- --------------------------------------------------------------------------------
Limited Term New York Municipal Fund
- --------------------------------------------------------------------------------
350 Linden Oaks, Rochester, New York 14625
1-800-525-7048
Statement of Additional Information dated April 28, 2000
This Statement of Additional Information is not a Prospectus. This document
contains additional information about the Fund and supplements information in
the Prospectus dated April 28, 2000. It should be read together with the
Prospectus, which may be obtained by writing to the Fund's Transfer Agent,
OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217 or by
calling the Transfer Agent at the toll-free number shown above or by downloading
it from the OppenheimerFunds Internet web site at www.oppenheimerfunds.com.
Contents Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks........2
The Fund's Investment Policies..........................................2
Municipal Securities....................................................3
Other Investment Techniques and Strategies.............................18
Investment Restrictions................................................27
How the Fund is Managed.....................................................29
Organization and History...............................................29
Trustees and Officers of the Fund......................................30
The Manager ...........................................................36
Brokerage Policies of the Fund..............................................37
Distribution and Service Plans..............................................39
Performance of the Fund.....................................................42
About Your Account
How To Buy Shares...........................................................48
How To Sell Shares..........................................................56
How to Exchange Shares......................................................61
Dividends and Taxes.........................................................64
Additional Information About the Fund.......................................66
Financial Information About the Fund
Report of Independent Accountants...........................................68
Financial Statements .......................................................69
Appendix A: Municipal Bond Ratings Definitions.............................A-1
Appendix B: Industry Classifications.......................................B-1
Appendix C: Special Sales Charge Arrangements and Waivers..................C-1
<PAGE>
A B O U T T H E F U N D
Additional Information About the Fund's Investment Policies and Risks
The investment objective and the principal investment policies of the Fund
are described in the Prospectus. This Statement of Additional Information
contains supplemental information about those policies and the types of
securities that the Fund's investment Manager, OppenheimerFunds, Inc., can
select for the Fund. Additional explanations are also provided about the
strategies the Fund can use to try to achieve its objective.
The Fund's Investment Policies. The composition of the Fund's portfolio and the
techniques and strategies that the Manager uses will vary over time. The Fund is
not required to use all of the investment techniques and strategies described
below in seeking its goal. The Fund does not make investments with the objective
of seeking capital growth. However, the values of the securities held by the
Fund may be affected by changes in general interest rates and other factors
prior to their maturity. Because the current value of debt securities varies
inversely with changes in prevailing interest rates, if interest rates increase
after a security is purchased, that security will normally fall in value.
Conversely, should interest rates decrease after a security is purchased,
normally its value will rise.
However, those fluctuations in value will not generally result in realized
gains or losses to the Fund unless the Fund sells the security prior to the
security's maturity. A debt security held to maturity is redeemable by its
issuer at full principal value plus accrued interest. The Fund does not usually
intend to dispose of securities prior to their maturity, but may do so for
liquidity purposes, or because of other factors affecting the issuer that cause
the Manager to sell the particular security. In that case, the Fund could
realize a capital gain or loss on the sale.
There are variations in the credit quality of municipal securities, both
within a particular rating classification and between classifications. These
variations depend on numerous factors. The yields of municipal securities depend
on a number of factors, including general conditions in the municipal securities
market, the size of a particular offering, the maturity of the obligation and
rating (if any) of the issue. These factors are discussed in greater detail
below.
|X| Determining the Average Effective Portfolio Maturity. In seeking to
maintain an average effective portfolio maturity of less than five years, the
Fund may purchase individual securities that have effective maturities of more
or less than five years. The effective maturity of a bond might lengthen if
market interest rates increase, and the effective maturity might shorten if
market interest rates decline. Increasing market interest rates therefore could
cause the average effective maturity of the portfolio to lengthen beyond five
years, absent any portfolio transactions.
If the average effective maturity of the portfolio should exceed five
years, the Fund will not purchase securities that have effective maturities
beyond five years. The Manager might also take steps to reduce the average
effective maturity of the portfolio below five years. Those steps might include
selling bonds with effective maturities beyond five years or buying bonds with
effective maturities less than five years.
In computing the Fund's average effective portfolio maturity, the Manager
intends to use the same effective maturity dates that are shorter than the
bond's stated maturity that are used in the marketplace for evaluating a bond
for trading and pricing purposes. That date might be the date of a mandatory
put, pre-refunded call, optional call or the average life to which a bond is
priced. A bond having a variable coupon rate or anticipated principal prepayment
may be assigned an effective maturity that is shorter than a stated call date,
put date or average life, to reflect more closely the reduced price volatility
expectations as to that bond.
Municipal Securities. The types of municipal securities in which the Fund may
invest are described in the Prospectus under "About the Fund's Investments."
Municipal securities are generally classified as general obligation bonds,
revenue bonds and notes. A discussion of the general characteristics of these
principal types of municipal securities follows below.
|X| Municipal Bonds. Long-term municipal securities (which have a maturity
of more than one year when issued) are classified as "municipal bonds." The
principal classifications of long-term municipal bonds are "general obligation"
and "revenue" bonds (including "industrial development" bonds). They may have
fixed, variable or floating rates of interest, as described below, or may be
"zero-coupon" bonds, as described below.
Some bonds may be "callable," allowing the issuer to redeem them before
their maturity date. To protect bondholders, callable bonds may be issued with
provisions that prevent them from being called for a period of time. Typically,
that is 5 to 10 years from the issuance date. When interest rates decline, if
the call protection on a bond has expired, it is more likely that the issuer may
call the bond. If that occurs, the Fund might have to reinvest the proceeds of
the called bond in bonds that pay a lower rate of return. In turn, that could
reduce the Fund's yield.
o General Obligation Bonds. The basic security behind general obligation bonds
is the issuer's pledge of its full faith and credit and taxing power, if any,
for the repayment of principal and the payment of interest. Issuers of general
obligation bonds include states, counties, cities, towns, and regional
districts. The proceeds of these obligations are used to fund a wide range of
public projects, including construction or improvement of schools, highways and
roads, and water and sewer systems. The rate of taxes that can be levied for the
payment of debt service on these bonds may be limited or unlimited.
Additionally, there may be limits as to the rate or amount of special
assessments that can be levied to meet these obligations.
o Revenue Bonds. The principal security for a revenue bond is generally the net
revenues derived from a particular facility, group of facilities, or, in some
cases, the proceeds of a special excise tax or other specific revenue source.
Revenue bonds are issued to finance a wide variety of capital projects. Examples
include electric, gas, water and sewer systems; highways, bridges, and tunnels;
port and airport facilities; colleges and universities; and hospitals.
Although the principal security for these types of bonds may vary
from bond to bond, many provide additional security in the form of a debt
service reserve fund that may be used to make principal and interest payments on
the issuer's obligations. Housing finance authorities have a wide range of
security, including partially or fully insured mortgages, rent subsidized and/or
collateralized mortgages, and/or the net revenues from housing or other public
projects. Some authorities provide further security in the form of a state's
ability (without obligation) to make up deficiencies in the debt service reserve
fund.
o Industrial Development Bonds. Industrial development bonds are considered
municipal bonds if the interest paid is exempt from federal income tax. They are
issued by or on behalf of public authorities to raise money to finance various
privately operated facilities for business and manufacturing, housing, sports,
and pollution control. These bonds may also be used to finance public facilities
such as airports, mass transit systems, ports, and parking. The payment of the
principal and interest on such bonds is dependent solely on the ability of the
facility's user to meet its financial obligations and the pledge, if any, of
real and personal property financed by the bond as security for those payments.
The Fund will purchase particular industrial development bonds only if the
interest paid on the bonds is tax exempt under the Internal Revenue Code. The
Internal Revenue Code limits the types of facilities that may be financed with
tax-exempt industrial revenue and private-activity bonds (discussed below) and
the amounts of these bonds that each state can issue.
As an operating policy, the Fund will not invest more than 5% of its
assets in securities for which the obligation to pay interest and repay
principal are the responsibility of an industrial user with less than three
year's operating history.
o Private Activity Municipal Securities. The Tax Reform Act of 1986 (the "Tax
Reform Act") reorganized, as well as amended, the rules governing tax exemption
for interest on certain types of municipal securities. The Tax Reform Act
generally did not change the tax treatment of bonds issued in order to finance
governmental operations. Thus, interest on general obligation bonds issued by or
on behalf of state or local governments, the proceeds of which are used to
finance the operations of such governments, continues to be tax-exempt. However,
the Tax Reform Act limited the use of tax-exempt bonds for non-governmental
(private) purposes. More stringent restrictions were placed on the use of
proceeds of such bonds. Interest on certain private activity bonds is taxable
under the revised rules. There is an exception for "qualified" tax-exempt
private activity bonds, for example, exempt facility bonds including certain
industrial development bonds, qualified mortgage bonds, qualified Section
501(c)(3) bonds, and qualified student loan bonds.
In addition, limitations as to the amount of private activity bonds which
each state may issue were revised downward by the Tax Reform Act, which will
reduce the supply of such bonds. The value of the Fund's portfolio could be
affected if there is a reduction in the availability of such bonds.
Interest on certain private activity bonds issued after August 7, 1986,
which continues to be tax-exempt, will be treated as a tax preference item
subject to the alternative minimum tax (discussed below) to which certain
taxpayers are subject. The Fund may hold municipal securities the interest on
which (and thus a proportionate share of the exempt-interest dividends paid by
the Fund) will be subject to the federal alternative minimum tax on individuals
and corporations.
The federal alternative minimum tax is designed to ensure that all persons
who receive income pay some tax, even if their regular tax is zero. This is
accomplished in part by including in taxable income certain tax preference items
that are used to calculate alternative minimum taxable income. The Tax Reform
Act made tax-exempt interest from certain private activity bonds a tax
preference item for purposes of the alternative minimum tax on individuals and
corporations. Any exempt-interest dividend paid by a regulated investment
company will be treated as interest on a specific private activity bond to the
extent of the proportionate relationship the interest the investment company
receives on such bonds bears to all its exempt interest dividends.
In addition, corporate taxpayers subject to the alternative minimum tax
may, under some circumstances, have to include exempt-interest dividends in
calculating their alternative minimum taxable income. That could occur in
situations where the "adjusted current earnings" of the corporation exceeds its
alternative minimum taxable income.
To determine whether a municipal security is treated as a taxable private
activity bond, it is subject to a test for: (a) a trade or business use and
security interest, or (b) a private loan restriction. Under the trade or
business use and security interest test, an obligation is a private activity
bond if: (i) more than 10% of the bond proceeds are used for private business
purposes and (ii) 10% or more of the payment of principal or interest on the
issue is directly or indirectly derived from such private use or is secured by
the privately used property or the payments related to the use of the property.
For certain types of uses, a 5% threshold is substituted for this 10% threshold.
The term "private business use" means any direct or indirect use in a
trade or business carried on by an individual or entity other than a state or
municipal governmental unit. Under the private loan restriction, the amount of
bond proceeds that may be used to make private loans is limited to the lesser of
5% of the proceeds or $5.0 million. Thus, certain issues of municipal securities
could lose their tax-exempt status retroactively if the issuer fails to meet
certain requirements as to the expenditure of the proceeds of that issue or the
use of the bond-financed facility. The Fund makes no independent investigation
of the users of such bonds or their use of proceeds of the bonds. If the Fund
should hold a bond that loses its tax-exempt status retroactively, there might
be an adjustment to the tax-exempt income previously distributed to
shareholders.
Additionally, a private activity bond that would otherwise be a qualified
tax-exempt private activity bond will not, under Internal Revenue Code Section
147(a), be a qualified bond for any period during which it is held by a person
who is a "substantial user" of the facilities or by a "related person" of such a
substantial user. This "substantial user" provision applies primarily to exempt
facility bonds, including industrial development bonds. The Fund may invest in
industrial development bonds and other private activity bonds. Therefore, the
Fund may not be an appropriate investment for entities which are "substantial
users" (or persons related to "substantial users") of such exempt facilities.
Those entities and persons should consult their tax advisors before purchasing
shares of the Fund.
A "substantial user" of such facilities is defined generally as a
"non-exempt person who regularly uses part of a facility" financed from the
proceeds of exempt facility bonds. Generally, an individual will not be a
"related person" under the Internal Revenue Code unless such individual or the
individual's immediate family (spouse, brothers, sisters and immediate
descendants) own directly or indirectly in the aggregate more than 50% in value
of the equity of a corporation or partnership which is a "substantial user" of a
facility financed from the proceeds of exempt facility bonds.
|X| Municipal Notes. Municipal securities having a maturity (when the
security is issued) of less than one year are generally known as municipal
notes. Municipal notes generally are used to provide for short-term working
capital needs. Some of the types of municipal notes the Fund can invest in are
described below.
o Tax Anticipation Notes. These are issued to finance working capital needs of
municipalities. Generally, they are issued in anticipation of various seasonal
tax revenue, such as income, sales, use or other business taxes, and are payable
from these specific future taxes.
o Revenue Anticipation Notes. These are notes issued in expectation of receipt
of other types of revenue, such as federal revenues available under federal
revenue-sharing programs.
o Bond Anticipation Notes. Bond anticipation notes are issued to provide interim
financing until long-term financing can be arranged. The long-term bonds that
are issued typically also provide the money for the repayment of the notes.
o Construction Loan Notes. These are sold to provide project construction
financing until permanent financing can be secured. After successful completion
and acceptance of the project, it may receive permanent financing through public
agencies, such as the Federal Housing Administration.
|X| Tax-Exempt Commercial Paper. This type of short-term obligation
(usually having a maturity of 270 days or less) is issued by a municipality to
meet current working capital needs.
|X| Municipal Lease Obligations. The Fund's investments in municipal lease
obligations may be through certificates of participation that are offered to
investors by public entities. Municipal leases may take the form of a lease or
an installment purchase contract issued by a state or local government authority
to obtain funds to acquire a wide variety of equipment and facilities.
Some municipal lease securities may be deemed to be "illiquid" securities.
Their purchase by the Fund would be limited as described below in "Illiquid
Securities." Municipal lease obligations that the Manager has determined to be
liquid under guidelines set by the Board of Trustees are not subject to the
Fund's 15% limit on investments in illiquid securities.
Those guidelines require the Manager to evaluate:
o the frequency of trades and price quotations for such securities;
o the number of dealers or other potential buyers willing to purchase or sell
such securities;
o the availability of market-makers; and
o the nature of the trades for such securities.
Municipal leases have special risk considerations. Although lease
obligations do not constitute general obligations of the municipality for which
the municipality's taxing power is pledged, a lease obligation is ordinarily
backed by the municipality's covenant to budget for, appropriate and make the
payments due under the lease obligation. However, certain lease obligations
contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in future years unless
money is appropriated for that purpose on a yearly basis. While the obligation
might be secured by the lease, it might be difficult to dispose of that property
in case of a default.
Projects financed with certificates of participation generally are not
subject to state constitutional debt limitations or other statutory requirements
that may apply to other municipal securities. Payments by the public entity on
the obligation underlying the certificates are derived from available revenue
sources. That revenue might be diverted to the funding of other municipal
service projects. Payments of interest and/or principal with respect to the
certificates are not guaranteed and do not constitute an obligation of a state
or any of its political subdivisions.
Municipal leases may also be subject to "abatement risk." The leases
underlying certain municipal lease obligations may state that lease payments are
subject to partial or full abatement. That abatement might occur, for example,
if material damage to or destruction of the leased property interferes with the
lessee's use of the property. However, in some cases that risk might be reduced
by insurance covering the leased property, or by the use of credit enhancements
such as letters of credit to back lease payments, or perhaps by the lessee's
maintenance of reserve funds for lease payments.
In addition, municipal lease securities do not have as highly liquid a
market as conventional municipal bonds. Municipal leases, like other municipal
debt obligations, are subject to the risk of non-payment of interest or
repayment of principal by the issuer. The ability of issuers of municipal leases
to make timely lease payments may be adversely affected in general economic
downturns and as relative governmental cost burdens are reallocated among
federal, state and local governmental units. A default in payment of income
would result in a reduction of income to the Fund. It could also result in a
reduction in the value of the municipal lease and that, as well as a default in
repayment of principal, could result in a decrease in the net asset value of the
Fund. While the Fund holds these securities, the Manager will evaluate the
likelihood of a continuing market for these securities and their credit quality.
The Fund attempts to reduce its exposure to some of these risks by not
investing more than 10% of its total assets in municipal leases obligations that
contain "non-appropriation" clauses. Also, the Fund will invest in leases with
non-appropriation clauses only if certain conditions are met:
o the nature of the leased equipment or property is such that its ownership
or use is essential to a governmental function of a municipality,
o appropriate covenants are obtained from the municipal obligor prohibiting
the substitution or purchase of similar equipment if lease payments are not
appropriated,
o the lease obligor has maintained good market acceptability in the past,
o the investment is of a size that will be attractive to institutional
investors, and
o the underlying leased equipment has elements of portability and/or use
that enhance its marketability if foreclosure is ever required on the
underlying equipment.
|X| Credit Ratings of Municipal Securities. Ratings by ratings
organizations such as Moody's Investors Service, Standard & Poor's Ratings
Services and Fitch IBCA, Inc. represent the respective rating agency's opinions
of the credit quality of the municipal securities they undertake to rate.
However, their ratings are general opinions and are not guarantees of quality.
Municipal securities that have the same maturity, coupon and rating may have
different yields, while other municipal securities that have the same maturity
and coupon but different ratings may have the same yield.
After the Fund buys a municipal security, it may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event requires the Fund to sell the security, but the Manager will
consider such events in determining whether the Fund should continue to hold the
security. To the extent that ratings given by Moody's, Standard & Poor's, or
Fitch change as a result of changes in those rating organizations or their
rating systems, the Fund will attempt to use comparable ratings as standards for
investments in accordance with the Fund's investment policies.
The Fund may buy municipal securities that are "pre-refunded." The
issuer's obligation to repay the principal value of the security is generally
collateralized with U.S. government securities placed in an escrow account. As a
result, the pre-refunded security has essentially the same risks of default as
an AAA-rated security.
The rating definitions of Moody's, Standard & Poor's, Duff & Phelps and
Fitch for municipal securities are contained in Appendix A to this Statement of
Additional Information. The Fund can purchase securities that are unrated by
nationally recognized rating organizations. The Manager will make its own
assessment of the credit quality of unrated issues the Fund buys. The Manager
will use criteria similar to those used by the rating agencies, and assign a
rating category to a security that is comparable to what the Manager believes a
rating agency would assign to that security. However, the Manager's rating does
not constitute a guarantee of the quality of a particular issue.
In evaluating the credit quality of a particular security, whether it is
rated or unrated, the Manager will normally take into consideration a number of
factors. Among them are the financial resources of the issuer, or the underlying
source of funds for debt service on a security, the issuer's sensitivity to
economic conditions and trends, any operating history of the facility financed
by the obligation and the degree of community support for it, the capabilities
of the issuer's management and regulatory factors affecting the issuer and the
particular facility.
o Special Risks of Lower-Grade Securities. The Fund can invest up to 5% of its
assets in securities rated below investment grade. These are commonly referred
to as "junk bonds." Lower grade securities may have a higher yield than
securities rated in the higher rating categories. In addition to having a
greater risk of default than higher-grade, securities, there may be less of a
market for these securities. As a result they may be harder to sell at an
acceptable price. The additional risks mean that the Fund may not receive the
anticipated level of income from these securities, and the Fund's net asset
value may be affected by declines in the value of lower-grade securities.
However, because the added risk of lower quality securities might not be
consistent with the Fund's policy of prudent investment management, the Fund
limits its investments in lower quality securities and does not buy securities
rated below "Ba" by Moody's or "BB" by Standard & Poor's or Fitch (or unrated
securities that the Manager deems to be of comparable quality).
<PAGE>
While securities rated "Baa" by Moody's or "BBB" by Standard & Poor's or
Duff & Phelps are investment grade, they may be subject to special risks and
have some speculative characteristics.
In the event of unanticipated financial difficulties, default or
bankruptcy of an issuer of an obligation or the underlying source of funds for
debt service on an obligation the Fund owns, the Fund can take such action as
the Manager considers appropriate. That might include, for example, retaining
the services of persons, firms, professional organizations and others to
evaluate or protect real estate, facilities or other assets securing the
obligation or acquired by the Fund as a result of such event. The Fund will
incur additional costs in taking protective action with respect to portfolio
obligations that are in default or the assets securing those obligations. As a
result, the Fund's share prices could be adversely affected. Any income derived
from the Fund's ownership or operation of assets acquired as a result of these
types of actions might not be tax-exempt.
Special Investment Considerations - New York Municipal Securities. . As
explained in the Prospectus, the Fund concentrates its investment in securities
issued by the State of New York, its agencies, authorities and
instrumentalities. Therefore the Fund's investments are highly sensitive to the
fiscal stability of New York State (referred to in the section as the "State")
and its subdivisions, agencies, instrumentalities or authorities, including New
York City, which issue the municipal securities in which the Fund invests. The
following information on risk factors in concentrating in New York municipal
securities is only a summary, based the State's Annual Information Statement,
dated August 24, 1999, as supplemented on October 20, 1999 and as updated on
February 3, 2000, and on publicly available official statements relating to
offerings of the City of municipal securities on or prior to November 3, 1999,
and it does not purport to be a complete description of the considerations
contained therein. No representation is made as to the accuracy of this
information.
During the mid-1970's the State, some of its agencies, instrumentalities
and public benefit corporations (the "Authorities"), and certain of its
municipalities faced serious financial difficulties. To address many of these
financial problems, the State developed various programs, many of which were
successful in reducing the financial crisis. Any further financial problems
experienced by these Authorities or municipalities could have a direct adverse
effect on the New York municipal securities in which the Fund invests.
|X| Factors Affecting Investments in New York State Securities. The
forecast of the State's economy shows continued expansion during the 1999 and
2000 calendar years, with employment growth gradually slowing from the 1998
calendar year. The financial and business service sectors are expected to
continue to do well, while employment in the manufacturing and government
sectors are expected to post only small, if any, declines. On an average annual
basis, the employment growth rate in the State is expected to be lower than in
1998. Personal income is expected to have recorded moderate gains in 1999. Wage
growth in 1999 and 2000 is expected to have been slower than in the 1998
calendar year, because the recent robust growth in bonus payments has moderated.
The forecast for continued growth, and any resultant impact on the State
Plan, contains some uncertainties. Stronger-than-expected gains in employment
and wages could lead to surprisingly strong growth in consumer spending.
Investments could also remain robust. Conversely, net exports could plunge even
more sharply than expected, with adverse impacts on the growth of both consumer
spending and investment. The inflation rate may differ significantly from
expectations due to the upward pressure of a tight labor market and the downward
pressure of price reductions emanating from the current economic weakness in
Asia. In addition, the State economic forecast could over- or under-estimate the
level of future bonus payments or inflation growth, resulting in forecasted
average wage growth that could differ significantly from actual growth.
Similarly, the State forecast could fail to correctly account for declines in
banking employment and the direction of employment change that is likely to
accompany telecommunications and energy deregulation.
The national economy has maintained a robust rate of growth with over 16.9
million jobs added nationally since early 1992. The State economy has continued
to expand, but growth remains somewhat slower than in the nation. Although the
State has added over 400,000 jobs since late 1992, employment growth in the
State has been hindered during recent years by significant cutbacks in the
computer and instrument manufacturing, utility, defense and banking industries.
Government downsizing has also moderated these job gains.
The 1999-2000 Fiscal Year. The 1999-2000 State Plan projects a closing
balance of $2.85 billion in the General Fund. Total receipts and transfers from
other funds are projected to reach $39.31 billion, and increase of over $2.57
billion from the prior fiscal year, and disbursements and transfers to other
funds are projected to be $37.36 billion, an increase of $868 million from the
total disbursed in the prior fiscal year.
As a result of the late budget, the State issued its Annual Information
Statement and the first of the three required quarterly updates (the "First
Quarterly Update") to the State Plan on August 24, 1999. The State issued its
second quarterly update to the State Plan (the "Mid-Year Update") on October 29,
1999. The Mid-Year Update projected continued balance in the State's 1999-2000
Financial Plan with estimated receipts and transfers of $39.32 Billion,
increased by $15 million as compared to the First Quarterly Update. The State
also lowered its disbursement projections by $10 million, with total
disbursements of $37.35 billion expected for the current fiscal year. The
additional receipts and lower disbursements increased the State's projected
cash-basis surplus by $25 million over the First Quarterly Update. The State
earmarked the additional resources for the Contingency Reserve Fund. The State
Plan projected a closing balance in the General Fund of $2.87 billion. The
balance was comprised of $1.82 billion reserved to finance already-enacted tax
cuts, $473 million in the Tax Stabilization Reserve Fund, $250 million in the
Debt Reduction Reserve Fund, $132 million in the Contingency Reserve Fund (after
the proposed deposit of $25 million) and $200 million in the Community Projects
Fund.
The State issued its Third Quarterly Update to the 1999-2000 Financial
Plan on January 11, 2000, in conjunction with the release of the 2000-01
Executive Budget. On January 31, 2000, the Governor submitted amendments to his
2000-01 Executive Budget as permitted by law. Accordingly, the State published a
revised Financial Plan on January 31, 2000 that reflects the impact of the
Governor's amendments. The State revised the cash-basis 1999-2000 State
Financial Plan on January 11, 2000, with the release of the 2000-01 Executive
Budget. The State updated the Financial Plan on January 31, 2000 to reflect the
Governor's amendments to his Executive Budget. After these changes, the Division
of the Budget (the "DoB") now expects the State to close the 1999-2000 fiscal
year with an available cash surplus of $758 million in the General Fund, an
increase of $733 million over the surplus estimate in the Mid-Year Update. The
larger projected surplus derives from $499 million in net higher projected
receipts and $259 million in net lower estimated disbursements. The DoB revised
both its projected receipts and disbursements based on a review of actual
operating results through December 1999, as well as an analysis of underlying
economic and programmatic trends it believes may affect the Financial Plan for
the balance of the year. The State plans to use the entire $758 million surplus
to make additional deposits to reserve funds. At the close of the current fiscal
year, the State expects to deposit $75 million from the surplus into the State's
Tax Stabilization Reserve Fund. In the 2000-01 Executive Budget, as amended, the
Governor is proposing to use the remaining $683 million from the 1999-2000
surplus to fully finance the estimated 2001-02 and 2002-03 costs of his proposed
tax reduction package ($433 million) and to increase the Debt Reduction Reserve
Fund ($250 million). Through the first nine months of 1999-2000, General Fund
receipts, including transfers from other funds, have totaled $30.07 billion.
General Fund disbursements, including transfers to other funds, totaled $25.19
billion over the same period.
Projections of total State receipts in the State Plan are based on the
State tax structure in effect during the fiscal year and on assumptions relating
to basic economic factors and their historical relationships to State tax
receipts. In preparing projections of State receipts, economic forecasts
relating to personal income, wages, consumption, profits and employment have
been particularly important. The projection of receipts from most tax or revenue
sources is generally made by estimating the change in yield of such tax or
revenue source caused by economic and other factors, rather than by estimating
the total yield of such tax or revenue source from its estimated tax base. The
forecasting methodology, however, ensures that State fiscal year collection
estimates for taxes that are based on a computation of annual liability, such as
the business and personal income taxes, are consistent with estimates of total
liability under those taxes.
Projections of total State disbursements are based on assumptions relating
to economic and demographic factors, levels of disbursements for various
services provided by local governments (where the cost is partially reimbursed
by the State), and the results of various administrative and statutory
mechanisms in controlling disbursements for State operations. Factors that may
affect the level of disbursements in the fiscal year include uncertainties
relating to the economy of the nation and the State, the policies of the federal
government, and changes in the demand for and use of State services.
In recent years, State actions affecting the level of receipts and
disbursements, the relative strength of the State and regional economy, and
actions of the federal government have help to create projected structural
budget gaps for the State. These gaps result from a significant disparity
between recurring revenues and the costs of maintaining or increasing the level
of support for State programs. To address a potential imbalance in any given
fiscal year, the State would be required to take actions to increase receipts
and/or reduce disbursements as it enacts the budget for that year, and under the
State Constitution, the Governor is required to propose a balanced budget each
year. There can be no assurance, however, that the legislature will enact the
Governor's proposals or that the State's actions will be sufficient to preserve
budgetary balance in a given fiscal year or to align recurring receipts and
disbursements in future fiscal years.
o State Governmental Funds Group. Substantially all State non-pension
financial operations are accounted for in the State's governmental
funds group. Governmental funds include:
o the General Fund, which receives all income not required by law to be
deposited in another fund;
o Special Revenue Funds, which receive most of the money the State gets
from the federal government and other income the use of which is
legally restricted to certain purposes;
o Capital Projects Funds, used to finance the acquisition and
construction of major capital facilities by the State and to aid in
certain projects conducted by local governments or public authorities;
and
o Debt Service Funds, which are used for the accumulation of money for
the payment of principal of and interest on long-term debt and to meet
lease-purchase and other contractual-obligation commitments.
2000-01 Fiscal Year (Executive Budget Forecast). The Governor presented
his 2000-01 Executive Budget to the Legislature on January 10, 2000. The
Executive Budget contains financial projections for the State's 1999-2000
through 2002-03 fiscal years, a detailed explanation of receipts estimates and
the economic forecast on which it is based, and a proposed Capital Program and
Financing Plan for the 2000-01 through 2004-05 fiscal years. On January 31,
2000, the Governor submitted amendments to his Executive Budget, the most
significant of which recommends eliminating all gross receipts taxes on energy
providers. There can be no assurance that the Legislature will enact into law
the Governor's Executive Budget, as amended, or that the State's adopted budget
projections will not differ materially and adversely from the projections set
forth in this Update.
The 2000-01 Financial Plan is projected to have receipts in excess of
disbursements on a cash basis in the General fund, after accounting for the
transfer of available receipts from 1999-2000 to 2000-01. Under the Governor's
Executive Budget, as amended, total General Fund receipts, including transfers
from the other funds, are projected at $38.62 billion, an increase of $1.28
billion (3.4 percent) over the current fiscal year. General Fund disbursements,
including transfers to other funds, are recommended to grow by 2.3 percent to
$37.93 billion, an increase of $869 million over 1999-2000. State Funds spending
(the portion of the budget supported exclusively by State taxes, fees, and
revenues) is projected to total $52.46 billion, an increase of $2.57 billion or
5.1 percent. Spending from All Governmental Funds is expected to grow by 5.5
percent, increasing by $4.0 billion to $76.82 billion.
The economic forecast of the state has also been modified for 2000 and
2001 from the mid-year forecast to reflect a stronger-than-expected economy.
Continued growth is projected for 2000 and 2001 for employment, wages, and
personal income, although the growth in employment will moderate from the 1999
pace. Personal income is estimated to have grown by 4.7 percent in 1999, fueled
in part by a large increase in financial sector bonus payments at the year's
end. Personal income is projected to grow 5.5 percent in 2000 and 4.8 percent
2001. Total bonus payments are projected to increase by 11 percent in 2000 and
10.5 percent in 2001. Overall employment growth is expected to continue at a
more modest pace than in 1999, reflecting the slower growth in the national
economy, continued spending restraint by government employers, and restructuring
in the manufacturing, health care, social service, and banking sectors.
Many uncertainties exist in any forecast of the national and State
economies. Given the recent volatility in the international and domestic
financial markets, such uncertainties are particularly present at this time. The
timing and impact of changes in economic conditions are difficult to estimate
with a high degree of accuracy. Unforeseeable events may occur. The actual rate
of change, in any, or all, of the concepts that are forecasted may differ
substantially and adversely from the outlook described.
o Local Government Assistance Corporation. In 1990, as part of a State fiscal
reform program, legislation was enacted creating Local Government Assistance
Corporation, a public benefit corporation empowered to issue long-term
obligations to fund payments to local governments that had been traditionally
funded through the State's annual seasonal borrowing. The legislation authorized
the corporation to issue its bonds and notes in an amount not in excess of $4.7
billion (exclusive of certain refunding bonds). Over a period of years, the
issuance of these long-term obligations, which are to be amortized over no more
than 30 years, was expected to eliminate the need for continued short-term
seasonal borrowing.
The legislation also dedicated revenues equal to one-quarter of the
four-cent State sales and use tax to pay debt service on these bonds. The
legislation also imposed a cap on the annual seasonal borrowing of the State at
$4.7 billion, less net proceeds of bonds issued by the corporation and bonds
issued to provide for capitalized interest. An exception is in cases where the
Governor and the legislative leaders have certified the need for additional
borrowing and have provided a schedule for reducing it to the cap. If borrowing
above the cap is thus permitted in any fiscal year, it is required by law to be
reduced to the cap by the fourth fiscal year after the limit was first exceeded.
This provision capping the seasonal borrowing was included as a covenant with
the corporation's bondholders in the resolution authorizing such bonds.
As of June 1995, the corporation had issued bonds and notes to provide net
proceeds of $4.7 billion completing the program. The impact of its borrowing, as
well as other changes in revenue and spending patterns, is that the State has
been able to meet its cash flow needs throughout the fiscal year without relying
on short-term seasonal borrowings.
|X| Authorities. The fiscal stability of the State is related to the
fiscal stability of its public Authorities. Authorities have various
responsibilities, including those which finance, construct and/or operate
revenue-producing public facilities. Authorities are not subject to the
constitutional restrictions on the incurrence of debt which apply to the State
itself, and may issue bonds and notes within the amounts, and restrictions set
forth in their legislative authorization. As of December 31, 1998, there were 17
Authorities that had outstanding debt of $100 million or more and the aggregate
outstanding debt, including refunding bonds, of all Authorities was $94 billion,
only a portion of which constitutes State-supported or State-related debt.
Authorities are generally supported by revenues generated by the projects
financed or operated, such as tolls charged for use of highways, bridges or
tunnels, charges for electric power, electric and gas utility services, rentals
charged for and housing units and charges for occupancy at medical care
facilities. In addition, State legislation authorizes several financing
techniques for Authorities. There are statutory arrangements providing for State
local assistance payments otherwise payable to localities to be made under
certain circumstances to Authorities. Although the State has no obligation to
provide additional assistance to localities whose local assistance payments have
been paid to Authorities under these arrangements, if local assistance payments
are diverted, the affected localities could seek additional State assistance.
Some Authorities also receive moneys from State appropriations to pay for the
operating costs of certain of their programs.
|X| Ratings of the State's Securities. S&P rates the State's general
obligation bonds A, Moody's rates the State's general obligation bonds A2.
Ratings reflect only the respective views of such organizations, and an
explanation of the significance of such ratings must be obtained from the rating
agency furnishing the same. There is no assurance that a particular rating will
continue for any given period of time or that any such rating will not be
revised downward or withdrawn entirely if, in the judgment of the agency
originally establishing the rating, circumstances so warrant. A downward
revision or withdrawal of such ratings, or either of them, may have an effect on
the market price of the State municipal securities in which the Fund invests.
Ratings reflect only the views of the ratings organizations, and an
explanation of the significance of a rating may be obtained from the rating
agency furnishing the rating. There is no assurance that a particular rating
will continue for any given period of time or that a rating will not be revised
downward or withdrawn entirely, if, in the judgment of the agency originally
establishing the rating, circumstances warrant. A downward revision or
withdrawal of a ratings, could have an effect on the market price of the State
municipal securities in which the Fund invests.
|X| The State's General Obligation Debt. As of March 31, 1999, the State
had approximately $4.78 billion in general obligation bonds outstanding
including $185 million in bond anticipation notes. Principal and interest due on
general obligation bonds and interest due on bond anticipation notes were $748.2
million for the 1998-99 fiscal year and are estimated to be $730.7 million for
the State's 1999-2000 fiscal year.
|X| Pending Litigation. The State is a defendant in numerous legal
proceedings pertaining to matters incidental to the performance of routine
governmental operations. That litigation includes, but is not limited to, claims
asserted against the State arising from alleged torts, alleged breaches of
contracts, condemnation proceedings and other alleged violations of state and
federal laws. These proceedings could affect adversely the financial condition
of the State in the 1999-2000 fiscal year or thereafter.
The State believes that the State Plan includes sufficient reserves for
the payment of judgments that may be required during the 1999-2000 fiscal year.
There can be no assurance, however, that an adverse decision in any of these
proceedings would not exceed the amount the State Plan reserves for the payment
of judgments and, therefore, could affect the ability of the State to maintain a
balanced 1999-2000 State Plan. The General Purpose Financial Statements for the
1998-1999 fiscal year report estimated probable awarded and anticipated
unfavorable judgments of $895 million, of which $132 million is expected to be
paid during the 1999-2000 fiscal year.
In addition, the State is party to other claims and litigations that its
legal counsel has advised are not probable of adverse court decisions or are not
deemed to be materially adverse. Although, the amounts of potential losses, if
any, are not presently determinable, it is the State's opinion that its ultimate
liability in these cases is not expected to have a material adverse effect on
the State's financial position in the 1999-2000 fiscal year or thereafter.
|X| Other Functions. Certain localities in addition to the City could have
financial problems leading to requests for additional State assistance during
the State's current fiscal year and thereafter. The potential impact on the
State of such actions by localities is not included in the projections of the
State receipts and disbursements in the State's 1999-2000 fiscal year.
|X| Factors Affecting Investments in New York City Municipal Securities.
The fiscal health of New York City (the "City") has a more significant effect on
the fiscal health of the State than any other municipality. The national
economic downturn which began in July 1990 adversely affected the local economy
which had been declining since late 1989. As a result, the City experienced job
losses in 1990 and 1991 and real Gross City Product fell in those two years.
Beginning in 1992, the improvement in the national economy helped stabilize
conditions in the City. Employment losses moderated toward year-end and real
Gross City Product increased, boosted by strong wage gains. After noticeable
improvements in the City's economy during 1994, economic growth slowed in 1995.
It improved commencing in calendar year 1996, reflecting improved securities
industry earnings and employment in other sectors. Overall, the City's economic
improvement accelerated significantly in 1997 and 1998. Much of the increase can
be traced to the performance of the securities industry, but the City's economy
also produced gains in the retail trade sector, the hotel and tourism industry,
and business services, with private sector employment higher than previously
forecasted. The City's current financial plan assumes that, after strong growth
in 1998-1999 moderate economic growth will occur through calendar year 2003,
with moderating job growth and wage increases.
For each of the 1981 through 1998 fiscal years, the City had an operating
surplus, before discretionary and other transfers, and achieved balanced
operating results as reported in accordance with generally accepted accounting
principles. The City has been required to close substantial gaps between
forecast revenues and forecast expenditures in order to maintain balanced
operating results. There can be no assurance that the City will continue to
maintain balanced operating results as required by State law without tax or
other revenue increases or reductions in City services or entitlement programs,
which could adversely affect the City's economic base.
The Mayor is responsible for preparing the City's financial plan,
including the City's current financial plan for the 2000 through 2003 fiscal
years (referred to below as the "2000-2003 Financial Plan", or "Financial
Plan").
The City's projections set forth in the Financial Plan are based on
various assumptions and contingencies which are uncertain and which may not
materialize. Implementation of the Financial Plan is dependent upon the City's
ability to market its securities successfully. The City's financing program for
fiscal years 2000 through 2003 contemplates the issuance of $7.449 billion of
general obligation bonds and $3.35 billion of bonds to be issued by the New York
City Transitional Finance Authority (the "Finance Authority") to finance City
capital projects. In addition, it is currently expected that approximately $2.4
billion of bonds will be issued by the Tobacco Settlement Asset Securitization
Corporation ("TSASC") and paid from revenues received from a settlement with
leading tobacco companies. The Finance Authority and TSASC were created to
assist the City in financing its capital program while keeping the City's
indebtedness within the forecast level of the constitutional restrictions on the
amount of debt the City is authorized to incur. If TSASC is unable to issue
bonds in the amount expected, the City will need to find another source of
financing or substantially curtail or halt its capital program.
In addition, the City issues revenue and tax anticipation notes to finance
its seasonal working capital requirements. The success of projected public sales
of City bonds and notes, New York City Municipal Water Finance Authority ("Water
Authority") bonds, Finance Authority bonds and TSASC bonds will be subject to
prevailing market conditions. The City's planned capital and operating
expenditures are dependent upon the sale of its general obligation bonds and
notes, and the Water Authority, Finance Authority and TSASC bonds. Future
developments concerning the City and public discussion of such developments, as
well as prevailing market conditions, may affect the market for outstanding City
general obligation bonds and notes.
The City Comptroller and other agencies and public officials issue reports
and make public statements which, among other things, state that projected
revenues and expenditures may be different from those forecasted in the City's
Financial Plan. It is reasonable to expect that such reports and statements will
continue to be issued and to engender public comment.
|X| The City's 2000-2003 Financial Plan. The Financial Plan projects
revenues and expenditures for the 2000 fiscal year balanced in accordance with
GAAP and projects gaps of $1.8 billion, $1.9 billion and $1.8 billion for the
years 2001 through 2003, respectively. The Financial Plan takes into account an
increase in projected tax revenues in fiscal years 2000 through 2003; projected
resources in fiscal years 2000 through 2003, respectively, from the receipt by
the City of funds from the settlement of litigation with the leading cigarette
companies; a reduction in the assumed collection of projected rent payments for
the City's airports and a delay in the receipt of such payments from fiscal year
2000 to fiscal year 2001; net increases in spending in fiscal years 2000 through
2003, including spending for Medicaid, education initiatives, anti-smoking
programs, employee fringe benefit costs, and other agency programs. In addition,
the Financial Plan includes a proposed discretionary transfer in fiscal year
2000 to pay debt service due in fiscal year 2001 totaling $429 million, and a
proposed discretionary transfer in fiscal year 2001 to pay debt service due in
fiscal year 2002 totaling $345 million.
