<PAGE> 1
DEAR SHAREHOLDER:
Bond markets both here in the U.S. and abroad have continued to perform well
since our May 1995 letter. Leadership during the first half of the year,
however, was clearly held by the U.S.-- where steadily falling interest rates
and the expectation for low inflation sparked an outstanding rally. However,
more recently, we have seen a shift in leadership away from the domestic
markets towards overseas markets.
During the past 12 months, the Trust's total return at net asset value was
8.81%, with a dividend yield of 9.86% for the month ended October 31, 1995(1)
INVESTMENT BREAKDOWN:
OPPENHEIMER MULTI-GOVERNMENT TRUST
AS OF 10/31/95(2)
[GRAPH]
- - Foreign government obligations: 35.5%
- - U.S. government obligations: 32.2%
- - Short-term securities: 13.0%
- - U.S. corporate bonds & notes: 9.1%
- - Foreign corporate bonds & notes: 7.5%
- - Structured notes: 2.5%
- - Equity securities: 0.2%
As we've stated previously, one of the key benefits of the Trust is its ability
to allocate assets strategically among U.S. government issues, foreign
fixed-income securities, and higher-yielding U.S. corporate bonds and, as
such, capitalize on worldwide investment opportunities. At the same time,
allocating the Trust's assets among three distinct fixed-income sectors can
provide the diversification necessary to lower risk. As of the last writing,
over 70% of the portfolio was invested in domestic bonds--a strategy that
served the Trust well during the spring rally...especially our investment in
U.S. corporate bonds.(2)
Towards the end of the summer, however--more than six months into the
significant domestic bond rally--your managers began to shift assets overseas
where the believe valuations are more compelling. Our current portfolio
allocations is 48% domestic and 52% foriegn, and generally resembles the
world's bond supply, with a tilt toward the foreign issues we currently favor.
Currently, 48% of the portfolio is invested in U.S. bonds, with 32% in U.S.
government obligationsand 16% in corporate bonds and short term securities.
Within Treasuries, we favor shorter-term bonds because the typically offer most
of the income of longer-term bonds, but with lower price fluctuation during
iterest rate changes. U.S. corporate bonds offer high income, but have returns
that tend to be negatively correlated to those of Tresury bonds; thus, they
provide an important level of diversification to the portfolio.
<PAGE> 2
In foreign markets, our focus is on government bonds in both developed and
emerging markets. Though European bonds have begun to close the gap with U.S.
bonds, they're still at lower prices than domestic bonds. Higher yeilds in
markeys like Germany suggests discounted pricing and long-term value. And
emerging market bonds are benefiting form a stronger dollar and the level of
stability it offers dollar-linked markets. So, we're now seeing the capital
return that was pulled out of these markets following the 1994 peso
devaluation. Of course, foreign investments are always subjected to the risk
of adverse currency fluctuations, But over time, the long-term returns more
that compensate for temporary risk, especially when these Invesments are part
of a diversified portfolio.
High yields relative to both the U.S. and developed foreign markets, plus
renewed price stability, are compelling arguments for emerging market bonds.
Some of our largest foreign positions are in the United Kingdom, Australia ,
Mexico and Brazil. Though their economies are different in many ways, their
bond markets share the characteristics we're looking for--relative stability,
high income and value.
Your managers feel confident that this is an excellent environment for
fixed-income investors worldwide. Interest rates and inflation are low
globally, which has led to prices that have been predominantly stable and
rising. And, despite some mixed signals recently, the American economy appears
to be maintaining a steady, sustainable growth rate, while the economies of
Europe and Latin America are improving.
In 1995, the U.S. was the clear winner. Next year it could be Europe or Asia.
Or even Latin America. We're confident that by being able to diversify
investments throughout the world, we will be positioned to participate in any
environment.
Thank you for your confidence in OppenheimerFunds, and we look forward to
helping you reach your financial goals in the future.
Sincerely,
/s/ DONALD W. SPIRO
--------------------
Donald W. Spiro
President
Oppenheimer Multi-Government Trust
November 21, 1995
1. Total return is based on the change in net asset value per share from
10/31/94 to 10/31/95, without deducting any brokerage costs. Dividend
yield is determined by annualizing the October 1995 dividend of $0.052 and
dividing by the closing price on the New York Stock Exchange of $6.875 per
share on 10/27/95 (payment date). Past performance does not guarantee
future results.
2. Portfolio composition is subject to change. Chart is based on total
investments at market value rather than net assets.
<PAGE> 3
STATEMENT OF INVESTMENTS October 31, 1995
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market
Face Amount Value
(1) See Note 1
-------------- -----------
<S> <C> <C>
CERTIFICATES OF DEPOSIT -- 6.0%
Bank Pacific CD, Zero Coupon, 17.947%, 3/5/96 (IDR) (12)............ 500,000,000 $ 206,187
Citibank CD:
10.75%, 11/20/95 (CLP) (2)........................................ 172,621,262 416,306
29.50%, 12/22/95 (HUF) (2)........................................ 33,722,500 256,299
CS First Boston, Inc. CD:
15.75%, 6/11/96 (IDR) (2)(3)...................................... 556,000,000 244,826
12.50%, 12/21/95 (ARA) (2)(3)..................................... 500,000 500,064
Indonesia (Republic of) Bank Negara CD, Zero Coupon,
15.909%, 6/17/96 (IDR) (2)(12).................................... 1,000,000,000 395,641
Thai Military Bank Ltd. CD:
11%, 11/30/95 (THB) (2)........................................... 12,500,000 496,820
11%, 12/15/95 (THB) (2)........................................... 10,000,000 397,456
10%, 1/31/96 (THB) (2)............................................ 5,000,000 198,668
-----------
Total Certificates of Deposit (Cost $3,162,001)..................... 3,112,267
-----------
MORTGAGE-BACKED OBLIGATIONS -- 28.2%
GOVERNMENT AGENCY -- 26.9%
FHLMC/FNMA/Sponsored -- 18.6%
Federal Home Loan Mortgage Corp.:
Collateralized Mtg. Obligations, Gtd. Multiclass Mtg.
