As filed with the Securities and Exchange
Commission on July 26, 1996.
Registration No. 811-5670
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT UNDER THE INVESTMENT /X/
COMPANY ACT OF 1940
AMENDMENT NO. 10 /X/
OPPENHEIMER WORLD BOND FUND
(formerly "Oppenheimer Multi-Government Trust")
- -------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
- -------------------------------------------------------------------
(Address of Principal Executive Offices)
212-323-0200
- -------------------------------------------------------------------
(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
- -------------------------------------------------------------------
(Name and Address of Agent for Service)
<PAGE>
<PAGE>
FORM N-2
OPPENHEIMER WORLD BOND FUND
(formerly "Oppenheimer Multi-Government Trust")
Cross Reference Sheet
Part A of
Form N-2
Item No. Prospectus Heading
1 *
2 *
3 *
4 *
5 *
6 *
7 *
8 General Description of the Registrant
9 Management
10 Capital Stock, Long-Term Debt, and Other Securities
11 *
12 *
13 See Item 15 of the Statement of Additional
Information
Part B of
Form N-2
Item No. Heading In Statement of Additional Information
14 Cover Page
15 Table of Contents
16 *
17 See Item 8 of the Prospectus
18 Management
19 Control Persons and Principal Holders of Securities
20 See Item 9 of the Prospectus
21 Brokerage Allocation and Other Practices
22 See Item 10 of the Prospectus
23 Financial Statements
- ----------------
* Not applicable or negative answer.
<PAGE>
<PAGE>
OPPENHEIMER WORLD BOND FUND
(formerly "Oppenheimer Multi-Government Trust")
PART A
July 26, 1996
INFORMATION REQUIRED IN A PROSPECTUS
Item 1. Outside Front Cover.
Inapplicable.
Item 2. Inside Front and Outside Back Cover Page.
Inapplicable.
Item 3. Fee Table and Synopsis.
Inapplicable.
Item 4. Financial Highlights.
Inapplicable.
Item 5. Plan of Distribution.
Inapplicable.
Item 6. Selling Shareholders.
Inapplicable.
Item 7. Use of Proceeds.
Inapplicable.
Item 8. General Description of the Registrant.
1. Organization. Oppenheimer World Bond Fund, formerly
named "Oppenheimer Multi-Government Trust" (the "Fund" or
"Registrant") is a closed-end diversified management investment
company organized as a Massachusetts business trust on October 5,
1988.
2, 3 and 4. Objectives. The Fund's primary investment
objective is high current income consistent with preservation of
capital. Its secondary objective is capital appreciation, which it
may pursue by seeking to take advantage of changes in currency
exchange and interest rates and by investing in convertible
securities. The Fund's investment policies and practices are not
"fundamental" policies (as defined below) unless a particular
policy is identified as fundamental. The Fund's Board of Trustees
may change non-fundamental investment policies without shareholder
approval. The Fund's investment objectives are fundamental
policies.
Investment Policies and Strategies. In seeking its objectives,
as a matter of non-fundamental policy, the Fund will invest at
least 65% of its total assets in bonds (defined, for purposes of
this non-fundamental investment policy, to be debt securities), and
will invest at least 50% of its net assets in foreign securities.
Also, as a matter of non-fundamental policy, the Fund will not make
any purchase that will cause 25% or more of its total assets to be
invested in Foreign Government Securities and foreign corporate
securities of any one country (other than the United States).
Foreign Government Securities are debt instruments issued or
guaranteed by foreign governments, or their political subdivisions,
agencies or instrumentalities, including supranational entities.
The Fund may also invest in U.S. Government Securities, which are
debt instruments issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
In addition to investment in U.S. Government Securities and
Foreign Government Securities, the Fund may invest in fixed-income
securities of domestic and foreign corporations, including short-
term money market instruments. Other securities and investments
which may be held by the Fund include put and call options, common
stock acquired upon the exercise of options or conversion of
convertible securities, and futures contracts and related options.
The Fund is designed for long-term investment and investors should
not consider it as a trading vehicle although the Fund itself may
at times have a relatively high turnover rate.
The Fund's investment adviser, OppenheimerFunds, Inc. (the
"Adviser"), will adjust the duration of the Fund's investment in
debt securities from time to time, depending on its assessment of
relative yields of securities of different maturities and its
expectations of future changes in interest rates. The Fund
measures its portfolio duration on a "dollar-weighted" basis.
"Effective portfolio duration" refers to the expected percentage
change in the value of a bond resulting from a change in general
interest rates (measured by each 1% change in the rates on U.S.
Treasury securities). For example, if a bond has an effective
duration of three years, a 1% increase in general interest rates
would be expected to cause the bond to decline about 3%. It is a
measure of portfolio volatility.
U.S. Government Securities are considered among the most
creditworthy of fixed-income investments. Because of this, the
yields available from U.S. Government Securities are generally
lower than the yields available from corporate debt securities.
Nevertheless, the values of U.S. Government Securities (like those
of fixed-income securities generally) will change as interest rates
fluctuate. Despite guarantees as to the timely payment of
principal and interest on U.S. Government Securities and Foreign
Government Securities, such guarantees do not extend to the value
or yield of such securities nor do they extend to the value of
shares of the Fund.
Special Risks - High Yield Securities. The debt
instruments in which the Fund may invest may be unrated or, if
rated, in any rating category, provided, that, investments in
securities rated lower than investment grade ("Baa" by Moody's
Investors Service, Inc. ("Moody's") or "BBB" by Standard & Poor's
Corporation ("Standard & Poor's")) may not exceed 50% of the Fund's
total assets, with no more than 30% of the Fund's total assets
being invested in non-investment grade: (1) Foreign Government
Securities, (2) securities issued by foreign corporations or (3)
securities denominated in non-U.S. currencies. Notwithstanding the
foregoing, the Fund may not invest more than 5% of its total
assets, measured at the time of purchase, in securities which are
rated "C" or "D" by either Moody's or Standard & Poor's. Those
securities may be considered highly speculative and may be in
default. The Appendix to this Prospectus describes these rating
categories.
The primary advantage of lower-rated, high yield securities is
their relatively higher investment return. High yield bonds offer
a higher yield to maturity than bonds with higher ratings, as
compensation for holding an obligation that may be subject to
greater risk. During periods of falling interest rates, the values
of outstanding fixed-income securities generally rise. Conversely,
during periods of rising interest rates, the values of such
securities generally decline. The magnitude of these fluctuations
will generally be greater for securities with longer maturities.
Those changes will affect the values of the Fund's portfolio
securities, and therefore its net asset value per share. Further,
because of their high coupon rates, high yield securities are
generally less price sensitive to changes in interest rates than
U.S. Treasury Securities. However, high yield securities, whether
rated or unrated, may be subject to greater market fluctuations and
risks of loss of income and principal and have less liquidity than
lower yielding, higher-rated fixed-income securities.
Some of the principal risks of high yield securities include:
(i) limited liquidity and secondary market support, (ii)
substantial market price volatility resulting from changes in
prevailing interest rates, (iii) subordination of the holder's
claims to the prior claims of banks and other senior lenders in
bankruptcy proceedings, (iv) the operation of mandatory sinking
fund or call/redemption provisions during periods of declining
interest rates, whereby the holder might receive redemption
proceeds at times when only lower-yielding portfolio securities are
available for investment, (v) the possibility that earnings of the
issuer may be insufficient to meet its debt service, and (vi) the
issuer's low creditworthiness and potential for insolvency during
periods of rising interest rates and economic downturn. Some high
yield bonds pay interest in kind rather than in cash.
As a result of the limited liquidity of high yield securities,
their prices have at times experienced significant and rapid
decline when a significant number of holders of high yield
securities simultaneously decided to sell them. A decline is also
likely in the high yield bond market during an economic downturn.
An economic downturn or an increase in interest rates could
severely disrupt the market for high yield securities and adversely
affect the value of outstanding securities and the ability of the
issuers to repay principal and interest.
Interest Rate Risks. In addition to credit risks, described
below, debt securities are subject to changes in value due to
changes in prevailing interest rates. When prevailing interest
rates fall, the values of outstanding debt securities generally
rise. Conversely, when interest rates rise, the values of
outstanding debt securities generally decline. The magnitude of
these fluctuations will usually be greater when the average
maturity of the portfolio securities is longer.
Credit Risks. Debt securities are also subject to credit
risks. Credit risk relates to the ability of the issuer of a debt
security to make interest or principal payments on the security as
they become due. Generally, higher-yielding, lower-rated bonds
(which are some of the type of bonds the Fund seeks to invest in)
are subject to greater credit risk than higher-rated bonds.
Securities issued or guaranteed by the U.S. Government are subject
to little, if any, credit risk if they are backed by the "full
faith and credit of the U.S. Government," which in general terms
means that the U.S. Treasury stands behind the obligation to pay
interest and principal. While the Manager may rely to some extent
on credit ratings by nationally recognized rating agencies,
including, but not limited to Standard & Poor's or Moody's, in
evaluating the credit risk of securities selected for the Fund's
portfolio, it may also use its own research and analysis or that
provided by other sources. However, many factors affect an
issuer's ability to make timely payments, and there can be no
assurance that the credit risks of a particular security will not
change over time or that the credit risk will be correctly analyzed
by the Manager, by nationally recognized rating agencies, or by
other sources.
Foreign Securities. The Fund may invest in equity and debt
securities (which may either be denominated in U.S. dollars or in
non-U.S. currencies), issued or guaranteed by foreign corporations,
certain supranational entities (described below), and foreign
governments or their agencies or instrumentalities, and in debt
obligations issued by U.S. corporations denominated in non-U.S.
currencies. All such securities are referred to as "foreign
securities."
Investing in foreign securities offers potential benefits not
available from investing solely in securities of domestic issuers,
including the opportunity to invest in foreign issuers that appear
to offer growth potential, or in foreign countries with economic
policies or business cycles different from those of the U.S., or to
reduce fluctuations in portfolio value by taking advantage of
foreign stock markets that do not move in a manner parallel to U.S.
markets. If the Fund's portfolio securities are held abroad, the
countries in which they may be held and the sub-custodians or
depositories holding them must be approved by the Corporation's
Board of Directors to the extent that approval is required under
applicable rules of the Securities and Exchange Commission.
Risks of Foreign Investing. Investments in foreign
securities present special additional risks and considerations not
typically associated with investments in domestic securities:
reduction of income by foreign taxes; fluctuation in value of
foreign portfolio investments due to changes in currency rates and
control regulations (e.g., currency blockage); transaction charges
for currency exchange; lack of public information about foreign
issuers; lack of uniform accounting, auditing and financial
reporting standards comparable to those applicable to domestic
issuers; less volume on foreign exchanges than on U.S. exchanges;
greater volatility and less liquidity on foreign markets than in
the U.S.; less regulation of foreign issuers, stock exchanges and
brokers than in the U.S.; greater difficulties in commencing
lawsuits and obtaining judgments in foreign courts; higher
brokerage commission rates than in the U.S.; increased risks of
delays in settlement of portfolio transactions or loss of
certificates for portfolio securities; possibilities in some
countries of expropriation, confiscatory taxation, political,
financial or social instability or adverse diplomatic developments;
and unfavorable differences between the U.S. economy and foreign
economies. In the past, U.S. Government policies have discouraged
certain investments abroad by U.S. investors, through taxation or
other restrictions, and it is possible that such restrictions could
be re-imposed.
Special Risks of Emerging Market Countries. Investments in
emerging market countries may involve further risks in addition to
those identified above for investments in foreign securities.
Securities issued by emerging market countries and by companies
located in those countries may be subject to extended settlement
periods, whereby the Fund might not receive principal and/or income
on a timely basis and its net asset value could be affected. There
may be a lack of liquidity for emerging market securities; interest
rates and foreign currency exchange rates may be more volatile;
sovereign limitations on foreign investments may be more likely to
be imposed; there may be significant balance of payment deficits;
and their economies and markets may respond in a more volatile
manner to economic changes than those of developed countries.
Because the Fund may purchase securities denominated in
foreign currencies, a change in the value of any such currency
against the U.S. dollar will result in a change in the U.S. dollar
value of the Fund's assets and the Fund's income available for
distribution. In addition, although a portion of the Fund's
investment income may be received or realized in foreign
currencies, the Fund will be required to compute and distribute its
income in U.S. dollars, and absorb the cost of currency
fluctuations. The Fund may engage in foreign currency exchange
transactions for hedging purposes to protect against changes in
future exchange rates.
U.S. Government Securities.
U.S. Government Securities are debt obligations issued or
guaranteed by the United States Government or its agencies or
instrumentalities. Obligations of U.S. Government agencies or
instrumentalities may or may not be guaranteed or supported by the
"full faith and credit" of the United States. Some are backed by
the right of the issuer to borrow from the U.S. Treasury; others,
by discretionary authority of the U.S. Government to purchase the
agencies' obligations; while others are supported only by the
credit of the instrumentality. All U.S. Treasury obligations are
backed by the full faith and credit of the United States. If the
securities are not backed by the full faith and credit of the
United States, the owner of the securities must look principally to
the agency issuing the obligation for repayment and may not be able
to assert a claim against the United States in the event that the
agency or instrumentality does not meet its commitment. U.S.
Government Securities include the following:
U.S. Treasury Obligations. These include Treasury Bills
(which have maturities of one year or less when issued), Treasury
Notes (which have maturities of two to ten years when issued) and
Treasury Bonds (which have maturities generally greater than ten
years when issued). U.S. Treasury obligations are backed by the
full faith and credit of the United States.
Obligations Issued or Guaranteed by U.S. Government
Agencies or Instrumentalities. These are obligations that are
supported by any of the following: (a) the full faith and credit of
the U.S. Government, such as Government National Mortgage
Association ("Ginnie Mae") modified pass-through certificates as
described below, (b) the right of the issuer to borrow an amount
limited to a specific line of credit from the U.S. Government such
as bonds issued by Federal National Mortgage Association ("Fannie
Mae"), (c) the discretionary authority of the U.S. Government to
purchase the obligations of the agency or instrumentality, or (d)
the credit of the instrumentality, such as obligations of Federal
Home Loan Mortgage Corporation ("Freddie Mac"). Agencies and
instrumentalities the securities of which are supported by the
discretionary authority of the U.S. Government to purchase such
securities and which the Fund may purchase under (c) above
include: Federal Land Banks, Farmers Home Administration, Central
Bank for Cooperatives, Federal Intermediate Credit Banks, Freddie
Mac and Fannie Mae.
Zero Coupon Treasury Securities. "Zero coupon" Treasury
securities are: (i) U.S. Treasury notes or bonds which have been
stripped of their unmatured interest coupons and receipts; or (ii)
certificates representing interests in such stripped debt
obligations or coupons. The Fund will not invest in certificates
which are issued by private issuers. Because a zero coupon
security pays no interest to its holder during its life, the Fund
will invest in such securities for capital appreciation purposes.
Such securities usually trade at a deep discount from their face or
par value and will be subject to greater fluctuations of market
value in response to changing interest rates than debt obligations
of comparable maturities which make current distribution of
interest. Current Federal tax law requires that a holder of a zero
coupon security accrue a portion of the discount at which the
security was purchased as income each year even though the holder
received no interest payment in cash on the security during the
year. The Fund will not invest more than 10% of its total assets
at the time of purchase in zero coupon Treasury securities.
Mortgage-Backed Securities and CMOs. The Fund's investment
in U.S. Government Securities may include securities which
represent participation interests in pools of residential mortgage
loans which are guaranteed by agencies or instrumentalities of the
U.S. Government. Such securities differ from conventional debt
securities which provide for periodic payment of interest in fixed
amounts (usually semi-annually) with principal payments at maturity
or specified call dates. Mortgage-backed securities provide
monthly payments which are, in effect, a "pass-through" of the
monthly interest and principal payments (including any prepayment
made by the individual borrowers on the pooled mortgage loans).
Principal prepayments result from the sale of the underlying
property or the refinancing or foreclosure of underlying mortgages
or other factors.
The effective maturity of a mortgage-backed security may be
shortened by unscheduled or early payment of principal and interest
on the underlying mortgages, which may affect the effective yield
of such securities. The principal that is returned may be invested
in instruments having a higher or lower yield than the prepaid
instruments, depending on then-current market conditions. Such
securities therefore may be less effective as a means of "locking
in" attractive long-term interest rates and may have less potential
for appreciation during periods of declining interest rates than
conventional bonds with comparable stated maturities. If the Fund
buys mortgage-backed securities at a premium, prepayments of
principal and foreclosures of mortgages may result in some loss of
the Fund's principal investment to the extent of the premium paid.
The Fund may invest in collateralized mortgage obligations
("CMOs") that are issued or guaranteed by the U.S. Government or
its agencies or instrumentalities (or by a private issuer), or that
are collateralized by a portfolio of mortgages or mortgage-related
securities guaranteed by such an agency or instrumentality (or by
a private issuer). Payment of the interest and principal generated
by the pool of mortgages is passed through to the holders as the
payments are received by the issuer of the CMO. CMOs may be issued
in a variety of classes or series ("tranches") that may have
different maturities and other different characteristics. For
example, the principal value of certain CMO tranches may be more
volatile than other types of mortgage-related securities, because
of the possibility that the principal value of the CMO may be
prepaid earlier than the maturity of the CMO as a result of
prepayments of the underlying mortgage loans by the borrowers.
The Fund may invest in "stripped" mortgage-backed securities
or CMOs or other securities issued by agencies or instrumentalities
of the U.S. Government. Stripped mortgage-backed securities
usually have two classes. The classes receive different
proportions of the interest and principal distributions on the pool
of mortgage assets that act as collateral for the security. In
certain cases, one class will receive all of the interest payments
(and is known as an "I/O"), while the other class will receive all
of the principal value on maturity (and is known as a "P/O").
The yield to maturity on the class that receives only interest
is extremely sensitive to the rate of payment of the principal on
the underlying mortgages. Principal prepayments increase that
sensitivity. Stripped securities that pay "interest only" are
therefore subject to greater price volatility when interest rates
change, and they have the additional risk that if the underlying
mortgages are prepaid, the Fund will lose the anticipated cash flow
from the interest on the prepaid mortgages. That risk is increased
when general interest rates fall, and in times of rapidly falling
interest rates, the Fund might receive back less than its
investment.
The value of "principal only" securities generally increases
as interest rates decline and prepayment rates rise. The price of
these securities is typically more volatile than that of coupon-
bearing bonds of the same maturity.
Stripped securities are generally purchased and sold by
institutional investors through investment banking firms. At
present, established trading markets have not yet developed for
these securities. Therefore, some stripped securities may be
deemed "illiquid." If the Fund holds illiquid stripped securities,
the amount it can hold will be subject to the Fund's investment
policy limiting investments in illiquid securities to 10% of the
Fund's assets.
The Fund may also enter into "forward roll" transactions with
banks or other buyers that provide for future delivery of the
mortgage-backed securities in which the Fund may invest. The Fund
would be required to deposit cash, U.S. Government securities or
other high-grade debt securities to its custodian bank in an amount
equal to its purchase payment obligation under the roll.
GNMA Certificates. Certificates of the Government National
Mortgage Association ("GNMA Certificates") are mortgage-backed
securities which evidence an undivided interest in a pool or pools
of mortgages. The GNMA Certificates that the Fund may purchase are
of the "modified pass-through" type, which entitle the holder to
receive timely payment of all interest and principal payments due
on the mortgage pool, net of fees paid to the "issuer" and GNMA,
regardless of whether the mortgagor actually makes the payment.
The National Housing Act authorizes GNMA to guarantee the
timely payment of principal and interest on securities backed by a
pool of mortgages insured by the Federal Housing Administration
("FHA") or guaranteed by the Veterans Administration ("VA"). The
GNMA guarantee is backed by the full faith and credit of the U.S.
Government. GNMA is also empowered to borrow without limitation
from the U.S. Treasury if necessary to make any payments required
under its guarantee.
The average life of a GNMA Certificate is likely to be
substantially shorter than the original maturity of the mortgages
underlying the securities. Prepayment of principal by mortgagors
and mortgage foreclosures will usually result in the return of the
greater part of principal investment long before the maturity of
the mortgages in the pool. Foreclosures impose no risk to
principal investment because of the GNMA guarantee, except to the
extent that the Fund has purchased the certificates at a premium in
the secondary market.
FHLMC Securities. The Federal Home Loan Mortgage
Corporation ("FHLMC") was created to promote development of a
nationwide secondary market for conventional residential mortgages.
FHLMC issues two types of mortgage pass-through securities ("FHLMC
Certificates"): mortgage participation certificates ("PCs") and
guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA
Certificates in that each PC represents a pro rata share of all
interest and principal payments made and owned on the underlying
pool. FHMLC guarantees timely monthly payment of interest on PCs
and the ultimate payment of principal.
GMCs also represent a pro rata interest in a pool of
mortgages. However, these instruments pay interest semi-annually
and return principal once a year in guaranteed minimum payments.
The expected average life of these securities is approximately ten
years. The FHLMC guarantee is not backed by the full faith and
credit of the U.S. Government.
FNMA Securities. The Federal National Mortgage Association
("FNMA") was established to create a secondary market in mortgages
insured by the FHA. FNMA issues guaranteed mortgage pass-through
certificates ("FNMA Certificates"). FNMA Certificates resemble
GNMA Certificates in that each FNMA Certificates represents a pro
rata share of all interest and principal payments made and owed on
the underlying pool FNMA guarantees timely payment of interest and
principal on FNMA Certificates. The FNMA guarantee is not backed
by the full faith and credit of the U.S. Government.
Other Securities.
Corporate Securities
The corporate fixed-income securities in which the Fund may
invest include securities issued by domestic and foreign
corporations and issuers and may be denominated in U.S. dollars or
in non-U.S. currencies. These investments may include non-
convertible debt obligations such as bonds, debentures and notes.
The corporate fixed-income investments of the Fund may also include
preferred and convertible preferred stocks of domestic corporations
and issuers. Investment in foreign securities involves
considerations and risks not associated with investment in
securities of U.S. issuers.
Preferred Stocks. Preferred stocks, like common stocks,
represent ownership interests in a corporation. However, unlike
common stock, preferred stock offers a stated dividend rate payable
from a corporation's earnings. Dividends on some preferred stocks
may be "cumulative" if stated dividends from prior periods have not
been paid. Preferred stock also generally has a preference over
common stock on the distribution of a corporation's assets in the
event of liquidation of the corporation, and may be
"participating," which means that it may be entitled to a dividend
exceeding the stated dividend in certain cases. The rights of
preferred stocks are generally subordinate to rights associated
with a corporation's debt securities.
Convertible Securities. Convertible fixed-income
securities may include convertible debt obligations and preferred
stocks, and can provide a potential for current income through
interest and dividend payments and at the same time provide an
opportunity for capital appreciation by virtue of their
convertibility into common stock.
Convertible securities rank senior to common stock in a
corporation's capital structure and, therefore, may entail less
risk than the corporation's common stock. The value of a
convertible security is a function of its "investment value" (its
value without considering its conversion privilege) and its
"conversion value" (the security's worth if it were to be exchanged
pursuant to its conversion privilege for the underlying security at
the market value of the underlying security). Convertible
securities generally offer lower interest or dividend yields than
non-convertible debt securities of similar quality.
To the extent that a convertible security's investment value
is greater than its conversion value, its price will be primarily
a reflection of such investment value and its price will be likely
to increase when interest rates fall and decrease when interest
rates rise as with other fixed-income securities (the credit
standing of the issuer and other factors may also have an effect on
the convertible security's value). If the conversion value exceeds
the investment value, the price of the convertible security will
rise above its investment value and, in addition, will sell at some
premium over its conversion value, which represents the price
investors are willing to pay for the privilege of purchasing a
fixed-income security with a possibility of capital appreciation
due to the conversion privilege. At such times the price of the
convertible security will tend to fluctuate directly with the price
of the underlying equity security. Convertible securities may be
purchased by the Fund at varying price levels above their
investment values and/or their conversion values in keeping with
the Fund's objectives.
Money Market Instruments
The Fund may invest in U.S. dollar-denominated debt
obligations maturing in one year or less to maintain liquidity
deemed necessary by the Adviser for investment purposes. In
addition, the Fund may invest in such instruments for defensive
purposes, to minimize the impact of fluctuating interest rates on
the net asset value of the Fund during periods of adverse market
conditions. These obligations include:
(1) U.S. Government Securities: Debt instruments of the type
described under "U.S. Government Securities" above. Instruments in
money market instruments will be viewed by the Fund as U.S.
Government Securities to the extent that the securities or, in the
case of repurchase agreements, the securities collateralizing the
agreements, are U.S. Government Securities.