The Financial Plan is based on numerous assumptions, including the
condition of the City's and the region's economies and modest employment growth
and the concomitant receipt of economically sensitive tax revenues in the
amounts projected. The Financial Plan is subject to various other uncertainties
and contingencies relating to, among other factors, the extent, if any, to which
wage increases for City employees exceed the annual wage costs assumed for the
2000 through 2003 fiscal years; continuation of projected interest earnings
assumptions for pension fund assets and current assumptions with respect to
wages for City employees affecting the City's required pension fund
contributions; the willingness and ability of the State to provide the aid
contemplated by the Financial Plan and to take various other actions to assist
the City; the ability of the Health and Hospitals Corporation, the Board of
Education and other such agencies to maintain balanced budgets; the willingness
of the federal government to provide the amount of federal aid contemplated in
the Financial Plan; the impact on City revenues and expenditures of federal and
State welfare reform and any future legislation affecting Medicare or other
entitlement programs; adoption of the City's budgets by the City Council in
substantially the forms submitted by the Mayor; the ability of the City to
implement cost reduction initiatives, and the success with which the City
controls expenditures; the impact of conditions in the real estate market on
real estate tax revenues; the City's ability to market its securities
successfully in the public credit markets; and unanticipated expenditures that
may be incurred as a result of the need to maintain the City's infrastructure.
On July 14, 1999, the City Comptroller issued a report, which projected a
surplus for fiscal year 2000 of between $223 million and $891 million. In
addition, the report projected budget gaps of between $1.8 billion and $3.5
billion, $1.7 billion and $3.6 billion, and $1.7 billion and $4.1 billion in
fiscal years 2001 through 2003, respectively. The report further noted that the
City Comptroller's forecast is contingent on the continued growth of the City
economy and that the fear of renewed inflationary pressures has created
uncertainty in the bond market which may dampen economic growth in the future.
The City depends on aid from the State both to enable the City to balance
its budget and to meet its cash requirements. There can be no assurance that
there will not be reductions in State aid to the City from amounts currently
projected; that, in future years, State budgets will be adopted by the April 1
statutory deadline, or interim appropriations will be enacted; or that any such
reductions or delays will not have adverse effects on the City's cash flow or
expenditures. In addition, the federal budget negotiation process could result
in a reduction or a delay in the receipt of federal grants, which could have
additional adverse effects on the City's cash flow or revenues.
Various actions proposed in the City's Financial Plan are uncertain. If
these measures cannot be implemented, the City will be required to take other
actions to decrease expenditures or increase revenues to maintain a balanced
financial plan.
|X| Ratings of the City's Bonds. Moody's Investors Service, Inc. has rated
the City's general obligation bonds "A3." Standard & Poor's Ratings Group has
rated those bonds "A-." Fitch IBCA, Inc. has rated these bonds "A." Those
ratings reflect only the views of Moody's, Standard & Poor's and Fitch from
which an explanation of the significance of such ratings may be obtained. There
is no assurance that those ratings will continue for any given period of time or
that they will not be revised downward or withdrawn entirely. Any downward
revision or withdrawal could have an adverse effect on the market prices of the
City's bonds. On July 10, 1995, Standard & Poor's revised its rating of City
bonds downward to "BBB+." On July 16, 1998, Standard & Poor's revised its rating
of City bonds upward to "A-." Moody's rating of City bonds was revised in
February 1998 to "A3" from "Baal." On March 8, 1999, Fitch revised its rating of
City bonds upward to "A."
|X| The City's Outstanding Indebtedness. As of September 30, 1999, the
City and the Municipal Assistance Corporation for the City of New York had,
respectively, $26.315 billion and $2.846 billion of outstanding net long-term
debt.
The City depends on the State for State aid both to enable the City to
balance its budget and to meet its cash requirements. There can be no assurance
that there will not be reductions in State aid to the City from amounts
currently projected; that State budgets in future fiscal years will be adopted
by the April 1 statutory deadline, or interim appropriations enacted; or that
any such reductions or delays will not have adverse effects on the City's cash
flow or expenditures.
|X| Pending Litigation. The City is a defendant in lawsuits pertaining to
material matters, including claims asserted that are incidental to performing
routine governmental and other functions. That litigation includes, but is not
limited to, actions commenced and claims asserted against the City arising out
of alleged constitutional violations, torts, breaches of contract, and other
violations of law and condemnation proceedings. While the ultimate outcome and
fiscal impact, if any, of the proceedings and claims brought against the City
are not currently predictable, adverse determinations in certain of them might
have a material adverse effect upon the City's ability to carry out the
Financial Plan. The 2000-2003 Financial Plan includes provisions for the payment
of claims of $393 million, $407 million, $429 million and $448 million for the
2000 through 2003 fiscal years, respectively. As of June 30, 1999, the City
estimates its potential future liability for outstanding claims against it to be
$3.5 billion.
Other Investment Techniques and Strategies. In seeking its objective, the Fund
may from time to time employ the types of investment strategies and investments
described below. It is not required to use all of these strategies at all times,
and at times may not use some of them.
|X| Floating Rate and Variable Rate Obligations. Variable rate obligations
may have a demand feature that allows the Fund to tender the obligation to the
issuer or a third party prior to its maturity. The tender may be at par value
plus accrued interest, according to the terms of the obligations.
The interest rate on a floating rate note is based on a stated prevailing
market rate, such as a bank's prime rate, the 91-day U.S. Treasury Bill rate, or
some other standard, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable rate note is also based on a stated
prevailing market rate but is adjusted automatically at specified intervals of
not less than one year. Generally, the changes in the interest rate on such
securities reduce the fluctuation in their market value. As interest rates
decrease or increase, the potential for capital appreciation or depreciation is
less than that for fixed-rate obligations of the same maturity. The Manager may
determine that an unrated floating rate or variable rate obligation meets the
Fund's quality standards by reason of the backing provided by a letter of credit
or guarantee issued by a bank that meets those quality standards.
Floating rate and variable rate demand notes that have a stated maturity
in excess of one year may have features that permit the holder to recover the
principal amount of the underlying security at specified intervals not exceeding
one year and upon no more than 30 days' notice. The issuer of that type of note
normally has a corresponding right in its discretion, after a given period, to
prepay the outstanding principal amount of the note plus accrued interest.
Generally the issuer must provide a specified number of days' notice to the
holder.
|X| Inverse Floaters and Other Derivative Investments. "Inverse floaters"
are municipal obligations on which the interest rates typically fall as market
rates increase and increase as market rates fall. Changes in market interest
rates or the floating rate of the security inversely affect the residual
interest rate of an inverse floater. As a result, the price of an inverse
floater will be considerably more volatile than that of a fixed-rate obligation
when interest rates change.
<PAGE>
To provide investment leverage, a municipal issuer might decide to issue
two variable rate obligations instead of a single long-term, fixed-rate bond.
For example, the interest rate on one obligation reflects short-term interest
rates. The interest rate on the other instrument, the inverse floater, reflects
the approximate rate the issuer would have paid on a fixed-rate bond, multiplied
by a factor of two, minus the rate paid on the short-term instrument. The two
portions may be recombined to create a fixed-rate bond. The Manager might
acquire both portions of that type of offering, to reduce the effect of the
volatility of the individual securities. This provides the Manager with a
flexible portfolio management tool to vary the degree of investment leverage
efficiently under different market conditions. The Fund can invest up to 5% of
its total assets in inverse floaters.
Inverse floaters may offer relatively high current income, reflecting the
spread between short-term and long-term tax-exempt interest rates. As long as
the municipal yield curve remains relatively steep and short term rates remain
relatively low, owners of inverse floaters will have the opportunity to earn
interest at above-market rates because they receive interest at the higher
long-term rates but have paid for bonds with lower short-term rates. If the
yield curve flattens and shifts upward, an inverse floater will lose value more
quickly than a conventional long-term bond. The Fund might invest in inverse
floaters to seek higher tax-exempt yields than are available from fixed-rate
bonds that have comparable maturities and credit ratings. In some cases, the
holder of an inverse floater may have an option to convert the floater to a
fixed-rate bond, pursuant to a "rate-lock" option.
Some inverse floaters have a feature known as an interest rate "cap" as
part of the terms of the investment. Investing in inverse floaters that have
interest rate caps might be part of a portfolio strategy to try to maintain a
high current yield for the Fund when the Fund has invested in inverse floaters
that expose the Fund to the risk of short-term interest rate fluctuations.
"Embedded" caps might be used to hedge a portion of the Fund's exposure to
rising interest rates. When interest rates exceed a pre-determined rate, the cap
generates additional cash flows that offset the decline in interest rates on the
inverse floater, and the hedge is successful. However, the Fund bears the risk
that if interest rates do not rise above the pre-determined rate, the cap (which
is purchased for additional cost) will not provide additional cash flows and
will expire worthless.
Inverse floaters are a form of derivative investment. Certain derivatives,
can be used to increase or decrease the Fund's exposure to changing security
prices, interest rates or other factors that affect the value of securities.
However, these techniques could result in losses to the Fund if the Manager
judges market conditions incorrectly or employs a strategy that does not
correlate well with the Fund's other investments. These techniques can cause
losses if the counterparty does not perform its promises. An additional risk of
investing in municipal securities that are derivative investments is that their
market value could be expected to vary to a much greater extent than the market
value of municipal securities that are not derivative investments but have
similar credit quality, redemption provisions and maturities.
|X| "When-Issued" and "Delayed-Delivery" Transactions. The Fund can
purchase securities on a "when-issued" basis, and may purchase or sell such
securities on a "delayed-delivery" (or "forward commitment") basis.
"When-issued" or "delayed-delivery" refers to securities whose terms and
indenture have been created. A market exists for the securities, but they are
not available for immediate delivery.
These transactions are negotiated, and the price (which is generally
expressed in yield terms) is fixed at the time the commitment is made. Delivery
and payment for the securities take place at a later date. Normally the
settlement date is within six months of the purchase of municipal bonds and
notes. However, the Fund, from time to time, may purchase municipal securities
having a settlement date more than six months and possibly as long as two years
or more after the trade date. The securities are subject to change in value from
market fluctuation during the settlement period. The value at delivery might be
less than the purchase price. For example, changes in interest rates in a
direction other than that expected by the Manager before settlement will affect
the value of these securities and could cause loss to the Fund. No income begins
to accrue to the Fund on a when-issued security until the Fund receives the
security at the settlement of the trade.
The Fund may engage in when-issued transactions in order to secure what is
considered to be an advantageous price and yield at the time of entering into
the obligation. When the Fund engages in when-issued or delayed-delivery
transactions, it relies on the buyer or seller, as the case may be, to complete
the transaction. Its failure to do so may cause the Fund to lose the opportunity
to obtain the security at a price and yield it considers advantageous.
When the Fund engages in when-issued and delayed-delivery transactions, it
does so for the purpose of acquiring or selling securities consistent with its
investment objective and policies or for delivery pursuant to options contracts
it has entered into, and not for the purpose of investment leverage. Although
the Fund will enter into when-issued or delayed-delivery purchase transactions
to acquire securities, the Fund may dispose of a commitment prior to settlement.
If the Fund chooses to dispose of the right to acquire a when-issued security
prior to its acquisition or to dispose of its right to deliver or receive
against a forward commitment, it may incur a gain or loss.
At the time the Fund makes a commitment to purchase or sell a security on
a when-issued or forward commitment basis, it records the transaction on its
books and reflects the value of the security purchased. In a sale transaction,
it records the proceeds to be received, in determining its net asset value. The
Fund will identify on its books liquid securities at least equal to the value of
purchase commitments until the Fund pays for the investment.
When-issued transactions and forward commitments can be used by the Fund
as a defensive technique to hedge against anticipated changes in interest rates
and prices. For instance, in periods of rising interest rates and falling
prices, the Fund might sell securities in its portfolio on a forward commitment
basis to attempt to limit its exposure to anticipated falling prices. In periods
of falling interest rates and rising prices, the Fund might sell portfolio
securities and purchase the same or similar securities on a when-issued or
forward commitment basis, to obtain the benefit of currently higher cash yields.
|X| Zero-Coupon Securities. The Fund can buy zero-coupon and delayed
interest municipal securities. Zero-coupon securities do not make periodic
interest payments and are sold at a deep discount from their face value. The
buyer recognizes a rate of return determined by the gradual appreciation of the
security, which is redeemed at face value on a specified maturity date. This
discount depends on the time remaining until maturity, as well as prevailing
interest rates, the liquidity of the security and the credit quality of the
issuer. In the absence of threats to the issuer's credit quality, the discount
typically decreases as the maturity date approaches. Original issue discount on
these securities is included in the Fund's tax-free income. Some zero-coupon
securities are convertible, in that they are zero-coupon securities until a
predetermined date, at which time they convert to a security with a specified
coupon rate.
Because zero-coupon securities pay no interest and compound semi-annually
at the rate fixed at the time of their issuance, their value is generally more
volatile than the value of other debt securities. Their value may fall more
dramatically than the value of interest-bearing securities when interest rates
rise. When prevailing interest rates fall, zero-coupon securities tend to rise
more rapidly in value because they have a fixed rate of return.
The Fund's investment in zero-coupon securities may cause the Fund to
recognize income and make distributions to shareholders before it receives any
cash payments on the zero-coupon investment. To generate cash to satisfy those
distribution requirements, the Fund may have to sell portfolio securities that
it otherwise might have continued to hold or to use cash flows from other
sources such as the sale of Fund shares.
|X| Puts and Standby Commitments. The Fund can acquire "stand-by
commitments" or "puts" with respect to municipal securities to enhance portfolio
liquidity and to try to reduce the average effective portfolio maturity. These
arrangements give the Fund the right to sell the securities at a set price on
demand to the issuing broker-dealer or bank. However, securities having this
feature may have a relatively lower interest rate.
When the Fund buys a municipal security subject to a standby commitment to
repurchase the security, the Fund is entitled to same-day settlement from the
purchaser. The Fund receives an exercise price equal to the amortized cost of
the underlying security plus any accrued interest at the time of exercise. A put
purchased in conjunction with a municipal security enables the Fund to sell the
underlying security within a specified period of time at a fixed exercise price.
The Fund might purchase a standby commitment or put separately in cash or
it might acquire the security subject to the standby commitment or put (at a
price that reflects that additional feature). The Fund will enter into these
transactions only with banks and securities dealers that, in the Manager's
opinion, present minimal credit risks. The Fund's ability to exercise a put or
standby commitment will depend on the ability of the bank or dealer to pay for
the securities if the put or standby commitment is exercised. If the bank or
dealer should default on its obligation, the Fund might not be able to recover
all or a portion of any loss sustained from having to sell the security
elsewhere.
Puts and standby commitments are not transferable by the Fund. They
terminate if the Fund sells the underlying security to a third party. The Fund
intends to enter into these arrangements to facilitate portfolio liquidity,
although such arrangements might enable the Fund to sell a security at a
pre-arranged price that may be higher than the prevailing market price at the
time the put or standby commitment is exercised. However, the Fund might refrain
from exercising a put or standby commitment if the exercise price is
significantly higher than the prevailing market price, to avoid imposing a loss
on the seller that could jeopardize the Fund's business relationships with the
seller.
<PAGE>
A put or standby commitment increases the cost of the security and reduces
the yield otherwise available from the security. Any consideration paid by the
Fund for the put or standby commitment will be reflected on the Fund's books as
unrealized depreciation while the put or standby commitment is held, and a
realized gain or loss when the put or commitment is exercised or expires.
Interest income received by the Fund from municipal securities subject to puts
or stand-by commitments may not qualify as tax exempt in its hands if the terms
of the put or stand-by commitment cause the Fund not to be treated as the tax
owner of the underlying municipal securities.
|X| Repurchase Agreements. The Fund can acquire securities subject to
repurchase agreements. It might do so for temporary defensive purposes or for
liquidity purposes to meet anticipated redemptions of Fund shares, or pending
the investment of the proceeds from sales of Fund shares, or pending the
settlement of portfolio securities transactions.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to an approved vendor for delivery on an agreed upon
future date. The resale price exceeds the purchase price by an amount that
reflects an agreed-upon interest rate effective for the period during which the
repurchase agreement is in effect. Approved vendors include U.S. commercial
banks, U.S. branches of foreign banks or broker-dealers that have been
designated a primary dealer in government securities, which meet the credit
requirements set by the Fund's Board of Trustees from time to time.
The majority of these transactions run from day to day. Delivery pursuant
to resale typically will occur within one to five days of the purchase.
Repurchase agreements having a maturity beyond seven days are subject to the
Fund's limits on holding illiquid investments. The Fund cannot invest more than
20% of its total assets in taxable repurchase agreements offering taxable
income.
Repurchase agreements, considered "loans" under the Investment Company
Act, are collateralized by the underlying security. The Fund's repurchase
agreements require that at all times while the repurchase agreement is in
effect, the collateral's value must equal or exceed the repurchase price to
fully collateralize the repayment obligation. Additionally, the Manager will
monitor the vendor's creditworthiness to confirm that the vendor is financially
sound and will continuously monitor the collateral's value. However, if the
vendor fails to pay the resale price on the delivery date, the Fund may incur
costs in disposing of the collateral and may experience losses if there is any
delay in its ability to do so.
|X| Illiquid and Restricted Securities. Under the policies and procedures
established by the Fund's Board of Trustees, the Manager determines the
liquidity of certain of the Fund's investments. To enable the Fund to sell its
holdings of a restricted security not registered under the Securities Act of
1933, the Fund may have to cause those securities to be registered. The expenses
of registering restricted securities may be negotiated by the Fund with the
issuer at the time the Fund buys the securities. When the Fund must arrange
registration because the Fund wishes to sell the security, a considerable period
may elapse between the time the decision is made to sell the security and the
time the security is registered so that the Fund could sell it. The Fund would
bear the risks of any downward price fluctuation during that period.
<PAGE>
The Fund may also acquire restricted securities through private
placements. Those securities have contractual restrictions on their public
resale. Those restrictions might limit the Fund's ability to dispose of the
securities and might lower the amount the Fund could realize upon the sale.
The Fund has limitations that apply to purchases of restricted securities,
as stated in the Prospectus. Those percentage restrictions do not limit
purchases of restricted securities that are eligible for sale to qualified
institutional purchasers under Rule 144A of the Securities Act of 1933, if those
securities have been determined to be liquid by the Manager under Board-approved
guidelines. Those guidelines take into account the trading activity for such
securities and the availability of reliable pricing information, among other
factors. If there is a lack of trading interest in a particular Rule 144A
security, the Fund's holdings of that security may be considered to be illiquid.
Illiquid securities include repurchase agreements maturing in more than seven
days.
|X| Borrowing for Leverage. The Fund has the ability to borrow from banks
on an unsecured basis in amounts limited (as a fundamental policy) to a maximum
of 10% of its total assets, to invest the borrowed funds in portfolio
securities. This technique is known as "leverage." The Fund may borrow only from
banks. As a fundamental policy, borrowings can be made only to the extent that
the value of the Fund's assets, less its liabilities other than borrowings, is
equal to at least 300% of all borrowings (including the proposed borrowing). If
the value of the Fund's assets fails to meet this 300% asset coverage
requirement, the Fund is required to reduce its bank debt within 3 days to meet
the requirement. To do so, the Fund might have to sell a portion of its
investments at a disadvantageous time.
The Fund will pay interest on these loans, and that interest expense will
raise the overall expenses of the Fund and reduce its returns. If it does
borrow, its expenses will be greater than comparable funds that do not borrow
for leverage. The interest on a loan might be more (or less) than the yield on
the securities purchased with the loan proceeds. Additionally, the Fund's net
asset value per share might fluctuate more than that of funds that do not
borrow.
The Fund has entered into an agreement enabling it to participate with
either OppenheimerFunds in an unsecured line of credit with a bank. Interest is
charged to each fund based on its respective borrowings. The Fund pays a
commitment fee equal to its pro rata share of the average amortized amount of
the credit line. This fee is described in the notes to the Financial Statements
at the end of this Statement of Additional Information.
|X| Investments in Other Investment Companies. On a temporary basis, the
Fund can invest up to 5% of its total assets in shares of other investment
companies that have an investment objective of seeking income exempt from
federal, New York State and New York City personal income taxes. It can invest
up to 5% of its total assets in any one investment company (but cannot own more
than 3% of the outstanding voting stock of that company). These limits do not
apply to shares acquired in a merger, consolidation, reorganization or
acquisition of another investment company. Because the Fund would be subject to
its ratable share of the other investment company's expenses, the Fund will not
make these investments unless the Manager believes that the potential investment
benefits justify the added costs and expenses.
<PAGE>
|X| Hedging. The Fund can use hedging to attempt to protect against
declines in the market value of its portfolio, to permit the Fund to retain
unrealized gains in the value of portfolio securities that have appreciated, or
to facilitate selling securities for investment reasons. To do so the Fund
could:
o buy puts on securities, or
o write covered calls on securities. Covered calls can also be written on
debt securities to attempt to increase the Fund's income, but that
income would not be tax-exempt. Therefore it is unlikely that the Fund
would write covered calls for that purpose.
The Fund is not obligated to use hedging instruments, even though it is
permitted to use them in the Manager's discretion, as described below. The
particular options the Fund can use are described below. The Fund may employ
other hedging instruments and strategies in the future, if those investment
methods are consistent with the Fund's investment objective, are permissible
under applicable regulations governing the Fund and are approved by the Fund's
Board of Trustees.
o Put and Call Options. The Fund can buy and sell certain kinds of put
options (puts) and call options (calls). These strategies are described
below.
o Writing Covered Call Options. The Fund can write (that is, sell) call
options. The Fund's call writing is subject to a number of restrictions:
(1) Calls the Fund sells must be listed on a national securities exchange.
(2) Each call the Fund writes must be "covered" while it is outstanding.
That means the Fund must own the investment on which the call was
written.
When the Fund writes a call on a security, it receives cash (a premium).
The Fund agrees to sell the underlying investment to a purchaser of a
corresponding call on the same security during the call period at a fixed
exercise price regardless of market price changes during the call period. The
call period is usually not more than nine months. The exercise price may differ
from the market price of the underlying security. The Fund has retained the risk
of loss that the price of the underlying security may decline during the call
period. That risk may be offset to some extent by the premium the Fund receives.
If the value of the investment does not rise above the call price, it is likely
that the call will lapse without being exercised. In that case the Fund would
keep the cash premium and the investment.
The Fund's custodian bank, or a securities depository acting for the
custodian, will act as the Fund's escrow agent through the facilities of the
Options Clearing Corporation ("OCC"), as to the investments on which the Fund
has written calls traded on exchanges, or as to other acceptable escrow
securities. In that way, no margin will be required for such transactions. OCC
will release the securities on the expiration of the calls or upon the Fund's
entering into a closing purchase transaction.
To terminate its obligation on a call it has written, the Fund may
purchase a corresponding call in a "closing purchase transaction." The Fund will
then realize a profit or loss, depending upon whether the net of the amount of
the option transaction costs and the premium received on the call the Fund wrote
was more or less than the price of the call the Fund purchased to close out the
transaction. A profit may also be realized if the call lapses unexercised,
because the Fund retains the underlying investment and the premium received. Any
such profits are considered short-term capital gains for federal tax purposes,
as are premiums on lapsed calls. When distributed by the Fund, they are taxable
as ordinary income.
o Purchasing Calls and Puts. The Fund may buy calls only to close out a call it
has written, as discussed above. Calls the Fund buys must be listed on a
securities exchange. A call or put option may not be purchased if the purchase
would cause the value of all the Fund's put and call options to exceed 5% of its
total assets.
The Fund may buy only those puts that relate to securities that the Fund
owns or broadly-based municipal bond indices. The Fund may not sell puts other
than puts it has previously purchased, to close out a position.
When the Fund purchases a put, it pays a premium. The Fund then has the
right to sell the underlying investment to a seller of a corresponding put on
the same investment during the put period at a fixed exercise price. Puts on
municipal bond indices are settled in cash. Buying a put on a debt security,
interest rate future or municipal bond index future the Fund owns enables it to
protect itself during the put period against a decline in the value of the
underlying investment below the exercise price. If the market price of the
underlying investment is equal to or above the exercise price and as a result
the put is not exercised or resold, the put will become worthless at its
expiration date. In that case the Fund will lose its premium payment and the
right to sell the underlying investment. A put may be sold prior to expiration
(whether or not at a profit).
o Risks of Hedging with Options. The use of hedging instruments requires special
skills and knowledge of investment techniques that are different than what is
required for normal portfolio management. If the Manager uses a hedging
instrument at the wrong time or judges market conditions incorrectly, hedging
strategies may reduce the Fund's returns.
The Fund's option activities could affect its portfolio turnover rate and
brokerage commissions. The exercise of calls written by the Fund might cause the
Fund to sell related portfolio securities, thus increasing its turnover rate.
The Fund could pay a brokerage commission each time it buys a call or put, sells
a call, or buys or sells an underlying investment in connection with the
exercise of a call or put. Such commissions might be higher on a relative basis
than the commissions for direct purchases or sales of the underlying
investments. Premiums paid for options are small in relation to the market value
of the underlying investments. Consequently, put and call options offer large
amounts of leverage. The leverage offered by trading in options could result in
the Fund's net asset value being more sensitive to changes in the value of the
underlying investment.
If a covered call written by the Fund is exercised on an investment that
has increased in value, the Fund will be required to sell the investment at the
call price. It will not be able to realize any profit if the investment has
increased in value above the call price.
There is a risk in using short hedging by purchasing puts on municipal
bond indices or futures to attempt to protect against declines in the value of
the Fund's securities. The risk is that the prices of such futures or the
applicable index will correlate imperfectly with the behavior of the cash (that
is, market) prices of the Fund's securities. It is possible for example, that
while the Fund has used hedging instruments in a short hedge, the market might
advance and the value of debt securities held in the Fund's portfolio might
decline. If that occurred, the Fund would lose money on the hedging instruments
and also experience a decline in value of its debt securities. However, while
this could occur over a brief period or to a very small degree, over time the
value of a diversified portfolio of debt securities will tend to move in the
same direction as the indices upon which the hedging instruments are based.
The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable index.
To compensate for the imperfect correlation of movements in the price of debt
securities being hedged and movements in the price of the hedging instruments,
the Fund might use hedging instruments in a greater dollar amount than the
dollar amount of debt securities being hedged. It might do so if the historical
volatility of the prices of the debt securities being hedged is greater than the
historical volatility of the applicable index.
An option position may be closed out only on a market that provides
secondary trading for options of the same series. There is no assurance that a
liquid secondary market will exist for a particular option. If the Fund could
not effect a closing purchase transaction due to a lack of a market, it would
have to hold the callable investment until the call lapsed or was exercised, and
could experience losses.
o Regulatory Aspects of Hedging Instruments. Transactions in options by the Fund
are subject to limitations established by the option exchanges. The exchanges
limit the maximum number of options that may be written or held by a single
investor or group of investors acting in concert. Those limits apply regardless
of whether the options were written or purchased on the same or different
exchanges, or are held in one or more accounts or through one or more different
exchanges or through one or more brokers. Thus, the number of options that the
Fund may write or hold may be affected by options written or held by other
entities, including other investment companies having the same advisor as the
Fund (or an advisor that is an affiliate of the Fund's advisor). The exchanges
also impose position limits on futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may impose
certain other sanctions.
|X| Portfolio Turnover. A change in the securities held by the Fund from
buying and selling investments is known as "portfolio turnover." Short-term
trading increases the rate of portfolio turnover and could increase the Fund's
transaction costs. However, the Fund ordinarily incurs little or no brokerage
expense because most of the Fund's portfolio transactions are principal trades
that do not require payment of brokerage commissions.
The Fund ordinarily does not trade securities to achieve capital gains,
because they would not be tax-exempt income. To a limited degree, the Fund may
engage in short-term trading to attempt to take advantage of short-term market
variations. It may also do so to dispose of a portfolio security prior to its
maturity. That might be done if, on the basis of a revised credit evaluation of
the issuer or other considerations, the Manager believes such disposition is
advisable or the Fund needs to generate cash to satisfy requests to redeem Fund
shares. In those cases, the Fund may realize a capital gain or loss on its
investments. The Fund's annual portfolio turnover rate normally is not expected
to exceed 50%.
<PAGE>
Investment Restrictions
|X| What Are "Fundamental Policies?" Fundamental policies are those
policies that the Fund has adopted to govern its investments that can be changed
only by the vote of a "majority" of the Fund's outstanding voting securities.
Under the Investment Company Act, such a "majority" vote is defined as the vote
of the holders of the lesser of:
o 67% or more of the shares present or represented by proxy at a
shareholder meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or
o more than 50% of the outstanding shares.
The Fund's investment objective is not a fundamental policy, but will not
be changed without approval by the Fund's Board of Trustees and notice to
shareholders. Other policies described in the Prospectus or this Statement of
Additional Information are "fundamental" only if they are identified as such.
The Fund's Board of Trustees can change non-fundamental policies without
shareholder approval. However, significant changes to investment policies will
be described in supplements or updates to the Prospectus or this Statement of
Additional Information, as appropriate. The Fund's most significant investment
policies are described in the Prospectus.
o Does the Fund Have Additional Fundamental Policies? The following investment
restrictions are fundamental policies of the Fund:
o The Fund cannot invest in common stocks, preferred stocks, warrants or other
equity securities.
o The Fund cannot make loans to others except in accordance with the Fund's
investment objective and policies. The Fund can also enter into contracts that
compensate service providers by means of compensating balances.
o The Fund cannot mortgage or pledge any of its assets, and the Fund can borrow
money only from a bank for temporary or emergency purposes or for investment
purposes in amounts not exceeding 10% of its total assets. When borrowings are
made for investment purposes, the Fund must comply with the provisions of the
Investment Company Act that require the Fund to maintain asset coverage of at
least 300% of all such borrowings. If asset coverage should fall below 300%, the
Fund will be required to reduce its borrowings within three days to the extent
needed to meet the 300% asset coverage requirement.
o The Fund cannot purchase the securities of any issuer if the Fund would then
own more than 10% of the voting securities of that issuer.
o The Fund cannot invest more than 25% of its assets in any industry or
industries. However, the Fund can invest more than 25% of its assets in
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Industrial revenue bonds whose interest and principal
payments are the responsibility of companies within the same industry are
grouped together as an "industry" for the purpose of this restriction.
o
<PAGE>
The Fund cannot purchase or sell real estate, real estate investment trust
securities, commodities, commodity contracts, or oil or gas interests. However,
the Fund can invest in municipal securities that are secured by real estate or
interests in real estate.
o The Fund cannot invest in companies for the purpose of exercising control or
management.
o The Fund cannot sell securities short, purchase securities on margin, or write
put options. The Fund can purchase securities that have puts attached.
o The Fund cannot underwrite securities of other issuers. A permitted exception
is in case the purchase of municipal obligations in accordance with the Fund's
investment objective and policies is deemed to be an underwriting, whether the
Fund buys the securities directly from the issuer or from an underwriter for an
issuer.
o The Fund cannot invest in or hold securities of any issuer if Trustees of the
Fund own more than 1/2 of 1% of the securities of that issuer and together own
more than 5% of the securities of that issuer.
o The Fund cannot issue "senior securities."
On November 10, 1998, the Board of Trustees of the Fund changed the Fund's
classification under the Investment Company Act from "non-diversified" to
"diversified." That change did not require the approval of shareholders. In
making that change, the Fund has adopted an operating policy on diversification
of its investments (which amplifies the restriction, stated above against owning
more than 10% of the voting securities of any issuer). This policy cannot be
changed without the approval of shareholders as in the case of a "fundamental"
policy. Under this policy,
o With respect to 75% of its assets, the Fund cannot purchase securities issued
or guaranteed by any one issuer (other than the U.S. government or its agencies
or instrumentalities), if more than 5% of the Fund's total assets would be
invested in securities of that issuer.
Unless the Prospectus or Statement of Additional Information states that a
percentage restriction applies on an ongoing basis, it applies only at the time
the Fund makes an investment. In that case the Fund need not sell securities to
meet the percentage limits if the value of the investment increases in
proportion to the size of the Fund.
|X| Does the Fund Have Any Restrictions That Are Not Fundamental? The Fund
has a number of other investment restrictions that are not fundamental policies,
which means that they can be changed by the Board of Directors without
shareholder approval.
In carrying out its policy prohibiting concentration of its assets, the
Fund has an operating policy that the Fund cannot invest 25% or more of its
assets in any particular industry or group of related industries. Subject to the
Fund's policy on concentration, the Fund may invest more than 25% of its total
assets in a particular segment of the municipal securities market, such as
general obligation bonds, pollution control bonds, hospital bonds or any other
industry segment listed in Appendix B to this Statement of Additional
Information. In that case, economic, business, political or other events
affecting that segment or an issuer in that segment might affect the value of
other bonds of issuers in the same segment and therefore would increase the
Fund's exposure to market risks.
In applying its policy prohibiting the issuance of senior securities, the
Fund interprets that policy not to prohibit certain investment activities for
which assets of the Fund are designated as segregated to cover the related
obligations. Examples of those activities include borrowing money, repurchase
agreements, delayed-delivery and when-issued transactions and contracts to buy
or sell derivatives.
Diversification. The Fund intends to be "diversified" as defined in the
Investment Company Act and to satisfy the restrictions against investing too
much of its assets in any one "issuer" as set forth in the restrictions above.
In implementing this policy, the identification of the issuer of a municipal
security depends on the terms and conditions of the security. When the assets
and revenues of an agency, authority, instrumentality or other political
subdivision are separate from those of the government creating it and the
security is backed only by the assets and revenues of the subdivision, agency,
authority or instrumentality, the latter would be deemed to be the sole issuer.
Similarly, if an industrial development bond is backed only by the assets and
revenues of the non-governmental user, then that user would be deemed to be the
sole issuer. However, if in either case the creating government or some other
entity guarantees a security, the guarantee would be considered a separate
security and would be treated as an issue of that government or other entity.
How the Fund Is Managed
Organization and History. The Fund is a series of Rochester Portfolio Series, a
Massachusetts business trust that is an open-end, diversified management
investment company with an unlimited number of authorized shares of beneficial
interest (that trust is referred to in this section as the "Fund's parent Trust"
or the "Trust"). The Fund is currently the only series of the Trust.
The Fund and its parent Trust are governed by a Board of Trustees, which
is responsible for protecting the interests of shareholders under Massachusetts
law. The Trustees meet periodically throughout the year to oversee the Fund's
(and the Trust's) activities, review its performance, and review the actions of
the Manager.
|X| Classes of Shares. The Board of Trustees has the power, without
shareholder approval, to divide unissued shares of the Fund into two or more
classes. The Board has done so, and the Fund currently has four classes of
shares, Class A, Class B, Class C and Class X. Class X shares are no longer
offered for sale. They are described below in "Classes of Shares." All classes
invest in the same investment portfolio. Shares are freely transferable. Each
share has one vote at shareholder meetings, with fractional shares voting
proportionally on matters submitted to the vote of shareholders. Each class of
shares:
o has its own dividends and distributions,
o pays certain expenses which may be different for the different
classes, o may have a different net asset value,
o may have separate voting rights on matters in which the interests of
one class are different from the interests of another class, and
o votes as a class on matters that affect that class alone.
|X| Meetings of Shareholders. As a Massachusetts business trust, the Trust
is not required to hold, and does not plan to hold, regular annual meetings of
shareholders of the Fund. The Trust will hold meetings when required to do so by
the Investment Company Act or other applicable law. It will also do so when a
shareholder meeting is called by the Trustees or upon proper request of the
shareholders.
Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Trust, to remove a Trustee. The
Trustees will call a meeting of shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of its outstanding shares.
If the Trustees receive a request from at least 10 shareholders stating that
they wish to communicate with other shareholders to request a meeting to remove
a Trustee, the Trustees will then either make the Fund's shareholder list
available to the applicants or mail their communication to all other
shareholders at the applicants' expense. The shareholders making the request
must have been shareholders for at least six months and must hold shares of the
Fund valued at $25,000 or more or constituting at least 1% of the Fund's
outstanding shares, whichever is less. The Trustees may also take other action
as permitted by the Investment Company Act.
|X| Shareholder and Trustee Liability. The Trust's Declaration of Trust
contains an express disclaimer of shareholder or Trustee liability for the
Fund's or the Trust's obligations. It also provides for indemnification and
reimbursement of expenses out of the Trust's property for any shareholder held
personally liable for its obligations. The Declaration of Trust also states that
upon request, the Trust shall assume the defense of any claim made against a
shareholder for any act or obligation of the Trust and shall satisfy any
judgment on that claim. Massachusetts law permits a shareholder of a business
trust (such as the Trust) to be held personally liable as a "partner" under
certain circumstances. However, the risk that a Fund shareholder will incur
financial loss from being held liable as a "partner" of the Fund's parent Trust
is limited to the relatively remote circumstances in which the Trust would be
unable to meet its obligations.
The Fund's contractual arrangements state that any person doing business
with the Fund (and each shareholder of the Fund) agrees under the Declaration of
Trust to look solely to the assets of the Fund for satisfaction of any claim or
demand that may arise out of any dealings with the Fund. Additionally, the
Trustees shall have no personal liability to any such person, to the extent
permitted by law.
Trustees and Officers. The Trustees and officers and their principal occupations
and business affiliations during the past five years are listed below. Trustees
denoted with an asterisk (*) below are deemed to be "interested persons" of the
Fund under the Investment Company Act. Mr. Cannon is a Trustee of the Fund as
well as the Rochester Fund Municipals Fund and the Bond Fund Series. All of the
other Trustees are also trustees or directors of the following Oppenheimer
funds1:
1 Mr. Cannon is only a Trustee of the Fund as well as Rochester Fund
Municipals and Oppenheimer Convertible Securities Fund.
<PAGE>
Oppenheimer Quest Value Fund, Inc.,
Oppenheimer Quest For Value Funds, a series fund having the following series:
Oppenheimer Quest Small Cap Value Fund,
Oppenheimer Quest Balanced Value Fund, and
Oppenheimer Quest Opportunity Value Fund,
Oppenheimer Quest Global Value Fund, Inc.,
Oppenheimer Quest Capital Value Fund, Inc.,
Rochester Portfolio Series, a series fund having one series:
Limited-Term New York Municipal Fund,
Bond Fund Series, a series fund having one series:
Oppenheimer Convertible Securities Fund,
Rochester Fund Municipals, and
Oppenheimer MidCap Fund
Ms. Macaskill and Messrs. Bishop, Wixted, Donohue, Farrar and Zack, who are
officers of the Fund, respectively hold the same offices of the other
Oppenheimer funds listed above. As of April 3, 2000, the Trustees and the
officers of the Fund as a group owned less than 1% of the outstanding shares of
the Fund. The foregoing statement does not reflect shares held of record by an
employee benefit plan for employees of the Manager other than shares
beneficially owned under that plan by the officers of the Fund listed below. Ms.
Macaskill and Mr. Donohue are trustees of that plan.
Bridget A. Macaskill*, Chairman of the Board of Trustees and President; Age: 51
Two World Trade Center, New York, New York 10048-0203
President (since June 1991), Chief Executive Officer (since September 1995) and
a Director (since December 1994) of the Manager; President and director (since
June 1991) of HarbourView Asset Management Corporation, an investment advisor
subsidiary of the Manager; Chairman and a director of Shareholder Services, Inc.
(since August 1994) and Shareholder Financial Services, Inc. (since September
1995), (both are transfer agent subsidiaries of the Manager); President (since
September 1995) and a director (since October 1990) of Oppenheimer Acquisition
Corp., the Manager's parent holding company; President (since September 1995)
and a director (since November 1989) of Oppenheimer Partnership Holdings, Inc.,
a holding company subsidiary of the Manager; a director of Oppenheimer Real
Asset Management, Inc., an investment advisory subsidiary of the Manager (since
July 1996); President and a director (since October 1997) of OppenheimerFunds
International Ltd. and of Oppenheimer Millennium Funds plc, off-shore investment
companies managed by the Manager; President and a director of other Oppenheimer
funds; a director of Prudential Corporation plc (a U.K. financial service
company).
John Cannon, Trustee; Age: 70
620 Sentry Parkway West Suite 220, Blue Bell, PA 19422
Independent Consultant; Chief Investment Officer, CDC Associates, a registered
investment advisor; Director, Neuberger & Berman Income Managers Trust,
Neuberger & Berman Income
<PAGE>
Funds and Neuberger Berman Trust, (1995 - present); formerly Chairman and
Treasurer, CDC Associates, (1993 - February 1996); prior thereto, President, AMA
Investment Advisers, Inc., a mutual fund investment advisor, (1976 - 1991);
Senior Vice President AMA Investment Advisers, Inc., (1991 - 1993).
Paul Y. Clinton, Trustee; Age: 69
39 Blossom Avenue, Osterville, Massachusetts 02655
Principal of Clinton Management Associates, a financial and venture capital
consulting firm; Trustee of Capital Cash Management Trust, a money-market fund
and Narragansett Tax-Free Fund, a tax-exempt bond fund; Director of OCC Cash
Reserves, Inc. and Trustee of OCC Accumulation Trust, both of which are open-end
investment companies. Formerly: Director, External Affairs, Kravco Corporation,
a national real estate owner and property management corporation; President of
Essex Management Corporation, a management consulting company; a general partner
of Capital Growth Fund, a venture capital partnership; a general partner of
Essex Limited Partnership, an investment partnership; President of Geneve Corp.,
a venture capital fund; Chairman of Woodland Capital Corp., a small business
investment company; and Vice President of W.R. Grace & Co.
Thomas W. Courtney, Trustee; Age 66
833 Wyndemere Way, Naples, Florida 34105
Principal of Courtney Associates, Inc. (venture capital firm); former General
Partner of Trivest Venture Fund (private venture capital fund); former President
of Investment Counseling Federated Investors, Inc.; Trustee of Cash Assets
Trust, a money market fund; Director of OCC Cash Reserves, Inc., and Trustee of
OCC Accumulation Trust, both of which are open-end investment companies; former
President of Boston Company Institutional Investors; Trustee of Hawaiian
Tax-Free Trust and Tax Free Trust of Arizona, tax-exempt bond funds; Director of
several privately owned corporations; former Director of Financial Analysts
Federation.
