial
development bonds as being in a particular industry, despite the fact that there
is no industry concentration limitation as to municipal securities the Trust may
own. Although this application of the restriction is not technically a
fundamental policy of the Trust, it will not be changed without shareholder
approval. Should any such change be made, the Prospectus and/or Statement of
Additional Information will be supplemented to reflect the change.
Unless the Prospectus or this Statement of Additional Information states
that a percentage restriction applies on an ongoing basis, it applies only at
the time the Trust makes an investment. The Trust need not sell securities to
meet the percentage limits if the value of the investment increases in
proportion to the size of the Trust.
For purposes of the Trust's policy not to concentrate its investments in
securities of issuers, the Trust has adopted the industry classifications set
forth in Appendix B to this Statement of Additional Information. This is not a
fundamental policy.
How the Trust Is Managed
Organization and History. The Trust is an open-end, non-diversified management
investment company organized as a Massachusetts business trust in 1988, with an
unlimited number of authorized shares of beneficial interest.
The Trust is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The Trustees
meet periodically throughout the year to oversee the Trust's activities, review
its performance, and review the actions of the Manager. Although the Trust will
not normally hold annual meetings of its shareholders, it may hold shareholder
meetings from time to time on important matters. Shareholders of the Trust may
have the right to call a meeting to remove a Trustee or to take other action
described in the Declaration of Trust.
|X| Classes of Shares. The Trust has a single class of shares of stock.
While that class has no designation, it is deemed to be the equivalent of Class
A for purposes of the shareholder account policies that apply to Class A shares
of the Oppenheimer funds. Shares of the Trust are freely transferable. Each
share has one vote at shareholder meetings, with fractional shares voting
proportionally on matters submitted to a vote of shareholders. There are no
preemptive or conversion rights and shares participate equally in the assets of
the Trust upon liquidation.
|X| Meetings of Shareholders. As a Massachusetts business trust, the Trust
is not required to hold, and does not plan to hold, regular annual meetings of
shareholders. The Trust will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will also do so when a
shareholder meeting is called by the Trustees or upon proper request of the
shareholders.
Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Trust, to remove a Trustee. The
Trustees will call a meeting of shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of the outstanding shares
of the Trust. If the Trustees receive a request from at least 10 shareholders
stating that they wish to communicate with other shareholders to request a
meeting to remove a Trustee, the Trustees will then either make the shareholder
lists of the Trust available to the applicants or mail their communication to
all other shareholders at the applicants' expense. The shareholders making the
request must have been shareholders for at least six months and must hold shares
of the Trust valued at $25,000 or more or constituting at least 1% of the
outstanding shares of the Trust, whichever is less. The Trustees may also take
other action as permitted by the Investment Company Act.
|_| Shareholder and Trustee Liability. The Declaration of Trust
contains an express disclaimer of shareholder or Trustee liability for the
Trust's obligations. It also provides for indemnification and reimbursement of
expenses out of the Trust's property for any shareholder held personally liable
for its obligations. The Declaration of Trust also states that upon request, the
Trust shall assume the defense of any claim made against a shareholder for any
act or obligation of the Trust and shall satisfy any judgment on that claim.
Massachusetts law permits a shareholder of a business trust (such as the Trust)
to be held personally liable as a "partner" under certain circumstances.
However, the risk that a Trust shareholder will incur financial loss from being
held liable as a "partner" of the Trust is limited to the relatively remote
circumstances in which the Trust would be unable to meet its obligations.
The Trust's contractual arrangements state that any person doing business
with the Trust (and each shareholder of the Trust) agrees under the Declaration
of Trust to look solely to the assets of the Trust for satisfaction of any claim
or demand that may arise out of any dealings with the Trust. Additionally, the
Trustees shall have no personal liability to any such person, to the extent
permitted by law.
Trustees and Officers of the Trust. The Trust's Trustees and officers and their
principal occupations and business affiliations during the past five years are
listed below. Trustees denoted with an asterisk (*) below are deemed to be
"interested persons" of the Trust under the Investment Company Act. All of the
Trustees are also trustees, directors or managing general partners of the
following Denver-based Oppenheimer funds1:
1Ms. Macaskill is not a Trustee or Director of Oppenheimer Integrity Funds,
Oppenheimer Strategic Income Fund, Panorama Series Fund, Inc. or Oppenheimer
Variable Account Funds.
Oppenheimer Capital Income Fund Oppenheimer Senior Floating Rate
Fund
Oppenheimer Cash Reserves Oppenheimer Strategic Income Fund
Oppenheimer Champion Income Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer High Yield Fund Oppenheimer Variable Account Funds
Oppenheimer International Bond Fund Panorama Series Fund, Inc.
Oppenheimer Integrity Funds Centennial America Fund, L. P.
Oppenheimer Limited-Term Government Centennial California Tax Exempt
Fund Trust
Oppenheimer Main Street Funds, Inc. Centennial Government Trust
Oppenheimer Main Street Small Cap Centennial Money Market Trust
Fund
Oppenheimer Municipal Fund Centennial New York Tax Exempt Trust
Oppenheimer Real Asset Fund Centennial Tax Exempt Trust
Robert G. Avis*, Trustee, Age: 68
One North Jefferson Ave., St. Louis, Missouri 63103
Chairman, President and Chief Executive Officer of A.G. Edwards Capital, Inc.
(general partnership of private equity funds), Director of A.G. Edwards & Sons,
Inc. (a broker-dealer) and Director of A.G. Edwards Trust Companies (trust
companies), formerly, Vice Chairman of A.G. Edwards & Sons, Inc. and A.G.
Edwards, Inc. (its parent holding company) and Chairman of A.G.E. Asset
Management (an investment advisor).
William A. Baker, Trustee, Age: 84
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
Sam Freedman, Trustee, Age: 59
4975 Lakeshore Drive, Littleton, Colorado 80123
Formerly Chairman and Chief Executive Officer of OppenheimerFunds Services,
Chairman, Chief Executive Officer and a director of Shareholder Services, Inc.,
Chairman, Chief Executive Officer and director of Shareholder Financial
Services, Inc., Vice President and director of Oppenheimer Acquisition Corp. and
a director of OppenheimerFunds, Inc.
Raymond J. Kalinowski, Trustee, Age: 70
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc. (a computer products training
company), self-employed consultant (securities matters).
C. Howard Kast, Trustee, Age: 77
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).
Robert M. Kirchner, Trustee, Age: 78
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
Bridget A. Macaskill*, President and Trustee, Age: 51
Two World Trade Center, New York, New York 10048-0203
President (since June 1991), Chief Executive Officer (since September 1995) and
a Director (since December 1994) of the Manager; President and director (since
June 1991) of HarbourView Asset Management Corporation, an investment adviser
subsidiary of the Manager; Chairman and a director of Shareholder Services, Inc.
(since August 1994) and Shareholder Financial Services, Inc. (since September
1995), transfer agent subsidiaries of the Manager; President (since September
1995) and a director (since October 1990) of Oppenheimer Acquisition Corp., the
Manager's parent holding company; President (since September 1995) and a
director (since November 1989) of Oppenheimer Partnership Holdings, Inc., a
holding company subsidiary of the Manager; a director of Oppenheimer Real Asset
Management, Inc. (since July 1996); President and a director (since October
1997) of OppenheimerFunds International Ltd., an offshore fund management
subsidiary of the Manager and of Oppenheimer Millennium Funds plc; President and
a director of other Oppenheimer funds; a director of Prudential Corporation plc
(a U.K. financial service company).
Ned M. Steel, Trustee, Age: 84
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; a director of Visiting Nurse
Corporation of Colorado.
James C. Swain*, Chairman, Chief Executive Officer and Trustee, Age: 65
6803 South Tucson Way, Englewood, Colorado 80112
Vice Chairman of the Manager (since September 1988); formerly President and a
director of Centennial Asset Management Corporation, an investment adviser
subsidiary of the Manager and Chairman of the Board of Shareholder Services,
Inc.
Michael A. Carbuto, Vice President and Portfolio Manager, Age: 44
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager and Centennial Asset Management Corporation (since
May 1988); an officer of other Oppenheimer funds.
Andrew J. Donohue, Vice President and Secretary, Age: 49
Two World Trade Center, New York, New York 10048-0203
Executive Vice President (since January 1993), General Counsel (since October
1991) and a Director (since September 1995) of the Manager; Executive Vice
President and General Counsel (since September 1993) and a director (since
January 1992) of the Distributor; Executive Vice President, General Counsel and
a director of HarbourView Asset Management Corporation, Shareholder Services,
Inc., Shareholder Financial Services, Inc. and (since September 1995)
Oppenheimer Partnership Holdings, Inc.; President and a director of Centennial
Asset Management Corporation (since September 1995); President, General Counsel
and a director of Oppenheimer Real Asset Management, Inc. (since July 1996);
General Counsel (since May 1996) and Secretary (since April 1997) of Oppenheimer
Acquisition Corp.; Vice President and a director of OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc (since October 1997); an
officer of other Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer, Age: 40
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an
officer of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Scott T. Farrar, Assistant Treasurer, Age: 34
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Brian W. Wixted, Treasurer, Age: 40
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since April 1999) of the Manager; Treasurer
of HarbourView Asset Management Corporation, Shareholder Services, Inc.,
Shareholder Financial Services, Inc. and Oppenheimer Partnership Holdings, Inc.
(since April 1999); Assistant Treasurer of Oppenheimer Acquisition Corp. (since
April 1999); Assistant Secretary of Centennial Asset Management Corporation
(since April 1999); formerly Principal and Chief Operating Officer, Bankers
Trust Company - Mutual Fund Services Division (March 1995 - March 1999); Vice
President and Chief Financial Officer of CS First Boston Investment Management
Corp. (September 1991 - March 1995); and Vice President and Accounting Manager,
Merrill Lynch Asset Management (November 1987 - September 1991).
Robert G. Zack, Assistant Secretary, Age: 51
Two World Trade Center, New York, New York 10048-0203
Senior Vice President (since May 1985) and Associate General Counsel (since May
1981) of the Manager, Assistant Secretary of Shareholder Services, Inc. (since
May 1985), and Shareholder Financial Services, Inc. (since November 1989);
Assistant Secretary of OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since October 1997); an officer of other Oppenheimer
funds.
