Semiannual Report January 31, 2000
[photo of Pennsylvania with cutouts]
Oppenheimer
Pennsylvania Municipal Fund
[logo] OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
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REPORT HIGHLIGHTS
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[sidebar]
CONTENTS
3 President's Letter
5 An Interview with
Your Fund's
Managers
13 Financial
Statements
32 Officers and
Trustees
[end sidebar]
As of January 31, 2000, Oppenheimer Pennsylvania Municipal Fund's Class A shares
provided a dividend yield, at Net Asset Value, of 5.92%!(1)
Oppenheimer Pennsylvania Municipal Fund announced three dividend increases for
Class A shares since this report last year--$.002 per share starting with the
June distribution, $.003 per share starting with the September distribution, and
an additional $.002 per share starting with the February, 2000 distribution.
That's three dividend increases--raising the dividend by over 14%--just since
January, 1999!
As of January 31, 2000, Lipper Analytical Services, Inc., ranked Oppenheimer
Pennsylvania Municipal Fund's standardized yield of 6.16% #1 among 60
Pennsylvania Municipal Debt funds--up from #10 only one year ago!(2)
The Fund's distribution yield of 5.92% as of January 31, 2000 exceeds
the 4.98% median distribution yield in Lipper's Pennsylvania Municipal Debt
Funds category by over 18%!(3)
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Dividend Distributions 2/1/99 - 1/31/00(4) Dividend per Share (in cents)
<TABLE>
<CAPTION>
Month Class A Class B Class C Month Class A Class B Class C
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------- -----------------------------------
February 4.9 4.1 4.1 August 5.1 4.3 4.3
- --------------------------------------- -----------------------------------
March 4.9 4.2 4.2 September 5.4 4.6 4.6
- --------------------------------------- -----------------------------------
April 4.9 4.1 4.1 October 5.4 4.7 4.7
- --------------------------------------- -----------------------------------
May 4.9 4.2 4.2 November 5.4 4.7 4.7
- --------------------------------------- -----------------------------------
June 5.1 4.3 4.3 December 5.4 4.6 4.6
- --------------------------------------- -----------------------------------
July 5.1 4.3 4.3 January 5.4 4.7 4.7
- --------------------------------------- -----------------------------------
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</TABLE>
1. As of 1/31/00, Oppenheimer Pennsylvania Municipal Fund's (Class A Shares)
30-day SEC yield was 6.16%. Dividend yield at NAV (based on last distribution)
is annualized and divided by period-end Net Asset Value. Standardized yield is
based on net investment income for the 30-day period ended 1/31/00. Falling net
asset values will tend to artificially raise yields.
2. According to Lipper Analytical Services, Inc. Lipper rankings are based on
total returns, but do not consider sales charges.
3. As calculated by Lipper Analytical Services, Inc.
4. This assumes shares were purchased and held for the entire accrual period.
Since dividends accrue daily, your actual distributions will vary depending on
the date you purchased your shares and any account activity during the month.
Income distributions include all accrued income earned by the Fund during the
reporting period. The Fund attempts to pay dividends on Class A shares at a
constant level. There is no assurance that it will be able to do so. The Board
of Trustees may change the targeted dividend rate at any time without prior
notice to shareholders. Additionally, the amount of those dividends and the
dividends paid on Class B and Class C shares may vary over time, depending on
market conditions, the composition of the Fund's portfolio, and expenses borne
by the particular class of shares. Dividends and distributions paid on Class A
shares will generally be higher than dividends for Class B and Class C shares,
which normally have higher expenses than Class A. The Fund cannot guarantee that
it will pay any dividends or distributions. The Fund's policy of seeking to
maintain a steady dividend for its Class A shares did not materially affect
portfolio strategies during this reporting period.
2 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
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PRESIDENT'S LETTER
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[photo with caption]
[Bridget A. Macaskill
President,
Oppenheimer
Pennsylvania
Municipal Fund}
Dear shareholder,
Whenever a new year begins--let alone a new decade or century--it makes sense to
pause a moment to assess where we've been and where we're going.
In retrospect, U.S. stocks and bonds in 1999 were subject to sudden and
substantial swings in investor sentiment because of economic uncertainty. When
the year began, investors were concerned that growth in the United States might
slow in response to economic weakness overseas. At mid-year, investors were
concerned that the economy was too strong, potentially rekindling inflationary
pressures. Yet, by year end, it became clearer that while the U.S. economy grew
robustly in 1999, inflation remained at low levels. Indeed, investors appeared
more comfortable with the economy after the Federal Reserve Board demonstrated
its inflation-fighting resolve by raising interest rates three times between
June and November.
As is normal in a rising-interest-rate environment, bond prices generally
declined in 1999, led lower by U.S. Treasury bonds. In the stock market, while
most major indices advanced, strong performance was mostly limited to a handful
of large-capitalization growth companies, principally in the technology arena.
Smaller and value-oriented stocks provided particularly lackluster returns, and
overall, foreign stocks outperformed U.S. stocks in 1999.
Looking forward, we expect the U.S. economy to remain on a moderate-growth,
low-inflation course. As recent revisions of 1999's economic statistics
demonstrated, the economy has defied many analysts' forecasts by growing at a
strong rate, which should be positive for the bond market. Similarly, positive
economic forces could help the stock market's performance broaden to include
value-oriented and smaller stocks.
We see particularly compelling opportunities outside of the U.S. market. Many
foreign stocks also ended 1999 more attractively valued than large-cap U.S.
stocks, and economic trends in overseas markets could lead to higher stock
prices. In Europe, corporate restructuring has just begun, giving companies
there the same potential for cost-cutting and
3 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
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PRESIDENT'S LETTER
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productivity improvements that U.S. companies enjoyed 10 years ago. In Japan and
Asia, economic recovery is expected to gain strength, which could allow stocks
to rally from relatively low levels.
Another 1999 trend that should remain in force in 2000 is the growth of
businesses related to the Internet. The rise of e-commerce has been good for
consumers and the economy because of greater price competition, which has helped
keep inflation under control. The Internet has also been good for investors, as
even companies with no earnings have seen their stock prices soar. Clearly,
while the Internet is here to stay, not all "dot-com" companies will survive,
and many of these high-flying Internet stocks will eventually--and perhaps very
suddenly--return to more reasonable levels. The long-term winners are most
likely to be companies that support the Internet's growth with content or
infrastructure.
What else is in store for investors in 2000? While we do not have an infallible
crystal ball, we believe that in almost any investment environment, consistent
success stems from an unwavering focus on fundamental investment principles such
as maintaining a long-term perspective, using diversification to manage risks,
and availing oneself of the services of a knowledgeable financial advisor.
Indeed, these principles serve as the foundation for every investment we offer,
helping to make OppenheimerFunds The Right Way to Invest in 2000 and beyond.
Sincerely,
[signature]
Bridget A. Macaskill
February 22, 2000
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of any particular fund. Specific
discussion, as it applies to your Fund, is contained in the pages that follow.
4 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
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AN INTERVIEW WITH YOUR FUND'S MANAGERS
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[sidebar]
As of
January 31, 2000,
the Fund's CLass A
distribution
yield of 5.92% is
94 basis points more
than the
median yield of all
60 Pennsylvania
municipal
bond funds.(1)
[end sidebar]
How has Oppenheimer Pennsylvania Municipal Fund performed during
the six-month period ended January 31, 2000?
The big news in the past six-month period was the Fund's two dividend
increases--$.003 per share, announced last August, and an additional $.002
announced on January 31, 2000. Together with a $.002 increase announced last
May, the Fund's dividend has gone from 4.9 cents per share to 5.6 cents per
share--a dividend increase of over 14% since this report last year!
The Fund's Class A shares provided an annualized tax-free dividend yield of
5.92% (computed without sales charges) as of January 31, 2000. This tax-free
dividend yield is the equivalent of 8.82% in taxable yield for a Pennsylvania
taxpayer in the 32.9% combined Pennsylvania State and federal income tax
bracket. For taxpayers subject to higher federal tax rates, or additional local
income taxes, the equivalent yield would make your Fund investment even more
attractive.
What is the current state of the Pennsylvania municipal bond market?