Robert G. Galli, Trustee; Age: 66
19750 Beach Road, Jupiter, FL 33469
A Trustee or Director of other Oppenheimer funds. Formerly he held the following
positions: Vice Chairman of the Manager, OppenheimerFunds, Inc. (October 1995 -
December 1997); Executive Vice President of the Manager (December 1977 - October
1995); Executive Vice President and a director (April 1986 - October 1995) of
HarbourView Asset Management Corporation, an investment advisor subsidiary of
the Manager.
Lacy B. Herrmann, Trustee; Age: 70
380 Madison Avenue, Suite 2300, New York, New York 10017
Chairman and Chief Executive Officer of Aquila Management Corporation, the
sponsoring organization and manager, administrator and/or sub-advisor to the
following open-end investment companies, and Chairman of the Board of Trustees
and President of each: Churchill Cash Reserves Trust, Aquila Cascadia Equity
Fund, Pacific Capital Cash Assets Trust, Pacific Capital U.S. Treasuries Cash
Assets Trust, Pacific Capital Tax-Free Cash Assets Trust, Prime Cash Fund,
Narragansett Insured Tax-Free Income Fund, Tax-Free Fund For Utah, Churchill
Tax-Free Fund of Kentucky, Tax-Free Fund of Colorado, Tax-Free Trust of Oregon,
Tax-Free Trust of Arizona, Hawaiian Tax-Free Trust, and Aquila Rocky Mountain
Equity Fund; Vice President, Director, Secretary, and formerly Treasurer of
Aquila Distributors, Inc., distributor of the above funds; President and
Chairman of the Board of Trustees of Capital Cash Management Trust ("CCMT"), and
an Officer and Trustee/Director of its predecessors; President and Director of
STCM Management Company, Inc., sponsor and advisor to CCMT; Chairman, President
and a Director of InCap Management Corporation, formerly sub-advisor and
administrator of Prime Cash Fund and Short Term Asset Reserves; Director of OCC
Cash Reserves, Inc., and Trustee of OCC Accumulation Trust, both of which are
open-end investment companies; Trustee Emeritus of Brown University.
George Loft, Trustee; Age: 85
51 Herrick Road, Sharon, Connecticut 06069
Private Investor.
Ronald H. Fielding, Vice President; Age: 51
350 Linden Oaks, Rochester, NY 14625
Senior Vice President (since January 1996) of the Manager; Chairman of the
Rochester Division of the Manager (since January 1996); an officer and portfolio
manager of other Oppenheimer funds; prior to joining the Manager in January
1996, he was President and a director of Rochester Capital Advisors, Inc. (1993
- - 1995), the Fund's prior investment advisor, and of Rochester Fund Services,
Inc. (1986 - 1995), the Fund's prior distributor; President and a trustee of
Limited Term New York Municipal Fund (1991 - 1995), Oppenheimer Convertible
Securities Fund (1986 - 1995) and Rochester Fund Municipals (1986 - 1995);
President and a director of Rochester Tax Managed Fund, Inc. (1982 - 1995) and
of Fielding Management Company, Inc. (1982 - 1995), an investment advisor.
Andrew J. Donohue, Secretary; Age: 49
Two World Trade Center, New York, New York 10048-0203
Executive Vice President (since January 1993), General Counsel (since October
1991) and a Director (since September 1995) of the Manager; Executive Vice
President and General Counsel (since September 1993) and a director (since
January 1992) of OppenheimerFunds Distributor, Inc., the Fund's Distributor;
Executive Vice President, General Counsel and a director of HarbourView Asset
Management Corporation, Shareholder Services, Inc., Shareholder Financial
Services, Inc. and (since September 1995) Oppenheimer Partnership Holdings,
Inc.; President and a director of Centennial Asset Management Corporation (since
September 1995), , an investment advisory subsidiary of the Manager; President,
General Counsel and a director of Oppenheimer Real Asset Management, Inc. (since
July 1996); General Counsel (since May 1996) and Secretary (since April 1997) of
Oppenheimer Acquisition Corp.; Vice President and a director of OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc (since October 1997); an
officer of other Oppenheimer funds.
Brian W. Wixted, Treasurer; Age: 40
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since April 1999) of the Manager; Treasurer
of HarbourView Asset Management Corporation, Shareholder Services, Inc.,
Shareholder Financial Services, Inc. and Oppenheimer Partnership Holdings, Inc.
(since April 1999); Assistant Treasurer of Oppenheimer Acquisition Corp. (since
April 1999); Assistant Secretary of Centennial Asset Management Corporation
(since April 1999); formerly Principal and Chief Operating Officer, Bankers
Trust Company - Mutual Fund Services Division (March 1995 -
<PAGE>
March 1999); Vice President and Chief Financial Officer of CS First Boston
Investment Management Corp. (September 1991 - March 1995); and Vice President
and Accounting Manager, Merrill Lynch Asset Management (November 1987 -
September 1991).
Robert Bishop, Assistant Treasurer; Age: 41
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an
officer of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Adele A. Campbell, Assistant Treasurer; Age 36
350 Linden Oaks, Rochester, New York 14625
Assistant Vice President of the Manager (1996-Present); Formerly Assistant Vice
President of Rochester Fund Services, Inc. (1994 - 1996), Assistant Manager of
Fund Accounting, Rochester Fund Services (1992 - 1994), Audit Manager for Price
Waterhouse, LLP (1991 - 1992).
Scott T. Farrar, Assistant Treasurer; Age: 34
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer
of other Oppenheimer funds; formerly an Assistant Vice President of the
Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller
for the Manager.
Robert G. Zack, Assistant Secretary; Age: 51
Two World Trade Center, New York, New York 10048-0203
Senior Vice President (since May 1985) and Associate General Counsel (since May
1981) of the Manager, Assistant Secretary of Shareholder Services, Inc. (since
May 1985), and Shareholder Financial Services, Inc. (since November 1989);
Assistant Secretary of OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since October 1997); an officer of other Oppenheimer
funds.
|X| Remuneration of Trustees. The officers of the Fund and one Trustee,
Ms. Macaskill, are affiliated with the Manager and receive no salary or fee from
the Fund. The remaining Trustees received the compensation shown below. The
compensation from the Fund was paid during its fiscal year ended December 31,
1999. The table below also shows the total compensation from all of the
Oppenheimer funds listed above, including the compensation from the Fund. That
amount represents compensation received as a director, trustee, or member of a
committee of the Board during the calendar year 1999.
<PAGE>
- -------------------------------------------------------------------------------
Total Compensation
Retirement From all
Aggregate Benefits Accrued Oppenheimer
Compensation as Part of Fund Quest/Rochester
Trustee's Name From Fund1 Expenses Funds (10 Funds)2
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
John Cannon $9,433 $2,718 $28,439
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Paul Y. Clinton $32,034 $25,320 $140,1903
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Thomas W. Courtney $25,930 $19,215 $140,1903
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Robert G. Galli $6,715 $0 $176,2154
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Lacy B. Herrmann $35,973 $29,258 $139,2903
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
George Loft $34,302 $27,587 $140,1903
- -------------------------------------------------------------------------------
1. Aggregate compensation from the Fund includes fees and any retirement plan
benefits accrued for a Trustee.
2. For the 1999 calendar year.
3. Total compensation for the 1999 calendar year includes compensation 12 funds
for which OpCap Advisors served as the investment advisor. Each series of an
investment company is considered a separate "fund" for this purpose.
4. Total compensation for the 1999 calendar year also includes compensation
received for serving as trustee or director of 24 other Oppenheimer funds.
|X| Retirement Plan for Trustees. The Fund has adopted a retirement plan
that provides for payments to retired Trustees. Payments are up to 80% of the
average compensation paid during a Trustee's five years of service in which the
highest compensation was received. A Trustee must serve as Trustee for any of
the Oppenheimer Quest/Rochester/MidCap funds listed above for at least 15 years
to be eligible for the maximum payment. Each Trustee's retirement benefits will
depend on the amount of the Trustee's future compensation and length of service.
Therefore the amount of those benefits cannot be determined at this time, nor
can we estimate the number of years of credited service that will be used to
determine those benefits.
|X| Deferred Compensation Plan for Trustees. The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they are
entitled to receive from the Fund. Under the plan, the compensation deferred by
a Trustee is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Trustee. The
amount paid to the Trustee under the plan will be determined based upon the
performance of the selected funds.
Deferral of Trustees' fees under the plan will not materially affect the
Fund's assets, liabilities or net income per share. The plan will not obligate
the Fund to retain the services of any Trustee or to pay any particular level of
compensation to any Trustee. Pursuant to an Order issued by the Securities and
Exchange Commission, the Fund may invest in the funds selected by the Trustee
under the plan without shareholder approval for the limited purpose of
determining the value of the Trustee's deferred fee account.
|X| Major Shareholders. As of April 3, 2000, the only person who owned of
record or who were known by the Fund to own beneficially 5% or more of any class
of the Fund's outstanding shares was:
Merrill Lynch Pierce Fenner & Smith Inc. 4800 Deer Lake Drive East, Floor
3, Jacksonville, Florida 32246, which owned 40,794,668.988 Class A shares
(approximately 13% of the Class A shares then outstanding); 4,831,936.090
Class B shares (approximately 18% of the Class B shares then outstanding;
6,793,898.931 Class C shares (approximately 20% of the Class C shares then
outstanding); and 2,455,673.472 Class X shares (approximately 22% of the
Class X shares then outstanding), for the benefit of its customers.
The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a
holding company controlled by Massachusetts Mutual Life Insurance Company.
The portfolio manager of the Fund is principally responsible for the
day-to-day management of the Fund's investment portfolio. Other members of the
Manager's fixed-income portfolio department, in particular Anthony A. Tanner, an
Assistant Portfolio Manager of the Fund, provide the Fund's portfolio manager
with research and support in managing the Fund's portfolio. Mr. Tanner is a Vice
President of the Rochester Division of the Manager and served as an officer of
the Fund's prior investment advisor.
|X| Code of Ethics. The Fund, the Manager and the Distributor have a Code
of Ethics. It is designed to detect and prevent improper personal trading by
certain employees, including portfolio managers, that would compete with or take
advantage of the Fund's portfolio transactions. Covered persons include persons
with knowledge of the investments and investment intentions of the Fund and
other funds advised by the Manager. The Code of Ethics does permit personnel
subject to the Code to invest in securities, including securities that may be
purchased or held by the Fund, subject to a number of restrictions and controls.
Compliance with the Code of Ethics is carefully monitored and enforced by the
Manager.
|X| The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Fund under an investment advisory
agreement between the Manager and the Fund. The Manager selects securities for
the Fund's portfolio and handles its day-to day business. That agreement
requires the Manager, at its expense, to provide the Fund with adequate office
space, facilities and equipment. It also requires the Manager to provide and
supervise the activities of all administrative and clerical personnel required
to provide effective corporate administration for the Fund. Those
responsibilities include the compilation and maintenance of records with respect
to the Fund's operations, the preparation and filing of specified reports, and
the composition of proxy materials and registration statements for continuous
public sale of shares of the Fund.
The Fund pays expenses not expressly assumed by the Manager under the
advisory agreement. The investment advisory agreement lists examples of expenses
paid by the Fund. The major categories relate to interest, taxes, fees to
disinterested Trustees, legal and audit expenses, custodian and transfer agent
expenses, share issuance costs, certain printing and registration costs,
brokerage commissions, and non-recurring expenses, including litigation cost.
The management fees paid by the Fund to the Manager are calculated at the rates
described in the Prospectus, which are applied to the assets of the Fund as a
whole. The fees are allocated to each class of shares based upon the relative
proportion of the Fund's net assets represented by that class. The management
fees paid by the Fund to the Manager during its last three fiscal years are
listed below.
The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties, or
reckless disregard for its obligations and duties under the investment advisory
agreement, the Manager is not liable for any loss the Fund sustains by reason of
good faith errors or omissions on its part with respect to any of its duties
under the agreement.
<PAGE>
The agreement permits the Manager to act as investment advisor for any
other person, firm or corporation and to use the name "Oppenheimer" in
connection with other investment companies for which it may act as investment
advisor or general distributor. If the Manager shall no longer act as investment
advisor to the Fund, the Manager may withdraw the Fund's right to use the name
"Oppenheimer" as part of its name.
o Accounting and Record-Keeping Services. The Manager provides accounting and
record-keeping services to the Fund pursuant to an Accounting and Administration
Agreement approved by the Board of Trustees. Under that agreement, the Manager
maintains the general ledger accounts and records relating to the Fund's
business and calculates the daily net asset values of the Fund's shares.
<PAGE>
- -------------------------------------------------------------------------------
Accounting and Administrative
Fiscal Year Management Fee Paid to Services Fee Paid to
Ended 12/31 OppenheimerFunds, Inc. OppenheimerFunds, Inc.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1997 $3,140,951 $225,111
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1998 $4,331,766 $314,752
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1999 $5,372,033 $392,771
- -------------------------------------------------------------------------------
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the duties of
the Manager under the investment advisory agreement is to buy and sell portfolio
securities for the Fund. The investment advisory agreement allows the Manager to
use broker-dealers to effect the Fund's portfolio transactions. Under the
agreement, the Manager may employ those broker-dealers (including "affiliated"
brokers, as that term is defined in the Investment Company Act) that, the
Manager thinks in its best judgment based on all relevant factors, will
implement the Fund's policy to obtain, at reasonable expense, the "best
execution" of portfolio transactions. "Best execution" refers to prompt and
reliable execution at the most favorable price obtainable. The Manager need not
seek competitive commission bidding. However, the Manager is expected to
minimize the commissions paid to the extent consistent with the interest and
policies of the Fund as established by its Board of Trustees.
Under the investment advisory agreement, the Manager may select brokers
that provide brokerage and/or research services for the Fund and/or the other
accounts over which the Manager or its affiliates have investment discretion.
The commissions paid to such brokers may be higher than another qualified broker
would charge, if the Manager makes a good faith determination that the
commission is fair and reasonable in relation to the services provided. Subject
to those other considerations, as a factor in selecting brokers for the Fund's
portfolio transactions, the Manager may also consider sales of shares of the
Fund and other investment companies managed by the Manager or its affiliates.
Brokerage Practices Followed by the Manager. The Manager allocates brokerage for
the Fund subject to the provisions of the investment advisory agreement and the
procedures and rules described above. Generally the Manager's portfolio traders
allocate brokerage upon
<PAGE>
recommendations from the Manager's portfolio managers. In certain instances,
portfolio managers may directly place trades and allocate brokerage. In either
case, the Manager's executive officers supervise the allocation of brokerage.
Most securities purchases made by the Fund are in principal transactions
at net prices. The Fund usually deals directly with the selling or purchasing
principal or market maker without incurring charges for the services of a broker
on its behalf unless the Manager determines that a better price or execution may
be obtained by using the services of a broker. Therefore, the Fund does not
incur substantial brokerage costs. Portfolio securities purchased from
underwriters include a commission or concession paid by the issuer to the
underwriter in the price of the security. Portfolio securities purchased from
dealers include a spread between the bid and asked price.
The Fund seeks to obtain prompt execution of orders at the most favorable
net prices. In an option transaction, the Fund ordinarily uses the same broker
for the purchase or sale of the option and any transaction in the investment to
which the option relates.
Other funds advised by the Manager have investment objectives and policies
similar to those of the Fund. Those other funds may purchase or sell the same
securities as the Fund at the same time as the Fund, which could affect the
supply and price of the securities. When possible, the Manager tries to combine
concurrent orders to purchase or sell the same security by more than one of the
accounts managed by the Manager or its affiliates. The transactions under those
combined orders are averaged as to price and allocated in accordance with the
purchase or sale orders actually placed for each account.
The investment advisory agreement permits the Manager to allocate
brokerage for research services. The research services provided by a particular
broker may be useful only to one or more of the advisory accounts of the Manager
and its affiliates. Investment research received by the Manager for the
commissions paid by those other accounts may be useful both to the Fund and one
or more of the Manager's other accounts. Investment research services may be
supplied to the Manager by a third party at the instance of a broker through
which trades are placed. Investment research services include information and
analysis on particular companies and industries as well as market or economic
trends and portfolio strategy, market quotations for portfolio evaluations,
information systems, computer hardware and similar products and services. If a
research service also assists the Manager in a non-research capacity (such as
bookkeeping or other administrative functions), then only the percentage or
component that provides assistance to the Manager in the investment
decision-making process may be paid in commission dollars.
The research services provided by brokers broaden the scope and supplement
the research activities of the Manager. That research provides additional views
and comparisons for consideration and helps the Manager to obtain market
information for the valuation of securities that are either held in the Fund's
portfolio or are being considered for purchase. The Manager provides information
to the Board of the Fund about the commissions paid to brokers furnishing
research services, together with the Manager's representation that the amount of
such commissions was reasonably related to the value or benefit of such
services.
<PAGE>
------------------------------------------------------------------------------
Fiscal Year Ended 12/31 Total Brokerage Commissions Paid by the Fund1
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1997 None
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1998 None
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1999 None
------------------------------------------------------------------------------
1. Amounts do not include spreads or concessions on principal amounts on a net
trade basis.
Distribution and Service Plans
The Distributor. Under its General Distributor's Agreement with the Fund, the
Distributor acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund. The Distributor is not
obligated to sell a specific number of shares. Expenses normally attributable to
sales are borne by the Distributor. They exclude payments under the Distribution
and Service Plans but include advertising and the cost of printing and mailing
prospectuses (other than those furnished to existing shareholders).
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is discussed in the table below:
------------------------------------------------------------------------------
Aggregate Class A
Front-End Front-End Commissions Commissions Commissions
Fiscal Sales Sales on Class A on Class B on Class C
Year Charges on Charges Shares Shares Shares
Ended Class A Retained by Advanced by Advanced by Advanced by
12/31: Shares Distributor Distributor1 Distributor1 Distributor1
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1997 $2,677,697 $473,852 $255,046 $648,027 $275,006
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1998 $3,768,254 $509,884 $1,394,666 $1,284,173 $748,672
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1999 $3,235,381 $366,186 $1,785,574 $881,649 $602,450
------------------------------------------------------------------------------
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. During the fiscal year ended 12/31/97, the
Fund also offered Class X shares (previously designated as Class B shares).
The Fund ceased to offer Class X shares after January 5, 1998. The
commissions advanced by the Distributor on sales of Class X shares during
1997 was $265,074.
- --------------------------------------------------------------------------------
Class A Class B Class C
Contingent Contingent Contingent Class X
Deferred Sales Deferred Sales Deferred Sales Contingent
Charges Charges Charges Deferred Sales
Fiscal Year Retained by Retained Retained by Charge Retained
Ended 12/31: Distributor by Distributor Distributor by Distributor
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1999 $133,654 $180,775 $82,528 $57,568
- --------------------------------------------------------------------------------
Distribution and Service Plans. The Fund has adopted a Service Plan for its
Class A shares and Distribution and Service Plans for its Class B, Class C and
Class X shares under Rule 12b-1 of the Investment Company Act. Under those
plans, the Fund makes payments to the Distributor in connection with the
distribution and/or servicing of the shares of the particular class.
Each plan has been approved by a vote of the Board of Trustees of the
Fund, including a majority of the Independent Trustees2, cast in person at a
meeting called for the purpose of voting on that plan.
2 In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers
to those Trustees who are not "interested persons" of the Fund and who do
not have any direct or indirect financial interest in the operation of the
distribution plan or any agreement under the plan.
Under the plans the Manager and the Distributor may make payments to
affiliates and, in their sole discretion, from time to time may use their own
resources (at no direct cost to the Fund) to make payments to brokers, dealers
or other financial institutions for distribution and administrative services
they perform. The Manager may use profits from the advisory fee it receives from
the Fund. The Distributor and the Manager may, in their sole discretion,
increase or decrease the amount of payments they make to plan recipients from
their own resources.
Unless a plan is terminated as described below, the plan continues in
effect from year to year, but only if the Fund's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose of
voting on continuing the plan. A plan may be terminated at any time by the vote
of a majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the outstanding shares
of that class.
The Board and the Independent Trustees must approve all material
amendments to a plan. An amendment to increase materially the amount of payments
to be made under the plan must be approved by shareholders of the class affected
by the amendment. Because Class B and Class X shares automatically convert into
Class A shares after six years, the Fund must obtain the approval of Class A as
well as Class B and Class X shareholders for an amendment to the Class A plan
that would materially increase the amount to be paid under that plan. That
approval must be by a "majority" (as defined in the Investment Company Act) of
the shares of each class, voting separately by class.
While the plans are in effect, the Treasurer of the Fund shall provide
separate written reports on the plans to the Fund's Board of Trustees at least
quarterly for its review. The reports shall detail the amount of all payments
made under a plan and the purpose for which the payments were made. Those
reports are subject to the review and approval of the Independent Trustees in
the exercise of their fiduciary duty.
Each plan states that while it is in effect, the selection or replacement
and nomination of those Trustees of the Fund who are not "interested persons" of
the Fund is committed to the discretion of the Independent Trustees. This
provision does not prevent the involvement of others in the selection and
nomination process as long as the final decision as to selection or nomination
is approved by a majority of the Independent Trustees.
Under the plans for a class, no payment will be made to any recipient in
any quarter in which the aggregate net asset value of all Fund shares of that
class held by the recipient for itself and its customers does not exceed a
minimum amount, if any, that may be set from time to time by a majority of the
Fund's Independent Trustees. Initially, the Board of Trustees has set the fees
at the maximum rate allowed under the Class A, Class B and Class C plans and has
set no minimum asset amount needed to qualify for payments. The Class X plan
permits the Fund to pay an asset-based sales charge of up to 0.75% per year of
average daily net assets attributable to Class X shares, but the Board of
Trustees has set that asset-based sales charge 0.50% per year of the average
daily net assets attributable to Class X shares.
|X| Class A Service Plan. 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 (they are referred to as "recipients") for personal
services and account maintenance services they provide for their customers who
hold Class A shares. The services include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining accounts in
the Fund, making the Fund's investment plans available and providing other
services at the request of the Fund or the Distributor. The Distributor makes
payments to plan recipients quarterly at an annual rate not to exceed 0.25% of
the average annual net assets of Class A shares held in accounts of the service
providers or their customers.
For the fiscal year ended December 31, 1999, payments under the Plan for
Class A shares totaled $2,573,038, all of which was paid by the Distributor to
recipients. . That amount included $45,289 paid to an affiliate of the
Distributor. Any unreimbursed expenses the Distributor incurs with respect to
Class A shares for any fiscal year may not be recovered in subsequent years. The
Distributor may not use payments received under the Class A plan to pay any of
its interest expenses, carrying charges, other financial costs, or allocation of
overhead.
|X| Class B, Class C and Class X Service and Distribution 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, Class C and Class X
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 plans during that period. The types of services that
recipients provide are similar to the services provided under the Class A
service plan described above. Under the Class X plan, the Distributor receives a
service fee of 0.25% of the average annual net assets of Class X shares and
makes payments to plan recipients quarterly at an annual rate not to exceed
0.25% of the average net assets of Class X shares held in accounts of the
service providers or their customers.
The plans permit the Distributor to retain both the asset-based sales
charges and the service fee on shares or to pay recipients the service fee on a
quarterly basis, without payment in advance. However, the Distributor presently
intends to pay recipients the service fee on Class B and Class C shares in
advance for the first year the shares are outstanding. The advance payment is
based on the net asset value of shares sold. Shares purchased by exchange do not
qualify for an advance service fee payment. After the first year shares are
outstanding, the Distributor makes service fee payments quarterly on outstanding
shares under each plan. If Class B or Class C shares are redeemed during the
first year after their purchase, the recipient of the service fees on those
shares will be obligated to repay the Distributor a pro rata portion of the
advance payment made on those shares.
The Distributor retains the asset-based sales charge on Class B and Class
X shares. The Distributor retains the asset-based sales charge on Class C shares
during the first year the shares are outstanding. It pays the asset-based sales
charge as an ongoing commission to the dealer on Class C shares outstanding for
a year or more. If a dealer has a special agreement with the Distributor, the
Distributor will pay the Class B and/or Class C service fees and the asset-based
sales charge to the dealer quarterly in lieu of paying the sales commission and
service fee in advance at the time of purchase.
The asset-based sales charge on Class B and Class C shares allows
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 contingent deferred sales charges collected on
redeemed shares and from the Fund under the plans. The Fund pays the asset-based
sales charge to the Distributor for its services rendered in distributing Class
B and Class C shares. The payments are made to the Distributor in recognition
that the Distributor: o pays sales commissions to authorized brokers and dealers
at the time of sale and pays service fees as described in the Prospectus, o may
finance payment of sales commissions and/or the advance of the service fee
payment to recipients under the plans, or may provide such financing from its
own resources or from the resources of an affiliate, o employs personnel to
support distribution of shares, and o bears the costs of sales literature,
advertising and prospectuses (other than those furnished to current
shareholders) and state "blue sky" registration fees and certain other
distribution expenses.
- -------------------------------------------------------------------------------
Distribution Fees Paid to the Distributor for the Year Ended 12/31/99
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Distributor's
Distributor's Unreimbursed
Total Amount Aggregate Expenses as %
Payments Retained by Unreimbursed of Net Assets
Class: Under Plan Distributor Expenses Under Plan of Class
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class B Plan $781,955 $698,4851 $2,094,673 2.36%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class C Plan $1,161,836 $767,1852 $1,647,219 1.38%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class X Plan $331,936 $233,4703 N/A N/A
- -------------------------------------------------------------------------------
1. Includes $786 paid to an affiliate of the Distributor's parent company.
2. Includes $3,824 paid to an affiliate of the Distributor's parent company.
3. Includes $1,191 paid to an affiliate of the Distributor's parent company.
If a 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. All payments under the plans
are subject to the limitations imposed by the Conduct Rules of the National
Association of Securities Dealers, Inc. on payments of asset-based sales charges
and service fees to NASD members.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses a variety of terms to
illustrate its performance. These terms include "standardized yield,"
"tax-equivalent yield," "dividend yield," "average annual total return,"
"cumulative total return," "average annual total return at net asset value" and
"total return at net asset value." An explanation of how yields and total
returns are calculated is set forth below. The charts below show the Fund's
performance as of its most recent fiscal year end for its classes of shares that
are currently offered to investors. You can obtain current performance
information by calling the Fund's Transfer Agent at 1-800-525-7048 or by
visiting the OppenheimerFunds Internet web site at
http://www.oppenheimerfunds.com.
The Fund's illustrations of its performance data in advertisements must
comply with rules of the Securities and Exchange Commission. Those rules
describe the types of performance data that may be used and how it is to be
calculated. In general, any advertisement by the Fund of its performance data
must include the average annual total returns for the advertised class of shares
of the Fund. Those returns must be shown for the 1, 5 and 10-year periods (or
the life of the class, if less) ending as of the most recently ended calendar
quarter prior to the publication of the advertisement (or its submission for
publication). Certain types of yields may also be shown, provided that they are
accompanied by standardized average annual total returns.
Use of standardized performance calculations enables an investor to
compare the Fund's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using the
Fund's performance information as a basis for comparison with other investments:
o Yields and total returns measure the performance of a hypothetical account in
the Fund over various periods and do not show the performance of each
shareholder's account. Your account's performance will vary from the model
performance data if your dividends are received in cash, or you buy or sell
shares during the period, or you bought your shares at a different time and
price than the shares used in the model.
o The Fund's performance returns do not reflect the effect of taxes on dividends
and distributions. o An investment in the Fund is not insured by the FDIC or any
other government agency.
o The principal value of the Fund's shares, and its yields and total returns are
not guaranteed and normally will fluctuate on a daily basis. o When an
investor's shares are redeemed, they may be worth more or less than their
original cost.
o Yields and total returns for any given past period represent historical
performance information and are not, and should not be considered, a prediction
of future yields or returns.
The performance of each class of shares is shown separately, because the
performance of each class of shares will usually be different. That is because
of the different kinds of expenses each class bears. The yields and total
returns of each class of shares of the Fund are affected by market conditions,
the quality of the Fund's investments, the maturity of those investments, the
types of investments the Fund holds, and its operating expenses that are
allocated to the particular class.
|X| Yields. The Fund uses a variety of different yields to illustrate its
current returns. Each class of shares calculates its yield separately because of
the different expenses that affect each class.
o
<PAGE>
Standardized Yield. The "standardized yield" (sometimes referred to
just as "yield") is shown for a class of shares for a stated 30-day period. It
is not based on actual distributions paid by the Fund to shareholders in the
30-day period, but is a hypothetical yield based upon the net investment income
from the Fund's portfolio investments for that period. It may therefore differ
from the "dividend yield" for the same class of shares, described below.
Standardized yield is calculated using the following formula set forth in
rules adopted by the Securities and Exchange Commission, designed to assure
uniformity in the way that all funds calculate their yields:
(a-b) 6
Standardized Yield = 2 ((--- + 1) - 1)
( cd)
The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense assumptions).
c = the average daily number of shares of that class outstanding during the
30-day period that were entitled to receive dividends.
d = the maximum offering price per share of that class on the last day of the
period, adjusted for undistributed net investment income.
The standardized yield for a particular 30-day period may differ from the
yield for other periods. The SEC formula assumes that the standardized yield for
a 30-day period occurs at a constant rate for a six-month period and is
annualized at the end of the six-month period. Additionally, because each class
of shares is subject to different expenses, it is likely that the standardized
yields of the Fund's classes of shares will differ for any 30-day period.
o Dividend Yield. The Fund may quote a "dividend yield" for each class of its
shares. Dividend yield is based on the dividends paid on a class of shares
during the actual dividend period. To calculate dividend yield, the dividends of
a class declared during a stated period are added together, and the sum is
multiplied by 12 (to annualize the yield) and divided by the maximum offering
price on the last day of the dividend period. The formula is shown below:
Dividend Yield = dividends paid x 12/maximum offering price (payment date)
The maximum offering price for Class A shares includes the current maximum
initial sales charge. The maximum offering price for Class B and Class C shares
is the net asset value per share, without considering the effect of contingent
deferred sales charges. The Class A dividend yield may also be quoted without
deducting the maximum initial sales charge.
o Tax-Equivalent Yield. The "tax-equivalent yield" of a class of shares is the
equivalent yield that would have to be earned on a taxable investment to achieve
the after-tax results represented by the Fund's tax-equivalent yield. It adjusts
the Fund's standardized yield, as calculated above, by a stated tax rate. Using
different tax rates to show different tax equivalent yields shows investors in
different tax brackets the tax equivalent yield of the Fund based on their own
tax bracket.
The tax-equivalent yield is based on a 30-day period, and is computed by
dividing the tax-exempt portion of the Fund's current yield (as calculated
above) by one minus a stated income tax rate. The result is added to the portion
(if any) of the Fund's current yield that is not tax-exempt.
The tax-equivalent yield may be used to compare the tax effects of income
derived from the Fund with income from taxable investments at the tax rates
stated. Your tax bracket is determined by your federal and state taxable income
(the net amount subject to federal and state income tax after deductions and
exemptions). The tax-equivalent yield table assumes that the investor is taxed
at the highest bracket, regardless of whether a switch to non-taxable
investments would cause a lower bracket to apply.
- -------------------------------------------------------------------------------
The Fund's Yields for the 30-Day Periods Ended 12/31/99
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Tax-Equivalent Yield
Class of (43.74% Combined Federal/
Shares Standardized Yield Dividend Yield New York Tax Bracket)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Without After Without After
Sales Sales Sales Sales Without After Sales
Charge Charge Charge Charge Sales Charge Charge
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class A 4.57% 4.41% 4.51% 4.35% 8.12% 7.84%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class B 3.79% N/A 3.59% N/A 6.74% N/A
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class C 3.81% N/A 3.62% N/A 6.77% N/A
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class X 4.03% N/A 3.87% N/A 7.16% N/A
- -------------------------------------------------------------------------------
|X| Total Return Information. There are different types of "total returns"
to measure the Fund's performance. Total return is the change in value of a
hypothetical investment in the Fund over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period. Because of
differences in expenses for each class of shares, the total returns for each
class are separately measured. The cumulative total return measures the change
in value over the entire period (for example, ten years). An average annual
total return shows the average rate of return for each year in a period that
would produce the cumulative total return over the entire period. However,
average annual total returns do not show actual year-by-year performance. The
Fund uses standardized calculations for its total returns as prescribed by the
SEC. The methodology is discussed below.
In calculating total returns for Class A shares, the current maximum sales
charge of 3.50% (as a percentage of the offering price) is deducted from the
initial investment ("P") (unless the return is shown without sales charge, as
described below). For Class B shares, payment of the applicable contingent
deferred sales charge is applied, depending on the period for which the return
is shown: 4.0% in the first year, 3.0% in the second year, 2.0% in the third and
fourth years, 1.0% in the fifth year, and none thereafter. For Class C shares,
the 1% contingent deferred sales charge is deducted for returns for the 1-year
period.
o Average Annual Total Return. The "average annual total return" of each class
is an average annual compounded rate of return for each year in a specified
number of years. It is the rate of return based on the change in value of a
hypothetical initial investment of $1,000 ("P" in the formula below) held for a
number of years ("n") to achieve an Ending Redeemable Value ("ERV" in the
formula) of that investment, according to the following formula:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
o Cumulative Total Return. The "cumulative total return" calculation measures
the change in value of a hypothetical investment of $1,000 over an entire period
of years. Its calculation uses some of the same factors as average annual total
return, but it does not average the rate of return on an annual basis.
Cumulative total return is determined as follows:
ERV - P
------- = Total Return
P
o Total Returns at Net Asset Value. From time to time the Fund may also quote a
cumulative or an average annual total return "at net asset value" (without
deducting sales charges) for Class A, Class B or Class C shares. Each is based
on the difference in net asset value per share at the beginning and the end of
the period for a hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions.
- ------------------------------------------------------------------------------
The Fund's Total Returns for the Periods Ended 12/31/99
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Cumulative Total
Class of Returns Average Annual Total Returns
Shares (Life of Class)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
5-Years 10-Years
(or (or
Life-of-Class, Life-of-Class,
1-Year if Less) if Less)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
After Without After Without After Without After Without
Sales Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge Charge
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class A 57.65%1 63.37%1 -4.34% -0.87% 4.77% 5.52% 5.65%1 6.10%1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class B 7.53%2 9.50%2 -5.42% -1.64% 2.76%2 3.46%2 N/A N/A
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class C 9.21%3 9.21%3 -2.58% -1.63% 3.36%3 3.36%3 N/A N/A
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class X 23.29%4 23.29%4 -3.76% -1.39% 4.59%4 4.59%4 N/A N/A
- -------------------------------------------------------------------------------
1 Inception of Class A: 9/18/91
2 Inception of Class B: 5/1/97
3 Inception of Class C: 5/1/97
4 Inception of Class X: 5/1/95
Other Performance Comparisons. The Fund compares its performance annually to
that of an appropriate broadly-based market index in its Annual Report to
shareholders. You can obtain that information by contacting the Transfer Agent
at the addresses or telephone numbers shown on the cover of this Statement of
Additional Information. The Fund may also compare its performance to that of
other investments, including other mutual funds, or use rankings of its
performance by independent ranking entities. Examples of these performance
comparisons are set forth below.
|X| Lipper Rankings. From time to time the Fund may publish the ranking of
the performance of its classes of shares by Lipper Analytical Services, Inc.
("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring
service. Lipper monitors the performance of regulated investment companies,
including the Fund, and ranks their performance for various periods based on
investment styles. The Lipper performance rankings are based on total returns
that include the reinvestment of capital gain distributions and income dividends
but do not take sales charges or taxes into consideration. Lipper also publishes
"peer-group" indices of the performance of all mutual funds in a category that
it monitors and averages of the performance of the funds in particular
categories.
|X| Morningstar Rankings. From time to time the Fund may publish the
ranking and/or star rating of the performance of its classes of shares by
Morningstar, Inc., an independent mutual fund monitoring service. Morningstar
rates and ranks mutual funds in broad investment categories: domestic stock
funds, international stock funds, taxable bond funds and municipal bond funds.
The Fund is ranked among municipal bond funds.
Morningstar proprietary star ratings reflect historical risk-adjusted
total investment return. Investment return measures a fund's (or class's) one-,
three-, five- and ten-year average annual total returns (depending on the
inception of the fund or class) in excess of 90-day U.S. Treasury bill returns
after considering the fund's sales charges and expenses. Risk is measured by a
fund's (or class's) performance below 90-day U.S. Treasury bill returns. Risk
and investment return are combined to produce star ratings reflecting
performance relative to the other funds in the fund's category. Five stars is
the "highest" ranking (top 10% of funds in a category), four stars is "above
average" (next 22.5%), three stars is "average" (next 35%), two stars is "below
average" (next 22.5%) and one star is "lowest" (bottom 10%). The current star
rating is the fund's (or class's) overall rating, which is the fund's 3-year
rating or its combined 3- and 5-year ranking (weighted 60%/40% respectively), or
its combined 3-, 5-, and 10-year rating (weighted 40%/30%/30%, respectively),
depending on the inception date of the fund (or class). Ratings are subject to
change monthly.
The Fund may also compare its total return ranking to that of other funds
in its Morningstar category, in addition to its star rating. Those total return
rankings are percentages from one percent to one hundred percent and are not
risk-adjusted. For example, if a fund is in the 94th percentile, that means that
94% of the funds in the same category performed better than it did.
|X| Performance Rankings and Comparisons by Other Entities and
Publications. From time to time the Fund may include in its advertisements and
sales literature performance information about the Fund cited in newspapers and
other periodicals such as The New York Times, The Wall Street Journal, Barron's,
or similar publications. That information may include performance quotations
from other sources, including Lipper and Morningstar. The performance of the
Fund's classes of shares may be compared in publications to the performance of
various market indices or other investments, and averages, performance rankings
or other benchmarks prepared by recognized mutual fund statistical services.
Investors may also wish to compare the Fund's returns to the return on
fixed-income investments available from banks and thrift institutions. Those
include certificates of deposit, ordinary interest-paying checking and savings
accounts, and other forms of fixed or variable time deposits, and various other
instruments such as Treasury bills. However, the Fund's returns and share price
are not guaranteed or insured by the FDIC or any other agency and will fluctuate
daily, while bank depository obligations may be insured by the FDIC and may
provide fixed rates of return. Repayment of principal and payment of interest on
Treasury securities is backed by the full faith and credit of the U.S.
government.
From time to time, the Fund may publish rankings or ratings of the Manager
or Transfer Agent, and of the investor services provided by them to shareholders
of the Oppenheimer funds, other than performance rankings of the Oppenheimer
funds themselves. Those ratings or rankings of shareholder and investor services
by third parties may include comparisons of their services to those provided by
other mutual fund families selected by the rating or ranking services. They may
be based upon the opinions of the rating or ranking service itself, using its
research or judgment, or based upon surveys of investors, brokers, shareholders
or others.
A B O U T Y O U R A C C O U N T
How to Buy Shares
Additional information is presented below about the methods that can be
used to buy shares of the Fund. Appendix C contains more information about the
special sales charge arrangements offered by the Fund, and the circumstances in
which sales charges may be reduced or waived for certain classes of investors.
AccountLink. When shares are purchased through AccountLink, each purchase must
be at least $25. Shares will be purchased on the regular business day the
Distributor is instructed to initiate the Automated Clearing House ("ACH")
transfer to buy the shares. Dividends will begin to accrue on shares purchased
with the proceeds of ACH transfers on the business day the Fund receives Federal
Funds for the purchase through the ACH system before the close of The New York
Stock Exchange. The Exchange normally closes at 4:00 P.M., but may close earlier
on certain days. If Federal Funds are received on a business day after the close
of the Exchange, the shares will be purchased and dividends will begin to accrue
on the next regular business day. The proceeds of ACH transfers are normally
received by the Fund 3 days after the transfers are initiated. The Distributor
and the Fund are not responsible for any delays in purchasing shares resulting
from delays in ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge
rate may be obtained for Class A shares under Right of Accumulation and Letters
of Intent because of the economies of sales efforts and reduction in expenses
realized by the Distributor, dealers and brokers making such sales. No sales
charge is imposed in certain other circumstances described in Appendix C to this
Statement of Additional Information because the Distributor or dealer or broker
incurs little or no selling expenses.
|X|
<PAGE>
Right of Accumulation. To qualify for the lower sales charge rates that apply to
larger purchases of Class A shares, you and your spouse can add together:
o Class A and Class B shares you purchase for your individual
accounts, or for your joint accounts, or for trust or custodial
accounts on behalf of your children who are minors, and
o Current purchases of Class A and Class B shares of the Fund and
other Oppenheimer funds to reduce the sales charge rate that applies
to current purchases of Class A shares, and
o Class A and Class B shares of Oppenheimer funds you previously
purchased subject to an initial or contingent deferred sales charge to
reduce the sales charge rate for current purchases of Class A shares,
provided that you still hold your investment in one of the Oppenheimer
funds.
A fiduciary can count all shares purchased for a trust, estate or other
fiduciary account (including one or more employee benefit plans of the same
employer) that has multiple accounts. The Distributor will add the value, at
current offering price, of the shares you previously purchased and currently own
to the value of current purchases to determine the sales charge rate that
applies. The reduced sales charge will apply only to current purchases. You must
request it when you buy shares.
|X| The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for
which the Distributor acts as the distributor or the sub-distributor and
currently include the following:
Oppenheimer Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer California Municipal Fund
Oppenheimer Main Street Growth & Income Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Preservation Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer Capital Income Fund
Oppenheimer MidCap Fund
Oppenheimer Champion Income Fund
Oppenheimer Multiple Strategies Fund
Oppenheimer Convertible Securities Fund
Oppenheimer Municipal Bond Fund
Oppenheimer Developing Markets Fund
Oppenheimer New York Municipal Fund
Oppenheimer Disciplined Allocation Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer Disciplined Value Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Discovery Fund
Oppenheimer Quest Balanced Value Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Emerging Technologies Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Enterprise Fund
Oppenheimer Europe Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Global Fund
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Global Growth & Income Fund
Oppenheimer Real Asset Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Growth Fund
Oppenheimer Strategic Income Fund
Oppenheimer High Yield Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Insured Municipal Fund
Oppenheimer Trinity Core Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer Trinity Growth Fund
Oppenheimer International Bond Fund
Oppenheimer Trinity Value Fund
Oppenheimer International Growth Fund
Oppenheimer U.S. Government Trust
Oppenheimer International Small Company Fund
Oppenheimer World Bond Fund
Oppenheimer Large Cap Growth Fund
Limited-Term New York Municipal Fund
Rochester Fund Municipals
And the following money market funds:
Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Cash Reserves
Centennial Money Market Trust Oppenheimer Money Market Fund, Inc.