O Remuneration of Trustees. The officers of the Trust and certain Trustees of
the Trust (Ms. Macaskill and Mr. Swain) who are affiliated with the Manager
receive no salary or fee from the Trust. The remaining Trustees of the Trust
received the compensation shown below. The compensation from the Trust was paid
during its fiscal year ended June 30, 1999. The compensation from all of the
Denver-based Oppenheimer funds includes the Trust and is compensation received
as a trustee, director, managing general partner or member of a committee of the
Board during the calendar year 1998.
-----------------------------------------------------------------------------
Aggregate Total Compensation
Trustee's Name Compensation from all Denver-Based
and Other Positions from Trust Oppenheimer Funds1
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Robert G. Avis $256 $67,998
-----------------------------------------------------------------------------
William A. Baker $260 $69,998
-----------------------------------------------------------------------------
Sam Freedman $279 $73,998
Review Committee Member
----------------------------------------------------------------------------
Raymond J. Kalinowski $279 $73,998
Audit Committee Member
-----------------------------------------------------------------------------
C. Howard Kast $291 $76,998
Audit and Review
Committee Chairman
-----------------------------------------------------------------------------
Robert M. Kirchner $256 $67,998
Audit Committee Member
-----------------------------------------------------------------------------
Ned M. Steel $256 $67,998
-----------------------------------------------------------------------------
1. For the 1998 calendar year.
o Deferred Compensation Plan for Trustees. The Trustees have adopted
a Deferred Compensation Plan for disinterested Trustees that enables them to
elect to defer receipt of all or a portion of the annual fees they are entitled
to receive from the Trust. Under the plan, the compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Trustee. The
amount paid to the Trustee under this plan will be determined based upon the
performance of the selected funds.
Deferral of fees of the Trustees under this plan will not materially
affect the Trust's assets, liabilities or net income per share. This plan will
not obligate the Trust to retain the services of any Trustee or to pay any
particular level of compensation to any Trustee. Pursuant to an Order issued by
the Securities and Exchange Commission, the Trust may invest in the funds
selected by any Trustee under this plan without shareholder approval for the
limited purpose of determining the value of the Trustees' deferred fee accounts.
|X| Major Shareholders. As of October 21, 1999 the only person who owned
of record or was known by the Trust to own beneficially 5% or more of the
Trust's outstanding retail shares was A.G. Edwards & Sons, Inc. ("Edwards"), 1
North Jefferson Avenue, St. Louis, Missouri 63103, which owned 50,025,845.850
shares of the Trust which was 90.1% of the outstanding shares of the Trust on
that date, for accounts of its customers none of whom individually owned more
than 5% of the outstanding shares..
The Manager. The Manager is wholly-owned by OppenheimerFunds, Inc., which is a
wholly-owned subsidiary of Oppenheimer Acquisition Corp., a holding company
controlled by Massachusetts Mutual Life Insurance Company.
The portfolio manager of the Trust is principally responsible for the
day-to-day management of the Trust's investment portfolio. Other members of the
Manager's fixed-income portfolio department, particularly security analysts,
traders and other portfolio managers, have broad experience with fixed-income
securities. They provide the Trust's portfolio managers with research and
support in managing the Trust's investments.
|X| The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Trust under an investment advisory
agreement between the Manager and the Trust. The Manager selects securities for
the Trust's portfolio and handles its day-to-day business. The agreement
requires the Manager, at its expense, to provide the Trust with adequate office
space, facilities and equipment. It also requires the Manager to provide and
supervise the activities of all administrative and clerical personnel required
to provide effective administration for the Trust. Those responsibilities
include the compilation and maintenance of records with respect to its
operations, the preparation and filing of specified reports, and composition of
proxy materials and registration statements for continuous public sale of shares
of the Trust.
Expenses not expressly assumed by the Manager under the investment
advisory agreement are paid by the Trust. The investment advisory agreement
lists examples of expenses paid by the Trust. The major categories relate to
interest, taxes, fees to unaffiliated Trustees, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs, certain printing
and registration costs and non-recurring expenses, including litigation costs.
The management fees paid by the Trust to the Manager are calculated at the rates
described in the Prospectus.
- --------------------------------------------------------------------------------
Fiscal Year Management Fee Paid to Centennial Asset Management Corporation
ending 6/30
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1997 $226,414
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1998 $269,488
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1999 $296,653
- --------------------------------------------------------------------------------
The Manager has temporarily undertaken to assume any expenses of the Trust
in any fiscal year they exceed 0.80% of the Trust's average annual net assets.
The payment of the management fee at the end of any month will be reduced so
that there will not be any accrued but unpaid liability under those expense
limitations. Any assumption of the Trust's expenses under this arrangement
lowers the Trust's overall expense ratio and increases its yield and total
return during the time such expenses are assumed. The Manager reserves the right
to terminate or amend this undertaking at any time. For the fiscal years ended
June 30, 1997, 1998 and 1999 the management fees payable by the Trust to the
Manager would have been $266,414, $269,488 and $258,691, respectively, without
the Manager's voluntary expense assumption. Those amounts do not reflect the
effect of the expense assumptions of $45,647, $24,124 and $37,962 respectively,
in those periods by the Manager.
The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the investment advisory
agreement, the Manager is not liable for any loss resulting from a good faith
error or omission on its part with respect to any of its duties under the
agreement.
|X| The Distributor. Under its General Distributor's Agreement with the
Trust, Centennial Asset Management Corporation acts as the Trust's principal
underwriter and Distributor in the continuous public offering of the Trust's
shares. The Distributor is not obligated to sell a specific number of shares.
The Distributor bears the expenses normally attributable to sales, including
advertising and the cost of printing and mailing prospectuses, other than those
furnished to existing shareholders.
Portfolio Transactions. Portfolio decisions are based upon recommendations and
judgment of the Manager subject to the overall authority of the Board of
Trustees. Most purchases made by the Trust are principal transactions at net
prices, so the Trust incurs little or no brokerage costs. The Trust deals
directly with the selling or purchasing principal or market maker without
incurring charges for the services of a broker on its behalf unless the Manager
determines that a better price or execution may be obtained by using the
services of a broker. Purchases of portfolio securities from underwriters
include a commission or concession paid by the issuer to the underwriter, and
purchases from dealers include a spread between the bid and asked prices.
The Trust seeks to obtain prompt execution of orders at the most favorable
net price. If broker/dealers are used for portfolio transactions, transactions
may be directed to broker/dealers for their execution and research services. The
research services provided by a particular broker may be useful only to one or
more of the advisory accounts of the Manager and its affiliates. Investment
research received for the commissions of those other accounts may be useful both
to the Trust and one or more of such other accounts. Investment research
services may be supplied to the Manager by a third party at the instance of a
broker through which trades are placed. It may include information and analyses
on particular companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio evaluations,
information systems, computer hardware and similar products and services. If a
research service also assists the Manager in a non-research capacity (such as
bookkeeping or other administrative functions), then only the percentage or
component that provides assistance to the Manager in the investment
decision-making process may be paid in commission dollars.
The research services provided by brokers broaden the scope and supplement
the research activities of the Manager. That research provides additional views
and comparisons for consideration, and helps the Manager obtain market
information for the valuation of securities held in the Trust's portfolio or
being considered for purchase.
Subject to applicable rules covering the Manager's activities in this
area, sales of shares of the Trust and/or the other investment companies managed
by the Manager or distributed by the Distributor may also be considered as a
factor in the direction of transactions to dealers. That must be done in
conformity with the price, execution and other considerations and practices
discussed above. Those other investment companies may also give similar
consideration relating to the sale of the Trust's shares. No portfolio
transactions will be handled by any securities dealer affiliated with the
Manager.
The Trust's policy of investing in short-term debt securities with
maturities of less than one year results in high portfolio turnover and may
increase the Trust's transaction costs. However, since brokerage commissions, if
any, are small, high turnover does not have an appreciable adverse effect upon
the income of the Trust.
Service Plan
The Trust has adopted a Service Plan for the shares. The plan has been approved
by a vote of the Board of Trustees, including a majority of the Independent
Trustees2, cast in person at a meeting called for the purpose of voting on that
plan.
2. In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to
those Trustees who are not "interested persons" of the Fund (or its parent
corporation) and who do not have any direct or indirect financial interest in
the operation of any agreement under the plan.
Under the plan, the Manager and the Distributor may make payments to
affiliates and, in their sole discretion, from time to time, may use their own
resources (at no direct cost to the Trust) to make payments to brokers, dealers
or other financial institutions for distribution and administrative services
they perform. The Manager may use its profits from the advisory fee it receives
from the Trust. In their sole discretion, the Distributor and the Manager may
increase or decrease the amount of payments they make from their own resources
to plan recipients.
Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if the Trust's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose of
voting on continuing the plan. A plan may be terminated at any time by the vote
of a majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the outstanding shares
of the Trust.
The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount of
payments to be made under a plan must be approved by shareholders of the class
affected by the amendment. The approval must be by a "majority" (as defined in
the Investment Company Act) of the shares.
While the plan is in effect, the Treasurer of the Trust shall provide
separate written reports on the plan to the Board of Trustees at least quarterly
for its review. The Reports shall detail the amount of all payments made under
the plan and the purpose for which the payments were made. Those reports are
subject to the review and approval of the Independent Trustees.
The plan states that while it is in effect, the selection and nomination
of those Trustees of the Trust who are not "interested persons" of the Trust is
committed to the discretion of the Independent Trustees. This does not prevent
the involvement of others in the selection and nomination process as long as the
final decision as to selection or nomination is approved by a majority of the
Independent Trustees.
Under the plan, no payment will be made to any recipient in any quarter in
which the aggregate net asset value of all Trust shares held by the recipient
for itself and its customers does not exceed a minimum amount, if any, that may
be set from time to time by a majority of the Independent Trustees. The Board of
Trustees has set no minimum amount of assets to qualify for payments under the
plan.
|X| Service Plan Fees. Under the service plan, the Distributor currently
uses the fees it receives from the Trust to pay brokers, dealers and other
financial institutions (they are referred to as "recipients") for personal
services and account maintenance services they provide for their customers who
hold shares. The services include, among others, answering customer inquiries
about the Trust, assisting in establishing and maintaining accounts in the
Trust, making the Trust's investment plans available and providing other
services at the request of the Trust or the Distributor. The service plan
permits reimbursements to the Distributor at a rate of up to 0.20% of average
annual net assets of the shares. While the plan permits the Board to authorize
payments to the Distributor to reimburse itself for services under the plan, the
Board has not yet done so. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.20% of the average annual net assets
consisting of shares held in the accounts of the recipients or their customers.