(2) Bank Obligations and Instruments Secured Thereby: The
bank obligations the Fund may invest in include time deposits,
certificates of deposit, and bankers' acceptances if they are: (i)
obligations of a domestic bank with total assets of at least $1
billion or (ii) obligations of a foreign bank with total assets of
at least U.S. $1 billion. The Fund may also invest in instruments
secured by such obligations (e.g., debt which is guaranteed by the
bank). For purposes of this section, the term "bank" includes
commercial banks, savings banks, and savings and loan associations
which may or may not be members of the Federal Deposit Insurance
Corporation.
Time deposits are non-negotiable deposits in a bank for a
specified period of time at a stated interest rate, whether or not
subject to withdrawal penalties. However, time deposits that are
subject to withdrawal penalties, other than those maturing in seven
days or less, are subject to the limitation on investments by the
Fund in illiquid investments, set forth in the Prospectus under
"Illiquid and Restricted Securities."
Banker's acceptances are marketable short-term credit
instruments used to finance the import, export, transfer or storage
of goods. They are deemed "accepted" when a bank guarantees their
payment at maturity.
(3) Commercial Paper: Obligations rated "A-1", "A-2" or "A-3"
by Standard & Poor's or Prime-1, Prime-2 or Prime-3 by Moody's or
if not rated, issued by a corporation or a foreign government,
subdivision, agency or instrumentality having an existing debt
security rated "A" or better by Standard & Poor's or Moody's.
(4) Corporate Obligations: Corporate debt obligations
(including master demand notes but not including commercial paper)
if they are issued by domestic corporations and are rated "A" or
better by Standard & Poor's or Moody's or unrated securities which
are of comparable quality in the opinion of the Adviser.
(5) Other Obligations: Obligations other than those listed in
(1) through (4) above, but not satisfying the standards set forth
therein, if they are: (i) subject to repurchase agreements; or (ii)
guaranteed as to principal and interest by a domestic or foreign
bank having total assets in excess of $1 billion, by a corporation
whose commercial paper may be purchased by the Fund, or by a
foreign government, subdivision, agency or instrumentality having
an existing debt security rated "A" or better by Standard & Poor's
or Moody's.
(6) Board Approved Instruments: Other short-term investments
of a type which the Board determines presents minimal credit risks
and which are of "high quality" as determined by any major rating
service or, in the case of an instrument that is not rated, of
comparable qualify as determined by the Board. Appendix B to the
Prospectus dated November 23, 1988 contains a general description
of securities ratings.
Bankers' acceptances are marketable short-term credit
instruments used to finance the import, export, transfer or storage
of goods. They are deemed "accepted" when a bank guarantees their
payment at maturity.
Bank time deposits may be non-negotiable until expiration and
may impose penalties for early withdrawal. Master demand notes are
corporate obligations which permit the investment of fluctuating
amounts by the Fund at varying rates of interest pursuant to direct
arrangements between the Fund, as lender, and the borrower. They
permit daily changes in the amounts borrowed. The Fund has the
right to increase the amount under the note at any time up to the
full amount provided by the note agreement, or to decrease the
amount, and the borrower may repay up to the full amount of the
note without penalty. These notes may or may not be backed by bank
letters of credit. Because these notes are direct lending
arrangements between the lender and borrower, it is not generally
contemplated that they will be traded, and there is no secondary
market for them, although they are redeemable (and thus immediately
repayable by the borrower) at principal amount, plus accrued
interest, at any time. The Fund has no limitations on the type of
issuer from whom these notes will be purchased; however, in
connection with such purchase and on an ongoing basis, subject to
policies established by the Board of Trustees, the Adviser will
consider the earning power, cash flow and other liquidity ratios of
the issuer, and its ability to pay principal and interest on
demand, including a situation in which all holders of such notes
made demand simultaneously. Investments in bank time deposits and
master demand notes are subject to the 15% investment limitation on
securities that are not readily marketable as set forth below.
Asset-Backed Securities
The Fund may invest in securities that represent undivided
fractional interests in pools of consumer loans, similar in
structure to the mortgage-backed securities in which the Fund may
invest described above. Payments of principal and interest are
passed through to holders of asset-backed securities and are
typically supported by some form of credit enhancement, such as a
letter of credit, surety bond, limited guarantee by another entity
or having a priority to certain of the borrower's other
obligations. The degree of credit enhancement varies and generally
applies, until exhausted, to only a fraction of the asset-backed
security's par value. If the credit enhancement of any asset-
backed security held by the Fund has been exhausted, and if any
required payments of principal and interest are not made with
respect to the underlying loans, the Fund may then experience
losses or delays in receiving payment and a decrease in the value
of the asset-backed security.
The value of asset-backed securities is affected by changes in
the market's perception of the asset backing the security, the
creditworthiness of the servicing agent for the loan pool, the
originator of the loans, or the financial institution providing any
credit enhancement, and is also affected if any credit enhancement
is exhausted. The risks of investing in asset-backed securities
are ultimately dependent upon payment of the underlying consumer
loans by the individuals, and the Fund would generally have no
recourse to the entity that originated the loans in the event of
default by a borrower. The underlying loans are subject to
prepayments that shorten the weighted average life of asset-backed
securities and may lower their return in the same manner as
described above for prepayments of a pool of mortgage loans
underlying mortgage-backed securities.
Participation Interests
The Fund may acquire participation interests in loans that are
made to U.S. or foreign companies or to foreign governments (the
"borrower"). They may be interests in, or assignments of, the loan
and are acquired from banks or brokers that have made the loan or
are members of the lending syndicate. No more than 5% of the
Fund's net assets can be invested in participation interest of the
same borrower. The Manager has set certain creditworthiness
standards for issuers of loan participations, and monitors their
creditworthiness. The value of loan participation interests
depends primarily upon the creditworthiness of the borrower, and
its ability to pay interest and principal. Borrowers may have
difficulty making payments. If a borrower fails to make scheduled
interest or principal payments, the Fund could experience a decline
in the net asset value of its shares. Some borrowers may have
senior securities rated as low as "C" by Moody's or "D" by Standard
& Poor's, but may be deemed acceptable credit risks. Participation
interests are subject to the Fund's limitations on investments in
illiquid securities.
Other Investment Techniques and Strategies. In pursuing its
investment objectives, the Fund may engage in the following special
investment techniques.
Direct Placements and Other Illiquid Securities. The Fund
may invest up to 10% of its assets in illiquid securities, which
are those securities that are not readily marketable. These
include securities purchased in direct placements and securities
subject to statutory or contractual restrictions and delays on
resale (restricted securities). This policy does not limit the
acquisition of restricted securities eligible for resale pursuant
to Rule 144A under the Securities Act of 1933 that are determined
to be liquid by the Board of Trustees or the Adviser under Board-
approved guidelines. Such guidelines take into account trading
activity for such securities and the availability of reliable
pricing information, among other factors. If there is a lack of
trading interest in particular Rule 144A securities, the Fund's
holdings of those securities may be illiquid. Restricted
securities may generally be resold only in privately-negotiated
transactions with a limited number of purchasers or in a public
offering registered under the Securities Act of 1933 and are,
therefore, unlike securities which are traded in the open market
and can be expected to be sold immediately if the market demand is
adequate. If restricted securities are substantially comparable to
registered securities of the same issuer which are readily
marketable, the Fund may not purchase them unless they are offered
at a discount from the market price of the registered securities.
No restricted securities will be purchased unless the issuer has
agreed to register the securities at its expense within a specific
time period. Adverse conditions in the public securities market at
certain times may preclude a public offering of an issuer's
unregistered securities. There may be undesirable delays in
selling restricted securities at prices representing fair value.
Other illiquid securities in which the Fund may invest include
bank time deposits, master demand notes and certain puts and calls
which are traded in the over-the-counter markets.
Repurchase Agreements. In order to increase income, any of
the securities permissible for purchase may be acquired by the Fund
subject to repurchase agreements with commercial banks with total
assets in excess of $1 billion or securities dealers with a net
worth in excess of $50 million. In a repurchase transaction, at
the time the Fund acquires a security, it simultaneously resells it
to the vendor and must deliver that security to the vendor on a
specific future date. The repurchase 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. The Fund will not enter into a
repurchase transaction of more than seven days. Repurchase
agreements are considered "loans" under the Investment Company Act
of 1940 (the "1940 Act"), collateralized by the underlying
security. The Fund's repurchase agreements will require that at
all times while the repurchase agreement is in effect, the
collateral's value must equal or exceed the repurchase price to
collateralize the loan fully. The Adviser will monitor the
collateral daily and, in the event its value declines below the
repurchase price, will immediately demand additional collateral be
deposited. If such demand is not met within one day, the existing
collateral will be sold. Additionally, the Adviser will consider
the creditworthiness of the vendor. If the vendor fails to pay the
agreed-upon resale price on the delivery date, the Fund's risks in
such event may include any decline in value of the collateral to an
amount which is less than 100% of the repurchase price, any costs
of disposing of such collateral, and loss from any delay in
foreclosing on the collateral. There is no limit on the amount of
the Fund's assets that may be subject to repurchase agreements.
When-Issued and Delayed Delivery Transactions. The Fund
may purchase mortgage-backed securities, municipal bonds and other
debt securities on a "when-issued" basis, and may purchase or sell
such securities on a "delayed delivery" basis. "When-issued" or
"delayed delivery" refers to securities whose terms and indenture
are available and for which a market exists, but which are not
available for immediate delivery. Although the Fund will enter
into such transactions for the purpose of acquiring securities for
its portfolio for delivery pursuant to option contracts it has
entered into, the Fund may dispose of a commitment prior to
settlement. The Fund does not intend to make such purchases for
speculative purposes. When such transactions are negotiated, the
price (which is generally expressed in yield terms) is fixed at the
time the commitment is made, but delivery and payment for the
securities take place at a later date. During the period between
commitment by the Fund and settlement (generally between two months
and 120 days), no payment is made for the securities purchased, and
no interest accrues to the Fund from the transaction. Such
securities are subject to market fluctuations; the value at
delivery may be less than the purchase price. The Fund will
maintain a segregated account with its custodian, consisting of
cash, short-term U.S. Government Securities or other high-grade
debt obligations at least equal to the value of purchase
commitments until payment is made. Such securities may bear
interest at a lower rate than longer term securities. The
commitment to purchase a security for which payment will be made on
a future date may be deemed a separate security and involve a risk
of loss if the value of the security declines prior to the
settlement date, which risk is in addition to the risk of decline
of the Fund's other assets.
Hedging. The Fund may use Interest Rate Futures; Bond
Index Futures (together with Interest Rate Futures, "Futures");
Forward Contracts (defined below); call and put options on
securities, Futures, bond indices and foreign currencies; and enter
into interest rate swap agreements (all of the foregoing are
referred to as "Hedging Instruments"). Hedging Instruments may be
used to attempt to protect against possible declines in the market
value of the Fund's portfolio from downward trends in debt
securities markets (generally due to a rise in interest rates), to
protect the Fund's unrealized gains in the value of its debt
securities which have appreciated, to facilitate selling debt
securities for investment reasons, to establish a position in the
debt securities markets as a temporary substitute for purchasing
particular debt securities, or to reduce the risk of adverse
currency fluctuations. The Fund's strategy of hedging with Futures
and options on Futures will be incidental to the Fund's activities
in the underlying cash market. Covered calls and puts may also be
written on debt securities to attempt to increase the Fund's
income. A call or put may be purchased only if, after such
purchase, the value of all call and put options held by the Fund
would not exceed 5% of the Fund's total assets. The Hedging
Instruments the Fund may use are described below. As of the date
of this Registration Statement, the Fund does not intend to enter
into Futures, Forward Contracts and options on Futures if after any
such purchase, the sum of margin deposits on Futures and premiums
paid on Futures options would exceed 5% of the value of the Fund's
total assets.
Interest Rate Futures and Bond Index Futures. The Fund may
buy and sell Futures. An Interest Rate Future obligates the seller
to deliver and the purchaser to take a specific type of debt
security at a specific future date for a fixed price. That
obligation may be satisfied by actual delivery of the debt security
or by entering into an offsetting contract. A bond index assigns
relative values to the bonds included in that index and is used as
a basis for trading long-term Bond Index Futures contracts. Bond
Index Futures reflect the price movements of bonds included in the
index. They differ from Interest Rate Futures in that settlement
is made in cash rather than by delivery; or settlement may be made
by entering into an offsetting contract.
Calls on Securities and Futures. The Fund may write (i.e.,
sell) or purchase call options ("calls") on securities that were
traded on U.S. and foreign securities and over-the-counter markets.
All such calls written by the Fund must be "covered" while the call
is outstanding (i.e., the Fund must own the securities subject to
the call or other securities acceptable for applicable escrow
requirements). Calls on Futures must be covered by deliverable
securities or by liquid assets segregated to satisfy the Futures
contract. If a call written by the Fund is exercised, the Fund
forgoes any possible profit from an increase in the market price of
the underlying security over the exercise price.
Puts on Securities and Futures. The Fund may purchase put
options ("puts") which relate to securities (whether or not it
holds such securities in its portfolio) or Futures. It may also
write puts on securities or Futures if such puts are covered by
segregated liquid assets. The Fund will not write puts if, as a
result, more than 50% of the Fund's assets would be required to be
segregated liquid assets. In writing puts, there is the risk that
the Fund may be required to buy the underlying security at a
disadvantageous price.
Foreign Currency Options. The Fund may purchase and write
puts and calls on foreign currencies that are traded on a
securities or commodities exchange or quoted by major recognized
dealers in such options, for the purpose of protecting against
declines in the dollar value of foreign securities and against
increases in the dollar cost of foreign securities to be acquired.
If a rise is anticipated in the dollar value of a foreign currency
in which securities to be acquired are denominated, the increased
cost of such securities may be partially offset by purchasing calls
or writing puts on that foreign currency. If a decline in the
dollar value of a foreign currency is anticipated, the decline in
value of portfolio securities denominated in that currency may be
partially offset by writing calls or purchasing puts on that
foreign currency. However, in the event of currency rate
fluctuations adverse to the Fund's position, it would either lose
the premium it paid and incur transaction costs, or purchase or
sell the foreign currency at a disadvantageous price.
Forward Contracts. The Fund may enter into foreign
currency exchange contracts ("Forward Contracts"), which obligate
the seller to deliver and the purchaser to take a specific foreign
currency at a specific future date for a fixed price. The Fund may
enter into a Forward Contract in order to "lock in" the U.S. dollar
price of a security denominated in a foreign currency which it has
purchased or sold but which has not yet settled, or to protect
against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and a foreign currency. There
is a risk that use of Forward Contracts may reduce the gain that
would otherwise result from a change in the relationship between
the U.S. dollar and a foreign currency. Forward contracts include
standardized foreign currency futures contracts which are traded on
foreign exchanges and are subject to procedures and regulations
applicable to other Futures. The Fund may also enter into a
Forward Contract to sell a foreign currency denominated in a
currency other than that in which the underlying security is
denominated. This is done in the expectation that there is a
greater correlation between the foreign currency of the Forward
Contract and the foreign currency of the underlying investment than
between the U.S. dollar and the currency of the underlying
investment. This technique is referred to as "cross hedging". The
success of cross hedging is dependent on many factors, including
the ability of the Adviser to correctly identify and monitor the
correlation between foreign currencies and the U.S. dollar. To the
extent that the correlation is not identical, the Fund may
experience losses or gains on both the underlying security and the
cross currency hedge.
The Fund will not speculate in foreign currency exchange
contracts. There is no limitation as to the percentage of the
Fund's assets that may be committed to foreign currency exchange
contracts. The Fund does not enter into such Forward Contracts or
maintain a net exposure in such contracts to the extent that the
Fund would be obligated to deliver an amount of foreign currency in
excess of the value of the Fund's assets denominated in that
currency or enter into a "cross-hedge" unless it is denominated in
a currency or currencies that the Adviser believes will have price
movements that tend to correlate closely with the currency.
Interest Rate Swaps. In an interest rate swap, the Fund
and another party exchange their right to receive or their
obligation to pay interest on a security. For example, they may
swap a right to receive floating rate payments for fixed rate
payments. The Fund enters into swaps only on securities it owns.
The Fund may not enter into swaps with respect to more than 25% of
its total assets. Also, the Fund will segregate liquid assets
(such as cash or U.S. Government securities or other appropriate
high grade debt obligations) to cover any amounts it could owe
under swaps that exceed the amounts it is entitled to receive, and
it will adjust that amount daily, as needed.
Hedging instruments can be volatile investments and may
involve special risks. The use of hedging instruments requires
special skills and knowledge of investment techniques that are
different than what is required for normal portfolio management.
If the Manager uses a hedging instrument at the wrong time or
judges market conditions incorrectly, hedging strategies may reduce
the Fund's return. The Fund could also experience losses if the
prices of its futures and options positions were not correlated
with its other investments or if it could not close out a position
because of an illiquid market for the future or option.
Options trading involves the payment of premiums and has
special tax effects on the Fund. There are also special risks in
particular hedging strategies. If a covered call written by the
Fund is exercised on a security that has increased in value, the
Fund will be required to sell the security at the call price and
will not be able to realize any profit if the security has
increased in value above the call price. For example, the use of
forward contracts may reduce the gain that would otherwise result
from a change in the relationship between the U.S. dollar and a
foreign currency. To limit its exposure in foreign currency
exchange contracts, the Fund limits its exposure to the amount of
its assets denominated in the foreign currency. Interest rate
swaps are subject to credit risks (if the other party fails to meet
its obligations) and also to interest rate risks. The Fund could
be obligated to pay more under its swap agreements than it receives
under them, as a result of interest rate changes.
Derivative Investments. The Fund can invest in a number of
different kinds of "derivative investments." In general, a
"derivative investment" is a specially designed investment whose
performance is linked to the performance of another investment or
security, such as an option, future, index or currency. In the
broadest sense, derivative investments include exchange-traded
options and futures contracts. The risks of investing in
derivative investments include not only the ability of the company
issuing the instrument to pay the amount due on the maturity of the
instrument, but also the risk that the underlying investment or
security might not perform the way the Manager expected it to
perform. The performance of derivative investments may also be
influenced by interest rate changes in the U.S. and abroad. All of
this can mean that the Fund will realize less principal and/or
income than expected. Certain derivative investments held by the
Fund may trade in the over-the-counter market and may be illiquid.
Examples of derivative investments the Fund may invest in
include, among others, "index-linked" notes which are debt
securities of companies that call for interest payments and/or
payment on the maturity of the note in different terms than the
typical note where the borrower agrees to make fixed interest
payments and pay a fixed sum on the maturity of the note. The
principal and/or interest payments on maturity of an index-linked
note depends on the performance of one or more market indices, such
as the S & P 500 Index. Further examples of derivative investments
the Fund may invest in include "debt exchangeable for common stock"
of an issuer or "equity-linked debt securities" of an issuer. At
maturity, the principal amount of the debt security is exchanged
for common stock of the issuer or is payable in an amount based on
the issuer's common stock price at the time of maturity. In either
case there is a risk that the amount payable at maturity will be
less than the principal amount of the debt.
The Fund may also invest in currency-indexed securities.
Typically these are short-term or intermediate-term debt securities
having a value at maturity, and/or interest rates determined by
reference to one or more specified foreign currencies. Certain
currency-indexed securities purchased by the Fund may have a payout
factor tied to a multiple of the movement of the U.S. dollar (or
the foreign currency in which the security is denominated) against
the movement in the U.S. dollar, the foreign currency, another
currency, or an index. Such securities may be subject to increased
principal risk and increased volatility than comparable securities
without a payout factor in excess of one, but the Manager believes
the increased yield justifies the increased risk.
Loans of Portfolio Securities. To attempt to increase its
income, the Fund may lend its portfolio securities if, after any
loan, the value of the securities loaned does not exceed 25% of the
total value of its assets. Under applicable regulatory
requirements (which are subject to change), the loan collateral
must, on each business day, be at least equal to the value of the
loaned securities and must consist of cash, bank letters of credit
or U.S. Government Securities. To be acceptable as collateral,
letters of credit must obligate a bank to pay amounts demanded by
the Fund if the demand meets the terms of the letter. Such terms
and the issuing bank must be satisfactory to the Fund. The Fund
receives an amount equal to the dividends or interest on loaned
securities and also receives one or more of (a) negotiated loan
fees, (b) interest on securities used as collateral, or (c)
interest on short-term debt securities purchased with such loan
collateral; either type of interest may be shared with the
borrower. The Fund may also pay reasonable finder's, custodian and
administrative fees. The terms of the Fund's loans must meet
certain tests under the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code" or the "Code"), and permit the Fund to
reacquire loaned securities on five days' notice or in time to vote
on any important matter. The Fund will make such loans only to
banks and securities dealers with whom it may enter into repurchase
transactions. If the borrower fails to return the loaned security
the Fund's risks include: (1) any costs in disposing of the
collateral; (2) loss from a decline in value of the collateral to
an amount less than 100% of the securities loaned; (3) being unable
to exercise its voting or consent rights with respect to the
security; and (4) any loss arising from the Fund being unable to
timely settle a sale of such securities.
Borrowing. From time to time, the Fund may increase its
ownership of securities by borrowing up to 10% of the value of its
net assets from banks and investing the borrowed funds (on which
the Fund will pay interest), subject to compliance with the 300%
asset coverage requirement of the 1940 Act. Subject to the 10%
limit (which is a fundamental policy), the Fund may also borrow to
finance repurchases and/or tenders of its shares and may also
borrow for temporary purposes in an amount not exceeding 5% of the
value of the Fund's total assets. Any investment gains made with
the proceeds obtained from borrowings in excess of interest paid on
the borrowings will cause the net income per share or the net asset
value per share of the Fund's Shares to be greater than would
otherwise be the case. On the other hand, if the investment
performance of the securities purchased fails to cover their cost
(including any interest paid on the money borrowed) to the Fund,
then the net income per share or net asset value per share of the
Fund's Shares will be less than would otherwise have been the case.
This speculative factor is known as "leverage." Although such
borrowings would therefore involve additional risk to the Fund, the
Fund will only borrow if such additional risk of loss of principal
is considered by the Adviser to be appropriate in relation to the
Fund's primary investment objective of high current income
consistent with preservation of capital. The Adviser will make
this determination by examining both the market for securities in
which the Fund invests and interest rates in general to ascertain
that the climate is sufficiently stable to warrant borrowing.
Because the Fund will limit its borrowings to finance repurchases
of and/or tenders for its Shares to 10% of the value of its net
assets, the Fund may not be able to purchase as many Shares as it
would have if its borrowing power extended to the maximum limit
allowed under the 1940 Act.
Defensive Strategies. There may be times when, in the
Adviser's judgment, conditions in the securities markets would make
pursuing the Fund's primary investment strategy inconsistent with
the best interests of its shareholders. At such times, the Fund
may employ alternative strategies primarily seeking to reduce
fluctuations in the value of the Fund's assets. In implementing
these defensive strategies, the Fund may increase the portion of
its assets invested in U.S. Government Securities up to 100% and/or
nonconvertible high-grade debt securities up to 35%. The Fund may
also hold up to 100% of its assets in cash or cash equivalents. It
is impossible to predict when, or for how long, alternative
strategies will be utilized.
Other Investment Restrictions. The Fund has adopted the
following investment restrictions, which together with its
investment objective, are fundamental policies changeable only with
the approval of the holders of a "majority" of the Fund's
outstanding voting securities, defined in the Investment Company
Act of 1940 as the affirmative vote of the lesser of (a) more than
50% of the outstanding Shares of the Fund, or (b) 67% or more of
the Shares present or represented by proxy at a meeting if more
than 50% of the Fund's outstanding Shares are represented at the
meeting in person or by proxy. The percentage limitations set
forth below, as well as those described elsewhere, apply only at
the time of investment and require no action by the Fund as a
result of subsequent changes in the value or size of the Fund.
Under these restrictions, the Fund will not:
As to 75% of its total assets, invest in securities of
any one issuer (other than the United States Government,
its agencies or instrumentalities) if after any such
investment either (a) more than 5% of the Fund's total
assets would be invested in the securities of that
issuer, or (b) the Fund would then own more than 10% of
the voting securities of that issuer;
Concentrate investments to the extent of more than 25% of
its total assets in securities of issuers in the same
industry; provided that this limitation shall not apply
with respect to investments in U.S. Government
Securities;
Make loans except through (a) the purchase of debt
securities in accordance with its investment objectives
and policies; (b) the lending of portfolio securities as
described above; or (c) the acquisition of securities
subject to repurchase agreements;
Borrow money, except in conformity with the restrictions
stated above under "Borrowing";
Pledge, hypothecate, mortgage or otherwise encumber its
assets, except to secure permitted borrowings or for the
escrow arrangements contemplated in connection with the
use of Hedging Instruments;
Participate on a joint or joint and several basis in any
securities trading account;
Invest in companies for the purpose of exercising control
or management thereof;
Make short sales of securities or maintain a short
position, unless at all times when a short position is
open it owns an equal amount of such securities or by
virtue of ownership of other securities has the right,
without payment of any further consideration, to obtain
an equal amount of the securities sold short ("short
sales against the box"); short sales may be made to defer
realization of gain or loss for Federal income tax
purposes;
Invest in (a) real estate, except that it may purchase
and sell securities of companies which deal in real
estate or interests therein; (b) commodities or commodity
contracts (except that the Fund may purchase and sell
Hedging Instruments whether or not they are considered to
be a commodity or commodity contract); or (c) interests
in oil, gas or other mineral exploration or development
programs;
Act as an underwriter of securities, except insofar as
the Fund might be deemed to be an underwriter for
purposes of the Securities Act of 1933 in the resale of
any securities held for its own portfolio; or
Purchase securities on margin, except that the Fund may
make margin deposits in connection with any of the
Hedging Instruments it may use.