There is an initial sales charge on the purchase of Class A shares of each
of the Oppenheimer funds except the money market funds. Under certain
circumstances described in this Statement of Additional Information, redemption
proceeds of certain money market fund shares may be subject to a contingent
deferred sales charge.
Letters of Intent. Under a Letter of Intent, if you purchase Class A shares or
Class A and Class B shares of the Fund and other Oppenheimer funds during a
13-month period, you can reduce the sales charge rate that applies to your
purchases of Class A shares. The total amount of your intended purchases of both
Class A and Class B shares will determine the reduced sales charge rate for the
Class A shares purchased during that period. You can include purchases made up
to 90 days before the date of the Letter.
A Letter of Intent is an investor's statement in writing to the
Distributor of the intention to purchase Class A shares or Class A and Class B
shares of the Fund (and other Oppenheimer funds) during a 13-month period (the
"Letter of Intent period"). At the investor's request, this may include
purchases made up to 90 days prior to the date of the Letter. The Letter states
the investor's intention to make the aggregate amount of purchases of shares
which, when added to the investor's holdings of shares of those funds, will
equal or exceed the amount specified in the Letter. Purchases made by
reinvestment of dividends or distributions of capital gains and purchases made
at net asset value without sales charge do not count toward satisfying the
amount of the Letter.
A Letter enables an investor to count the Class A and Class B shares
purchased under the Letter to obtain the reduced sales charge rate on purchases
of Class A shares of the Fund (and other Oppenheimer funds) that applies under
the Right of Accumulation to current purchases of Class A shares. Each purchase
of Class A shares under the Letter will be made at the offering price (including
the sales charge) that applies to a single lump-sum purchase of shares in the
amount intended to be purchased under the Letter.
In submitting a Letter, the investor makes no commitment to purchase
shares. However, if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the investor's
holdings of shares on the last day of that period, do not equal or exceed the
intended purchase amount, the investor agrees to pay the additional amount of
sales charge applicable to such purchases. That amount is described in "Terms of
Escrow," below (those terms may be amended by the Distributor from time to
time). The investor agrees that shares equal in value to 5% of the intended
purchase amount will be held in escrow by the Transfer Agent subject to the
Terms of Escrow. Also, the investor agrees to be bound by the terms of the
Prospectus, this
<PAGE>
Statement of Additional Information and the Application used for a Letter
of Intent. If those terms are amended, as they may be from time to time by the
Fund, the investor agrees to be bound by the amended terms and that those
amendments will apply automatically to existing Letters of Intent.
If the total eligible purchases made during the Letter of Intent period do
not equal or exceed the intended purchase amount, the commissions previously
paid to the dealer of record for the account and the amount of sales charge
retained by the Distributor will be adjusted to the rates applicable to actual
total purchases. If total eligible purchases during the Letter of Intent period
exceed the intended purchase amount and exceed the amount needed to qualify for
the next sales charge rate reduction set forth in the Prospectus, the sales
charges paid will be adjusted to the lower rate. That adjustment will be made
only if and when the dealer returns to the Distributor the excess of the amount
of commissions allowed or paid to the dealer over the amount of commissions that
apply to the actual amount of purchases. The excess commissions returned to the
Distributor will be used to purchase additional shares for the investor's
account at the net asset value per share in effect on the date of such purchase,
promptly after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter, shares
redeemed by the investor prior to the termination of the Letter of Intent period
will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter in placing any purchase
orders for the investor during the Letter of Intent period. All of such
purchases must be made through the Distributor.
|X| Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary)
made pursuant to a Letter, shares of the Fund equal in value up to 5% of the
intended purchase amount specified in the Letter shall be held in escrow by the
Transfer Agent. For example, if the intended purchase amount is $50,000, the
escrow shall be shares valued in the amount of $2,500 (computed at the public
offering price adjusted for a $50,000 purchase). Any dividends and capital gains
distributions on the escrowed shares will be credited to the investor's account.
2. If the total minimum investment specified under the Letter is
completed within the thirteen-month Letter of Intent period, the escrowed shares
will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended purchase
amount specified in the Letter, the investor must remit to the Distributor an
amount equal to the difference between the dollar amount of sales charges
actually paid and the amount of sales charges which would have been paid if the
total amount purchased had been made at a single time. That sales charge
adjustment will apply to any shares redeemed prior to the completion of the
Letter. If the difference in sales charges is not paid within twenty days after
a request from the Distributor or the dealer, the Distributor will, within sixty
days of the expiration of the Letter, redeem the number of escrowed shares
necessary to realize such difference in sales charges. Full and fractional
shares remaining after such redemption will be released from escrow. If a
request is received to redeem escrowed shares prior to the payment of such
additional sales charge, the sales charge will be withheld from the redemption
proceeds.
<PAGE>
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for redemption any
or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding of
which may be counted toward completion of a Letter) include:
(a) Class A shares sold with a front-end sales charge or subject to a Class A
contingent deferred sales charge,
(b) Class B shares of other Oppenheimer funds acquired subject to a contingent
deferred sales charge, and
(c) Class A or Class B shares acquired by exchange of either
(1) Class A shares of one of the other Oppenheimer funds that were
acquired subject to a Class A initial or contingent deferred sales
charge or
(2) Class B shares of one of the other Oppenheimer funds that were
acquired subject to a contingent deferred sales charge.
6. Shares held in escrow hereunder will automatically be exchanged for
shares of another fund to which an exchange is requested, as described in the
section of the Prospectus entitled "How to Exchange Shares" and the escrow will
be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan to buy shares directly
from a bank account, you must enclose a check (the minimum is $25) for the
initial purchase with your application. Shares purchased by Asset Builder Plan
payments from bank accounts are subject to the redemption restrictions for
recent purchases described in the Prospectus. Asset Builder Plans are available
only if your bank is an ACH member. Asset Builder Plans may not be used to buy
shares for OppenheimerFunds employer-sponsored qualified retirement accounts.
Asset Builder Plans also enable shareholders of Oppenheimer Cash Reserves to use
their fund account to make monthly automatic purchases of shares of up to four
other Oppenheimer funds.
If you make payments from your bank account to purchase shares of the
Fund, your bank account will be debited automatically. Normally the debit will
be made two business days prior to the investment dates you selected on your
Application. Neither the Distributor, the Transfer Agent nor the Fund shall be
responsible for any delays in purchasing shares that result from delays in ACH
transmissions.
Before you establish Asset Builder payments, you should obtain a
prospectus of the selected fund(s) from your financial advisor (or the
Distributor ) and request an application from the Distributor. Complete the
application and return it. You may change the amount of your Asset Builder
payment or you can terminate these automatic investments at any time by writing
to the Transfer Agent. The Transfer Agent requires a reasonable period
(approximately 10 days) after receipt of your instructions to implement them.
The Fund reserves the right to amend, suspend, or discontinue offering Asset
Builder plans at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the Fund's
shares (for example, when a purchase check is returned to the Fund unpaid)
causes a loss to be incurred when the net asset value of the Fund's shares on
the cancellation date is less than on the purchase date. That loss is equal to
the amount of the decline in the net asset value per share multiplied by
<PAGE>
the number of shares in the purchase order. The investor is responsible for that
loss. If the investor fails to compensate the Fund for the loss, the Distributor
will do so. The Fund may reimburse the Distributor for that amount by redeeming
shares from any account registered in that investor's name, or the Fund or the
Distributor may seek other redress.
Classes of Shares. Each class of shares of the Fund represents an interest in
the same portfolio of investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class B,
Class C or Class X shares and the dividends payable on Class B or Class C or
Class X shares will be reduced by incremental expenses borne solely by that
class. Those expenses include the asset-based sales charges to which Class B,
Class C and Class X shares are subject.
The availability of three classes of shares permits an investor to choose
the method of purchasing shares that is more appropriate for the investor. That
may depend on the amount of the purchase, the length of time the investor
expects to hold shares, and other relevant circumstances. Class A shares
normally are sold subject to an initial sales charge. While Class B and Class C
shares have no initial sales charge, the purpose of the deferred sales charge
and asset-based sales charge on Class B and Class C shares is the same as that
of the initial sales charge on Class A shares to compensate the Distributor and
brokers, dealers and financial institutions that sell shares of the Fund. A
salesperson who is entitled to receive compensation from his or her firm for
selling Fund shares may receive different levels of compensation for selling one
class of shares rather than another.
The Distributor will not accept any order in the amount of $500,000 or
more for Class B shares or $1 million or more for Class C shares on behalf of a
single investor (not including dealer "street name" or omnibus accounts). That
is because generally it will be more advantageous for that investor to purchase
Class A shares of the Fund.
|X| Class X Shares. Effective January 6, 1998, the Fund ceased offering
Class X shares to investors. Prior to May 1, 1997, Class X shares had been
designated as the Fund's Class B shares. On that date, the Fund re-designated
its Class B shares as Class X shares and commenced offering shares of a new
Class B. Already-issued Class X shares remain outstanding until they are
redeemed or exchanged or converted. (Class X shares of the Fund may be exchanged
only for Class B shares of other Oppenheimer funds.)
Class X shares were originally sold at net asset value without initial
sales charge. However, if Class X shares are redeemed within 4 years of their
purchase, a contingent deferred sales charge will be deducted from the
redemption proceeds. That contingent deferred sales charge will not be assessed
on shares purchased by reinvestment of dividends or capital gains distributions,
nor on the amount of the account value represented by any increase in the net
asset value of shares over the original net asset value. The contingent deferred
sales charge is assessed on the lesser of the original net asset value or the
net asset value of the shares at the time of redemption. The contingent deferred
sales charge is paid to compensate the Distributor for its expenses incurred in
providing distribution-related services to the Fund in connection with the sale
of Class X shares.
To determine whether the contingent deferred sales charge applies to
redeemed shares, the Fund redeems shares in the same order as for Class B and
Class C shares. The contingent deferred sales charge is not imposed in the
circumstances that apply to waivers of the Class B and Class C contingent
deferred sales charge as set forth in Appendix C to this Statement of Additional
Information. The amount of the contingent deferred sales charge will depend on
the number of years since you invested and the dollar amount being redeemed,
according to the following schedule:
---------------------------------------------------------------------------
Years Since Beginning of Month Contingent Deferred Sales Charge on
in Which Purchase Order was Redemptions in that Year (as % of Amount
Accepted Subject to Charge)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
0 - 1 2.50%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1 - 2 2.00%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2 - 3 1.50%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3 - 4 1.00%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
4 and following None
---------------------------------------------------------------------------
In the table, a "year" is a 12-month period. In applying the sales charge,
all purchases are considered to have been made on the first regular business
day of the month in which the purchase was made.
|X| Class B and Class X. Under current interpretations of applicable
federal income tax law by the Internal Revenue Service, the conversion of Class
B and Class X shares to Class A shares after six years is not treated as a
taxable event for the shareholder. If those laws or the IRS interpretation of
those laws should change, the automatic conversion feature may be suspended. In
that event, no further conversions of Class B and Class X shares would occur
while that suspension remained in effect. Although Class B and Class X shares
could then be exchanged for Class A shares on the basis of relative net asset
value of the two classes, without the imposition of a sales charge or fee, such
exchange could constitute a taxable event for the shareholder, and absent such
exchange, Class B and Class X shares might continue to be subject to the
asset-based sales charge for longer than six years.
|X| Allocation of Expenses. The Fund pays expenses related to its daily
operations, such as custodian fees, trustees' fees, transfer agency fees, legal
fees and auditing costs. Those expenses are paid out of the Fund's assets and
are not paid directly by shareholders. However, those expenses reduce the net
asset value of shares, and therefore are indirectly borne by shareholders
through their investment.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's share classes recognizes two types of expenses.
General expenses that do not pertain specifically to any one class are allocated
pro rata to the shares of all classes. The allocation is based on the percentage
of the Fund's total assets that is represented by the assets of each class, and
then equally to each outstanding share within a given class. Such general
expenses include management fees, legal, bookkeeping and audit fees, printing
and mailing costs of shareholder reports, Prospectuses, Statements of Additional
Information and other materials for current shareholders, fees to unaffiliated
Trustees, custodian expenses, share issuance costs, organization and start-up
costs, interest, taxes and brokerage commissions, and non-recurring expenses,
such as litigation costs.
Other expenses that are directly attributable to a particular class are
allocated equally to each outstanding share within that class. Examples of such
expenses include distribution and service plan (12b-1) fees, transfer and
shareholder servicing agent fees and expenses, and shareholder meeting expenses
(to the extent that such expenses pertain only to a specific class).
Determination of Net Asset Values Per Share. The net asset values per share of
each class of shares of the Fund are determined as of the close of business of
The New York Stock Exchange on each day that the Exchange is open. It is done by
dividing the value of the Fund's net assets attributable to that class by the
number of shares of that class that are outstanding. The Exchange normally
closes at 4:00 P.M., New York time, but may close earlier on some other days
(for example, in case of weather emergencies or on days falling before a
holiday). The Exchange's most recent annual announcement (which is subject to
change) states that it will close on New Year's Day, Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. It may also close on other days.
Dealers other than Exchange members may conduct trading in municipal
securities on days on which the Exchange is closed (including weekends and U.S.
holidays) or after 4:00 P.M. on a regular business day. The Fund's net asset
values will not be calculated on those days, and the values of some of the
Fund's portfolio securities may change significantly on those days when
shareholders may not purchase or redeem shares.
|X| Securities Valuation. The Fund's Board of Trustees has established
procedures for the valuation of the Fund's securities. In general those
procedures are as follows:
o Long-term debt securities having a remaining maturity in excess of 60 days are
valued based on the mean between the "bid" and "asked" prices determined by a
portfolio pricing service approved by the Fund's Board of Trustees or obtained
by the Manager from two active market makers in the security on the basis of
reasonable inquiry.
o The following securities are valued at the mean between the "bid" and "asked"
prices determined by a pricing service approved by the Fund's Board of Trustees
or obtained by the Manager from two active market makers in the security on the
basis of reasonable inquiry:
(1) debt instruments that have a maturity of more than 397 days when
issued,
(2) debt instruments that had a maturity of 397 days or less when
issued and have a remaining maturity of more than 60 days, and
(3) non-money market debt instruments that had a maturity of 397 days
or less when issued and which have a remaining maturity of 60 days or
less.
o The following securities are valued at cost, adjusted for amortization of
premiums and accretion of discounts:
(1) money market debt securities held by a non-money market fund that
had a maturity of less than 397 days when issued that have a remaining
maturity of 60 days or less, and
(2) debt instruments held by a money market fund that have a remaining
maturity of 397 days or less.
o Securities not having readily-available market quotations are valued at fair
value determined under the Board's procedures.
If the Manager is unable to locate two market makers willing to give
quotes, a security may be priced at the mean between the "bid" and "asked"
prices provided by a single active market maker (which in certain cases may be
the "bid" price if no "asked" price is available).
In the case of municipal securities, when last sale information is not
generally available, the Manager may use pricing services approved by the Board
of Trustees. The pricing service may use "matrix" comparisons to the prices for
comparable instruments on the basis of quality, yield, and maturity. Other
special factors may be involved (such as the tax-exempt status of the interest
paid by municipal securities). The Manager will monitor the accuracy of the
pricing services. That monitoring may include comparing prices used for
portfolio valuation to actual sales prices of selected securities.
Puts and calls are valued at the last sale price on the principal exchange
on which they are traded or on Nasdaq, as applicable, as determined by a pricing
service approved by the Board of Trustees or by the Manager. If there were no
sales that day, they shall be valued at the last sale price on the preceding
trading day if it is within the spread of the closing "bid" and "asked" prices
on the principal exchange or on Nasdaq on the valuation date. If not, the value
shall be the closing bid price on the principal exchange or on Nasdaq on the
valuation date. If the put, call or future is not traded on an exchange or on
Nasdaq, it shall be valued by the mean between "bid" and "asked" prices obtained
by the Manager from two active market makers. In certain cases that may be at
the "bid" price if no "asked" price is available.
When the Fund writes an option, an amount equal to the premium received is
included in the Fund's Statement of Assets and Liabilities as an asset. An
equivalent credit is included in the liability section. The credit is adjusted
("marked-to-market") to reflect the current market value of the option. In
determining the Fund's gain on investments, if a call or put written by the Fund
is exercised, the proceeds are increased by the premium received. If a call
written by the Fund expires, the Fund has a gain in the amount of the premium.
If the Fund enters into a closing purchase transaction, it will have a gain or
loss, depending on whether the premium received was more or less than the cost
of the closing transaction. If the Fund exercises a put it holds, the amount the
Fund receives on its sale of the underlying investment is reduced by the amount
of premium paid by the Fund.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the Prospectus. The
information below provides additional information about the procedures for
redeeming.
Checkwriting. When a check is presented to the Bank for clearance, the Bank will
ask the Fund to redeem a sufficient number of full and fractional shares in the
shareholder's account to cover the amount of the check. This enables the
shareholder to continue receiving dividends on those shares until the check is
presented to the Fund. Checks may not be presented for payment at the offices of
the Bank or the Fund's custodian. This limitation does not affect the use of
checks for the payment of bills or to obtain cash at other banks. The Fund
reserves the right to amend, suspend or discontinue offering checkwriting
privileges at any time without prior notice.
In choosing to take advantage of the Checkwriting privilege, by signing
the Account Application or by completing a Checkwriting card, each individual
who signs:
(1) for individual accounts, represents that they are the
registered owner(s) of the shares of the Fund in that account;
(2) for accounts for corporations, partnerships, trusts and other
entities, represents that they are an officer, general partner,
trustee or other fiduciary or agent, as applicable, duly
authorized to act on behalf of the registered owner(s);
(3) authorizes the Fund, its Transfer Agent and any bank through
which the Fund's drafts (checks) are payable to pay all checks
drawn on the Fund account of such
<PAGE>
person(s) and to redeem a sufficient amount of shares from that
account to cover payment of each check;
(4) specifically acknowledges that if they choose to permit
checks to be honored if there is a single signature on checks
drawn against joint accounts, or accounts for corporations,
partnerships, trusts or other entities, the signature of any one
signatory on a check will be sufficient to authorize payment of
that check and redemption from the account, even if that account
is registered in the names of more than one person or more than
one authorized signature appears on the Checkwriting card or the
Application, as applicable;
(5) understands that the Checkwriting privilege may be terminated
or amended at any time by the Fund and/or the Fund's bank; and
(6) acknowledges and agrees that neither the Fund nor its bank
shall incur any liability for that amendment or termination of
checkwriting privileges or for redeeming shares to pay checks
reasonably believed by them to be genuine, or for returning or
not paying checks that have not been accepted for any reason.
Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of
redemption proceeds may be delayed if the Fund's custodian bank is not open for
business on a day when the Fund would normally authorize the wire to be made,
which is usually the Fund's next regular business day following the redemption.
In those circumstances, the wire will not be transmitted until the next bank
business day on which the Fund is open for business. No dividends will be paid
on the proceeds of redeemed shares awaiting transfer by Federal Funds wire.
Reinvestment Privilege. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of:
o Class A shares purchased subject to an initial sales charge or Class
A shares on which a contingent deferred sales charge was paid, or
o Class B shares that were subject to the Class B contingent deferred
sales charge when redeemed.
The reinvestment may be made without sales charge only in Class A shares
of the Fund or any of the other Oppenheimer funds into which shares of the Fund
are exchangeable as described in "How to Exchange Shares" below. Reinvestment
will be at the net asset value next computed after the Transfer Agent receives
the reinvestment order. The shareholder must ask the Transfer Agent for that
privilege at the time of reinvestment. This privilege does not apply to Class C
or Class X shares. The Fund may amend, suspend or cease offering this
reinvestment privilege at any time as to shares redeemed after the date of such
amendment, suspension or cessation.
Any capital gain that was realized when the shares were redeemed is
taxable, and reinvestment will not alter any capital gains tax payable on that
gain. If there has been a capital loss on the redemption, some or all of the
loss may not be tax deductible, depending on the timing and amount of the
reinvestment. Under the Internal Revenue Code, if the redemption proceeds of
Fund shares on which a sales charge was paid are reinvested in shares of the
Fund or another of the Oppenheimer funds within 90 days of payment of the sales
charge, the shareholder's basis in the shares of the Fund that were redeemed may
not include the amount of
<PAGE>
the sales charge paid. That would reduce the loss or increase the gain
recognized from the redemption. However, in that case the sales charge would be
added to the basis of the shares acquired by the reinvestment of the redemption
proceeds.
Payments "In Kind". The Prospectus states that payment for shares tendered for
redemption is ordinarily made in cash. However, the Board of Trustees of the
Fund may determine that it would be detrimental to the best interests of the
remaining shareholders of the Fund to make payment of a redemption order wholly
or partly in cash. In that case, the Fund may pay the redemption proceeds in
whole or in part by a distribution "in kind" of liquid securities from the
portfolio of the Fund, in lieu of cash.
The Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act. Under that rule, the Fund is obligated to redeem shares solely in
cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any
90-day period for any one shareholder. If shares are redeemed in kind, the
redeeming shareholder might incur brokerage or other costs in selling the
securities for cash. The Fund will value securities used to pay redemptions in
kind using the same method the Fund uses to value its portfolio securities
described above under "Determination of Net Asset Values Per Share." That
valuation will be made as of the time the redemption price is determined.
Involuntary Redemptions. The Fund's Board of Trustees has the right to cause the
involuntary redemption of the shares held in any account if the aggregate net
asset value of those shares is less than $200 or such lesser amount as the Board
may fix. The Board of Trustees will not cause the involuntary redemption of
shares in an account if the aggregate net asset value of such shares has fallen
below the stated minimum solely as a result of market fluctuations. If the Board
exercises this right, it may also fix the requirements for any notice to be
given to the shareholders in question (not less than 30 days). The Board may
alternatively set requirements for the shareholder to increase the investment,
or set other terms and conditions so that the shares would not be involuntarily
redeemed.
Transfers of Shares. A transfer of shares to a different registration is not an
event that triggers the payment of sales charges. Therefore, shares are not
subject to the payment of a contingent deferred sales charge of any class at the
time of transfer to the name of another person or entity. It does not matter
whether the transfer occurs by absolute assignment, gift or bequest, as long as
it does not involve, directly or indirectly, a public sale of the shares. When
shares subject to a contingent deferred sales charge are transferred, the
transferred shares will remain subject to the contingent deferred sales charge.
It will be calculated as if the transferee shareholder had acquired the
transferred shares in the same manner and at the same time as the transferring
shareholder.
If less than all shares held in an account are transferred, and some but
not all shares in the account would be subject to a contingent deferred sales
charge if redeemed at the time of transfer, the priorities described in the
Prospectus under "How to Buy Shares" for the imposition of the Class B, Class C
or Class X contingent deferred sales charge will be followed in determining the
order in which shares are transferred.
Special Arrangements for Repurchase of Shares from Dealers and Brokers. The
Distributor is the Fund's agent to repurchase its shares from authorized dealers
or brokers on behalf of their customers. Shareholders should contact their
broker or dealer to arrange this type of redemption. The repurchase price per
share will be the net asset value next computed after the Distributor receives
an order placed by the dealer or broker. However, if the Distributor receives a
repurchase order from a dealer or broker after the close of The New York Stock
Exchange on a regular business day, it will be processed at that day's net asset
value if the order was received by the dealer or broker from its customers prior
to the time the Exchange closes. Normally, the Exchange closes at 4:00 P.M., but
may do so earlier on some days. Additionally, the order must have been
transmitted to and received by the Distributor prior to its close of business
that day (normally 5:00 P.M.).
Ordinarily, for accounts redeemed by a broker-dealer under this procedure,
payment will be made within three business days after the shares have been
redeemed upon the Distributor's receipt of the required redemption documents in
proper form. The signature(s) of the registered owners on the redemption
documents must be guaranteed as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the Fund
valued at $5,000 or more can authorize the Transfer Agent to redeem shares
(having a value of at least $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal Plan. Shares will be
redeemed three business days prior to the date requested by the shareholder for
receipt of the payment. Automatic withdrawals of up to $1,500 per month may be
requested by telephone if payments are to be made by check payable to all
shareholders of record. Payments must also be sent to the address of record for
the account and the address must not have been changed within the prior 30 days.
Required minimum distributions from OppenheimerFunds-sponsored retirement plans
may not be arranged on this basis.
Payments are normally made by check, but shareholders having AccountLink
privileges (see "How To Buy Shares") may arrange to have Automatic Withdrawal
Plan payments transferred to the bank account designated on the Account
Application or by signature-guaranteed instructions sent to the Transfer Agent.
Shares are normally redeemed pursuant to an Automatic Withdrawal Plan three
business days before the payment transmittal date you select in the Account
Application. If a contingent deferred sales charge applies to the redemption,
the amount of the check or payment will be reduced accordingly.
The Fund cannot guarantee receipt of a payment on the date requested. The
Fund reserves the right to amend, suspend or discontinue offering these plans at
any time without prior notice. Because of the sales charge assessed on Class A
share purchases, shareholders should not make regular additional Class A share
purchases while participating in an Automatic Withdrawal Plan. Class B, Class C
and Class X shareholders should not establish withdrawal plans, because of the
imposition of the contingent deferred sales charge on such withdrawals (except
where the contingent deferred sales charge is waived as described in Appendix C,
below).
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions that apply to such plans, as stated below.
These provisions may be amended from time to time by the Fund and/or the
Distributor. When adopted, any amendments will automatically apply to existing
Plans.
|X| Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent to exchange a pre-determined amount of shares of the Fund for shares (of
the same class) of other Oppenheimer funds automatically on a monthly,
quarterly, semi-annual or annual basis under an Automatic Exchange Plan. The
minimum amount that may be exchanged to each other fund account is $25.
Instructions should be provided on the OppenheimerFunds Application or
signature-guaranteed instructions. Exchanges made under these plans are subject
to the restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional Information.
|X| Automatic Withdrawal Plans. Fund shares will be redeemed as necessary
to meet withdrawal payments. Shares acquired without a sales charge will be
redeemed first. Shares acquired with reinvested dividends and capital gains
distributions will be redeemed next, followed by shares acquired with a sales
charge, to the extent necessary to make withdrawal payments. Depending upon the
amount withdrawn, the investor's principal may be depleted. Payments made under
these plans should not be considered as a yield or income on your investment.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan as agent for the shareholder(s) (the "Planholder") who executed the Plan
authorization and application submitted to the Transfer Agent. Neither the Fund
nor the Transfer Agent shall incur any liability to the Planholder for any
action taken or not taken by the Transfer Agent in good faith to administer the
Plan. Share certificates will not be issued for shares of the Fund purchased for
and held under the Plan, but the Transfer Agent will credit all such shares to
the account of the Planholder on the records of the Fund. Any share certificates
held by a Planholder may be surrendered unendorsed to the Transfer Agent with
the Plan application so that the shares represented by the certificate may be
held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done at
net asset value without a sales charge. Dividends on shares held in the account
may be paid in cash or reinvested.
Shares will be redeemed to make withdrawal payments at the net asset value
per share determined on the redemption date. Checks or AccountLink payments
representing the proceeds of Plan withdrawals will normally be transmitted three
business days prior to the date selected for receipt of the payment, according
to the choice specified in writing by the Planholder. Receipt of payment on the
date selected cannot be guaranteed.
The amount and the interval of disbursement payments and the address to
which checks are to be mailed or AccountLink payments are to be sent may be
changed at any time by the Planholder by writing to the Transfer Agent. The
Planholder should allow at least two weeks' time after mailing such notification
for the requested change to be put in effect. The Planholder may, at any time,
instruct the Transfer Agent by written notice to redeem all, or any part of, the
shares held under the Plan. That notice must be in proper form in accordance
with the requirements of the then-current Prospectus of the Fund. In that case,
the Transfer Agent will redeem the number of shares requested at the net asset
value per share in effect and will mail a check for the proceeds to the
Planholder.
The Planholder may terminate a Plan at any time by writing to the Transfer
Agent. The Fund may also give directions to the Transfer Agent to terminate a
Plan. The Transfer Agent will also terminate a Plan upon its receipt of evidence
satisfactory to it that the Planholder has died or is legally incapacitated.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that have
not been redeemed will be held in uncertificated form in the name of the
Planholder. The account will continue as a dividend-reinvestment, uncertificated
account unless and until proper instructions are received from the Planholder,
his or her executor or guardian, or another authorized person.
To use shares held under the Plan as collateral for a debt, the Planholder
may request issuance of a portion of the shares in certificated form. Upon
written request from the Planholder, the Transfer Agent will determine the
number of shares for which a certificate may be issued without causing the
withdrawal checks to stop. However, should such uncertificated shares become
exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent to act
as agent in administering the Plan.
How to Exchange Shares
As stated in the Prospectus, shares of a particular class of Oppenheimer funds
having more than one class of shares may be exchanged only for shares of the
same class of other Oppenheimer funds. Shares of Oppenheimer funds that have a
single class without a class designation are deemed "Class A" shares for this
purpose. You can obtain a current list showing which funds offer which classes
by calling the Distributor at 1-800-525-7048.
o All of the Oppenheimer funds currently offer Class A, B and C shares
except Oppenheimer Money Market Fund, Inc., Centennial Money Market Trust,
Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New
York Tax Exempt Trust, Centennial California Tax Exempt Trust, and
Centennial America Fund, L.P., which only offer Class A shares.
o Oppenheimer Main Street California Municipal Fund currently offers only
Class A and Class B shares.
o Class B and Class C shares of Oppenheimer Cash Reserves are generally
available only by exchange from the same class of shares of other
Oppenheimer funds or through OppenheimerFunds-sponsored 401(k) plans.
o Only certain Oppenheimer funds currently offer Class Y shares. Class Y
shares of Oppenheimer Real Asset Fund may not be exchanged for shares of
any other fund.
o Class M shares of Oppenheimer Convertible Securities Fund may be exchanged
only for Class A shares of other Oppenheimer funds. They may not be
acquired by exchange of shares of any class of any other Oppenheimer funds
except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash
Reserves acquired by exchange of Class M shares.
o Class A shares of Oppenheimer Senior Floating Rate Fund are not
available by exchange of shares of Oppenheimer Money Market Fund or
Class A shares of Oppenheimer Cash Reserves. If any Class A shares of
another Oppenheimer fund that are exchanged for Class A shares of
Oppenheimer Senior Floating Rate Fund are subject to the Class A
contingent deferred sales charge of the other Oppenheimer fund at the
time of exchange, the holding period for that Class A contingent
deferred sales charge will carry over to the Class A shares of
Oppenheimer Senior Floating Rate Fund acquired in the exchange. The
Class A shares of Oppenheimer Senior Floating Rate Fund acquired in
that exchange will be subject to the Class A Early Withdrawal Charge
of Oppenheimer Senior Floating Rate Fund if they are repurchased
before the expiration of the holding period.
o Class X shares of this Fund can be exchanged only for Class B shares of
other Oppenheimer funds and no exchanges may be made to Class X shares.
o Shares of Oppenheimer Capital Preservation Fund may not be exchanged for
shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves
or Oppenheimer Limited-Term Government Fund. Only participants in certain
retirement plans may purchase shares of Oppenheimer Capital Preservation
Fund, and only those participants may exchange shares of other Oppenheimer
funds for shares of Oppenheimer Capital Preservation Fund.
Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any money market fund offered by the Distributor. Shares of any
money market fund purchased without a sales charge may be exchanged for shares
of Oppenheimer funds offered with a sales charge upon payment of the sales
charge. They may also be used to purchase shares of Oppenheimer funds subject to
an early withdrawal charge or contingent deferred sales charge.
Shares of Oppenheimer Money Market Fund, Inc. purchased with the
redemption proceeds of shares of other mutual funds (other than funds managed by
the Manager or its subsidiaries) redeemed within the 30 days prior to that
purchase may subsequently be exchanged for shares of other Oppenheimer funds
without being subject to an initial sales charge or contingent deferred sales
charge. To qualify for that privilege, the investor or the investor's dealer
must notify the Distributor of eligibility for this privilege at the time the
shares of Oppenheimer Money Market Fund, Inc. are purchased. If requested, they
must supply proof of entitlement to this privilege.
Shares of the Fund acquired by reinvestment of dividends or distributions
from any of the other Oppenheimer funds or from any unit investment trust for
which reinvestment arrangements have been made with the Distributor may be
exchanged at net asset value for shares of any of the Oppenheimer funds.
The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund may impose these changes at any time, it will provide
you with notice of those changes whenever it is required to do so by applicable
law. It may be required to provide 60 days' notice prior to materially amending
or terminating the exchange privilege. That 60 day notice is not required in
extraordinary circumstances.
|X| How Exchanges Affect Contingent Deferred Sales Charges. No contingent
deferred sales charge is imposed on exchanges of shares of any class purchased
subject to a contingent deferred sales charge. However, when Class A shares
acquired by exchange of Class A shares of other Oppenheimer funds purchased
subject to a Class A contingent deferred sales charge are redeemed within 18
months of the end of the calendar month of the initial purchase of the exchanged
Class A shares, the Class A contingent deferred sales charge is imposed on the
redeemed shares. The Class B contingent deferred sales charge is imposed on
Class B shares acquired by exchange if they are redeemed within 6 years of the
initial purchase of the exchanged Class B shares. The Class C contingent
deferred sales charge is imposed on Class C shares acquired by exchange if they
are redeemed within 12 months of the initial purchase of the exchanged Class C
shares.
When Class B, Class C or Class X shares are redeemed to effect an
exchange, the priorities described in "How To Buy Shares" in the Prospectus for
the imposition of the Class B or the Class C contingent deferred sales charge
will be followed in determining the order in which the shares are exchanged.
Before exchanging shares, shareholders should take into account how the exchange
may affect any contingent deferred sales charge that might be imposed in the
subsequent redemption of remaining shares.
Shareholders owning shares of more than one Class must specify which class
of shares they wish to exchange.
|X| Limits on Multiple Exchange Orders. The Fund reserves the right to
reject telephone or written exchange requests submitted in bulk by anyone on
behalf of more than one account. The Fund may accept requests for exchanges of
up to 50 accounts per day from representatives of authorized dealers that
qualify for this privilege.
|X| Telephone Exchange Requests. When exchanging shares by telephone, a
shareholder must have an existing account in the fund to which the exchange is
to be made. Otherwise, the investors must obtain a Prospectus of that fund
before the exchange request may be submitted. If all telephone lines are busy
(which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by telephone
and would have to submit written exchange requests.
|X| Processing Exchange Requests. Shares to be exchanged are redeemed on
the regular business day the Transfer Agent receives an exchange request in
proper form (the "Redemption Date"). Normally, shares of the fund to be acquired
are purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The Fund
reserves the right, in its discretion, to refuse any exchange request that may
disadvantage it. For example, if the receipt of multiple exchange requests from
a dealer might require the disposition of portfolio securities at a time or at a
price that might be disadvantageous to the Fund, the Fund may refuse the
request.
When you exchange some or all of your shares from one fund to another, any
special account feature such as an Asset Builder Plan or Automatic Withdrawal
Plan, will be switched to the new fund account unless you tell the Transfer
Agent not to do so. However, special redemption and exchange features such as
Automatic Exchange Plans and Automatic Withdrawal Plans cannot be switched to an
account in Oppenheimer Senior Floating Rate Fund.
In connection with any exchange request, the number of shares exchanged
may be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information, or would include shares covered by a share
certificate that is not tendered with the request. In those cases, only the
shares available for exchange without restriction will be exchanged.
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks. A shareholder should assure that the
fund selected is appropriate for his or her investment and should be aware of
the tax consequences of an exchange. For federal income tax purposes, an
exchange transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. "Reinvestment Privilege," above, discusses some
of the tax consequences of reinvestment of redemption proceeds in such cases.
The Fund, the Distributor, and the Transfer Agent are unable to provide
investment, tax or legal advice to a shareholder in connection with an exchange
request or any other investment transaction.
Dividends and Taxes
Dividends and Distributions. Dividends will be payable on shares held of record
at the time of the previous determination of net asset value, or as otherwise
described in "How to Buy Shares." Daily dividends will not be declared or paid
on newly purchased shares until such time as Federal Funds (funds credited to a
member bank's account at the Federal Reserve Bank) are available from the
purchase payment for such shares. Normally, purchase checks received from
investors are converted to Federal Funds on the next business day. Shares
purchased through dealers or brokers normally are paid for by the third business
day following the placement of the purchase order.
Shares redeemed through the regular redemption procedure will be paid
dividends through and including the day on which the redemption request is
received by the Transfer Agent in proper form. Dividends will be declared on
shares repurchased by a dealer or broker for three business days following the
trade date (that is, up to and including the day prior to settlement of the
repurchase). If all shares in an account are redeemed, all dividends accrued on
shares of the same class in the account will be paid together with the
redemption proceeds.
The Fund's practice of attempting to pay dividends on Class A shares at a
constant level requires the Manager to monitor the Fund's portfolio and, if
necessary, to select higher-yielding securities when it is deemed appropriate to
seek income at the level needed to meet the target. Those securities must be
within the Fund's investment parameters, however. The Fund expects to pay
dividends at a targeted level from its net investment income and other
distributable income without any impact on the net asset values per share.
Dividends, distributions and the proceeds of the redemption of Fund shares
represented by checks returned to the Transfer Agent by the Postal Service as
undeliverable will be invested in shares of Oppenheimer Money Market Fund, Inc.
Reinvestment will be made as promptly as possible after the return of such
checks to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds. Unclaimed accounts may be subject to state escheatment
laws, and the Fund and the Transfer Agent will not be liable to shareholders or
their representatives for compliance with those laws in good faith.
The amount of a distribution paid on a class of shares may vary from time
to time depending on market conditions, the composition of the Fund's portfolio,
and expenses borne by the Fund or borne separately by a class. Dividends are
calculated in the same manner, at the same time and on the same day for shares
of each class. However, dividends on Class B, Class C and Class X shares are
expected to be lower than dividends on Class A shares. That is due to the effect
of the asset-based sales charge on Class B, Class C and Class X shares. Those
dividends will also differ in amount as a consequence of any difference in net
asset value among the different classes of shares.
Tax Status of the Fund's Dividends and Distributions. The Fund intends to
qualify under the Internal Revenue Code during each fiscal year to pay
"exempt-interest dividends" to its shareholders. Exempt-interest dividends that
are derived from net investment income earned by the Fund on municipal
securities will be excludable from gross income of shareholders for federal
income tax purposes. To the extent the Fund fails to qualify to pay
exempt-interest dividends in any given form, such dividends would be included in
the gross income of shareholders for federal income tax purposes.
Net investment income includes the allocation of amounts of income from
the municipal securities in the Fund's portfolio that are free from federal
income taxes. This allocation will be made by the use of one designated
percentage applied uniformly to all income dividends paid during the Fund's tax
year. That designation will normally be made following the end of each fiscal
year as to income dividends paid in the prior year. The percentage of income
designated as tax-exempt may substantially differ from the percentage of the
Fund's income that was tax-exempt for a given period.
A portion of the exempt-interest dividends paid by the Fund may be an item
of tax preference for shareholders subject to the federal alternative minimum
tax. The amount of any dividends attributable to tax preference items for
purposes of the alternative minimum tax will be identified when tax information
is distributed by the Fund.
A shareholder receiving a dividend from income earned by the Fund from one
or more of the following sources must treat the dividend as ordinary income in
the computation of the shareholder's gross income, regardless of whether the
dividend is reinvested:
(1) certain taxable temporary investments (such as certificates of deposit,
repurchase agreements, commercial paper and obligations of the U.S.
government, its agencies and instrumentalities);
(2) income from securities loans;
(3) income or gains from options or futures;
(4) any excess of net short-term capital gain over net long-term
capital loss; and
(5) any market discount amortization on tax-exempt bonds.
The Fund's dividends will not be eligible for the dividends-received
deduction for corporations. Shareholders receiving Social Security benefits
should be aware that exempt-interest dividends are a factor in determining
whether (and the extent to which) such benefits are subject to federal income
tax. Losses realized by shareholders on the redemption of Fund shares within six
months of purchase will be disallowed for federal income tax purposes to the
extent of exempt-interest dividends received on such shares.
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for federal income tax on amounts
it pays as dividends and other distributions. That qualification enables the
Fund to "pass through" its income and realized capital gains to shareholders
without having to pay tax on them. The Fund qualified as a regulated investment
company in its last fiscal year and intends to qualify in future years, but
reserves the right not to qualify. The Internal Revenue Code contains a number
of complex tests to determine whether the Fund qualifies. The Fund might not
meet those tests in a particular year. If it does not qualify, the Fund will be
treated for tax purposes as an ordinary corporation and will receive no tax
deduction for payments of dividends and other distributions made to
shareholders. In such an instance, all of the Fund's dividends would be taxable
to shareholders.
In any year in which the Fund qualifies as a regulated investment company
under the Internal Revenue Code, the Fund will also be exempt from New York
corporate income and franchise taxes. It will also be qualified under New York
law to pay exempt-interest dividends that will be exempt from New York State and
New York City personal income taxes. That exemption applies to the extent that
the Fund's distributions are attributable to interest on New York municipal
securities. Distributions from the Fund attributable to income from sources
other than New York municipal securities and U.S. government obligations will
generally be subject to New York State and New York City personal income taxes
as ordinary income.
Distributions by the Fund from investment income and long- and short-term
capital gains will generally not be excludable from taxable net investment
income in determining New York corporate franchise tax and New York City general
corporation tax for corporate shareholders of the Fund. Additionally, certain
distributions paid to corporate shareholders of the Fund may be includable in
income subject to the New York alternative minimum tax.