For the fiscal year ended June 30, 1999 payments under the plan totaled
$115,846, all of which was paid by the Distributor to recipients. That included
$90 paid to an affiliate of the Distributor's parent company. Any unreimbursed
expenses the Distributor incurs with respect to the shares in any fiscal year
cannot be recovered in subsequent years. The Distributor may not use payments
received under the plan to pay any of its interest expenses, carrying charges,
or other financial costs, or allocation of overhead.
Performance of the Trust
Explanation of Performance Terminology. The Trust uses a variety of terms to
illustrate its performance. These terms include "yield," "compounded effective
yield, " "tax-equivalent yield" and "average annual total return." An
explanation of how yields and total returns are calculated is set forth below.
The charts below show the Trust's performance as of the Trust's most recent
fiscal year end. You can obtain current performance information by calling the
Trust's Transfer Agent at 1-800-525-9310.
The Trust's illustrations of its performance data in advertisements must
comply with rules of the Securities and Exchange Commission. Those rules
describe the types of performance data that may be used and how it is to be
calculated. If the Trust shows total returns in addition to its yields, the
returns must be for the 1-, 5- and 10-year periods ending as of the most recent
calendar quarter prior to the publication of the advertisement (or its
submission for publication).
Use of standardized performance calculations enables an investor to
compare the Trust's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using the
Trust's performance information as a basis for comparisons with other
investments:
|_| Yields and total returns measure the performance of a hypothetical
account in the Trust over various periods and do not show the performance
of each shareholder's account. Your account's performance will vary from
the model performance data if your dividends are received in cash, or you
buy or sell shares during the period, or you bought your shares at a
different time than the shares used in the model.
|_| An investment in the Trust is not insured by the FDIC or any other
government agency.
|_| The Trust's yield is not fixed or guaranteed and will fluctuate.
|_| Yields and total returns for any given past period represent historical
performance information and are not, and should not be considered, a
prediction of future yields or returns.
|_| Yields. The Trust's current yield is calculated for a seven-day
period of time as follows. First, a base period return is calculated for the
seven-day period by determining the net change in the value of a hypothetical
pre-existing account having one share at the beginning of the seven-day period.
The change includes dividends declared on the original share and dividends
declared on any shares purchased with dividends on that share, but such
dividends are adjusted to exclude any realized or unrealized capital gains or
losses affecting the dividends declared. Next, the base period return is
multiplied by 365/7 to obtain the current yield to the nearest hundredth of one
percent.
The compounded effective yield for a seven-day period is calculated by (1)
adding 1 to the base period return (obtained as described above), (2) raising
the sum to a power equal to 365 divided by 7, and (3) subtracting 1 from the
result.
The yield as calculated above may vary for accounts less than
approximately $100 in value due to the effect of rounding off each daily
dividend to the nearest full cent. The calculation of yield under either
procedure described above does not take into consideration any realized or
unrealized gains or losses on the Trust's portfolio securities which may affect
dividends. Therefore, the return on dividends declared during a period may not
be the same on an annualized basis as the yield for that period.
The Trust's "tax equivalent yield" adjusts the Trust's current yield, as
calculated above, by a stated federal tax rate. The tax equivalent yield is
computed by dividing the tax-exempt portion of the Trust's current yield by one
minus a stated income tax rate and adding the result to the portion (if any) of
the Trust's current yield that is not tax-exempt. The tax equivalent yield may
be compounded as described above to provide a compounded effective tax
equivalent yield.
The Trust's tax equivalent yield may be used to compare the tax effects of
income derived from the Trust with income from taxable investments at the tax
rates stated. Exhibit D includes a tax equivalent yield table, based on various
effective tax brackets for individual taxpayers. Such tax brackets are
determined by a taxpayer's federal taxable income (the net amount subject to
federal income tax after deductions and exemptions). The tax equivalent yield
table assumes that the investor is taxed at the highest bracket, regardless of
whether a switch to non-taxable investments would cause a lower bracket to apply
and that state income tax payments are fully deductible for income tax purposes.
For taxpayers with income above certain levels, otherwise allowable itemized
deductions are limited. The Trust's tax equivalent yield for the seven-day
period ended June 30, 1999 was 4.34%. Its tax-equivalent compounded effective
yield for the same period was 4.39% for an investor in the highest federal tax
bracket.
o Total Return Information. There are different types of "total
returns" to measure the Trust's performance. Total return is the change in value
of a hypothetical investment in the Trust over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period. The cumulative
total return measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show actual
year-by-year performance. The Trust uses standardized calculations for its total
returns as prescribed by the SEC. The methodology is discussed below.
|_| Average Annual Total Return. The "average annual total return" of each
class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below) held
for a number of years ("n") to achieve an Ending Redeemable Value ("ERV" in the
formula) of that investment, according to the following formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
|_| Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
ERV - P
------- = Total Return
P
- --------------------------------------------------------------------------------
Yield Compounded Average Annual Total Returns (at 6/30/99)
(7 days ended Effective Yield
6/30/99) (7 days ended
6/30/99)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1-Year 5 Years 10 Years
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2.44% 2.47% 2.42% 2.74% 3.00%
- --------------------------------------------------------------------------------
|X| Other Performance Comparisons. Yield information may be useful to
investors in reviewing the Trust's performance. The Trust may make comparisons
between its yield and that of other investments, by citing various indices such
as The Bank Rate Monitor National Index (provided by Bank Rate MonitorJ) which
measures the average rate paid on bank money market accounts, NOW accounts and
certificates of deposits by the 100 largest banks and thrifts in the top ten
metro areas. When comparing the Trust's yield with that of other investments,
investors should understand that certain other investment alternatives such as
certificates of deposit, U.S. government securities, money market instruments or
bank accounts may provide fixed yields and may be insured or guaranteed.
From time to time, the Trust may include in its advertisements and sales
literature performance information about the Trust cited in other newspapers and
periodicals, such as The New York Times, which may include performance
quotations from other sources.
From time to time, the Trust's Manager may publish rankings or ratings of
the Manager (or the Transfer Agent) or the investor services provided by them.
Those ratings or rankings of investor/shareholder services by third parties may
compare the services provided to those of other mutual fund families selected by
the rating or ranking services. They may be based on the opinions of the rating
or ranking service itself, based on its research or judgment, or based on
surveys of investors, brokers, shareholders or others.
A B O U T Y O U R A C C O U N T
How to Buy Shares
Determination of Net Asset Value Per Share. The net asset value per share of the
Trust is determined twice each day that the New York Stock Exchange ("Exchange")
is open, at 12:00 Noon and at 4:00 P.M, on each day that the Exchange is open,
by dividing the value of the Trust's net assets by the total number of shares
outstanding. All references to time in this Statement of Additional Information
mean New York time. The Exchange's most recent annual announcement (which is
subject to change) states that it will close on New Year's Day, Martin Luther
King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. It may also close on other days.
The Trust's Board of Trustees has adopted the amortized cost method to
value the Trust's portfolio securities. Under the amortized cost method, a
security is valued initially at its cost and its valuation assumes a constant
amortization of any premium or accretion of any discount, regardless of the
impact of fluctuating interest rates on the market value of the security. This
method does not take into consideration any unrealized capital gains or losses
on securities. While this method provides certainty in valuing securities, in
certain periods the value of a security determined by amortized cost may be
higher or lower than the price the Trust would receive if it sold the security.
The Trust's Board of Trustees has established procedures reasonably
designed to stabilize the Trust's net asset value at $1.00 per share. Those
procedures include a review of the valuations of the Trust's portfolio holdings
by the Board of Trustees, at intervals it deems appropriate, to determine
whether the Trust's net asset value calculated by using available market
quotations deviates from $1.00 per share based on amortized cost.
The Board of Trustees will examine the extent of any deviation between the
Trust's net asset value based upon available market quotations and amortized
cost. If the Trust's net asset value were to deviate from $1.00 by more than
0.5%, Rule 2a-7 requires the Board of Trustees to consider what action, if any,
should be taken. If they find that the extent of the deviation may cause a
material dilution or other unfair effects on shareholders, the Board of Trustees
will take whatever steps it considers appropriate to eliminate or reduce the
dilution, including, among others, withholding or reducing dividends, paying
dividends from capital or capital gains, selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten the average maturity
of the portfolio, or calculating net asset value per share by using available
market quotations.
During periods of declining interest rates, the daily yield on shares of
the Trust may tend to be lower (and net investment income and dividends higher)
than those of a fund holding the identical investments as the Trust but which
used a method of portfolio valuation based on market prices or estimates of
market prices. During periods of rising interest rates, the daily yield of the
Trust would tend to be higher and its aggregate value lower than that of an
identical portfolio using market price valuation.
How to Sell Shares
The information below supplements the terms and conditions for redeeming shares
set forth in the Prospectus.
Checkwriting. When a check is presented to the Bank for clearance, the Bank will
ask the Trust to redeem a sufficient number of full and fractional shares in the
shareholder's account to cover the amount of the check. This enables the
shareholder to continue receiving dividends on those shares until the check is
presented to the Trust. Checks may not be presented for payment at the offices
of the Bank or the Trust's Custodian. This limitation does not affect the use of
checks for the payment of bills or to obtain cash at other banks. The Trust
reserves the right to amend, suspend or discontinue offering checkwriting
privileges at any time without prior notice.
In choosing to take advantage of the Checkwriting privilege, by signing the
Account Application or by completing a Checkwriting card, each individual who
signs:
(1) for individual accounts, represents that they are the registered owner(s)
of the shares of the Trust in that account;
(2) for accounts for corporations, partnerships, trusts and other entities,
represents that they are an officer, general partner, trustee or other
fiduciary or agent, as applicable, duly authorized to act on behalf of the
registered owner(s);
(3) authorizes the Trust, its Transfer Agent and any bank through which the
Trust's drafts (checks) are payable to pay all checks drawn on the Trust
account of such person(s) and to redeem a sufficient amount of shares from
that account to cover payment of each check;
(4) specifically acknowledges that if they choose to permit checks to be
honored if there is a single signature on checks drawn against joint
accounts, or accounts for corporations, partnerships, trusts or other
entities, the signature of any one signatory on a check will be sufficient
to authorize payment of that check and redemption from the account, even if
that account is registered in the names of more than one person or more
than one authorized signature appears on the Checkwriting card or the
Application, as applicable;
(5) understands that the Checkwriting privilege may be terminated or amended at
any time by the Trust and/or the Trust's bank; and
(6) acknowledges and agrees that neither the Trust nor its bank shall incur any
liability for that amendment or termination of checkwriting privileges or
for redeeming shares to pay checks reasonably believed by them to be
genuine, or for returning or not paying checks that have not been accepted
for any reason.
Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of
redemptions proceeds may be delayed if the Trust's custodian bank is not open
for business on a day when the Trust would normally authorize the wire to be
made, which is usually the Trust's next regular business day following the
redemption. In those circumstances, the wire will not be transmitted until the
next bank business day on which the Trust is open for business. No distributions
will be paid on the proceeds of redeemed shares awaiting transfer by Federal
Funds wire
How to Exchange Shares
As stated in the Prospectus, direct shareholders can exchange shares of the
Trust for Class A shares of any of the following eligible funds:
Oppenheimer Main Street California
Oppenheimer Bond Fund Municipal Fund
Oppenheimer Main Street Growth &
Oppenheimer Capital Appreciation Fund Income Fund
Oppenheimer Capital Preservation Oppenheimer Main Street Small Cap Fund
Oppenheimer California Municipal Fund Oppenheimer MidCap Fund
Oppenheimer Champion Income Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Convertible Securities Fund Oppenheimer Municipal Bond Fund
Oppenheimer Developing Markets Fund Oppenheimer New York Municipal Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Disciplined Value Fund Oppenheimer Pennsylvania Municipal
Fund
Oppenheimer Discovery Fund Oppenheimer Quest Balanced Value Fund
Oppenheimer Quest Capital Value Fund,
Oppenheimer Enterprise Fund Inc.
Oppenheimer Quest Global Value Fund,
Oppenheimer Capital Income Fund Inc.
Oppenheimer Europe Fund Oppenheimer Quest Opportunity Value
Fund
Oppenheimer Florida Municipal Fund Oppenheimer Quest Small Cap Value Fund
Oppenheimer GlobalFund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Global Growth & Income Fund Oppenheimer Real Asset Fund
Oppenheimer Gold & Special Minerals Fund Oppenheimer Strategic Income Fund
Oppenheimer Growth Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer High Yield Fund Oppenheimer Trinity Core Fund
Oppenheimer Insured Municipal Fund Oppenheimer Trinity Growth Fund
Oppenheimer Intermediate Municipal Fund Oppenheimer Trinity Value Fund
Oppenheimer International Bond Fund Oppenheimer U.S. Government Trust
Oppenheimer International Growth Fund Oppenheimer World Bond Fund
Oppenheimer International Small
Company Fund Limited-Term New York Municipal Fund
Oppenheimer Large Cap Growth Fund Rochester Fund Municipals
Oppenheimer Limited-Term Government Fund
and the following money
market funds:
Centennial New York Tax Exempt Trust
Centennial America Fund, L. P. Centennial Tax Exempt Trust
Centennial California Tax Exempt Trust Oppenheimer Cash Reserves
Centennial Government Trust Oppenheimer Money Market Fund, Inc.
Centennial Money Market Trust
Shares of the Trust purchased without a sales charge may be exchanged for
shares of an eligible fund offered with a sales charge upon payment of the sales
charge. Shares of the Trust acquired by reinvestment of dividends or
distributions from the Trust or any of the other eligible funds (other than
Oppenheimer Cash Reserves) or from any unit investment trust for which
reinvestment arrangements have been made with the Distributor may be exchanged
at net asset value for shares of any of the eligible funds.
|_| Limits on Multiple Exchange Orders. The Trust reserves the right to
reject telephone or written exchange requests submitted in bulk by anyone on
behalf of more than one account. The Trust may accept requests for exchanges of
up to 50 accounts per day from representatives of authorized dealers that
qualify for this privilege.
|_| Telephone Exchange Requests. When exchanging shares by telephone, a
direct shareholder must have an existing account in the fund to which the
exchange is to be made. Otherwise, the investor must obtain a prospectus of that
fund before the exchange request may be submitted. If all telephone lines are
busy (which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by telephone
and would have to submit written exchange requests.
|_| Processing Exchange Requests. Shares to be exchanged are redeemed on
the regular business day the Transfer Agent receives an exchange request in
proper form (the "Redemption Date"). Normally, shares of the fund to be acquired
are purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The Trust
reserves the right, in its discretion, to refuse any exchange request that may
disadvantage it (for example, if the receipt of multiple exchange requests from
a dealer might require the disposition of portfolio securities at a time or at a
price that might be disadvantageous to the Trust).
In connection with any exchange request, the number of shares exchanged
may be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information or would include shares covered by a share
certificate that is not tendered with the request. In those cases, only the
shares available for exchange without restriction will be exchanged.
The different eligible funds available for exchange have different
investment objectives, policies and risks. A shareholder should assure that the
fund selected is appropriate for his or her investment and should be aware of
the tax consequences of an exchange. For Federal income tax purposes, an
exchange transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. The Trust, the Distributor, the Sub-Distributor,
and the Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other investment
transaction.
The Trust may amend, suspend or terminate the exchange privilege at any
time. Although, the Trust may impose these changes at any time, it will provide
you with notice of those changes whenever it is required to do so by applicable
law. It may be required to provide 60 days notice prior to materially amending
or terminating the exchange privilege. That 60-day notice is not required in
extraordinary circumstances.
Dividends and Taxes
Tax Status of the Trust's Dividends and Distributions. The Trust intends to
qualify under the Internal Revenue Code during each fiscal year to pay
"exempt-interest dividends" to its shareholders. Exempt-interest dividends that
are derived from net investment income earned by the Trust on municipal
securities will be excludable from gross income of shareholders for federal
income tax purposes.
Net investment income includes the allocation of amounts of income from
the municipal securities in the Trust's portfolio that are free from federal
income taxes. This allocation will be made by the use of one designated
percentage applied uniformly to all income dividends paid during the Trust's tax
year. That designation will normally be made following the end of each fiscal
year as to income dividends paid in the prior year. The percentage of income
designated as tax-exempt may substantially differ from the percentage of the
Trust's income that was tax-exempt for a given period.
A portion of the exempt-interest dividends paid by the Trust may be an
item of tax preference for shareholders subject to the alternative minimum tax.
The amount of any dividends attributable to tax preference items for purposes of
the alternative minimum tax will be identified when tax information is
distributed by the Trust.
A shareholder receiving a dividend from income earned by the Trust from
one or more of the following sources treats the dividend as a receipt of either
ordinary income or long-term capital gain in the computation of gross income,
regardless of whether the dividend is reinvested:
(1) certain taxable temporary investments (such as certificates of deposit,
repurchase agreements, commercial paper and obligations of the U.S. government,
its agencies and instrumentalities);
(2) income from securities loans;
(3) income or gains from options or futures; or
(4) an excess of net short-term capital gain over net long-term capital loss
from the Trust.
The Trust's dividends will not be eligible for the dividends-received
deduction for corporations. Shareholders receiving Social Security benefits
should be aware that exempt-interest dividends are a factor in determining
whether such benefits are subject to federal income tax. Losses realized by
shareholders on the redemption of Trust shares within six months of purchase
(which period may be shortened by regulation) will be disallowed for federal
income tax purposes to the extent of exempt-interest dividends received on such
shares.
If the Trust qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for federal income taxes on amounts
paid by it as dividends and distributions. That qualification enables the Trust
to "pass through" its income and realized capital gains to shareholders without
having to pay tax on them. The Trust qualified as a regulated investment company
in its last fiscal year and intends to qualify in future years, but reserves the
right not to qualify. The Internal Revenue Code contains a number of complex
tests to determine whether the Trust qualifies. The Trust might not meet those
tests in a particular year. If it does not qualify, the Trust will be treated
for tax purposes as an ordinary corporation and will receive no tax deduction
for payments of dividends and distributions made to shareholders.
In any year in which the Trust qualifies as a regulated investment company
under the Internal Revenue Code, the Trust will also be exempt from New York
corporate income and franchise taxes. It will also be qualified under New York
law to pay exempt interest dividends that will be exempt from New York State and
New York City personal income tax. That exemption applies to the extent that the
Trust's distributions are attributable to interest on New York municipal
securities. Distributions from the Trust attributable to income from sources
other than New York municipal securities and U.S. government obligations will
generally be subject to New York income tax as ordinary income.
Distributions by the Trust from investment income and long- and short-term
capital gains will generally not be excludable from taxable net investment
income in determining New York corporate franchise tax and New York City general
corporation tax for corporate shareholders of the Trust. Additionally, certain
distributions paid to corporate shareholders of the Trust may be includable in
income subject to the New York alternative minimum tax.
Under the Internal Revenue Code, by December 31 each year the Trust must
distribute 98% of its taxable investment income earned from January 1 through
December 31 of that year and 98% of its capital gains realized in the period
from November 1 of the prior year through October 31 of the current year. If it
does not, the Trust must pay an excise tax on the amounts not distributed. It is
presently anticipated that the Trust will meet those requirements. However, the
Trust's Board of Trustees and the Manager might determine in a particular year
that it would be in the best interest of shareholders not to make distributions
at the required levels and to pay the excise tax on the undistributed amounts.
That would reduce the amount of income or capital gains available for
distribution to shareholders.
Dividend Reinvestment in Another Trust. Direct shareholders of the Trust may
elect to reinvest all dividends and/or capital gains distributions in Class A
shares of any eligible fund listed above. To elect this option, the shareholder
must notify the Transfer Agent in writing and must have an existing account in
the fund selected for reinvestment. Otherwise, the shareholder first must obtain
a prospectus for that fund and an application from the Distributor to establish
an account. The investment will be made at the close of business on the payable
date of the dividend or distribution.
Additional Information About the Trust
The Distributor. The Trust's shares are sold through dealers, brokers and other
financial institutions that have a sales agreement with the Sub-Distributor. The
Distributor and the Sub-Distributor also distribute shares of the other funds
managed by the Manager or an affiliate.
The Transfer Agent. Shareholder Services, Inc. the Trust's Transfer Agent,
is responsible for maintaining the Trust's shareholder registry and
shareholder accounting records, and for paying dividends and distributions to
shareholders of the Trust. It also handles shareholder servicing and
administrative functions. It is paid on a "at-cost" basis.