Participation Certificates, 6.65%, 4/15/21...................... 1,549,800 1,532,840
Mtg.-Backed Certificates, 11.50%, 1/1/18.......................... 161,686 181,493
Mtg.-Backed Certificates, 13%, 5/1/19............................. 609,699 710,300
Federal National Mortgage Assn.:
7%, 8/1/25........................................................ 5,366,809 5,321,513
Interest-Only Stripped Mtg.-Backed Security, Trust 222, Cl. 2,
9.176%, 6/1/23 (4).............................................. 6,514,447 1,951,281
Interest-Only Stripped Mtg.-Backed Security, Trust 240, Cl. 2,
8.767%, 2/1/24 (4).............................................. 138,025 42,745
-----------
9,740,172
-----------
GNMA/Guaranteed -- 8.3%
Government National Mortgage Assn.:
7%, 1/15/24-5/15/24 (11).......................................... 3,783,473 3,757,446
7.50%, 11/15/23-5/15/24........................................... 587,271 594,978
-----------
4,352,424
-----------
</TABLE>
3
<PAGE> 4
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market
Face Amount Value
(1) See Note 1
-------------- -----------
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS (CONTINUED)
PRIVATE -- 1.3%
Commercial -- 0.9%
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates,
Series 1992-CHF, Cl. E, 8.25%, 12/25/20........................... $ 466,982 $ 449,251
-----------
Multi-Family -- 0.4%
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates,
Series 1995-C1, Cl. F, 6.90%, 2/25/07............................. 234,639 205,603
-----------
Total Mortgage-Backed Obligations (Cost $14,513,000)................ 14,747,450
-----------
U.S. GOVERNMENT OBLIGATIONS -- 3.5%
TREASURY -- 3.5%
U.S. Treasury Bonds, 10.75%, 8/15/05................................ 620,000 830,800
U.S. Treasury Nts., 8.50%, 7/15/97.................................. 950,000 994,234
-----------
Total U.S. Government Obligations (Cost $1,824,991)................. 1,825,034
-----------
FOREIGN GOVERNMENT OBLIGATIONS -- 35.0%
ARGENTINA -- 2.2%
Argentina (Republic of):
Medium-Term Nts., 8%, 8/9/97 (NLG)................................ 800,000 496,159
Sr. Unsec. Unsub. Bonds, 13.45%, 10/21/97 (ITL)................... 1,000,000,000 632,390
-----------
1,128,549
-----------
AUSTRALIA -- 3.4%
Australia (Commonwealth of) Bonds, 12.50%, 1/15/98 (AUD)............ 40,000 33,211
First Australia National Mortgage Acceptance Corp. Ltd. Bonds,
Series 22, 11.40%, 12/15/01 (AUD)................................. 1,548,400 1,267,420
South Australia Government Finance Gtd. Bonds, 12.50%, 10/15/00
(AUD)............................................................. 550,000 485,971
-----------
1,786,602
-----------
BRAZIL -- 2.5%
Banco do Estado de Sao Paulo SA, 9.25% Nts., 10/4/96................ 250,000 240,000
Banco Estado Minas Gerais, 8.25%, 2/10/00........................... 500,000 410,000
Brazil (Federal Republic of):
Bonds, Nota do Tesouro Nacional, 6%, 2/1/96....................... 100,000 96,380
Eligible Interest Bonds, 6.812%, 4/15/06 (5)...................... 850,000 565,250
-----------
1,311,630
-----------
</TABLE>
4
<PAGE> 5
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market
Face Amount Value
(1) See Note 1
-------------- -----------
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
BULGARIA -- 1.9%
Bulgaria (Republic of) Interest Arrears Bonds, 6.75%, 7/28/11 (5)... $ 2,250,000 $ 998,438
-----------
COSTA RICA -- 0.7%
Central Bank of Costa Rica Principal Bonds, Series A, 6.25%,
5/21/10........................................................... 600,000 351,000
-----------
ECUADOR -- 0.5%
Ecuador (Republic of) Disc. Bonds, 6.812%, 2/28/25 (5).............. 500,000 250,000
-----------
GREAT BRITAIN -- 2.1%
United Kingdom Treasury Nts., 12.50%, 11/21/05 (GBP)................ 550,000 1,099,179
-----------
IRELAND -- 2.1%
National Treasury Management Agency (Irish Government) Bonds:
8%, 10/18/00 (IEP)................................................ 370,000 610,880
9%, 7/15/01 (IEP)................................................. 290,000 501,084
-----------
1,111,964
-----------
JAMAICA -- 0.4%
Jamaica (Government of) 1990 Refinancing Agreement Nts., Tranche A,
6.75%, 10/16/00 (5)(6)............................................ 204,166 182,729
-----------
JORDAN -- 0.5%
Hashemite Kingdom of Jordan Par Bonds, 4%, 12/23/23 (7)............. 500,000 233,750
-----------
MEXICO -- 3.7%
Banco Nacional de Comercio Exterior SNC International Finance BV
Gtd. Bonds, 12.65%, 6/21/98 (ESP)................................. 35,000,000 275,562
Banco Nacional de Comercio Exterior SNC, Zero Coupon,
11.310%, 12/5/95 (3)(12).......................................... 500,000 496,000
Banco Nacional de Obras y Servicios Publicos SA Nts.,
10.75%, 8/16/96................................................... 440,000 443,850
United Mexican States:
Combined Facility 3, Loan Participation Agreement, Tranche A,
6.75%, 9/20/97 (5)(6)........................................... 71,440 49,562
Nacional Financiera SNC Nts., 13.60%, 4/2/98 (ESP)................ 50,000,000 401,840
</TABLE>
5
<PAGE> 6
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market
Face Amount Value
(1) See Note 1
-------------- -----------
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
MEXICO (CONTINUED)
Petroleos Mexicanos Gtd. Medium-Term Nts., 7.60%, 6/15/00......... $ 100,000 $ 86,250
Petroleos Mexicanos Gtd. Sr. Unsec. Nts., 6.875%, 3/8/99 (5)...... 200,000 177,000
-----------
1,930,064
-----------
MOROCCO -- 2.8%
Morocco (Kingdom of) Loan Participation Agreement:
Tranche A, 6.688%, 1/1/09 (5)..................................... 2,300,000 1,390,063
Tranche B, 6.688%, 1/1/04 (5)..................................... 100,000 67,625
-----------
1,457,688
-----------
NEW ZEALAND -- 0.5%
New Zealand (Republic of) Bonds, 10%, 7/15/97 (NZD)................. 395,000 271,240
-----------
NORWAY -- 2.3%
Norwegian Government Gtd. Bonds, 9.50%, 10/31/02 (NOK).............. 6,390,000 1,182,384
-----------
PANAMA -- 1.6%
Panama (Republic of) Debs., 7.25%, 5/10/02 (5)...................... 1,000,000 820,000
-----------
PHILIPPINES -- 0.1%
Philippines (Republic of) Front-Loaded Interest Reduction Bonds,
Series B, 5%, 6/1/08 (7).......................................... 100,000 76,563
-----------
POLAND -- 1.4%
Poland (Republic of):
Disc. Bonds, 6.875%, 10/27/24 (5)................................. 500,000 383,125
Treasury Bills, Zero Coupon, 24.957%, 4/17/96 (PLZ) (12).......... 1,000,000 364,614
-----------
747,739
-----------
PORTUGAL -- 1.3%
Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio Prazo,
11.875%, 2/23/00 (PTE)............................................ 100,000,000 697,447
-----------
SPAIN -- 2.3%
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado,
12.25%, 3/25/00 (ESP)............................................. 141,000,000 1,218,886
-----------
</TABLE>
6
<PAGE> 7
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
Market
Face Amount Value
(1) See Note 1
-------------- -----------
<S> <C> <C>
SUPRANATIONAL -- 1.5%
International Bank for Reconstruction and Development Bonds, 12.50%,
7/25/97 (NZD)..................................................... 1,100,000 $ 785,947
-----------
SWEDEN -- 1.2%
Sweden (Kingdom of) Bonds, Series 1028, 11%, 1/21/99 (SEK).......... 4,100,000 653,832
-----------
Total Foreign Government Obligations (Cost $18,057,486)............. 18,295,631
-----------
CORPORATE BONDS AND NOTES -- 16.3%
BASIC INDUSTRY -- 1.2%
Metals/Mining -- 0.2%
Kaiser Aluminum & Chemical Corp., 9.875% Sr. Nts., 2/15/02.......... 100,000 102,750
UCAR Global Enterprises, Inc., 12% Sr. Sub. Nts., 1/15/05........... 25,000 28,188
-----------
130,938
-----------