Conditions in the Pennsylvania municipal bond market have mirrored those of the
national municipal bond market during this reporting period. The nation's
healthy economy has impacted positively on municipal finances, helping the
overall credit quality of municipal bond issuers to remain solid. However, this
vigorous national economic activity has also led the Federal Reserve to increase
short-term interest rates, leading to higher interest rates across the yield
curve. As a result, municipal bond prices have been on the decline
nationally--as well as in Pennsylvania. Since heightened interest rates increase
the cost of borrowing money, municipalities have scaled back on the number of
new bonds that they issue. During 1999, for example, 28% fewer new municipal
bonds were issued in Pennsylvania than during 1998.
1. According to Lipper Analytical Services, Inc. Lipper rankings are based on
total returns and do not include sales charges which, if included, would affect
results.
5 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
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AN INTERVIEW WITH YOUR FUND'S MANAGERS
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[sidebar]
[photo]
Portfolio Management Team
(l to r)
Anthony A, Tanner, CFA
Vice President and Portfolio
Manager, Rochester Division
Joined the Rochester
Investment Team
in June, 1991.
Ronald H. Fielding, CFA
Senior Vice President,
Portfolio Manager and Chief
Strategist, Rochester Division
Founded the Rochester
Investment Team
in May, 1983.
Daniel G. Loughran, CFA
Vice President and Senior
Research Analyst, Rochester Division
Joined the Rochester
Investment Team
in October, 1994.
[end sidebar]
Rising interest rates have also produced widened credit yield spreads throughout
the municipal market. This means that the yield on bonds issued by smaller, BBB
and unrated municipalities has risen at a greater rate than the yield on insured
bonds, and bonds issued by larger municipalities. Stated differently, the price
of municipal bonds of smaller, BBB and unrated municipalities has decreased more
than the others. This is a normal part of the interest rate cycle, and does not
reflect a decline in the general credit quality of lower-rated issuers--in fact,
the Fund did not experience any credit losses during this period of volatility.
Changes in credit spreads are cyclical by nature--they typically widen when
interest rates increase and narrow when interest rates decrease. What widening
credit yield spreads can provide investors is the opportunity to earn higher
income on each dollar invested in municipal bonds and bond funds--by buying
when they're "on sale."
Municipal bond prices have declined steadily since October, 1998, but the bulk
of the decline began in June of 1999 when the Fed made the first of four, .25%
increases in the bank overnight borrowing rate. While these interest rate
increases have hurt short-term bond market performance, they potentially produce
two long-term benefits. First, they have helped keep inflation in
check--allowing fixed-income investors to maintain their purchasing power.
Second, the difference between long-term municipal bond yields and inflation has
widened--resulting in higher "real interest rates" for municipal bond and bond
fund investors. Under current circumstances, a well-diversified municipal bond
fund can offer income-oriented investors superior yield and total return
potential.
How do you plan to manage the portfolio to take advantage of these conditions?
Current market conditions play right into our research-driven portfolio
management style. We have historically used our rigorous in-house research
capability to uncover the true value of precisely those bonds whose yields have
recently increased the most. Our sharp focus on smaller municipal issuers helps
us
6 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
to find bonds which represent good credit quality that are often overlooked
by our competitors. Current prices now enable us to capture the increased yield
advantages offered by smaller and lower-rated issues while broadening
diversification in the Fund. As a result, we have increased the breadth of our
holdings of smaller, BBB-rated issues and improved the Fund's tax-free yield.
For example, we recently purchased bonds issued by the Northumberland County
Authority to finance construction of a career and arts center. These bonds do
not carry an institutional credit rating because the small size of the issue
made the cost of obtaining a bond rating prohibitive. However, payment on the
bonds is unconditionally guaranteed by the County. Through our research, we were
able to learn that Northumberland County has a comparatively low debt burden and
historically successful financial management. Analyzing these factors, and
similar facts that rating agencies evaluate, we concluded that these bonds
possessed credit characteristics similar to those that receive an investment
grade rating. The Northumberland County Authority bonds had an effective
maturity of 13 years, and yielded 6.75%. This represented a yield premium of
1.00 percent over insured general obligation bonds with similar effective
maturities. A year earlier, such a bond would have paid investors only half of
that yield premium. Over the longer term, our strategy of pursuing small issuers
like this should benefit shareholders by securing an above average rate of
tax-free income while creating the opportunity for greater total returns should
these bonds return to their historic average pricing levels.
Have you been finding value in other areas?
With the backdrop of rising interest rates, we began to reduce our holdings of
lower coupon bonds that are more sensitive to interest rates, replacing them
with less volatile issues. During the last six-month period we have been able to
purchase some high quality bonds which we feel carry very low interest rate
risk--strengthening the foundation of the portfolio. We have been successfully
combing the secondary markets for premium coupon callable bonds, seeking those
with characteristics that
7 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
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AN INTERVIEW WITH YOUR FUND'S MANAGERS
- --------------------------------------------------------------------------------
[sidebar]
[photo]
[caption]
Portfolio Management Team
(l to r)
Christopher D. Weiler, CFA
Credit Analyst,
Rochester Division
Joined the Rochester
Investment Team
in January, 1999.
Richard A. Stein, CFA
Vice President-Credit Analysis,
Rochester Division
Joined the Rochester
Investment Team
in May, 1993.
James E. Bragg
Credit Analyst,
Rochester Analyst,
Rochester Division
Joined the Rochester
Investment Team
in June 1999.
[end sidebar]
indicate the bond issuer may continue to pay interest, rather than redeem the
bond at the first possible redemption date. We have found such bonds in the
housing sector. Adding them to the portfolio at current prices has provided
above-market yields with very low price volatility.
Is now a good time for me to add to my investment in Oppenheimer
Pennsylvania Municipal Fund?
If you like to buy things when they're on sale, now is a good time to add to
your investment in Oppenheimer Pennsylvania Municipal Fund. Recent declines
in municipal bond prices have been due primarily to rising interest rates. The
effect of interest rate increases on "real interest rates," as discussed
earlier, has made the Oppenheimer Pennsylvania Municipal Bond Fund an attractive
value for investors.
In our experience, we can remember few other times when the market has so
clearly favored municipals--especially considering that municipal income is
generally free of federal, Pennsylvania state and, if applicable, local personal
income taxes. Our management style is positioned to generate yield, and yield,
over the long term, comprises the single greatest component of total return on a
fixed-income investment. In other words, yield is total return in the making.
Municipal bond investing, like most other types of investing, should be
undertaken with this type of long-term view. As always, we recommend that you
consult with your financial advisor to review your municipal bond allocation. We
feel that market conditions have generated some outstanding values which can
contribute to this portfolio, and we are very positive on the possibilities for
the municipal bond market going forward. We hope that you are, as well.
8 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
Yields
For the 30 days ended 1/31/00(1)
<TABLE>
<CAPTION>
Dividend Yield Standardized
At NAV At MOP Yield
<S> <C> <C> <C>
- -------------------------------------------------
Class A 5.84% 5.56% 6.16%
- -------------------------------------------------
Class B 5.12% 5.12% 5.70%
- -------------------------------------------------
Class C 5.11% 5.11% 5.69%
- -------------------------------------------------
</TABLE>
Cumulative Total Returns
As of 1/31/00(2)
<TABLE>
<CAPTION>
At Net Asset Value At Maximum Offering Price
Since Since
Inception 6-month Inception 6-month
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------
Class A 77.10% -6.76% 68.70% -11.19%
- ----------------------------------------------------------------
Class B 21.57% -7.04% 21.57% -11.57%
- ----------------------------------------------------------------
Class C 12.50% -7.04% 12.50% -7.94%
- ----------------------------------------------------------------
</TABLE>
1. Dividend Yield at Maximum Offering Price (based on last distribution) and
Standardized Yield (based on net investment income for the 30-day period ended
1/31/00) are annualized and divided by period-end offering price. Dividend yield
at NAV does not include sales charges. Falling share prices may artificially
increase yields.