The Custodian. Citibank, N.A. is the Custodian of the Trust's assets. The
Custodian's responsibilities include safeguarding and controlling the Trust's
portfolio securities and handling the delivery of such securities to and from
the Trust. It will be the practice of the Trust to deal with the Custodian in a
manner uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates. The Trust's cash balances with the Custodian in
excess of $100,000 are not protected by federal deposit insurance. Those
uninsured balances at times may be substantial.
Independent Auditors. Deloitte & Touche LLP are the independent auditors of the
Trust. They audit the Trust's financial statements and perform other related
audit services. They also act as auditors for the Manager and OFI and for
certain other funds advised by the Manager and its affiliates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Centennial New York Tax Exempt Trust:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Centennial New York Tax Exempt Trust as of June
30, 1999, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended June 30, 1999 and 1998
and the financial highlights for the period July 1, 1994 to June 30, 1999. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1999, by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Centennial New York
Tax Exempt Trust as of June 30, 1999, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
July 22, 1999
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS June 30, 1999
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT SEE NOTE 1
=====================================================================================================================
SHORT-TERM TAX-EXEMPT OBLIGATIONS - 101.2%
- ---------------------------------------------------------------------------------------------------------------------
NEW YORK - 94.5%
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Babylon, NY IDA RB, J. D'Addario & Co. Project, 3.40% (1) $ 500,000 $ 500,000
- ---------------------------------------------------------------------------------------------------------------------
Buffalo, NY RAN, Series A, 3.75%, 7/27/99 2,500,000 2,501,316
- ---------------------------------------------------------------------------------------------------------------------
Erie Cnty., NY RAN, 4%, 10/13/99 1,200,000 1,203,531
- ---------------------------------------------------------------------------------------------------------------------
Franklin Cnty., NY IDA RAN, McAdam Cheese Co. Project, 3.65% (1) 1,900,000 1,900,000
- ---------------------------------------------------------------------------------------------------------------------
Hempstead, NY IDA RRB, Trigen-Nassau Energy, 3.45% (1) 1,000,000 1,000,000
- ---------------------------------------------------------------------------------------------------------------------
Jefferson Cnty., NY IDA RB, 3.15% (1) 2,500,000 2,499,998
- ---------------------------------------------------------------------------------------------------------------------
L.I., NY PAU Electric System RB, Series 10, FSA Insured, 3.69% (1) 2,500,000 2,500,000
- ---------------------------------------------------------------------------------------------------------------------
NYC GOUN, Series F-2, 3.25% (1) 300,000 300,000
- ---------------------------------------------------------------------------------------------------------------------
NYC GOUN, Series F-5, 3.35% (1) 700,000 700,000
- ---------------------------------------------------------------------------------------------------------------------
NYC GOUN, Subseries J2, 2.80% (1) 1,000,000 1,000,000
- ---------------------------------------------------------------------------------------------------------------------
NYC HDC MH RB, James Tower Development, Series A, 3.15% (1) 1,200,000 1,200,018
- ---------------------------------------------------------------------------------------------------------------------
NYC IDA Civic Facility RB, Columbia Grammar School Project, 3.30% (1) 900,000 900,000
- ---------------------------------------------------------------------------------------------------------------------
NYC MTAU Transportation Facilities RB, 3.05%, 7/15/99 (2) 1,200,000 1,200,000
- ---------------------------------------------------------------------------------------------------------------------
NYC MTAU Transportation Facilities RB, 3.10%, 8/10/99 (2) 2,700,000 2,700,000
- ---------------------------------------------------------------------------------------------------------------------
NYC MTAU Transportation Facilities RB, Series SG3 6, 2.88% (1) 2,390,000 2,390,000
- ---------------------------------------------------------------------------------------------------------------------
NYS DA COP, Rockefeller University, 3.65% (1) 500,000 500,000
- ---------------------------------------------------------------------------------------------------------------------
NYS DA RB, Cornell University, 3.40%, 10/12/99 (2) 2,000,000 2,000,000
- ---------------------------------------------------------------------------------------------------------------------
NYS Environmental Quality GOB, 3.10%, 8/25/99 (2) 1,250,000 1,250,000
- ---------------------------------------------------------------------------------------------------------------------
NYS ERDAUPC RB, NYS Electric & Gas Corp., Series D, 3%, 12/1/99 (2) 3,000,000 3,000,044
- ---------------------------------------------------------------------------------------------------------------------
NYS GOB, 2.95%, 8/12/99 (2) 2,500,000 2,500,000
- ---------------------------------------------------------------------------------------------------------------------
NYS HFA RB, Normandie Court I Project, 3.20% (1) 1,200,000 1,200,008
- ---------------------------------------------------------------------------------------------------------------------
NYS HFA RB, Saxony Housing, Series A, 3.30% (1) 800,000 800,000
- ---------------------------------------------------------------------------------------------------------------------
NYS LGAC RB, Series G, 3% (1) 2,400,000 2,400,000
- ---------------------------------------------------------------------------------------------------------------------
NYS MAG RB, Series PT217, 3.30%, 10/1/99 (2) 2,800,000 2,800,000
- ---------------------------------------------------------------------------------------------------------------------
NYS MCFFA RB, St. Lukes Hospital, Series B, 7.45%, 2/15/00 (2) 6,250,000 6,537,038
- ---------------------------------------------------------------------------------------------------------------------
NYS PAU RB, 3.05%, 8/24/99 (2) 1,000,000 1,000,000
- ---------------------------------------------------------------------------------------------------------------------
NYS PAU RB, 3.10%, 7/12/99 (2) 1,700,000 1,700,000
- ---------------------------------------------------------------------------------------------------------------------
NYS TBTAU Beneficial Interest COP, MBIA Insured, 3.35%, 7/15/99 (2) 1,900,000 1,900,000
- ---------------------------------------------------------------------------------------------------------------------
NYS TBTAU RB, Series SG-41, 2.95%, 11/10/99 (2) 1,930,000 1,930,000
- ---------------------------------------------------------------------------------------------------------------------
NYS Urban Empire Development Corp. RB, Series A, 3.65% (1) 1,900,000 1,900,000
- ---------------------------------------------------------------------------------------------------------------------
Southeast NY IDA RB, Unilock NY, Inc. Project, 3.75% (1) 2,000,000 2,000,000
- ---------------------------------------------------------------------------------------------------------------------
Suffolk Cnty., NY TAN, Series II, 4%, 9/9/99 2,500,000 2,503,012
--------------
58,414,965
- ---------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS - 6.7%
- ---------------------------------------------------------------------------------------------------------------------
PR CMWLTH TAN & RAN, 3.50%, 7/30/99 2,500,000 2,501,274
- ---------------------------------------------------------------------------------------------------------------------
PR Industrial, Medical & Environmental PC Facilities FAU RB,
Reynolds Metals Co. Project, 3.60%, 9/1/99 (2) 1,600,000 1,600,000
--------------
4,101,274
- ---------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE 101.2% 62,516,239
- ---------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (1.2) (724,364)
-------------- ----------------
NET ASSETS 100.0% $61,791,875
============== ================
</TABLE>
3 Centennial New York Tax Exempt Trust
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
=====================================================================================================================
To simplify the listings of securities, abbreviations are used per the table
below:
<S> <C>
CMWLTH - Commonwealth MAG - Mtg. Agency
COP - Certificates of Participation MCFFA - Medical Care Facilities Finance Agency
DA - Dormitory Authority MH - Multifamily Housing
ERDAUPC - Energy Research & Development Authority MTAU - Metropolitan Transportation Authority
Pollution Control NYC - New York City
FAU - Finance Authority NYS - New York State
GOB - General Obligation Bonds PAU - Power Authority
GOUN - General Obligation Unlimited Nts. PC - Pollution Control
HDC - Housing Development Corp. RAN - Revenue Anticipation Nts.
HFA - Housing Finance Agency RB - Revenue Bonds
IDA - Industrial Development Agency RRB - Revenue Refunding Bonds
LGAC - Local Government Assistance Corp. TAN - Tax Anticipation Nts.
L.I. - Long Island TBTAU - Triborough Bridge & Tunnel Authority
</TABLE>
1. Floating or variable rate obligation maturing in more than one year. The
interest rate, which is based on specific, or an index of, market interest
rates, is subject to change periodically and is the effective rate on June 30,
1999. This instrument may also have a demand feature which allows, on up to 30
days' notice, the recovery of principal at any time, or at specified intervals
not exceeding one year.
2. Put obligation redeemable at full face value on the date reported.
See accompanying Notes to Financial Statements.
4 Centennial New York Tax Exempt Trust
<PAGE>
- -------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES June 30, 1999
<TABLE>
<CAPTION>
====================================================================================================================================
ASSETS
<S> <C>
Investments, at value $62,516,239
- ------------------------------------------------------------------------------------------------------------------------------------
Cash 45,898
- ------------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest 680,689
Shares of beneficial interest sold 115,495
Other 2,764
------------
Total assets 63,361,085
====================================================================================================================================
LIABILITIES
Payables and other liabilities:
Shares of beneficial interest redeemed 1,432,844
Dividends 55,898
Shareholder reports 34,571
Service plan fees 28,865
Transfer and shareholder servicing agent fees 4,877
Other 12,155
------------
Total liabilities 1,569,210
====================================================================================================================================
NET ASSETS $61,791,875
============
====================================================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $61,795,348
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (3,473)
------------
Net assets - applicable to 61,795,348 shares of beneficial
interest outstanding $61,791,875
============
====================================================================================================================================
NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE $1.00
</TABLE>
See accompanying Notes to Financial Statements.