Under the Internal Revenue Code, by December 31 each year the Fund must
distribute at least 98% of the sum of its taxable investment income earned from
January 1 through December 31 of that year and its net capital gains realized in
the period from November 1 of the prior year through October 31 of the current
year. If it does not, the Fund must pay an excise tax on the amounts not
distributed. It is presently anticipated that the Fund will meet those
requirements. However, the Fund's Board of Trustees and the Manager might
determine in a particular year that it would be in the best interest of
shareholders not to make distributions at the required levels and to pay the
excise tax on the undistributed amounts. That would reduce the amount of income
or capital gains available for distribution to shareholders.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the same
class of any of the other Oppenheimer funds listed above. Reinvestment will be
made at net asset value without sales charge. To elect this option, the
shareholder must notify the Transfer Agent in writing and must have an existing
account in the fund selected for reinvestment. Otherwise the shareholder must
first obtain a prospectus for that fund and an application from the Transfer
Agent to establish an account. The investment will be made at the net asset
value per share in effect at the close of business on the payable date of the
dividend or distribution. Dividends and/or other distributions from certain of
the other Oppenheimer funds may be invested in shares of this Fund on the same
basis.
Additional Information About the Fund
The Transfer Agent. The Fund's Transfer Agent, OppenheimerFunds Services, is a
division of the Manager. It is responsible for maintaining the Fund's
shareholder registry and shareholder accounting records, and for paying
dividends and distributions to shareholders of the Fund. It also handles
shareholder servicing and administrative functions. It is paid on the basis of a
fixed fee per account.
The Custodian. Citibank, N.A. is the custodian of the Fund's assets. The
custodian's responsibilities include safeguarding and controlling the Fund's
portfolio securities, and handling the delivery of such securities to and from
the Fund. It will be the practice of the Fund to deal with the custodian in a
manner uninfluenced by any banking relationship the custodian may have with the
Manager and its affiliates. The Fund's cash balances with the custodian in
excess of $100,000 are not protected by Federal Deposit Insurance. Those
uninsured balances may at times be substantial.
<PAGE>
Independent Auditors. KPMG LLP are the independent auditors of the Fund for the
year ending December 31, 2000. They audit the Fund's financial statements and
perform other related audit services. They also act as auditors for certain
other funds advised by the Manager and its affiliates. PricewaterhouseCoopers
LLP were the independent accountants of the Fund, including audits of the
financial statements and other related audit services for the year ended
December 31, 1999.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To the Board of Trustees and Shareholders of
Rochester Portfolio Series
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Limited Term New York Municipal
Fund (the sole portfolio constituting Rochester Portfolio Series, hereafter
referred to as the Fund) at December 31, 1999, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended and the financial highlights for each of the periods
indicated, in conformity with accounting principles generally accepted in the
United States. These financial statements and financial highlights (hereafter
referred to as financial statements) are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Denver, Colorado
January 24, 2000
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
MUNICIPAL BONDS AND NOTES--100.0%
- ------------------------------------------------------------------------------------------------------------------------------------
New York--85.0%
$ 100,000 Albany GO 7.000 %
01/15/2010 01/15/2000(b) $ 102,233
344,704 Albany Hsg. Authority 0.000
10/01/2012 10/01/2002(a) 104,201
250,000 Albany Hsg. Authority 6.250
10/01/2012(s) 10/01/2005(b) 252,260
1,085,000 Albany IDA (Albany Medical Center) 5.600
05/01/2005 11/22/2003(c) 1,051,658
1,920,000 Albany IDA (H. Johnson Office Park) 5.250
03/01/2018 03/01/2000(d) 1,884,806
175,000 Albany IDA (Port of Albany) 6.250
02/01/2005 10/09/2002(c) 175,674
40,000 Albany IDA (Spectrapark) 7.300
12/01/2000 06/01/2000(b) 40,660
50,000 Albany IDA (Spectrapark) 7.500
12/01/2003 06/01/2000(b) 50,823
3,525,000 Albany IDA (Spectrapark) 7.600
12/01/2009(s) 06/01/2000(b) 3,584,854
1,655,000 Albany IDA (University Heights-Albany Pharmacy) 6.750
12/01/2019(s) 12/01/2009(b) 1,752,678
40,000 Albany Parking Authority 0.000
09/15/2002 ----- 34,612
25,000 Albany Parking Authority 0.000
09/15/2003 ----- 20,424
625,000 Albany Parking Authority 0.000
09/15/2004 ----- 481,081
20,000 Albany Parking Authority 0.000
09/15/2005 ----- 14,481
1,000,000 Albany Parking Authority 6.700
11/01/2006(s) 11/01/2001(b) 1,055,840
1,610,000 Albany Parking Authority 6.850
11/01/2012(s) 11/01/2001(b) 1,702,704
5,040,000 Albany Parking Authority 7.150
09/15/2016(s) 09/15/2001(b) 5,145,487
265,000 Albany Water Finance Authority 7.500
12/01/2006 06/01/2000(b) 268,350
675,000 Albany Water Finance Authority 7.500
12/01/2017(s) 06/01/2000(b) 683,437
3,100,000 Allegany County IDA (Atlantic Richfield) 6.625
09/01/2016 09/01/2002(b) 3,159,613
4,800,000 Amherst IDA (Amherst Rink) 5.550
10/01/2017 10/01/2007(a) 4,999,872
2,000,000 Amherst IDA (Amherst Rink) 5.650
10/01/2022 10/01/2007(a) 2,095,940
980,000 Andpress HDC (Andpress Plaza) 6.600
01/15/2023(s) 08/01/2003(b) 1,008,802
295,000 Babylon IDA (WWH Ambulance) 7.000
09/15/2001 03/19/2001(c) 300,516
55,000 Baldwinsville Devel. Corp. 7.200
06/01/2010(s) 07/01/2000(b) 56,217
200,000 Battery Park City Authority 5.650
12/01/2013(s) 06/01/2000(b) 200,004
45,000 Battery Park City Authority 5.800
11/01/2022 06/04/2022(c) 42,839
630,000 Blauvelt Volunteer Fire Company 6.000
10/15/2008 02/25/2005(c) 602,759
40,000 Brookhaven GO 6.400
10/01/2010 10/01/2002(b) 42,281
185,000 Brookhaven IDA (Dowling College) 6.200
03/01/2001 ----- 186,900
195,000 Brookhaven IDA (Dowling College) 6.300
03/01/2002 ----- 197,976
205,000 Brookhaven IDA (Dowling College) 6.400
03/01/2003 ----- 209,303
875,000 Brookhaven IDA (Stony Brook Foundation) 5.750
11/01/2008 08/13/2005(c) 859,294
505,000 Buffalo GO 6.000
12/01/2015 12/01/2011(b) 515,100
1,080,000 Carnegie Redevelopment Corp. 6.250
09/01/2005 05/02/2003(c) 1,081,253
1,550,000 Carnegie Redevelopment Corp. 6.500
09/01/2011 05/17/2009(c) 1,554,867
60,000 Cayuga County COP (Auburn Memorial Hospital) 6.000
01/01/2021 02/07/2014(c) 58,089
795,000 Clifton Springs Hospital & Clinic 7.000
01/01/2005 09/17/2003(c) 788,163
5,000 Cortland County IDA (Paul Bunyon Products) 8.000
07/01/2000(s) ----- 5,049
275,000 Dutchess County IDA (Bard College) 6.500
11/01/2003 ----- 285,274
1,175,000 Dutchess County Res Rec (Solid Waste) 6.800
01/01/2010(s) 12/01/2002(g) 1,262,067
50,000 East Irondequoit CSD 6.125
05/15/2008 05/15/2002(b) 51,666
290,000 Elmira HDC 7.500
08/01/2008 02/01/2000(b) 293,251
20,000 Elmira HDC 7.500
08/01/2009 02/01/2000(b) 20,224
395,000 Erie County IDA (FMC Corp.) 6.000
02/01/2003 08/02/2001(c) 391,484
190,000 Erie County IDA (Medaille College) 7.400
12/30/2002 01/19/2002(c) 194,585
25,000 Erie County IDA (Medishield) 7.200
08/01/2004 02/01/2000(b) 25,039
545,000 Erie County IDA (Mercy Hospital) 5.900
06/01/2003 12/25/2001(c) 529,909
2,230,000 Franklin County IDA (COP) 8.125
08/01/2006 06/28/2004(c) 2,440,490
1,070,000 Franklin County IDA (Correctional Facilities) 6.375
11/01/2002 05/31/2001(c) 1,078,849
85,000 Franklin County IDA (Correctional Facilities) 6.750
11/01/2012(s) 11/01/2002(b) 89,558
</TABLE>
9 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 2,120,000 Franklin County SWMA 6.000 %
06/01/2005 11/19/2003(c) $ 2,101,556
1,350,000 Franklin County SWMA 6.125
06/01/2009 12/28/2007(c) 1,327,684
850,000 Hamilton EHC (Hamilton Apartments) 11.250
01/01/2015(s) 05/01/2000(b) 880,829
1,315,000 Hempstead IDA (South Shore Y JCC) 5.950
11/01/2007 08/19/2004(c) 1,252,143
10,000 Hempstead IDA (United Cerebral Palsy) 7.500
10/01/2009(s) 04/01/2000(b) 10,254
565,000 Herkimer County IDA (Burrows Paper) 7.250
01/01/2001 ----- 566,785
3,000,000 Herkimer County IDA (Burrows Paper) 8.000
01/01/2009 10/28/2005(c) 3,130,380
2,700,000 Herkimer Hsg. Authority 7.150
03/01/2011(s) 04/10/2005(g) 2,750,355
2,000,000 Hsg. NY Corp. 5.500
11/01/2010 05/07/2010(c) 1,964,660
15,000 Hudson HDC (Providence Hall - Schuyler Court) 6.400
07/01/2012(s) 01/01/2003(b) 15,349
25,000 Hudson HDC (Providence Hall - Schuyler Court) 6.500
01/01/2025(s) 01/01/2003(b) 25,536
405,000 Hudson IDA (Have) 7.125
12/01/2007 10/16/2004(c) 404,741
1,160,000 Islip Res Rec 5.850
07/01/2002 ----- 1,194,290
2,790,000 Jamestown Hsg. Authority 6.125
07/01/2010(s) 11/18/2005(g) 2,795,385
2,000,000 Jefferson County IDA (Champion International) 7.200
12/01/2020 11/15/2002(b) 2,086,680
850,000 Kiryas Joel BAN 5.000
06/17/2000 ----- 853,357
85,000 Lillian Cooper HDC 7.000
01/01/2022(s) 01/01/2002(b) 87,124
52,378 Locke Fire District #1 (i) 7.500
07/01/2002 05/30/2001(c) 55,386
1,300,000 Lockport HDC 6.000
10/01/2018 10/22/2013(c) 1,260,766
1,430,000 Madison County IDA (Morrisville College) 6.750
07/01/2007 03/08/2004(c) 1,419,918
790,000 Madison County IDA (Oneida Healthcare Center) 5.300
07/01/2005 02/24/2003(c) 769,744
250,000 Medina Hsg. Corp. 8.250
08/15/2011(s) 02/15/2000(b) 256,827
520,000 Middleton IDA (Fleurchem) 7.125
12/01/2008 06/08/2005(c) 522,948
1,555,000 Middletown IDA (Southwinds Retirement Home) 5.875
03/01/2007 10/23/2003(c) 1,500,637
580,000 Middletown IDA (Southwinds Retirement Home) 7.250
03/01/2003 09/30/2001(c) 605,804
5,000 Monroe County Airport Authority (GRIA) 0.000
01/01/2004 ----- 4,105
500,000 Monroe County Airport Authority (GRIA) 5.375
01/01/2019 08/26/2016(c) 455,620
8,160,000 Monroe County COP 8.050
01/01/2011(s) 07/01/2000(b) 8,305,003
30,000 Monroe County GO 6.100
05/01/2003 ----- 30,484
2,425,000 Monroe County IDA (Al Sigl Center) 6.125
12/15/2008 05/06/2005(c) 2,477,331
960,000 Monroe County IDA (Al Sigl Center) 6.375
12/15/2005 08/21/2003(c) 942,682
1,135,000 Monroe County IDA (Al Sigl Center) 6.750
12/15/2010 01/31/2009(c) 1,109,985
10,000 Monroe County IDA (Cohber Press) 7.500
12/01/2000 06/01/2000(b) 10,081
100,000 Monroe County IDA (Cohber Press) 7.550
12/01/2001 06/01/2000(b) 100,184
1,280,000 Monroe County IDA (Dayton Rogers Manufacturing) 5.850
12/01/2006 02/19/2004(c) 1,234,189
1,280,000 Monroe County IDA (DePaul Properties) 5.900
09/01/2007 09/27/2004(c) 1,232,205
635,000 Monroe County IDA (Geva Theatre) 7.750
04/01/2002 04/21/2001(c) 636,422
360,000 Monroe County IDA (Geva Theatre) 7.750
04/01/2003 ----- 360,806
1,660,000 Monroe County IDA (Piano Works) 6.625
11/01/2006 02/04/2004(c) 1,658,805
300,000 Monroe County IDA (Roberts Wesleyan College) 6.200
09/01/2005 ----- 301,554
150,000 Monroe County IDA (West End Business) 6.750
12/01/2004 02/12/2003(c) 151,291
730,000 Montgomery County IDA (ASMF) (t) (u) 6.500
01/15/2003 08/15/2001(c) 504,430
6,600,000 MTA Commuter Facilities, Series A 6.500
07/01/2016 07/01/2007(b) 6,790,938
50,000 MTA Service Contract 7.000
07/01/2009(s) 07/01/2001(b) 52,748
75,000 MTA Service Contract, Series 5 6.000
07/01/2018 10/08/2017(c) 73,726
20,000 MTA Service Contract, Series 5 6.500
07/01/2016(s) 07/01/2001(b) 20,437
55,000 MTA Service Contract, Series 5 6.500
07/01/2016(s) 07/01/2001(b) 57,354
150,000 MTA Service Contract, Series P 5.750
07/01/2015 09/23/2014(c) 146,029
2,785,000 MTA Service Contract, Series R 5.200
07/01/2008 ----- 2,798,479
2,915,000 MTA Service Contract, Series R 5.300
07/01/2009 ----- 2,870,605
1,420,000 MTA Service Contract, Series R 5.300
07/01/2009 ----- 1,400,447
7,135,000 MTA, Series A 6.500
07/01/2016 07/01/2007(b) 7,341,416
15,000 MTA, Series K 6.000
07/01/2016(s) 07/01/2002(b) 15,074
</TABLE>
10 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 65,000 MTA, Series K 6.250 %
07/01/2011(s) 07/01/2002(b) $ 68,273
20,000 Nassau County GO 6.375
05/15/2013 05/15/2002(b) 21,008
295,000 Nassau County IDA (ACLDD) 7.250
10/01/2004 11/19/2002(c) 298,009
575,000 Nassau County IDA (NSCFGA) 5.750
05/01/2008 09/14/2004(c) 542,432
1,505,000 Nassau County IDA (United Cerebral Palsy) (w) 5.750
11/01/2007 09/02/2004(c) 1,479,641
3,605,000 Nassau County IDA (United Cerebral Palsy) (w) 5.750
11/01/2009 06/06/2005(c) 3,514,731
690,000 New Rochelle IDA (College of New Rochelle) 6.000
07/01/2002 07/16/2001(c) 700,867
260,000 New Rochelle IDA (College of New Rochelle) 6.300
07/01/2003 ----- 274,240
275,000 New Rochelle IDA (College of New Rochelle) 6.400
07/01/2004 ----- 290,702
235,000 Newark SCHC (Newark Rose Garden Apartments) 9.000
03/01/2011(s) 03/01/2000(b) 243,458
2,100,000 Newark-Wayne Community Hospital 7.600
09/01/2015(s) 06/11/2003(g) 2,180,514
1,400,000 Niagara County IDA (Sevenson Hotel) 5.750
05/01/2003 10/30/2001(c) 1,385,370
115,000 Niagara Frontier Transit Authority 7.000
02/15/2000 ----- 115,400
3,900,000 NYC Cultural Resources (SRGF) 7.250
12/01/2015(s) 12/01/2002(b) 4,060,212
25,000 NYC GO 0.000
08/15/2000 ----- 24,348
1,500,000 NYC GO 0.000
02/01/2001 ----- 1,427,670
50,000 NYC GO 0.000
08/15/2001 ----- 46,371
1,460,000 NYC GO 0.000
02/01/2002 ----- 1,320,205
1,000,000 NYC GO 0.000
02/01/2003 ----- 858,760
20,000 NYC GO 5.500
10/01/2014 ----- 19,303
10,000 NYC GO 5.500
10/01/2016 ----- 9,460
15,000 NYC GO 5.600
12/01/2010 06/01/2000(b) 15,015
10,000 NYC GO 5.625
10/01/2012 ----- 9,999
20,000 NYC GO 5.625
10/01/2013 ----- 19,791
15,000 NYC GO 5.625
08/01/2014 ----- 14,693
45,000 NYC GO 5.750
08/01/2011 08/01/2002(b) 46,106
140,000 NYC GO 5.750
08/15/2011 08/15/2005(b) 141,495
45,000 NYC GO 5.750
05/15/2012 05/15/2005(a) 47,018
45,000 NYC GO 5.750
05/15/2012 05/15/2005(b) 45,254
20,000 NYC GO 5.750
08/15/2012 08/15/2005(b) 20,118
20,000 NYC GO 5.750
08/15/2012 08/15/2003(a) 20,900
25,000 NYC GO 5.750
05/15/2013 05/15/2005(b) 25,027
40,000 NYC GO 5.750
05/15/2013 05/15/2005(b) 41,794
465,000 NYC GO 5.750
08/01/2013 08/01/2009(b) 465,823
80,000 NYC GO 5.750
08/15/2013 08/15/2005(b) 80,089
280,000 NYC GO 5.750
08/15/2013 08/15/2005(b) 280,311
55,000 NYC GO 5.750
10/15/2013 10/15/2009(b) 55,096
130,000 NYC GO 5.750
02/01/2014 02/14/2013(c) 128,942
100,000 NYC GO 5.750
02/01/2014(s) 02/01/2008(b) 100,475
5,000 NYC GO 5.750
05/15/2014 05/15/2003(a) 5,216
10,000 NYC GO 5.750
05/15/2014 ----- 9,917
1,665,000 NYC GO 5.750
08/15/2014 ----- 1,651,081
65,000 NYC GO 5.750
08/18/2014 ----- 64,457
215,000 NYC GO 5.750
02/01/2015 02/14/2014(c) 211,059
200,000 NYC GO 5.750
08/01/2015 ----- 196,260
25,000 NYC GO 5.750
08/01/2015 ----- 24,935
75,000 NYC GO 5.750
08/15/2015 ----- 73,594
80,000 NYC GO 5.750
08/01/2016 ----- 78,035
615,000 NYC GO 5.750
08/15/2016 ----- 599,865
25,000 NYC GO 5.750
02/01/2017 10/14/2015(c) 24,245
70,000 NYC GO 5.750
02/01/2019 08/27/2017(c) 67,066
60,000 NYC GO 5.800
08/01/2013 08/01/2005(b) 60,209
645,000 NYC GO 5.875
03/15/2013 03/15/2006(b) 651,198
</TABLE>
11 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 25,000 NYC GO 5.875 %
03/15/2014 03/15/2008(b) $ 25,078
50,000 NYC GO 5.875
08/01/2024 12/06/2019(c) 47,990
50,000 NYC GO 6.000
08/01/2006 02/01/2000(a) 50,079
15,000 NYC GO 6.000
08/01/2006 02/01/2000(b) 15,020
25,000 NYC GO 6.000
08/01/2008 08/01/2003(b) 25,814
5,000 NYC GO 6.000
08/01/2008 02/01/2000(b) 5,007
1,750,000 NYC GO 6.000
04/15/2009 04/15/2007(b) 1,826,650
15,000 NYC GO 6.000
05/15/2010 05/15/2003(b) 15,527
30,000 NYC GO 6.000
08/01/2010 08/01/2003(b) 31,090
55,000 NYC GO 6.000
02/01/2011 02/01/2006(b) 56,646
50,000 NYC GO 6.000
02/15/2011 02/15/2005(a) 52,887
25,000 NYC GO 6.000
02/15/2011 02/15/2007(b) 25,675
130,000 NYC GO 6.000
08/01/2011 02/01/2000(a) 130,172
25,000 NYC GO 6.000
08/01/2011 08/01/2003(b) 25,908
5,000 NYC GO 6.000
08/01/2011 02/01/2000(b) 5,007
60,000 NYC GO 6.000
02/15/2012 02/15/2005(a) 63,464
45,000 NYC GO 6.000
02/15/2012 02/15/2005(b) 45,949
30,000 NYC GO 6.000
08/01/2012 02/01/2000(a) 30,031
100,000 NYC GO 6.000
08/01/2012 08/01/2003(b) 101,722
15,000 NYC GO 6.000
02/15/2014 02/15/2005(a) 15,831
20,000 NYC GO 6.000
02/15/2014 02/15/2005(b) 20,340
15,000 NYC GO 6.000
02/15/2015 02/15/2005(a) 15,831
25,000 NYC GO 6.000
02/15/2015 02/15/2005(b) 25,425
25,000 NYC GO 6.000
05/15/2015 05/15/2005(b) 26,266
10,000 NYC GO 6.000
05/15/2015 05/15/2005(b) 10,120
450,000 NYC GO 6.000
08/01/2015 02/01/2000(b) 454,072
10,000 NYC GO 6.000
08/01/2016 (s) 08/01/2006(b) 10,016
50,000 NYC GO 6.000
08/01/2016 (s) 08/01/2006(b) 50,548
1,130,000 NYC GO 6.000
08/01/2017 02/11/2017(c) 1,126,892
1,530,000 NYC GO 6.000
08/01/2017 02/27/2016(c) 1,525,792
55,000 NYC GO 6.000
05/15/2019 05/15/2003(a) 57,873
10,000 NYC GO 6.000
05/15/2019 ----- 9,870
15,000 NYC GO 6.000
08/15/2026 08/17/2022(c) 14,601
100,000 NYC GO 6.125
08/01/2010 08/01/2004(b) 104,431
65,000 NYC GO 6.125
08/01/2011 08/01/2004(b) 67,880
2,500,000 NYC GO 6.250
08/01/2008 08/01/2006(b) 2,653,125
30,000 NYC GO 6.250
10/01/2008 10/01/2002(b) 31,663
15,000 NYC GO 6.250
10/01/2008 10/01/2002(b) 15,732
10,550,000 NYC GO 6.250
08/01/2009 08/01/2006(b) 11,157,574
205,000 NYC GO 6.250
08/01/2010 08/01/2006(b) 216,222
75,000 NYC GO 6.250
08/01/2010 08/01/2004(b) 79,375
2,000,000 NYC GO 6.250
08/01/2012 08/01/2006(b) 2,082,680
4,270,000 NYC GO 6.250
08/01/2013 08/01/2006(b) 4,417,187
25,000 NYC GO 6.250
04/01/2016 04/01/2006(a) 26,909
25,000 NYC GO 6.250
04/01/2016 04/01/2006(b) 25,440
70,000 NYC GO 6.250
08/01/2016 08/01/2002(b) 70,757
40,000 NYC GO 6.250
08/01/2017 (s) 08/01/2006(b) 40,594
110,000 NYC GO 6.250
08/01/2019 ----- 108,831
75,000 NYC GO 6.250
08/01/2021 08/01/2002(b) 75,246
175,000 NYC GO 6.300
08/15/2008 08/15/2005(a) 188,279
875,000 NYC GO 6.300
08/15/2008 08/15/2005(b) 922,171
590,000 NYC GO 6.375
02/15/2006 02/15/2005(a) 633,979
410,000 NYC GO 6.375
02/15/2006 ----- 434,637
</TABLE>
12 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 195,000 NYC GO 6.375 %
08/01/2006 08/01/2004(a) $ 205,957
425,000 NYC GO 6.375
08/01/2006 08/01/2002(b) 445,200
670,000 NYC GO 6.375
08/01/2007 08/01/2002(a) 707,647
1,485,000 NYC GO 6.375
08/01/2007 08/01/2002(b) 1,543,286
2,835,000 NYC GO 6.375
08/15/2009 08/15/2005(a) 3,060,468
10,665,000 NYC GO 6.375
08/15/2009 08/15/2005(b) 11,348,307
395,000 NYC GO 6.375
08/01/2010 08/01/2005(a) 426,256
1,495,000 NYC GO 6.375
08/01/2010 08/01/2005(b) 1,591,442
215,000 NYC GO 6.375
08/15/2010 08/15/2005(a) 232,099
815,000 NYC GO 6.375
08/15/2010 08/15/2005(b) 867,217
30,000 NYC GO 6.375
08/15/2011 08/15/2005(a) 32,386
105,000 NYC GO 6.375
08/15/2011 08/15/2005(b) 111,727
2,100,000 NYC GO 6.375
08/01/2012 08/15/2005(a) 2,267,013
7,900,000 NYC GO 6.375
08/01/2012 08/15/2005(b) 8,266,560
15,000 NYC GO 6.500
08/01/2005 08/01/2002(a) 15,873
95,000 NYC GO 6.500
08/01/2005 08/01/2002(b) 99,799
20,000 NYC GO 6.500
08/01/2006 08/01/2002(b) 21,010
600,000 NYC GO 6.500
02/15/2008 02/15/2005(a) 648,090
20,000 NYC GO 6.500
08/01/2008 08/01/2002(a) 21,164
105,000 NYC GO 6.500
08/01/2008 08/01/2002(b) 110,305
8,725,000 NYC GO 6.500
08/01/2011 08/01/2002(b) 9,165,787
35,000 NYC GO 6.500
08/01/2012 08/01/2002(a) 37,072
70,000 NYC GO 6.500
08/01/2012 08/01/2002(b) 73,305
25,000 NYC GO 6.500
08/01/2013 08/01/2002(a) 26,480
55,000 NYC GO 6.500
08/01/2013 08/01/2002(b) 57,747
20,000 NYC GO 6.500
08/01/2014 08/01/2002(b) 20,999
22,000 NYC GO 6.500
08/01/2014 08/01/2005(a) 23,874
78,000 NYC GO 6.500
08/01/2014 08/15/2005(b) 83,032
10,000 NYC GO 6.500
08/01/2016 08/01/2005(a) 10,852
40,000 NYC GO 6.500
08/01/2016 08/01/2005(b) 41,018
10,000 NYC GO 6.500
08/01/2019 08/01/2005(a) 10,852
70,000 NYC GO 6.500
08/01/2019(s) 08/01/2005(b) 71,696
1,445,000 NYC GO 6.600
02/15/2010 02/15/2005(a) 1,567,290
9,325,000 NYC GO 6.600
10/01/2016 10/01/2002(a) 9,907,999
4,675,000 NYC GO 6.600
10/01/2016 10/01/2002(b) 4,824,273
10,000,000 NYC GO 6.625
02/15/2014 02/15/2005(a) 10,857,500
1,520,000 NYC GO 6.750
10/01/2005 10/01/2002(a) 1,623,694
30,000 NYC GO 6.750
10/01/2005 10/01/2002(b) 31,767
35,000 NYC GO 6.750
10/01/2006 10/01/2002(a) 37,350
5,000 NYC GO 6.750
10/01/2006 10/01/2002(b) 5,257
55,000 NYC GO 6.750
10/01/2017 10/01/2002(a) 58,693
210,000 NYC GO 7.000
02/01/2000 ----- 210,506
50,000 NYC GO 7.000
02/01/2000 ----- 50,112
65,000 NYC GO 7.000
02/01/2001 02/01/2000(a) 66,894
425,000 NYC GO 7.000
02/01/2001 02/01/2000(b) 425,850
20,000 NYC GO 7.000
02/01/2001 02/01/2000(b) 20,044
5,000 NYC GO 7.000
02/01/2002 02/01/2000(a) 5,019
20,000 NYC GO 7.000
08/15/2002 02/15/2000(a) 20,165
35,000 NYC GO 7.000
02/01/2003 02/01/2000(a) 35,084
2,990,000 NYC GO 7.000
02/01/2006 02/01/2002(a) 3,170,297
260,000 NYC GO 7.000
02/01/2006 02/01/2002(b) 274,110
160,000 NYC GO 7.000
12/01/2006 06/01/2000(b) 161,947
365,000 NYC GO 7.000
08/01/2007 ----- 402,814
</TABLE>
13 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 5,000 NYC GO 7.000 %
02/01/2009 02/01/2000(b) $ 5,011
730,000 NYC GO 7.000
10/01/2009 10/01/2002(a) 783,290
50,000 NYC GO 7.000
10/01/2010 10/01/2002(a) 53,703
5,000 NYC GO 7.000
10/01/2010 10/01/2002(b) 5,326
5,000 NYC GO 7.000
12/01/2010 06/01/2000(b) 5,055
5,000 NYC GO 7.000
02/01/2011 02/01/2000(a) 5,011
30,000 NYC GO 7.000
02/01/2012 02/01/2000(b) 30,061
8,960,000 NYC GO 7.000
10/01/2013 10/01/2002(a) 9,614,080
185,000 NYC GO 7.000
10/01/2013 10/01/2002(b) 196,923
25,000 NYC GO 7.000
10/01/2015 04/01/2000(a) 25,169
1,520,000 NYC GO 7.000
02/01/2016 02/01/2002(b) 1,599,146
15,000 NYC GO 7.000
08/01/2016 08/01/2002(a) 16,061
1,360,000 NYC GO 7.000
08/15/2016 08/15/2004(a) 1,495,021
70,000 NYC GO 7.000
10/01/2016 04/01/2000(a) 70,430
15,000 NYC GO 7.000
02/01/2017 02/01/2002(b) 15,781
5,000 NYC GO 7.000
02/01/2018 02/01/2002(b) 5,301
55,000 NYC GO 7.000
02/01/2018 02/01/2002(b) 57,864
35,000 NYC GO 7.000
10/01/2018 04/01/2000(a) 35,225
15,000 NYC GO 7.000
10/01/2019 04/01/2000(a) 15,087
5,000 NYC GO 7.100
02/01/2004 02/01/2000(b) 5,008
100,000 NYC GO 7.100
08/15/2007 08/15/2004(a) 110,163
175,000 NYC GO 7.100
02/01/2009 02/01/2002(b) 184,840
20,000 NYC GO 7.100
02/01/2010 02/01/2002(b) 21,125
25,000 NYC GO 7.200
08/01/2001 02/01/2000(a) 25,063
5,000 NYC GO 7.200
08/01/2002 08/01/2000(a) 5,165
30,000 NYC GO 7.200
08/01/2002 08/01/2000(b) 30,868
5,000 NYC GO 7.200
02/01/2005 02/01/2000(a) 5,012
1,450,000 NYC GO 7.200
08/15/2008 08/15/2004(a) 1,603,308
20,000 NYC GO 7.200
02/01/2015 02/01/2002(a) 21,285
50,000 NYC GO 7.250
12/01/2001 06/01/2000(b) 50,618
40,000 NYC GO 7.250
10/01/2005 04/01/2000(a) 40,909
100,000 NYC GO 7.250
02/01/2007 02/01/2000(a) 100,260
5,000 NYC GO 7.250
02/01/2007 02/01/2000(b) 5,012
15,000 NYC GO 7.250
08/15/2017 02/15/2000(a) 15,277
500,000 NYC GO 7.400
02/01/2000 ----- 501,285
10,000 NYC GO 7.400
08/15/2000 02/15/2000(a) 10,086
285,000 NYC GO 7.400
02/01/2002 ----- 300,538
5,000 NYC GO 7.500
08/01/2001 02/01/2000(b) 5,087
5,000 NYC GO 7.500
08/15/2001 02/15/2000(b) 5,019
2,025,000 NYC GO 7.500
02/01/2003 02/01/2002(b) 2,152,838
105,000 NYC GO 7.500
08/15/2003 02/15/2000(b) 106,959
20,000 NYC GO 7.500
12/01/2003 06/01/2000(a) 20,284
10,125,000 NYC GO 7.500
02/01/2004 02/01/2002(b) 10,773,506
25,000 NYC GO 7.500
12/01/2004 06/01/2000(a) 25,355
15,000 NYC GO 7.500
02/01/2005 02/01/2002(a) 16,052
85,000 NYC GO 7.500
02/01/2005 02/01/2002(b) 90,444
5,000 NYC GO 7.500
08/15/2005 02/15/2000(b) 5,019
6,450,000 NYC GO 7.500
02/01/2006 02/01/2002(b) 6,863,122
220,000 NYC GO 7.500
02/01/2007 02/01/2002(b) 234,091
750,000 NYC GO 7.500
02/01/2009 02/01/2002(b) 802,590
1,675,000 NYC GO 7.500
02/01/2009 02/01/2002(b) 1,782,284
135,000 NYC GO 7.500
03/15/2009 03/15/2000(b) 137,862
50,000 NYC GO 7.625
02/01/2013 02/01/2002(a) 53,670
</TABLE>
14 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 40,000 NYC GO 7.650 %
02/01/2007 02/01/2002(b) $ 42,680
295,000 NYC GO 7.700
02/01/2009 02/01/2002(a) 317,090
5,000 NYC GO 7.700
02/01/2009 02/01/2002(b) 5,340
315,000 NYC GO 7.750
08/15/2001 02/15/2000(b) 320,972
5,000 NYC GO 7.750
08/15/2005 08/15/2001(b) 5,322
75,000 NYC GO 7.750
08/15/2006 08/15/2001(b) 79,449
15,000 NYC GO 7.750
08/15/2007 08/15/2001(b) 15,890
60,000 NYC GO 7.750
02/01/2010 02/01/2002(b) 64,465
45,000 NYC GO 7.750
08/15/2011 08/15/2001(a) 47,899
20,000 NYC GO 7.750
08/15/2012 08/15/2001(b) 21,288
20,000 NYC GO 7.750
08/15/2014 08/15/2001(b) 21,186
5,000 NYC GO 7.875
08/01/2000 02/01/2000(b) 5,052
40,000 NYC GO 7.875
08/01/2004 08/01/2000(b) 41,394
15,000 NYC GO 8.000
08/01/2001 02/01/2000(b) 15,151
5,000 NYC GO 8.000
08/01/2003 02/01/2000(b) 5,052
65,000 NYC GO 8.000
08/01/2003 08/01/2001(b) 69,349
60,000 NYC GO 8.000
08/01/2003 08/01/2001(b) 63,725
5,000 NYC GO 8.250
08/01/2011 08/01/2001(b) 5,353
1,355,000 NYC GO CAB 0.000 (v)
05/15/2014 05/15/2008(b) 1,128,837
5,000,000 NYC GO CARS 7.070 (r)
09/01/2011 08/01/2002(b) 5,325,000
10,000 NYC GO DIAMONDS 0.000 (v)
08/01/2007 08/01/2002(b) 8,832
11,870,000 NYC GO Indexed Inverse Floater 0.420 (r)
08/15/2010 ----- 11,843,292
14,600,000 NYC GO Indexed Inverse Floater 2.750 (r)
08/15/2017 ----- 13,481,202
2,000,000 NYC GO LIMO 0.000 (v)
02/01/2004 02/01/2000(b) 2,108,960
1,950,000 NYC GO LIMO 0.000 (v)
02/01/2007 02/01/2002(e) 1,787,311
170,000 NYC GO Municipal RAES 0.000
04/01/2000 ----- 168,169
630,000 NYC GO Municipal RAES 0.000
04/01/2001 ----- 594,896
115,000 NYC GO PRAMS 0.000 (v)
10/01/2006 10/01/2002(b) 101,193
50,000 NYC GO PRAMS 0.000 (v)
02/01/2012 02/01/2002(b) 46,025
450,000 NYC HDC (Barclay Avenue) 5.750
04/01/2007 01/10/2004(c) 447,588
9,490,000 NYC HDC (Multifamily Hsg.), Series A 5.500
11/01/2009(s) 05/01/2008(b) 9,564,876
4,835,000 NYC HDC (Multifamily Hsg.), Series A 5.625
05/01/2012 05/31/2011(c) 4,779,591
1,715,000 NYC HDC (Multifamily Hsg.), Series A 6.550
10/01/2015(s) 04/01/2003(b) 1,783,291
110,000 NYC HDC (Multifamily Hsg.), Series A 7.300
06/01/2010(s) 06/01/2001(b) 115,417
210,000 NYC HDC (Multifamily Hsg.), Series A 7.350
06/01/2019(s) 06/01/2001(b) 220,483
8,145,000 NYC HDC (Multifamily Hsg.), Series B 5.700
11/01/2013(s) 05/01/2005(b) 8,226,206
1,970,000 NYC HDC (Pass Through Certificate) (i) 6.500
09/20/2003 06/05/2002(c) 2,072,223
695,000 NYC HDC (South Bronx Cooperatives) 8.100
09/01/2023(s) 08/27/2000(g) 717,581
1,645,000 NYC HDC (South Williamsburg Cooperatives) 7.900
02/01/2023(s) 01/29/2000(g) 1,680,022
2,600,000 NYC Health & Hospital Corp. 5.625
02/15/2013 08/21/2012(c) 2,592,642
1,000,000 NYC Hsg. Authority, Series A 5.650
07/01/2010 10/06/2009(c) 992,980
1,985,000 NYC IDA (Acme Architectural Products) 5.875
11/01/2009 10/23/2005(c) 1,852,700
850,000 NYC IDA (ALA Realty) 7.000
12/01/2005 08/07/2003(c) 866,804
1,840,000 NYC IDA (American Airlines) 6.900
08/01/2024 08/01/2004(b) 1,877,297
685,000 NYC IDA (Atlantic Veal & Lamb) 7.250
12/01/2008 05/28/2005(c) 696,720
1,640,000 NYC IDA (Blood Center) 6.800
05/01/2002 05/16/2001(c) 1,714,915
335,000 NYC IDA (Brooklyn Heights Montessori School) 7.500
01/01/2007 11/17/2003(c) 339,811
745,000 NYC IDA (Chardan Corp.) 6.250
11/01/2008 07/16/2005(c) 738,928
615,000 NYC IDA (College of Aeronautics) 5.500
05/01/2012 ----- 587,128
450,000 NYC IDA (College of Aeronautics) 5.500
05/01/2013 ----- 424,584
360,000 NYC IDA (College of New Rochelle) 6.200
09/01/2010(s) 09/01/2005(b) 373,464
725,000 NYC IDA (Comprehensive Care Management) 5.750
11/01/2008 03/17/2005(c) 671,314
285,000 NYC IDA (Comprehensive Care Management) 5.750
11/01/2008 03/15/2005(c) 264,001
</TABLE>
15 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 635,000 NYC IDA (Comprehensive Care Management) 7.250 %
12/01/2006 03/28/2004(c) $ 629,177
886,940 NYC IDA (Cummins Engine) 6.500
03/01/2005 04/09/2003(c) 880,865
575,000 NYC IDA (Elmhurst Parking Garage) 7.400
07/30/2002 08/14/2001(c) 596,447
920,000 NYC IDA (Essie Cosmetics) 5.500
11/01/2008 03/19/2005(c) 863,963
45,000 NYC IDA (Federation Protestant Welfare) 6.950
11/01/2011 11/01/2001(b) 47,199
1,660,000 NYC IDA (Friends Seminary School) 6.125
12/01/2007 04/14/2004(c) 1,660,299
1,320,000 NYC IDA (Gabrielli Truck Sales) 7.250
12/01/2007 10/18/2004(c) 1,329,068
715,000 NYC IDA (Good Shepherd Services) 5.125
06/01/2004 07/09/2002(c) 700,199
22,780,000 NYC IDA (Japan Airlines) 6.000
11/01/2015(s) 02/07/2007(g) 23,542,447
1,170,000 NYC IDA (JBFS) 6.500
12/15/2002 12/30/2001(c) 1,171,100
435,000 NYC IDA (Julia Gray) (w) 6.500
11/01/2007 12/20/2004(c) 432,586
425,000 NYC IDA (Koenig Manufacturing) 7.375
12/01/2010 09/23/2006(c) 433,079
1,220,000 NYC IDA (Little Red Schoolhouse) 5.750
11/01/2007 08/19/2004(c) 1,151,046
855,000 NYC IDA (MediSys Health Network) 5.750
03/15/2006 06/12/2004(c) 828,632
825,000 NYC IDA (Morrisons Pastry) 5.750
11/01/2009 08/10/2004(c) 780,145
360,000 NYC IDA (Ohel Children's Home & Family Services) 7.125
03/15/2003 10/18/2001(c) 384,494
2,785,000 NYC IDA (Plaza Packaging) 7.650
12/01/2009(s) 06/01/2000(b) 2,843,206
695,000 NYC IDA (Precision Gear) 5.875
11/01/2009 10/26/2005(c) 655,607
590,000 NYC IDA (Precision Gear) 5.875
11/01/2009 10/10/2005(c) 556,559
195,000 NYC IDA (Precision Gear) 6.500
11/01/2008 10/10/2005(c) 194,163
575,000 NYC IDA (Promotional Slideguide) 7.000
12/01/2005 08/18/2003(c) 582,141
2,845,000 NYC IDA (Special Needs Facilities Pooled Program)5.950
07/01/2008 01/31/2004(c) 2,703,120
190,000 NYC IDA (Streamline Plastics) 7.125
12/01/2005 08/27/2003(c) 192,656
13,215,000 NYC IDA (Terminal One Group Association) 6.000
01/01/2015 09/01/2012(c) 13,182,623
215,000 NYC IDA (Terminal One Group Association) 6.000
01/01/2019 07/28/2017(c) 209,887
300,000 NYC IDA (Terminal One Group Association) 6.100
01/01/2009(s) 01/01/2006(b) 308,016
1,235,000 NYC IDA (Ulano) 6.250
11/01/2006 01/30/2004(c) 1,200,729
160,000 NYC IDA (United Nations School) 6.050
12/01/2005 ----- 163,760
170,000 NYC IDA (United Nations School) 6.100
12/01/2006 ----- 174,116
180,000 NYC IDA (United Nations School) 6.150
12/01/2007 ----- 184,828
1,700,000 NYC IDA (Visy Paper) 7.550
01/01/2005 09/11/2002(c) 1,736,873
4,000,000 NYC IDA (Visy Paper) 7.800
01/01/2016(s) 01/01/2006(b) 4,224,040
585,000 NYC IDA (World Casing Corp.) 5.950
11/01/2007 09/02/2004(c) 578,869
20,000 NYC Municipal Water Finance Authority 5.500
06/15/2019 10/29/2015(c) 18,590
855,000 NYC Municipal Water Finance Authority 5.750
06/15/2013(s) 06/15/2000(b) 843,876
50,000 NYC Municipal Water Finance Authority 5.750
06/15/2013(s) 06/15/2000(b) 51,681
40,000 NYC Municipal Water Finance Authority 5.750
06/15/2018 12/02/2015(c) 39,219
140,000 NYC Municipal Water Finance Authority 5.750
06/15/2018 01/08/2017(c) 137,267