5. The shares of beneficial interest of the Fund, $.01 par
value per share (the "Shares"), are listed and traded on The New
York Stock Exchange (the "NYSE"). The following table sets forth
for the Shares for the periods indicated: (a) the per Share high
sales price on the NYSE, the net asset value per Share as of the
last day of the week immediately preceding the day for which the
high sales price on the NYSE is reported, and the premium or
discount (expressed as a percentage of net asset value) represented
by the difference between such high sales price and the
corresponding net asset value and (b) the per Share low sales price
on the NYSE, the net asset value per Share as of the last day of
the week immediately preceding the day for which the low sales
price on the NYSE is reported, and the premium or discount
(expressed as a percentage of net asset value) represented by the
difference between such low sales price and the corresponding net
asset value.
<TABLE>
<CAPTION>
Market Price High;(1) Market Price Low;(1)
NAV and Premium/ NAV and Premium/
Ended (Discount) That Day(2) (Discount) That Day(2)
- ----- --------------------- ---------------------
<S> <C> <C>
1/31/94 Market: $8.50 Market: $7.75
NAV: $8.57 NAV: $8.54
Premium/(Discount):(.82)% Premium/(Discount): (9.25)%
4/30/94 Market: $8.25 Market: $7.375
NAV: $8.61 NAV: $8.13
Premium/(Discount):(4.18)% Premium/(Discount): (9.29)%
7/31/94 Market: $7.875 Market: $7.25
NAV: $8.07 NAV: $8.01
Premium/(Discount):(2.42)% Premium/(Discount): (9.49)%
10/31/94 Market: $7.625 Market: $6.625
NAV: $8.05 NAV: $7.88
Premium/(Discount):(5.28)% Premium/(Discount): (15.93)%
1/31/95 Market: $7.25 Market: $6.625
NAV: $7.86 NAV: $7.84
Premium/(Discount): (7.76)% Premium/(Discount): (15.50)%
4/30/95 Market: $7.375 Market: $6.5
NAV: $7.58 NAV: $7.68
Premium/(Discount): (2.70)% Premium/(Discount): (15.36)%
7/31/95 Market: $7.25 Market: $6.5
NAV: $7.85 NAV: $7.84
Premium/(Discount): (7.64)% Premium/(Discount): (17.09)%
10/31/95 Market: $7.125 Market: $6.625
NAV: $7.87 NAV: $7.87
Premium/(Discount): (9.47)% Premium/(Discount): (15.82)%
1/31/96 Market: $7.375 Market: $6.75
NAV: $8.04 NAV: $7.91
Premium/(Discount): (8.27)% Premium/(Discount): (14.66)%
</TABLE>
- --------------
(1)As reported by the NYSE.
(2)The Fund's computation of net asset value (NAV) is as of the
close of trading on the last day of the week immediately preceding
the day for which the high and low market price is reported and the
premium or discount (expressed as a percentage of net asset value)
is calculated based on the difference between the high or low
market price and the corresponding net asset value for that day,
divided by the net asset value.
On February 2, 1996, the net asset value per share of the Fund
was $8.10, the closing sales price on the NYSE was $7.375 and the
discount to net asset value (expressed as a percentage) was 8.95%.
Since the Fund's inception in 1988, the Fund's shares have from
time to time generally traded for an amount less than the Fund's
net asset value.
The Board of Trustees of the Fund has determined that it may
be in the interests of Fund shareholders for the Fund to take
action to attempt to reduce or eliminate a market value discount
from net asset value. To that end, the Fund may, from time to
time, either repurchase Shares in the open market or, subject to
conditions imposed from time to time by the Board, make a tender
offer for a portion of the Fund's Shares at their net asset value
per Share. Subject to the Fund's fundamental policy with respect
to borrowings, the Fund may incur debt to finance repurchases
and/or tenders. Interest on any such borrowings will reduce the
Fund's net income. In addition, the acquisition of Shares by the
Fund will decrease the total assets of the Fund and therefore will
have the effect of increasing the Fund's expense ratio. If the
Fund must liquidate portfolio securities to purchase Shares
tendered, the Fund may be required to sell portfolio securities for
other than investment purposes and may realize gains and losses.
Gains realized on securities held for less than three months may
affect the Fund's ability to retain its status as a regulated
investment company under the Internal Revenue Code.
In addition to open-market Share purchases and tender offers,
the Board could also seek shareholder approval to convert the Fund
to an open-end investment company if the Fund's Shares trade at a
substantial discount. If the Fund's Shares have traded on the NYSE
at an average discount from net asset value of more than 10%,
determined on the basis of the discount as of the end of the last
trading day in each week during the period of 12 calendar weeks
ending October 31 in such year, the Trustees will consider
recommending to shareholders a proposal to convert the Fund to an
open-end company. If during a year in which the Fund's Shares
trade at the average discount stated, and for the period described,
in the preceding sentence the Fund also receives written requests
from the holders of 10% or more of the Fund's outstanding Shares
that a proposal to convert to an open end company be submitted to
the Fund's shareholders, within six months the Trustees will
submit a proposal to the Fund's shareholders, to the extent
consistent with the 1940 Act, to amend the Fund's Declaration of
Trust to convert the Fund from a closed-end to an open-end
investment company. If the Fund converted to an open-end
investment company, it would be able continuously to issue and
offer its Shares for sale, and each Share of the Fund could be
tendered to the Fund for redemption at the option of the
shareholder, at a redemption price equal to the current net asset
value per Share. To meet such redemption request, the Fund could
be required to liquidate portfolio securities. Its Shares would no
longer be listed on the NYSE. The Fund cannot predict whether any
repurchase of Shares made while the Fund is a closed-end investment
company would decrease the discount from net asset value at which
the Shares trade. To the extent that any such repurchase decreased
the discount from net asset value to an amount below 10% during the
measurement period described above, the Fund would not be required
to submit to shareholders a proposal to convert the Fund to an
open-end investment company.
Item 9. Management
1(a). The Fund is governed by a Board of Trustees, which is
responsible under Massachusetts law for protecting the interests of
shareholders. The Trustees meet periodically throughout the year
to oversee the Fund's activities, review its performance, and
review the actions of the Adviser. The Fund is required to hold
annual shareholder meetings for the election of trustees and the
ratification of its independent auditors. The Fund may also hold
shareholder meetings from time to time for other important matters,
and shareholders have the right to call a meeting to remove a
Trustee or to take other action described in the Fund's Declaration
of Trust.
1(b). The Adviser, a Colorado corporation with its principal
offices at Two World Trade Center, New York, New York 10048-0203,
acts as investment manager for the Fund under an investment
advisory agreement (the "Advisory Agreement") under which it
provides ongoing investment advice and conducts the investment
operations of the Fund, including purchases and sales of its
portfolio securities, under the general supervision and control of
the Trustees of the Fund. The Adviser also acts as accounting
agent for the Fund.
The Adviser has operated as an investment company adviser
since April 30, 1959. It and its affiliates currently manage
investment companies with assets in excess of $50 billion as of
June 30, 1996, and held in more than 2.8 million shareholder
accounts. The Adviser is owned by Oppenheimer Acquisition Corp.,
a holding company owned in part by senior management of the
Adviser, and ultimately controlled by Massachusetts Mutual Life
Insurance Company.
The Adviser provides office space and investment advisory
services for the Fund and pays all compensation of those Trustees
and officers of the Fund who are affiliated persons of the Adviser.
Under the Advisory Agreement, the Fund pays the Adviser an advisory
fee computed and paid weekly at an annual rate of .65 of 1% of the
net assets of the Fund at the end of that week. The Fund also pays
the Adviser an annual fee of $18,000, plus out-of-pocket costs and
expenses reasonably incurred, for performing limited accounting
services for the Fund. During the fiscal years ended October 31,
1993, 1994 and 1995, the Fund paid management fees to the Adviser
of $363,058, $353,510, and $332,730, respectively. The Fund
incurred approximately $19,325 in expenses for the fiscal year
ended October 31, 1995 for services provided by Shareholder
Financial Services, Inc. ("SFSI").
Under the Advisory Agreement, the Fund pays certain of its
other costs not paid by the Adviser, including (a) brokerage and
commission expenses, (b) Federal, state, local and foreign taxes,
including issue and transfer taxes, incurred by or levied on the
Fund, (c) interest charges on borrowings, (d) the organizational
and offering expenses of the Fund, whether or not advanced by the
Adviser, (e) fees and expenses of registering the Shares of the
Fund under the appropriate Federal securities laws and of
qualifying Shares of the Fund under applicable state securities
laws, (f) fees and expenses of listing and maintaining the listings
of the Fund's Shares on any national securities exchange, (g)
expenses of printing and distributing reports to shareholders, (h)
costs of shareholder meetings and proxy solicitation, (i) charges
and expenses of the Fund's Administrator, custodian and Registrar,
Transfer and Dividend Disbursing Agent, (j) compensation of the
Fund's Trustees who are not interested persons of the Adviser, (k)
legal and auditing expenses, (l) the cost of certificates
representing the Fund's Shares, (m) costs of stationery and
supplies, and (n) insurance premiums. The Adviser has advanced
certain of the Fund's organizational and offering expenses, which
were repaid by the Fund. There is no expense limitation provision.
1(c). The Portfolio Managers of the Fund are Thomas Reedy,
David Rosenberg and Ashwin Vasan, who also serve as Vice Presidents
of the Fund and of the Adviser, and are officers of certain mutual
funds managed by the Adviser ("Oppenheimer Funds"). Messrs. Reedy,
Rosenberg and Vasan Have been the persons principally responsible
for the day-to-day management of the Fund'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
Adviser, and, prior to joining the Adviser, 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.
1(d). The Administrator for the Fund is Mitchell Hutchins
Asset Management Inc. (the "Administrator"), a Delaware corporation
with principal offices at 1285 Avenue of the Americas, New York,
New York 10019 and an affiliate of PaineWebber Incorporated.
Because of the services rendered to the Fund by the
Administrator and the Adviser, the Fund itself requires no
employees other than its officers, none of whom receives
compensation from the Fund and all of whom are employed by the
Adviser or the Administrator. In connection with its
responsibilities as Administrator and in consideration of its
administrative fee, subject to the supervision of the Board of
Trustees the Administrator will: (i) prepare all quarterly, semi-
annual and annual reports required to be sent to Fund shareholders,
and arrange for the printing and dissemination of such reports to
shareholders; (ii) assemble and file all reports required to be
filed by the Fund with the Securities and Exchange Commission
("SEC") on Form N-SAR, or such other form as the SEC may substitute
for Form N-SAR; (iii) review the provision of services by the
Fund's independent accountants, including but not limited to the
examination by such accountants of financial statements of the
Fund and the review of the Fund's Federal, state and local tax
returns; and make such reports and recommendations to the Board of
Trustees concerning the performance of the independent accountants
as the Board reasonably requests or as it deems appropriate; (iv)
file with the appropriate authorities all required Federal, state
and local tax returns; (v) arrange for the dissemination to
shareholders of the Fund's proxy materials, and oversee the
tabulation of proxies by the Fund's transfer agent; (vi) negotiate
the terms and conditions under which custodian services will be
provided to the Fund and the fees to be paid by the Fund in
connection therewith; (vii) recommend an accounting agent (which
may or may not be the Fund's custodian or its affiliate) to the
Board, which agent would be responsible for computing the Fund's
net asset value in accordance with the Fund's registration
statement under the 1940 Act and the Securities Act of 1933, as
amended; (vii) negotiate the terms and conditions under which such
accounting agent would compute the Fund's net asset value, and the
fees to be paid by the Fund in connection therewith; review the
provision of such accounting services to the Fund and make such
reports and recommendations to the Board concerning the provisions
of such services as the Board reasonably requests or the
Administrator deems appropriate; (ix) negotiate the terms and
conditions under which the transfer agency and dividend disbursing
services will be provided to the Fund, and the fees to be paid by
the Fund in connection therewith; review the provision of transfer
agency and dividend disbursing services to the Fund; and make such
reports and recommendations to the Board concerning the performance
of the Fund's transfer and dividend disbursing agent as the Board
reasonably requests or the Administrator deems appropriate; (x)
establish the accounting policies of the Fund; reconcile accounting
issues which may arise with respect to the Fund's operations;
consult with the Fund's independent accountants, legal counsel,
custodian, accounting agent and transfer and dividend disbursing
agent as necessary in connection therewith; (xi) determine the
amounts available for distribution as dividends and distributions
to shareholders; prepare and arrange for the printing of dividend
notices to the shareholders; and provide the Fund's transfer and
dividend disbursing agent and custodian with such information as is
required for such parties to effect the payment of dividends and
distributions and to implement the Fund's dividend reinvestment
plan; (xii) review the Fund's bills and authorize payments of such
bills by the Fund's custodian; and (xiii) if requested by the
Board, designate one of its employees to serve as an officer of the
Fund, and such person shall not be compensated by the Fund for so
serving.
For the services rendered to the Fund and related expenses
borne by the Administrator, the Fund pays the Administrator a fee,
calculated and paid weekly, at the annualized rate of .20% of the
Fund's net assets at the end of that week. During the fiscal years
ended October 31, 1993, 1994 and 1995, the Fund paid administration
fees to the Administrator of $111,769, $108,772 and $102,379,
respectively.
1(e). The Bank of New York, 48 Wall Street, New York, New
York, acts as the custodian (the "Custodian") for the Fund's assets
held in the United States. The Adviser and its affiliates have
banking relationships with the Custodian. The Adviser has
represented to the Fund that its banking relationships with the
Custodian have been and will continue to be unrelated to and
unaffected by the relationship between the Fund and the Custodian.
It will be the practice of the Fund to deal with the Custodian in
a manner uninfluenced by any banking relationship the Custodian may
have with the Adviser and its affiliates. Rules adopted under the
1940 Act permit the Fund to maintain its securities and cash in the
custody of certain eligible banks and securities depositories.
Pursuant to those Rules, the Fund's portfolio of securities and
cash, when invested in foreign securities, will be held in foreign
banks and securities depositories approved by the Trustees of the
Fund in accordance with the rules of the Securities and Exchange
Commission.
SFSI, a subsidiary of the Adviser, acts as primary transfer
agent, shareholder servicing agent and dividend paying agent for
the Fund. Fees paid to SFSI are based on the number of shareholder
accounts and the number of shareholder transactions, plus out-of-
pocket costs and expenses. United Missouri Trust Company of New
York acts as co-transfer agent and co-registrar with SFSI to
provide such services as SFSI may request.
1(f). See 1(b) above.
1(g). Inapplicable.
2. Inapplicable.
3. None as of February 6, 1996.
Item 10. Capital Stock, Long-Term Debt, and Other Securities.
1. The Fund is authorized to issue an unlimited number of
Shares of beneficial interest, $.01 par value. The Fund's Shares
have no preemptive, conversion, exchange or redemption rights.
Each Share has equal voting, dividend, distribution and liquidation
rights. All Shares outstanding are, and, when issued, those
offered hereby will be, fully paid and nonassessable. Shareholders
are entitled to one vote per Share. All voting rights for the
election of Trustees are noncumulative, which means that the
holders of more than 50% of the Shares can elect 100% of the
Trustees then nominated for election if they choose to do so and,
in such event, the holders of the remaining Shares will not be able
to elect any Trustees. Under the rules of the NYSE applicable to
listed companies, the Fund is required to hold an annual meeting of
shareholders in each year.
Under Massachusetts law, under certain circumstances
shareholders could be held personally liable for the obligations of
the Fund. However, the Declaration of Trust disclaims shareholder
liability for actions or obligations of the Fund and requires that
notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by the Fund. The Declaration
of Trust provides for indemnification by the Fund for all losses
and expenses of any shareholder held personally liable for
obligations of the Fund. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which the Fund would be unable to meet its
obligations. The likelihood of such circumstances is remote.
Pursuant to the Trust's Dividend Reinvestment and Cash
Purchase Plan (the "Plan"), all dividends and capital gains
distributions ("Distributions") declared by the Trust will be
automatically reinvested in additional full and fractional shares
of the Trust ("Shares") unless (i) a shareholder elects to receive
cash or (ii) Shares are held in nominee name, in which event the
nominee should be consulted as to participation 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"), and 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 asset value
before the Agent has completed its purchases, the average purchase
price per Share paid by the Agent may exceed the net asset value,
resulting in fewer Shares being acquired than if the Distribution
had been paid in Shares issued by the Trust.
Participants may elect to withdraw from the Plan at any time
and thereby receive cash in lieu of Shares by sending appropriate
written instructions to the Agent. Elections received by the Agent
will be effective only if received more than ten days prior to the
record date for any Distribution; otherwise, such termination will
be effective shortly after the investment of such Distribution with
respect to any subsequent Distribution. Upon withdrawal from or
termination of the Plan, all Shares acquired under the Plan will
remain in the Participant's account unless otherwise requested.
For full Shares, the Participant may either: (1) receive without
charge a share certificate for such Shares; or (2) request the
Agent (after receipt by the Agent of signature guaranteed
instructions by all registered owners) to sell the Shares acquired
under the Plan and remit the proceeds less any brokerage
commissions and a $2.50 service fee. Fractional Shares may either
remain in the Participant's account or be reduced to cash by the
Agent at the current market price with the proceeds remitted to the
Participant. Shareholders who have previously withdrawn from the
Plan may rejoin at any time by sending written instructions signed
by all registered owners to the Agent.
There is no direct charge for participation in the Plan; all
fees of the Agent are paid by the Trust. There are no brokerage
charges for Shares issued directly by the Trust. However, each
Participant will pay a pro rata share of brokerage commissions
incurred with respect to open market purchases of Shares to be
issued under the Plan. Participants will receive tax information
annually for their personal records and to assist in Federal income
tax return preparation. The automatic reinvestment of
Distributions does not relieve Participants of any income tax that
may be payable on Distributions.
The Plan may be terminated or amended at any time upon 30
days' prior written notice to Participants which, with respect to
a Plan termination, must precede the record date of any
Distribution by the Trust. Additional information concerning the
Plan may be obtained by shareholders holding Shares registered
directly in their names by writing the Agent, Shareholder Financial
Services, Inc., P.O. Box 173673, Denver, CO, 80217-3673 or by
calling 1-800-647-7374. Shareholders holding Shares in nominee
name should contact their brokerage firm or other nominee for more
information.
The Fund presently has provisions in its Declaration of Trust
and By-Laws (together, the "Charter Documents") which could have
the effect of limiting (i) the ability of other entities or persons
to acquire control of the Fund, (ii) the Fund's freedom to engage
in certain transactions or (iii) the ability of the Fund's Trustees
or shareholders to amend the Charter Documents or effect changes in
the Fund's management. Those provisions of the Charter Documents
may be regarded as "anti-takeover" provisions. Specifically, under
the Fund's Declaration of Trust, the affirmative vote of the
holders of not less than two thirds (66-2/3%) of the Fund's Shares
outstanding and entitled to vote is required to authorize the
consolidation of the Fund with another entity, a merger of the Fund
with or into another entity (except for certain mergers in which
the Fund is the successor), a sale or transfer of all or
substantially all of the Fund's assets, the dissolution of the
Fund, the conversion of the Fund to an open-end company, and any
amendment of the Fund's Declaration of Trust that would affect any
of the other provisions requiring a two-thirds vote. However, a
"majority" shareholder vote, as defined in the Charter Documents,
shall be sufficient to approve any of the foregoing transactions
that have been recommended by two-thirds of the Trustees.
Notwithstanding the foregoing, if a corporation, person or entity
is directly, or indirectly through its affiliates, the beneficial
owner of more than 5% of the outstanding shares of the Fund, the
affirmative vote of 80% (which is higher than that required under
the 1940 Act) of the outstanding Shares of the Fund is required
generally to authorize any of the following transactions or to
amend the provisions of the Declaration of Trust relating to
transactions involving: (i) a merge or consolidation of the Fund
with or into any such corporation or entity, (ii) the issuance of
any securities of the Fund to any such corporation, person or
entity for cash; (iii) the sale, lease or exchange of all or any
substantial part of the assets of the Fund to any such corporation,
entity or person (except assets having an aggregate market value of
less than $1,000,000); or (iv) the sale, lease or exchange to the
Fund, in exchange for securities of the Fund, of any assets of any
such corporation, entity or person (except assets having an
aggregate fair market value of less than $1,000,000). If two-
thirds of the Board of Trustees has approved a memorandum of
understanding with such beneficial owner, however, a majority
shareholder vote will be sufficient to approve the foregoing
transactions. Reference is made to the Charter Documents of the
Fund, on file with the Securities and Exchange Commission, for the
full text of these provisions.
2. Inapplicable.
3. Inapplicable.
4. The Fund qualified for treatment as, and elected to be,
a regulated investment company ("RIC") under Subchapter M of the
Internal Revenue Code for its taxable year ended October 31, 1994,
and intends to continue to qualify as a RIC for each subsequent
taxable year. However, the Fund reserves the right not to qualify
under Subchapter M as a RIC in any year or years.
For each taxable year that the Fund qualifies for treatment as
a RIC, the Fund (but not its shareholders) will not be required to
pay Federal income tax. Shareholders will normally have to pay
Federal income taxes, and any state income taxes, on the dividends
and distributions they receive from the Fund. Such dividends and
distributions derived from net investment income or short-term
capital gains are taxable to the shareholder as ordinary dividend
income regardless of whether the shareholder receives such
distributions in additional Shares or in cash. Since the Fund's
income is expected to be derived primarily from interest rather
than dividends, only a small portion, if any, of such dividends and
distributions is expected to be eligible for the Federal dividends-
received deduction available to corporations. The Fund does not
anticipate that any portion of its dividends or distributions will
qualify for pass-through treatment as "exempt-interest dividends"
since less than 50% of its assets is permitted to be invested in
municipal obligations.
Long-term or short-term capital gains may be generated by the
sale of portfolio securities and by transactions in options and
futures contracts. Distributions of long-term capital gains, if
any, are taxable to shareholders as long-term capital gains
regardless of how long a shareholder has held the Fund's shares and
regardless of whether the distribution is received in additional
shares or in cash. For Federal income tax purposes, if a capital
gain distribution is received with respect to Shares held for six
months or less, any loss on a subsequent sale or exchange of such
Shares will be treated as long-term capital loss to the extent of
such long-term capital gain distribution. Capital gains
distributions are not eligible for the dividends-received
deduction.
Any dividend or capital gains distribution received by a
shareholder from an investment company will have the effect of
reducing the net asset value of the shareholder's stock in that
company by the exact amount of the dividend or capital gains
distribution. Furthermore, capital gains distributions and
dividends are subject to Federal income taxes. If the net asset
value of the Shares should be reduced below a shareholder's cost as
a result of the payment of dividends or realized long-term capital
gains, such payment would be a return of the shareholder's
investment capital to the extent of such reduction below the
shareholder's cost, but nonetheless could be fully taxable.
The tax treatment of listed put and call options written or
purchased by the Fund on debt securities and of future contracts
entered into by the Fund will be governed by Section 1256 of the
Internal Revenue Code. Absent a tax election to the contrary,
each such position held by the Fund will be marked-to-market (i.e.,
treated as if it were closed out) on the last business day of each
taxable year of the Fund, and all gain or loss associated with
transactions in such positions will be treated as 60% long-term
capital gain or loss and 40% short-term capital gain or loss.
Positions of the Fund which consist of at least one debt security
and at least one option or futures contract which substantially
diminishes the Fund's risk of loss with respect of such debt
security could be treated as "mixed straddles" which are subject to
the straddle rules of Section 1092 of the Code, the operation of
which may cause deferral of losses, adjustments in the holding
periods of debt securities and conversion of short-term capital
losses into long-term capital losses. Certain tax elections exist
for mixed straddles which reduce or eliminate the operation of the
straddle rules. Furthermore, as a regulated investment company,
the Fund would be subject to the requirement that less than 30% of
its gross income be derived from gains on the sale or other
disposition of securities held for less than three months. This
requirement may limit the Fund's ability to engage in options and
futures transactions. The Fund will monitor its transactions in
options and futures contracts and may make certain tax elections in
order to mitigate the effect of these rules and prevent
disqualification of the Fund as a regulated investment company
under Subchapter M of the Code. Such tax election may result in an
increase in distribution of ordinary income (relative to long-term
capital gains) to shareholders.