5 Centennial New York Tax Exempt Trust
<PAGE>
- -----------------------------------------------------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED June 30, 1999
<TABLE>
====================================================================================================================================
<S> <C>
INVESTMENT INCOME - Interest $1,886,935
====================================================================================================================================
EXPENSES
Management fees - Note 3 296,653
- ------------------------------------------------------------------------------------------------------------------------------------
Service plan fees - Note 3 115,846
- ------------------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees - Note 3 40,046
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder reports 38,030
- ------------------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 11,240
- ------------------------------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 10,198
- ------------------------------------------------------------------------------------------------------------------------------------
Registration and filing fees 6,808
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance expenses 2,363
- ------------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 2,133
- ------------------------------------------------------------------------------------------------------------------------------------
Other 1,950
-----------
Total expenses 525,267
Less expenses paid indirectly - Note 1 (10,815)
Less reimbursement of expenses by Centennial Asset
Management Corporation - Note 3 (37,962)
-----------
Net expenses 476,490
====================================================================================================================================
NET INVESTMENT INCOME 1,410,445
====================================================================================================================================
NET REALIZED LOSS ON INVESTMENTS (739)
====================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,409,706
===========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
1999 1998
====================================================================================================================================
OPERATIONS
<S> <C> <C>
Net investment income $ 1,410,445 $ 1,536,032
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized loss (739) (844)
-------------------------------------
Net increase in net assets resulting from operations 1,409,706 1,535,188
====================================================================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (1,418,059) (1,528,418)
====================================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions - Note 2 4,993,614 7,903,908
====================================================================================================================================
NET ASSETS
Total increase 4,985,261 7,910,678
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of period 56,806,614 48,895,936
------------ ------------
End of period (including undistributed net investment
income of $7,614 from June 30, 1998) $61,791,875 $56,806,614
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
6 Centennial New York Tax Exempt Trust
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Year Ended June 30,
1999 1998 1997 1996 1995
==========================================================================================================================
PER SHARE OPERATING DATA
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Income from investment operations - net
investment income and net realized gain .02 .03 .03 .03 .03
Dividends and distributions to shareholders (.02) (.03) (.03) (.03) (.03)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======================================================================
==========================================================================================================================
TOTAL RETURN(1) 2.42% 2.87% 2.76% 2.79% 2.85%
==========================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $61,792 $56,807 $48,896 $39,807 $35,846
- --------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $59,345 $53,923 $45,363 $42,351 $29,590
- --------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 2.38% 2.85% 2.73% 2.76% 2.84%
Expenses, before voluntary assumption by the
Manager(3) 0.89% 0.89% 0.88% 0.93% 0.95%
Expenses, net of voluntary assumption by the Manager 0.80% 0.80% 0.80% 0.80% 0.80%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns reflect
changes in net investment income only. Total returns are not annualized for
periods of less than one full year.
2. Annualized for periods less than one full
year.
3. The expense ratio reflects the effect of gross expenses paid indirectly by
the Trust.
See accompanying Notes to Financial Statements.
7 Centennial New York Tax Exempt Trust
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Centennial New York Tax Exempt Trust (the Trust) is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The Trust's investment objective is to seek the
maximum current income exempt from Federal, New York State and New York City
income taxes for individual investors that is consistent with preservation of
capital. The Trust's investment advisor is Centennial Asset Management
Corporation (the Manager), a subsidiary of OppenheimerFunds, Inc. (OFI). The
following is a summary of significant accounting policies consistently followed
by the Trust.
SECURITIES VALUATION. Portfolio securities are valued on the basis of amortized
cost, which approximates market value.
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, to shareholders. Therefore, no federal
income or excise tax provision is required.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders, which are
determined in accordance with income tax regulations, are recorded on the
ex-dividend date.
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
OTHER. Investment transactions are accounted for as of trade date. Realized
gains and losses on investments are determined on an identified cost basis,
which is the same basis used for federal income tax purposes.
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related event in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
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 no par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1999 YEAR ENDED JUNE 30, 1998
SHARES AMOUNT SHARES AMOUNT
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Sold 194,238,424 $ 194,238,424 189,493,444 $189,493,444
Dividends and distributions 1,385,354 1,385,354 1,477,555 1,477,555
reinvested
Redeemed (190,630,164) (190,630,164) (183,067,091) (183,067,091)
-------------- -------------- ------------- -------------
Net increase 4,993,614 $4,993,614 7,903,908 $7,903,908
============== ============== ============= =============
</TABLE>
8 Centennial New York Tax Exempt Trust
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
3. MANAGEMENT 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 a fee of 0.50% of the first
$250 million of net assets; 0.475% of the next $250 million; 0.45% of the next
$250 million; 0.425% of the next $250 million and 0.40% of net assets in excess
of $1 billion. The Manager has voluntarily undertaken to assume Trust expenses
in excess of 0.80% of average annual net assets. The Trust's management fee for
the year ended June 30, 1999 was 0.50% of average annual net assets.
Shareholder Services, Inc. (SSI), a subsidiary of OFI, is the transfer and
shareholder servicing agent for the Trust and for other registered investment
companies. SSI's total costs of providing such services are allocated ratably to
these companies.
Under an approved service plan, the Trust may expend up to 0.20% of its net
assets annually to reimburse the Manager, as distributor, for costs incurred in
connection with the personal service and maintenance of accounts that hold
shares of the Trust, including amounts paid to brokers, dealers, banks and other
institutions.
Centennial New York Tax Exempt Trust
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 2000 shareholders will receive information regarding all dividends and
distributions paid to them by the Trust during calendar year 1999. Regulations
of the U.S. Treasury Department require the Trust to report this information to
the Internal Revenue Service.
None of the dividends paid by the Trust during the fiscal year ended June 30,
1999 are eligible for the corporate dividend-received deduction. The dividends
were derived from interest on municipal bonds and are not subject to federal
income tax. To the extent a shareholder is subject to any state or local laws,
some or all of the dividends received may be taxable.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Trust to the Internal Revenue Service. Because
of the complexity of the federal regulations which may affect your individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax advisor for specific guidance.
<PAGE>
Appendix A
- ------------------------------------------------------------------------------
Description of Securities Ratings
- ------------------------------------------------------------------------------
Below is a description of the two highest rating categories for Short Term Debt
and Long Term Debt by the "Nationally-Recognized Statistical Rating
Organizations" which the Manager evaluates in purchasing securities on behalf of
the Trust. The ratings descriptions are based on information supplied by the
ratings organizations to subscribers.
Short-Term Debt Ratings.
Moody's Investors Service, Inc.
- ------------------------------------------------------------------------------
The following rating designations for commercial paper (defined by Moody's as
promissory obligations not having original maturity in excess of nine months),
are judged by Moody's to be investment grade, and indicate the relative
repayment capacity of rated issuers:
Prime-1: Superior capacity for repayment. Capacity will normally be evidenced by
the following characteristics: (a) leveling market positions in well-established
industries; (b) high rates of return on funds employed; (c) conservative
capitalization structures with moderate reliance on debt and ample asset
protection; (d) broad margins in earning coverage of fixed financial charges and
high internal cash generation; and (e) well established access to a range of
financial markets and assured sources of alternate liquidity.
Prime-2: Strong capacity for repayment. This will normally be evidenced by many
of the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
Moody's ratings for state and municipal short-term obligations are designated
"Moody's Investment Grade" ("MIG"). Short-term notes which have demand features
may also be designated as "VMIG". These rating categories are as follows:
MIG1/VMIG1: Best quality. There is present strong protection by established cash
flows, superior liquidity support or demonstrated broad-based access to the
market for refinancing.
MIG2/VMIG2: High quality. Margins of protection are ample although not so
large as in the preceding group.
<PAGE>
Standard & Poor's Ratings Services
- ------------------------------------------------------------------------------
The following ratings by Standard & Poor's for commercial paper (defined by S&P
as debt having an original maturity of no more than 365 days) assess the
likelihood of payment:
A-1: Strong capacity for timely payment. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.
A-2: Satisfactory capacity for timely payment. However, the relative degree of
safety is not as high as for issues designated "A-1".
S&P's ratings for Municipal Notes due in three years or less are:
SP-1: Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2: Satisfactory capacity to pay principal and interest.
S&P assigns "dual ratings" to all municipal debt issues that have a demand or
double feature as part of their provisions. The first rating addresses the
likelihood of repayment of principal and interest as due, and the second rating
addresses only the demand feature. With short-term demand debt, S&P's note
rating symbols are used with the commercial paper symbols (for example,
"SP-1+/A-1+").
Fitch IBCA, Inc.
- ------------------------------------------------------------------------------
Fitch assigns the following short-term ratings to debt obligations that are
payable on demand or have original maturities of generally up to three years,
including commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes:
F-1+: Exceptionally strong credit quality; the strongest degree of assurance for
timely payment.
F-1: Very strong credit quality; assurance of timely payment is only slightly
less in degree than issues rated "F-1+". F-2: Good credit quality; satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as for issues assigned "F-1+" or "F-1" ratings.
Duff & Phelps, Inc.
- ------------------------------------------------------------------------------
The following ratings are for commercial paper (defined by Duff & Phelps as
obligations with maturities, when issued, of under one year), asset-backed
commercial paper, and certificates of deposit (the ratings cover all obligations
of the institution with maturities, when issued, of under one year, including
bankers' acceptance and letters of credit):
Duff 1+: Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or access to alternative sources of funds, is
outstanding, and safety is just below risk-free U.S. Treasury short-term
obligations.
Duff 1: Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are minor.
Duff 1-: High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.
Duff 2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
Thomson BankWatch, Inc.
- ------------------------------------------------------------------------------
The following short-term ratings apply to commercial paper, certificates of
deposit, unsecured notes, and other securities having a maturity of one year or
less.
TBW-1: The highest category; indicates the degree of safety regarding timely
repayment of principal and interest is very strong.
TBW-2: The second highest rating category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated "TBW-1".
Long Term Debt Ratings
These ratings are relevant for securities purchased by the Trust with a
remaining maturity of 397 days or less, or for rating issuers of short-term
obligations.
Moody's Investors Service, Inc.
- ------------------------------------------------------------------------------
Bonds (including municipal bonds) are rated as follows:
Aaa: Judged to be the best quality. They carry the smallest degree of investment
risk and are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin, and principal is
secure. While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong
positions of such issues.
Aa: Judged to be of high quality by all standards. Together with the "Aaa" group
they comprise what are generally known as high-grade bonds. They are rated lower
than the best bonds because margins of protection may not be as large as in
"Aaa" securities or fluctuations of protective elements may be of greater
amplitude or there may be other elements present which make the long-term risks
appear somewhat larger than in "Aaa" securities.
Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating
classification. The modifier "1" indicates that the security ranks in the higher
end of its generic rating category; the modifier "2" indicates a mid-range
ranking; and the modifier "3" indicates that the issue ranks in the lower end of
its generic rating category.
- ------------------------------------------------------------------------------
Standard & Poor's Ratings Services
- ------------------------------------------------------------------------------
Bonds (including municipal bonds) are rated as follows:
AAA: The highest rating assigned by S&P. Capacity to pay interest and repay
principal is extremely strong.
AA: A strong capacity to pay interest and repay principal and differ from
"AAA" rated issues only in small degree.