2. This performance is not annualized. Total returns include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. Class A return at maximum
offering price includes the current maximum initial sales charge of 4.75%. Class
B return at maximum offering price includes the applicable contingent deferred
sales charge of 5% (1-year) and 1% (5 years). Because Class B shares convert to
Class A shares 72 months after purchase, the "life-of-class" return for Class B
uses Class A performance for the period after conversion. Class C return at
maximum offering price includes the contingent deferred sales charge of 1%
(1-year). An explanation of the different performance calculations is in the
Fund's prospectus. Class B and C shares are subject to an annual 0.75%
asset-based sales charge. Performance without sales charges includes changes in
net asset value per share without deducting any sales charges. Such performance
would have been lower if sales charges had been taken into account. Inception
dates: Class A - 9/18/89; Class B - 5/3/93; Class C - 8/29/95.
9 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
Sector Allocations
By Municipal Sector as of 1/31/00
as a percentage of investments(1)
<TABLE>
<S> <C>
- ------------------------------------
Hospital/Healthcare 18.1%
- ------------------------------------
Manufacturing, Durable Goods 13.6%
- ------------------------------------
Single Family Housing 13.5%
- ------------------------------------
Resource Recovery 11.8%
- ------------------------------------
Adult Living Facilities 11.3%
- ------------------------------------
Higher Education 9.6%
- ------------------------------------
Lease Rental 4.7%
- ------------------------------------
Non-Profit Organization 4.5%
- ------------------------------------
General Obligation 3.5%
- ------------------------------------
Pollution Control 3.0%
- ------------------------------------
Marine/Aviation Facilities 2.6%
- ------------------------------------
Student Loans 1.4%
- ------------------------------------
Education 1.2%
- ------------------------------------
Miscellaneous 1.2%
- ------------------------------------
</TABLE>
1. Sector weightings are as of January 31, 2000, and are subject to change.
10 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
Credit
Allocation(1)
[pie chart]
AAA 15.9%
AA 11.4%
A 3.1%
BBB 46.1%
BB 5.3%
CCC 4.5%
NR 13.7%
Total Returns (for the periods ended 12/31/99)(2)
<TABLE>
<CAPTION>
Cumulative Average Annual
NAV MOP NAV MOP
<S> <C> <C> <C> <C>
A Shares
- -----------------------------------------------------
1- Year -6.18% -10.63% -6.18% -10.63%
- -----------------------------------------------------
5- Year 30.32% 24.13% 5.44% 4.42%
- -----------------------------------------------------
Life (9/18/89) 79.41% 70.90% 5.85% 5.35%
- -----------------------------------------------------
B Shares
- -----------------------------------------------------
1- Year -6.81% -11.27% -6.81% -11.27%
- -----------------------------------------------------
5- Year 25.51% 23.51% 4.65% 4.31%
- -----------------------------------------------------
Life (5/3/93) 23.16% 23.16% 3.18% 3.18%
- -----------------------------------------------------
C Shares
- -----------------------------------------------------
1- Year -6.80% -7.70% -6.80% -7.70%
- -----------------------------------------------------
Life (8/29/95) 14.04% 14.04% 3.08% 3.08%
- -----------------------------------------------------
</TABLE>
1. Portfolio data are as of January 31, 2000, are dollar-weighted based on
invested assets and are subject to change. The Fund may invest up to 25% of its
assets in below-investment-grade securities which carry greater risk that an
issuer may default on repayment of principal or interest. Securities rated by
any rating organization are included in the equivalent Standard and Poor's
rating category. Average credit quality and allocation include securities rated
by a national rating organization as well as unrated securities (22% of total
investments as of 1/31/00) to which the Manager in its judgment has assigned
ratings as securities comparable to those rated by a rating agency in the same
category.
2. Total returns include changes in share price and reinvestment of
dividends and capital gains distributions in a hypothetical investment for the
periods shown. Class A returns at MOP include the current maximum initial sales
charge of 4.75%. Class B returns at MOP include the applicable contingent
deferred sales charge of 5%(1-year) and 1% (5-year). Because Class B shares
convert to Class A shares 72 months after purchase, the "life-of-class" return
for Class B uses Class A performance for the period after conversion. Class C
returns at MOP for the one-year period include the contingent deferred sales
charge of 1% (1-year). An explanation of the different performance calculations
is in the Fund's prospectus. Class B and C shares are subject to an annual 0.75%
asset-based sales charge.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. The Fund's
performance may, from time to time, be subject to substantial short-term
changes, particularly during periods of market or interest rate volatility. For
updates on the Fund's performance, please contact your financial advisor, call
us at 1-800-525-7048 or visit our website, www.oppenheimerfunds.com.
11 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
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Financials
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12 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
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STATEMENT OF INVESTMENTS January 31, 2000 / Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings: Market
Moody's/ Face Value
S&P/Fitch Amount See Note 1
<S> <C> <C> <C>
===========================================================================================
Municipal Bonds and Notes--102.1%
- -------------------------------------------------------------------------------------------
Pennsylvania--97.6%
Allegheny Cnty., PA HDAU RRB, Allegheny Valley
HF Management Co., 7.375%, 8/1/04(1) Caa/CCC $ 20,000 $ 19,001
- -------------------------------------------------------------------------------------------
Allegheny Cnty., PA HDAU RRB, Allegheny Valley
HF Management Co., 7.50%, 8/1/13(1) Caa/CCC 75,000 69,987
- -------------------------------------------------------------------------------------------
Allegheny Cnty., PA HDAU RRB,
Allegheny Valley Hospital, 7.75%, 8/1/20(1) Caa/CCC 30,000 27,811
- -------------------------------------------------------------------------------------------
Allegheny Cnty., PA IDAU RRB, Environmental
Improvements, Series USX-A, 6.70%, 12/1/20 Baa2/BBB- 25,000 24,745
- -------------------------------------------------------------------------------------------
Allegheny Cnty., PA Residential FAU SFM RB,
5.625%, 11/1/23 Aaa/NR 10,000 9,099
- -------------------------------------------------------------------------------------------
Allegheny Cnty., PA Residential FAU SFM RRB,
Series Y, 6.60%, 11/1/14 Aaa/NR 25,000 25,159
- -------------------------------------------------------------------------------------------
Beaver Cnty., PA IDAU PC RB, J. Ray McDermott
Project, 6.80%, 2/1/09 Ba1/BBB- 65,000 65,021
- -------------------------------------------------------------------------------------------
Beaver Cnty., PA IDAU PC RB, St. Joe Minerals
Corp. Project, 6%, 5/1/07 A2/A 20,000 20,400
- -------------------------------------------------------------------------------------------
Beaver Cnty., PA IDAU PC RRB, Colt Industries,
Inc. Project, 7%, 6/1/08 Baa2/A- 45,000 45,472
- -------------------------------------------------------------------------------------------
Beaver Cnty., PA IDAU PC RRB, Speciality
Products Corp., 6.60%, 9/1/10 Aa3/NR 50,000 50,057
- -------------------------------------------------------------------------------------------
Beaver Cnty., PA IDAU PC RRB, Toledo Edison Co.
Project, 7.625%, 5/1/20 Ba1/BB+/BB 105,000 110,398
- -------------------------------------------------------------------------------------------
Beaver Cnty., PA IDAU PC RRB, Toledo Edison Co.
Project, 7.75%, 5/1/20 Ba1/BB+/BB 10,000 10,571
- -------------------------------------------------------------------------------------------
Beaver Cnty., PA IDAU PC RRB, Toledo Edison Co.