The Internal Revenue Code requires that a holder (such as the
Fund) of a zero coupon security accrue a portion of the discount at
which the security was purchased as income each year even though
the Fund receives no interest payment in cash on the security
during the year. As an investment company, the Fund must pay out
substantially all of its net investment income each year.
Accordingly, the Fund may be required to pay out as an income
distribution each year an amount which is greater than the total
amount of cash interest the Fund actually received. Such
distributions will be made from the cash assets of the Fund or by
liquidation of portfolio securities, if necessary. If a
distribution of cash necessitates the liquidation of portfolio
securities, the Adviser will select which securities to sell. The
Fund may realize a gain or loss from such sales. In the event the
Fund realizes net capital gains from such transactions, its
shareholders may receive a larger capital gain distribution than
they would in the absence of such transactions.
It is the Fund's present policy, which may be changed by the
Board of Trustees, to pay monthly dividends to shareholders from
net investment income of the Fund. The Fund intends to distribute
all of its net investment income on an annual basis. The Fund will
distribute all of its net realized long-term and short-term capital
gains, if any, at least once per year. The Fund may, but is not
required to, make such distributions on a more frequent basis to
the extent permitted by applicable law and regulations.
Under the Internal Revenue Code, by December 31 each year, the
Fund must distribute a specified minimum percentage (currently 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
that year, or else the Fund must pay an excise tax on amounts not
distributed. While it is presently anticipated that the Fund will
meet those requirements, the Fund's Board and the Adviser might
determine in a particular year it would be in the best interests of
the Fund not to make such distributions at the mandated level and
to pay the excise tax which would reduce the amount available for
distributions to shareholders. If the Fund pays a dividend in
January which was declared in the previous December to shareholders
of record on a date in December, then such dividend or distribution
will be treated for tax purposes as being paid in December and will
be taxable to shareholders as if received in December.
Under the Plan, all of the Fund's dividends and distributions
to shareholders will be reinvested in full and fractional Shares.
With respect to distributions made in Shares issued by the Fund
pursuant to the Plan, the amount of the distribution for tax
purposes is the fair market value of the Shares issued on the
reinvestment date. In the case of Shares purchased on the open
market, a participating shareholder's tax basis in each Share is
its cost. In the case of Shares issued by the Fund, the
shareholder's tax basis in each Share received is its fair market
value on the reinvestment date.
Distributions of investment company taxable income to
shareholders who are nonresident alien individuals or foreign
corporations will generally be subject to a 30% United States
withholding tax under provisions of the Internal Revenue Code
applicable to foreign individuals and entities, unless a reduced
rate of withholding or a withholding exemption is provided under an
applicable treaty.
Under Section 988 of the Code, foreign currency gain or loss
with respect to foreign currency-denominated debt instruments and
other foreign currency-denominated positions held or entered into
by the Fund will be ordinary income or loss. In addition, foreign
currency gain or loss realized with respect to certain foreign
currency "hedging" transactions will be treated as ordinary income
or loss.
5. The following information is provided as of February 6,
1996:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Amount Amount
Held by Outstanding
Registrant Exclusive of
Amount or for its Amount Shown
Title of Class Authorized Account Under (3)
- -------------- ---------- ---------- ------------
<S> <C> <C> <C>
Shares of Beneficial Unlimited None $6,615,505
Interest, $.01 par value
</TABLE>
Item 11. Defaults and Arrears on Senior Securities.
Inapplicable.
Item 12. Legal Proceedings.
Inapplicable.
Item 13. Table of Contents of the Statement of Additional
Information.
Reference is made to Item 15 of the Statement of Additional
Information.
<PAGE>
<PAGE>
Appendix: Description of Ratings
Description of Moody's Investors Service, Inc.
Bond Ratings
Aaa: Bonds which are rated "Aaa" are judged to be the best
quality and to carry the smallest degree of investment risk.
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, the changes that can be expected are
most unlikely to impair the fundamentally strong position of such
issues.
Aa: Bonds which are rated "Aa" are 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 with "Aaa" securities or fluctuation 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 those of "Aaa" securities.
A: Bonds which are rated "A" possess many favorable
investment attributes and are to be considered as upper-medium
grade obligations. Factors giving security to principal and
interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated "Baa" are considered medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and have
speculative characteristics as well.
Ba: Bonds which are rated "Ba" are judged to have speculative
elements; their future cannot be considered well-assured. Often the
protection of interest and principal payments may be very moderate
and not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B: Bonds which are rated "B" generally lack characteristics
of desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any
long period of time may be small.
Caa: Bonds which are rated "Caa" are of poor standing and may
be in default or there may be present elements of danger with
respect to principal or interest.
Ca: Bonds which are rated "Ca" represent obligations which
are speculative in a high degree and are often in default or have
other marked shortcomings.
C: Bonds which are rated "C" can be regarded as having
extremely poor prospects of ever retaining any real investment
standing.
Description of Standard & Poor's Bond Ratings
AAA: "AAA" is the highest rating assigned to a debt
obligation and indicates an extremely strong capacity to pay
principal and interest.
AA: Bonds rated "AA" also qualify as high quality debt
obligations. Capacity to pay principal and interest is very strong,
and in the majority of instances they differ from "AAA" issues only
in small degree.
A: Bonds rated "A" have a strong capacity to pay principal
and interest, although they are somewhat more susceptible to
adverse effects of change in circumstances and economic conditions.
BBB: The bond investments in which the Fund will principally
invest will be in the lower-rated categories, described below.
Bonds rated "BBB" are regarded as having an adequate capacity to
pay principal and interest. Whereas they normally exhibit
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
principal and interest for bonds in this category than for bonds in
the "A" category.
BB, B, CCC, CC: Bonds rated "BB," "B," "CCC" and "CC" are
regarded, on balance, as predominantly speculative with respect to
the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "CC" the highest degree. While
such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.
C, D: Bonds on which no interest is being paid are rated "C."
Bonds rated "D" are in default and payment of interest and/or
repayment of principal is in arrears.
<PAGE>
<PAGE>
Oppenheimer World Bond Fund
(formerly "Oppenheimer Multi-Government Trust")
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated July 26, 1996
This Statement of Additional Information is not a Prospectus.
This document contains additional information about the Fund and
supplements information in the Prospectus dated July 26, 1996. It
should be read together with the Prospectus, and the Registration
Statement on Form N-2, of which the Prospectus and this Statement
of Additional Information are a part, can be inspected and copied
at public reference facilities maintained by the Securities and
Exchange Commission (the "SEC") in Washington, D.C. and certain of
its regional offices, and copies of such materials can be obtained
at prescribed rates from the Public Reference Branch, Office of
Consumer Affairs and Information Services, SEC, Washington, D.C.,
20549.
TABLE OF CONTENTS
Page
Investment Objective and Policies*
Management . . . . . . . . . . . . . . . . . . . . . . . . .
Control Persons and Principal Holders of Securities. . . . .
Investment Advisory and Other Services*
Brokerage Allocation and Other Practices . . . . . . . . . .
Tax Status*
Financial Statements . . . . . . . . . . . . . . . . . . . .
- --------------------
*See Prospectus<PAGE>
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 14. Cover Page.
Reference is made to the preceding page.
Item 15. Table of Contents.
Reference is made to the preceding page and to Items 16
through 23 of the Statement of Additional Information set forth
below.
Item 16. General Information and History.
Inapplicable.
Item 17. Investment Objective and Policies.
Reference is made to Item 8 of the Prospectus.
Item 18. Management.
1 and 2. The Fund's Trustees and officers and their principal
occupations and business affiliations during the past five years
are listed below. The address of each Trustee and officer is Two
World Trade Center, New York, New York 10048-0203, unless another
address is listed below. All of the Trustees are also trustees of
Oppenheimer Fund, Oppenheimer Global Fund, Oppenheimer Enterprise
Fund, Oppenheimer Growth Fund, Oppenheimer Target Fund, Oppenheimer
Gold & Special Minerals Fund, Oppenheimer Discovery Fund,
Oppenheimer Global Growth & Income Fund, Oppenheimer Global
Emerging Growth Fund, Oppenheimer Tax-Free Bond Fund, Oppenheimer
New York Tax-Exempt Fund, Oppenheimer California Tax-Exempt Fund,
Oppenheimer Multi-State Tax-Exempt Trust, Oppenheimer Asset
Allocation Fund, Oppenheimer Money Market Fund, Inc., Oppenheimer
U.S. Government Trust and Oppenheimer Multi-Sector Income
Trust(collectively, the "New York-based Oppenheimer funds"). Ms.
Macaskill and Messrs. Bishop, Bowen, Donohue, Farrar and Zack
respectively hold the same offices with the other New York-based
Oppenheimer funds as with the Fund.
Leon Levy, Chairman of the Board of Trustees; Age: 69
General Partner of Odyssey Partners, L.P. (investment
partnership) and Chairman of Avatar Holdings, Inc. (real
estate development).
Robert G. Galli, Trustee*; Age: 62
Vice Chairman of the Adviser and Vice President and Counsel of
Oppenheimer Acquisition Corp., the Adviser's parent holding
company; formerly he held the following positions: a director
of the Adviser and OppenheimerFunds Distributor, Inc. (the
"Distributor"), Vice President and a director of HarbourView
Asset Management Corporation ("HarbourView") and Centennial
Asset Management Corporation ("Centennial"), investment
advisory subsidiaries of the Adviser, a director of
Shareholder Financial Services, Inc. ("SFSI") and Shareholder
Services, Inc. ("SSI"), transfer agent subsidiaries of the
Adviser, an officer of other Oppenheimer funds and Executive
Vice President and General Counsel of the Adviser and the
Distributor.
Benjamin Lipstein, Trustee; Age: 72
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of
Business Administration, New York University; Director of
Sussex Publishers, Inc. (Publishers of Psychology Today and
Mother Earth News); and Director of Spy Magazine, L.P.
Bridget A. Macaskill, President and Trustee*; Age: 47
Two World Trade Center, New York, New York 10048-0203
President, Chief Executive Officer and a Director of the
Adviser; Chairman and a Director of SSI; President and a
Director of OAC, HarbourView, and of Oppenheimer Partnership
Holdings, Inc., the latter being a holding company subsidiary
of the Manager; formerly an Executive Vice President of the
Manager.
Elizabeth B. Moynihan, Trustee; Age: 66
801 Pennsylvania Avenue, N.W., Washington, DC 20004
Author and architectural historian; a trustee of the Freer
Gallery of Art (Smithsonian Institution), the Institute of
Fine Arts (New York University), National Building Museum; a
member of the Trustees Council, Preservation League of New
York State; a member of the Indo-U.S. Sub-Commission on
Education and Culture.
- ------------------
* A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
Kenneth A. Randall, Trustee; Age: 68
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion Resources, Inc. (electric utility
holding company), Dominion Energy, Inc. (electric power and
oil and gas producer), Enron-Dominion Cogen Corp.
(cogeneration company), Kemper Corporation (insurance and
financial services company), Fidelity Life Association (mutual
life insurance company); formerly Chairman of the Board of
ICL, Inc. (information systems) and President and Chief
Executive Officer of the Conference Board, Inc. (international
economic and business research).
Edward V. Regan, Trustee; Age: 65
40 Park Avenue, New York, New York 10016
Chairman of Municipal Assistance Corporation for the City of
New York; President of Jerome Levy Economics Institute; a
member of the U.S. Competitiveness Policy Council; a director
or GranCare, Inc. (healthcare provider); formerly New York
State Comptroller and trustee, New York State and Local
Retirement Fund.
Russell S. Reynolds, Jr., Trustee; Age: 64
200 Park Avenue, New York, New York 10166
Founder Chairman of Russell Reynolds Associates, Inc.
(executive recruiting); Chairman of Directors Publication,
Inc. (consulting and publishing); a trustee of Mystic Seaport
Museum, International House, Greenwich Hospital and the
Greenwich Historical Society.
Sidney M. Robbins, Trustee; Age: 83
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions,
Graduate School of Business, Columbia University; Visiting
Professor of Finance, University of Hawaii; a director of The
Korea Fund, Inc. (closed-end investment company); a member of
the Board of Advisors, Olympus Private Placement Fund, L.P.;
Professor Emeritus of Finance, Adelphi University.
Donald W. Spiro, Trustee*; Age: 69
Chairman Emeritus and a director of the Adviser; formerly
Chairman of the Adviser and the Distributor.
- ---------------
* A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
<PAGE>
Pauline Trigere, Trustee; Age: 83
498 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design
and sale of women's fashions).
Clayton K. Yeutter, Trustee; Age: 65
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel to Hogan & Hartson (a law firm); a director of
B.A.T. Industries, Ltd. (tobacco and financial services),
Caterpillar, Inc. (machinery), ConAgra, Inc. (food and
agricultural products), Farmers Insurance Company (insurance),
FMC Corp. (chemicals and machinery), Lindsay Manufacturing Co.
(irrigation equipment), Texas Instruments, Inc. (electronics)
and The Vigoro Corporation (fertilizer manufacturer); formerly
(in descending chronological order) Counsellor to the
President (Bush) for Domestic Policy, Chairman of the
Republican National Committee, Secretary of the U.S.
Department of Agriculture, and U.S. Trade Representative.
Thomas P. Reedy, Vice President and Portfolio Manager;
Age: 34
Vice President of the Adviser; an officer of other Oppenheimer
funds; formerly a Securities Analyst for the Adviser.
David Rosenberg, Vice President and Portfolio Manager;
Age: 37
Vice President of the Adviser; an officer of other Oppenheimer
funds; formerly an officer and Portfolio Manager for Delaware
Investment Advisors and for one of its mutual funds.
Ashwin Vasan, Vice President and Portfolio Manager; Age: 33
Vice President of the Adviser; an officer of other Oppenheimer
funds; formerly a Securities Analyst for the Adviser, prior to
which he was a Securities Analyst for Citibank, N.A.
Andrew J. Donohue, Secretary; Age: 45
Executive Vice President and General Counsel of the Adviser
and the Distributor; an officer of other Oppenheimer funds;
formerly Senior Vice President and Associate General Counsel
of the Adviser and the Distributor, prior to which he was a
partner in Kraft & McManimon (a law firm), an officer of First
Investors Corporation (a broker-dealer) and First Investors
Management Company, Inc. (broker-dealer and investment
adviser), and a director and an officer of First Investors
Family of Funds and First Investors Life Insurance Company.
George C. Bowen, Treasurer; Age: 59
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Adviser; Vice
President and Treasurer of the Distributor and HarbourView;
Senior Vice President, Treasurer, Assistant Secretary and a
director of Centennial; Vice President, Treasurer and
Secretary of SSI and SFSI; an officer of other Oppenheimer
funds.
Robert G. Zack, Assistant Secretary; Age: 47
Senior Vice President and Associate General Counsel of the
Adviser; Assistant Secretary of SSI and SFSI; an officer of
other OppenheimerFunds.
Robert Bishop, Assistant Treasurer; Age: 37
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Adviser/Mutual Fund
Accounting; an officer of other Oppenheimer funds; previously
a Fund Controller for the Adviser, prior to which he was an
Accountant for Yale & Seffinger, P.C., an accounting firm; and
previously an Accountant and Commissions Supervisor for Stuart
James Company Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer; Age: 30
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Adviser/Mutual Fund
Accounting; an officer of other Oppenheimer funds; previously
a Fund Controller for the Adviser, prior to which he was an
International Mutual Fund Supervisor for Brown Brothers
Harriman & Co., a bank, and previously a Senior Fund
Accountant for State Street Bank & Trust Company.
The Board of Trustees does not have an executive or investment
committee. The Trustees of the Fund have appointed a study
committee consisting of Messrs. Robbins (Chairman) and Lipstein and
Mrs. Moynihan, none of whom is an "interested person" of the
Adviser or the Fund. The study committee's function is to report
to the Board on matters that include (i) legal and regulatory
developments, (ii) periodic renewals of the Advisory Agreement,
(iii) review of the transfer agent and registrar agreement, (iv)
review of the administrative services provided by Mitchell Hutchins
Asset Management, Inc., (v) portfolio management, (vi) valuation of
portfolio securities, (vii) custodian relationships and use of
foreign subcustodians, (viii) code of ethics matters, policy on use
of insider information, (ix) consideration of tender offers and
other repurchases of fund shares and possible conversion to open-
end status, and (x) indemnification and insurance of the Fund's
officers and trustees.
3. Inapplicable.
4. The officers of the Fund are affiliated with the Adviser;
they and the Trustees of the Fund who are affiliated with the
Adviser (Ms. Macaskill and Messrs. Galli and Spiro; Mr. Spiro is
also an officer) receive no salary or fee from the Fund. The
Trustees of the Fund (including Mr. Delaney, a former Trustee, but
excluding Ms. Macaskill and Messrs. Galli and Spiro) received the
total amounts shown below from all 17 of the New York-based
Oppenheimer funds (including the Fund) listed in the first
paragraph of Item 18, parts 1 and 2 (and from Oppenheimer Global
Environment Fund, Oppenheimer Time Fund and Oppenheimer Mortgage
Income Fund, which ceased operations following the acquisition of
their assets by other Oppenheimer funds), for services in the
positions shown:
<TABLE>
<CAPTION>
Retirement Total
Aggregate Benefits As Compensation From
Compensation Accrued as Part All New York-based
Name and Position from Fund of Fund Expenses Oppenheimer Funds1
<S> <C> <C> <C>
Leon Levy $2,417 $4,482 $141,000
Chairman and Trustee
Benjamin Lipstein $1,478 $2,740 $ 86,200
Study Committee Member
and Trustee
Elizabeth B. Moynihan $1,478 $2,740 $ 86,200
Study Committee Member3
and Trustee
Kenneth A. Randall $1,344 $2,492 $ 78,400
Audit Committee Member
and Trustee
Edward V. Regan $1,179 $2,187 $ 68,800
Audit Committee Member3
and Trustee
Russell S. Reynolds, Jr. $ 893 $1,656 $ 52,100
Trustee
Sidney M. Robbins $2,093 $3,881 $122,100
Study Committee Chairman,
Audit Committee Vice-Chairman
and Trustee
Pauline Trigere $ 893 $1,656 $ 52,100
Trustee
Clayton K. Yeutter $ 893 $1,656 $ 52,100
Trustee
</TABLE>
- -------------------
1 For the 1995 calendar year.
2 Board and committee positions held during a portion of the
period shown.
3 Committee position held during a portion of the period shown.
The Fund has adopted a retirement plan that provides for
payment to a retired Trustee of up to 80% of the average
compensation paid during that Trustee's five years of service in
which the highest compensation was received. A Trustee must serve
in that capacity for any of the New York-based Oppenheimer funds
for at least 15 years to be eligible for the maximum payment.
During the fiscal year ended December 31, 1995, the Fund made a
payment of $507 to two retired trustees. The total accrual by all
the New York-based Oppenheimer funds referred to in the preceding
paragraph for their collective projected benefit obligations under
the plan was $2,560,500 for the 1995 calendar year.
Item 19. Control Persons and Principal Holders of Securities.
1. Inapplicable.
2. As of February 6, 1996, the only person owning of record
or known by the Fund to own beneficially 5% or more of the
outstanding Shares was Cede & Co., c/o Depository Trust Company
("DTC"), 7 Hanover Square, New York, New York 10004, a nominee
which owned of record 5,235,312.277 Shares (approximately 79% of
the Shares then outstanding).
3. As of February 6, 1996, the trustees and officers of the
Fund as a group owned less than 1% of the outstanding Shares.
Item 20. Investment Advisory and Other Services.
Reference is made to Item 9 of the Prospectus.
Item 21. Brokerage Allocation and Other Practices.
1 and 2. The Fund paid no brokerage commissions during the
fiscal year ended October 31, 1993 and paid $405 and $1,333 in
brokerage commissions during the fiscal year ended October 31, 1994
and 1995, respectively. The Fund will not effect portfolio
transactions through any broker (i) which is an affiliated person
of the Fund, (ii) which is an affiliated person of such affiliated
person or (iii) an affiliated person of which is an affiliated
person of the Fund or its Adviser. There is no principal
underwriter of shares of the Fund. As most purchases of portfolio
securities made by the Fund are principal transactions at net
prices, the Fund incurs little or no brokerage costs. The Fund
deals directly with the selling or purchasing principal or market
maker without incurring charges for the services of a broker on its
behalf unless it is determined 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 price.
Transactions in foreign securities markets generally involve the
payment of fixed brokerage commissions, which are usually higher
than those in the United States. The Fund seeks to obtain prompt
execution of orders at the most favorable net price.
3. The Advisory Agreement between the Fund and the Advisor
(the "Advisory Agreement") contains provisions relating to the
selection of brokers, dealers and futures commission merchants
(collectively referred to as "brokers") for the Fund's portfolio
transactions. The Adviser is authorized by the Advisory Agreement
to employ brokers as may, in its best judgment based on all
relevant factors, implement the policy of the Fund to obtain, at
reasonable expense, the "best execution" (prompt and reliable
execution at the most favorable price obtainable) of such
transactions. The Adviser need not seek competitive bidding but is
expected to minimize the commissions paid to the extent consistent
with the interests and policies of the Fund.
Certain other investment companies advised by the Adviser and
its affiliates have investment objectives and policies similar to
those of the Fund. If possible, concurrent orders to purchase or
sell the same security by more than one of the accounts managed by
the Adviser or its affiliates are combined. The transactions
effected pursuant to such combined orders are averaged as to price
and allocated in accordance with the purchase or sale orders
actually placed for each account. If transactions on behalf of
more than one fund during the same period increase the demand for
securities being purchased or the supply of securities being sold,
there may be an adverse effect on price or quantity. When the Fund
engages in an option transaction, ordinarily the same broker will
be used for the purchase or sale of the option and any transactions
in the security to which the option relates.
Under the Advisory Agreement, if brokers are used for
portfolio transactions, the Adviser may select brokers for their
execution and/or research services, on which no dollar value can be
placed. Information received by the Adviser for those other
accounts may or may not be useful to the Fund. The commissions
paid to such dealers may be higher than another qualified dealer
would have charged if a good faith determination is made by the
Adviser that the commission is reasonable in relation to the
services provided. Subject to applicable regulations, sales of
shares of the Fund and/or investment companies advised by the
Adviser or its affiliates may also be considered as a factor in
directing transactions to brokers, but only in conformity with the
price, execution and other considerations and practices discussed
above.
Such research, which may be provided by a broker through a
third party, includes information on particular companies and
industries as well as market, economic or institutional activity
areas. It serves to broaden the scope and supplement the research
activities of the Adviser, to make available additional views for
consideration and comparisons, and to enable the Adviser to obtain
market information for the valuation of securities held in the
Fund's portfolio or being considered for purchase.
4. During the fiscal year ended October 31, 1995, there were
no commissions related to brokerage transactions that were directed
to brokers because of research provided.
5. Inapplicable.
Item 22. Tax Status.
Reference is made to Item 10 of the Prospectus.
Item 23. Financial Statements.
1. Statement of Investments
2. Statement of Assets and Liabilities
3. Statement of Operations
4. Statements of Changes in Net Assets
5. Financial Highlights
6. Notes to Financial Statements
7. Independent Auditors' Report
8. Independent Auditors' Consent
<PAGE>
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
<PAGE>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
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>
<PAGE>
TATEMENT OF INVESTMENTS April 30, 1996 (Unaudited)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
<S> <C> <C>
CERTIFICATES OF DEPOSIT -- 1.4%
Bank Pacific CD, Zero Coupon, 17.948%, 3/5/96 (2)(3)(4) (IDR).............. 500,000,000 $ 107,323
CS First Boston, Inc. CD, 15.75%, 6/11/96 (2)(5) (IDR)..................... 556,000,000 238,686
Indonesia (Republic of) Bank Negara CD, Zero Coupon, 15.914%, 6/17/96
(2)(4) (IDR)............................................................. 1,000,000,000 420,176
-----------
Total Certificates of Deposit (Cost $904,723).............................. 766,185
-----------
MORTGAGE-BACKED OBLIGATIONS -- 23.4%
GOVERNMENT AGENCY -- 22.3%
FHLMC/FNMA/Sponsored -- 9.9%
Federal Home Loan Mortgage Corp.:
Collateralized Mtg. Obligations, Gtd. Multiclass Mtg.