Paper -- 1.0%
Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01................... 100,000 103,000
QUNO Corp., 9.125% Sr. Nts., 5/15/05................................ 100,000 100,500
Repap New Brunswick, Inc., 9.25% First Priority Sr. Sec. Nts.,
7/15/00 (5)....................................................... 100,000 100,000
Repap Wisconsin, Inc., 9.25% First Priority Sr. Sec. Nts., 2/1/02... 100,000 97,000
Riverwood International Corp., 11.25% Sr. Sub. Nts., 6/15/02........ 100,000 107,000
-----------
507,500
-----------
CONSUMER RELATED -- 3.7%
Consumer Products -- 0.4%
Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B,
11.622%, 5/27/98 (12)............................................. 100,000 79,875
Revlon Consumer Products Corp., 10.50% Sr. Sub. Nts., Series B,
2/15/03........................................................... 100,000 103,375
-----------
183,250
-----------
Food/Beverages/Tobacco -- 0.6%
Pulsar Internacional SA de CV, 11.80% Nts., 9/19/96 (6)............. 250,000 250,625
Specialty Foods Corp., 11.125% Sr. Nts., Series A, 10/1/02 (3)...... 50,000 47,750
-----------
298,375
-----------
Healthcare -- 0.6%
Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04................ 100,000 108,750
</TABLE>
7
<PAGE> 8
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market
Face Amount Value
(1) See Note 1
-------------- -----------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
CONSUMER RELATED (CONTINUED)
Healthcare (Continued)
Quorum Health Group, Inc., 11.875% Sr. Sub. Nts., 12/15/02.......... $ 100,000 $ 110,000
Tenet Healthcare Corp., 10.125% Sr. Sub. Nts., 3/1/05............... 100,000 108,250
-----------
327,000
-----------
Hotel/Gaming -- 1.1%
Bally's Park Place Funding, Inc., 9.25% Gtd. First Mtg. Nts.,
3/15/04........................................................... 100,000 99,125
Boyd Gaming Corp., 10.75% Sr. Sub. Nts., 9/1/03..................... 100,000 105,750
Capital Gaming International, Inc. Promissory Nts................... 2,000 --
Empress River Casino Finance Corp., 10.75% Gtd. Sr. Nts., 4/1/02.... 100,000 101,000
HMH Properties, Inc., 9.50% Sr. Sec. Nts., 5/15/05 (3).............. 100,000 100,750
Rio Hotel & Casino, Inc., 10.625% Sr. Sub. Nts., 7/15/05 (3)........ 100,000 98,000
Trump Plaza Funding, Inc., 10.875% Gtd. Mtg. Nts., 6/15/01.......... 100,000 94,000
-----------
598,625
-----------
Textile/Apparel -- 1.0%
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series B, 10/1/03.... 100,000 94,500
PT Polysindo Eka Perkasa, Zero Coupon Promissory Nts., 17.899%,
10/23/96 (IDR) (12)............................................... 1,000,000,000 352,268
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05............ 100,000 100,500
-----------
547,268
-----------
ENERGY -- 1.1%
Chesapeake Energy Corp., 10.50% Sr. Nts., 6/1/02.................... 100,000 101,500
Kelley Oil & Gas Corp., 13.50% Sr. Nts., 6/15/99.................... 50,000 42,750
Moran Energy, Inc., 8.75% Cv. Sub. Debs., 1/15/08................... 200,000 148,000
Petroleum Heat & Power Co., Inc., 12.25% Sub. Debs., 2/1/05......... 100,000 110,500
Santa Fe Energy Resources, Inc., 11% Sr. Sub. Debs., 5/15/04........ 100,000 107,500
United Meridian Corp., 10.375% Sr. Sub. Nts., 10/15/05.............. 50,000 51,375
-----------
561,625
-----------
FINANCIAL SERVICES -- 5.7%
Banks & Thrifts -- 1.8%
Banco Bamerindus do Brasil SA:
10.50% Debs., 6/23/97............................................. 100,000 95,000
9% Unsub. Unsec. Bonds, 10/29/98.................................. 90,000 76,500
Banco Ganadero SA, Zero Coupon Sr. Unsub. Unsec. Nts., 9.928%,
6/15/96 (3) (12).................................................. 250,000 235,669
Banco Mexicano SA, 8% Sr. Unsub. Unsec. Exchangeable Medium-Term
Nts., 11/4/98..................................................... 100,000 86,125
</TABLE>
8
<PAGE> 9
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
FINANCIAL SERVICES (CONTINUED)
Banks & Thrifts (Continued)
Market
Face Amount Value
(1) See Note 1
-------------- -----------
Morgan Stanley Group, 14.25% Indian Rupee Indexed Nts.,
6/26/96 (2) (INR)................................................. 3,141,000 $ 91,842
Rabobank Nederland, 11.05% Sr. Unsec. Debs., 12/12/97 (ITL)......... 575,000,000 363,399
-----------
948,535
-----------
Diversified Financial -- 3.7%
Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98................... 450,000 375,750
KfW International Finance, Inc., 11.625% Gtd. Nts., 11/27/98
(ITL)............................................................. 825,000,000 528,514
Olympic Financial Ltd., 13% Sr. Nts., 5/1/00........................ 100,000 109,500
Swiss Bank Corp. (Jersey), 7% Sr. Unsub. Unsec. Medium-Term Nts.,
1/5/00 (DEM)...................................................... 1,250,000 937,546
-----------
1,951,310
-----------
Insurance -- 0.2%
American Life Holding Co., 11.25% Sr. Sub. Nts., 9/15/04............ 100,000 104,500
-----------
HOUSING RELATED -- 0.5%
Homebuilders/Real Estate -- 0.5%
NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03............................... 100,000 97,500
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (3).... 250,000 190,000
-----------
287,500
-----------
MANUFACTURING -- 0.4%
Automotive -- 0.4%
Aftermarket Technology Corp., 12% Sr. Sub. Nts., Series B, 8/1/04... 100,000 106,250
JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01............ 100,000 101,500
-----------
207,750
-----------
MEDIA -- 1.0%
Broadcasting -- 0.1%
Sinclair Broadcast Group, Inc., 10% Sr. Sub. Nts., 9/30/05.......... 50,000 51,625
-----------
Cable Television -- 0.8%
American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04 (8)... 107,579 70,195
Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13.............. 100,000 105,500
PriCellular Wireless Corp., 0%/12.25% Sr. Sub. Disc. Nts., 10/1/03
(8)............................................................... 150,000 111,000
</TABLE>
9
<PAGE> 10
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market
Face Amount Value
(1) See Note 1
-------------- -----------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
MEDIA (CONTINUED)
Cable Television (Continued)
TeleWest Communications PLC, 0%/11% Sr. Disc. Debs., 10/1/07 (8).... $ 100,000 $ 58,500
Videotron Holdings PLC, 0%/11% Sr. Disc. Nts., 8/15/05 (8).......... 100,000 59,625
-----------
404,820
-----------
Diversified Media -- 0.1%
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts.,
8/1/03 (8)........................................................ 50,000 40,125
-----------
OTHER -- 0.4%
Services -- 0.4%
Acetex Corp., 9.75% Sr. Sec. Nts., 10/1/03 (3)...................... 50,000 51,500
Protection One Alarm Monitoring, Inc., Units (each unit consists of
ten $1,000 principal amount of 0%/13.625% sr. sub. disc. nts.,
6/30/05 and 32 warrants, each warrant entitles holder to purchase
1 share of Protection One, Inc. common stock) (3)(9).............. 200,000 143,000
-----------
194,500
-----------
RETAIL -- 0.9%
Drug Stores -- 0.2%
Duane Reade, 12% Sr. Nts., Series B, 9/15/02........................ 100,000 92,250
-----------
Specialty Retailing -- 0.4%
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03................. 100,000 98,500
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05 (3)...... 100,000 107,500
-----------
206,000
-----------
Supermarkets -- 0.3%
Grand Union Co., 12% Sr. Nts., 9/1/04............................... 100,000 96,750
Penn Traffic Co., 9.625% Sr. Sub. Nts., 4/15/05..................... 100,000 73,000
-----------
169,750
-----------
TRANSPORTATION -- 0.4%
Railroads -- 0.2%
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc.