Project, Series A, 7.75%, 5/1/20 Ba1/BB+/BB 2,000,000 2,123,180
- -------------------------------------------------------------------------------------------
Berks Cnty., PA GOB, Prerefunded, FGIC Insured,
Inverse Floater, 8.59%, 11/10/20(2) Aaa/AAA/AAA 1,000,000 1,108,750
- -------------------------------------------------------------------------------------------
Berks Cnty., PA IDAU Manufacturer Facility
Development RB, Construction Fasteners Project,
6.40%, 3/1/15 A1/NR 75,000 74,997
- -------------------------------------------------------------------------------------------
Blair Cnty., PA HA RB, Altoona Hospital Project,
AMBAC Insured, Inverse Floater, 6.375%, 7/1/14(2) Aaa/AAA/AAA 700,000 731,591
- -------------------------------------------------------------------------------------------
Bucks Cnty., PA IDAU RB, HCF-Chandler Hall,
6.30%, 5/1/29 NR/NR 1,300,000 1,103,999
- -------------------------------------------------------------------------------------------
Cambria Cnty., PA IDAU PC RRB, Bethlehem
Steel Corp. Project, 7.50%, 9/1/15 NR/NR 190,000 192,683
- -------------------------------------------------------------------------------------------
Carbon Cnty., PA HA RRB, Gnaden Huetten
Memorial Hospital, Series A, AMBAC Insured,
7%, 11/15/14 Aaa/AAA/AAA 100,000 103,576
</TABLE>
13 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings: Market
Moody's/ Face Value
S&P/Fitch Amount See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Pennsylvania Continued
Chester Cnty., PA Education & HFAU College RRB,
Immaculata College, 5.625%, 10/15/27 NR/BBB- $1,750,000 $1,458,625
- -------------------------------------------------------------------------------------------
Columbia Cnty., PA HA Healthcare RRB,
Bloomsburg Hospital Project, 5.90%, 6/1/29 NR/BBB- 370,000 292,537
- -------------------------------------------------------------------------------------------
Crawford Cnty., PA HA Senior Living Facilities RRB,
6.25%, 8/15/29 NR/NR/BBB 1,000,000 861,660
- -------------------------------------------------------------------------------------------
Cumberland Cnty., PA Municipal Authority RRB,
Presbyterian Homes Project, 6%, 12/1/26 NR/A/A 125,000 115,539
- -------------------------------------------------------------------------------------------
Delaware Cnty., PA Authority RB, Villanova University
Project, MBIA Insured, Prerefunded, 6.90%, 8/1/16 Aaa/AAA 230,000 236,596
- -------------------------------------------------------------------------------------------
Delaware Cnty., PA College Authority RRB,
Neumann College, Series A, 5.375%, 10/1/26 NR/BBB- 2,200,000 1,749,528
- -------------------------------------------------------------------------------------------
Delaware Cnty., PA IDAU PC RRB, Series A,
7.375%, 4/1/21 Baa2/A 25,000 25,915
- -------------------------------------------------------------------------------------------
Delaware Valley, PA Regional FAU RB, Series C,
AMBAC Insured, Inverse Floater, 6.774%, 8/1/18(2) Aaa/AAA/AAA 1,250,000 1,129,687
- -------------------------------------------------------------------------------------------
Erie, PA Municipal Airport Authority
General RB, Series B, 5.875%, 7/1/16 NR/BBB- 245,000 220,206
- -------------------------------------------------------------------------------------------
Lancaster Cnty., PA HA RB, St. Anne's Home
Health Center, 6.625%, 4/1/28 NR/NR 300,000 264,459
- -------------------------------------------------------------------------------------------
Langhorne, PA St. Mary HA RRB, Franciscan
Health Project, Series B, BIG Insured, 7%, 7/1/14 Aaa/AAA/AAA 500,000 510,800
- -------------------------------------------------------------------------------------------
Lawrence Cnty., PA IDAU PC RRB, PA Power Co.
New Castle Project, Series A, 7.15%, 3/1/17 Baa2/BB+ 20,000 20,584
- -------------------------------------------------------------------------------------------
Lebanon Cnty., PA HFAU Health Center RB,
Series A, 6.625%, 12/15/29 NR/NR 440,000 395,072
- -------------------------------------------------------------------------------------------
Lehigh Cnty., PA GP RB, Lehigh Valley
Hospital, Inc., Series A, MBIA Insured, 7%, 7/1/16 Aaa/AAA 1,250,000 1,399,575
- -------------------------------------------------------------------------------------------
Lehigh Cnty., PA GP RRB, Bible Fellowship
Project-A, 6%, 12/15/23 NR/NR 1,000,000 828,640
- -------------------------------------------------------------------------------------------
Lehigh Cnty., PA GP RRB, Kidspeace
Obligation Group, 6%, 11/1/23 NR/NR 3,000,000 2,498,220
- -------------------------------------------------------------------------------------------
Luzerne Cnty., PA IDAU Export Facilities RRB,
Pennsylvania Gas & Water Co. Project,
Series A, 7.20%, 10/1/17 A3/A 240,000 252,634
- -------------------------------------------------------------------------------------------
Luzerne Cnty., PA IDAU Facilities RB, Pennsylvania
Gas & Water Co. Project, Series B, 7.125%, 12/1/22 A3/NR 25,000 25,772
- -------------------------------------------------------------------------------------------
Mercer Cnty., PA IDAU RRB, Zero Coupon,
7.06%, 1/15/13(3) NR/AAA 2,605,000 1,040,359
- -------------------------------------------------------------------------------------------
Monroeville, PA HA RRB, Forbes Health System,
6.25%, 10/1/15(1) Caa/CCC 4,000,000 3,577,000
</TABLE>
14 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
<TABLE>
<CAPTION>
Ratings: Market
Moody's/ Face Value
S&P/Fitch Amount See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Pennsylvania Continued
Monroeville, PA HA RRB, Forbes Health System,
7%, 10/1/03(1) Caa/CCC $ 45,000 $ 43,304
- -------------------------------------------------------------------------------------------
Montgomery Cnty., PA Health & HEAU RB,
Temple Continuing Care Center Project, 6.625%, 7/1/19 NR/NR 50,000 44,327
- -------------------------------------------------------------------------------------------
Montgomery Cnty., PA Health & HEFAU RB,
Faulkeways at Gwynedd Project, 6.75%, 11/15/24 NR/BBB+ 435,000 401,187
- -------------------------------------------------------------------------------------------
Montgomery Cnty., PA Health & HEFAU RB,
Faulkeways at Gwynedd Project, 6.75%, 11/15/30 NR/BBB+ 945,000 862,558
- -------------------------------------------------------------------------------------------
Montgomery Cnty., PA Health & HEFAU RB,
Philadelphia Geriatric Center, 7.375%, 12/1/30 NR/NR 700,000 662,249
- -------------------------------------------------------------------------------------------
Montgomery Cnty., PA Health & HEFAU RB,
Temple Continuing Care Center, 6.75%, 7/1/29 NR/NR 3,500,000 3,061,940
- -------------------------------------------------------------------------------------------
Montgomery Cnty., PA IDAU PC PA Electric Co.