Participation Certificates, 6.65%, 4/15/21............................... 1,549,800 1,485,375
Mtg.-Backed Certificates, 11.50%, 1/1/18................................. 131,201 148,158
Mtg.-Backed Certificates, 13%, 5/1/19.................................... 524,867 614,751
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed
Security:
Trust 222, Cl. 2, 11.456%, 6/1/23 (6).................................... 6,279,656 2,104,666
Trust 240, Cl. 2, 12.908%-13.152%, 9/1/23-2/1/24 (6)..................... 1,632,162 557,694
Trust 257, Cl. 2, 17.56%, 2/1/24 (6)..................................... 978,008 335,579
-----------
5,246,223
-----------
GNMA/Guaranteed -- 12.4%
Government National Mortgage Assn.:
7%, 5/1/26 (7)........................................................... 2,500,000 2,407,025
7%, 1/15/24-5/15/24...................................................... 3,699,901 3,567,924
7.50%, 5/15/24-1/15/26................................................... 611,201 604,741
-----------
6,579,690
-----------
PRIVATE -- 1.1%
Commercial -- 1.1%
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates,
Series 1996-C1, Cl. E, 7.51%, 2/1/28 (8)................................. 553,342 434,201
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series
1995-C1, Cl. F, 6.90%, 2/25/27........................................... 212,572 174,110
-----------
608,311
-----------
Total Mortgage-Backed Obligations (Cost $12,109,522)....................... 12,434,224
-----------
U.S. GOVERNMENT OBLIGATIONS -- 13.5%
U.S. Treasury Nts.:
6.25%, 2/15/03........................................................... 5,000,000 4,912,500
7.75%, 1/31/00........................................................... 400,000 418,500
8%, 10/15/96 (14)........................................................ 1,800,000 1,820,811
-----------
Total U.S. Government Obligations (Cost $7,223,755)........................ 7,151,811
-----------
</TABLE>
3
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
FOREIGN GOVERNMENT OBLIGATIONS -- 42.1%
<S> <C> <C>
ALGERIA -- 1.6%
Algeria (Republic of) Reprofiled Debt Loan Participation, Tranche A,
6.812%, 9/4/06 (8)(10)................................................... $ 1,500,000 $ 847,500
-----------
ARGENTINA -- 4.2%
Argentina (Republic of):
Bonds, Bonos del Tesoro, Series 10, 5.469%, 4/1/00 (10).................. 252,468 236,246
Past Due Interest Bonds, Series L, 6.312%, 3/31/05 (10).................. 99,000 75,735
Sr. Unsec. Unsub. Bonds, 13.45%, 10/21/97 (ITL).......................... 1,000,000,000 654,336
Banco Hipotecario Nacional (Argentina) Medium-Term Nts., 10.625%, 3/29/99
(8)...................................................................... 250,000 251,250
Buenos Aires (Province of):
Bonds, 10%, 3/5/01 (DEM)................................................. 1,160,000 779,123
Sr. Unsub. Unsec. Nts., 10%, 12/7/98 (DEM)............................... 350,000 241,927
-----------
2,238,617
-----------
AUSTRALIA -- 1.3%
Australia (Commonwealth of) Bonds, 12.50%, 1/15/98 (AUD)................... 40,000 33,663
First Australia National Mortgage Acceptance Corp. Ltd. Bonds, Series 22,
11.40%, 12/15/01 (AUD)................................................... 481,950 404,911
New South Wales Treasury Corp. Gtd. Bonds, 12%, 12/1/01 (AUD).............. 285,000 257,028
-----------
695,602
-----------
BRAZIL -- 1.3%
Banco do Estado de Sao Paulo SA Nts., 9.25%, 10/4/96....................... 250,000 248,750
Banco Estado Minas Gerais, 8.25%, 2/10/00.................................. 500,000 445,000
Brazil (Federal Republic of) Interest Due and Unpaid Bonds, 6.375%, 1/1/01
(10)..................................................................... 13,950 12,851
-----------
706,601
-----------
BULGARIA -- 0.3%
Bulgaria (Republic of) Disc. Bonds, Tranche A, 6.25%, 7/28/24 (10)......... 300,000 149,625
-----------
CANADA -- 2.4%
Canada (Government of) Bonds, 7.75%, 9/1/99 (CAD).......................... 1,698,000 1,288,976
-----------
COLOMBIA -- 0.2%
Colombia (Republic of) Concorde Loan Participation, 6.188%, 1/31/98
(8)(10).................................................................. 92,500 91,112
-----------
COSTA RICA -- 0.6%
Central Bank of Costa Rica Interest Claim Bonds, Series A, 6.094%, 5/21/05
(10)..................................................................... 352,851 315,802
-----------
DENMARK -- 0.6%
Denmark (Kingdom of) Bonds, 8%, 5/15/03 (DKK).............................. 1,640,000 296,500
-----------
</TABLE>
4
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
<S> <C> <C>
ECUADOR -- 0.7%
Ecuador (Republic of) Disc. Bonds, 6.063%, 2/28/25 (10).................... $ 630,000 $ 352,800
-----------
FINLAND -- 0.6%
Finland (Republic of) Bonds, 9.50%, 3/15/04 (FIM).......................... 1,270,000 294,273
-----------
GREAT BRITAIN -- 4.4%
United Kingdom Treasury Nts., 13%, 7/14/00 (9) (GBP)....................... 1,295,000 2,340,658
-----------
IRELAND -- 0.7%
National Treasury Management Agency (Irish Government) Bonds, 8%, 10/18/00
(IEP).................................................................... 240,000 390,019
-----------
ITALY -- 0.6%
Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 10.50%,
11/1/98 (ITL)............................................................ 450,000,000 298,464
-----------
JAMAICA -- 0.3%
Jamaica (Government of) 1990 Refinancing Agreement Nts., Tranche A, 6.344%,
10/16/00 (8)(10)......................................................... 175,000 164,500
-----------
JORDAN -- 2.0%
Hashemite Kingdom of Jordan Interest Arrears Bonds, 6.438%, 12/23/05
(10)..................................................................... 1,300,000 1,036,750
-----------
MEXICO -- 4.4%
Banco Nacional de Comercio Exterior SNC International Finance BV:
Gtd. Bonds, 12.65%, 6/21/98 (ESP)........................................ 35,000,000 281,669
Medium-Term Nts., 8%, 4/14/00............................................ 125,000 116,719
Bonos de la Tesoreria de la Federacion, Zero Coupon, 37.786%, 3/6/97 (4)
(MXP).................................................................... 1,600,000 163,654
United Mexican States:
Bonds, 10.375%, 1/29/03 (DEM)............................................ 1,855,000 1,239,876
Combined Facility 3, Loan Participation Agreement, Tranche A, 6.50%,
9/20/97 (8)(10)....................................................... 52,400 43,230
Nacional Financiera SNC Nts., 13.60%, 4/2/98 (ESP)....................... 50,000,000 410,726
Petroleos Mexicanos Gtd. Medium-Term Nts., 7.60%, 6/15/00................ 100,000 94,250
-----------
2,350,124
-----------
MOROCCO -- 0.7%
Morocco (Kingdom of) Loan Participation Agreement:
Tranche A, 6.594%, 1/1/09 (10)........................................... 420,000 301,744
Tranche B, 6.521%, 1/1/04 (10)........................................... 94,117 75,412
-----------
377,156
-----------
NEW ZEALAND -- 1.8%
New Zealand (Republic of) Bonds, 8%, 2/15/01 (NZD)......................... 1,460,000 969,175
-----------
</TABLE>
5
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
<S> <C> <C>
NORWAY -- 0.2%
Norwegian Government Bonds, 9.50%, 10/31/02 (NOK).......................... 445,000 $ 79,625
-----------
PANAMA -- 2.5%
Panama (Republic of):
Debs., 6.75%, 5/10/02 (10)............................................... 1,300,000 1,202,500
Past Due Interest Debs., 12/29/49 (7).................................... 250,000 136,625
-----------
1,339,125
-----------
POLAND -- 2.0%
Poland (Republic of) Treasury Bills, Zero Coupon:
21.466%, 10/16/96 (4) (PLZ).............................................. 1,000,000 342,076
20.376%, 3/19/97 (4) (PLZ)............................................... 800,000 253,501
22.382%, 7/24/96 (4) (PLZ)............................................... 1,300,000 465,342
-----------
1,060,919
-----------
PORTUGAL -- 2.2%
Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio Prazo, 11.875%,
2/23/00 (PTE)............................................................ 165,000,000 1,175,821
-----------
SPAIN -- 1.6%
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado, 12.25%,
3/25/00 (ESP)............................................................ 96,000,000 849,610
-----------
SUPRANATIONAL -- 2.6%
European Bank for Reconstruction & Development Sr. Unsec. Medium-Term Nts.,
10%, 12/20/96 (CZK)...................................................... 17,000,000 607,360
International Bank for Reconstruction & Development Bonds, 12.50%, 7/25/97
(NZD).................................................................... 1,100,000 785,669
-----------
1,393,029
-----------
SWEDEN -- 0.5%
Sweden (Kingdom of) Bonds, Series 1028, 11%, 1/21/99 (SEK)................. 1,600,000 258,287
-----------
TRINIDAD & TOBAGO -- 0.8%
Trinidad & Tobago Loan Participation Agreement, Tranche A, 1.772%, 9/30/00
(8)(10) (JPY)............................................................ 54,000,000 443,335
-----------
VENEZUELA -- 1.0%
Venezuela (Republic of):
Debs., Series C, 6.75%, 12/31/03 (10).................................... 130,000 97,663
Disc. Bonds, Series DL, 6.563%, 12/18/07 (10)............................ 500,000 327,500
Front-Loaded Interest Reduction Bonds, Series A, 6.375%,
3/31/07 (10).......................................................... 200,000 132,750
-----------
557,913
-----------
Total Foreign Government Obligations (Cost $22,005,323).................... 22,361,918
-----------
</TABLE>
6
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
CORPORATE BONDS AND NOTES -- 15.5%
<S> <C> <C>
BASIC INDUSTRY -- 1.0%
Chemicals -- 0.1%
Acetex Corp., 9.75% Sr. Sec. Nts., 10/1/03................................. $ 50,000 $ 50,250
-----------
Metals/Mining -- 0.2%
Kaiser Aluminum & Chemical Corp., 9.875% Sr. Nts., 2/15/02................. 100,000 100,000
UCAR Global Enterprises, Inc., 12% Sr. Sub. Nts., 1/15/05.................. 25,000 28,750
-----------
128,750
-----------
Paper -- 0.7%
Indah Kiat International Finance Co. BV, 12.50% Sr. Sec. Gtd. Nts., Series
C, 6/15/06............................................................... 100,000 102,250
QUNO Corp., 9.125% Sr. Nts., 5/15/05....................................... 100,000 99,500
Repap Wisconsin, Inc., 9.25% First Priority Sr. Sec. Nts., 2/1/02.......... 100,000 96,500
Riverwood International Corp., 10.25% Sr. Nts., 4/1/06..................... 100,000 100,500
-----------
398,750
-----------
CONSUMER RELATED -- 4.3%
Consumer Products -- 0.4%
Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B, 11.623%,
5/27/98 (4).............................................................. 100,000 83,750
Revlon Consumer Products Corp., 10.50% Sr. Sub. Nts., Series B, 2/15/03.... 100,000 102,750
-----------
186,500
-----------
Food/Beverages/Tobacco -- 0.6%
Doane Products Co., 10.625% Sr. Nts., 3/1/06............................... 50,000 51,000
Pulsar Internacional SA de CV, 11.80% Nts., 9/19/96 (8).................... 250,000 251,250
-----------
302,250
-----------
Healthcare -- 0.6%
Magellan Health Services, Inc., 11.25% Sr. Sub. Nts., Series A, 4/15/04.... 100,000 111,500
Quorum Health Group, Inc., 11.875% Sr. Sub. Nts., 12/15/02................. 100,000 111,250
Tenet Healthcare Corp., 10.125% Sr. Sub. Nts., 3/1/05...................... 100,000 107,500
-----------
330,250
-----------
Hotel/Gaming -- 1.2%
Bally's Park Place Funding, Inc., 9.25% Gtd. First Mtg. Nts., 3/15/04...... 50,000 51,375
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% Sr. Gtd. Nts., 4/1/02........... 100,000 104,875
GNF Corp., 10.625% Gtd. First Mtg. Nts., Series B, 4/1/03.................. 50,000 51,750
Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03................. 100,000 104,750
</TABLE>
7
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
CORPORATE BONDS AND NOTES (CONTINUED)
CONSUMER RELATED (CONTINUED)
Hotel/Gaming (Continued)
<S> <C> <C>
HMH Properties, Inc., 9.50% Sr. Sec. Nts., 5/15/05......................... $ 100,000 $ 97,625
Trump Atlantic City Associates/Trump Atlantic City Funding, Inc., 11.25%
First Mtg. Nts., 5/1/06.................................................. 100,000 102,875
-----------
619,000
-----------
Restaurants -- 0.2%
Carrols Corp., 11.50% Sr. Nts., 8/15/03.................................... 85,000 86,912
-----------
Textile/Apparel -- 1.3%
Consoltex Group, Inc., 11% Sr. Sub. Gtd. Nts., Series B, 10/1/03........... 100,000 89,250
PT Polysindo Eka Perkasa, Zero Coupon Promissory Nts.:
17.90%, 10/23/96 (4) (IDR)............................................... 1,000,000,000 389,846
19.111%, 2/28/97 (4) (IDR)............................................... 350,000,000 128,574
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05................... 100,000 98,500
-----------
706,170
-----------
ENERGY -- 1.5%
Chesapeake Energy Corp., 10.50% Sr. Nts., 6/1/02........................... 100,000 106,125
Falcon Drilling, Inc., 8.875% Sr. Nts., Series B, 3/15/03.................. 100,000 99,000
Kelley Oil & Gas Corp., 13.50% Sr. Nts., 6/15/99........................... 50,000 52,500
Moran Energy, Inc., 8.75% Cv. Sub. Debs., 1/15/08.......................... 200,000 171,847
Petroleum Heat & Power Co., Inc.:
12.25% Sub. Debs., 2/1/05................................................ 49,000 54,758
9.375% Sub. Debs., 2/1/06................................................ 50,000 49,375
Santa Fe Energy Resources, Inc., 11% Sr. Sub. Debs., 5/15/04............... 100,000 109,500
TransTexas Gas Corp., 11.50% Sr. Sec. Gtd. Nts., 6/15/02................... 100,000 100,875
United Meridian Corp., 10.375% Sr. Sub. Nts., 10/15/05..................... 50,000 52,250
-----------
796,230
-----------
FINANCIAL SERVICES -- 3.6%
Banks & Thrifts -- 3.4%
Banco Bamerindus do Brasil SA:
10.50% Debs., 6/23/97.................................................... 300,000 289,500
9% Unsub. Unsec. Bonds, 10/29/98......................................... 90,000 75,600
Banco de Colombia, 5.20% Cv. Jr. Sub. Unsec. Nts., 2/1/99.................. 250,000 226,250
Banco Ganadero SA, Zero Coupon Sr. Unsub. Unsec. Nts., 9.762%, 6/15/96
(4)(5)................................................................... 250,000 247,159
Banco Itamarati SA, 11.625% Sr. Unsec. Debs., 11/23/97..................... 250,000 255,625
Banco Mexicano SA, 8% Sr. Unsub. Unsec. Exchangeable Medium-Term Nts.,
11/4/98.................................................................. 100,000 93,875
</TABLE>
8
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
CORPORATE BONDS AND NOTES (CONTINUED)
FINANCIAL SERVICES (CONTINUED)
Banks & Thrifts (Continued)
<S> <C> <C>
PT Inti Indorayon Utama, Zero Coupon Promissory Nts., 17.234%, 2/12/1997
(4) (IDR)................................................................ 700,000,000 $ 264,620
Morgan Stanley Group, Inc., 14.25% Indian Rupee Indexed Nts., 6/26/96 (2)
(INR).................................................................... 3,141,000 90,391
SCF Finance Co., Zero Coupon Bonds, 10.294%, 6/1/96 (4) (THB).............. 6,500,000 254,259
-----------
1,797,279
-----------
Insurance -- 0.2%
American Life Holding Co., 11.25% Sr. Sub. Nts., 9/15/04................... 100,000 106,000
-----------
HOUSING RELATED -- 0.5%
Homebuilders/Real Estate -- 0.5%
NVR, Inc., 11% Sr. Gtd. Nts., 4/15/03...................................... 100,000 101,500
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (8)........... 250,000 188,750
-----------
290,250
-----------
MANUFACTURING -- 0.3%
Automotive -- 0.3%
Aftermarket Technology Corp., 12% Sr. Sub. Nts., Series B, 8/1/04.......... 50,000 53,500
JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01................... 100,000 102,500
-----------
156,000
-----------
MEDIA -- 1.1%
Broadcasting -- 0.1%
Sinclair Broadcast Group, Inc., 10% Sr. Sub. Nts., 9/30/05................. 50,000 49,000
-----------
Cable Television -- 0.9%
American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04 (11)......... 99,579 73,688
Bell Cablemedia PLC, 0%/11.875% Sr. Disc. Nts., 9/15/05 (11)............... 100,000 64,000
EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec. Disc. Nts.,
3/15/04 (5)(11).......................................................... 100,000 62,250
International CableTel, Inc., 0%/11.50% Sr. Deferred Coupon Nts., Series A,
2/1/06 (5)(11)........................................................... 100,000 59,000
TeleWest PLC, 0%/11% Sr. Disc. Debs., 10/1/07 (11)......................... 100,000 62,250
United International Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts.,
12.495%, 11/15/99 (4).................................................... 100,000 65,000
Videotron Holdings PLC, 0%/11% Sr. Disc. Nts., 8/15/05 (11)................ 100,000 66,500
-----------
452,688
-----------
Diversified Media -- 0.1%
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03
(11)..................................................................... 50,000 42,750
-----------
</TABLE>
9
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C>
OTHER -- 0.3%
Services -- 0.3%
Protection One, Inc., 0%/13.625% Sr. Disc. Nts., 6/30/05 (11).............. $ 200,000 $ 173,000
-----------
RETAIL -- 0.5%
Department Stores -- 0.2%
Federated Department Stores, Inc., 8.125% Sr. Nts., 10/15/02............... 100,000 99,500
-----------
Specialty Retailing -- 0.1%
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03........................ 50,000 48,750
-----------
Supermarkets -- 0.2%
Ralph's Grocery Co., 10.45% Sr. Nts., 6/15/04.............................. 100,000 98,500
-----------
TRANSPORTATION -- 0.2%
Railroads -- 0.1%
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts.,
Series B, 12/15/03 (11).................................................. 100,000 68,250
-----------
Shipping -- 0.1%
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04.................. 50,000 52,000
-----------
UTILITIES -- 2.2%
Electric Utilities -- 0.2%
El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11............. 100,000 100,250
-----------
Telecommunications -- 2.0%
Arch Communications Group, Inc., 0%/10.875% Sr. Disc. Nts.,
3/15/08 (11)............................................................. 100,000 56,375
Brooks Fiber Properties, Inc., 0%/10.875% Sr. Disc. Nts.,
3/1/06 (5)(11)........................................................... 100,000 55,500
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04 (8)(11)..................... 250,000 202,500
Cellular Communications International, Inc., Zero Coupon Sr. Disc. Nts.,
12.154%, 8/15/00 (4)..................................................... 100,000 60,000
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (11)................. 150,000 123,750
Cencall Communications Corp., 0%/10.125% Sr. Disc. Nts.,
1/15/04 (11)............................................................. 100,000 59,750
Horizon Cellular Telephone LP/Horizon Finance Corp., 0%/11.375% Sr. Sub.
Disc. Nts., 10/1/00 (11)................................................. 150,000 134,250
IntelCom Group (USA), Inc., 0%/13.50% Sr. Disc. Nts., 9/15/05 (12)......... 150,000 93,750
</TABLE>
10
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
CORPORATE BONDS AND NOTES (CONTINUED)
UTILITIES (CONTINUED)
Telecommunications (Continued)
<S> <C> <C>
MFS Communications Co., Inc.:
0%/8.875% Sr. Disc. Nts., 1/15/06 (11)................................... $ 50,000 $ 31,063
0%/9.375% Sr. Disc. Nts., 1/15/04 (11)................................... 150,000 114,188
PriCellular Wireless Corp., 0%/12.25% Sr. Sub. Disc. Nts., 10/1/03 (11).... 150,000 117,000
-----------
1,048,126
-----------
Total Corporate Bonds and Notes (Cost $8,081,382).......................... 8,187,405
-----------
<CAPTION>
Shares
---------------
<S> <C> <C>
COMMON STOCKS -- 0.0%
Finlay Enterprises, Inc. (12).............................................. 333 4,912
Grand Union Co. (12)....................................................... 1,767 11,044
-----------
Total Common Stocks (Cost $32,539)......................................... 15,956
-----------
PREFERRED STOCKS AND OTHER SECURITIES -- 0.2%
Time Warner, Inc., 10.25% Cum., Series K, Exchangeable Preferred Stock
(Cost $100,000) (8)(13).................................................. 100 100,000
-----------
<CAPTION>
Units
---------------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES -- 0.0%
American Telecasting, Inc. Wts., Exp. 6/99................................. 500 3,750
Capital Gaming International, Inc. Wts., Exp. 2/99......................... 3,538 106
Cellular Communications International, Inc. Wts., Exp. 8/03................ 100 1,500
IntelCom Group, Inc. Wts., Exp. 9/05 (8)................................... 495 5,940
Protection One, Inc. Wts., Exp. 6/05....................................... 640 8,160
Terex Corp. Rts., Exp. 7/96 (8)............................................ 30 2
-----------
Total Rights, Warrants and Certificates (Cost $16,281)..................... 19,458
-----------
<CAPTION>
Face Amount (1)
---------------
<S> <C> <C>
STRUCTURED INSTRUMENTS -- 4.1%
Bayerische Landesbank Girozentrale, New York Branch, 5.60% CD Linked Nts.,
1/30/97 (indexed to the closing Nikkei 225 Index on 1/23/97 10 yr.
Japanese Yen swap rate & New Zealand Dollar on 1/28/97) (2) (NZD)........ 377,130 276,503
Canadian Imperial Bank, 10% CD British Pound Sterling Maximum Rate Linked
Nts., 11/8/96 (indexed to the 3-month GBP LIBOR, multiplied by 9) (8).... 250,000 255,225
Canadian Imperial Bank of Commerce, New York Branch, 16% CD Linked Nts.,
9/11/96 (indexed to the Russian Federation GKO, Zero Coupon, 9/4/96)..... 250,000 248,625
</TABLE>
11
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Market Value
Face Amount (1) See Note 1
--------------- -----------
<S> <C> <C>
STRUCTURED INSTRUMENTS (CONTINUED)
ING Baring Securities Ltd., Zero Coupon Promissory Nts., 10.516%, 4/28/97
(4) (CZK)................................................................ 7,650,000 $ 248,100
ING Baring Securities Ltd., Zero Coupon Promissory Nts., 11.128%, 7/18/96
(4)(CZK)................................................................. 7,000,000 246,135
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts., 12.38%,
1/3/97 (indexed to the Brazilian National Treasury Nts., Zero Coupon,
1/2/97) (4).............................................................. 400,000 370,240
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts., 12.638%,
1/3/97 (indexed to the Brazilian National Treasury Nts., Zero Coupon,
1/2/97) (4).............................................................. 280,000 259,168
United Mexican States Linked Nts. (indexed to the greater of Cetes Option
Amount or USD LIBOR Option Amount, 11/27/96 (8).......................... 250,000 285,937
-----------
Total Structured Instruments (Cost $2,125,275)............................. 2,189,933
-----------
<CAPTION>
Date Strike Contracts
----- --------- --------------
<S> <C> <C>
CALL OPTION PURCHASED -- 0.0%
OTC German Deutsche Mark/U.S. Dollar Call Opt.
(Cost $4,131)................................... 5/2/96 1.495 DEM 842,978 84
PUT OPTION PURCHASED -- 0.0%
OTC German Deutsche Mark/U.S. Dollar Put Opt.
(Cost $16,185).................................. 5/2/96 1.495 DEM 842,978 20,063
</TABLE>
<TABLE>
<CAPTION>
Face Amount (1)
---------------
<S> <C> <C>
REPURCHASE AGREEMENT -- 0.4%
Repurchase agreement with Zion First National Bank, 5.31%, dated 4/30/96,
to be repurchased at $200,030 on 5/1/96, collateralized by U.S. Treasury
Nts., 6.75%-7.50%, 6/30/99-11/15/01, with a value of $204,209 (Cost
$200,000)................................................................ $ 200,000 200,000
-----------
Total Investments, at Value (Cost $52,819,116)............................. 100.6% 53,447,037
Liabilities in Excess of Other Assets...................................... (0.6) (315,972)
--------------- -----------
Net Assets................................................................. 100.0% $53,131,065
--------------- -----------
--------------- -----------
</TABLE>
12
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS April 30, 1996 (Unaudited) (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> <C> <C> <C>
AUD -- Australian Dollar INR -- Indian Rupee
CAD -- Canadian Dollar ITL -- Italian Lira
CZK -- Czech Koruna JPY -- Japanese Yen
DEM -- German Deutsche Mark MXP -- Mexican Peso
DKK -- Danish Krone NOK -- Norwegian Krone
ESP -- Spanish Peseta NZD -- New Zealand Dollar
FIM -- Finnish Markka PLZ -- Polish Zloty
GBP -- British Pound Sterling PTE -- Portuguese Escudo
IDR -- Indonesian Rupiah SEK -- Swedish Krona
IEP -- Irish Punt 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. Issuer is in default. The security is being valued under procedures
established by the Board of Trustees to determine fair value in good faith.
4. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
5. 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 $662,595 or 1.25% of the Fund's net
assets, at April 30, 1996.
6. 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.
7. When-issued security to be delivered and settled after April 30, 1996.
8. Identifies issues considered to be illiquid -- See Note 8 of Notes to
Financial Statements.
9. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
<TABLE>
<CAPTION>
Contracts Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
--------------- ---------- --------- ------- ------------
<S> <C> <C> <C> <C> <C>
OTC Australian Dollar Call Opt........... 172,810 5/20/96 1.273 AUD $1,400 $1,192
OTC Australian Dollar Call Opt........... 86,482 5/24/96 1.272 AUD 739 597
OTC Australian Dollar Call Opt........... 86,757 5/28/96 1.268 AUD 703 460
OTC German Deutsche Mark/U.S. Dollar Call
Opt.................................... 842,979 5/2/96 1.495 DEM 20,316 84
------- ------
$23,158 $2,333
------- ------
------- ------
</TABLE>
10. Represents the current interest rate for a variable rate security.
11. Denotes a step bond: a zero coupon bond that converts to a fixed rate of
interest at a designated future date.
12. Non-income producing security.
13. Interest or dividend is paid in kind.
14. Securities with an aggregate market value of $50,625 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
See accompanying Notes to Financial Statements.
13
<PAGE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES April 30, 1996 (Unaudited)
Oppenheimer Multi-Government Trust
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $52,819,116) -- see accompanying statement.................... $53,447,037
Cash........................................................................................ 520,276
Unrealized appreciation on forward foreign currency exchange contracts -- Note 5.......... 64,296
Receivables:
Investments sold.......................................................................... 2,734,355
Interest.................................................................................. 1,048,822
Closed forward foreign currency exchange contracts........................................ 18,277
Other....................................................................................... 25,322
-----------
Total assets........................................................................... 57,858,385
-----------
LIABILITIES:
Options written, at value (premiums received $23,158) -- see accompanying
statement -- Note 7..................................................................... 2,333
Unrealized depreciation on forward foreign currency exchange contracts -- Note 5.......... 1,070
Payables and other liabilities:
Investments purchased..................................................................... 4,499,793
Dividends................................................................................. 63,701
Trustees' fees............................................................................ 57,114
Shareholder reports....................................................................... 53,357
Closed forward foreign currency exchange contracts........................................ 11,084
Management and administrative fees........................................................ 10,574
Daily variation on futures contracts -- Note 6.......................................... 9,375
Other..................................................................................... 18,919
-----------
Total liabilities...................................................................... 4,727,320
-----------
NET ASSETS.................................................................................. $53,131,065
-----------
-----------
COMPOSITION OF NET ASSETS:
Par value of shares of beneficial interest.................................................. $ 66,155
Additional paid-in capital.................................................................. 59,784,052
Undistributed net investment income......................................................... 108,509
Accumulated net realized loss on investments and foreign currency transactions.............. (7,502,894)
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies......................................................... 675,243
-----------
NET ASSETS -- applicable to 6,615,505 shares of beneficial interest outstanding........... $53,131,065
-----------
-----------
NET ASSET VALUE PER SHARE................................................................... $8.03
-----
-----
</TABLE>
See accompanying Notes to Financial Statements.
14
<PAGE>
<PAGE>
STATEMENT OF OPERATIONS For the Six Months Ended April 30, 1996 (Unaudited)
Oppenheimer Multi-Government Trust
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest..................................................................................... $2,755,058
----------
EXPENSES:
Management fees -- Note 4.................................................................. 170,924
Administrative fees -- Note 4.............................................................. 52,592
Custodian fees and expenses.................................................................. 23,425
Trustees' fees and expenses -- Note 1...................................................... 37,109
Shareholder reports.......................................................................... 25,718
Transfer agent and accounting service fees -- Note 4....................................... 20,888
Legal and auditing fees...................................................................... 10,426
Registration and filing fees................................................................. 2,308
Other........................................................................................ 1,226
----------
Total expenses........................................................................ 344,616
----------
NET INVESTMENT INCOME........................................................................ 2,410,442
----------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................................................ 671,472
Closing of futures contracts............................................................... (128,529)
Closing and expiration of options written.................................................. (68,908)
Foreign currency transactions.............................................................. 49,687
----------
Net realized gain..................................................................... 523,722
----------
Net change in unrealized appreciation or depreciation on:
Investments................................................................................ 458,964
Translation of assets and liabilities denominated in foreign currencies.................... (379,158)
----------
Net change............................................................................ 79,806
----------
NET REALIZED AND UNREALIZED GAIN............................................................. 603,528
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......................................... $3,013,970
----------
----------
</TABLE>
See accompanying Notes to Financial Statements.
15
<PAGE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Six Months Ended
April 30, Year Ended
1996 October 31,
(Unaudited) 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income....................................................... $ 2,410,442 $ 4,710,494
Net realized gain (loss).................................................... 523,722 (1,281,279)
Net change in unrealized appreciation or depreciation....................... 79,806 943,379
---------------- ----------------
Net increase in net assets resulting from operations................... 3,013,970 4,372,594
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME........................ (2,222,784) (4,472,033)
---------------- ----------------
NET ASSETS:
Total increase (decrease)................................................... 791,186 (99,439)
Beginning of period......................................................... 52,339,879 52,439,318
---------------- ----------------
End of period [including undistributed (overdistributed) net investment
income of $108,509 and $(79,149), respectively]........................... $ 53,131,065 $ 52,339,879
---------------- ----------------
---------------- ----------------
</TABLE>
See accompanying Notes to Financial Statements.
16
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
Oppenheimer Multi-Government Trust
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Year Ended October 31,
1996 -------------------------------------------------------
(Unaudited) 1995 1994 1993 1992 1991
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 7.91 $ 7.93 $ 8.54 $ 8.55 $ 8.97 $ 8.66
----------- ------- ------- ------- ------- -------
Income (loss) from investment
operations:
Net investment income................ .37 .71 .69 .82 .89 .97
Net realized and unrealized gain
(loss)............................. .09 (.05) (.61) -- (.39) .33
----------- ------- ------- ------- ------- -------
Total income from investment
operations....................... .46 .66 .08 .82 .50 1.30
----------- ------- ------- ------- ------- -------
Dividends and distributions to
shareholders:
Dividends from net investment
income............................. (.34) (.68) (.68) (.75) (.92) (.99)
Tax return of capital distribution... -- -- (.01) (.08) -- --
----------- ------- ------- ------- ------- -------
Total dividends and distributions
to shareholders.................. (.34) (.68) (.69) (.83) (.92) (.99)
----------- ------- ------- ------- ------- -------
Net asset value, end of period......... $ 8.03 $ 7.91 $ 7.93 $ 8.54 $ 8.55 $ 8.97
----------- ------- ------- ------- ------- -------
----------- ------- ------- ------- ------- -------
Market value, end of period............ $ 7.13 $ 7.00 $ 7.00 $ 8.00 $ 8.63 $ 9.50
TOTAL RETURN, AT MARKET VALUE(1)....... 6.21% 9.09% (4.84)% 2.22% 0.70% 37.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)........................... $53,131 $52,340 $52,439 $56,526 $55,668 $57,208
Average net assets (in thousands)...... $52,878 $51,207 $54,380 $55,877 $56,970 $55,604
Ratios to average net assets:
Net investment income.............. 9.17%(2) 9.20% 8.90% 9.59% 10.13% 11.06%
Expenses........................... 1.31%(2) 1.24% 1.24% 1.22% 1.32% 1.21%
Portfolio turnover rate(3)............. 146.9% 344.2% 315.5% 112.5% 98.4% 59.9%
</TABLE>
(1) Assumes a hypothetical purchase at the current market price on the business
day before the first day of the fiscal period, with all dividends and
distributions reinvested in additional shares on the reinvestment date, and
a sale at the current market price on the last business day of the period.
Total return does not reflect sales charges or brokerage commissions. Total
returns are not annualized for periods of less than one full year.
(2) Annualized.
(3) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding
short-term securities) for the period ended April 30, 1996 were $72,565,611
and $68,898,164, respectively.
See accompanying Notes to Financial Statements.
17
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 objective is to seek high
current income consistent with preservation of capital. The Trust's investment
advisor is OppenheimerFunds, Inc. (the Manager). The following is a summary of
significant accounting policies consistently followed by the Trust.
Investment Valuation -- Portfolio securities are valued at the close of the
New York Stock Exchange on the last day of each week 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 foreign currency contracts are valued based on the
closing prices of the forward currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid or asked price closest to the last
reported sale price is used.
Securities Purchased on a When-Issued Basis -- Delivery and payment for
securities that have been purchased by the Trust on a forward commitment or
when-issued basis can take place a month or more after the transaction date.
During this period, such securities do not earn interest, are subject to market
fluctuation and may increase or decrease in value prior to their delivery. The
Trust maintains, in a segregated account with its custodian, assets with a
market value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Trust's net asset value to the extent the Trust makes such
purchases while remaining substantially fully invested. As of April 30, 1996,
the Trust had entered into outstanding when-issued or forward commitments of
$2,541,250.
In connection with its ability to purchase securities on a when-issued or
forward commitment basis, the Trust may enter into mortgage 'dollar-rolls' in
which the Trust sells securities for delivery in the current month and
simultaneously contracts with the same counterparty to repurchase similar (same
type coupon and maturity) but not identical securities on a specified future
date. The Trust records each dollar-roll as a sale and a new purchase
transaction.
Security Credit Risk. -- The Fund invests in high yield securities, which may
be subject to
18
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
a greater degree of credit risk, greater market fluctuations and risk of loss of
income and principal, and may be more sensitive to economic conditions than
lower yielding, higher rated fixed income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. At April 30, 1996, securities with an aggregate
market value of $107,323, representing .20% of the Fund's net assets, were in
default.
Foreign Currency Translation -- The accounting records of the Trust are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of exchange.
Amounts related to the purchase and sale of securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions. The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from changes
in market values of securities held and reported with all other foreign currency
gains and losses in the Trust's Statement of Operations.
Repurchase Agreements -- The Trust requires the custodian to take possession,
to have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Trust may be delayed or limited.
Federal Taxes -- The Trust intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
Trustees' Fees and Expenses -- The Trust has adopted a nonfunded retirement
plan for the Trust's independent trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During the
six months ended April 30, 1996, a provision of $7,777 was made for the Trust's
projected benefit obligations and payments of $1,214 were made to retired
trustees, resulting in an accumulated liability of $33,997 at April 30, 1996.
Distributions to Shareholders -- The Trust intends to declare and pay
dividends from net investment income monthly. Distributions from net realized
gains on investments, if any, will be made at least once each year.
Classification of Distributions to Shareholders -- Net investment income
(loss) and net realized gain (loss) may differ for financial statement and tax
purposes primarily because of paydown gains and losses and the recognition of
certain foreign currency gains (losses) as ordinary income (loss) for tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gain (loss) was recorded by the
Trust.
Other -- Investment transactions are accounted for on the date the investments
are purchased or sold (trade date) and dividend
19
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
income is recorded on the ex-dividend date. Discount on securities purchased is
amortized over the life of the respective securities, in accordance with federal
income tax requirements. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes. Dividends in kind are
recognized as income on the ex-dividend date, at the current market value of the
underlying security. Interest on payment-in-kind debt instruments is accrued as
income at the coupon rate and a market adjustment is made periodically.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of $.01 par value shares of
beneficial interest. There were no transactions in shares of beneficial interest
for the six months ended April 30, 1996 and the year ended October 31, 1995.
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At April 30, 1996 net unrealized appreciation on investments and options written
of $648,746 was composed of gross appreciation of $1,400,055, and gross
depreciation of $751,309.
4. MANAGEMENT AND ADMINISTRATIVE FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Trust which provides for an annual fee of 0.65% on
the Trust's average annual net assets.
Mitchell Hutchins Asset Management Inc. serves as the Trust's Administrator. The
Trust pays the Administrator an annual fee of 0.20% of the Trust's average
annual net assets.
The Manager acts as the accounting agent for the Trust at an annual fee of
$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.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Trust uses forward contracts to seek to manage foreign currency risks. They
may also be used to tactically shift portfolio currency risk. The Trust
generally enters into forward contracts as a hedge upon the purchase or sale of
a security denominated in a foreign currency. In addition, the Trust may enter
into such contracts as a hedge against changes in foreign currency exchange
rates on portfolio positions.
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank
20
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
or dealer. The Trust will realize a gain or loss upon the closing or settlement
of the forward transaction.
Securities held in segregated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains and losses in the Trust's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms of
the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
At April 30, 1996, outstanding forward contracts to purchase and sell currencies
were as follows:
<TABLE>
<CAPTION>
Contract
Amount Valuation as of Unrealized Unrealized
Contracts to Sell Expiration Date (000s) April 30, 1996 Appreciation Depreciation
- -------------------------------------- --------------- -------- --------------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Swiss Francs (CHF).................... 7/18/96 545 CHF $ 441,072 $ 6,644 $ --
Danish Kroner (DKK)................... 5/1/96 1,748 DKK 295,599 1,119 --
Japanese Yen (JPY).................... 2/18/96 50,175 JPY 492,271 26,978 --
New Zealand Dollars (NZD)............. 5/1/96 -- NZD 218 -- 1
---------- ------------ ------
$ 1,229,160 34,741 1
---------- ------------ ------
----------
<CAPTION>
Contracts to Purchase
- --------------------------------------
<S> <C> <C> <C> <C> <C>
Finnish Markka (FIM).................. 5/2/96 1,447 FIM $ 298,290 $ -- $1,069
New Zealand Dollars (NZD)............. 12/18/96 818 NZD 548,803 29,555 --
---------- ------------ ------
$ 847,093 29,555 1,069
---------- ------------ ------
----------
$ 64,296 $1,070
------------ ------
------------ ------
</TABLE>
6. FUTURES CONTRACTS
The Trust may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Trust may also buy
or write put or call options on these futures contracts.
The Trust generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Trust may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Trust is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Trust each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Trust recognizes a realized gain or loss when the contract is closed
or expired.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Lia-
21
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
bilities reflects a receivable or payable for the daily mark to market for
variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
At April 30, 1996, the Fund had outstanding futures contracts to sell debt
securities as follows:
<TABLE>
<CAPTION>
Valuation
Number as of
Expiration of April 30, Unrealized
Contract to Sell Date Contracts 1996 Depreciation
- ---------------- ---------- --------- ---------- ------------
<S> <C> <C> <C> <C>
U.S. Treasury
Nts......... 6/96 25 $2,687,500 $ 31,250
</TABLE>
7. OPTION ACTIVITY
The Trust may buy and sell put and call options, or write covered put and call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Trust generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Trust receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Trust will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a
footnote to the Statement of Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the Trust gives up the opportunity for
profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Trust may incur a loss
if the market price of the security decreases and the option is exercised. The
risk in buying an option is that the Trust pays a premium whether or not the
option is exercised. The Trust also has the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not exist.
Written option activity for the six months ended April 30, 1996 was as follows:
<TABLE>
<CAPTION>
Call Options
-----------------------
Number of Amount of
Options Premiums
---------- ---------
<S> <C> <C>
Options outstanding at
October 31, 1995........... 2,837 $ 35,528
Options written.............. 3,370,817 73,413
Options closed or expired.... (2,184,627) (85,783)
---------- --------
Options outstanding at
April 30, 1996............. 1,189,027 $ 23,158
---------- --------
---------- --------
</TABLE>
8. ILLIQUID AND RESTRICTED SECURITIES
At April 30, 1996, 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
22
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Oppenheimer Multi-Government Trust
Trustees as reflecting fair value. The Trust intends to invest no more than 10%
of its net assets (determined at the time of purchase) in illiquid or restricted
securities. The aggregate value of these securities subject to this limitation
at April 30, 1996 was $3,564,732 which represents 6.71% of the Trust's net
assets. Information concerning these securities is as follows:
<TABLE>
<CAPTION>
Valuation
Per Unit
Cost as of
Acquisition Per April 30,
Security Date Unit 1996
- ------------------------------------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Algeria (Republic of) Reprofiled Debt Loan Participation, Tranche A,
6.812%, 9/4/06......................................................... 3/13/96- $ 55.00 $ 56.50
3/21/96
Banco Hipotecario Nacional (Argentina) Medium-Term Nts., 10.625%,
3/29/99................................................................ 3/22/96 $ 99.95 $ 100.50
Canadian Imperial Bank, 10% CD British Pound Sterling Maximum Rate Linked
Nts., 11/8/96.......................................................... 4/28/95 $ 100.00 $ 102.09
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04........................... 11/2/95 $ 67.50 $ 81.00
Colombia (Republic of) Concorde Loan Participation, 6.188%, 1/31/98...... 12/5/95 $ 99.00 $ 98.50
IntelCom Group, Inc. Wts., Exp. 9/05..................................... 8/3/95 $ -- $ 12.00
Jamaica (Government of) 1990 Refinancing Agreement Nts., Tranche A,
6.344%, 10/16/00....................................................... 7/12/95- $ 88.68 $ 94.00
8/15/95
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1996-C1, Cl. E, 7.51%, 2/1/28..................... 4/25/96 $ 78.60 $ 78.47
Pulsar Internacional SA de CV, 11.80% Nts., 9/19/96...................... 9/14/95 $ 100.00 $ 100.50
Terex Corp. Rts., Exp. 7/96.............................................. 6/29/94 $ 1.49 $ 0.05
Time Warner, Inc., 10.25% Cum., Series K, Exchangeable Preferred Stock... 4/3/96 $1,000.00 $1,000.00
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11............. 11/8/93 $ 100.00 $ 75.50
Trinidad & Tobago Loan Participation Agreement, Tranche A, 1.772%,
9/30/00................................................................ 12/13/95- $ 84.94 $ 86.00
12/18/95
United Mexican States:
Linked Nts............................................................. 11/30/95 $ 100.00 $ 114.38
Combined Facility 3, Loan Participation Agreement, Tranche A, 6.50%,
9/20/97.............................................................. 10/25/94 $ 89.00 $ 82.50
</TABLE>
23
<PAGE>
<PAGE>
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 investment advisor to the Trust is OppenheimerFunds, Inc. (the
Manager). At a meeting held February 22, 1996, the Board of Trustees approved
and recommended, subject to shareholder approval, replacing this fundamental
policy with certain non-fundamental policies. If shareholders approve this
proposal at a meeting originally scheduled for May 21, 1996 (adjourned to June
28, 1996), this fundamental policy would be removed, and the Trust would make
the following investment policy changes: (1) adopt a non-fundamental policy that
the Trust shall invest at least 65% of its total assets in bonds (defined, for
purposes of this non-fundamental investment policy, to be debt securities), (2)
remove the non-fundamental investment policy that the Fund shall invest at least
30% of its total assets in U.S. government securities. 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 participation interests, 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.
Portfolio Managers of the Trust are Thomas P. Reedy, David A. Rosenberg and
Ashwin K. 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
(OppenheimerFunds). 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 $0.75.
Depending upon the circumstances hereinafter described, Plan Shares will be
acquired by the Agent for the Participant's account through receipt of newly
issued Shares or the purchase of outstanding Shares on the open market. If
24
<PAGE>
<PAGE>
the market price of Shares on the relevant date (normally the payment date)
equals or exceeds their net asset value, the Agent will ask the Trust for
payment of the Distribution in additional Shares at the greater of the Trust's
net asset value determined as of the date of purchase or 95% of the then-current
market price. If the market price is lower than net asset value, the
Distribution will be paid in cash, which the Agent will use to buy Shares on The
New York Stock Exchange (the NYSE), or otherwise on the open market to the
extent available. If the market price exceeds the net asset value before the
Agent has completed its purchases, the average purchase price per Share paid by
the Agent may exceed the net asset value, resulting in fewer Shares being
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 Oppenheimer Multi-Government Trust 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.'
<PAGE>
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
1. Financial Statements.
(a) Statement of Investments - (See Part B, Statement of
Additional Information): filed herewith.
(b) Statement of Assets and Liabilities - (See Part B,
Statement of Additional Information): filed herewith.
(c) Statement of Operations - (See Part B, Statement of
Additional Information): filed herewith.
(d) Statements of Changes in Net Assets - (See Part B,
Statement of Additional Information): filed herewith.
(e) Financial Highlights - (See Part B, Statement of
Additional Information): filed herewith.
(f) Notes to Financial Statements - (See Part B, Statement of
Additional Information): filed herewith.
(g) Independent Auditors' Report - (See Part B, Statement of
Additional Information): filed herewith.
(h) Independent Auditors' Consent - (See Part B, Statement of
Additional Information): filed herewith.
2. Exhibits:
(a) (1) Declaration of Trust of Registrant - Filed with
Registrant's Registration Statement, 10/7/88, and refiled with
Post-Effective Amendment No. 8 to Registrant's Registration
Statement, 2/27/95, and incorporated herein by reference.
(2) Amendment No. 1 dated as of October 18, 1988 to
Declaration of Trust of Registrant - Filed with Pre-Effective
Amendment No. 2 to Registrant's Registration Statement, 11/12/88,
and refiled with Post-Effective Amendment No. 8 to Registrant's
Registration Statement, 2/27/95, and incorporated herein by
reference.
(3) Amendment No. 2 dated as of November 12, 1988 to
Declaration of Trust of Registrant - Filed with Post-Effective
Amendment No. 1 to Registrant's Registration Statement, 11/25/88,
and refiled with Post-Effective Amendment No. 8 to Registrant's
Registration Statement, 2/27/95, and incorporated herein by
reference.
(4) Amendment No. 3 dated November 6, 1989 to
Declaration of Trust of Registrant - Filed with Post-Effective
Amendment No. 8 to Registrant's Registration Statement, 2/27/95,
and incorporated herein by reference.
(5) Amendment No. 4 dated July 3, 1996 to Declaration of
Trust of Registrant - Filed herewith.
(b) (1) By-Laws of Registrant - Filed with Registrant's
Registration Statement, 10/7/88, and refiled with Post-Effective
Amendment No. 8 to Registrant's Registration Statement, 2/27/95,
and incorporated herein by reference.
(2) Amendment to By-Laws of Registrant - Filed with
Post-Effective Amendment No. 8 to Registrant's Registration
Statement, 2/27/95, and incorporated herein by reference.
(3) Amendment to By-Laws of Registrant - Filed herewith.
(c) Inapplicable
(d) Specimen certificate for Shares of Beneficial Interest,
$.01 par value - Filed with Pre-Effective Amendment No. 2 to
Registrant's Registration Statement, 11/12/88, and refiled with
Post-Effective Amendment No. 8 to Registrant's Registration
Statement, 2/27/95, and incorporated herein by reference.
(e) See Exhibit (k)(2).
(f) Inapplicable
(g) (1) Investment Advisory Agreement with Oppenheimer
Management Corporation dated 10/22/90 - Filed with Post-Effective
Amendment No. 5 to Registrant's Registration Statement dated
2/28/91 and refiled with Post-Effective Amendment No. 8 to
Registrant's Registration Statement, 2/27/95, and incorporated
herein by reference.
(2) Form of Administration Agreement with Mitchell
Hutchins Asset Management Inc. - Filed with Pre-Effective Amendment
No. 2 to Registrant's Registration Statement, 11/12/88, and refiled
with Post-Effective Amendment No. 8 to Registrant's Registration
Statement, 2/27/95, and incorporated herein by reference.
(h) Inapplicable
(i) Retirement Plan for Non-Interested Trustees or Directors
(adopted by Registrant on 6/7/90) - Filed with Post-Effective
Amendment No. 45 to the Registration Statement of Oppenheimer
Special Fund (Reg. No. 2-14586) dated 10/21/94, and refiled with
Post-Effective Amendment No. 8 to Registrant's Registration
Statement, 2/27/95, and incorporated herein by reference.
(j) Co-Custody Agreement - Filed with Post-Effective
Amendment No. 7 to Registrant's Registration Statement, dated
2/26/93, and refiled with Post-Effective Amendment No. 8 to
Registrant's Registration Statement, 2/27/95, and incorporated
herein by reference.
(k) (1) Accounting Service Agreement - Filed with Post-
Effective Amendment No. 8 to Registrant's Registration Statement,
2/27/95, and incorporated herein by reference.
(2) Registrar, Transfer Agency and Service Agreement -
Filed with Post-Effective Amendment No. 8 to Registrant's
Registration Statement, 2/27/95, and incorporated herein by
reference.
(3) Co-Transfer Agent and Co-Registrar Agreement - Filed
with Post-Effective Amendment No. 8 to Registrant's Registration
Statement, 2/27/95, and incorporated herein by reference.
(l) Inapplicable.