Fitch IBCA, Inc.
- ------------------------------------------------------------------------------
AAA: Considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA: Considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated "AAA". Plus (+) and minus (-) signs are used
in the "AA" category to indicate the relative position of a credit within that
category.
Because bonds rated in the "AAA" and "AA" categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issuers
is generally rated "F-1+".
- ------------------------------------------------------------------------------
Duff & Phelps, Inc.
- ------------------------------------------------------------------------------
AAA: The highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.
AA: High credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions. Plus (+) and
minus (-) signs are used in the "AA" category to indicate the relative position
of a credit within that category.
Thomson BankWatch, Inc.
- ------------------------------------------------------------------------------
TBW issues the following ratings for companies. These ratings assess the
likelihood of receiving payment of principal and interest on a timely basis and
incorporate TBW's opinion as to the vulnerability of the company to adverse
developments, which may impact the market's perception of the company, thereby
affecting the marketability of its securities.
A: Possesses an exceptionally strong balance sheet and earnings record,
translating into an excellent reputation and unquestioned access to its natural
money markets. If weakness or vulnerability exists in any aspect of the
company's business, it is entirely mitigated by the strengths of the
organization.
A/B: The company is financially very solid with a favorable track record and
no readily apparent weakness. Its overall risk profile, while low, is
not quite as favorable as for companies in the highest rating
<PAGE>
Appendix B
- ------------------------------------------------------------------------------
Industry Classifications
- ------------------------------------------------------------------------------
Adult Living Facilities
Education
Electric
Gas
General Obligation
Higher Education
Highways
Hospital
Lease Rental
Manufacturing,
Durables Manufacturing,
Non Durables
Marine/Aviation
Facilities
Multi-Family Housing
Pollution Control
Resource Recovery
Sales Tax
Sewer
Single Family Housing
Special Assessment
Telephone
Water
<PAGE>
Appendix C
- ------------------------------------------------------------------------------
TAX EQUIVALENT YIELD TABLES
- ------------------------------------------------------------------------------
The equivalent yield tables below compare tax-free income with taxable income
under federal, New York State and New York City income tax rates effective
January 1, 1999. Combined taxable income refers to the net amount subject to (i)
Federal and New York State income tax as to the first two tables below and (ii)
Federal, New York State and New York City income tax as to the third and fourth
tables below, in each case after deductions and exemptions. The tables assume
that an investor's highest tax bracket applies to the change in taxable income
resulting from a switch between taxable and non-taxable investments, that the
investor is not subject to the Alternative Minimum Tax and that New York State
and local income tax payments are fully deductible for Federal income tax
purposes. They do not reflect the phaseout of itemized deductions and personal
exemptions at higher income levels, resulting in higher effective tax rates and
tax equivalent yields.
- ------------------------------------------------------------------------------
New York State Residents Combined Taxable Income
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Centennial New York Tax Exempt Trust Yield of:
Joint Return Effective Tax Bracket
- ------------ ---------------------
2.0% 2.5% 3.0% 3.5% 4.0% 4.5%
But
Over Not Over Federal NYS Combined Is Approximately Equivalent to a
Taxable Yield of:
$ 22,000 $ 26,000 15.0% 5.25% 22.62% 2.58% 3.23% 3.88% 4.52% 5.17% 5.82%
$ 26,000 $ 40,000 15.0% 5.90% 23.17% 2.60% 3.25% 3.90% 4.56% 5.21% 5.86%
$ 40,000 $ 43,050 15.0% 6.85% 23.98% 2.63% 3.29% 3.95% 4.60% 5.26% 5.92%
$ 43,050 $ 45,000 28.0% 6.85% 35.61% 3.11% 3.88% 4.66% 5.44% 6.21% 6.99%
$ 45,000 $ 90,000 28.0% 6.85% 35.65% 3.11% 3.88% 4.66% 5.44% 6.22% 6.99%
$ 90,000 $104,050 28.0% 6.85% 35.69% 3.11% 3.89% 4.66% 5.44% 6.22% 7.00%
$104,050 $158,550 31.0% 6.85% 38.37% 3.25% 4.06% 4.87% 5.68% 6.49% 7.30%
$158,550 $283,150 36.0% 6.85% 42.83% 3.50% 4.37% 5.25% 6.12% 7.00% 7.87%
$283,150 39.6% 6.85% 46.05% 3.71% 4.63% 5.56% 6.49% 7.41% 8.34%
Centennial New York Tax Exempt
Trust Yield of:
Single Return Effective Tax Bracket 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%
- ------------- ---------------------
But
Over Not Over Federal NYS Combined Is Approximately Equivalent to a
Taxable Yield of:
$ 25,000 $ 25,750 15.0% 6.85% 24.03% 2.63% 3.29% 3.95% 4.61% 5.27% 5.92%
$ 25,750 $ 50,000 28.0% 6.85% 35.65% 3.11% 3.88% 4.66% 5.44% 6.22% 6.99%
$ 50,000 $ 62,450 28.0% 6.85% 35.69% 3.11% 3.89% 4.66% 5.44% 6.22% 7.00%
$ 62,450 $130,250 31.0% 6.85% 38.37% 3.25% 4.06% 4.87% 5.68% 6.49% 7.30%
$130,250 $283,150 36.0% 6.85% 42.83% 3.50% 4.37% 4.25% 6.12% 7.00% 7.87%
$283,150 39.6% 6.85% 46.05% 3.71% 4.63% 5.56% 6.49% 7.41% 8.34%
</TABLE>
<PAGE>
New York City Residents Combined Taxable Income
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Centennial New York Tax Exempt
Trust Yield of:
Joint Return Effective Tax Bracket
- ------------ ---------------------
2.0% 2.5% 3.0% 3.5% 4.0% 4.5%
But
Over Not Over Federal NYC Combined Is Approximately Equivalent to a
Taxable Yield of:
$ 22,000 $ 26,000 15.0% 3.71% 22.62% 2.58% 3.23% 3.88% 4.52% 5.17% 5.82%
$ 26,000 $ 40,000 15.0% 3.71% 23.17% 2.60% 3.25% 3.90% 4.56% 5.21% 5.86%
$ 40,000 $ 43,050 15.0% 3.71% 23.98% 2.63% 3.29% 3.95% 4.60% 5.26% 5.92%
$ 43,050 $ 45,000 28.0% 3.71% 35.61% 3.11% 3.88% 4.66% 5.44% 6.21% 6.99%
$ 45,000 $ 90,000 28.0% 3.77% 35.65% 3.11% 3.88% 4.66% 5.44% 6.22% 6.99%
$ 90,000 $104,050 28.0% 3.83% 35.69% 3.11% 3.89% 4.66% 5.44% 6.22% 7.00%
$104,050 $158,550 31.0% 3.83% 38.37% 3.25% 4.06% 4.87% 5.68% 6.49% 7.30%
$158,550 $283,150 36.0% 3.83% 42.83% 3.50% 4.37% 5.25% 6.12% 7.00% 7.87%
$283,150 39.6% 3.83% 46.05% 3.71% 4.63% 5.56% 6.49% 7.41% 8.34%
Centennial New York Tax Exempt
Trust Yield of:
Single Return Effective Tax Bracket 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%
- ------------- ---------------------
But
Over Not Over Federal NYC Combined Is Approximately Equivalent to a
Taxable Yield of:
$ 25,000 $ 25,750 15.0% 3.77% 24.03% 2.63% 3.29% 3.95% 4.61% 5.27% 5.92%
$ 25,750 $ 50,000 28.0% 3.77% 35.65% 3.11% 3.88% 4.66% 5.44% 6.22% 6.99%
$ 50,000 $ 62,450 28.0% 3.83% 35.69% 3.11% 3.89% 4.66% 5.44% 6.22% 7.00%
$ 62,450 $130,250 31.0% 3.83% 38.37% 3.25% 4.06% 4.87% 5.68% 6.49% 7.30%
$130,250 $283,150 36.0% 3.83% 42.83% 3.50% 4.37% 4.25% 6.12% 7.00% 7.87%
$283,150 39.6% 3.83% 46.05% 3.71% 4.63% 5.56% 6.49% 7.41% 8.34%
</TABLE>
<PAGE>
- ------------------------------------------------------------------------------
Centennial New York Tax Exempt Trust
- ------------------------------------------------------------------------------
Investment Advisor and Distributor
Centennial Asset Management Corporation
6803 South Tucson Way
Englewood, Colorado 80112
Sub-Distributor
OppenheimerFunds Distributor, Inc.
P.O. Box 5254
Denver, Colorado 80217
Transfer Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217
1-800-525-9310
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
PX0780.001.1199
<PAGE>
CENTENNIAL NEW YORK TAX EXEMPT TRUST
FORM N-1A
PART C
OTHER INFORMATION
Item 23. Exhibits
(a) Amended Declaration of Trust dated February 1, 1990: Previously filed with
Post-Effective Amendment No. 3 (1/30/90), and refiled with Registrant's
Post-Effective Amendment No. 9 (11/1/94), pursuant to Item 102 of Regulation
S-T, and incorporated herein by reference.
(b) Amended By-Laws dated June 26, 1990: Previously filed with Registrant's
Post-Effective Amendment No. 6 (10/29/91), and refiled with Registrant's
Post-Effective Amendment No. 9 (11/1/94), pursuant to Item 102 of Regulation
S-T, and incorporated herein by reference.
(c) Specimen Share Certificate: Previously filed with Registrant's
Post-Effective Amendment No. 14 (8/27/99).
(d) Investment Advisory Agreement dated October 22, 1990: Previously filed with
Registrant's Post-Effective Amendment No. 5 (10/29/90), refiled with
Registrant's Post-Effective Amendment No. 9 (11/1/94), pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.
(e) (i) General Distributor's Agreement Centennial Asset Management
Corporation dated October 13, 1992: Previously filed with Registrant's
Post Effective Amendment No. 8 (10/28/93), and incorporated herein by
reference.
(ii) Sub-Distributor's Agreement between Centennial Asset Management
Corporation and OppenheimerFunds Distributor, Inc. dated May 28, 1993:
Previously filed with Registrant's Post-Effective Amendment No. 8
(10/28/93), and incorporated herein by reference.
(iii) Form of Dealer Agreement of Centennial Asset Management
Corporation (formerly Centennial Capital Corporation): Previously
filed with Post-Effective Amendment No. 6 of Centennial Government
Trust (Reg. No. 2-75912), (10/26/84), and incorporated herein by
reference.
