OPPENHEIMER STRATEGIC INCOME FUND
Supplement dated September 25, 1998 to the
Statement of Additional Information
dated January 26, 1998, revised February 12, 1998
The Statement of Additional Information is revised as follows:
1. The Supplement dated May 15, 1998 is replaced by this Supplement.
2. The following paragraph is added below the paragraph titled, "Special Risks
of Emerging Market Countries" on page 5.
|_| Risks of Conversion to Euro. On January 1, 1999, eleven countries
in the European Monetary Union will adopt the euro as their official currency.
However, their current currencies (for example, the franc, the mark, and the
lire) will also continue in use until January 1, 2002. After that date, it is
expected that only the euro will be used in those countries. A common currency
is expected to confer some benefits in those markets, by consolidating the
government debt market for those countries and reducing some currency risks and
costs. But the conversion to the new currency will affect the Fund operationally
and also has potential risks, some of which are listed below. Among other
things, the conversion will affect:
o issuers in which the Fund invests, because of changes in the
competitive environment from a consolidated currency market and
greater operational costs from converting to the new currency. This
might depress stock values.
o vendors the Fund depends on to carry out its business, such as its
Custodian (which holds the foreign securities the Fund buys), the
Manager (which must price the Fund's investments to deal with the
conversion to the euro) and brokers, foreign markets and securities
depositories. If they are not prepared, there could be delays in
settlements and additional costs to the Fund. o exchange contracts and
derivatives that are outstanding during the transition to the euro. The
lack of currency rate calculations between the affected currencies and
the need to update the Fund's contracts could pose extra costs to the
Fund.
The Manager is upgrading (at its expense) its computer and bookkeeping systems
to deal with the conversion. The Fund's Custodian has advised the Manager of its
plans to deal with the conversion, including how it will update its record
keeping systems and handle the redenomination of outstanding foreign debt. The
Fund's portfolio manager will also monitor the effects of the conversion on the
issuers in which the Fund invests. The possible effect of these factors on the
Fund's investments cannot be determined with certainty at this time, but they
may reduce the value of some of the Fund's holdings and increase its operational
costs.
3. The third paragraph in the section entitled AHow To Exchange
Shares@ on page 58 is replaced as follows:
Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any Money Market Fund. Shares of any Money Market Fund purchased
without a sales charge may be exchanged for shares of Oppenheimer funds offered
with a sales charge upon payment of the sales
[over]
charge (or, if applicable, may be used to purchase shares of Oppenheimer funds
subject to a contingent deferred sales charge). However, shares of Oppenheimer
Money Market Fund, Inc. purchased with the redemption proceeds of shares of
other mutual funds (other than funds managed by the Manager or its subsidiaries)
redeemed within the 30 days prior to that purchase may subsequently be exchanged
for shares of other Oppenheimer funds without being subject to an initial or
contingent deferred sales charge, whichever is applicable. To qualify for that
privilege, the investor or the investor's dealer must notify the Distributor of
eligibility for this privilege at the time the shares of Oppenheimer Money
Market Fund, Inc. are purchased, and, if requested, must supply proof of
entitlement to this privilege.
Shares of the Fund acquired by reinvestment of dividends or
distributions from any of the other Oppenheimer funds or from any unit
investment trust for which reinvestment arrangements have been made with the
Distributor may be exchanged at net asset value for shares of any of the
Oppenheimer funds. No contingent deferred sales charge is imposed on exchanges
of shares of any class purchased subject to a contingent deferred sales charge.
However, if you redeem Class A shares of the Fund that were acquired by exchange
of Class A shares of other Oppenheimer funds purchased subject to a Class A
contingent deferred sales charge within 18 months of the end of the calendar
month of the purchase of the exchanged Class A shares, the Class A contingent
deferred sales charge is imposed on the redeemed shares (see "Class A Contingent
Deferred Sales Charge" in the Prospectus). (A different holding period may apply
to shares purchased prior to June 1, 1998). The Class B contingent deferred
sales charge is imposed on Class B shares acquired by exchange if they are
redeemed within six years of the initial purchase of the exchanged Class B
shares. The Class C contingent deferred sales charge is imposed on Class C
shares acquired by exchange if they are redeemed within 12 months of the initial
purchase of the exchanged Class C shares.
September 25, 1998 PX0230.006