Nts., Series B, 12/15/03 (8)...................................... 200,000 131,000
-----------
</TABLE>
10
<PAGE> 11
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market
Face Amount Value
(1) See Note 1
-------------- -----------
<S> <C> <C>
CORPORATE BONDS AND NOTES (CONTINUED)
TRANSPORTATION (CONTINUED)
Shipping -- 0.2%
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04........... $ 100,000 $ 102,500
-----------
UTILITIES -- 1.0%
Telecommunications -- 1.0%
Cellular Communications International, Inc., Units (each unit
consists of $1,000 principal amount of zero coupon sr. disc. nts.,
8/15/00 and one warrant to purchase 1.126 shares of common stock)
(9)............................................................... 100,000 57,000
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (8)........... 150,000 117,000
Horizon Cellular Telephone LP/Horizon Finance Corp., 0%/11.375% Sr.
Sub. Disc. Nts., 10/1/00 (8)...................................... 150,000 128,250
IntelCom Group (USA), Inc. (ICG) and IntelCom Group, Inc., Units
(each unit consists of ten 0%/13.50% sr. disc. nts., 9/15/05 of
ICG and 33 warrants to purchase an equal number of common shares
of IntelCom at an exercise price equal to $12.51 per share)
(3)(8)(9)......................................................... 150,000 84,750
MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (8)..... 150,000 116,250
-----------
503,250
-----------
Total Corporate Bonds and Notes (Cost $8,456,872)................... 8,549,996
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares
--------------
<S> <C> <C>
COMMON STOCKS -- 0.0%
Finlay Enterprises, Inc. (10)....................................... 333 4,579
Grand Union Co. (10)................................................ 1,767 18,995
-----------
Total Common Stocks (Cost $32,539).................................. 23,574
-----------
</TABLE>
<TABLE>
<CAPTION>
Units
--------------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES -- 0.0%
American Telecasting, Inc. Wts., Exp. 6/99.......................... 500 1,625
Capital Gaming International, Inc. Wts., Exp. 2/99.................. 3,538 172
Terex Corp. Rts., Exp. 7/96 (3)..................................... 30 2
-----------
Total Rights, Warrants and Certificates (Cost $16,281).............. 1,799
-----------
</TABLE>
11
<PAGE> 12
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market
Value
Date Strike Contracts See Note 1
-------- ------ -------------- -----------
<S> <C> <C> <C> <C>
PUT OPTIONS PURCHASED -- 0.1%
Brazil (Federal Republic of) Eligible Interest
Bonds, 6.812%, 4/15/06, Put Opt.............. Jan. 96 $64.75 850 $ 12,495
Morocco (Kingdom of) Loan Participation
Agreement, Tranche A, 6.688%, 1/1/09,
Put Opt...................................... Jan. 96 60.25 2,300 61,951
-----------
Total Put Options Purchased (Cost $60,275)..... 74,446
-----------
</TABLE>
<TABLE>
<CAPTION>
Face Amount
(1)
--------------
<S> <C> <C>
STRUCTURED INSTRUMENTS -- 2.4%
Canadian Imperial Bank, 10% Certificate of Deposit British Pound
Sterling Maximum Rate Linked Nts., 11/8/96 (indexed to the 3-month
GBP LIBOR, multiplied by 9) (6)................................... $ 250,000 254,100
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
13.471%, 12/14/95 (indexed to the Nota Do Tesouro Nacional, Zero
Coupon, 12/13/95)(12)............................................. 400,000 393,970
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
11.192%, 2/15/96 (indexed to the Nota Do Tesouro Nacional, Zero
Coupon, 2/15/96)(12).............................................. 630,000 610,340
-----------
Total Structured Instruments (Cost $1,254,310)...................... 1,258,410
-----------
REPURCHASE AGREEMENT -- 6.9%
Repurchase agreement with Paine Webber, Inc., 5.85%, dated 10/31/95,
to be repurchased at $3,600,585 on 11/1/95, collateralized by U.S.
Treasury Nts., 6%-7.875%, 7/15/96-5/31/99, with a value of
$3,675,176 (Cost $3,600,000)...................................... 3,600,000 3,600,000
-----------
Total Investments, at Value (Cost $50,977,755)...................... 98.4% 51,488,607
Assets Net of Liabilities........................................... 1.6 851,272
-------------- -----------
Net Assets.......................................................... 100.0% $52,339,879
============== ===========
</TABLE>
12
<PAGE> 13
STATEMENT OF INVESTMENTS October 31, 1995 (Continued)
Oppenheimer Multi-Government Trust
(1) Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
<TABLE>
<S> <C> <C>
ARA -- Argentine Austral
AUD -- Australian Dollar
CLP -- Chilean Peso
DEM -- German Deutsche Mark
ESP -- Spanish Peseta
GBP -- British Pound Sterling
HUF -- Hungarian Forint
IDR -- Indonesian Rupiah
IEP -- Irish Punt
INR -- Indian Rupee
ITL -- Italian Lira
NLG -- Netherlands Guilder
NOK -- Norwegian Krone
NZD -- New Zealand Dollar
PLZ -- Polish Zloty
PTE -- Portuguese Escudo
SEK -- Swedish Krona
THB -- Thai Baht
</TABLE>
(2) Indexed instrument for which the principal amount and/or interest due at
maturity is affected by the relative value of a foreign currency.
(3) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $2,299,811 or 4.39% of the Fund's
net assets, at October 31, 1995.
(4) Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities
typically decline in price as interest rates decline. Most other fixed
income securities increase in price when interest rates decline. The
principal amount of the underlying pool represents the notional amount on
which current interest is calculated. The price of these securities is
typically more sensitive to changes in prepayment rates than traditional
mortgage-backed securities (for example, GNMA pass-throughs). Interest
rates disclosed represent current yields based upon the current cost basis
and estimated timing and amount of future cash flows.
(5) Represents the current interest rate for a variable rate security.
(6) Identifies issues considered to be illiquid -- See Note 6 of Notes to
Financial Statements.
(7) Represents the current interest rate for an increasing rate security.
(8) Denotes a step bond: a zero coupon bond that converts to a fixed rate of
interest at a designated future date.
(9) Units may be comprised of several components, such as debt and equity
and/or warrants to purchase equity at some point in the future. For units
which represent debt securities, face amount disclosed represents total
underlying principal.
(10) Non-income producing security.
(11) A sufficient amount of liquid assets has been designated to cover
outstanding written call options, as follows:
<TABLE>
<CAPTION>
Face Amount Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
--------------- --------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C>
Call Option on Bulgaria
(Republic of) Interest Arrears
Bonds, 6.75%, 7/28/11.......... 2,250,000 1/22/96 $ 45.00 $32,175 $ 26,325
Call Option on Spain (Kingdom
of) Gtd. Bonds, Bonos y
Obligacion del Estado, 12.25%,
3/25/00........................ 71,000,000 ESP 11/24/95 105.47 ESP 3,353 4,472
-------- ------
$35,528 $ 30,797
======== ==========
</TABLE>
(12) For zero coupon bonds, the interest rate shown is the effective yield on
the date of purchase.