(f) Form of Deferred Compensation Agreement for Disinterested
Trustees/Directors: Filed with Post-Effective Amendment No. 40 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
(10/27/98), and incorporated herein by reference.
(g) Custodian Agreement dated December 22, 1988: Previously filed with
Registrant's Post-Effective Amendment No. 6 (10/21/91), refiled with
Registrant's Post-Effective Amendment No. 9 (11/1/94), pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.
(h) Not applicable.
(i) Opinion and Consent of Counsel dated September 22, 1987: Previously filed
with Registrant's Pre-Effective Amendment No. 1 (11/28/88), refiled with
Registrant's Post-Effective Amendment No. 9 (11/1/94), pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.
(j) Independent Auditors' Consent: Filed herewith.
(k) Not applicable.
(l) Investment letter from Oppenheimer Management Corporation to Registrant
dated December 5, 1988: Previously filed with Registrant's Pre-Effective
Amendment No. 1 (11/28/88), and refiled with Registrant's Post-Effective
Amendment No. 9, (11/1/94) pursuant to Item 102 of Regulation S-T and
incorporated herein by reference.
(m) Service Plan and Agreement between Registrant and Centennial Asset
Management Corporation under Rule 12b-1 dated August 24, 1993: Previously filed
with Registrant's Post-Effective Amendment No. 8, (10/28/93), and incorporated
herein by reference.
(n) Financial Data Schedule: Filed herewith.
(o) Not applicable.
- -- Powers of Attorney (including Certified Board resolutions): Previously
filed with Post-Effective Amendment No. 20 to the Registration Statement of
Oppenheimer Total Return Fund, Inc. (Reg. No. 2-11052), (4/30/99), Brian W.
Wixted and incorporated herein by reference. Filed with Registrant's
Post-Effective Amendment No. 13 (10/28/98) George Bowen; Filed with
Registrant's Post Effective Amendment No. 23 (10/8/96) Sam Freedman and
Bridget Macaskill and with Registrant's Post Effective Amendment No. 20
(10/29/93) (all others), and incorporated herein by reference.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
Reference is made to the provisions of Article Seven of Registrant's
Amended and Restated Declaration of Trust filed as Exhibit 23(a) to this
Registration Statement, and incorporated herein by reference.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person, Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
Item 26. Business and Other Connections of Investment Adviser
(a) Centennial Asset Management Corporation is the investment adviser of the
Registrant; it and certain subsidiaries and affiliates act in the same capacity
to other registered investment companies as described in Parts A and B hereof
and listed in Item 28(b) below.
(b) There is set forth below information as to any other business, profession,
vocation or employment of a substantial nature in which each officer and
director of Centennial Asset Management Corporation is, or at any time during
the past two fiscal years has been, engaged for his/her own account or in the
capacity of director, officer, employee, partner or trustee.
Name and Current Position
with Centennial Asset Other Business and Connections
Management Corporation During the Past Two Years
Michael Carbuto,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice President
of Centennial Asset Management
Corporation.
Andrew J. Donohue,
President and Director Executive Vice President (since September
1993), and a director (since January
1992) of the Distributor; Executive Vice
President, General Counsel and a director
of HarbourView Asset Management
Corporation, Shareholder Services, Inc.,
Shareholder Financial Services, Inc. and
Oppenheimer Partnership Holdings, Inc.
since (September 1995); President and a
director of Centennial Asset Management
Corporation (since September 1995);
President and a director of Oppenheimer
Real Asset Management, Inc.(since July
1996); General Counsel (since May 1996)
and Secretary (since April 1997) of
Oppenheimer Acquisition Corp.; Vice
President and Director of
OppenheimerFunds International, Ltd. and
Oppenheimer Millennium Funds plc (since
October 1997); an officer of other
Oppenheimer funds.
Katherine P. Feld,
Secretary and Director Vice President and Secretary of the
Distributor; Secretary of HarbourView
Asset Management Corporation, and
Centennial Asset Management Corporation;
Secretary, Vice President and Director of
Centennial Capital Corporation; Vice
President and Secretary of Oppenheimer
Real Asset Management, Inc.
Ray Olson, Assistant Vice President of OFI;
Treasurer Assistant Vice President and Treasurer,
OFDI.
Brian W. Wixted Senior Vice President and Treasurer of
Assistant Treasurer OFI; (April
1999); Vice President and Treasurer of
OFDI; formerly Principal and Chief
Operating Officer, Bankers Trust Company
Mutual Fund Service Division (March 1995
- March 1999); Vice President and Chief
Financial Officer of CS First Boston
Investment Management Corp. (September
1991 - March 1995); and Vice President
and Accounting Manager, Merrill Lynch
Asset Management (November 1987 -
September 1991).
Carol Wolf,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice President
of OFI; Vice President Finance and
Accounting; Point of Contact: Finance
Supporters of Children: Member of the
Oncology Advisory Board of the Children's
Hospital.
Arthur J. Zimmer,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; Vice President
of OFI.
The Oppenheimer funds include the New York-based Oppenheimer funds, the
Denver-based Oppenheimer funds and the Oppenheimer Quest/Rochester funds, as set
forth below:
New York-based Oppenheimer Funds
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Preservation Fund
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Europe Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer Large Cap Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer Series Fund, Inc.
Oppenheimer Trinity Core Fund
Oppenheimer Trinity Growth Fund
Oppenheimer Trinity Value Fund
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
Quest/Rochester Funds
Limited Term New York Municipal Fund
Oppenheimer Convertible Securities Fund
Oppenheimer MidCap Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Rochester Fund Municipals
Denver-based Oppenheimer Funds
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Capital Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Municipal Fund
Oppenheimer Real Asset Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The address of OppenheimerFunds, Inc., the New York-based Oppenheimer funds, the
Quest funds, OppenheimerFunds Distributor, Inc., HarbourView Asset Management
Corp., Oppenheimer Partnership Holdings, Inc., and Oppenheimer Acquisition Corp.
is Two World Trade Center, New York, New York 10048-0203.
The address of the Denver-based Oppenheimer funds, Shareholder Financial
Services, Inc., Shareholder Services, Inc., OppenheimerFunds Services,
Centennial Asset Management Corporation, Centennial Capital Corporation, and
Oppenheimer Real Asset Management, Inc. is 6803 South Tucson Way, Englewood,
Colorado 80112.
The address of the Rochester-based funds is 350 Linden Oaks, Rochester, New York
14625-2807.
Item 27. Principal Underwriter
(a) Centennial Asset Management Corporation is the Distributor of Registrant's
shares. It is also the Distributor of each of the other registered open-end
investment companies for which Centennial Asset Management Corporation is the
investment adviser, as described in Part A and B of this Registration Statement
and listed in Item 28(b) above.
(b) The directors and officers of the Registrant's principal underwriter are:
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
Michael Carbuto(1) Vice President Vice President of
Centennial
California Tax Exempt
Trust,
Centennial New York Tax
Exempt Trust, and
Centennial
Tax Exempt Trust
Andrew J. Donohue(1) President and Director Vice President and
Secretary
Katherine P. Feld(1) Secretary and Director None
Ray Olson Treasurer None
Brian W. Wixted Assistant Treasurer None
Carol Wolf(2) Vice President Vice President of
Centennial
Government Trust,
Centennial Money Market
Trust and Centennial
America Fund, L.P.
Arthur Zimmer(2) Vice President Vice President of
Centennial
Government Trust,
Centennial Money Market
Trust and Centennial
America Fund, L.P.
- -----------------------
(1) Two World Trade Center, New York, NY 10048-0203
(2) 6803 South Tucson Way, Englewood, CO 80112
(c) Not applicable.
Item 28. Location of Accounts and Records
The accounts, books and other documents required to be maintained by Registrant
pursuant to Section 31(a) of the Investment Company Act of 1940 and rules
promulgated thereunder are in the possession of OppenheimerFunds, Inc. at its
offices at 6803 South Tucson Way, Englewood, Colorado 80112.
Item 29. Management Services
Not applicable
Item 30. Undertakings
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
County of Arapahoe and State of Colorado on the 28th day of October, 1999.
CENTENNIAL NEW YORK TAX EXEMPT TRUST
By: /s/ James C. Swain *
James C. Swain, Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:
Signatures Title Date
/s/ James C. Swain* Chairman of the October 28, 1999
- ------------------------------------- Board of
Trustees
James C. Swain Principal Executive
Officer and Trustee
/s/ Bridget A. Macaskill* President and October 28, 1999
- ------------------------------------- Trustee
Bridget A. Macaskill
/s/ Robert G. Avis* Trustee October 28, 1999
- -------------------------------------
Robert G. Avis
/s/ William A. Baker* Trustee October 28, 1999
- -------------------------------------
William A. Baker
/s/ Sam Freedman* Trustee October 28, 1999
- -------------------------------------
Sam Freedman
/s/ Raymond J. Kalinowski* Trustee October 28, 1999
- -------------------------------------
Raymond J. Kalinowski
/s/ C. Howard Kast* Trustee October 28, 1999
- -------------------------------------
C. Howard Kast
/s/ Robert M. Kirchner* Trustee October 28, 1999
- -------------------------------------
Robert M. Kirchner
/s/ Ned M. Steel* Trustee October 28, 1999
- -------------------------------------
Ned M. Steel
/s/ Brian W. Wixted* Treasurer October 28, 1999
- -------------------------------------
Brian W. Wixted
*By: /s/ Robert G. Zack
- ---------------------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
CENTENNIAL NEW YORK TAX EXEMPT TRUST
EXHIBIT INDEX
Exhibit No. Description
23(j) Independent Auditors' Consent
23(n) Financial Data Schedule
Exhibit 23(j)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 15 to Registration Statement No. 33-23494 of Centennial New York Tax Exempt
Trust on Form N-1A of our report dated July 22, 1999, appearing in the Statement
of Additional Information, which is a part of such Registration Statement, and
to the reference to us under the heading "Financial Highlights" appearing in the
Prospectus, which is also a part of such Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
October 26, 1999
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> CENTENNIAL NEW YORK TAX-EXEMPT TRUST
<S> <C>
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<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
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<INVESTMENTS-AT-VALUE> 62,516,239
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<ASSETS-OTHER> 2,764
<OTHER-ITEMS-ASSETS> 45,898
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<PAID-IN-CAPITAL-COMMON> 61,795,348
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