(m) Inapplicable
(n) Inapplicable
(o) Inapplicable
(p) Inapplicable
(q) Inapplicable
(r) Financial Data Schedule - Filed herewith
Item 25. Marketing Arrangements.
Inapplicable.
Item 26. Other Expenses of Issuance and Distribution.
Inapplicable.
Item 27. Persons Controlled by or under Common Control.
None.
Item 28. Number of Holders of Securities.
(1) (2)
Number of
Record Holders at
Title of Class February 1, 1996
Shares of Beneficial Interest, 1,114
$.01 par value
Item 29. Indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to trustees,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer,
or controlling person of the Registrant in connection with the
successful defense of any action, suit or proceeding) is asserted
against the Registrant by such trustee, officer or controlling
person, the 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
Act, and will be governed by the final adjudication of such issue.
The Registrant hereby undertakes that it will apply the
indemnification provision of its By-laws in a manner consistent
with Release 11330 of the Securities and Exchange Commission under
the Investment Company Act of 1940, so long as the interpretation
therein of Sections 17(h) and 17(i) of the Investment Company Act
remains in effect.
Registrant, in conjunction with the Registrant's Trustees, and
other registered management investment companies managed by the
Adviser, generally maintains insurance on behalf of any person who
is or was a Trustee, officer, employee, or agent of Registrant.
However, in no event will Registrant pay that portion of the
premium, if any, for insurance to indemnify any such person for any
act for which Registrant itself is not permitted to indemnify him.
Item 30. Business and Other Connections of Investment Adviser.
(a) OppenheimerFunds, Inc. 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 OppenheimerFunds, Inc.
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 & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- --------------------------- ------------------------------
Mark J.P. Anson,
Vice President Formerly Vice President of Equity
Derivatives at Salomon Brothers,
Inc.
Peter M. Antos,
Senior Vice President An officer and/or portfolio manager
of certain Oppenheimer funds; a
Chartered Financial Analyst; Senior
Vice President of HarbourView;
prior to March, 1996 he was the
senior equity portfolio manager for
the Panorama Series Fund, Inc. (the
"Company") and other mutual funds
and pension funds managed by G.R.
Phelps & Co. Inc. ("G.R. Phelps"),
the Company's former investment
adviser, which was a subsidiary of
Connecticut Mutual Life Insurance
Company; was also responsible for
managing the common stock
department and common stock
investments of Connecticut Mutual
Life Insurance Co.
Lawrence Apolito,
Vice President None.
Victor Babin,
Senior Vice President None.
Bruce Bartlett,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds;
formerly a Vice President and
Senior Portfolio Manager at First
of America Investment Corp.
Kathleen Beichert,
Assistant Vice President
Robert J. Bishop,
Vice President Assistant Treasurer of the
Oppenheimer Funds (listed below);
previously a Fund Controller for
OppenheimerFunds, Inc. (the
"Manager").
George Bowen, Senior
Vice President & Treasurer Treasurer of the New York-based
Oppenheimer Funds; Vice President
and Treasurer of the Denver-based
Oppenheimer Funds. Vice President
and Treasurer of OppenheimerFunds
Distributor, Inc. (the
"Distributor") and HarbourView
Asset Management Corporation
("HarbourView"), an investment
adviser subsidiary of the Manager;
Senior Vice President, Treasurer,
Assistant Secretary and a director
of Centennial Asset Management
Corporation ("Centennial"), an
investment adviser subsidiary of
the Manager; Vice President,
Treasurer and Secretary of
Shareholder Services, Inc. ("SSI")
and Shareholder Financial Services,
Inc. ("SFSI"), transfer agent
subsidiaries of the Manager;
Director and Chief Executive
Officer of Multi-Source Services,
Inc.; President, Treasurer and
Director of Centennial Capital
Corporation; Vice President and
Treasurer of Main Street Advisers.
Scott Brooks,
Assistant Vice President None.
Susan Burton,
Assistant Vice President Previously a Director of
Educational Services for H.D. Vest
Investment Securities, Inc.
Adele A. , Assistant Vice
President and Assistant
Treasurer: Rochester
Division Assistant Vice President of
Operations for Rochester Fund
Services, Inc.
Michael A. Carbuto,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds; Vice
President of Centennial.
Ruxandra Chivu,
Assistant Vice President None.
O. Leonard Darling,
Executive Vice President Formerly Co-Director of Fixed
Income for State Street Research &
Management Co.
Robert A. Densen,
Senior Vice President None.
Robert Doll, Jr., Executive
Vice President and Director An officer and/or portfolio manager
of certain Oppenheimer funds.
John Doney, Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Andrew J. Donohue,
Executive Vice President,
General Counsel and Director Secretary of the New York-based
Oppenheimer Funds; Vice President
and Secretary of the Denver-based
Oppenheimer Funds; Secretary of the
Oppenheimer Quest and Oppenheimer
Rochester Funds; Executive Vice
President, Director and General
Counsel of the Distributor;
President and a Director of
Cetennial; formerly Senior Vice
President and Associate General
Counsel of the Manager and the
Distributor.
George Evans, Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Scott Farrar, Vice President Assistant Treasurer of the New
York-based and Denver-based
Oppenheimer funds.
Katherine P. Feld,
Vice President and Secretary Vice President and Secretary of
OppenheimerFunds Distributor, Inc.;
Secretary of HarbourView Asset
Management Corporation, Main Street
Advisers, Inc. and Centennial Asset
Management Corporation; Secretary,
Vice President and Director of
Centennial Capital Corporation.
Ronald H. Fielding, Senior
Vice President; Chairman:
Rochester Division Formerly Chairman of the Board and
Director of Rochester Fund
Distributors, Inc. ("RFD");
President and Director of Fielding
Management Company, Inc. ("FMC");
President and Director of Rochester
Capital Advisors, Inc. ("RCAI");
Managing Partner of Rochester
Capital Advisors, L.P.; President
and Director of Rochester Fund
Services, Inc. ("RFS"); President
and Director of Rochester Tax
Managed Fund, Inc.; an officer,
Director and/or portfolio manager
of certain Oppenheimer funds.
John Fortuna,
Assistant Vice President
Jon S. Fossel,
Chairman of the Board Director of OAC, the Manager's
parent holding company; President,
CEO and a director of HarbourView;
a director of SSI and SFSI;
President, Director, Trustee, and
Managing General Partner of the
Denver-based Oppenheimer Funds;
President and Chairman of the Board
of Main Street Advisers, Inc.;
formerly Chief Executive Officer of
the Manager.
Patricia Foster,
Vice President: Rochester
Division
Robert G. Galli,
Vice Chairman Trustee of the New York-based
Oppenheimer Funds; Vice President
and Counsel of OAC; formerly he
held the following positions: Vice
President and a director of
HarbourView and Centennial, a
director of SFSI and SSI, an
officer of other Oppenheimer Funds.
Linda Gardner,
Assistant Vice President None.
Janelle Gellerman,
Assistant Vice President
Jill Glazerman, None.
Assistant Vice President
Ginger Gonzalez,
Vice President, Director of
Marketing Communications Formerly 1st Vice President /
Director of Graphic and Print
Communications for Shearson Lehman
Brothers.
Mildred Gottlieb,
Assistant Vice President Formerly served as a Strategy
Consultant for the Private Client
Division of Merrill Lynch.
Caryn Halbrecht,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds;
formerly Vice President of Fixed
Income Portfolio Management at
Bankers Trust.
Barbara Hennigar, Executive
Vice President and President
and Chief Executive Officer
of OppenheimerFunds Services,
a division of the Manager President and Director of SFSI;
President and Chief Executive
Officer of SSI.
Dorothy Hirshman,
Assistant Vice President None.
Alan Hoden, Vice President None.
Merryl Hoffman,
Vice President None.
Scott T. Huebl,
Assistant Vice President None.
Richard Hymes,
Assistant Vice President
Jane Ingalls,
Assistant Vice President Formerly a Senior Associate with
Robinson, Lake/Sawyer Miller.
Bennett Inkeles,
Assistant Vice President Formerly employed by Doremus &
Company, an advertising agency.
Ronald Jamison,
Vice President Formerly Vice President and
Associate General Counsel at
Prudential Securities, Inc.
Frank Jennings,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Formerly a Managing Director of
Global Equities at Paine Webber's
Mitchell Hutchins division.
Heidi Kagan,
Assistant Vice President None.
Thomas W. Keffer,
Vice President
Avram Kornberg,
Vice President Formerly a Vice President with
Bankers Trust.
Paul LaRocco, Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Formerly a Securities Analyst for
Columbus Circle Investors.
Michael Levine,
Assistant Vice President
Stephen F. Libera,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds; a
Chartered Financial Analyst; a Vice
President of HarbourView; prior to
March, 1996 he was the senior bond
portfolio manager for Panorama
Series Fund, Inc., other mutual
funds and pension accounts managed
by G.R. Phelps; was also
responsible for managing the public
fixed-income securities department
at Connecticut Mutual Life
Insurance Co.
Mitchell J. Lindauer,
Vice President None.
Loretta McCarthy,
Executive Vice President None.
Bridget Macaskill, President,
Chief Executive Officer
and Director President, Director and Trustee of
the New York-based and the Denver-
based Oppenheimer funds; President
and a Director of OAC, HarbourView
and Oppenheimer Partnership
Holdings, Inc.; Director of Main
Street Advisers, Inc.; Chairman and
Director of SSI.
Timothy Martin,
Assistant Vice President Formerly Vice President, Mortgage
Trading, at S.N. Phelps & Co.,
Salomon Brothers, and Kidder
Peabody.
Sally Marzouk, Vice President None.
Lisa Migan,
Assistant Vice President
Robert J. Milnamow,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Formerly a Portfolio Manager with
Phoenix Securities Group.
Denis R. Molleur,
Vice President None.
Kenneth Nadler,
Vice President None.
David Negri, Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Barbara Niederbrach,
Assistant Vice President None.
Robert A. Nowaczyk,
Vice President None.
Robert E. Patterson,
Senior Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Tilghman G. Pitts III,
Executive Vice President Chairman and Director of the
Distributor.
Jane Putnam, Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Formerly Senior Investment Officer
and Portfolio Manager with Chemical
Bank.
Russell Read, Vice President Consultant for Prudential Insurance
on behalf of the General Motors
Pension Plan.
Thomas Reedy, Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Formerly a Securities Analyst for
the Manager.
David Robertson,
Vice President None.
Adam Rochlin, Vice President Formerly a Product Manager for
Metropolitan Life Insurance
Company.
Michael S. Rosen
Vice President; President:
Rochester Division Formerly Vice President of RFS;
President and Director of RFD; Vice
President and Director of FMC; Vice
President and director of RCAI;
General Partner of RCA; an officer
and/or portfolio manager of certain
Oppenheimer funds.
David Rosenberg,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Richard H. Rubinstein,
Senior Vice President An officer and/or portfolio manager
of certain Oppenheimer funds;
formerly Vice President and
Portfolio Manager/Security Analyst
for Oppenheimer Capital Corp., an
investment adviser.
Lawrence Rudnick,
Assistant Vice President Formerly Vice President of Dollar
Dry Dock Bank.
James Ruff,
Executive Vice President None.
Ellen Schoenfeld,
Assistant Vice President None.
Stephanie Seminara,
Vice President
Diane Sobin,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds;
formerly a Vice President and
Senior Portfolio Manager for Dean
Witter InterCapital, Inc.
Richard A. Soper, None.
Assistant Vice President
Nancy Sperte,
Executive Vice President None.
Donald W. Spiro,
Chairman Emeritus Vice Chairman and Trustee of the
New York-based Oppenheimer Funds;
formerly Chairman of the Manager
and the Distributor.
Arthur Steinmetz,
Senior Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Ralph Stellmacher,
Senior Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
John Stoma,
Senior Vice President,
Director Retirement Plans Formerly Vice President of U.S.
Group Pension Strategy and
Marketing for Manulife Financial.
Michael C. Strathearn,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds; a
Chartered Financial Analyst; a Vice
President of HarbourView; prior to
March, 1996 he was an equity
portfolio manager for Panorama
Series Fund, Inc. and other mutual
funds and pension accounts managed
by G.R. Phelps.
James C. Swain,
Vice Chairman of the Board Chairman, CEO and Trustee, Director
or Managing Partner of the Denver-
based Oppenheimer Funds; President
and a Director of Centennial;
formerly President and Director of
OAMC, and Chairman of the Board of
SSI.
James Tobin, Vice President None.
Jay Tracey, Vice President Vice President of the Manager; Vice
President and Portfolio Manager of
Oppenheimer Discovery Fund,
Oppenheimer Global Emerging Growth
Fund and Oppenheimer Enterprise
Fund. Formerly Managing Director
of Buckingham Capital Management.
Gary Tyc,
Vice President, Assistant
Secretary and Assistant
Treasurer Assistant Treasurer of the
Distributor and SFSI.
Ashwin Vasan, Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Valerie Victorson,
Vice President None.
Dorothy Warmack,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds.
Jerry A. Webman,
Senior Vice President Director of New York-based tax-
exempt fixed income Oppenheimer
Funds; Formerly Managing
Director and Chief Fixed
Income Strategist at Prudential
Mutual Funds.
Christine Wells,
Vice President None.
Kenneth B. White,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds; a
Chartered Financial Analyst; Vice
President of HarbourView; prior to
March, 1996 he was an equity
portfolio manager for Panorama
Series Fund, Inc. and other mutual
funds and pension funds managed by
G.R. Phelps.
William L. Wilby,
Senior Vice President An officer and/or portfolio manager
of certain Oppenheimer funds; Vice
President of HarbourView.
Carol Wolf, Vice President An officer and/or portfolio manager
of certain Oppenheimer funds; Vice
President of Centennial; Vice
President, Finance and Accounting
and member of the Board of
Directors of the Junior League of
Denver, Inc.
Robert G. Zack,
Senior Vice President and
Assistant Secretary Associate General Counsel of the
Manager; Assistant Secretary of the
Oppenheimer Funds; Assistant
Secretary of SSI, SFSI; an officer
of other Oppenheimer Funds.
Arthur J. Zimmer,
Vice President An officer and/or portfolio manager
of certain Oppenheimer funds; Vice
President of Centennial.
The Oppenheimer Funds include the New York-based Oppenheimer
Funds, the Denver-based Oppenheimer Funds, and the Rochester-based
Oppenheimer Funds, set forth below:
New York-based Oppenheimer Funds
- --------------------------------
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest for Value Funds
Oppenheimer Series Fund, Inc.
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
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
Daily Cash Accumulation Fund, Inc.
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Rochester-based Oppenheimer Funds
- ---------------------------------
Bond Fund Series - Oppenheimer Bond Fund For Growth
Rochester Fund Municipals
Rochester Portfolio Series - Limited Term New York Municipal Fund
The address of OppenheimerFunds, Inc., the New York-based
Oppenheimer 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 Corp., Oppenheimer Real Asset Management, Inc.,
and Main Street Advisers, Inc. is 3410 South Galena Street, Denver,
Colorado 80231.
The address of the Rochester-based funds is 350 Linden Oaks,
Rochester, New York 14625-2807.
Item 31. Location of Accounts and Records.
All accounts, books and other documents, required to be
maintained by the Registrant under Section 31(a) of the Investment
Company Act of 1940 and the Rule thereunder are maintained by
OppenheimerFunds, Inc. at its offices at 3410 South Galena Street,
Denver, Colorado 80231.
Item 32. Management Services.
The Registrant is not a party to any management-related
service contract not discussed in Part A of this Registration
Statement.
Item 33. Undertakings.
1. The Registrant undertakes to suspend the offering of the
shares covered hereby until it amends its prospectus if (1)
subsequent to the effective date of this Registration Statement,
its net asset value per share declines more than 10 percent from
its net asset value per share as of the effective date of this
Registration Statement, or (2) its net asset value increases to an
amount greater than its net proceeds as stated in the prospectus.
2. Inapplicable
3. Inapplicable
4. Inapplicable
5. Inapplicable
6. Inapplicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or
the Investment Company Act of 1940, the Registrant has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York and
State of New York on the 26th day of July, 1996.
OPPENHEIMER WORLD BOND FUND
By: /s/ Bridget A. Macaskill*
-------------------------------
Bridget A. Macaskill, President
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:
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Leon Levy* Chairman of the
- -------------- Board of Trustees July 26, 1996
Leon Levy
/s/ Donald W. Spiro* Vice Chairman of the
- ------------------- Board of Trustees July 26, 1996
Donald W. Spiro
/s/ Bridget A. Macaskill* President & Trustee July 26, 1996
- ------------------------
Bridget A. Macaskill
/s/ George Bowen* Treasurer and
- ----------------- Principal Financial
George Bowen & Accounting Officer July 26, 1996
/s/ Robert G. Galli* Trustee July 26, 1996
- -------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee July 26, 1996
- ----------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan* Trustee July 26, 1996
- ---------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee July 26, 1996
- ----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee July 26, 1996
- --------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee July 26, 1996
- ------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins* Trustee July 26, 1996
- ----------------------
Sidney M. Robbins
/s/ Pauline Trigere* Trustee July 26, 1996
- -------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee July 26, 1996
- -----------------------
Clayton K. Yeutter
</TABLE>
*By: /s/ Robert G. Zack
--------------------------------
Robert G. Zack, Attorney in Fact<PAGE>
<PAGE>
OPPENHEIMER WORLD BOND FUND
Registration No. 811-5670
Post-Effective Amendment No. 10
Index to Exhibits
Exhibit No. Description
24(1)(h) Independent Auditor's Consent
24(2)(a)(5) Amendment No. 4 to Declaration of Trust
24(2)(b)(3) Amendment to By-Laws
24(2)(r) Financial Data Schedule
- -- Power of Attorney
Consent of Independent Auditors
The Board of Trustees
Oppenheimer Multi-Government Trust
We consent to the use of our report dated November 21, 1995
included herein.
/s/ KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Denver, Colorado
July 26, 1996
OPPENHEIMER MULTI-GOVERNMENT TRUST
DECLARATION OF TRUST
AMENDMENT NO. 4
Changing its name to
OPPENHEIMER WORLD BOND FUND
Dated:July 3, 1996
<PAGE>
<PAGE>
The undersigned constituting all of the Trustees of
Oppenheimer Multi-Government Trust (the "Trust") acting pursuant to
Section 8.3 of the Trust's Declaration of Trust dated October 5,
1988 (the "DOT") hereby amend the DOT as follows:
Section 1.1 of the DOT is hereby amended and restated as
follows:
Section 1.1 Name. The name of the trust created hereby is
the "Oppenheimer World Bond Fund" and so far as may be practicable
the Trustees shall conduct the Trust's activities, execute all
documents and sue or be sued under that name, which name (and the
word "Trust" whenever herein used) shall refer to the Trustees as
trustees, and not as individuals, or personally, and shall not
refer to the officers, agents, employees or Shareholders of the
Trust. Should the Trustees determine that the use of such name is
not advisable, they may use such other name for the Trust as they
deem proper and the Trust may hold its property and conduct its
activities under such other name.
Section 1.2(n) of the DOT is hereby amended and restated as
follows:
(n) "Trust" means the Oppenheimer World Bond Fund.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
instrument as of this July 2, 1996.
/s/ Robert G. Galli /s/ Benjamin Lipstein
/s/ Leon Levy /s/ Donald W. Spiro
/s/ Sidney M. Robbins /s/ Kenneth A. Randall
/s/ Russell S. Reynolds /s/ Elizabeth B. Moynihan
/s/ Clayton K. Yeutter /s/ Edward V. Regan
/s/ Bridget A. Macaskill
AMENDED AND RESTATED BY-LAWS
OF
OPPENHEIMER WORLD BOND FUND
(formerly Oppenheimer Multi-Government Trust)
Adopted as of July 3, 1996
ARTICLE I
Definitions
The terms "Commission", "Declaration", "Distributor",
"Investment Adviser", "Majority Shareholder Vote", "1940 Act",
"Shareholder", "Shares", Transfer Agent", "Trust", "Trust
Property", and "Trustees" have the respective meanings given them
in the Amended and Restated Declaration of Trust of OPPENHEIMER
WORLD BOND FUND dated July 3, 1996, as amended from time to time.
ARTICLE II
Offices
SECTION 2.1. Principal Office. Until changed by the
Trustees, the principal office of the Trust in the Commonwealth of
Massachusetts shall be in the City of Boston, County of Suffolk.
SECTION 2.2. Other Offices. In addition to its principal
office in the Commonwealth of Massachusetts, the Trust may have an
office or offices in the City of New York, State of New York, and
at such other places within and without the Commonwealth as the
Trustees may from time to time designate or the business of the
Trust may require.
ARTICLE III
Shareholders' Meetings
SECTION 3.1. Place of Meetings. Meetings of Shareholders
shall be held at such place, within or without the Commonwealth of
Massachusetts, as may be designated from time to time by the
Trustees.
SECTION 3.2. Annual Meetings. An annual meeting of
Shareholders, at which the Shareholders shall elect Trustees and
transact such other business as may properly come before the
meeting, shall be held on such date and at such time as shall be
fixed by the Board of Trustees.
SECTION 3.3. Special Meetings. Special meetings of
Shareholders of the Trust shall be held whenever called by the
Board of Trustees or the President of the Trust. Special meetings
of Shareholders shall also be called by the Secretary upon the
written request of the holders of Shares entitled to vote not less
than twenty-five percent (25%) of all the votes entitled to be cast
at such meeting. Such request shall state the purpose or purposes
of such meeting and the matters proposed to be acted on thereat.
The Secretary shall inform such Shareholders of the reasonable
estimated cost of preparing and mailing such notice of the meeting,
and, upon payment to the Trust of such costs, the Secretary shall
give notice stating the purpose or purposes of the meeting to all
entitled to vote at such meeting. No special meeting need be
called upon the request of the holders of Shares entitled to cast
less than a majority of all votes entitled to be cast at such
meeting, to consider any matter which is substantially the same as
a matter voted upon at any special meeting of Shareholders held
during the preceding twelve months.
SECTION 3.4. Notice of Meetings. Written or printed notice
of every Shareholders' meeting stating the place, date, and purpose
or purposes thereof, shall be given by the Secretary not less than
ten (10) nor more than ninety (90) days before such meeting to each
Shareholder entitled to vote at such meeting. Such notice shall be
deemed to be given when deposited in the United States mail,
postage prepaid, directed to the Shareholder at his address as it
appears on the records of the Trust.
SECTION 3.5. Quorum and Adjournment of Meetings. Except as
otherwise provided by law, by the Declaration or by these By-Laws,
at all meetings of Shareholders the holders of a majority of the
Shares issued and outstanding and entitled to vote thereat, present
in person or represented by proxy, shall be requisite and shall
constitute a quorum for the transaction of business. In the
absence of a quorum, the Shareholders present or represented by
proxy and entitled to vote thereat shall have power to adjourn the
meeting from time to time. Any adjourned meeting may be held as
adjourned without further notice. At any adjourned meeting at
which a quorum shall be present, any business may be transacted as
if the meeting had been held as originally called.
SECTION 3.6. Voting Rights, Proxies. At each meeting of
Shareholders, each holder of record of Shares entitled to vote
thereat shall be entitled to one vote in person or by proxy,
executed in writing by the Shareholder or his duly authorized
attorney-in-fact, for each Share of beneficial interest of the
Trust and for the fractional portion of one vote for each
fractional Share entitled to vote so registered in his name on the
records of the Trust on the date fixed as the record date for the
determination of Shareholders entitled to vote at such meeting. No
proxy shall be valid after eleven months from its date, unless
otherwise provided in the proxy. At all meetings of Shareholders,
unless the voting is conduc-ted by inspectors, all questions
relating to the qualification of voters and the validity of proxies
and the acceptance or rejection of votes shall be decided by the
chairman of the meeting. Pursuant to a resolution of a majority of
the Trustees, proxies may be solicited in the name of one or more
Trustees or Officers of the Trust.
SECTION 3.7. Vote Required. Except as otherwise provided by
law, by the Declaration of Trust, or by these By-Laws, at each
meeting of Shareholders at which a quorum is present, all matters
shall be decided by Majority Shareholder Vote.
SECTION 3.8. Inspectors of Election. In advance of any
meeting of Shareholders, the Trustees may appoint Inspectors of
Election to act at the meeting or any adjournment thereof. If
Inspectors of Election are not so appointed, the chairman of any
meeting of Shareholders may, and on the request of any Shareholder
or his proxy shall, appoint Inspectors of Election of the meeting.
In case any person appointed as Inspector fails to appear or fails
or refuses to act, the vacancy may be filled by appointment made by
the Trustees in advance of the convening of the meeting or at the
meeting by the person acting as chairman. The Inspectors of
Election shall determine the number of Shares outstanding, the
Shares represented at the meeting, the existence of a quorum, the
authenticity, validity and effect of proxies, shall receive votes,
ballots or consents, shall hear and determine all challenges and
questions in any way arising in connection with the right to vote,
shall count and tabulate all votes or consents, determine the
results, and do such other acts as may be proper to conduct the
election or vote with fairness to all Shareholders. On request of
the chairman of the meeting, or of any Shareholder or his proxy,
the Inspectors of Election shall make a report in writing of any
challenge or question or matter determined by them and shall
execute a certificate of any facts found by them.