See accompanying Notes to Financial Statements.
13
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES October 31, 1995
Oppenheimer Multi-Government Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $50,977,755) -- see accompanying statement................... $51,488,607
Cash..................................................................................... 40,891
Net unrealized appreciation on forward foreign currency exchange contracts -- Note 7..... 72,847
Receivables:
Interest and principal paydowns........................................................ 1,126,641
Investments sold and options written................................................... 341,376
Other.................................................................................... 15,415
-----------
Total assets....................................................................... 53,085,777
-----------
LIABILITIES:
Options written, at value (premiums received $35,528) -- Note 4.......................... 30,797
Payables and other liabilities:
Investments purchased.................................................................. 540,322
Dividends.............................................................................. 61,777
Deferred trustees' fees -- Note 1...................................................... 27,434
Management and administrative fees -- Note 5........................................... 10,726
Transfer agent and accounting services fees............................................ 5,957
Other.................................................................................. 68,885
-----------
Total liabilities.................................................................. 745,898
-----------
NET ASSETS............................................................................... $52,339,879
===========
COMPOSITION OF NET ASSETS:
Par value of shares of beneficial interest............................................... $ 66,155
Additional paid-in capital............................................................... 59,784,052
Overdistributed net investment income.................................................... (79,149)
Accumulated net realized loss from investment, written option and foreign currency
transactions........................................................................... (8,026,616)
Net unrealized appreciation on investments, written options and translation of assets and
liabilities denominated in foreign currencies.......................................... 595,437
-----------
NET ASSETS -- applicable to 6,615,505 shares of beneficial interest outstanding.......... $52,339,879
===========
NET ASSET VALUE PER SHARE................................................................ $7.91
======
</TABLE>
See accompanying Notes to Financial Statements.
14
<PAGE> 15
STATEMENT OF OPERATIONS For the Year Ended October 31, 1995
Oppenheimer Multi-Government Trust
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding taxes of $52,841)................................... $ 5,344,119
-----------
EXPENSES:
Management fees -- Note 5................................................................ 332,730
Administrative fees -- Note 5............................................................ 102,379
Custodian fees and expenses.............................................................. 49,736
Transfer agent and accounting services fees -- Note 5.................................... 37,325
Shareholder reports...................................................................... 32,253
Legal and auditing fees.................................................................. 26,499
Registration and filing fees............................................................. 15,176
Trustees' fees and expenses.............................................................. 7,790
Other.................................................................................... 29,737
-----------
Total expenses..................................................................... 633,625
-----------
NET INVESTMENT INCOME.................................................................... 4,710,494
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY:
Net realized loss on:
Investments............................................................................ (896,682)
Closing of futures contracts........................................................... (2,201)
Closing and expiration of options written -- Note 4.................................... (14,881)
Foreign currency transactions.......................................................... (367,515)
-----------
Net realized loss.................................................................. (1,281,279)
-----------
Net change in unrealized appreciation or depreciation on:
Investments and options written........................................................ 1,239,137
Translation of assets and liabilities denominated in foreign currencies................ (295,758)
-----------
Net change......................................................................... 943,379
-----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY.... (337,900)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................... $ 4,372,594
===========
</TABLE>
See accompanying Notes to Financial Statements.
15
<PAGE> 16
STATEMENTS OF CHANGES IN NET ASSETS
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income....................................................... $ 4,710,494 $ 4,837,543
Net realized loss on investments, options written and foreign currency
transactions.............................................................. (1,281,279) (4,490,883)
Net change in unrealized appreciation or depreciation on investments,
options written and translation of assets and liabilities denominated in
foreign currencies........................................................ 943,379 137,568
----------- -----------
Net increase in net assets resulting from operations.................. 4,372,594 484,228
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income........................................ (4,472,033) (4,482,879)
Tax return of capital distribution.......................................... -- (88,446)
----------- -----------
Total decrease........................................................ (99,439) (4,087,097)
----------- -----------
NET ASSETS:
Beginning of period......................................................... 52,439,318 56,526,415
----------- -----------
End of period (including overdistributed net investment income of $79,149
and $33,177, respectively)................................................ $52,339,879 $52,439,318
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE> 17
FINANCIAL HIGHLIGHTS
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989(1)
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period... $ 7.93 $ 8.54 $ 8.55 $ 8.97 $ 8.66 $ 9.12 $ 9.30
------- ------- ------- ------- ------- ------- -------
Income (loss) from investment
operations:
Net investment income................ .71 .69 .82 .89 .97 .96 .82
Net realized and unrealized
gain (loss) ...................... (.05) (.61) -- (.39) .33 (.43) (.09)
------- ------- ------- ------- ------- ------- -------
Total income from investment
operations....................... .66 .08 .82 .50 1.30 .53 .73
------- ------- ------- ------- ------- ------- -------
Dividends and distributions to
shareholders:
Dividends from net investment income . (.68) (.68) (.75) (.92) (.99) (.94) (.80)
Distributions from net realized
gain............................... -- -- -- -- -- (.05) (.04)
Tax return of capital distribution... -- (.01) (.08) -- -- -- --
------- ------- ------- ------- ------- ------- -------
Total dividends and distributions
to shareholders.................. (.68) (.69) (.83) (.92) (.99) (.99) (.84)
Offering costs......................... -- -- -- -- -- -- (.07)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period......... $ 7.91 $ 7.93 $ 8.54 $ 8.55 $ 8.97 $ 8.66 $ 9.12
======= ======= ======= ======= ======= ======= =======
Market value, end of period............ $ 7.00 $ 7.00 $ 8.00 $ 8.63 $ 9.50 $ 7.75 $ 9.00
TOTAL RETURN, AT MARKET VALUE(2)....... 9.09% (4.84)% 2.22% 0.70% 37.18% (3.27)% 0.47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)........................... $52,340 $52,439 $56,526 $55,668 $57,208 $54,676 $57,418
Average net assets (in thousands)...... $51,207 $54,380 $55,877 $56,970 $55,604 $56,175 $57,012
Number of shares outstanding at end of
period (in thousands)................ 6,616 6,616 6,616 6,511 6,378 6,310 6,298
Ratios to average net assets:
Net investment income................ 9.20% 8.90% 9.59% 10.13% 11.06% 10.83% 9.85%(3)
Expenses............................. 1.24% 1.24% 1.22% 1.32% 1.21% 1.22% 1.34%(3)
Portfolio turnover rate(4)............. 344.2% 315.5% 112.5% 98.4% 59.9% 95.3% 98.7%
</TABLE>
(1) For the period from November 23, 1988 (commencement of operations) to
October 31, 1989.
(2) Assumes a hypothetical purchase at the current market price on the business
day before the first day of the fiscal period, with all dividends and
distributions reinvested in additional shares on the reinvestment date, and
a sale at the current market price on the last business day of the period.
Total return does not reflect sales charges or brokerage commissions. Total
returns are not annualized for periods of less than one full year.
(3) Annualized.
(4) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding
short-term securities) for the period ended October 31, 1995 were
$166,192,670 and $170,038,446, respectively.
See accompanying Notes to Financial Statements.