RRB, Series A, 7.60%, 4/1/21 Baa2/A 25,000 26,064
- -------------------------------------------------------------------------------------------
Montgomery Cnty., PA IDAU Retirement
Community RRB, Adult Communities Total Services,
Series A, 5.875%, 11/15/22 NR/A- 370,000 318,392
- -------------------------------------------------------------------------------------------
Montgomery Cnty., PA IDAU RRB, 7.50%, 1/1/12 NR/A 1,725,000 1,767,952
- -------------------------------------------------------------------------------------------
Montgomery Cnty., PA IDAU RRB, Pollution Control
Project, Series B, MBIA Insured, 6.70%, 12/1/21 Aaa/AAA 80,000 82,451
- -------------------------------------------------------------------------------------------
Northeastern PA Education & HA RRB, Kings College
Project, Series B, 6%, 7/15/18 NR/BBB 25,000 23,564
- -------------------------------------------------------------------------------------------
Northhampton Cnty., PA IDAU RRB, PC Bethlehem
Steel, 7.55%, 6/1/17 NR/NR 470,000 476,942
- -------------------------------------------------------------------------------------------
Northumberland Cnty., PA Lease RB, Career & Arts
Center Project, 6.65%, 9/15/20 NR/NR 1,350,000 1,309,135
- -------------------------------------------------------------------------------------------
PA EDFAU Facilities RB, National Gypsum Co.,
Series A, 6.25%, 11/1/27 NR/NR 3,500,000 3,172,225
- -------------------------------------------------------------------------------------------
PA EDFAU Facilities RB, National Gypsum Co.,
Series B, 6.125%, 11/2/27 NR/NR 10,500,000 9,354,870
- -------------------------------------------------------------------------------------------
PA EDFAU RR RB, Colver Project, Series D,
7.15%, 12/1/18 NR/BBB-/BBB- 3,000,000 3,045,630
- -------------------------------------------------------------------------------------------
PA EDFAU RR RB, Northampton Generating,
Series A, 6.50%, 1/1/13 NR/BBB-/BBB- 1,450,000 1,421,406
- -------------------------------------------------------------------------------------------
PA EDFAU Wastewater Treatment RB,
Sun Co., Inc., R & M Project, Series A, 7.60%,
12/1/24 Baa3/BBB 2,000,000 2,109,440
- -------------------------------------------------------------------------------------------
PA FAU RRB, Municipal Capital Improvements
Program, 6.60%, 11/1/09 NR/A 35,000 36,832
- -------------------------------------------------------------------------------------------
PA HEAA Student Loan RB, Series B, AMBAC
Insured, Inverse Floater, 8.30%, 3/1/22(2) Aaa/AAA/AAA 1,250,000 1,193,750
</TABLE>
15 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings: Market
Moody's/ Face Value
S&P/Fitch Amount See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Pennsylvania Continued
PA HEAA Student Loan RB, Series C,
AMBAC Insured, 7.15%, 9/1/21 Aaa/AAA/AAA $ 100,000 $ 104,410
- -------------------------------------------------------------------------------------------
PA HEAU RB, Allegheny General Hospital,
Series A, 7.25%, 9/1/17(1) Caa1/CCC 100,000 86,561
- -------------------------------------------------------------------------------------------
PA HEFAU College & University RB,
Geneva College, 5.375%, 4/1/23 NR/BBB- 1,800,000 1,453,698
- -------------------------------------------------------------------------------------------
PA HEFAU College & University RRB,
Temple University, 7.40%, 10/1/10 NR/A 5,000 5,035
- -------------------------------------------------------------------------------------------
PA HEFAU RB, Allegheny General Hospital,
Series A, 7.125%, 9/1/07(1) Caa1/CCC 460,000 404,046
- -------------------------------------------------------------------------------------------
PA HEFAU RRB, Dickinson College, 6%, 8/1/01 NR/BBB+ 100,000 100,073
- -------------------------------------------------------------------------------------------
PA HEFAU RRB, University of Pennsylvania
Health Services, Series B, 5.875%, 1/1/15 A3/A 10,000 9,032
- -------------------------------------------------------------------------------------------
PA HEFAU RRB, Unrefunded Balance, Series A,
MBIA Insured, 6.625%, 8/15/09 Aaa/AAA 305,000 322,690
- -------------------------------------------------------------------------------------------
PA HFA RB, Series 67A, Inverse Floater, 12.954%,
10/1/18(1,2) NR/NR 2,000,000 1,664,800
- -------------------------------------------------------------------------------------------
PA HFA SFM RB, 6.75%, 10/1/14 Aa2/AA+ 15,000 15,402
- -------------------------------------------------------------------------------------------
PA HFA SFM RB, 6.85%, 4/1/16 Aa2/AA+ 325,000 328,464
- -------------------------------------------------------------------------------------------
PA HFA SFM RB, Inverse Floater, 8.95%, 10/3/23(2) Aa2/AA+ 1,000,000 1,068,750
- -------------------------------------------------------------------------------------------
PA HFA SFM RB, Series 34B, 7%, 4/1/24 Aa2/AA+ 1,025,000 1,047,058
- -------------------------------------------------------------------------------------------
PA HFA SFM RB, Series 40, 6.80%, 10/1/15 Aa2/AA+ 2,000,000 2,055,340
- -------------------------------------------------------------------------------------------
PA HFA SFM RB, Series 40, 6.90%, 4/1/25 Aa2/AA+ 145,000 149,148
- -------------------------------------------------------------------------------------------
PA HFA SFM RB, Series 44C, 6.65%, 10/1/21 Aa2/AA+ 1,000,000 1,019,820
- -------------------------------------------------------------------------------------------
PA HFA SFM RB, Series 51, 6.30%, 10/1/15 Aa2/AA+ 50,000 50,153
- -------------------------------------------------------------------------------------------
PA HFA SFM RRB, Series 1991-31A, 6.80%, 10/1/17 Aa2/AA+ 35,000 35,356
- -------------------------------------------------------------------------------------------
PA HFA SFM RRB, Series 33, 6.90%, 4/1/17 Aa2/AA+ 15,000 15,324
- -------------------------------------------------------------------------------------------
PA HFA SFM RRB, Series 39B, 6.875%, 10/1/24 Aa2/AA+ 3,000,000 3,053,010
- -------------------------------------------------------------------------------------------
PA HFA SFM RRB, Series 41B, 6.45%, 10/1/12 Aa2/AA+ 10,000 10,131
- -------------------------------------------------------------------------------------------
PA HFA SFM RRB, Series 41B, 6.65%, 4/1/25 Aa2/AA+ 10,000 10,186
- -------------------------------------------------------------------------------------------
PA HFA SFM RRB, Series 46, 6.30%, 10/1/27 Aa2/AA+ 20,000 19,920
- -------------------------------------------------------------------------------------------
PA HFA SFM RRB, Series 50B, 6.35%, 10/1/27 Aa2/AA+ 40,000 40,021
- -------------------------------------------------------------------------------------------
PA TUCM RRB, Series L, MBIA Insured, 6%, 6/1/15 Aaa/AAA 40,000 40,543
- -------------------------------------------------------------------------------------------
Philadelphia, PA Airport System RB, 6%, 6/15/15 Aaa/AAA/AAA 100,000 99,743
- -------------------------------------------------------------------------------------------
Philadelphia, PA Hospital & HEFAU RB,
Chestnut Hill College, 6%, 10/1/29 NR/NR 1,100,000 951,566
</TABLE>
16 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
<TABLE>
<CAPTION>
Ratings: Market
Moody's/ Face Value
S&P/Fitch Amount See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Pennsylvania Continued
Philadelphia, PA Hospital & HEFAU RB,
Frankford Hospital, Series A, 6%, 6/1/23 A3/NR/A $ 40,000 $ 39,882
- -------------------------------------------------------------------------------------------
Philadelphia, PA Hospital & HEFAU RRB,
Jeanes Health System Project, 6.60%, 7/1/10 Baa3/BBB+ 3,560,000 3,410,053
- -------------------------------------------------------------------------------------------
Philadelphia, PA Hospital & HEFAU RRB,
Jeanes Hospital Project, 5.875%, 7/1/17 Baa3/BBB+ 1,500,000 1,263,750
- -------------------------------------------------------------------------------------------
Philadelphia, PA Hospital & HEFAU RRB,
Temple University Hospital, Series A,
6.50%, 11/15/08 Baa1/BBB+ 15,000 14,557
- -------------------------------------------------------------------------------------------
Philadelphia, PA Hospital & HEFAU RRB,
Temple University Hospital, Series A,
6.625%, 11/15/23 Baa1/BBB+ 4,330,000 3,951,904
- -------------------------------------------------------------------------------------------
Philadelphia, PA IDAU HCF RRB, Baptist Home
of Philadelphia, Series A, 5.60%, 11/15/28 NR/NR 2,450,000 1,868,762
- -------------------------------------------------------------------------------------------
Philadelphia, PA IDAU RB, First Mtg.-Crime
Prevention Assn., 6.125%, 4/1/19 NR/NR 1,550,000 1,420,095
- -------------------------------------------------------------------------------------------
Philadelphia, PA Municipal Authority RRB,
Series B, 6.40%, 11/15/16 Baa/BBB 1,405,000 1,406,166
- -------------------------------------------------------------------------------------------
Philadelphia, PA Redevelopment Authority
Home Mtg. RB, Series A, 10.25%, 6/1/17 A1/A 50,000 51,963
- -------------------------------------------------------------------------------------------
Philadelphia, PA Regional POAU Lease RB,
MBIA Insured, Inverse Floater, 8.50%, 9/1/20(2) Aaa/AAA 2,100,000 2,094,750
- -------------------------------------------------------------------------------------------
Philadelphia, PA SDI RB, Inverse Floater,
11.202%, 4/1/27(1,2) NR/NR 2,055,000 1,113,810
- -------------------------------------------------------------------------------------------
Pittsburgh, PA UDA SFM RRB, Series B,
7.125%, 4/1/15 A1/A 1,000,000 1,035,640
- -------------------------------------------------------------------------------------------
Pittsburgh, PA Urban Redevelopment Authority
Mtg. RRB, Series A, 6.05%, 10/1/26 Aa2/A 45,000 43,383
- -------------------------------------------------------------------------------------------
Pittsburgh, PA Urban Redevelopment Authority
Mtg. RRB, Series A, 6.25%, 10/1/28 Aa2/AAA 1,070,000 1,064,233
- -------------------------------------------------------------------------------------------
Sayre, PA HCF Authority RB, Tioga Nursing Facility
Project, Series A, AMBAC Insured, 7.25%, 10/1/10 Aaa/AAA/AAA 300,000 306,603
- -------------------------------------------------------------------------------------------
Schuylkill Cnty., PA IDAU RR RRB, Schuylkill
Energy Resources, Inc., 6.50%, 1/1/10 NR/NR/BB+ 2,845,000 2,782,951
- -------------------------------------------------------------------------------------------
St. Mary HA Langhorne, PA RB, 7%, 7/1/09 Aaa/AAA/AAA 70,000 71,534
- -------------------------------------------------------------------------------------------
Westmoreland Cnty., PA IDAU RRB,
Redstone HCF, 5.85%, 11/15/29 NR/NR 2,000,000 1,597,940
-----------
89,932,379
</TABLE>
17 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings: Market
Moody's/ Face Value
S&P/Fitch Amount See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
U.S. Possessions--4.5%
PR CMWLTH GORB, MBIA Insured,
Inverse Floater, 7.584%, 7/1/08(2) Aaa/AAA $1,000,000 $ 1,042,500
- -------------------------------------------------------------------------------------------
PR CMWLTH Penuelas Municipal Lease
Purchase RB, 7.50%, 2/19/03 NR/NR 589,766 579,852
- -------------------------------------------------------------------------------------------
PR CMWLTH Urban Renewal & Housing Corp.