5,000,000 NYC Municipal Water Finance Authority 6.000
06/15/2017(s) 06/15/2004(b) 5,027,900
1,135,000 NYC Municipal Water Finance Authority 6.250
06/15/2021(s) 06/15/2001(b) 1,150,538
30,000 NYC Municipal Water Finance Authority 7.000
06/15/2015(s) 06/15/2001(b) 31,343
50,000 NYC Municipal Water Finance Authority 7.100
06/15/2012(s) 06/15/2001(b) 52,094
40,000 NYC Municipal Water Finance Authority 7.100
06/15/2012(s) 06/15/2001(b) 41,704
25,000 NYC Public Hsg. Authority 6.000
01/01/2004 07/01/2000(b) 25,485
1,925,000 NYS COP 7.625
03/01/2009(s) 06/17/2001(g) 2,033,108
2,000,000 NYS DA (4201 Schools Program) 5.250
07/01/2015 ----- 1,824,580
30,000 NYS DA (Bishop Henry B. Hucles Nursing Home) 5.625
07/01/2018 11/11/2014(c) 28,737
215,000 NYS DA (Brooklyn Law School) 6.375
07/01/2007(s) 07/01/2001(b) 224,488
80,000 NYS DA (Brooklyn Law School) 6.400
07/01/2011(s) 07/01/2001(b) 83,381
35,000 NYS DA (City University) 0.000
07/01/2005 11/25/2003(c) 25,688
1,500,000 NYS DA (City University) 5.500
07/01/2005 ----- 1,518,075
2,020,000 NYS DA (City University) 5.500
07/01/2006 ----- 2,038,099
75,000 NYS DA (City University) 5.500
07/01/2012 08/09/2010(c) 73,312
</TABLE>
16 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 1,050,000 NYS DA (City University) 5.600 %
07/01/2010 05/22/2009(c) $ 1,052,457
1,900,000 NYS DA (City University) 6.000
07/01/2010 07/01/2006(b) 1,952,136
70,000 NYS DA (City University) 6.000
07/01/2016 01/05/2016(c) 69,099
670,000 NYS DA (City University) 7.000
07/01/2014(s) 07/01/2000(b) 691,339
25,000 NYS DA (College of St. Rose) 6.000
07/01/2011(s) 07/01/2002(b) 25,748
3,500,000 NYS DA (Cornell University) 7.375
07/01/2020(s) 07/01/2000(b) 3,618,580
585,000 NYS DA (Cornell University) 7.375
07/01/2030(s) 07/01/2000(b) 604,820
70,000 NYS DA (Court Facility) 5.375
05/15/2016 05/28/2015(c) 64,412
5,000 NYS DA (Dept. of Health) 5.500
07/01/2014 ----- 4,772
50,000 NYS DA (Dept. of Health) 5.900
07/01/2009 07/01/2004(b) 51,026
85,000 NYS DA (Episcopal Health Services) 7.550
08/01/2029 02/01/2000(b) 86,879
70,000 NYS DA (Higher Education) 8.500
06/01/2003(s) 06/01/2000(b) 70,247
40,000 NYS DA (Jewish Geriatric) 7.150
08/01/2014 08/01/2004(b) 43,680
50,000 NYS DA (Jewish Geriatric) 7.350
08/01/2029 08/01/2004(b) 54,362
20,000 NYS DA (JGB Health Facilities) 7.000
07/01/2009(s) 07/01/2000(b) 20,042
3,960,000 NYS DA (KMH Homes) 6.950
08/01/2031 08/01/2001(b) 4,124,855
25,000 NYS DA (Manhattan College) 6.500
07/01/2019(s) 07/01/2002(b) 25,354
750,000 NYS DA (MEET) 5.375
07/01/2012 07/01/2007(a) 767,602
4,750,000 NYS DA (Mount Sinai School of Medicine) 6.750
07/01/2009(s) 07/01/2001(b) 4,985,125
190,000 NYS DA (Mount Sinai School of Medicine) 6.750
07/01/2015(s) 07/01/2001(b) 198,603
70,000 NYS DA (New Hope Community) 5.700
07/01/2017 08/24/2012(c) 67,633
50,000 NYS DA (Nursing Homes) 5.500
07/01/2010 07/09/2009(c) 49,568
225,000 NYS DA (NY Medical College) 6.875
07/01/2003 07/01/2002(a) 240,561
1,325,000 NYS DA (Nyack Hospital) 6.250
07/01/2013 05/10/2009(c) 1,273,020
10,000 NYS DA (NYS Association for Retarded Children) 7.100
07/01/2003 07/01/2000(b) 10,173
25,000 NYS DA (NYS Association for Retarded Children) 7.600
07/01/2018(s) 07/01/2000(b) 25,439
90,000 NYS DA (Park Ridge Hsg.) 7.850
02/01/2029 02/01/2000(b) 92,011
1,055,000 NYS DA (Pooled Capital Program) 7.800
12/01/2005(s) 06/01/2000(b) 1,084,835
45,000 NYS DA (St. Francis G&H) 7.375
08/01/2010 08/01/2000(b) 46,745
20,000 NYS DA (St. Vincent's Hospital) 5.750
08/01/2015 03/23/2011(c) 19,806
25,000 NYS DA (St. Vincent's Hospital) 7.375
08/01/2011 08/01/2001(b) 26,452
1,150,000 NYS DA (State University Educational Facilities) 5.750
05/15/2010 05/15/2008(b) 1,174,495
660,000 NYS DA (State University Educational Facilities) 6.000
05/15/2017 ----- 658,185
165,000 NYS DA (State University Educational Facilities) 6.000
05/15/2017 11/18/2016(c) 164,546
8,730,000 NYS DA (State University Educational Facilities) 6.375
05/15/2014 05/15/2003(a) 9,335,513
100,000 NYS DA (State University Educational Facilities) 7.000
05/15/2004 05/15/2000(a) 103,041
13,200,000 NYS DA (State University Educational Facilities) 7.000
05/15/2016 05/15/2000(a) 13,601,412
215,000 NYS DA (State University Educational Facilities) 7.000
05/15/2016 05/15/2000(a) 221,205
14,775,000 NYS DA (State University Educational Facilities) 7.375
05/15/2014(s) 05/15/2000(b) 15,243,958
330,000 NYS DA (Suffolk County Judicial Facilities) 9.000
10/15/2001(s) 04/01/2000(b) 354,948
10,000 NYS DA (Suffolk County Judicial Facilities) 9.000
10/15/2001(s) 04/01/2000(b) 10,749
155,000 NYS DA (Suffolk County Judicial Facilities) 9.250
04/15/2006(s) 04/01/2000(b) 170,035
30,000 NYS DA (Suffolk County Judicial Facilities) 9.500
04/15/2014(s) 04/15/2000(b) 34,553
1,000,000 NYS DA (Teresian House) 5.250
07/01/2017 11/02/2013(c) 870,950
3,290,000 NYS DA (United Health Services) 5.500
08/01/2017 05/17/2009(c) 3,114,314
145,000 NYS DA (University of Rochester) 6.500
07/01/2009(s) 07/01/2000(b) 146,708
20,000 NYS DA (University of Rochester) 6.500
07/01/2009(s) 07/01/2000(b) 20,236
60,000 NYS DA (Upstate Community Colleges) 5.500
07/01/2014 10/05/2012(c) 57,094
55,000 NYS DA (Upstate Community Colleges) 5.625
07/01/2012(s) 07/01/2004(b) 55,412
280,000 NYS DA (Upstate Community Colleges) 5.625
07/01/2014 01/24/2013(c) 271,110
35,000 NYS DA (Upstate Community Colleges) 5.875
07/01/2016 07/15/2015(c) 34,206
1,250,000 NYS DA (Upstate Community Colleges) 6.200
07/01/2015 07/01/2005(a) 1,349,512
20,000 NYS DA (WHELC) 5.800
02/01/2028 ----- 18,827
</TABLE>
17 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 200,000 NYS EFC (Consolidated Water) 7.150 %
11/01/2014(s) 11/01/2004(b) $ 206,612
20,000 NYS EFC (New Rochelle Water) 6.400
12/01/2024 06/01/2002(b) 20,155
2,000,000 NYS EFC (NYS Water Services) 6.700
09/15/2004 09/15/2000(b) 2,073,480
1,705,000 NYS EFC (NYS Water Services) 6.875
06/15/2014(s) 11/15/2004(b) 1,838,638
960,000 NYS EFC (NYS Water Services) 6.900
05/15/2015(s) 02/06/2004(g) 1,045,229
750,000 NYS EFC (NYS Water Services) 6.900
11/15/2015(s) 11/15/2004(b) 816,585
100,000 NYS EFC (NYS Water Services) 7.200
03/15/2011(s) 03/15/2000(b) 102,544
350,000 NYS EFC (NYS Water Services) 7.500
03/15/2011(s) 03/15/2000(b) 357,864
2,500,000 NYS EFC (NYS Water Services) 7.500
06/15/2012(s) 06/15/2000(b) 2,584,150
25,000 NYS EFC (Spring Valley Water Co.) 5.650
11/01/2023 ----- 23,265
50,000 NYS EFC (State Park Infrastructure) 5.750
03/15/2013 04/25/2011(c) 49,926
7,060,000 NYS ERDA (Brooklyn Union Gas) 6.750
02/01/2024 05/06/2002(b) 7,411,376
11,505,000 NYS ERDA (Brooklyn Union Gas) 6.750
02/01/2024 05/12/2002(b) 12,080,365
15,000 NYS ERDA (Central Hudson G&E) 6.250
06/01/2007(s) 06/01/2000(b) 15,016
25,000 NYS ERDA (Con Ed) 6.375
12/01/2027 12/01/2001(b) 25,088
200,000 NYS ERDA (Con Ed) 6.375
12/01/2027 12/01/2001(b) 201,050
11,735,000 NYS ERDA (Con Ed) 6.750
01/15/2027 01/15/2001(b) 12,029,079
16,510,000 NYS ERDA (Con Ed) 6.750
01/15/2027 01/15/2001(b) 16,923,741
9,290,000 NYS ERDA (Con Ed) 6.750
01/15/2027 01/15/2001(b) 9,532,283
29,910,000 NYS ERDA (Con Ed) 7.500
01/01/2026 07/01/2000(b) 30,277,295
1,110,000 NYS ERDA (Con Ed) 7.500
01/01/2026 07/01/2000(b) 1,123,675
325,000 NYS ERDA (LILCO) 6.900
08/01/2022 01/21/2003(a) 349,524
65,000 NYS ERDA (LILCO) 6.900
08/01/2022 02/01/2002(a) 69,905
2,935,000 NYS ERDA (LILCO) 6.900
08/01/2022 02/01/2002(b) 3,021,817
1,930,000 NYS ERDA (LILCO) 7.150
09/01/2019 06/15/2002(b) 2,023,431
10,675,000 NYS ERDA (LILCO) 7.150
06/01/2020 06/15/2002(b) 11,191,777
680,000 NYS ERDA (LILCO) 7.150
12/01/2020 06/15/2002(b) 712,919
15,000 NYS ERDA (LILCO) 7.150
02/01/2022 06/15/2002(a) 16,059
920,000 NYS ERDA (LILCO) 7.150
02/01/2022 06/15/2002(b) 964,537
17,000,000 NYS ERDA (NIMO) 6.625
10/01/2013 10/01/2001(b) 17,834,360
200,000 NYS ERDA (NYSEG) 5.700
12/01/2028 ----- 185,532
3,575,000 NYS ERDA (RG&E) 6.500
05/15/2032 05/15/2002(b) 3,624,049
15,000 NYS GO 6.000
11/15/2007 11/15/2002(b) 15,663
10,975,000 NYS GO 6.125
06/15/2014(s) 06/15/2006(b) 11,232,583
40,000 NYS GO 6.600
12/01/2014 06/01/2000(b) 40,730
80,000 NYS HFA (Children's Rescue) 7.400
11/01/2000 ----- 80,492
65,000 NYS HFA (Children's Rescue) 7.500
05/01/2001 ----- 65,574
140,000 NYS HFA (Children's Rescue) 7.500
11/01/2001 ----- 141,679
114,000 NYS HFA (General Hsg.) 6.500
11/01/2003 ----- 116,454
10,000 NYS HFA (General Hsg.) 6.600
11/01/2005 11/01/2000(b) 10,216
30,000 NYS HFA (General Hsg.) 6.600
11/01/2006 11/01/2000(b) 30,648
1,435,000 NYS HFA (Health Facility) 6.000
05/01/2007 ----- 1,479,270
2,165,000 NYS HFA (Health Facility) 6.000
05/01/2008 05/01/2006(b) 2,228,824
1,590,000 NYS HFA (HELP-Bronx Hsg.) 8.050
11/01/2005(s) 05/01/2000(b) 1,623,660
20,000 NYS HFA (HELP-Westchester Hsg.) 7.550
11/01/2002 05/01/2000(b) 20,094
5,000 NYS HFA (Hospital & Nursing Home) 5.500
11/01/2005 05/01/2000(a) 5,118
5,000 NYS HFA (Hospital & Nursing Home) 5.500
11/01/2012 05/01/2000(a) 5,002
15,000 NYS HFA (Hospital & Nursing Home) 5.875
11/01/2010 11/01/2001(a) 15,590
10,000 NYS HFA (Hospital & Nursing Home) 5.875
11/01/2011 11/01/2001(a) 10,357
5,000 NYS HFA (Hospital & Nursing Home) 5.900
11/01/2003 05/01/2000(a) 5,169
30,000 NYS HFA (Hospital & Nursing Home) 5.900
11/01/2005 05/01/2000(a) 31,209
5,000 NYS HFA (Hospital & Nursing Home) 5.900
11/01/2010 05/01/2000(a) 5,206
35,000 NYS HFA (Hospital & Nursing Home) 6.000
11/01/2014 05/01/2000(b) 35,845
</TABLE>
18 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 10,000 NYS HFA (Hospital & Nursing Home) 6.375 %
11/01/2001 ----- $ 10,326
10,000 NYS HFA (Hospital & Nursing Home) 6.875
11/01/2004 05/01/2000(a) 10,793
5,000 NYS HFA (Hospital & Nursing Home) 6.875
11/01/2005 05/01/2000(a) 5,457
480,000 NYS HFA (Hospital & Nursing Home) 6.875
11/01/2007 05/01/2000(a) 516,821
5,000 NYS HFA (Hospital & Nursing Home) 6.875
11/01/2009 05/01/2000(a) 5,597
3,000 NYS HFA (Hospital & Nursing Home) 6.875
11/01/2010 05/01/2000(a) 3,370
590,000 NYS HFA (Hospital & Nursing Home) 7.000
11/01/2017 05/01/2000(b) 655,490
80,000 NYS HFA (Meadow Manor) 7.750
11/01/2019(s) 05/01/2000(b) 80,178
225,000 NYS HFA (Monroe County Health Facilities) 7.625
05/01/2005(s) 04/19/2000(g) 235,136
475,000 NYS HFA (Multifamily Hsg.) 0.000
11/01/2008 11/01/2006(b) 295,930
420,000 NYS HFA (Multifamily Hsg.) 0.000
11/01/2009 11/01/2006(b) 246,540
10,000 NYS HFA (Multifamily Hsg.) 0.000
11/01/2010 11/01/2006(b) 5,480
200,000 NYS HFA (Multifamily Hsg.) 0.000
11/01/2011 11/01/2006(b) 103,008
1,730,000 NYS HFA (Multifamily Hsg.) 0.000
11/01/2012 11/01/2006(b) 835,002
130,000 NYS HFA (Multifamily Hsg.) 0.000
11/01/2013 11/01/2006(b) 58,787
25,000 NYS HFA (Multifamily Hsg.) 6.000
08/15/2003 ----- 25,252
1,000,000 NYS HFA (Multifamily Hsg.) 6.100
08/15/2016(s) 08/15/2008(b) 1,003,900
2,015,000 NYS HFA (Multifamily Hsg.) 6.100
08/15/2028 07/13/2023(c) 1,990,639
35,000 NYS HFA (Multifamily Hsg.) 6.200
08/15/2012(s) 08/15/2002(b) 35,928
2,940,000 NYS HFA (Multifamily Hsg.) 6.250
08/15/2014(s) 08/15/2004(b) 3,031,199
150,000 NYS HFA (Multifamily Hsg.) 6.250
08/15/2023(s) 08/15/2002(b) 152,508
1,000,000 NYS HFA (Multifamily Hsg.) 6.450
08/15/2014(s) 08/15/2002(b) 1,027,980
2,500,000 NYS HFA (Multifamily Hsg.) 6.625
08/15/2012(s) 02/15/2003(b) 2,565,600
350,000 NYS HFA (Multifamily Hsg.) 6.850
11/01/2019(s) 11/01/2004(b) 368,039
150,000 NYS HFA (Multifamily Hsg.) 6.950
08/15/2012(s) 08/15/2002(b) 157,720
1,845,000 NYS HFA (Multifamily Hsg.) 6.950
08/15/2024(s) 07/10/2002(g) 1,887,822
20,000 NYS HFA (Multifamily Hsg.) 7.000
08/15/2022(s) 08/15/2002(b) 20,978
1,000,000 NYS HFA (Multifamily Hsg.) 7.000
08/15/2023(s) 08/15/2001(b) 1,035,670
40,000 NYS HFA (Multifamily Hsg.) 7.300
11/01/2004 05/01/2000(b) 40,592
399,000 NYS HFA (Multifamily Hsg.) 7.450
11/01/2028(s) 05/01/2000(g) 407,674
2,020,000 NYS HFA (Multifamily Hsg.) 7.750
11/01/2020(s) 10/24/2000(g) 2,089,872
570,000 NYS HFA (Multifamily Hsg.) 8.000
11/01/2008(s) 09/19/2000(g) 590,366
25,000 NYS HFA (Multifamily Hsg.) 8.300
05/15/2005(s) 05/15/2000(b) 25,081
5,000 NYS HFA (Nonprofit Hsg.) 6.000
11/01/2012 11/01/2000(b) 5,087
5,000 NYS HFA (Nonprofit Hsg.) 6.200
11/01/2006 05/01/2000(b) 5,107
40,000 NYS HFA (Nonprofit Hsg.) 6.200
11/01/2008 05/01/2000(b) 40,846
10,000 NYS HFA (Nonprofit Hsg.) 6.200
11/01/2009 05/01/2000(b) 10,216
70,000 NYS HFA (Nonprofit Hsg.) 6.200
11/01/2011 05/01/2000(b) 71,496
40,000 NYS HFA (Nonprofit Hsg.) 6.400
11/01/2000 ----- 40,632
20,000 NYS HFA (Nonprofit Hsg.) 6.400
11/01/2002 11/01/2000(b) 20,431
25,000 NYS HFA (Nonprofit Hsg.) 6.400
11/01/2004 11/01/2000(b) 25,530
145,000 NYS HFA (Nonprofit Hsg.) 6.400
11/01/2005 11/01/2000(b) 148,151
5,000 NYS HFA (Nonprofit Hsg.) 6.400
11/01/2006 11/01/2000(b) 5,106
10,000 NYS HFA (Nonprofit Hsg.) 6.400
11/01/2008 11/01/2000(b) 10,211
80,000 NYS HFA (Nonprofit Hsg.) 6.400
11/01/2009 11/01/2001(b) 81,691
5,000 NYS HFA (Nonprofit Hsg.) 6.400
11/01/2011 11/01/2000(b) 5,106
10,000 NYS HFA (Nonprofit Hsg.) 6.400
11/01/2013 05/01/2000(b) 10,211
5,000 NYS HFA (Nonprofit Hsg.) 6.500
11/01/2000 ----- 5,086
15,000 NYS HFA (Nonprofit Hsg.) 6.500
11/01/2001 ----- 15,324
60,000 NYS HFA (Nonprofit Hsg.) 6.500
11/01/2002 ----- 61,270
5,000 NYS HFA (Nonprofit Hsg.) 6.500
11/01/2003 ----- 5,108
25,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2000 05/01/2000(b) 25,449
35,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2001 ----- 35,748
</TABLE>
19 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 10,000 NYS HFA (Nonprofit Hsg.) 6.600 %
11/01/2002 05/01/2000(b) $ 10,212
225,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2003 ----- 229,862
75,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2005 05/01/2000(b) 76,621
50,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2005 11/01/2000(b) 51,080
45,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2006 05/01/2000(b) 45,972
15,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2006 11/01/2000(b) 15,324
5,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2007 05/01/2000(b) 5,108
65,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2008 11/01/2000(b) 67,268
10,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2009 05/01/2000(b) 10,216
15,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2009 05/01/2000(b) 15,324
15,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2010 05/01/2000(b) 15,324
15,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2011 11/01/2003(b) 15,324
5,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2011 05/01/2000(b) 5,108
25,000 NYS HFA (Nonprofit Hsg.) 6.600
11/01/2013 05/01/2000(b) 25,537
20,000 NYS HFA (Nonprofit Hsg.) 6.750
11/01/2001 05/01/2000(b) 20,435
100,000 NYS HFA (Nonprofit Hsg.) 6.750
11/01/2004 05/01/2000(b) 104,290
5,000 NYS HFA (Nonprofit Hsg.) 6.750
11/01/2005 05/01/2000(b) 5,109
5,000 NYS HFA (Nonprofit Hsg.) 6.750
11/01/2008 05/01/2000(b) 5,109
15,000 NYS HFA (Nonprofit Hsg.) 6.750
11/01/2009 05/01/2000(b) 15,326
5,000 NYS HFA (Nonprofit Hsg.) 6.750
11/01/2010 11/01/2003(b) 5,109
1,420,000 NYS HFA (Nonprofit Hsg.) 6.750
11/01/2011 05/01/2000(b) 1,459,433
61,000 NYS HFA (Nonprofit Hsg.) 6.875
11/01/2010 05/01/2000(b) 61,766
10,000 NYS HFA (Nonprofit Hsg.) (i) 6.750
11/01/2000 05/01/2000(b) 10,191
195,000 NYS HFA (Phillips Village) 6.700
02/15/2002 ----- 198,165
250,000 NYS HFA (Phillips Village) 6.700
08/15/2002 ----- 254,947
175,000 NYS HFA (Phillips Village) 6.900
02/15/2004 ----- 178,888
85,000 NYS HFA (Phillips Village) 6.900
08/15/2004 ----- 87,088
150,000 NYS HFA (Service Contract) 5.500
09/15/2022 03/29/2019(c) 135,177
105,000 NYS HFA (Service Contract) 5.625
09/15/2013 06/20/2012(c) 102,928
175,000 NYS HFA (Service Contract) 5.875
03/15/2011(s) 09/15/2005(b) 177,093
11,040,000 NYS HFA (Service Contract) 5.875
09/15/2014 07/13/2013(c) 10,995,840
400,000 NYS HFA (Simeon Dewitt) 8.000
11/01/2018(s) 05/01/2000(b) 402,324
125,000 NYS HFA, Series A 6.100
11/01/2015(s) 05/01/2008(b) 126,944
5,000 NYS LGAC 5.375
04/01/2014 05/08/2012(c) 4,821
50,000 NYS LGAC 6.000
04/01/2018 04/01/2002(a) 52,406
665,000 NYS LGSC (SCSB) 6.375
12/15/2009 11/04/2005(c) 652,318
5,000 NYS Medcare (AOFMH) 6.500
11/01/2019 11/01/2001(b) 5,266
500,000 NYS Medcare (Beth Israel Medical Center) 7.000
11/01/2001 05/01/2000(b) 501,025
895,000 NYS Medcare (Beth Israel Medical Center) 7.125
11/01/2006(s) 05/01/2000(b) 916,659
450,000 NYS Medcare (Beth Israel Medical Center) 7.200
11/01/2014(s) 05/01/2000(b) 450,841
195,000 NYS Medcare (Beth Israel Medical Center) 7.400
11/01/2004(s) 05/01/2000(b) 197,449
260,000 NYS Medcare (Brookdale Hospital Medical Center) 6.600
02/15/2003 ----- 273,863
615,000 NYS Medcare (Brookdale Hospital Medical Center) 6.600
08/15/2003 ----- 651,888
20,000 NYS Medcare (Buffalo General Hospital) 6.000
08/15/2014(s) 08/15/2006(b) 20,243
35,000 NYS Medcare (Buffalo General Hospital) 6.125
08/15/2024 ----- 34,624
10,000 NYS Medcare (Central Suffolk Hospital) 5.875
11/01/2005 12/12/2003(c) 9,737
365,000 NYS Medcare (Downtown Hospital) 6.550
02/15/2006 02/15/2005(a) 397,054
945,000 NYS Medcare (Downtown Hospital) 6.550
08/15/2006 02/15/2005(a) 1,027,990
5,000 NYS Medcare (Hospital & Nursing Home) 5.650
08/15/2002 ----- 5,012
100,000 NYS Medcare (Hospital & Nursing Home) 5.650
08/15/2013 08/15/2005(b) 101,968
500,000 NYS Medcare (Hospital & Nursing Home) 5.750
02/15/2005 ----- 504,660
4,500,000 NYS Medcare (Hospital & Nursing Home) 5.750
08/15/2019 01/01/2011(c) 4,313,430
3,995,000 NYS Medcare (Hospital & Nursing Home) 5.950
08/15/2009 08/15/2002(b) 4,095,514
</TABLE>
20 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 10,000 NYS Medcare (Hospital & Nursing Home) 6.100 %
08/15/2013(s) 08/15/2002(b) $ 10,535
840,000 NYS Medcare (Hospital & Nursing Home) 6.125
02/15/2014(s) 02/15/2004(b) 887,006
2,805,000 NYS Medcare (Hospital & Nursing Home) 6.125
02/15/2014(s) 02/15/2006(b) 2,893,554
25,000 NYS Medcare (Hospital & Nursing Home) 6.125
02/15/2015(s) 02/15/2006(b) 25,365
15,000 NYS Medcare (Hospital & Nursing Home) 6.150
02/15/2002 02/15/2000(b) 15,462
190,000 NYS Medcare (Hospital & Nursing Home) 6.200
08/15/2022 08/15/2002(b) 190,082
200,000 NYS Medcare (Hospital & Nursing Home) 6.250
08/15/2012(s) 08/15/2004(b) 205,500
100,000 NYS Medcare (Hospital & Nursing Home) 6.250
02/15/2015 08/15/2005(b) 102,331
7,025,000 NYS Medcare (Hospital & Nursing Home) 6.400
08/15/2014 08/15/2006(b) 7,267,081
75,000 NYS Medcare (Hospital & Nursing Home) 6.400
11/01/2014(s) 05/01/2002(b) 78,743
3,210,000 NYS Medcare (Hospital & Nursing Home) 6.500
08/15/2012 08/15/2002(a) 3,401,476
570,000 NYS Medcare (Hospital & Nursing Home) 6.500
08/15/2012(s) 08/15/2002(b) 599,378
715,000 NYS Medcare (Hospital & Nursing Home) 6.500
02/15/2019(s) 02/15/2004(b) 725,303
25,000 NYS Medcare (Hospital & Nursing Home) 6.550
08/15/2012 08/15/2002(b) 26,363
2,615,000 NYS Medcare (Hospital & Nursing Home) 6.875
02/15/2032 02/15/2002(b) 2,749,437
25,000 NYS Medcare (Hospital & Nursing Home) 7.200
11/01/2000 05/01/2000(b) 25,308
685,000 NYS Medcare (Hospital & Nursing Home) 7.200
11/01/2001 05/01/2000(b) 693,343
85,000 NYS Medcare (Hospital & Nursing Home) 7.250
11/01/2002 05/01/2000(b) 86,039
395,000 NYS Medcare (Hospital & Nursing Home) 7.250
11/01/2003 05/01/2000(b) 399,827
20,000 NYS Medcare (Hospital & Nursing Home) 7.300
08/15/2011(s) 08/15/2001(b) 20,851
75,000 NYS Medcare (Hospital & Nursing Home) 7.300
08/15/2011(s) 08/15/2001(b) 79,095
290,000 NYS Medcare (Hospital & Nursing Home) 7.350
02/15/2029(s) 02/15/2000(b) 296,412
95,000 NYS Medcare (Hospital & Nursing Home) 7.350
02/15/2029(s) 02/15/2000(b) 97,109
1,825,000 NYS Medcare (Hospital & Nursing Home) 7.400
11/01/2016(s) 05/01/2000(b) 1,886,137
6,505,000 NYS Medcare (Hospital & Nursing Home) 7.450
08/15/2031 08/15/2001(a) 6,868,239
275,000 NYS Medcare (Hospital & Nursing Home) 8.625
02/15/2006 02/15/2000(b) 275,916
825,000 NYS Medcare (Hospital & Nursing Home) 9.000
02/15/2026 02/15/2000(b) 851,813
605,000 NYS Medcare (Hospital & Nursing Home) 9.375
11/01/2016(s) 05/01/2000(b) 625,612
2,335,000 NYS Medcare (Hospital & Nursing Home) 10.000
11/01/2006(s) 05/01/2000(b) 2,487,242
115,000 NYS Medcare (Hospital & Nursing Home) (i) 7.100
11/01/2000 ----- 116,391
1,915,000 NYS Medcare (Huntington Hospital) 6.500
11/01/2014(s) 11/01/2004(b) 1,922,105
1,060,000 NYS Medcare (Insured Mortgage Nursing) 6.500
11/01/2015 11/01/2004(b) 1,110,700
1,865,000 NYS Medcare (Long Term Health Care) 6.450
11/01/2014(s) 05/01/2002(b) 1,960,115
65,000 NYS Medcare (Long Term Health Care) 6.800
11/01/2014(s) 05/01/2002(b) 68,736
95,000 NYS Medcare (Long Term Health Care) 7.100
11/01/2012(s) 05/01/2001(b) 99,563
235,000 NYS Medcare (Long Term Health Care) 7.300
11/01/2005(s) 05/01/2000(b) 240,273
5,000 NYS Medcare (Mental Health) 0.000
08/15/2001 ----- 4,635
5,000 NYS Medcare (Mental Health) 0.000
02/15/2003 02/15/2000(b) 4,140
5,000 NYS Medcare (Mental Health) 0.000
08/15/2003 02/15/2000(b) 3,991
75,000 NYS Medcare (Mental Health) 5.550
08/15/2001 02/15/2000(b) 75,044
10,000 NYS Medcare (Mental Health) 5.700
02/15/2003 02/15/2000(b) 10,007
35,000 NYS Medcare (Mental Health) 6.000
02/15/2011(s) 02/15/2000(b) 35,042
5,000 NYS Medcare (Mental Health) 6.100
08/15/2013(s) 08/15/2002(b) 5,169
70,000 NYS Medcare (Mental Health) 6.375
08/15/2014(s) 08/15/2004(b) 71,691
120,000 NYS Medcare (Mental Health) 6.375
08/15/2014 08/15/2004(a) 129,697
5,000 NYS Medcare (Mental Health) 6.375
08/15/2014 08/15/2004(a) 5,251
4,005,000 NYS Medcare (Mental Health) 6.375
08/15/2014(s) 08/15/2004(b) 4,328,644
60,000 NYS Medcare (Mental Health) 6.375
08/15/2017(s) 02/15/2002(b) 61,926
85,000 NYS Medcare (Mental Health) 6.500
08/15/2024 08/15/2004(a) 92,305
5,000 NYS Medcare (Mental Health) 6.500
08/15/2024 08/15/2004(a) 5,125
85,000 NYS Medcare (Mental Health) 6.850
08/15/2000 ----- 86,276
45,000 NYS Medcare (Mental Health) 7.000
02/15/2001 ----- 46,162
5,000 NYS Medcare (Mental Health) 7.100
02/15/2002 02/15/2000(b) 5,110
</TABLE>
21 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 50,000 NYS Medcare (Mental Health) 7.200 %
08/15/2000 ----- $ 50,858
10,000 NYS Medcare (Mental Health) 7.200
02/15/2004 02/15/2000(b) 10,221
5,000 NYS Medcare (Mental Health) 7.300
08/15/2010(s) 02/15/2000(b) 5,111
50,000 NYS Medcare (Mental Health) 7.300
02/15/2021(s) 08/15/2001(b) 52,717
980,000 NYS Medcare (Mental Health) 7.375
02/15/2014(s) 02/15/2000(b) 1,001,736
45,000 NYS Medcare (Mental Health) 7.400
08/15/2000 ----- 45,827
10,000 NYS Medcare (Mental Health) 7.400
02/15/2002 02/15/2000(a) 10,237
15,000 NYS Medcare (Mental Health) 7.400
02/15/2002 02/15/2000(b) 15,341
5,000 NYS Medcare (Mental Health) 7.400
02/15/2003 08/15/2001(b) 5,281
10,000 NYS Medcare (Mental Health) 7.500
08/15/2007(s) 02/15/2001(b) 10,486
125,000 NYS Medcare (Mental Health) 7.500
02/15/2010 02/15/2000(b) 127,815
120,000 NYS Medcare (Mental Health) 7.600
02/15/2002 08/15/2000(b) 124,253
145,000 NYS Medcare (Mental Health) 7.625
02/15/2007 08/15/2001(b) 153,642
10,000 NYS Medcare (Mental Health) 7.625
08/15/2007 08/15/2001(b) 10,596
150,000 NYS Medcare (Mental Health) 7.625
02/15/2008(s) 02/15/2000(b) 150,555
1,345,000 NYS Medcare (Mental Health) 7.700
02/15/2018(s) 02/15/2000(b) 1,349,613
25,000 NYS Medcare (Mental Health) 7.750
08/15/2010(s) 02/15/2000(b) 25,594
190,000 NYS Medcare (Mental Health) 7.800
02/15/2019(s) 02/15/2000(b) 194,305
155,000 NYS Medcare (Mental Health) 7.875
08/15/2015(s) 02/15/2000(b) 156,938
380,000 NYS Medcare (Mental Health) 7.875
08/15/2015(s) 02/15/2000(b) 384,818
6,045,000 NYS Medcare (Mental Health) 7.875
08/15/2020(s) 08/15/2000(b) 6,280,513
2,530,000 NYS Medcare (Mental Health) 8.875
08/15/2007(s) 02/15/2000(b) 2,538,956
85,000 NYS Medcare (Montefiore Medical Center) 5.700
02/15/2012 02/15/2007(b) 85,800
30,000 NYS Medcare (North Shore University Hospital) 7.125
11/01/2008 11/01/2000(a) 31,335
20,000 NYS Medcare (North Shore University Hospital) 7.125
11/01/2008(s) 11/01/2000(b) 20,854
100,000 NYS Medcare (Our Lady of Mercy Medical Center) 6.250
08/15/2015(s) 02/15/2005(b) 102,470
250,000 NYS Medcare (Our Lady of Victory Hospital) 7.000
11/01/2004(s) 05/01/2000(b) 255,550
150,000 NYS Medcare (Saranac Lake General Hospital) 7.875
11/01/2010(s) 10/01/2000(g) 157,061
40,000 NYS Medcare (Sisters of Charity) 6.600
11/01/2007(s) 11/01/2001(b) 42,088
85,000 NYS Medcare (St. Luke's Hospital) 5.600
08/15/2013(s) 12/12/2004(g) 85,054
70,000 NYS Medcare (St. Luke's Hospital) 5.625
08/15/2018 11/29/2012(c) 66,585
185,000 NYS Medcare (St. Luke's Hospital) 7.375
02/15/2019(s) 02/15/2000(b) 189,183
80,000 NYS Medcare (St. Luke's Hospital) 7.375
02/15/2019 02/15/2000(b) 81,860
460,000 NYS Medcare (St. Luke's Hospital) 7.400
02/15/2009 02/15/2000(b) 470,819
1,435,000 NYS Medcare (St. Luke's Hospital) 7.500
11/01/2011(s) 05/01/2000(b) 1,467,130
700,000 NYS Medcare (St. Mary's Hospital) 6.000
11/01/2009 11/01/2005(b) 729,953
10,000 NYS Power Authority 5.500
01/01/2010(s) 07/01/2000(b) 10,159
530,000 NYS Thruway Authority 0.000
01/01/2001 ----- 506,039
250,000 NYS Thruway Authority 0.000
01/01/2005 ----- 192,745
385,000 NYS Thruway Authority 0.000
01/01/2006 ----- 280,141
50,000 NYS Thruway Authority 5.500
04/01/2015 05/09/2013(c) 48,812
45,000 NYS Thruway Authority 5.750
04/01/2016 11/28/2013(c) 43,543
500,000 NYS Thruway Authority 6.000
04/01/2011 04/01/2007(b) 513,690
3,000,000 NYS Thruway Authority 6.000
04/01/2012 04/01/2007(b) 3,060,450
10,000 NYS UDC (Correctional Facilities) 0.000
01/01/2000 ----- 10,000
25,000 NYS UDC (Correctional Facilities) 0.000
01/01/2003 ----- 21,614
30,000 NYS UDC (Correctional Facilities) 0.000
01/01/2007 ----- 20,660
1,375,000 NYS UDC (Correctional Facilities) 5.250
01/01/2013 07/26/2011(c) 1,292,871
3,450,000 NYS UDC (Correctional Facilities) 5.500
01/01/2015 07/07/2014(c) 3,263,010
20,105,000 NYS UDC (Correctional Facilities) 5.500
01/01/2015 07/07/2014(c) 19,015,309
6,000,000 NYS UDC (Correctional Facilities) 5.500
01/01/2016 07/07/2015(c) 5,626,740
1,025,000 NYS UDC (Correctional Facilities) 5.700
01/01/2016 02/10/2014(c) 984,595
70,000 NYS UDC (Correctional Facilities) 5.700
01/01/2027 07/21/2022(c) 64,404
</TABLE>
22 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 90,000 NYS UDC (Correctional Facilities) 5.750 %
01/01/2013 01/01/2005(b) $ 90,718
85,000 NYS UDC (Correctional Facilities) 5.750
01/01/2013 06/08/2012(c) 84,425
1,000,000 NYS UDC (Correctional Facilities) 5.750
01/01/2013 10/24/2012(c) 993,230
35,000 NYS UDC (South Mall) 0.000
01/01/2003 ----- 30,163
130,000 NYS UDC (South Mall) 0.000
01/01/2005 ----- 98,244
50,000 NYS UDC (South Mall) 0.000
01/01/2005 06/24/2004(c) 38,202
645,000 NYS UDC (South Mall) 0.000
01/01/2011 04/08/2008(c) 324,422
555,000 NYS UDC (South Mall) 0.000
01/01/2011 04/08/2008(c) 284,837
10,000,000 NYS UDC (Sub Lien) 5.500
07/01/2016 12/31/2012(c) 9,317,400
2,130,000 Oneida County IDA (Bonide Products) 5.750
11/01/2007 ----- 2,064,119
2,285,000 Oneida County IDA (Faxton Hospital) 6.625
01/01/2015(s) 01/01/2010(b) 2,413,600
90,000 Oneida Healthcare Corp. 7.100
08/01/2011 08/01/2001(b) 93,773
1,150,000 Oneida-Herkimer SWMA 6.600
04/01/2004 ----- 1,204,545
3,045,000 Oneida-Herkimer SWMA 6.750
04/01/2014 04/01/2003(a) 3,274,106
155,000 Oneida-Herkimer SWMA 6.750
04/01/2014(s) 04/01/2003(b) 157,229
85,000 Onondaga County IDA (Coltec Industries) 7.250
06/01/2008(s) 06/01/2000(b) 86,437
510,000 Onondaga County IDA (LeMoyne College) 5.500
03/01/2014 04/08/2012(c) 478,217
100,000 Onondaga County Res Rec 6.400
05/01/2002 ----- 101,414
5,000,000 Onondaga County Res Rec 6.625
05/01/2000 ----- 5,005,100
13,785,000 Onondaga County Res Rec 6.875
05/01/2006(s) 06/04/2003(g) 13,813,259
14,595,000 Onondaga County Res Rec 7.000
05/01/2015(s) 05/01/2004(b) 14,910,690
130,000 Orange County IDA (Glen Arden) 5.400
01/01/2008 ----- 122,564
1,060,000 Orange County IDA (Kingston Manufacturing) 7.250
11/01/2003 06/05/2002(c) 1,076,366
40,000 Orange County IDA (Mental Health) 6.000
05/01/2008 ----- 40,664
10,000 Orange County IDA (Mental Health) 6.125
05/01/2016 02/13/2013(c) 9,802
575,000 Oswego County IDA (SLRHF) 5.150
02/01/2013 12/11/2008(c) 541,282
1,805,000 Oswego County Res Rec 6.500
06/01/2004 05/23/2003(c) 1,859,944
1,750,000 Otsego County IDA (AOFMH) 5.350
10/01/2017 08/23/2014(c) 1,617,105
50,000 Philadelphia, NY GO 7.500
12/15/2009 ----- 58,024
10,000 Port Authority NY/NJ 5.000
02/01/2003(s) 02/01/2000(b) 10,002
9,725,000 Port Authority NY/NJ (Delta Air Lines) (w) 6.950
06/01/2008 06/01/2002(b) 10,237,410
1,000,000 Port Authority NY/NJ (KIAC) 6.750
10/01/2011 10/01/2006(b) 1,030,800
275,000 Port Authority NY/NJ (KIAC) 6.750
10/01/2019(s) 10/01/2006(b) 278,856
11,000,000 Port Authority NY/NJ (KIAC) 7.000
10/01/2007 05/02/2005(c) 11,504,020
15,000 Port Authority NY/NJ, 100th Series 5.750
12/15/2015 06/15/2005(b) 15,031
165,000 Port Authority NY/NJ, 67th Series 6.875
01/01/2025(s) 07/01/2000(b) 166,968
25,000 Port Authority NY/NJ, 68th Series 7.250
08/15/2009 02/15/2000(b) 25,332
15,000 Port Authority NY/NJ, 68th Series 7.250
08/15/2011 02/15/2000(b) 15,200
920,000 Port Authority NY/NJ, 68th Series 7.250
02/15/2025 02/15/2000(b) 931,923
165,000 Port Authority NY/NJ, 68th Series 7.250
02/15/2025(s) 02/15/2000(b) 167,138
270,000 Port Authority NY/NJ, 68th Series 7.250
02/15/2025(s) 02/15/2000(b) 273,499
6,235,000 Port Authority NY/NJ, 69th Series 7.125
06/01/2025(s) 06/01/2000(b) 6,364,688
25,000 Port Authority NY/NJ, 70th Series 7.000
08/01/2011 08/01/2000(b) 25,611
990,000 Port Authority NY/NJ, 70th Series 7.250
08/01/2025(s) 08/01/2000(b) 1,013,602
75,000 Port Authority NY/NJ, 70th Series 7.250
08/01/2025(s) 08/01/2000(b) 76,788
45,000 Port Authority NY/NJ, 70th Series 7.250
08/01/2025 08/01/2000(b) 46,073
60,000 Port Authority NY/NJ, 71st Series 6.500
01/15/2026(s) 01/15/2001(b) 61,631
25,000 Port Authority NY/NJ, 73rd Series 6.500
10/15/2011 04/15/2001(b) 25,766
780,000 Port Authority NY/NJ, 73rd Series 6.750
04/15/2026(s) 04/15/2001(b) 803,096
150,000 Port Authority NY/NJ, 73rd Series 6.750
04/15/2026(s) 04/15/2001(b) 154,442
50,000 Port Authority NY/NJ, 76th Series 6.500
11/01/2011 11/01/2001(b) 51,795
5,675,000 Port Authority NY/NJ, 76th Series 6.500
11/01/2026 11/01/2001(b) 5,749,570
90,000 Port Authority NY/NJ, 76th Series 6.500
11/01/2026(s) 11/01/2001(b) 92,789
</TABLE>
23 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 30,000 Port Authority NY/NJ, 83rd Series 6.375 %
10/15/2017(s) 10/15/2002(b) $ 31,135
10,000 Port Authority NY/NJ, 95th Series 6.000
07/15/2015 ----- 9,985
3,300,000 Port Authority NY/NJ, 96th Series 6.600
10/01/2023(s) 10/01/2004(b) 3,479,190
10,000 Port Authority NY/NJ, 97th Series 6.500
07/15/2019 01/15/2005(b) 10,310
1,200,000 Port Jervis IDA (Franciscan Health Partnership) 5.500
11/01/2016 10/31/2009(c) 1,021,380