17
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS
Oppenheimer Multi-Government Trust
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Multi-Government Trust (the Trust) is registered under the
Investment Company Act of 1940, as amended, as a diversified, closed-end
management investment company. The Trust's investment advisor is Oppenheimer
Management Corporation (the Manager). The following is a summary of significant
accounting policies consistently followed by the Trust.
Investment Valuation -- Portfolio securities are valued at the close of the New
York Stock Exchange on the last day of each week on which day the New York Stock
Exchange is open. Listed and unlisted securities for which such information is
regularly reported are valued at the last sale price of the day or, in the
absence of sales, at values based on the closing bid or asked price or the last
sale price on the prior trading day. Long-term and short-term "non-money market"
debt securities are valued by a portfolio pricing service approved by the Board
of Trustees. Such securities which cannot be valued by the approved portfolio
pricing service are valued using dealer-supplied valuations provided the Manager
is satisfied that the firm rendering the quotes is reliable and that the quotes
reflect current market value, or are valued under consistently applied
procedures established by the Board of Trustees to determine fair value in good
faith. Short-term "money market type" debt securities having a remaining
maturity of 60 days or less are valued at cost (or last determined market value)
adjusted for amortization to maturity of any premium or discount. Forward
contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. Options are valued based upon the last
sale price on the principal exchange on which the option is traded or, in the
absence of any transactions that day, the value is based upon the last sale
price on the prior trading date if it is within the spread between the closing
bid and asked prices. If the last sale price is outside the spread, the closing
bid or asked price closest to the last reported sale price is used.
Foreign Currency Translation -- The accounting records of the Trust are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of exchange.
Amounts related to the purchase and sale of securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Trust's Statement of Operations.
Repurchase Agreements -- The Trust requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Trust may be delayed or limited.
Federal Taxes -- The Trust intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. At October 31, 1995, the
Trust had available for federal income tax purposes an unused capital loss
carryover of approximately $7,801,000, $1,293,000 of which will expire in 1998,
$1,042,000 in 1999, $435,000
18
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS (Continued)
Oppenheimer Multi-Government Trust
in 2001, $4,196,000 in 2002, and $835,000 in 2003.
Trustees' Fees and Expenses -- The Trust has adopted a nonfunded retirement plan
for the Trust's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
October 31, 1995, the Trust's projected benefit obligations were reduced by
$7,005. In addition, one retired trustee is eligible for payments under the
Trust's retirement plan and a payment of $507 was made. The accumulated
liability for the Trust's projected benefit obligations was $27,434 at October
31, 1995.
Distributions to Shareholders -- The Trust intends to declare and pay dividends
from net investment income monthly. Distributions from net realized gains on
investments, if any, will be made at least once each year.
Classification of Distributions to Shareholders -- Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of paydown gains and losses and certain
foreign currency gains (losses) as ordinary income (loss) for tax purposes. The
character of the distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for
federal income tax purposes. Also, due to timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the year that the
income or realized gain (loss) was recorded by the Trust.
During the year ended October 31, 1995, the Trust changed the classification of
distributions to shareholders to better disclose the differences between
financial statement amounts and distributions determined in accordance with
income tax regulations. Accordingly, during the year ended October 31, 1995,
amounts have been reclassified to reflect a decrease in undistributed net
investment income of $284,433 and a decrease in accumulated net realized loss on
investments of $284,433.
Other -- Investment transactions are accounted for on the date the investments
are purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes. Dividends in kind are recognized as income
on the ex-dividend date, at the current market value of the underlying security.
Interest on payment-in-kind debt instruments is accrued as income at the coupon
rate and a market adjustment is made periodically.
2. SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of $.01 par value shares of
beneficial interest. There were no transactions in shares of beneficial interest
for the years ended October 31, 1995 and October 31, 1994.
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At October 31, 1995 net unrealized depreciation on investments and options
written of $515,583 was composed of gross appreciation of $1,263,052, and gross
depreciation of $747,469.
4. OPTION ACTIVITY
The Trust may buy put and call options, or write covered call options on
portfolio securities and cash secured put options in order to produce
incremental earnings or protect against changes in the value of portfolio
securities.
The Trust generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Trust receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
19
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (Continued)
Oppenheimer Multi-Government Trust
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Trust will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
In this report, securities designated to cover outstanding call options are
noted in the Statement of Investments. Shares subject to call, expiration date,
exercise price, premium received and market value are detailed in a footnote to
the Statement of Investments. Options written are reported as a liability in the
Statement of Assets and Liabilities. Gains and losses are reported in the
Statement of Operations.
The risk in writing a call option is that the Trust gives up the opportunity for
profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Trust may incur a loss
if the market price of the security decreases and the option is exercised. The
risk in buying an option is that the Trust pays a premium whether or not the
option is exercised. The Trust also has the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not exist.
Written option activity for the year ended October 31, 1995 was as follows:
<TABLE>
<CAPTION>
Put Options
------------------------
Number Amount
of Options of Premiums
---------- -----------
<S> <C> <C>
Options outstanding at
October 31, 1994................ -- $ --
Options written.................. 171,233 1,770
Options closed................... (171,233) (1,770)
--------- ----------
Options outstanding at
October 31, 1995................ -- $ --
========= ==========
</TABLE>
<TABLE>
<CAPTION>
Call Options
------------------------
Number Amount
of Options of Premiums
---------- -----------
<S> <C> <C>
Options outstanding at
October 31, 1994................ -- $ --
Options written.................. 12,104 95,232
Options expired.................. (2,812) (9,052)
Options exercised................ (1,524) (10,588)
Options closed................... (4,931) (40,064)
--------- ----------
Options outstanding at
October 31, 1995................ 2,837 $ 35,528
========= ==========
</TABLE>
5. MANAGEMENT AND ADMINISTRATIVE FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Trust which provides for an annual fee of .65% on
the Trust's average annual net assets.
Mitchell Hutchins Asset Management Inc. serves as the Trust's Administrator. The
Trust pays the Administrator an annual fee of .20% of the Trust's average annual
net assets.
The Manager acts as the accounting agent for the Trust at an annual fee of
$18,000, plus out-of-pocket costs and expenses reasonably incurred.
Shareholder Financial Services, Inc. (SFSI), a wholly-owned subsidiary of the
Manager, is the transfer agent and registrar for the Trust. Fees paid to SFSI
are based on the number of accounts and the number of shareholder transactions,
plus out-of-pocket costs and expenses.
6. ILLIQUID AND RESTRICTED SECURITIES
At October 31, 1995, investments in securities included issues that are illiquid
or restricted. The securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. The Trust intends to invest no more
than 10% of its net assets (determined at the time of purchase) in illiquid or
restricted securities. The aggregate value of these
20
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS (Continued)
Oppenheimer Multi-Government Trust
securities subject to this limitation at October 31, 1995 was $737,016 which
represents 1.4% of the Trust's net assets. Information concerning these
securities is as follows:
<TABLE>
<CAPTION>
Valuation
Cost Per Unit as
Acquisition Per of October
Security Date Unit 31, 1995
- ------------------- ----------------- ------- -----------
<S> <C> <C> <C>
Canadian Imperial
Bank, 10%
Certificate of
Deposit British
Pound Sterling
Maximum Rate
Linked Nts.,
11/8/96........... 4/28/95 $100.00 $101.64
Jamaica (Government
of) 1990
Refinancing
Agreement Nts.,
Tranche A, 6.75%,
10/16/00.......... 7/12/95-8/15/95 $ 88.68 $ 89.50
Pulsar
Internacional SA
de CV, 11.80%
Nts., 9/19/96..... 9/14/95 $100.00 $100.25
United Mexican
States, Combined
Facility 3, Loan
Participation
Agreement, Tranche
A, 6.75%,
9/20/97........... 10/25/94 $ 89.00 $ 69.38
</TABLE>
Pursuant to guidelines adopted by the Board of Trustees, certain unregistered
securities are determined to be liquid and are not included within the 10%
limitation specified above.
7. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Trust uses forward contracts to seek to manage foreign currency risks. They
may also be used to tactically shift portfolio currency risk. The Trust
generally enters into forward contracts as a hedge upon the purchase or sale of
a security denominated in a foreign currency. In addition, the Trust may enter
into such contracts as a hedge against changes in foreign currency exchange
rates on portfolio positions.
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Trust will realize a gain or loss
upon the closing or settlement of the forward transaction.
In this report, securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of Investments where
applicable. Unrealized appreciation or depreciation on forward contracts is
reported in the Statement of Assets and Liabilities. Realized and unrealized
gains and losses are reported with all other foreign currency gains and losses
in the Trust's Statement of Operations.
Risks include the potential inability of the counterparty to meet the terms of
the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
21
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (Continued)
Oppenheimer Multi-Government Trust
At October 31, 1995, outstanding forward contracts to purchase and sell
currencies were as follows:
<TABLE>
<CAPTION>
Contract Unrealized
Amount Valuation as of Appreciation
Contracts to Purchase Exchange Date (000s) October 31, 1995 (Depreciation)
----------------------------------------- ----------------- ------------ ---------------- --------------
<S> <C> <C> <C> <C> <C>
Canadian Dollar (CAD).................... 11/2/95 1,115 CAD $ 828,986 $ 3,253
German Deutsche Mark (DEM)............... 1/6/95-11/30/95 9,373 DEM 6,655,504 10,410
French Francs (FRF)...................... 11/10/95 4,915 FRF 1,004,518 16,040
Netherlands Guilder (NLG)................ 11/1/95 402 NLG 254,275 (668)
New Zealand Dollar (NZD)................. 11/3/95 3 NZD 1,747 (1)
Swedish Krone (SEK)...................... 11/2/95 45 SEK 6,727 (18)
----- ----------- ---------
15,853 $8,751,757 $ 29,016
======= =========== =========
</TABLE>
<TABLE>
<CAPTION>
Contract Unrealized
Amount Valuation as of Appreciation
Contracts to Sell Exchange Date (000s) October 31, 1995 (Depreciation)
----------------------------------------- ----------------- ------------ ---------------- --------------
<S> <C> <C> <C> <C> <C>
Canadian Dollar (CAD).................... 11/2/95 1,115 CAD $ 828,986 $ 15,265
German Deutsche Mark (DEM)............... 11/6/95-11/30/95 9,373 DEM 6,655,504 53,547
French Francs (FRF)...................... 11/10/95 4,915 FRF 1,004,518 (24,981)
----- ----------- ---------
15,403 $8,489,008 43,831
====== =========== =========
Net Unrealized Appreciation.............. $ 72,847
=========
</TABLE>
8. QUARTERLY RESULTS OF OPERATIONS: (UNAUDITED)
<TABLE>
<CAPTION>
Net Realized and
Unrealized Gain
(Loss) on
Investments, Net Increase
Net Options and Foreign (Decrease) in Net
Investment Currency Assets Resulting
Income Transactions from Operations Market Price
------------------ ------------------- ------------------- on NYSE
Total Per Total Per Total Per -------------------
Quarter ended (000) Share (000) Share (000) Share High Low
---------------- ------ ----- ------- ----- ------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
October 31, 1995........... $1,212 $.18 $ 71 $ .01 $ 1,283 $.19 $ 7.25 $ 6.50
July 31, 1995.............. 1,183 .18 1,319 .20 2,502 .38 7.125 6.625
April 30, 1995............. 1,144 .17 490 .08 1,634 .25 7.375 6.50
January 31, 1995........... 1,172 .18 (2,218) (.34) (1,046) (.16) 7.25 6.625
------ ---- ------- ----- ------- ----
Totals.................. $4,711 $.71 $ (338) $(.05) $ 4,373 $.66
====== ==== ======== ===== ======= ====
October 31, 1994........... $1,117 $.17 $ (867) $(.13) $ 250 $.04 $7.625 $6.625
July 31, 1994.............. 1,121 .17 (276) (.04) 845 .13 7.875 7.25
April 30, 1994............. 1,218 .18 (3,489) (.52) (2,271) (.34) 8.25 7.375
January 31, 1994........... 1,382 .17 278 .08 1,660 .25 8.50 7.75
------ ---- ------- ----- ------- -----
Totals.................. $4,838 $.69 $(4,354) $(.61) $ 484 $.08
====== ==== ======= ===== ======= ====
October 31, 1993........... $1,231 $.19 $ 57 $ .01 $ 1,288 $.20 $8.875 $ 8.00
July 31, 1993.............. 1,272 .19 211 .03 1,483 .22 8.875 8.50
April 30, 1993............. 1,397 .22 171 .03 1,568 .25 9.00 8.375
January 31, 1993........... 1,457 .22 (375) (.07) 1,082 .15 9.00 8.375
------ ---- ------- ----- ------- ----
Totals.................. $5,357 $.82 $ 64 $ .00 $ 5,421 $.82
====== ==== ======= ===== ======= ====
</TABLE>
22
<PAGE> 23
INDEPENDENT AUDITORS' REPORT
Oppenheimer Multi-Government Trust
The Board of Trustees and Shareholders of
Oppenheimer Multi-Government Trust:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Multi-Government Trust as of October 31, 1995, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year period then ended
and the financial highlights for each of the years in the six-year period then
ended and the period from November 23, 1988 (commencement of operations) to
October 31, 1989. These financial statements and financial highlights are the
responsibility of the Trust'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
October 31, 1995, by correspondence with the custodian and brokers; and where
confirmations 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Oppenheimer Multi-Government Trust as of October 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the six-year period then ended and the period from November
23, 1988 (commencement of operations) to October 31, 1989, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
November 21, 1995
23
<PAGE> 24
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
Oppenheimer Multi-Government Trust
In early 1996 shareholders will receive information regarding all dividends and
distributions paid to them by the Trust during calendar year 1995. 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 October 31,
1995 are eligible for the corporate dividend-received deduction.
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.
SHAREHOLDER MEETING (UNAUDITED)
On May 3, 1995, an annual shareholder meeting was held at which the five
Trustees identified below were elected and the selection of KPMG Peat Marwick
LLP as the independent certified public accountants and auditors of the Trust
for the fiscal year beginning November 1, 1994 was ratified (Proposal No. 1). In
addition, the terms of office of the following Trustees continued after the
meeting: Messrs. Leon Levy, Leo Cherne, Clayton K. Yeutter, Sidney M. Robbins,
Donald W. Spiro and Ms. Elizabeth B. Moynihan and Pauline Trigere. The following
is a report of the votes cast:
<TABLE>
<CAPTION>
Nominee/Proposal For Against Withheld/Abstain Total
- ----------------------------------------- -------------- ----------- ----------------- -----------------
<S> <C> <C> <C> <C>
Trustee
Robert G. Galli.......................... 5,020,516.0729 44,150.1423 42,944 5,107,610.2152
Benjamin Lipstein........................ 5,019,276.0729 44,150.1423 44,184 5,107,610.2152
Kenneth A. Randall....................... 5,019,516.0729 44,150.1423 43,944 5,107,610.2152
Edward V. Regan.......................... 5,019,516.0729 44,150.1423 43,944 5,107,610.2152
Russell S. Reynolds, Jr. ................ 5,019,276.0729 44,150.1423 44,184 5,107,610.2152
Proposal No. 1........................... 4,991,934.9931 91,545.8848 24,879.3373 5,108,360.2152
</TABLE>
24
<PAGE> 25
GENERAL INFORMATION CONCERNING THE TRUST
Oppenheimer Multi-Government Trust (the Trust) is a closed-end diversified
management investment company with a primary investment objective of seeking
high current income consistent with preservation of capital. The Trust's
secondary investment objective is capital appreciation. In seeking its
objectives, as a matter of fundamental policy, the Trust will invest at least
65% of its total assets in debt instruments issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or by foreign governments, their
political subdivisions, agencies or instrumentalities, including supranational
entities. The Trust has also undertaken to invest at least 50% of its assets in
foreign debt securities.