Refunding Bonds, 7.875%, 10/1/04 Baa3/BBB 350,000 357,784
- -------------------------------------------------------------------------------------------
PR Industrial Tourist Educational Medical &
Environmental Control Facilities RB, Polytechnic
University Project, Series A, 6.50%, 8/1/24 NR/BBB- 955,000 963,137
- -------------------------------------------------------------------------------------------
PR POAU SPF RB, American Airlines,
Series A, 6.30%, 6/1/23 Baa3/BBB- 35,000 33,395
- -------------------------------------------------------------------------------------------
PR Public Buildings Authority Public
Education & HF RRB, Series I, 6%, 7/1/12 Baa1/A 175,000 175,130
- -------------------------------------------------------------------------------------------
Rio Grande, PR CMWLTH Municipal Lease
Purchase Agreement Bonds, 8%, 12/10/03 NR/NR 970,492 980,711
-----------
4,132,509
- -------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $101,168,390) 102.1% 94,064,888
- -------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (2.1) (1,918,821)
-------------------------
Net Assets 100.0% $92,146,067
=========================
</TABLE>
18 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
To simplify the listings of securities, abbreviations are used per the table
below:
<TABLE>
<S> <C>
CMWLTH Commonwealth HFA Housing Finance Agency
EDFAU Economic Development Finance Authority HFAU Health Facilities Authority
FAU Finance Authority IDAU Industrial Development Authority
GP General Purpose PC Pollution Control
GOB General Obligation Bonds POAU Port Authority
GORB General Obligation Refunding Bonds RB Revenue Bonds
HA Hospital Authority RR Resource Recovery
HCF Health Care Facilities RRB Revenue Refunding Bonds
HDAU Hospital Development Authority SDI School District
HEAA Higher Education Assistance Agency SFM Single Family Mtg.
HEAU Higher Education Authority SPF Special Facilities
HEFAU Higher Educational Facilities Authority TUCM Turnpike Commission
HF Health Facilities UDA Urban Development Agency
</TABLE>
1. Identifies issues considered to be illiquid or restricted--see Note 5 of
Notes to Financial Statements.
2. Represents the current interest rate for a variable rate bond known as an
inverse floater which pays interest at a rate that varies inversely with
short-term interest rates. As interest rates rise, inverse floaters produce
less current income. Their price may be more volatile than the price of a
comparable fixed-rate security. Inverse floaters amount to $11,148,388 or
12.10% of the Fund's net assets as of January 31, 2000.
3. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
As of January 31, 2000, securities subject to the alternative minimum tax
amount to $32,544,268 or 35.32% of the Fund's net assets.
Distribution of investments by industry of issue, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
Industry Market Value Percent
<S> <C> <C>
- -------------------------------------------------------------------------
Hospital/Healthcare $16,998,394 18.1%
Manufacturing, Durable Goods 12,784,798 13.6
Single Family Housing 12,676,991 13.5
Resource Recovery 11,127,379 11.8
Adult Living Facilities 10,644,720 11.3
Higher Education 9,063,192 9.6
Municipal Leases 4,450,995 4.7
Not-for-Profit Organization 4,236,707 4.5
General Obligation 3,265,060 3.5
Pollution Control 2,828,912 3.0
Marine/Aviation Facilities 2,448,094 2.6
Student Loans 1,298,160 1.4
Education 1,129,688 1.2
Multi-Family Housing 513,551 0.6
Water Utilities 252,634 0.3
Electric Utilities 167,469 0.2
Manufacturing, Non-Durable Goods 74,997 0.1
Highways 40,543 0.0
Sales Tax 36,832 0.0
Gas Utilities 25,772 0.0
-----------------------------
Total $94,064,888 100.0%
=============================
</TABLE>
See accompanying Notes to Financial Statements.
19 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
January 31, 2000
================================================================================
<S> <C>
Assets
Investments, at value (cost $101,168,390)
--see accompanying statement $ 94,064,888
- --------------------------------------------------------------------------------
Cash 40,011
- --------------------------------------------------------------------------------
Receivables and other assets:
Interest 1,840,893
Investments sold 643,461
Shares of beneficial interest sold 490,863
Other 3,348
------------
Total assets 97,083,464
================================================================================
Liabilities
Payables and other liabilities:
Notes payable to bank (interest rate 6.625% at January 31, 2000) 4,403,148
Dividends 305,199
Shares of beneficial interest redeemed 68,470
Trustees' compensation 63,118
Distribution and service plan fees 13,309
Transfer and shareholder servicing agent fees 11,334
Other 72,819
------------
Total liabilities 4,937,397
================================================================================
Net Assets $ 92,146,067
============
================================================================================
Composition of Net Assets
Paid-in capital $101,311,474
- --------------------------------------------------------------------------------
Undistributed net investment income 6,260
- --------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (2,068,165)
- --------------------------------------------------------------------------------
Net unrealized depreciation on investments (7,103,502)
------------
Net assets $ 92,146,067
============
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $66,603,633 and 6,079,877 shares of beneficial interest
outstanding) $10.95
Maximum offering price per share (net asset value
plus sales charge of 4.75% of offering price) $11.50
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $20,110,339 and 1,836,306 shares of beneficial interest
outstanding) $10.95
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $5,432,095 and 496,282 shares of beneficial interest
outstanding) $10.95
</TABLE>
See accompanying Notes to Financial Statements.
20 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended January 31, 2000
================================================================================
Investment Income
<S> <C>
Interest $ 3,372,681
================================================================================
Expenses
Management fees 296,285
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 52,333
Class B 112,185
Class C 26,611
- --------------------------------------------------------------------------------
Interest expense 72,731
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 40,689
- --------------------------------------------------------------------------------
Shareholder reports 40,492
- --------------------------------------------------------------------------------
Custodian fees and expenses 12,325
- --------------------------------------------------------------------------------
Trustees' compensation 7,318
- --------------------------------------------------------------------------------
Other 15,102
-----------
Total expenses 676,071
Less reimbursement of expenses (28,695)
Less expenses paid indirectly (3,274)
-----------
Net expenses 644,102
================================================================================
Net Investment Income 2,728,579
================================================================================
Realized and Unrealized Loss
Net realized loss on investments (515,493)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on
investments (9,123,813)
-----------
Net realized and unrealized loss (9,639,306)
================================================================================
Net Decrease in Net Assets Resulting from Operations $(6,910,727)
===========
</TABLE>
See accompanying Notes to Financial Statements.