1,185,000 Putnam County IDA (Brewster Plastics) 7.375
12/01/2008 05/17/2005(c) 1,210,691
120,000 Rensselaer Hsg. Authority (Renwyck) 7.650
01/01/2011(s) 09/23/2002(g) 127,386
1,440,000 Rensselaer Municipal Leasing Corp. 6.250
06/01/2004 12/28/2002(c) 1,481,242
60,000 Rensselaer Municipal Leasing Corp. 6.900
06/01/2024 06/01/2004(b) 62,080
15,000 Riverhead HDC 8.250
08/01/2010(s) 02/01/2000(b) 15,383
2,550,000 Rochester Hsg. Authority (Crossroads Apartments) 7.300
07/01/2005 03/07/2003(c) 2,668,193
695,000 Rochester Hsg. Authority (Stonewood Village) 5.900
09/01/2009 08/18/2005(c) 688,884
490,000 Rockland County IDA (Dominican College) 7.000
03/01/2003 10/04/2001(c) 506,092
335,000 Rockland Gardens Hsg. Corp. 10.500
05/01/2011 05/01/2000(b) 346,357
50,000 Rome GO 6.900
12/15/2007 12/15/2003(b) 53,418
225,000 Roxbury CSD GO 6.400
06/15/2010 06/15/2005(b) 235,701
235,000 Roxbury CSD GO 6.400
06/15/2011 06/15/2005(b) 244,943
130,000 Saratoga County IDA (ARC) 7.250
03/01/2001 08/30/2000(c) 130,642
1,710,000 Saratoga County IDA (Saratoga Sheraton) 6.750
12/31/2007(s) 06/13/2003(g) 1,726,040
50,000 Schodack IDA (Hamilton Printing) 7.600
07/01/2000 ----- 50,315
60,000 Schodack IDA (Hamilton Printing) 7.625
07/01/2001 ----- 61,650
120,000 Schuyler County IDA (Cargill) 7.900
04/01/2007 04/01/2000(b) 122,687
55,000 SONYMA, Series 10-B 6.500
10/01/2002(s) 04/01/2000(b) 55,052
30,000 SONYMA, Series 27 5.650
04/01/2015 02/08/2012(c) 29,045
100,000 SONYMA, Series 27 6.900
04/01/2015(s) 04/01/2002(b) 105,578
500,000 SONYMA, Series 28 6.650
04/01/2022 12/22/2000(c) 508,360
100,000 SONYMA, Series 29-A 5.250
04/01/2015 01/28/2012(c) 93,512
25,000 SONYMA, Series 29-B 6.450
04/01/2015(s) 03/01/2003(b) 25,714
670,000 SONYMA, Series 30-B 6.000
04/01/2019 04/11/2004(c) 644,868
165,000 SONYMA, Series 30-C 5.850
10/01/2025 09/23/2014(c) 155,582
10,000 SONYMA, Series 34 5.550
09/30/2025 04/10/2025(c) 9,085
35,000 SONYMA, Series 36-A 5.700
04/01/2023(s) 04/01/2006(b) 35,629
665,000 SONYMA, Series 36-A 6.125
10/01/2020(s) 09/23/2002(g) 684,618
100,000 SONYMA, Series 39 5.750
10/01/2010(s) 04/01/2006(b) 101,403
155,000 SONYMA, Series 39 6.000
10/01/2017(s) 04/01/2006(b) 155,143
1,550,000 SONYMA, Series 40-A 6.350
04/01/2021(s) 06/01/2006(b) 1,550,140
175,000 SONYMA, Series 40-A 6.700
04/01/2025(s) 06/01/2004(b) 180,495
40,000 SONYMA, Series 40-B 5.800
10/01/2023 07/20/2022(c) 38,793
30,000 SONYMA, Series 41-A 6.450
10/01/2014(s) 06/01/2004(b) 31,242
50,000 SONYMA, Series 41-B 6.250
10/01/2014(s) 08/01/2004(b) 51,269
10,000 SONYMA, Series 42 6.000
10/01/2023 07/22/2000(c) 10,089
185,000 SONYMA, Series 42 6.400
10/01/2020 02/22/2004(c) 185,198
50,000 SONYMA, Series 43 6.100
04/01/2009 09/01/2006(b) 51,736
25,000 SONYMA, Series 43 6.100
10/01/2009 09/01/2006(b) 25,868
740,000 SONYMA, Series 43 6.450
10/01/2017(s) 09/01/2004(b) 766,618
125,000 SONYMA, Series 44 6.900
04/01/2006 11/01/2004(b) 131,574
20,000 SONYMA, Series 44 6.900
10/01/2006 11/01/2004(b) 21,121
50,000 SONYMA, Series 44 7.000
10/01/2007 11/01/2004(b) 53,077
7,015,000 SONYMA, Series 44 7.500
04/01/2026 11/01/2004(b) 7,567,081
100,000 SONYMA, Series 45 7.200
10/01/2017(s) 11/01/2004(b) 105,889
125,000 SONYMA, Series 46 6.500
04/01/2013(s) 03/28/2005(b) 128,909
20,655,000 SONYMA, Series 46 6.650
10/01/2025(s) 03/28/2007(b) 21,309,557
65,000 SONYMA, Series 47 6.375
10/01/2017(s) 03/28/2007(b) 66,984
</TABLE>
24 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 50,000 SONYMA, Series 48 6.000 %
04/01/2013 06/29/2007(b) $ 50,179
20,000 SONYMA, Series 48 6.000
04/01/2013(s) 06/29/2005(b) 20,216
1,770,000 SONYMA, Series 48 6.050
04/01/2017(s) 06/29/2007(b) 1,775,275
25,000 SONYMA, Series 48 6.100
04/01/2025 01/14/2022(c) 24,743
510,000 SONYMA, Series 50 6.250
04/01/2010 09/13/2007(b) 514,590
45,000 SONYMA, Series 51 6.400
10/01/2017(s) 09/13/2005(b) 46,064
50,000 SONYMA, Series 53 5.750
10/01/2011(s) 01/04/2008(b) 50,095
290,000 SONYMA, Series 54 6.100
10/01/2015(s) 03/05/2008(g) 293,524
105,000 SONYMA, Series 56 5.875
10/01/2019 01/06/2019(c) 103,006
100,000 SONYMA, Series 56 6.500
10/01/2026(s) 07/01/2006(b) 102,091
1,000,000 SONYMA, Series 61 5.800
10/01/2017 07/02/2017(c) 980,370
200,000 SONYMA, Series 63 6.000
04/01/2017(s) 04/01/2009(b) 200,258
75,000 SONYMA, Series 66 5.600
10/01/2017 07/29/2015(c) 71,507
540,000 SONYMA, Series 67 5.700
10/01/2017 10/10/2016(c) 517,282
90,000 SONYMA, Series 7 9.250
10/01/2014(s) 04/01/2000(b) 90,658
250,000 SONYMA, Series 8-A 0.000
04/01/2000 ----- 246,043
30,000 SONYMA, Series 8-A 0.000
10/01/2000 04/01/2000(b) 28,554
85,000 SONYMA, Series 8-A 0.000
04/01/2001 04/01/2000(b) 78,149
70,000 SONYMA, Series 8-A 0.000
10/01/2001 04/01/2000(b) 62,212
85,000 SONYMA, Series 8-A 0.000
04/01/2002 04/01/2000(b) 73,018
70,000 SONYMA, Series 8-A 0.000
10/01/2002 04/01/2000(b) 58,127
755,000 SONYMA, Series 8-A 6.875
04/01/2017(s) 04/01/2000(b) 755,423
75,000 SONYMA, Series 8-A 6.875
04/01/2017(s) 10/01/2000(b) 75,107
250,000 SONYMA, Series 8-A 6.875
04/01/2017(s) 10/01/2000(b) 250,403
5,000 SONYMA, Series EE-2 7.050
10/01/2000 07/04/2000(c) 5,045
170,000 SONYMA, Series EE-2 7.450
10/01/2010(s) 09/14/2000(g) 173,546
1,160,000 SONYMA, Series EE-2 7.500
04/01/2016(s) 09/14/2000(b) 1,184,244
65,000 SONYMA, Series EE-3 7.125
10/01/2000 07/04/2000(c) 65,397
50,000 SONYMA, Series EE-3 7.650
04/01/2016(s) 10/01/2000(b) 51,232
200,000 SONYMA, Series EE-3 7.750
04/01/2016(s) 04/01/2000(b) 204,966
50,000 SONYMA, Series EE-4 7.050
10/01/2000 07/04/2000(c) 50,250
100,000 SONYMA, Series EE-4 7.750
10/01/2010(s) 09/20/2000(g) 102,792
115,000 SONYMA, Series EE-4 7.800
10/01/2013(s) 10/01/2000(b) 118,252
65,000 SONYMA, Series HH-2 7.700
10/01/2009(s) 09/14/2000(g) 65,957
5,165,000 SONYMA, Series HH-2 7.750
04/01/2022 09/14/2000(b) 5,253,425
45,000 SONYMA, Series HH-2 7.850
04/01/2022(s) 09/14/2000(b) 45,956
35,000 SONYMA, Series II (i) 0.000
04/01/2005 04/01/2000(b) 23,333
5,000 SONYMA, Series II (i) 0.000
10/01/2005 04/01/2000(b) 3,207
5,000 SONYMA, Series II (i) 0.000
04/01/2006 04/01/2002(b) 3,085
5,000 SONYMA, Series II (i) 0.000
10/01/2006 04/01/2000(b) 2,968
5,000 SONYMA, Series II (i) 0.000
04/01/2007 04/01/2000(b) 2,845
15,000 SONYMA, Series II (i) 0.000
10/01/2007 04/01/2000(b) 8,209
15,000 SONYMA, Series II (i) 0.000
04/01/2008 04/01/2000(b) 7,894
80,000 SONYMA, Series JJ 0.000
04/01/2000 ----- 79,177
10,000 SONYMA, Series JJ 0.000
10/01/2000 ----- 9,696
5,000 SONYMA, Series MM-1 7.600
10/01/2002 02/04/2001(b) 5,106
60,000 SONYMA, Series MM-1 7.650
10/01/2003 02/04/2001(b) 61,263
100,000 SONYMA, Series MM-1 7.700
10/01/2004 02/04/2001(b) 101,721
50,000 SONYMA, Series MM-1 7.750
04/01/2005 02/04/2001(b) 50,762
10,000 SONYMA, Series MM-2 7.550
04/01/2002 10/01/2000(b) 10,176
10,000 SONYMA, Series MM-2 7.700
10/01/2005 10/01/2000(b) 10,136
25,000 SONYMA, Series NN 7.100
04/01/2002 07/01/2000(b) 25,429
20,000 SONYMA, Series NN 7.150
10/01/2003 07/01/2000(b) 20,302
</TABLE>
25 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 50,000 SONYMA, Series NN 7.450 %
10/01/2010(s) 07/01/2000(b) $ 51,050
15,000 SONYMA, Series QQ 7.600
10/01/2012 04/01/2000(b) 15,310
1,705,000 SONYMA, Series QQ 7.700
10/01/2012 04/01/2000(b) 1,742,629
70,000 SONYMA, Series RR 7.600
10/01/2010(s) 10/01/2000(b) 72,113
15,000 SONYMA, Series RR 7.700
10/01/2010(s) 10/01/2000(b) 15,425
25,000 SONYMA, Series TT 6.850
10/01/2001 ----- 25,505
20,000 SONYMA, Series TT 6.950
04/01/2002 ----- 20,518
125,000 SONYMA, Series TT 7.150
04/01/2004 04/01/2001(b) 128,656
10,000 SONYMA, Series TT 7.200
04/01/2005 04/01/2001(b) 10,261
25,000 SONYMA, Series TT 7.200
10/01/2005 04/01/2001(b) 25,652
75,000 SONYMA, Series UU 6.950
04/01/2000 ----- 75,238
460,000 SONYMA, Series UU 7.650
10/01/2023 04/01/2001(b) 472,369
40,000 SONYMA, Series VV 6.600
04/01/2000 ----- 40,100
25,000 SONYMA, Series VV 6.800
10/01/2002 ----- 25,574
60,000 SONYMA, Series VV 6.900
04/01/2003 ----- 61,489
50,000 SONYMA, Series VV 7.000
04/01/2004 10/01/2001(b) 51,155
100,000 SONYMA, Series VV 7.000
10/01/2004 10/01/2001(b) 102,025
670,000 SONYMA, Series VV 7.250
10/01/2007(s) 10/01/2001(b) 689,752
4,940,200 SONYMA, Series VV 7.375
10/01/2011(s) 10/01/2001(b) 5,112,761
75,000 SONYMA, Series VV 7.375
10/01/2011(s) 10/01/2001(b) 77,765
120,000 Springville HDC (Springbrook) 5.950
01/01/2010 12/11/2005(c) 119,198
1,000,000 St. Casimer's EHC 7.375
09/01/2010(s) 03/01/2000(b) 1,025,980
1,115,000 St. Lawrence IDA (PACES) 5.875
06/30/2007 04/16/2004(c) 1,055,437
25,000 Suffolk County GO 7.300
06/15/2001 06/15/2000(b) 25,350
1,430,000 Suffolk County IDA (ACLDD) 5.750
03/01/2006 04/29/2003(c) 1,373,930
240,000 Suffolk County IDA (Dowling College) 6.500
12/01/2006 ----- 244,457
50,000 Suffolk County IDA (Dowling College) 6.625
06/01/2024 12/29/2016(c) 48,088
2,205,000 Suffolk County IDA (Huntington First Aid Squad) 6.025
11/01/2008 03/23/2005(c) 2,122,886
7,390,000 Suffolk County IDA (Huntington Res Rec) 5.450
10/01/2002 ----- 7,504,176
7,945,000 Suffolk County IDA (Huntington Res Rec) 5.500
10/01/2003 ----- 8,096,273
8,545,000 Suffolk County IDA (Huntington Res Rec) 5.550
10/01/2004 ----- 8,731,794
290,000 Suffolk County IDA (Mattituck-Laurel Library) 6.000
09/01/2019(s) 09/01/2010(b) 291,122
40,000 Suffolk County IDA (OBPWC) 7.000
11/01/2002 12/16/2001(c) 39,527
1,020,000 Suffolk County IDA (Rimland Facilities) (i) 6.375 (v)
12/01/2004 06/01/2000(f) 1,019,796
40,000 Suffolk County Water Authority 5.625
06/01/2016 04/09/2013(c) 39,036
2,255,000 Sunnybrook EHC 11.250
12/01/2014(s) 04/01/2000(b) 2,333,970
3,120,000 Syracuse COP (Hancock International Airport) 6.500
01/01/2017(s) 01/01/2002(b) 3,209,294
1,105,000 Syracuse COP (Hancock International Airport) 6.600
01/01/2005 01/01/2002(b) 1,151,509
3,650,000 Syracuse COP (Hancock International Airport) 6.625
01/01/2012(s) 01/01/2002(b) 3,822,353
1,210,000 Syracuse COP (Hancock International Airport) 6.700
01/01/2007 01/01/2002(b) 1,263,071
675,000 Syracuse IDA (Pavilion on James Senior Hsg.) 6.500
08/01/2007 10/28/2004(c) 657,815
285,000 Syracuse IDA (Rockwest Center I) (i) 7.250
06/01/2003 01/03/2002(c) 287,138
930,000 Syracuse IDA (Rockwest Center II) (i) 7.000
12/01/2005 08/26/2003(c) 790,500
550,000 Syracuse IDA (St. Joseph's Hospital) 7.250
06/01/2001 06/19/2000(a) 562,744
5,825,000 Syracuse RAN 4.750
06/30/2000 ----- 5,835,369
1,355,000 Syracuse SCHC (East Hill Village Apartments) 6.125
11/01/2010 03/25/2006(c) 1,379,959
195,000 Tompkins County IDA (Kendall at Ithaca) 7.875
06/01/2015(s) 06/01/2005(b) 198,058
295,000 Tompkins Healthcare Corp. (Reconstruction Home) 10.800
02/01/2028 08/01/2005(b) 355,443
3,610,000 Tonawanda HDC (Tonawanda Towers) 6.150
10/01/2011(s) 02/17/2006(g) 3,614,837
20,000 Triborough Bridge & Tunnel Authority 6.000
01/01/2019 01/01/2001(b) 20,009
50,000 Triborough Bridge & Tunnel Authority 6.500
01/01/2019(s) 01/01/2002(b) 51,921
525,000 Triborough Bridge & Tunnel Authority 6.625
01/01/2017(s) 01/01/2001(b) 543,086
13,050,000 Triborough Bridge & Tunnel Authority 6.875
01/01/2015(s) 01/01/2001(b) 13,581,788
</TABLE>
26 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 370,000 Triborough Bridge & Tunnel Authority 6.875 %
01/01/2015(s) 01/01/2001(b) $ 385,078
75,000 Tupper Lake HDC 8.125
10/01/2010 03/15/2002(b) 75,189
1,830,000 Ulster County IDA (Benedictine Hospital) 6.050
06/01/2005 02/08/2003(c) 1,762,455
660,000 Union Hsg. Authority (Methodist Homes) 6.800
11/01/2004 12/30/2002(c) 665,603
4,065,000 United Nations Devel. Corp., Series B 5.400
07/01/2014 07/13/2013(c) 3,846,425
3,340,000 United Nations Devel. Corp., Series B 5.500
07/01/2017 07/13/2016(c) 3,084,056
6,070,000 United Nations Devel. Corp., Series C 5.500
07/01/2017 07/13/2016(c) 5,604,856
500,000 Utica IDA (Utica College) 5.300
08/01/2008 05/18/2004(c) 484,340
40,000 Utica SCHC (Brook Apartments) 0.000
01/01/2002 ----- 33,138
30,000 Utica SCHC (Brook Apartments) 0.000
01/01/2003 07/01/2000(b) 22,595
60,000 Utica SCHC (Brook Apartments) 0.000
01/01/2005 07/01/2000(b) 37,214
100,000 Utica SCHC (Steinhorst Apartments) 6.500
04/15/2008(s) 10/05/2004(g) 105,825
5,000 Valley Health Devel. Corp. 7.850
02/01/2002 05/01/2000(c) 5,059
10,000 Valley Health Devel. Corp. 7.850
08/01/2035(s) 08/01/2001(b) 10,687
95,000 Valley Health Devel. Corp. 11.300
02/01/2007 08/01/2000(b) 107,264
950,000 Valley Health Devel. Corp. 11.300
02/01/2023(s) 12/15/2000(b) 1,065,463
95,000 Watervliet EHC 8.000
11/15/2000 05/15/2000(b) 95,773
95,000 Watervliet EHC 8.000
11/15/2001 05/15/2000(b) 95,773
100,000 Watervliet EHC 8.000
11/15/2002 05/15/2000(b) 100,814
385,000 Westchester County IDA (Beth Abraham Hospital) 7.250
12/01/2009 12/02/2004(c) 386,043
775,000 Westchester County IDA (JBFS) 6.500
12/15/2002 12/30/2001(c) 780,107
450,000 Westchester County IDA (JDAM) 6.250
04/01/2005 12/04/2002(c) 453,123
1,010,000 Westchester County IDA (JDAM) 6.750
04/01/2016 06/29/2013(c) 998,981
150,000 Westchester County IDA (Westchester Airport) 5.950
08/01/2024 09/29/2020(c) 137,277
2,650,000 Westchester County IDA (WRC) 5.500
07/01/2009 ----- 2,382,615
1,675,000 Yonkers IDA (Hudson Scenic Studio) 5.875
11/01/2007 08/20/2004(c) 1,596,493
1,025,000 Yonkers IDA (Philipsburgh Hall) (w) 6.500
11/01/2001 ----- 1,024,877
185,000 Yonkers IDA (Philipsburgh Hall) (w) 6.750
11/01/2008 07/15/2005(c) 185,342
1,000,000 Yonkers IDA (St. Joseph's Hospital), Series 98-B 5.900
03/01/2008 03/01/2006(c) 935,020
- --------------
1,081,548,103
- --------------
- -----------------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--15.0%
700,000 American Samoa Power Authority 7.000
09/01/2000 ----- 709,345
2,225,000 Guam Airport Authority, Series A 6.500
10/01/2023(s) 10/01/2003(b) 2,243,245
4,410,000 Guam Airport Authority, Series B 6.400
10/01/2005(s) 03/15/2003(g) 4,593,456
15,335,000 Guam Airport Authority, Series B 6.600
10/01/2010(s) 10/01/2003(b) 16,015,567
21,115,000 Guam Airport Authority, Series B 6.700
10/01/2023(s) 10/01/2003(b) 21,784,134
15,075,000 Guam GO, Series A 5.375
11/15/2013 12/23/2011(c) 13,954,174
11,780,000 Guam GO, Series A 5.400
11/15/2018 12/22/2016(c) 10,411,989
1,760,000 Guam GO, Series A 5.625
09/01/2002 03/01/2000(b) 1,761,373
5,250,000 Guam GO, Series A 5.750
09/01/2004 03/01/2000(b) 5,253,098
1,975,000 Guam GO, Series A 5.900
09/01/2005 03/01/2000(b) 1,976,343
1,000,000 Guam GO, Series A 6.000
09/01/2006 03/01/2000(b) 1,000,680
35,000 Guam Highway, Series A 6.300
05/01/2012(s) 05/01/2002(b) 36,591
1,200,000 Guam Power Authority, Series A 6.300
10/01/2012 10/01/2002(a) 1,278,192
100,000 Guam Water System 7.000
07/01/2002 07/01/2000(b) 103,360
110,000 Guam Water System 7.000
07/01/2009 07/01/2000(b) 113,725
184,258 Puerto Rico Aquadilla Bus Lease (i) 8.500
02/02/2002 02/16/2001(c) 185,758
320,646 Puerto Rico Aquadilla Carts Lease (i) 8.000
02/02/2001 08/07/2000(c) 321,438
443,354 Puerto Rico Aquadilla Equipment Lease (i) 8.000
01/26/2002 02/08/2001(c) 444,494
266,476 Puerto Rico Aquadilla Truck Lease (i) (t) 8.500
10/15/2001 01/23/2001(c) 271,014
396,240 Puerto Rico Aqueduct & Sewer Vehicle Lease (i) 7.250
03/21/2000 ----- 397,837
2,247,099 Puerto Rico Dept. of Corrections Equipment Lease (i) 9.000
01/08/2003 08/09/2001(c) 2,294,086
</TABLE>
27 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 1,949,945 Puerto Rico Dept. of Corrections Furniture Lease (i) 7.000 %
04/25/2004 06/06/2002(c) $ 1,949,536
25,000 Puerto Rico Electric Power Authority 6.000
07/01/2016(s) 07/01/2004(b) 25,207
30,000 Puerto Rico Electric Power Authority 6.000
07/01/2016(s) 07/01/2004(b) 30,557
100,000 Puerto Rico GO 6.000
07/01/2014(s) 07/01/2002(b) 101,235
5,000 Puerto Rico GO 6.000
07/01/2014(s) 07/01/2002(b) 5,111
1,800,000 Puerto Rico GO YCN 7.584 (r)
07/01/2008(s) 07/01/2002(b) 1,896,750
55,000 Puerto Rico HBFA 5.850
10/01/2009 04/01/2007(b) 56,437
400,000 Puerto Rico HBFA 6.100
10/01/2015(s) 04/01/2007(b) 400,440
2,184,452 Puerto Rico Health Dept. Equipment Lease (i) 7.099
07/23/2003 11/03/2001(c) 2,178,619
125,000 Puerto Rico HFC 6.000
02/01/2009(s) 02/01/2002(b) 127,755
100,000 Puerto Rico HFC 6.650
10/15/2010(s) 10/01/2001(b) 103,209
10,000 Puerto Rico HFC 6.750
10/15/2013(s) 10/01/2001(b) 10,269
30,000 Puerto Rico HFC 6.850
10/15/2023(s) 10/10/2001(b) 31,275
40,000 Puerto Rico HFC 7.000
04/01/2000 ----- 40,132
10,000 Puerto Rico HFC 7.100
04/01/2002 04/01/2000(b) 10,247
615,000 Puerto Rico HFC 7.200
04/01/2003 04/01/2000(b) 630,320
90,000 Puerto Rico HFC 7.300
04/01/2006 04/01/2000(b) 92,264
90,000 Puerto Rico HFC 7.300
10/01/2006 04/01/2000(b) 92,264
55,000 Puerto Rico HFC 7.400
04/01/2007 04/01/2000(b) 56,397
20,000 Puerto Rico HFC 7.450
10/15/2009(s) 09/27/2000(b) 20,559
10,000 Puerto Rico HFC 7.500
10/15/2012(s) 09/27/2000(b) 10,279
3,620,000 Puerto Rico HFC 7.500
10/01/2015(s) 04/01/2000(b) 3,712,817
7,320,000 Puerto Rico HFC 7.500
04/01/2022(s) 04/01/2000(b) 7,508,856
175,000 Puerto Rico HFC 7.650
10/15/2022(s) 09/27/2000(b) 180,100
1,365,000 Puerto Rico Highway & Transportation Authority 6.625
07/01/2012(s) 07/01/2002(b) 1,418,781
419,012 Puerto Rico HR Vehicle Lease (i) 8.000
12/01/2000 09/02/2000(c) 420,529
51,287 Puerto Rico HR Vehicle Lease (i) 8.000
03/12/2001 09/15/2000(c) 51,550
575,000 Puerto Rico IMEPCF (Abbott Labs) 6.500
07/01/2009 07/01/2000(b) 589,088
6,250,000 Puerto Rico IMEPCF (PepsiCo) 6.250
11/15/2013 11/15/2002(b) 6,425,375
7,175,000 Puerto Rico IMEPCF (PepsiCo) 6.250
11/15/2013 11/15/2002(b) 7,376,331
530,000 Puerto Rico IMEPCF (Squibb) 6.500
07/01/2004(s) 07/01/2000(b) 539,434
3,525,000 Puerto Rico Infrastructure 7.500
07/01/2009(s) 07/01/2000(b) 3,568,781
235,000 Puerto Rico Infrastructure 7.600
07/01/2000 ----- 237,959
65,000 Puerto Rico Infrastructure 7.700
07/01/2001 07/01/2000(a) 65,818
5,000 Puerto Rico Infrastructure 7.700
07/01/2001 07/01/2000(b) 5,063
1,915,000 Puerto Rico Infrastructure 7.750
07/01/2008(s) 07/01/2000(b) 1,939,186
3,140,000 Puerto Rico Infrastructure 7.900
07/01/2007(s) 07/01/2000(b) 3,180,035
1,890,000 Puerto Rico ITEMECF (Mennonite General Hospital) 5.625
07/01/2017 06/15/2010(c) 1,633,527
2,470,000 Puerto Rico ITEMECF (Mennonite General Hospital) 6.375
07/01/2006 09/28/2003(c) 2,473,507
1,975,000 Puerto Rico ITEMECF (Mennonite General Hospital) 6.500
07/01/2012 07/27/2009(c) 1,929,852
8,735,000 Puerto Rico ITEMECF (Mennonite General Hospital) 6.500
07/01/2018 03/07/2016(c) 8,351,097
200,000 Puerto Rico ITEMECF (Polytech University) 5.700
08/01/2013 07/15/2009(c) 192,600
1,045,000 Puerto Rico ITEMECF (Ryder Memorial Hospital) 6.400
05/01/2009(s) 05/01/2004(b) 1,067,144
5,000,000 Puerto Rico Municipal Finance Agency 6.000
08/01/2016 08/01/2011(b) 5,162,050
425,923 Puerto Rico Natural Resources Dept. Equipment Lease (i) 7.250
01/25/2002 02/06/2001(c) 425,940
1,357,419 Puerto Rico Natural Resources Dept. Equipment Lease (i) 7.250
10/26/2003 11/24/2001(c) 1,346,654
350,534 Puerto Rico Natural Resources Dept. Equipment Lease (i)(x) 7.250
11/23/2001 03/01/2001(c) 345,392
370,826 Puerto Rico Office of the Governor Computer Lease (i) 6.906
09/30/2002 12/16/2000(c) 363,554
95,000 Puerto Rico Port Authority 5.700
07/01/2003(s) 07/01/2000(b) 96,264
20,000 Puerto Rico Port Authority 5.750
07/01/2002(s) 07/01/2000(b) 20,012
425,000 Puerto Rico Port Authority 7.000
07/01/2014(s) 07/01/2001(b) 445,600
110,000 Puerto Rico Port Authority 7.300
07/01/2007(s) 07/01/2000(b) 110,105
100,000 Puerto Rico Port Authority (American Airlines) 6.300
06/01/2023 ----- 97,663
</TABLE>
28 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C> <C>
Face
Effective Market Value
Amount Coupon
Maturity Maturity* See Note 1
====================================================================================================================================
$ 20,000 Puerto Rico Public Buildings Authority 6.000 %
07/01/2012(s) 07/01/2000(b) $ 20,020
8,335,000 Puerto Rico Public Buildings Authority 6.000
07/01/2012(s) 07/01/2000(b) 8,343,335
650,312 Puerto Rico State Courts Telephone System Lease (i) 7.250
06/04/2002 06/17/2001(c) 640,765
1,620,000 Puerto Rico Urban Renewal 7.875
10/01/2004(s) 04/01/2000(b) 1,656,304
43,222 Puerto Rico Vocational Rehab. Vehicle Lease (i) 8.000
02/17/2002 03/02/2001(c) 43,375
265,000 University of Puerto Rico 5.500
06/01/2012 02/04/2008(c) 264,868
500,000 University of V.I. 7.500
10/01/2009(s) 10/01/2004(b) 565,235
500,000 University of V.I. 7.650
10/01/2014(s) 10/01/2004(b) 568,385
602,000 V.I. GO (Hugo Insurance Claims Program) 7.750
10/01/2006(s) 06/19/2001(g) 634,514
60,000 V.I. HFA 6.500
03/01/2025(s) 03/01/2005(b) 60,849
5,000,000 V.I. Public Finance Authority 5.500
10/01/2015 ----- 4,627,100
1,000,000 V.I. Public Finance Authority 5.500
10/01/2018 10/14/2017(c) 898,400
2,830,000 V.I. Public Finance Authority 6.000
10/01/2005 ----- 2,828,189
175,000 V.I. Public Finance Authority 6.000
10/01/2022 03/26/2021(c) 160,529
2,000,000 V.I. Water & Power Authority 5.000
07/01/2009 07/12/2008(c) 1,850,620
1,100,000 V.I. Water & Power Authority 7.200
01/01/2002 01/18/2001(a) 1,131,548
11,995,000 V.I. Water & Power Authority 7.400
07/01/2011 05/09/2001(a) 12,606,025
- -------------
191,199,486
- -------------
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$1,287,725,486)--100.0%
1,272,747,589
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF
LIABILITIES--0.0%
549,601
- -------------
NET ASSETS
- --100.0%
1,273,297,190
=============
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
* Call Date, Put Date or Average Life of Sinking Fund, if applicable, as
detailed:
(a) Date of prerefunded call, or maturity date if escrowed to
maturity.
(b) Optional call date; corresponds to the most conservative yield
calculation.
(c) Average life due to mandatory (sinking fund) principal
payments prior to maturity.
(d) Date of mandatory put.
(e) Date of conversion.
(f) Effective maturity corresponding to variable coupon payment date.
(g) Average life due to mandatory (sinking fund) principal payments prior
to the applicable optional call date.
(i) Illiquid security -- See Note 5 of Notes to Financial Statements.
(r) 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 $34,601,622, or
2.63% of the Fund's total assets as of December 31, 1999.
(s) Security also has mandatory sinking fund principal payments prior to
maturity and an average life which is shorter than the stated final
maturity.
(t) Non-income accruing security.
(u) Partial interest payment received.
(v) Represents the current interest rate for a variable or increasing rate
security.
(w) When-issued security or forward purchase commitment to be delivered and
settled after December 31, 1999.
(x)Issuer is in default.
See accompanying Notes to Financial Statements.
29 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
===============================================================================
PORTFOLIO ABBREVIATIONS
To simplify the listing of securities in the Statement of Investments,
abbreviations are used per the table below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ACLDD Adults and Children with Learning and RAES Receipts
of Accrual on Exempt Securities
Developmental Disabilities RAN Revenue
Anticipation Notes
AOFMH Aurelia Osborn Fox Memorial Hospital Res Rec Resource
Recovery Facility
ARC Association of Retarded Citizens RG&E Rochester
Gas and Electric
ASMF Amsterdam Sludge Management Facility SCHC Senior
Citizen Housing Corporation
BAN Bond Anticipation Notes SCSB Schuyler
Community Services Board
CAB Capital Appreciation Bond SLRHF St. Luke
Residential Healthcare Facility
CARS Complimentary Auction Rate Security SONYMA State of
New York Mortgage Agency
Con Ed Consolidated Edison Company SRGF Solomon
R. Guggenheim Foundation
COP Certificates of Participation SWMA Solid
Waste Management Authority
CSD Central School District UDC Urban
Development Corporation
DA Dormitory Authority V.I. United
States Virgin Islands
DIAMONDS Direct Investment of Accrued Municipals WHELC Wartburg
Home of the Evangelical Lutheran
EFC Environmental Facilities Corporation Church
EHC Elderly Housing Corporation WRC
Westchester Resco Company
ERDA Energy Research and Development Authority WWH
Wyandach/Wheatley Heights
G&E Gas and Electric YCN Yield
Curve Note
G&H Geriatric and Healthcare
GO General Obligation
GRIA Greater Rochester International Airport
HBFA Housing Bank and Finance Agency
HDC Housing Development Corporation
HELP Homeless Economic Loan Program
HFA Housing Finance Agency
HFC Housing Finance Corporation
HR House of Representatives
IDA Industrial Development Agency
IMEPCF Industrial, Medical and Environmental Pollution
Control Facilities
ITEMECF Industrial, Tourist, Educational, Medical and
Environmental Community Facilities
JBFS Jewish Board of Family Services
JCC Jewish Community Center
JDAM Julia Dyckman Angus Memorial
LGAC Local Government Assistance Corporation
LGSC Local Government Services Corporation
LILCO Long Island Lighting Corporation
LIMO Limited Interest Municipal Obligation
MEET Manhattan Eye, Ear and Throat
MTA Metropolitan Transportation Authority
NIMO Niagara Mohawk Power Corporation
NJ New Jersey
NSCFGA North Shore Child and Family Guidance Association
NY New York
NYC New York City
NYS New York State
NYSEG New York State Electric and Gas
OBPWC Ocean Bay Park Water Corporation
PACES Potsdam Auxiliary and College Educational Service
PRAMS Prudential Receipts of Accrual Municipal Securities
</TABLE>
30 LIMITED TERM NEW YORK MUNICIAL FUND
<PAGE>
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
================================================================================
INDUSTRY CONCENTRATIONS December 31, 1999
Distribution of investments by industry of issue, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
<S> <C>
<C>
INDUSTRY MARKET VALUE
PERCENT
- ---------------------------------------------------------------------------------------------
General Obligation
$255,560,165 20.1 %
Hospital/Healthcare
119,633,924 9.4
Marine/Aviation Facilities
117,552,545 9.2
Municipal Leases
111,607,265 8.8
Multifamily Housing
109,105,283 8.6
Electric Utilities
106,254,561 8.3
Resource Recovery
68,247,970 5.4
Higher Education
66,287,810 5.2
Single Family Housing
58,898,735 4.6
Pollution Control
53,329,250 4.2
Nonprofit Organization
42,628,747 3.3
Highways/Railways
42,281,608 3.3
Manufacturing, Non-Durable Goods
27,613,573 2.2
Water Utilities
20,692,338 1.6
Gas Utilities
19,491,741 1.5
Sales Tax Revenue
17,604,879 1.4
Manufacturing, Durable Goods
12,330,378 1.0
Other
23,626,817 1.9
- ---------------------------------------------
$1,272,747,589 100.0 %
=============================================
</TABLE>
================================================================================
SUMMARY OF RATINGS December 31, 1999 Unaudited
Distribution of investments by rating category, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
<S>
<C>
RATING
PERCENT
- ---------------------------------------------------------------------------------------------
AAA
19.2 %
AA
12.0
A
41.1
BBB
22.8
BB
0.0
B
0.0
CCC
0.0
CC
0.0
C
0.0
Not
Rated
4.9
- ----------
100.0 %
==========
</TABLE>
Bonds rated by any nationally recognized statistical rating organization are
included in the equivalent Standard & Poor's rating category. As a general
matter, unrated bonds may be backed by mortgage liens or equipment liens on the
underlying property, and also may be guaranteed. Bonds which are backed by a
letter of credit or by other financial institutions or agencies may be assigned
an investment grade rating by the Manager, which reflects the quality of the
guarantor, institution or agency. Unrated bonds may also be assigned a rating
when the issuer has rated bonds outstanding with comparable credit
characteristics, or when, in the opinion of the Manager, the bond itself
possesses credit characteristics which allow for rating. The unrated bonds in
the portfolio are predominantly smaller issuers which have not applied for a
bond rating. Only those unrated bonds which subsequent to purchase have not been
designated investment grade by the Manager are included in the "Not Rated"
category.
31 LIMITED TERM NEW YORK MUNICIAL FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES December 31, 1999
<TABLE>
<CAPTION>
<S>
<C>
====================================================================================================
ASSETS
Investments, at value (cost $1,287,725,486)--see accompanying
statement $1,272,747,589
- ----------------------------------------------------------------------------------------------------
Cash
4,765,754
- ----------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest
24,543,364
Investments
sold
11,271,133
Shares of beneficial interest
sold 4,690,854
Other
17,443
- ---------------
Total
assets
1,318,036,137
====================================================================================================
LIABILITIES Payables and other liabilities:
Note payable to bank (interest rate 5.625% at
12/31/99) 31,200,000
Investments
purchased
7,136,682
Shares of beneficial interest
redeemed 5,637,212
Dividends
345,069
Trustees'
compensation
159,302
Other
260,682
- ---------------
Total
liabilities
44,738,947
====================================================================================================
NET
ASSETS
$1,273,297,190
===============
====================================================================================================
COMPOSITION OF NET ASSETS
Paid-in
capital
$1,313,188,861
- ----------------------------------------------------------------------------------------------------
Undistributed net investment
income 419,113
- ----------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment
transactions (25,332,887)
- ----------------------------------------------------------------------------------------------------
Net unrealized depreciation on
investments (14,977,897)
- ---------------
Net
assets
$1,273,297,190
===============
====================================================================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$1,025,714,473 and 321,398,604 shares of beneficial interest outstanding) $3.19
Maximum offering price per share (net asset value plus sales charge of 3.50% of
offering
price) $3.31
- ----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $88,757,534 and
27,838,154 shares of beneficial interest outstanding) $3.19
- ----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $119,329,270 and
37,478,234 shares of beneficial interest outstanding) $3.18
- ----------------------------------------------------------------------------------------------------
Class X Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $39,495,913 and
12,348,430 shares of beneficial interest outstanding) $3.20 </TABLE>
See accompanying Notes to Financial Statements.