The Trust may also invest in certain other securities, including fixed-income
securities of domestic and foreign corporations certain of which could be
high-yield, "lower-grade" debt instruments and may invest in a number of
different kinds of "derivative investments." The Trust may engage in certain
special investment techniques, including repurchase transactions, when-issued
and delayed delivery transactions and hedging. The investment advisor to the
Trust is Oppenheimer Management Corporation (the Manager).
Portfolio Managers of the Trust are Thomas Reedy, David Rosenberg and Ashwin
Vasan, who also serve as Vice Presidents of the Trust and of the Manager, and
are officers of certain mutual funds managed by the Manager (Oppenheimer funds).
Messrs. Reedy, Rosenberg and Vasan have been the persons principally responsible
for the day-to-day management of the Trust's portfolio since August 1993, June
1994 and August 1993, respectively. During the past five years, Mr. Reedy served
as a securities analyst for the Manager, and, prior to joining the Manager, Mr.
Rosenberg served as an officer and portfolio manager for Delaware Investment
Advisors and one of its mutual funds and Mr. Vasan served as a securities
analyst for Citibank, N.A.
Dividend Reinvestment and Cash Purchase Plan -- Pursuant to the Trust's Dividend
Reinvestment and Cash Purchase Plan (the Plan), as to shares of the Trust
("Shares") not registered in nominee name, all dividends and capital gains
distributions (Distributions) declared by the Trust will be automatically
reinvested in additional full and fractional Shares unless a shareholder elects
to receive cash. If Shares are registered in nominee name, the shareholder
should consult the nominee if the shareholder desires to participate in the
Plan. Shareholders that participate in the Plan (Participants) may, at their
option, make additional cash investments in Shares, semi-annually in amounts of
at least $100, through payment to Shareholder Financial Services, Inc., the
agent for the Plan (the Agent), accompanied by a service fee of $.75.
Depending upon the circumstances hereinafter described, Plan Shares will be
acquired by the Agent for the Participant's account through receipt of newly
issued Shares or the purchase of outstanding Shares on the open market. If the
market price of Shares on the relevant date (normally the payment date) equals
or exceeds their net asset value, the Agent will ask the Trust for payment of
the Distribution in additional Shares at the greater of the Trust's net asset
value determined as of the date of purchase or 95% of the then-current market
price. If the market price is lower than net asset value, the Distribution will
be paid in cash, which the Agent will use to buy Shares on The New York Stock
Exchange (the NYSE), or otherwise on the open market to the extent available. If
the market price exceeds the net
25
<PAGE> 26
asset value before the Agent has completed its purchases, the average purchase
price per Share paid by the Agent may exceed the net asset value, resulting in
fewer Shares being acquired than if the Distribution had been paid in Shares
issued by the Trust.
Participants may elect to withdraw from the Plan at any time and thereby receive
cash in lieu of Shares by sending appropriate written instructions to the Agent.
Elections received by the Agent will be effective only if received more than ten
days prior to the record date for any Distribution; otherwise, such termination
will be effective shortly after the investment of such Distribution with respect
to any subsequent Distribution. Upon withdrawal from or termination of the Plan,
all Shares acquired under the Plan will remain in the Participant's account
unless otherwise requested. For full Shares, the Participant may either: (1)
receive without charge a share certificate for such Shares; or (2) request the
Agent (after receipt by the Agent of signature guaranteed instructions by all
registered owners) to sell the Shares acquired under the Plan and remit the
proceeds less any brokerage commissions and a $2.50 service fee. Fractional
Shares may either remain in the Participant's account or be reduced to cash by
the Agent at the current market price with the proceeds remitted to the
Participant.
Shareholders who have previously withdrawn from the Plan may rejoin at any time
by sending written instructions signed by all registered owners to the Agent.
There is no direct charge for participation in the Plan; all fees of the Agent
are paid by the Trust. There are no brokerage charges for Shares issued directly
by the Trust. However, each Participant will pay a pro rata share of brokerage
commissions incurred with respect to open market purchases of Shares to be
issued under the Plan. Participants will receive tax information annually for
their personal records and to assist in federal income tax return preparation.
The automatic reinvestment of Distributions does not relieve Participants of any
income tax that may be payable to Distributions.
The Plan may be terminated or amended at any time upon 30 days' prior written
notice to Participants which, with respect to a Plan termination, must precede
the record date of any Distribution by the Trust. Additional information
concerning the Plan may be obtained by shareholders holding Shares registered
directly in their names by writing the Agent, Shareholder Financial Services,
Inc., P.O. Box 173673, Denver, CO 80217-3673 or by calling 1-800-647-7374.
Shareholders holding Shares in nominee name should contact their brokerage firm
or other nominee for more information.
Shareholder Information -- The Shares are traded on the NYSE. Daily market
prices for the Trust's shares are published in the New York Stock Exchange
Composite Transaction section of newspapers under the designation "OppenGvt."
The Trust's NYSE trading symbol is OGT. Weekly net asset value (NAV) and market
price information about the Trust is published each Monday in The Wall Street
Journal, each Sunday in The New York Times and each Saturday in Barron's, and
other newspapers in a table called "Closed-End Bond Funds."
26
<PAGE> 27
OPPENHEIMER MULTI-GOVERNMENT TRUST
Officers and Trustees
Leon Levy, Chairman of the Board
of Trustees
Leo Cherne, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Bridget A. Macaskill, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Thomas P. Reedy, Vice President
David Rosenberg, Vice President
Ashwin K. Vasan, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
Investment Advisor
Oppenheimer Management Corporation
Administrator
Mitchell Hutchins Asset Management Inc.
Transfer Agent and Registrar
Shareholder Financial Services, Inc.
Custodian of Portfolio Securities
The Bank of New York
Independent Auditors
KPMG Peat Marwick LLP
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
This is a copy of a report to shareholders of
Oppenheimer Multi-Government Trust. It does not offer
for sale or solicit orders to buy any securities.
Notice is hereby given in accordance with Section 23(c)
of the Investment Company Act of 1940 that periodically
the Trust may purchase its shares of beneficial
interest in the open market at prevailing market
prices.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including
possible loss of the principal amount invested.
RA0675.001.1295 [LOGO] PRINTED ON RECYCLED PAPER
1995 ANNUAL REPORT
- -------------------------------------------------------------
OPPENHEIMER
MULTI-GOVERNMENT
TRUST
OCTOBER 31, 1995
[OPPENHEIMERFUNDS LOGO]