21 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Jan. 31, 2000 July 31,
(Unaudited) 1999
<S> <C> <C>
================================================================================
Operations
Net investment income $ 2,728,579 $ 4,876,517
- --------------------------------------------------------------------------------
Net realized loss (515,493) (106,698)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation (9,123,813) (3,152,830)
---------------------------
Net increase (decrease) in net assets resulting from
operations (6,910,727) 1,616,989
================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (1,995,093) (3,432,062)
Class B (536,740) (957,717)
Class C (127,118) (235,856)
================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from
beneficial interest
transactions:
Class A 684,970 6,194,843
Class B (1,920,787) 2,794,536
Class C 126,056 803,073
================================================================================
Net Assets
Total increase (decrease) (10,679,439) 6,783,806
- --------------------------------------------------------------------------------
Beginning of period 102,825,506 96,041,700
---------------------------
End of period [including undistributed
(overdistributed) net investment income of $6,260
and $(63,368), respectively] $ 92,146,067 $102,825,506
===========================
</TABLE>
See accompanying Notes to Financial Statements.
22 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year
Ended Ended Ended
Jan. 31, 2000 July 31, Dec. 31,
Class A (Unaudited) 1999 1998 1997 1996(1) 1995
<S> <C> <C> <C> <C> <C> <C>
======================================================================================================
Per Share Operating Data
Net asset value, beginning of period $12.08 $12.42 $12.45 $12.01 $12.36 $11.19
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .33 .63 .61 .70 .40 .68
Net realized and unrealized gain (loss) (1.14) (.37) -- .43 (.35) 1.18
--------------------------------------------------------
Total income (loss) from investment
operations (.81) .26 .61 1.13 .05 1.86
- ------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.32) (.60) (.64) (.69) (.40) (.67)
Dividends in excess of net investment income -- -- -- -- -- (.02)
--------------------------------------------------------
Total dividends and/or distributions
to shareholders (.32) (.60) (.64) (.69) (.40) (.69)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.95 $12.08 $12.42 $12.45 $12.01 $12.36
========================================================
======================================================================================================
Total Return, at Net Asset Value(2) (6.76)% 2.01% 4.99% 9.68% 0.44% 16.94%
======================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $66,604 $72,794 $68,720 $68,280 $64,391 $66,483
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $70,421 $71,835 $69,202 $65,710 $64,997 $64,901
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 5.74% 5.03% 4.82% 5.79% 5.71% 5.68%
Expenses 1.13% 0.95% 1.00%(4) 0.93%(4) 1.03%(4) 1.02%(4)
Expenses, net of indirect expenses and/or
voluntary assumption of expenses 1.09% 0.90% 0.93% 0.90% N/A N/A
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 43% 37% 35% 22% 6% 31%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal
year end from December 31 to July 31.
2. Assumes a $1,000 hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
5. 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 January 31, 2000, were $43,682,421 and $43,242,990, respectively.
See accompanying Notes to Financial Statements
23 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year
Ended Ended Ended
Jan. 31, 2000 July 31, Dec. 31,
Class B (Unaudited) 1999 1998 1997 1996(1) 1995
<S> <C> <C> <C> <C> <C> <C>
======================================================================================================
Per Share Operating Data
Net asset value, beginning of period $12.07 $12.42 $12.45 $12.01 $12.36 $11.19
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .29 .53 .52 .61 .35 .59
Net realized and unrealized gain (loss) (1.13) (.38) -- .42 (.35) 1.17
--------------------------------------------------------
Total income (loss) from investment
operations (.84) .15 .52 1.03 -- 1.76
- ------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.28) (.50) (.55) (.59) (.35) (.57)
Dividends in excess of net investment income -- -- -- -- -- (.02)
--------------------------------------------------------
Total dividends and/or distributions
to shareholders (.28) (.50) (.55) (.59) (.35) (.59)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.95 $12.07 $12.42 $12.45 $12.01 $12.36
========================================================
======================================================================================================
Total Return, at Net Asset Value(2) (7.04)% 1.16% 4.20% 8.86% (0.01)% 16.06%
======================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $20,110 $24,206 $22,124 $19,339 $16,005 $14,466
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $22,241 $23,845 $20,969 $17,243 $15,085 $12,183
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.98% 4.26% 4.10% 5.02% 4.94% 4.89%
Expenses 1.98% 1.80% 1.75%(4) 1.78%(4) 1.89%(4) 1.89%(4)
Expenses, net of indirect expenses and/or
voluntary assumption of expenses 1.84% 1.65% 1.68% 1.65% 1.79% 1.78%
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 43% 37% 35% 22% 6% 31%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal
year end from December 31 to July 31.
2. Assumes a $1,000 hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
5. 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 January 31, 2000, were $43,682,421 and $43,242,990, respectively.
See accompanying Notes to Financial Statements
24 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
<TABLE>
<CAPTION>
Six Months Year Year
Ended Ended Ended
Jan. 31, 2000 July 31, Dec. 31,
Class C (Unaudited) 1999 1998 1997 1996(1) 1995(6)
<S> <C> <C> <C> <C> <C> <C>
======================================================================================================
Per Share Operating Data
Net asset value, beginning of period $12.07 $12.41 $12.44 $12.00 $12.36 $11.91
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .28 .53 .51 .60 .34 .21
Net realized and unrealized gain (loss (1.12) (.37) -- .43 (.36) .45
--------------------------------------------------------
Total income (loss) from investment
operations (.84) .16 .51 1.03 (.02) .66
- ------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.28) (.50) (.54) (.59) (.34) (.21)
Dividends in excess of net investment income -- -- -- -- -- --
--------------------------------------------------------
Total dividends and/or distributions
to shareholders (.28) (.50) (.54) (.59) (.34) (.21)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.95 $12.07 $12.41 $12.44 $12.00 $12.36
========================================================
======================================================================================================
Total Return, at Net Asset Value(2) (7.04)% 1.25% 4.20% 8.84% (0.15)% 5.55%
======================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) 5,432 $5,826 $5,198 $2,611 $482 $264
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $5,279 $5,867 $4,063 $1,390 $296 $ 51
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:3
Net investment income 4.97% 4.26% 4.28% 4.99% 4.83% 4.40%
Expenses 1.98% 1.80% 1.76%(4) 1.79%(4) 1.97%(4) 2.07%(4)
Expenses, net of indirect expenses and/or
voluntary assumption of expenses 1.84% 1.65% 1.67% 1.66% 1.87% 1.96%
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 43% 37% 35% 22% 6% 31%
</TABLE>
1. For the seven months ended July 31, 1996. The Fund changed its fiscal
year end from December 31 to July 31.
2. Assumes a $1,000 hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
5. 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 January 31, 2000, were $43,682,421 and $43,242,990, respectively.
6. For the period from August 29, 1995 (inception of offering) to December 31,
1995.
See accompanying Notes to Financial Statements
25 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Pennsylvania Municipal Fund (the Fund) is a separate series of
Oppenheimer Multi-State Municipal Trust, a non-diversified, open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek as high a level of current
interest income exempt from federal and Pennsylvania personal income taxes as
is available from municipal securities, consistent with preservation of
capital. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B and Class C shares. Class A shares are
sold at their offering price, which is normally net asset value plus an initial
sales charge. Class B and Class C shares are sold without an initial sales
charge but may be subject to a contingent deferred sales charge (CDSC). All
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own expenses directly attributable
to that class and exclusive voting rights with respect to matters affecting
that class. Classes A, B and C shares have separate distribution and/or service
plans. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities for which quotations are readily available
are valued at the last sale price, or if in the absence of a sale, at the last
sale price on the prior trading day if it is within the spread of the closing
bid and asked prices, and if not, at the closing bid price. Securities (includ-
ing restricted securities) for which quotations are not readily available are
valued primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at cost
(or last determined market value) and adjusted for amortization or accretion to
maturity of any premium or discount.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund 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. As of July 31, 1999, the
Fund had available for federal tax purposes an unused capital loss carryover
of approximately $1,552,000, which expires between 2002 and 2007.