SECTION 3.9. Inspection of Books and Records. Shareholders
shall have such rights and procedures of inspection of the books
and records of the Trust as are granted to Shareholders under the
Corporations and Associations Law of the State of Massachusetts.
SECTION 3.10. Action by Shareholders Without Meeting. Except
as otherwise provided by law, the provisions of these By-Laws
relating to notices and meetings to the contrary notwithstanding,
any action required or permitted to be taken at any meeting of
Shareholders may be taken without a meeting if a majority of the
Shareholders entitled to vote upon the action consent to the action
in writing and such consents are filed with the records of the
Trust. Such consent shall be treated for all purposes as a vote
taken at a meeting of Shareholders.
ARTICLE IV
Trustees
SECTION 4.1. Meetings of the Trustees. The Trustees may in
their discretion provide for regular or special meetings of the
Trustees. Regular meetings of the Trustees may be held at such
time and place as shall be determined from time to time by the
Trustees without further notice. Special meetings of the Trustees
may be called at any time by the President and shall be called by
the President or the Secretary upon the written request of any two
(2) Trustees.
SECTION 4.2. Notice of Special Meetings. Written notice of
special meetings of the Trustees, stating the place, date and time
thereof, shall be given not less than two (2) days before such
meeting to each Trustee, personally, by telegram, by mail, or by
leaving such notice at his place of residence or usual place of
business. If mailed, such notice shall be deemed to be given when
deposited in the United States mail, postage prepaid, directed to
the Trustee at his address as it appears on the records of the
Trust. Subject to the provisions of the 1940 Act, notice or waiver
of notice need not specify the purpose of any special meeting.
SECTION 4.3. Telephone Meetings. Except as may otherwise be
required by law, any Trustee, or any member or members of any
committee designated by the Trustees, may participate in a meeting
of the Trustees, or any such committee, as the case may be, by
means of a conference telephone or similar communications equipment
if all persons participating in the meeting can hear each other at
the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.
SECTION 4.4. Quorum, Voting and Adjournment of Meetings. At
all meetings of the Trustees, a majority of the Trustees shall be
requisite to and shall constitute a quorum for the transaction of
business. If a quorum is present, the affirmative vote of a
majority of the Trustees present shall be the act of the Trustees,
unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By-Laws.
If at any meeting of the Trustees there be less than a quorum
present, the Trustees present thereat may adjourn the meeting from
time to time, without notice other than announcement at the
meeting, until a quorum shall have been obtained.
SECTION 4.5. Action by Trustees Without Meeting. The
provisions of these By-Laws covering notices and meetings to the
contrary notwithstanding, and except as required by law, any action
required or permitted to be taken at any meeting of the Trustees
may be taken without a meeting if a consent in writing setting
forth the action shall be signed by all of the Trustees entitled to
vote upon the action and such written consent is filed with the
minutes of proceedings of the Trustees.
SECTION 4.6. Expenses and Fees. Each Trustee may be allowed
expenses, if any, for attendance at each regular or special meeting
of the Trustees, and each Trustee who is not an officer or employee
of the Trust or of its investment manager or underwriter or of any
corporate affiliate of any of said persons shall receive for
services rendered as a Trustee of the Trust such compensation as
may be fixed by the Trustees. Nothing herein contained shall be
construed to preclude any Trustee from serving the Trust in any
other capacity and receiving compensation therefor.
SECTION 4.7. Execution of Instruments and Documents and
Signing of Checks and Other Obligations and Transfers. All
instruments, documents and other papers shall be executed in the
name and on behalf of the Trust and all checks, notes, drafts and
other obligations for the payment of money by the Trust shall be
signed, and all transfer of securities standing in the name of the
Trust shall be executed, by the President, any Vice President or
the Treasurer or by any one or more officers or agents of the Trust
as shall be designated for that purpose by vote of the Trustees.
SECTION 4.8. Indemnification of Trustees, Officers, Employees
and Agents.
(a) As used in this Declaration of Trust the following terms
shall have the meanings set forth below:
(i) the term "indemnitee" shall mean any present or
former Trustee, officer or employee of the Trust,
any present or former Trustee, partner, Director
or officer of another trust, partnership,
corporation or association whose securities are
or were owned by the Trust or of which the Trust
is or was a creditor and who served or serves in
such capacity at the request of the Trust, and
the heirs, executors, administrators, successors
and assigns of any of the foregoing; however,
whenever conduct by an indemnitee is referred to,
the conduct shall be that of the original
indemnitee rather than that of the heir,
executor, administrator, successor or assignee;
(ii) the term "covered proceeding" shall mean any
threatened, pending or completed action, suit or
proceeding, whether civil, criminal,
administrative or investigative, to which an
indemnitee is or was a party or is threatened to
be made a party by reason of the fact or facts
under which he or it is an indemnitee as defined
above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the
conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses
(including attorney's fees), judgments, fines and
amounts paid in settlement actually and
reasonably incurred by an indemnitee in
connection with a covered proceeding; and
(v) the term "adjudication of liability" shall mean,
as to any covered proceeding and as to any
indemnitee, an adverse determination as to the
indemnitee whether by judgment, order,
settlement, conviction or upon a plea of nolo
contendere or its equivalent.
(b) The Trust shall not indemnify any indemnitee for any
covered expenses in any covered proceeding if there has
been an adjudication of liability against such indemnitee
expressly based on a finding of a disabiling conduct.
(c) Except as set forth in paragraph (b) above, the Trust
shall indemnify any indemnitee for covered expenses in
any covered proceeding, whether or not there is an
adjudication of liability as to such indemnitee, such
indemnification by the Trust to be to the fullest extent
now or hereafter permitted by any applicable law unless
the By-Laws limit or restrict the indemnification to
which any indemnitee may be entitled. The Board of
Trustees may adopt By-Law provisions to implement
paragraphs (a), (b) and (c) hereof.
(d) Nothing herein shall be deemed to affect the right of the
Trust and/or any indemnitee to acquire and pay for any
insurance covering any or all indemnitees to the extent
permitted by applicable law or to affect any other
indemnification rights to which any indemnitee may be
entitled to the extent permitted by applicable law. Such
rights to indemnification shall not, except as otherwise
provided by law, be deemed exclusive of any other rights
to which such indemnitee may be entitled under any
statute, By-Law, contract or otherwise.
(e) In case any Shareholder or former Shareholder shall be
held to be personally liable solely by reason of his
being or having been a Shareholder and not because of his
acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his heirs,
executors, administrators or other legal representatives
or in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled
out of the Trust estate to be held harmless from and
indemnified against all loss and expense arising from
such liability. The Trust shall, upon request by the
Shareholder, assume the defense of any such claim made
against any Shareholder for any act or obligation of the
Trust and satisfy any judgment thereon.
ARTICLE V
Committees
SECTION 5.1. Executive and Other Committees. The Trustees,
by resolution adopted by a majority of the Trustees, may designate
an Executive Committee and/or other committees, each committee to
consist of two (2) or more of the Trustees of the Trust and may
delegate to such committees, in the intervals between meetings of
the Trustees, any or all of the powers of the Trustees in the
management of the business and affairs of the Trust. In the
absence of any member of any such committee, the members thereof
present at any meeting, whether or not they constitute a quorum,
may appoint a Trustee to act in place of such absent member. Each
such committee shall keep a record of its proceedings.
The Executive Committee and any other committee shall fix its
own rules or procedure, but the presence of at least fifty percent
(50%) of the members of the whole committee shall in each case be
necessary to constitute a quorum of the committee and the
affirmative vote of the majority of the members of the committee
present at the meeting shall be necessary to take action.
All actions of the Executive Committee shall be reported to
the Trustees at the meeting thereof next succeeding to the taking
of such action.
SECTION 5.2. Advisory Committee. The Trustees may appoint an
advisory committee which shall be composed of persons who do not
serve the Trust in any other capacity and which shall have advisory
functions with respect to the investments of the Trust but which
shall have no power to determine that any security or other
investment shall be purchased, sold or otherwise disposed of by the
Trust. The number of persons constituting any such advisory
committee shall be determined from time to time by the Trustees.
The members of any such advisory committee may receive compensation
for their services and may be allowed such fees and expenses for
the attendance at meetings as the Trustees may from time to time
determine to be appropriate.
SECTION 5.3. Committee Action Without Meeting. The
provisions of these By-Laws covering notices and meetings to the
contrary notwithstanding, and except as required by law, any action
required or permitted to be taken at any meeting of any Committee
of the Trustees appointed pursuant to Section 5.1 of these By-Laws
may be taken without a meeting if a consent in writing setting
forth the action shall be signed by all members of the Committee
entitled to vote upon the action and such written consent is filed
with the records of the proceedings of the Committee.
ARTICLE VI
Officers
SECTION 6.1. Executive Officers. The executive officers of
the Trust shall be a Chairman, a President, one or more Vice
Presidents, a Secretary and a Treasurer. The Chairman shall be
selected from among the Trustees but none of the other executive
officers need be a Trustee. Two or more officers, except those of
President and any Vice President, may be held by the same person,
but no officer shall execute, acknowledge or verify any instrument
in more than one capacity.
The executive officers of the Trust shall be elected annually
by the Trustees and each executive officer so elected shall hold
office until his successor is elected and has qualified.
SECTION 6.2. Other Officers and Agents. The Trustees may
also elect one or more Assistant Vice Presidents, Assistant
Secretaries and Assistant Treasurers and may elect, or may delegate
to the President the power to appoint, such other officers and
agents as the Trustees shall at any time or from time to time deem
advisable.
SECTION 6.3. Term and Removal and Vacancies. Each officer of
the Trust shall hold office until his successor is elected and has
qualified. Any officer or agent of the Trust may be removed by the
Trustees whenever, in their judgment, the best interests of the
Trust will be served thereby, but such removal shall be without
prejudice to the contractual rights, if any, of the person so
removed.
SECTION 6.4. Compensation of Officers. The compensation of
officers and agents of the Trust shall be fixed by the Trustees, or
by the President to the extent provided by the Trustees with
respect to officers appointed by the President.
SECTION 6.5. Power and Duties. All officers and agents of
the Trust, as between themselves and the Trust, shall have such
authority and perform such duties in the management of the Trust as
may be provided in or pursuant to these By-Laws, or to the extent
not so provided, as may be prescribed by the Trustees; provided,
that no rights of any third party shall be affected or impaired by
any such By-Law or resolution of the Trustees unless he has
knowledge thereof.
SECTION 6.6. The Chairman. The Chairman shall preside at all
meetings of the Shareholders and of the Trustees, and he shall
perform such other duties as the Trustees may from time to time
prescribe.
SECTION 6.7. The President. The President shall be the chief
executive officer of the Trust; he shall have general and active
management of the business of the Trust, shall see that all orders
and resolutions of the Trustees are carried into effect, and, in
connection therewith, shall be authorized to delegate to one or
more Vice Presidents such of his powers and duties at such times
and in such manner as he may deem advisable.
SECTION 6.8. The Vice Presidents. The Vice President shall
be of such number and shall have such titles as may be determined
from time to time by the Trustees. The Vice President, or, if
there be more than one, the Vice Presidents in the order of their
seniority as may be determined from time to time by the Trustees or
the President, shall, in the absence or disability of the
President, exercise the powers and perform the duties of the
President, and he or they shall perform such other duties as the
Trustees or the President may from time to time prescribe.
SECTION 6.9. The Assistant Vice Presidents. The Assistant
Vice President, or, if there be more than one, the Assistant Vice
Presidents, shall perform such duties and have such powers as may
be assigned them from time to time by the Trustees or the
President.
SECTION 6.10. The Secretary. The Secretary shall attend all
meetings of the Trustees and all meetings of the Shareholders and
record all the proceedings of the meetings of the Shareholders and
of the Trustees in a book to be kept for that purpose, and shall
perform like duties for the standing committees when required. He
shall give, or cause to be given, notice of all meetings of the
Shareholders and special meetings of the Trustees, and shall
perform such other duties and have such powers as the Trustees, or
the President, may from time to time prescribe. He shall keep in
safe custody the seal of the Trust and affix or cause the same to
be affixed to any instrument requiring it, and, when so affixed, it
shall be attested by his signature or by the signature of an
Assistant Secretary.
SECTION 6.11. The Assistant Secretaries. The Assistant
Secretary, or, if there be more than one, the Assistant Secretaries
in the order determined by the Trustees or the President, shall, in
the absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary and shall perform such duties
and have such other powers as the Trustees or the President may
from time to time prescribe.
SECTION 6.12. The Treasurer. The Treasurer shall be the
chief financial officer of the Trust. He shall keep or cause to be
kept full and accurate accounts of receipts and disbursements in
books belonging to the Trust, and he shall render to the Trustees
and the President, whenever any of them require it, an account of
his transactions as Treasurer and of the financial condition of the
Trust; and he shall perform such other duties as the Trustees, or
the President, may from time to time prescribe.
SECTION 6.13. The Assistant Treasurers. The Assistant
Treasurer, or, if there shall be more than one, the Assistant
Treasurers in the order determined by the Trustees or the
President, shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer and
shall perform such other duties and have such other powers as the
Trustees, or the President, may from time to time prescribe.
SECTION 6.14. Delegation of Duties. Whenever an officer is
absent or disabled, or whenever for any reason the Trustees may
deem it desirable, the Trustees may delegate the powers and duties
of an officer or officers to any other officer or officers or to
any Trustee or Trustees.
ARTICLE VII
Dividends and Distributions
Subject to any applicable provisions of law and the
Declaration, dividends and distributions upon the Shares may be
declared at such intervals as the Trustees may determine, in cash,
in securities or other property, or in Shares, from any sources
permitted by law, all as the Trustees shall from time to time
determine.
Inasmuch as the computation of net income and net profits from
the sale of securities or other properties for federal income tax
purposes may vary from the computation thereof on the records of
the Trust, the Trustees shall have power, in their discretion, to
distribute as income dividends and as capital gain distributions,
respectively, amounts sufficient to enable the Trust to avoid or
reduce liability for federal income taxes.
ARTICLE VIII
Certificates of Shares
SECTION 8.1. Certificates of Shares. Certificates for Shares
of the Trust shall be in such form and of such design as the
Trustees shall approve, subject to the right of the Trustees to
change such form and design at any time or from time to time, and
shall be entered in the records of the Trust as they are issued.
Each such certificate shall bear a distinguishing number; shall
exhibit the holder's name and certify the number of full Shares
owned by such holder; shall be signed by or in the name of the
Trust by the President, or a Vice President, and countersigned by
the Secretary or an Assistant Secretary or the Treasurer and an
Assistant Treasurer of the Trust; shall be sealed with the seal;
and shall contain such recitals as may be required by law. Where
any certificate is signed by a Transfer Agent or by a Registrar,
the signature of such officers and the seal may be facsimile,
printed or engraved. The Trust may, at its option, determine not
to issue a certificate or certificates to evidence Shares owned of
record by any Shareholder.
In case any officer or officers who shall have signed, or
whose facsimile signature or signatures shall appear on, any such
certificate or certificates shall cease to be such officer or
officers of the Trust, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been
delivered by the Trust, such certificate or certificates shall,
nevertheless, be adopted by the Trust and be issued and delivered
as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall
appear therein had not ceased to be such officer or officers of the
Trust.
No certificate shall be issued for any share until such share
is fully paid.
SECTION 8.2 Transfer of Shares. Shares shall be transferable
on the books of the Trust by the holder thereof in person or by his
duly authorized attorney or legal representative, upon surrender
and cancellation of certificates, if any, for the same number of
Shares, duly endorsed or accompanied by proper instruments of
assignment and transfer, with such proof of the authenticity of the
signature as the Trust or its agent may reasonably require; in the
case of shares not represented by certificates, the same or similar
requirements may be imposed by the Board of Trustees.
SECTION 8.3 Share Ledgers. The share ledgers of the Trust,
containing the name and address of the Shareholders of the Trust
and the number of shares held by them respectively, shall be kept
at the principal offices of the Trust or, if the Trust employs a
transfer agent, at the offices of the transfer agent of the Trust.
SECTION 8.4. Lost, Stolen, Destroyed and Mutilated
Certificates. The Trustees may direct a new certificate or
certificates to be issued in place of any certificate or
certificates theretofore issued by the Trust alleged to have been
lost, stolen or destroyed, upon satisfactory proof of such loss,
theft, or destruction; and the Trustees may, in their discretion,
require the owner of the lost, stolen or destroyed certificate, or
his legal representative, to give to the Trust and to such
Registrar, Transfer Agent and/or Transfer Clerk as may be
authorized or required to countersign such new certificate or
certificates, a bond in such sum and of such type as they may
direct, and with such surety or sureties, as they may direct, as
indemnity against any claim that may be against them or any of them
on account of or in connection with the alleged loss, theft or
destruction of any such certificate.
ARTICLE IX
Waiver of Notice
Whenever any notice of the time, place or purpose of any
meeting of Shareholders, Trustees, or of any committee is required
to be given in accordance with law or under the provisions of the
Declaration or these By-Laws, a waiver thereof in writing, signed
by the person or persons entitled to such notice and filed with the
records of the meeting, whether before or after the holding
thereof, or actual attendance at the meeting of Shareholders,
Trustees or committee, as the case may be, in person, shall be
deemed equivalent to the giving of such notice to such person.
ARTICLE X
Miscellaneous
SECTION 10.1. Location of Books and Records. The books and
records of the Trust may be kept outside the Commonwealth of
Massachusetts at such place or places as the Trustees may from time
to time determine, except as otherwise required by law.
SECTION 10.2. Record Date. The Trustees may fix in advance
a date as the record date for the purpose of determining
Shareholders entitled to notice of, or to vote at, any meeting of
Shareholders, or Shareholders entitled to receive payment of any
dividend or the allotment of any rights, or in order to make a
determination of Shareholders for any other proper purpose. Such
date, in any case, shall be not more than one hundred twenty (120)
days, and in case of a meeting of Shareholders not less than ten
(10) days, prior to the date on which particular action requiring
such determination of Shareholders is to be taken. In lieu of
fixing a record date the Trustees may provide that the transfer
books shall be closed for a stated period but not to exceed, in any
case, twenty (20) days. If the transfer books are closed for the
purpose of determining Shareholders entitled to notice of a vote at
a meeting of Shareholders, such books shall be closed for at least
ten (10) days immediately preceding such meeting.
SECTION 10.3. Seal. The Trustees shall adopt a seal, which
shall be in such form and shall have such inscription thereon as
the Trustees may from time to time provide. The seal of the Trust
may be affixed to any document, and the seal and its attestation
may be lithographed, engraved or otherwise printed on any document
with the same force and effect as if it had been imprinted and
attested manually in the same manner and with the same effect as if
done by a Massachusetts business corporation under Massachusetts
law.
SECTION 10.4. Fiscal Year. The fiscal year of the Trust
shall end on such date as the Trustees may by resolution specify,
and the Trustees may by resolution change such date for future
fiscal years at any time and from time to time.
SECTION 10.5. Orders for Payment of Money. All orders or
instructions for the payment of money of the Trust, and all notes
or other evidences of indebtedness issued in the name of the Trust,
shall be signed by such officer or officers or such other person or
persons as the Trustees may from time to time designate, or as may
be specified in or pursuant to the agreement between the Trust and
the bank or trust company appointed as Custodian of the securities
and funds of the Trust.
ARTICLE XI
Compliance with Federal Regulations
The Trustees are hereby empowered to take such action as they
may deem to be necessary, desirable or appropriate so that the
Trust is or shall be in compliance with any federal or state
statute, rule or regulation with which compliance by the Trust is
required.
ARTICLE XII
Amendments
These By-Laws may be amended, altered, or repealed, or new By-
Laws may be adopted, (a) by a Majority Shareholder Vote, or (b) by
the Trustees; provided, however, that no By-Law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or
repeal requires, pursuant to law, the Declaration, or these By-
Laws, a vote of the Shareholders. The Trustees shall in no event
adopt By-Laws which are in conflict with the Declaration, and any
apparent inconsistency shall be construed in favor of the related
provisions in the Declaration.
ARTICLE XIII
Declaration of Trust
The Declaration of Trust establishing Oppenheimer World Bond
Fund (formerly "Oppenheimer Multi-Government Trust"and prior to
this "Oppenheimer Special Government Tust") dated October 5, 1988,
as amended by Amendemnet No. 1 dated October 18, 1988, Amendment
No. 2 dated November 23, 1988, Amendment No. 3 dated November 6,
1989 and Amendment No. 4 dated July 3, 1996, a copy of which is on
file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name refers to the Trustees under
the Declaration collectively as Trustees, but not as individuals or
personally; and no Trustee, Shareholder, officer, employee or agent
of the Trust shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of any
obligation or claim or otherwise, in connection with the affairs of
said Trust, but the Trust Estate only shall be liable.
/s/ Robert G. Zack
_____________________________
Robert G. Zack, Assistant Secretary
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 50,977,755
<INVESTMENTS-AT-VALUE> 51,488,607
<RECEIVABLES> 1,468,017
<ASSETS-OTHER> 15,415
<OTHER-ITEMS-ASSETS> 113,738
<TOTAL-ASSETS> 53,085,777
<PAYABLE-FOR-SECURITIES> 540,322
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 205,576
<TOTAL-LIABILITIES> 745,898
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 59,850,207
<SHARES-COMMON-STOCK> 6,615,505
<SHARES-COMMON-PRIOR> 6,615,505
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 79,149
<ACCUMULATED-NET-GAINS> (8,026,616)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 595,437
<NET-ASSETS> 52,339,879
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,344,119
<OTHER-INCOME> 0
<EXPENSES-NET> 633,625
<NET-INVESTMENT-INCOME> 4,710,494
<REALIZED-GAINS-CURRENT> (1,281,279)
<APPREC-INCREASE-CURRENT> 943,379
<NET-CHANGE-FROM-OPS> 4,372,594
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,472,033
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (99,439)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7,029,770)
<OVERDISTRIB-NII-PRIOR> 33,177
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 332,730
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 633,625
<AVERAGE-NET-ASSETS> 51,207,000
<PER-SHARE-NAV-BEGIN> 7.93
<PER-SHARE-NII> .71
<PER-SHARE-GAIN-APPREC> (.05)
<PER-SHARE-DIVIDEND> .68
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.91
<EXPENSE-RATIO> 1.24
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 841057
<NAME> Oppenheimer Multi-Government Trust
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1996
<INVESTMENTS-AT-COST> 52,819,116
<INVESTMENTS-AT-VALUE> 53,447,037
<RECEIVABLES> 3,801,454
<ASSETS-OTHER> 25,322
<OTHER-ITEMS-ASSETS> 584,572
<TOTAL-ASSETS> 57,858,385
<PAYABLE-FOR-SECURITIES> 4,499,793
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 227,527
<TOTAL-LIABILITIES> 4,727,320
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 59,850,207
<SHARES-COMMON-STOCK> 6,615,505
<SHARES-COMMON-PRIOR> 6,615,505
<ACCUMULATED-NII-CURRENT> 108,509
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7,502,894)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 675,243
<NET-ASSETS> 53,131,065
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,755,058
<OTHER-INCOME> 0
<EXPENSES-NET> 344,616
<NET-INVESTMENT-INCOME> 2,410,442
<REALIZED-GAINS-CURRENT> 523,722
<APPREC-INCREASE-CURRENT> 79,806
<NET-CHANGE-FROM-OPS> 3,013,970
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,222,784
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 791,186
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (8,026,616)
<OVERDISTRIB-NII-PRIOR> 79,149
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 223,516
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 344,616
<AVERAGE-NET-ASSETS> 52,878,000
<PER-SHARE-NAV-BEGIN> 7.91
<PER-SHARE-NII> 0.37
<PER-SHARE-GAIN-APPREC> 0.09
<PER-SHARE-DIVIDEND> 0.34
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 8.03
<EXPENSE-RATIO> 1.31
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
constitutes and appoints Andrew J. Donohue or Robert G. Zack, and
each of them, her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for her and in
her capacity as a trustee of OPPENHEIMER MULTI-GOVERNMENT TRUST, a
Massachusetts business trust (the "Fund"), to sign on her behalf
any and all Registration Statements (including any post-effective
amendments to Registration Statements) under the Securities Act of
1933, the Investment Company Act of 1940 and any amendments and
supplements thereto, and other documents in connection thereunder,
and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully as to all intents and purposes as she might
or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, and each of them, may lawfully
do or cause to be done by virtue hereof.
Dated this 5th day of October, 1995.
/s/ Bridget A. Macaskill
- ---------------------------------
Bridget A. Macaskill