26 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent Board of Trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During the
six months ended January 31, 2000, a provision of $1,861 was made for the
Fund's projected benefit obligations, resulting in an accumulated liability of
$62,795 as of January 31, 2000.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or
a portion of annual compensation they are entitled to receive from the Fund.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Board of Trustees in shares of one
or more Oppenheimer funds selected by the trustee. The amount paid to the Board
of Trustees under the plan will be determined based upon the performance of the
selected funds. Deferral of trustees' fees under the plan will not affect the
net assets of the Fund, and will not materially affect the Fund's assets,
liabilities or net investment income per share.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded
by the Fund.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date. Original
issue discount is accreted and premium is amortized in accordance with federal
income tax requirements. For municipal bonds acquired after April 30, 1993, on
disposition or maturity, taxable ordinary income is recognized to the extent of
the lesser of gain or market discount that would have accrued over the holding
period. 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.
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.
27 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended Jan. 31, 2000 Year Ended July 31, 1999
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
Class A
Sold 929,104 $ 10,690,152 1,238,583 $15,411,150
Dividends and/or
distributions reinvested 104,093 1,201,544 175,431 2,182,442
Redeemed (981,082) (11,206,726) (918,356) (11,398,749)
-------------------------------------------------------------
Net increase 52,115 $ 684,970 495,658 $ 6,194,843
=============================================================
- --------------------------------------------------------------------------------------------
Class B
Sold 285,392 $ 3,275,706 568,446 $ 7,057,504
Dividends and/or
distributions reinvested 25,898 298,909 44,913 558,600
Redeemed (479,788) (5,495,402) (389,892) (4,821,568)
-------------------------------------------------------------
Net increase (decrease) (168,498) $ (1,920,787) 223,467 $ 2,794,536
=============================================================
- --------------------------------------------------------------------------------------------
Class C
Sold 162,796 $ 1,840,796 196,171 $ 2,436,879
Dividends and/or
distributions reinvested 7,714 88,835 14,078 175,032
Redeemed (156,976) (1,803,575) (146,208) (1,808,838)
-------------------------------------------------------------
Net increase 13,534 $ 126,056 64,041 $ 803,073
=============================================================
============================================================================================
</TABLE>
3. Unrealized Gains and Losses on Securities
As of January 31, 2000, net unrealized depreciation on securities of $7,103,502
was composed of gross appreciation of $744,047, and gross depreciation of
$7,847,549.
28 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
================================================================================
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee of
0.60% of the first $200 million of average annual net assets, 0.55% of the next
$100 million, 0.50% of the next $200 million, 0.45% of the next $250 million,
0.40% of the next $250 million, and 0.35% of average annual net assets in
excess of $1 billion. Effective January 1, 1997, the Manager has voluntarily
undertaken to waive a portion of its management fee, whereby the Fund pays a
fee not to exceed 0.57% of average annual net assets. The Fund's management fee
for the six months ended January 31, 2000 was 0.60% of the average annual net
assets of each class of shares, annualized for periods of less than one full
year, before the voluntary waiver by the Manager.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing agent for the Fund and for
other Oppenheimer funds. OFS's total costs of providing such services are
allocated ratably to these funds.
- --------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
January 31, 2000 $164,595 $30,941 $2,780 $125,244 $14,999
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Six Months Ended Retained by Distributor Retained by Distributor Retained by Distributor
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
January 31, 2000 $-- $37,724 $3,308
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution
and Service Plans for Class B and Class C shares under Rule 12b-1 of the
Investment Company Act. Under those plans the Fund pays the Distributor for all
or a portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
29 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
================================================================================
4. Fees and Other Transactions with Affiliates Continued
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements
to the Distributor at a rate of up to 0.15% of average annual net assets of
Class A shares purchased. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.15% of the average annual net
assets consisting of Class A shares of the Fund. For the six months ended
January 31, 2000, payments under the Class A Plan totaled $52,333, all of which
was paid by the Distributor to recipients. That included $2,940 paid to an
affiliate of the Manager. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years.
- --------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan,
service fees and distribution fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The Class B and Class C plans provide
for the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The asset-based sales charges on
Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the
Fund under the plans. If any plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the six months ended January 31,
2000:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payment Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Class B Plan $112,185 $89,319 $733,613 3.65%
Class C Plan 26,611 8,127 68,248 1.26
</TABLE>
30 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
================================================================================
5. Illiquid or Restricted Securities
As of January 31, 2000, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 15% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid securities and no more than 10% of its
net assets in restricted securities. Certain restricted securities, eligible
for resale to qualified institutional investors, are not subject to that
limitation. The aggregate value of illiquid or restricted securities subject to
this limitation as of January 31, 2000, was $7,006,320, which represents 7.60%
of the Fund's net assets.
================================================================================
6. Bank Borrowings
The Fund may borrow up to 10% of its total assets from a bank to purchase
portfolio securities, or for temporary and emergency purposes. The Fund has
entered into an agreement which enables it to participate with certain other
Oppenheimer funds in an unsecured line of credit with a bank, which permits
borrowings up to $100 million, collectively. Interest is charged to each fund,
based on its borrowings, at a rate equal to the Federal Funds Rate plus 0.625%.
The Fund also pays a commitment fee equal to its pro rata share of the average
unutilized amount of the credit facility at a rate of 0.09% per annum. The
commitment fee allocated to the Fund for the six months ended January 31, 2000,
was $2,421.
The Fund had $4,400,000 borrowings outstanding at January 31, 2000. For
the year ended January 31, 2000, the average monthly loan balance was
$2,440,000 at an average interest rate of 5.95%.
31 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
- --------------------------------------------------------------------------------
<TABLE>
A Series of Oppenheimer Multi-State Municipal Trust
====================================================================================
<S> <C>
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Phillip A. Griffiths, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Clayton K. Yeutter, Trustee
Ronald H. Fielding, Vice President
Anthony A. Tanner, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
====================================================================================
Investment Advisor OppenheimerFunds, Inc.
====================================================================================
Distributor OppenheimerFunds Distributor, Inc.
====================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
====================================================================================
Custodian of Citibank, N.A.
Portfolio Securities
====================================================================================
Independent Auditors KPMG LLP
====================================================================================
Legal Counsel Mayer, Brown & Platt
The financial statements included herein have been take
from the records of the Fund without examination of the
independent auditors.
This is a copy of a report to shareholders of Oppenheimer
Pennsylvania Municipal Fund. This report must be preceded
or accompanied by a Prospectus of Oppenheimer Pennsylvania
Municipal Fund. For material information concerning the Fund,
see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations
of any bank, are not guaranteed by any bank, are not insured
by the FDIC or any other agency, and involve investment risks,
including the possible loss of the principal amount invested.
</TABLE>
32 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
- --------------------------------------------------------------------------------
OPPENHEIMERFUNDS FAMILY
- --------------------------------------------------------------------------------
<TABLE>
=========================================================================================================
<S> <C> <C>
Global Equity
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
=========================================================================================================
Equity
Stock Stock & Bond
Enterprise Fund(1) Main Street(R) Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R) Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund Specialty
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
=========================================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund Main Street(R) California Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
=========================================================================================================
Money Market(4)
Money Market Fund Cash Reserves
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund."
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 2000 OppenheimerFunds, Inc. All rights reserved.
</TABLE>
33 OPPENHEIMER PENNSYLVANIA MUNICIPAL FUND
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
- --------------------------------------------------------------------------------
INFORMATION AND SERVICES
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to
help.
- --------------------------------------------------------------------------------
Internet
24-hr access to account information and transactions
www.oppenheimerfunds.com
- --------------------------------------------------------------------------------
General Information
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
- --------------------------------------------------------------------------------
Telephone Transactions
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
- --------------------------------------------------------------------------------
PhoneLink
24-hr automated information and automated transactions
1.800.533.3310
- --------------------------------------------------------------------------------
Telecommunications Device for the Deaf (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
- --------------------------------------------------------------------------------
OppenheimerFunds Information Hotline 24 hours a day, timely and insightful
messages on the economy and issues that may affect your investments
1.800.835.3104
- --------------------------------------------------------------------------------
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
- --------------------------------------------------------------------------------
[logo] OppenheimerFunds(R)
Distributor, Inc.
RS0740.001.0100 March 31, 2000