32 LIMITED TERM NEW YORK MUNICIAL FUND
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
<S>
<C>
====================================================================================================
INVESTMENT INCOME
Interest
$70,617,563
====================================================================================================
EXPENSES
Management
fees
5,372,033
- ----------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class
A
2,573,038
Class
B
781,955
Class
C
1,161,836
Class
X
331,936
- ----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class
A
309,981
Class
B
44,329
Class
C
46,252
Class
X
25,476
- ----------------------------------------------------------------------------------------------------
Accounting service
fees 392,771
- ----------------------------------------------------------------------------------------------------
Custodian fees and
expenses 151,058
- ----------------------------------------------------------------------------------------------------
Trustees'
compensation
144,387
- ----------------------------------------------------------------------------------------------------
Other
436,716
- ----------------------------------------------------------------------------------------------------
Interest
442,615
- -------------
Total
expenses
12,214,383
Less expenses paid
indirectly (77,245)
- -------------
Net
expenses
12,137,138
====================================================================================================
NET INVESTMENT
INCOME 58,480,425
====================================================================================================
REALIZED AND UNREALIZED LOSS
Net realized loss on
investments (15,573,998)
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on
investments (56,843,187)
- ---------------
Net realized and unrealized
loss (72,417,185)
====================================================================================================
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS $(13,936,760)
===============
</TABLE>
See accompanying Notes to Financial Statements.
33 LIMITED TERM NEW YORK MUNICIAL FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S>
<C> <C>
Year Ended December
31,
1999 1998
============================================================================================================================
OPERATIONS
Net investment
income
$58,480,425 $48,783,527
- ----------------------------------------------------------------------------------------------------------------------------
Net realized
loss
(15,573,998) (479,664)
- ----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation (56,843,187) 10,408,295
- --------------------------------------------
Net increase (decrease) in net assets resulting from
operations (13,936,760) 58,712,158
============================================================================================================================
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class
A
(48,813,022) (42,908,426)
Class
B
(2,946,049) (1,728,342)
Class
C
(4,465,531) (2,438,783)
Class
X
(1,790,803) (2,182,644)
=============================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Class
A
105,030,998 199,445,734
Class
B
28,738,925 42,482,889
Class
C
31,044,037 67,445,258
Class
X
(5,563,113) (5,528,643)
============================================================================================================================
NET ASSETS
Total
increase
87,298,682 313,299,201
- -----------------------------------------------------------------------------------------------------------------------------
Beginning of
period
1,185,998,508 872,699,307
- --------------------------------------------
End of period (including undistributed net investment income of $419,113
and excess of distributions over net investment income of $45,907, respectively)
$1,273,297,190 $1,185,998,508
============================================
</TABLE>
See accompanying Notes to Financial Statements.
34 LIMITED TERM NEW YORK MUNICIAL FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C>
<C> <C> <C> <C>
CLASS A Year Ended December 31, 1999
1998 1997 1996 (1) 1995
====================================================================================================================================
PER SHARE OPERATING DATA
Net asset value, beginning of period $3.37
$3.34 $3.26 $3.28 $3.15
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.15
0.16 0.17 0.17 0.18
Net realized and unrealized gain (loss) (0.18)
0.03 0.08 (0.02) 0.13
- --------------------------------------------------------------------------------
Total income (loss) from investment operations (0.03)
0.19 0.25 0.15 0.31
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (0.15)
(0.16) (0.17) (0.17) (0.18)
- ---------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.15)
(0.16) (0.17) (0.17) (0.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.19
$3.37 $3.34 $3.26 $3.28
=================================================================================
====================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE (2) (0.87)%
5.94% 8.01% 4.82% 10.01%
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $1,025,714
$979,316 $771,828 $634,172 $567,537
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,060,745
$884,849 $677,376 $606,742 $520,990
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: (3)
Net investment income 4.64%
4.80% 5.27% 5.37% 5.44%
Expenses 0.81% 0.82%
(4) 0.83% 0.89% 0.90%
Expenses, net of indirect expenses and interest (5) (6) 0.77%
0.80% 0.80% 0.83% 0.83%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (7) 37%
25% 27% 24% 22%
</TABLE>
(1) On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
(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) During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
(6) Prior year ratios have been restated to conform to current year
presentation.
(7) 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 December 31, 1999, were
$624,429,182 and $478,113,286, respectively.
See accompanying Notes to Financial Statements.
35 LIMITED TERM NEW YORK MUNICIAL FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
<S> <C>
<C> <C>
CLASS B Year Ended December 31, 1999
1998 1997 (8)
==============================================================================================================
PER SHARE OPERATING DATA
Net asset value, beginning of period $3.37
$3.34 $3.25
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.13
0.14 0.10
Net realized and unrealized gain (loss) (0.18)
0.03 0.09
- -----------------------------------------------------
Total income (loss) from investment operations (0.05)
0.17 0.19
- --------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (0.13)
(0.14) (0.10)
- -----------------------------------------------------
Total dividends and distributions to shareholders (0.13)
(0.14) (0.10)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.19
$3.37 $3.34
=====================================================
==============================================================================================================
TOTAL RETURN, AT NET ASSET VALUE (2) (1.64)%
5.13% 5.89%
==============================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $88,758
$64,388 $21,500
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $78,263
$43,620 $9,873
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets: (3)
Net investment income 3.84%
3.97% 4.18%
Expenses 1.59%
1.59% (4) 1.56%
Expenses, net of indirect expenses and interest (5) (6) 1.55%
1.57% 1.54%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (7) 37%
25% 27%
</TABLE>
(1) On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
(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) During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
(6) Prior year ratios have been restated to conform to current year
presentation.
(7) 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 December 31, 1999, were
$624,429,182 and $478,113,286, respectively.
(8) For the period from May 1, 1997 (inception of offering) to December 31,
1997.
See accompanying Notes to Financial Statements.
36 LIMITED TERM NEW YORK MUNICIAL FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
<S> <C>
<C> <C>
CLASS C Year Ended December 31, 1999
1998 1997 (8)
=============================================================================================================
PER SHARE OPERATING DATA
Net asset value, beginning of period $3.36
$3.33 $3.25
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.13
0.14 0.10
Net realized and unrealized gain (loss) (0.18)
0.03 0.08
- ------------------------------------------------------
Total income (loss) from investment operations (0.05)
0.17 0.18
- -------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (0.13)
(0.14) (0.10)
- ------------------------------------------------------
Total dividends and distributions to shareholders (0.13)
(0.14) (0.10)
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.18
$3.36 $3.33
======================================================
=============================================================================================================
TOTAL RETURN, AT NET ASSET VALUE (2) (1.63)%
5.15% 5.58%
=============================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $119,329
$94,870 $26,862
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $116,249
$61,717 $12,705
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets: (3)
Net investment income 3.86%
3.98% 4.22%
Expenses 1.57%
1.57% (4) 1.54%
Expenses, net of indirect expenses and interest (5) (6) 1.53%
1.55% 1.51%
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (7) 37%
25% 27%
</TABLE>
(1) On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
(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) During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
(6) Prior year ratios have been restated to conform to current year
presentation.
(7) 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 December 31, 1999, were
$624,429,182 and $478,113,286, respectively.
(8) For the period from May 1, 1997 (inception of offering) to December 31,
1997.
See accompanying Notes to Financial Statements.
37 LIMITED TERM NEW YORK MUNICIAL FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
<S> <C>
<C> <C> <C> <C>
CLASS X Year Ended December 31, 1999
1998 1997 1996 (1) 1995 (9)
====================================================================================================================================
PER SHARE OPERATING DATA
Net asset value, beginning of period $3.38
$3.35 $3.27 $3.28 $3.21
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.13
0.15 0.16 0.16 0.11
Net realized and unrealized gain (loss) (0.18)
0.03 0.08 (0.01) 0.07
- ----------------------------------------------------------------------------
Total income (loss) from investment operations (0.05)
0.18 0.24 0.15 0.18
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (0.13)
(0.15) (0.16) (0.16) (0.11)
- ----------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.13)
(0.15) (0.16) (0.16) (0.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.20
$3.38 $3.35 $3.27 $3.28
============================================================================
====================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE (2) (1.39)%
5.38% 7.44% 4.59% 5.65%
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $39,496
$47,424 $52,510 $40,828 $16,415
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $44,237
$49,866 $49,563 $28,971 $8,869
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: (3)
Net investment income 4.11%
4.30% 4.75% 4.85% 5.21%
Expenses 1.34% 1.35%
(4) 1.35% 1.38% 0.90%
Expenses, net of indirect expenses and interest (5) (6) 1.30%
1.32% 1.32% 1.32% 0.83%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (7) 37%
25% 27% 24% 22%
</TABLE>
(1) On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
(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) During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
(6) Prior year ratios have been restated to conform to current year
presentation.
(7) 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 December 31, 1999, were
$624,429,182 and $478,113,286, respectively.
(8) For the period from May 1, 1997 (inception of offering) to December 31,
1997.
(9) For the period from May 1, 1995 (inception of offering) to December 31,
1995.
See accompanying Notes to Financial Statements.
38 LIMITED TERM NEW YORK MUNICIAL FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Limited Term New York Municipal Fund (the Fund) is a separate series of
Rochester Portfolio Series, a 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 income exempt from
federal income tax and New York State and New York City personal income taxes as
is consistent with its investment policies and prudent investment management.
The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B and Class C shares. As of January 6, 1998,
the Fund is no longer offering Class X shares (Class X shares were designated as
Class B shares prior to May 1, 1997). 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). Class X shares may also be subject
to a 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, C and X have separate distribution and/or
service plans. Class B and Class X 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. Portfolio securities are valued as of the close of the New
York Stock Exchange on each trading day. Long-term debt securities are valued by
a portfolio pricing service approved by the Board of Trustees. Such securities
which cannot be valued by an approved portfolio pricing service are valued using
dealer-supplied valuations provided the Manager is satisfied that the firm
rendering the quotes is reliable and that the quotes reflect current market
value, or are valued under consistently applied procedures established by the
Board of Trustees to determine fair value in good faith.
- --------------------------------------------------------------------------------
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. Normally the
settlement date occurs within six months after the transaction date; however,
the Fund may, from time to time, purchase securities whose settlement date
extends beyond six months and possibly as long as two years or more beyond trade
date. During this period, such securities do not earn interest, are subject to
market fluctuation and may increase or decrease in value prior to their
delivery. The Fund maintains segregated assets with a market value equal to or
greater than the amount of its purchase commitments. The purchase of securities
on a when-issued or forward commitment basis may increase the volatility of the
Fund's net asset value to the extent the Fund makes such purchases while
remaining substantially fully invested. As of December 31, 1999, the Fund had
entered into outstanding when-issued or forward commitments of $7,018,428.
- --------------------------------------------------------------------------------
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 December 31, 1999, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $25,286,000, which expires between 2002 and 2007.
- --------------------------------------------------------------------------------
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 year ended
December 31, 1999, a provision of $104,098 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $150,007 as of
December 31, 1999.
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.
39 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
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.
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. SHARES OF BENEFICIAL INTEREST
The 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>
<S> <C> <C>
<C> <C>
Year Ended December 31, 1999 Year
Ended December 31, 1998
Shares Amount
Shares Amount
- -------------------------------------------------------------------------------------------------------------
CLASS A
Sold 112,559,156 $371,678,795
85,263,031 $285,730,451
Dividends and/or distributions reinvested 9,638,646 31,694,788
8,362,718 28,044,127
Redeemed (91,380,672) (298,342,585)
(34,100,531) (114,328,844)
- --------------------------------------------------------------------
Net increase 30,817,130 $105,030,998
59,525,218 $199,445,734
====================================================================
- -------------------------------------------------------------------------------------------------------------
CLASS B
Sold 11,890,955 $39,104,573
13,306,853 $44,568,293
Dividends and/or distributions reinvested 638,858 2,095,730
360,864 1,209,382
Redeemed (3,819,240) (12,461,378)
(983,181) (3,294,786)
- -------------------------------------------------------------------
Net increase 8,710,573 $28,738,925
12,684,536 $42,482,889
===================================================================
- ------------------------------------------------------------------------------------------------------------
CLASS C
Sold 20,030,859 $66,135,515
22,535,160 $75,428,610
Dividends and/or distributions reinvested 1,035,649 3,395,130
552,623 1,849,561
Redeemed (11,796,007) (38,486,608)
(2,936,551) (9,832,913)
- -------------------------------------------------------------------
Net increase 9,270,501 $31,044,037
20,151,232 $67,445,258
===================================================================
- ------------------------------------------------------------------------------------------------------------
CLASS X
Sold ------ $ ------
5,830 $ 19,325
Dividends and/or distributions reinvested 362,172 1,195,024
443,451 1,488,806
Redeemed (2,059,716) (6,758,137)
(2,094,913) (7,036,774)
- -------------------------------------------------------------------
Net decrease (1,697,544) $(5,563,113)
(1,645,632) $(5,528,643)
===================================================================
</TABLE>
40 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
3. SECURITIES INFORMATION
As of December 31, 1999, net unrealized depreciation on securities of
$14,977,897 was composed of gross appreciation of $11,082,952, and gross
depreciation of $26,060,849.
As of December 31, 1999, unrealized appreciation (depreciation) based on
cost of securities for federal income tax purposes of $1,287,772,179 was:
Gross unrealized appreciation $ 11,061,002
Gross unrealized depreciation (26,085,592)
---------------
Net unrealized depreciation $(15,024,590)
===============
================================================================================
4. MANAGEMENT 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 0.50% of
the first $100 million of average daily net assets, 0.45% of the next $150
million, 0.40% of the next $1.75 billion, and 0.39% of average daily net assets
in excess of $2 billion. The Fund's management fee for the year ended December
31, 1999 was 0.41% of average annual net assets for each class of shares.
- --------------------------------------------------------------------------------
ACCOUNTING FEES. Accounting fees paid to the Manager were in accordance with the
accounting services agreement with the Fund, which provides for an annual fee of
$12,000 for the first $30 million of net assets and $9,000 for each additional
$30 million of net assets. During the year ended December 31, 1999, the Fund
paid $392,771 to the Manager for accounting and pricing services.
- --------------------------------------------------------------------------------
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. The Fund pays OFS an annual maintenance fee for each Fund
shareholder account and reimburses OFS for its out-of-pocket expenses. During
the year ended December 31, 1999, the Fund paid OFS $426,038.
- --------------------------------------------------------------------------------
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>
<S> <C> <C>
<C> <C> <C>
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
Year Ended Shares Distributor
Distributor(1) Distributor(1) Distributor(1)
- ----------------------------------------------------------------------------------------
- -----------------------------------------
December 31, 1999 $3,235,381 $366,186
$1,785,574 $881,649 $602,450
</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>
<S> <C>
<C> <C> <C>
Class A Class
B Class C Class X
Contingent Deferred Contingent Deferred
Contingent Deferred Contingent Deferred
Sales Charges Sales
Charges Sales Charges Sales Charges
Year Ended Retained by Distributor Retained by Distributor
Retained by Distributor Retained by Distributor
- -----------------------------------------------------------------------------------------------------------------------------------
December 31, 1999 $133,654
$180,775 $82,528 $57,568
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B, Class C and Class X 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.
- --------------------------------------------------------------------------------
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 0.25% of average annual net assets of Class A
shares. The Distributor makes payments to plan recipients quarterly at an annual
rate not to exceed 0.25% of the average annual net assets consisting of Class A
shares of the Fund. For the fiscal year ended December 31, 1999, payments under
the Class A Plan totaled $2,573,038, all of which was paid by the Distributor to
recipients. That included $45,289 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.
41 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
CLASS B, CLASS C AND CLASS X 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, Class C and Class X
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 and Class X
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 year ended December 31, 1999
were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
<C> <C>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained
Expenses of Net Assets
Under Plan by Distributor Under
Plan of Class
- -----------------------------------------------------------------------------------------------------------
Class B Plan $ 781,955 $698,485
$2,094,673 2.36 %
Class C Plan 1,161,836 767,185
1,647,219 1.38
Class X Plan 331,936 233,470
- ---- ----
</TABLE>
================================================================================
5. ILLIQUID OR RESTRICTED SECURITIES
As of December 31, 1999, investments in securities included issues that are
illiquid. A security may 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. Certain
restricted securities, eligible for resale to qualified institutional investors,
are not subject to that limit. The aggregate value of illiquid or restricted
securities subject to this limitation as of December 31, 1999 was $16,083,707,
which represents 1.26% 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 year ended December 31, 1999 was
$8,313.
The Fund had borrowings outstanding of $31,200,000 at December 31, 1999.
For the year ended December 31, 1999, the average monthly loan balance was
$7,600,356 at an average interest rate of 5.730%. The maximum amount of
borrowings outstanding at any month-end was $31,200,000.
42 LIMITED TERM NEW YORK MUNICIPAL FUND
<PAGE>
A-6
Appendix A
- --------------------------------------------------------------------------------
MUNICIPAL BOND RATINGS DEFINITIONS
- --------------------------------------------------------------------------------
Below are summaries of the rating definitions used by the nationally-recognized
rating agencies listed below for municipal securities. Those ratings represent
the opinion of the agency as to the credit quality of issues that they rate. The
summaries below are based upon publicly-available information provided by the
rating organizations.
Moody's Investors Service, Inc.
- --------------------------------------------------------------------------------
Long-Term Bond Ratings
Aaa: Bonds rated Aaa are judged to be the best quality. They carry the smallest
degree of investment risk. Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, the changes that can be expected are
most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group, they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as with Aaa securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than those of Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds rated Baa are considered medium grade obligations; that is, they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and have speculative
characteristics as well.
Ba: Bonds rated Ba are judged to have speculative elements. Their future cannot
be considered well-assured. Often the protection of interest and principal
payments may be very moderate and not well safeguarded during both good and bad
times over the future. Uncertainty of position characterizes bonds in this
class.
B: Bonds rated B generally lack characteristics of desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Caa: Bonds rated Caa are of poor standing and may be in default or there may be
present elements of danger with respect to principal or interest.
Ca: Bonds rated Ca represent obligations which are speculative in a high degree
and are often in default or have other marked shortcomings.
C: Bonds rated C are the lowest class of rated bonds and can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Con. (...): Bonds for which the security depends on the completion of some act
or the fulfillment of some condition are rated conditionally. These bonds are
secured by (a) earnings of projects under construction, (b) earnings of projects
unseasoned in operating experience, (c) rentals that begin when facilities are
completed, or (d) payments to which some other limitation attaches.
Parenthetical rating denotes probable credit stature upon completion of
construction or elimination of basis of condition.
Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier "1" indicates that the
obligation ranks in the higher end of its category; the modifier "2" indicates a
mid-range ranking and the modifier "3" indicates a ranking in the lower end of
the category. Advanced refunded issues that are secured by certain assets are
identified with a # symbol.
Short-Term Ratings - U.S. Tax-Exempt Municipals
There are four ratings below for short-term obligations that are investment
grade. Short-term speculative obligations are designated SG. For variable rate
demand obligations, a two-component rating is assigned. The first (MIG) element
represents an evaluation by Moody's of the degree of risk associated with
scheduled principal and interest payments, and the other (VMIG) represents an
evaluation of the degree of risk associated with the demand feature.
MIG 1/VMIG 1: Denotes best quality. There is strong protection by established
cash flows, superior liquidity support or demonstrated broad-based access to the
market for refinancing..
MIG 2/VMIG 2: Denotes high quality. Margins of protection are ample although not
as large as in the preceding group.
MIG 3/VMIG 3: Denotes favorable quality. All security elements are accounted for
but there is lacking the undeniable strength of the preceding grades. Liquidity
and cash flow protection may be narrow and market access for refinancing is
likely to be less well established.
MIG 4/VMIG 4: Denotes adequate quality. Protection commonly regarded as required
of an investment security is present and although not distinctly or
predominantly speculative, there is specific risk.
SG: Denotes speculative quality. Debt instruments in this category lack margins
of protection.
Standard & Poor's Rating Services
- --------------------------------------------------------------------------------
Long-Term Credit Ratings
AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
AA: Bonds rated "AA" differ from the highest rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: Bonds rated "A" are somewhat more susceptible to adverse effects of changes
in circumstances and economic conditions than obligations in higher-rated
categories. However, the obligor's capacity to meet its financial commitment on
the obligation is still strong.
BBB: Bonds rated BBB exhibit adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation. Bonds rated BB, B, CCC, CC and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: Bonds rated BB are less vulnerable to nonpayment than other speculative
issues. However, these face major uncertainties or exposure to adverse business,
financial, or economic conditions which could lead to the obligor's inadequate
capacity to meet its financial commitment on the obligation.
B: A bond rated B is more vulnerable to nonpayment than an obligation rated BB,
but the obligor currently has the capacity to meet its financial commitment on
the obligation.
CCC: A bond rated CCC is currently vulnerable to nonpayment, and is dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: The C rating may used where a bankruptcy petition has been filed or similar
action has been taken, but payments on this obligation are being continued.
D: Bonds rated D are in default. Payments on the obligation are not being made
on the date due.
The ratings from AA to CCC may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories. The
"r" symbol is attached to the ratings of instruments with significant noncredit
risks.
Short-Term Issue Credit Ratings
A-1: Rated in the highest category. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category, a plus (+) sign
designation indicates the issuer's capacity to meet its financial obligation is
very strong.
A-2: Obligation is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than obligations in higher rating
categories. However, the obligor's capacity to meet its financial commitment on
the obligation is satisfactory.
A-3: Exhibits adequate protection parameters. However, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity of the obligor to meet its financial commitment on the obligation.
B: Regarded as having significant speculative characteristics. The obligor
currently has the capacity to meet its financial commitment on the obligation.
However, it faces major ongoing uncertainties which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.
C: Currently vulnerable to nonpayment and is dependent upon favorable business,
financial, and economic conditions for the obligor to meet its financial
commitment on the obligation.
D: In payment default. Payments on the obligation have not been made on the due
date. The rating may also be used if a bankruptcy petition has been filed or
similar actions jeopardize payments on the obligation.
Fitch IBCA, Inc.
- --------------------------------------------------------------------------------
International Long-Term Credit Ratings
Investment Grade:
AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong capacity
for timely payment of financial commitments. This capacity is highly unlikely to
be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.
A: High Credit Quality. "A" ratings denote a low expectation of credit risk. The
capacity for timely payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.
BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.
Speculative Grade:
BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met.
B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.
CCC, CC C: High Default Risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.
DDD, DD, and D: Default. Securities are not meeting current obligations and are
extremely speculative. "DDD" designates the highest potential for recovery of
amounts outstanding on any securities involved.
Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the rating category. Plus and minus signs are not added
to the "AAA" category or to categories below "CCC."
International Short-Term Credit Ratings
F1: Highest credit quality. Strongest capacity for timely payment. May have an
added "+" to denote exceptionally strong credit feature.
F2: Good credit quality. A satisfactory capacity for timely payment, but the
margin of safety is not as great as in higher ratings.
F3: Fair credit quality. Capacity for timely payment is adequate. However,
near-term adverse changes could result in a reduction to non-investment grade.
B: Speculative. Minimal capacity for timely payment, plus vulnerability to
near-term adverse changes in financial and economic conditions.
C: High default risk. Default is a real possibility, Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.
D: Default. Denotes actual or imminent payment default.
Duff & Phelps Credit Rating Co. Ratings
- --------------------------------------------------------------------------------
Long-Term Debt and Preferred Stock
AAA: Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA+, AA, AA-: High credit quality. Protection factors are strong. Risk is modest
but may vary slightly from time to time because of economic conditions.
A+, A & A-: Protection factors are average but adequate. However, risk factors
are more variable in periods of greater economic stress.
BBB+, BBB & BBB-: Below average protection factors but still considered
sufficient for prudent investment. Considerable variability in risk during
economic cycles.
BB+, BB & BB-: Below investment grade but deemed likely to meet obligations when
due. Present or prospective financial protection factors fluctuate according to
industry conditions. Overall quality may move up or down frequently within the
category.
B+, B & B-: Below investment grade and possessing risk that obligations will not
be met when due. Financial protection factors will fluctuate widely according to
economic cycles, industry conditions and/or company fortunes. Potential exists
for frequent changes in the rating within this category or into a higher of
lower rating grade.
CCC: Well below investment-grade securities. Considerable uncertainty exists as
to timely payment of principal, interest or preferred dividends. Protection
factors are narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable company developments.
DD: Defaulted debt obligations. Issuer failed to meet scheduled principal and/or
interest payments.
DP: Preferred stock with dividend arrearages.
Short-Term Debt:
High Grade:
D-1+: Highest certainty of timely payment. Safety is just below risk-free U.S.
Treasury short-term debt.
D-1: Very high certainty of timely payment. Risk factors are minor.
D-1-: High certainty of timely payment. Risk factors are very small.
Good Grade:
D-2: Good certainty of timely payment. Risk factors are small.
Satisfactory Grade:
D-3: Satisfactory liquidity and other protection factors qualify issues as to
investment grade. Risk factors are larger and subject to more variation.
Nevertheless, timely payment is expected.
Non-Investment Grade:
D-4: Speculative investment characteristics. Liquidity is not sufficient to
insure against disruption in debt service.
Default:
D-5: Issuer failed to meet scheduled principal and/or interest payments.
<PAGE>
B-1
Appendix B
Municipal Bond Industry Classifications
Adult Living Facilities
Bond Anticipation Notes
Education
Electric Utilities
Gas Utilities
General Obligation
Higher Education
Highways/Railways
Hospital/Healthcare
Manufacturing, Durable Goods
Manufacturing, Non Durable Goods Marine/Aviation Facilities Multi-Family Housing
Municipal Leases Non Profit Organization Parking Fee Revenue Pollution Control
Resource Recovery Revenue Anticipation Notes Sales Tax Revenue Sewer Utilities
Single Family Housing Special Assessment Special Tax Sports Facility Revenue
Student Loans Tax Anticipation Notes Tax & Revenue Anticipation Notes Telephone
Utilities Water Utilities
<PAGE>
C-11
Appendix C
OppenheimerFunds Special Sales Charge Arrangements and Waivers
In certain cases, the initial sales charge that applies to purchases of Class A
shares1 of the Oppenheimer funds or the contingent deferred sales charge that
may apply to Class A, Class B or Class C shares may be waived.2 That is because
of the economies of sales efforts realized by OppenheimerFunds Distributor,
Inc., (referred to in this document as the "Distributor"), or by dealers or
other financial institutions that offer those shares to certain classes of
investors.
Not all waivers apply to all funds. For example, waivers relating to Retirement
Plans do not apply to Oppenheimer municipal funds, because shares of those funds
are not available for purchase by or on behalf of retirement plans. Other
waivers apply only to shareholders of certain funds.
For the purposes of some of the waivers described below and in the Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds, the
term "Retirement Plan" refers to the following types of plans:
(1) plans qualified under Sections 401(a) or 401(k) of the Internal Revenue
Code,
(2) non-qualified deferred compensation plans,
(3) employee benefit plans3
(4) Group Retirement Plans4
(5) 403(b)(7) custodial plan accounts
(6) Individual Retirement Accounts ("IRAs"), including traditional IRAs,
Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans
The interpretation of these provisions as to the applicability of a special
arrangement or waiver in a particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this document as the "Transfer
Agent") of the particular Oppenheimer fund. These waivers and special
arrangements may be amended or terminated at any time by a particular fund, the
Distributor, and/or OppenheimerFunds, Inc. (referred to in this document as the
"Manager"). Waivers that apply at the time shares are redeemed must be requested
by the shareholder and/or dealer in the redemption request.
- --------------
1. Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
2. In the case of Oppenheimer Senior Floating Rate Fund, a continuously-offered
closed-end fund, references to contingent deferred sales charges mean the
Fund's Early Withdrawal Charges and references to "redemptions" mean
"repurchases" of shares.
3. An "employee benefit plan" means any plan or arrangement, whether or not it
is "qualified" under the Internal Revenue Code, under which Class A shares of
an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single
employer or of affiliated employers. These may include, for example, medical
savings accounts, payroll deduction plans or similar plans. The fund accounts
must be registered in the name of the fiduciary or administrator purchasing
the shares for the benefit of participants in the plan.
4. The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship,
members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the
group has made special arrangements with the Distributor and all members of
the group participating in (or who are eligible to participate in) the plan
purchase Class A shares of an Oppenheimer fund or funds through a single
investment dealer, broker or other financial institution designated by the
group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and
403(b) plans other than plans for public school employees. The term "Group
Retirement Plan" also includes qualified retirement plans and non-qualified
deferred compensation plans and IRAs that purchase Class A shares of an
Oppenheimer fund or funds through a single investment dealer, broker or other
financial institution that has made special arrangements with the Distributor
enabling those plans to purchase Class A shares at net asset value but
subject to the Class A contingent deferred sales charge.
I. Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial
Sales Charge but May Be Subject to the Class A Contingent Deferred Sales Charge
(unless a waiver applies).
There is no initial sales charge on purchases of Class A shares of any of
the Oppenheimer funds in the cases listed below. However, these purchases may be
subject to the Class A contingent deferred sales charge if redeemed within 18
months of the end of the calendar month of their purchase, as described in the
Prospectus (unless a waiver described elsewhere in this Appendix applies to the
redemption). Additionally, on shares purchased under these waivers that are
subject to the Class A contingent deferred sales charge, the Distributor will
pay the applicable commission described in the Prospectus under "Class A
Contingent Deferred Sales Charge."1 This waiver provision applies to:
1 However, that commission will not be paid on purchases of shares in
amounts of $1 million or more (including any right of accumulation) by a
Retirement Plan that pays for the purchase with the redemption proceeds of
Class C shares of one or more Oppenheimer funds held by the Plan for more
than one year.
|_| Purchases of Class A shares aggregating $1 million or more.
|_| Purchases by a Retirement Plan (other than an IRA or 403(b)(7) custodial
plan) that:
(1) buys shares costing $500,000 or more, or
(2) has, at the time of purchase, 100 or more eligible employees or
total plan assets of $500,000 or more, or
(3) certifies to the Distributor that it projects to have annual plan
purchases of $200,000 or more.
|_| Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
purchases are made:
(1) through a broker, dealer, bank or registered investment advisor
that has made special arrangements with the Distributor for those
purchases, or
(2) by a direct rollover of a distribution from a qualified Retirement
Plan if the administrator of that Plan has made special arrangements
with the Distributor for those purchases.
|_| Purchases of Class A shares by Retirement Plans that have any of
the following record-keeping arrangements:
(1) The record keeping is performed by Merrill Lynch Pierce Fenner &
Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the
Retirement Plan. On the date the plan sponsor signs the record-keeping
service agreement with Merrill Lynch, the Plan must have $3 million or
more of its assets invested in (a) mutual funds, other than those
advised or managed by Merrill Lynch Asset Management, L.P. ("MLAM"),
that are made available under a Service Agreement between Merrill
Lynch and the mutual fund's principal underwriter or distributor, and
(b) funds advised or managed by MLAM (the funds described in (a) and
(b) are referred to as "Applicable Investments").
(2) The record keeping for the Retirement Plan is performed on a daily
valuation basis by a record keeper whose services are provided under a
contract or arrangement between the Retirement Plan and Merrill Lynch.
On the date the plan sponsor signs the record keeping service
agreement with Merrill Lynch, the Plan must have $3 million or more of
its assets (excluding assets invested in money market funds) invested
in Applicable Investments.
(3) The record keeping for a Retirement Plan is handled under a
service agreement with Merrill Lynch and on the date the plan sponsor
signs that agreement, the Plan has 500 or more eligible employees (as
determined by the Merrill Lynch plan conversion manager).
|_| Purchases by a Retirement Plan whose record keeper had a
cost-allocation agreement with the Transfer Agent on or before May 1,
1999.
<PAGE>
II. Waivers of Class A Sales Charges of Oppenheimer Funds
A. Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers.
Class A shares purchased by the following investors are not subject to any Class
A sales charges (and no commissions are paid by the Distributor on such
purchases):
|_| The Manager or its affiliates.
|_| Present or former officers, directors, trustees and employees (and
their "immediate families") of the Fund, the Manager and its affiliates,
and retirement plans established by them for their employees. The term
"immediate family" refers to one's spouse, children, grandchildren,
grandparents, parents, parents-in-law, brothers and sisters, sons- and
daughters-in-law, a sibling's spouse, a spouse's siblings, aunts, uncles,
nieces and nephews; relatives by virtue of a remarriage (step-children,
step-parents, etc.) are included.
|_| Registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the Distributor
for that purpose.
|_| Dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans for
their employees.
|_| Employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have entered into
sales arrangements with such dealers or brokers (and which are identified
as such to the Distributor) or with the Distributor. The purchaser must
certify to the Distributor at the time of purchase that the purchase is for
the purchaser's own account (or for the benefit of such employee's spouse
or minor children).
|_| Dealers, brokers, banks or registered investment advisors that have
entered into an agreement with the Distributor providing specifically for
the use of shares of the Fund in particular investment products made
available to their clients. Those clients may be charged a transaction fee
by their dealer, broker, bank or advisor for the purchase or sale of Fund
shares.
|_| Investment advisors and financial planners who have entered into an
agreement for this purpose with the Distributor and who charge an advisory,
consulting or other fee for their services and buy shares for their own
accounts or the accounts of their clients.
|_| "Rabbi trusts" that buy shares for their own accounts, if the purchases
are made through a broker or agent or other financial intermediary that has
made special arrangements with the Distributor for those purchases.
|_| Clients of investment advisors or financial planners (that have entered
into an agreement for this purpose with the Distributor) who buy shares for
their own accounts may also purchase shares without sales charge but only
if their accounts are linked to a master account of their investment
advisor or financial planner on the books and records of the broker, agent
or financial intermediary with which the Distributor has made such special
arrangements . Each of these investors may be charged a fee by the broker,
agent or financial intermediary for purchasing shares.
|_| Directors, trustees, officers or full-time employees of OpCap Advisors
or its affiliates, their relatives or any trust, pension, profit sharing or
other benefit plan which beneficially owns shares for those persons.
|_| Accounts for which Oppenheimer Capital (or its successor) is the
investment advisor (the Distributor must be advised of this arrangement)
and persons who are directors or trustees of the company or trust which is
the beneficial owner of such accounts.
|_| A unit investment trust that has entered into an appropriate agreement
with the Distributor.
|_| Dealers, brokers, banks, or registered investment advisors that have
entered into an agreement with the Distributor to sell shares to defined
contribution employee retirement plans for which the dealer, broker or
investment advisor provides administration services. |-|
<PAGE>
Retirement Plans and deferred compensation plans and trusts used to fund
those plans (including, for example, plans qualified or created under
sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue Code), in
each case if those purchases are made through a broker, agent or other
financial intermediary that has made special arrangements with the
Distributor for those purchases.
|_| A TRAC-2000 401(k) plan (sponsored by the former Quest for Value
Advisors) whose Class B or Class C shares of a Former Quest for Value Fund
were exchanged for Class A shares of that Fund due to the termination of
the Class B and Class C TRAC-2000 program on November 24, 1995.
|_| A qualified Retirement Plan that had agreed with the former Quest for
Value Advisors to purchase shares of any of the Former Quest for Value
Funds at net asset value, with such shares to be held through DCXchange, a
sub-transfer agency mutual fund clearinghouse, if that arrangement was
consummated and share purchases commenced by December 31, 1996.
B. Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions.
Class A shares issued or purchased in the following transactions are not subject
to sales charges (and no commissions are paid by the Distributor on such
purchases):
|_| Shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party.
|_| Shares purchased by the reinvestment of dividends or other distributions
reinvested from the Fund or other Oppenheimer funds (other than
Oppenheimer Cash Reserves) or unit investment trusts for which
reinvestment arrangements have been made with the Distributor.
|_| Shares purchased through a broker-dealer that has entered into a
special agreement with the Distributor to allow the broker's customers to
purchase and pay for shares of Oppenheimer funds using the proceeds of
shares redeemed in the prior 30 days from a mutual fund (other than a fund
managed by the Manager or any of its subsidiaries) on which an initial
sales charge or contingent deferred sales charge was paid. This waiver also
applies to shares purchased by exchange of shares of Oppenheimer Money
Market Fund, Inc. that were purchased and paid for in this manner. This
waiver must be requested when the purchase order is placed for shares of
the Fund, and the Distributor may require evidence of qualification for
this waiver.
|_| Shares purchased with the proceeds of maturing principal units of any
Qualified Unit Investment Liquid Trust Series.
|_| Shares purchased by the reinvestment of loan repayments by a
participant in a Retirement Plan for which the Manager or an affiliate acts
as sponsor.
C. Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions.
The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases:
|_| To make Automatic Withdrawal Plan payments that are limited annually to
no more than 12% of the account value adjusted annually.
|_| Involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (please refer to "Shareholder Account
Rules and Policies," in the applicable fund Prospectus).
|_| For distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes:
(1) Following the death or disability (as defined in the Internal
Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was established.
(2) To return excess contributions.
(3)
<PAGE>
To return contributions made due to a mistake of fact.
(4) Hardship withdrawals, as defined in the plan.2
2 This provision does not apply to IRAs.
(5) Under a Qualified Domestic Relations Order, as defined in the
Internal Revenue Code, or, in the case of an IRA, a divorce or
separation agreement described in Section 71(b) of the Internal
Revenue Code.
(6) To meet the minimum distribution requirements of the Internal
Revenue Code.
(7) To make "substantially equal periodic payments" as described
in Section 72(t) of the Internal Revenue Code.
(8) For loans to participants or beneficiaries.
(9) Separation from service.3
3 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.
(10) Participant-directed redemptions to purchase shares of a
mutual fund (other than a fund managed by the Manager or a
subsidiary of the Manager) if the plan has made special
arrangements with the Distributor.
(11) Plan termination or "in-service distributions," if the
redemption proceeds are rolled over directly to an
OppenheimerFunds-sponsored IRA.
|_| For distributions from Retirement Plans having 500 or more eligible
employees, except distributions due to termination of all of the
Oppenheimer funds as an investment option under the Plan.
|_| For distributions from 401(k) plans sponsored by broker-dealers that
have entered into a special agreement with the Distributor allowing
this waiver.
III. Waivers of Class B and Class C Sales Charges of Oppenheimer Funds
The Class B and Class C contingent deferred sales charges will not be applied to
shares purchased in certain types of transactions or redeemed in certain
circumstances described below.
A. Waivers for Redemptions in Certain Cases.
The Class B and Class C contingent deferred sales charges will be waived for
redemptions of shares in the following cases:
|_| Shares redeemed involuntarily, as described in "Shareholder
Account Rules and Policies," in the applicable Prospectus.
|_| Redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder, including a
trustee of a grantor trust or revocable living trust for which the
trustee is also the sole beneficiary. The death or disability must have
occurred after the account was established, and for disability you must
provide evidence of a determination of disability by the Social
Security Administration.
|_| Distributions from accounts for which the broker-dealer of record has
entered into a special agreement with the Distributor allowing this
waiver.
|_| Redemptions of Class B shares held by Retirement Plans whose records
are maintained on a daily valuation basis by Merrill Lynch or an
independent record keeper under a contract with Merrill Lynch.
|_| Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
accounts of clients of financial institutions that have entered into a
special arrangement with the Distributor for this purpose.
|_| Redemptions requested in writing by a Retirement Plan sponsor of Class
C shares of an Oppenheimer fund in amounts of $1 million or more held
by the Retirement Plan for more than one year, if the redemption
proceeds are invested in Class A shares of one or more Oppenheimer
funds.
|-|
<PAGE>
Distributions from Retirement Plans or other employee benefit
plans for any of the following purposes:
(1) Following the death or disability (as defined in the Internal
Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was established
in an Oppenheimer fund.
(2) To return excess contributions made to a participant's account.
(3) To return contributions made due to a mistake of fact.
(4) To make hardship withdrawals, as defined in the plan.4
4 This provision does not apply to IRAs.
(5) To make distributions required under a Qualified Domestic
Relations Order or, in the case of an IRA, a divorce or
separation agreement described in Section 71(b) of the Internal
Revenue Code.
(6) To meet the minimum distribution requirements of the Internal
Revenue Code.
(7) To make "substantially equal periodic payments" as described
in Section 72(t) of the Internal Revenue Code.
(8) For loans to participants or beneficiaries.5
5 This provision does not apply to loans from 403(b)(7) custodial plans.
(9) On account of the participant's separation from service.6
6 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.
(10)Participant-directed redemptions to purchase shares of a
mutual fund (other than a fund managed by the Manager or a
subsidiary of the Manager) offered as an investment option in a
Retirement Plan if the plan has made special arrangements with
the Distributor.
(11)Distributions made on account of a plan termination or
"in-service" distributions, if the redemption proceeds are rolled
over directly to an OppenheimerFunds-sponsored IRA.
(12)Distributions from Retirement Plans having 500 or more
eligible employees, but excluding distributions made because of
the Plan's elimination as investment options under the Plan of
all of the Oppenheimer funds that had been offered.
(13)For distributions from a participant's account under an
Automatic Withdrawal Plan after the participant reaches age 59
1/2, as long as the aggregate value of the distributions does not
exceed 10% of the account's value, adjusted annually.
(14)Redemptions of Class B shares under an Automatic Withdrawal
Plan for an account other than a Retirement Plan, if the
aggregate value of the redeemed shares does not exceed 10% of the
account's value, adjusted annually.
|_| Redemptions of Class B shares or Class C shares under an Automatic
Withdrawal Plan from an account other than a Retirement Plan if the
aggregate value of the redeemed shares does not exceed 10% of the account's
value annually.
B. Waivers for Shares Sold or Issued in Certain Transactions.
The contingent deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases:
|_| Shares sold to the Manager or its affiliates.
|_| Shares sold to registered management investment companies or separate
accounts of insurance companies having an agreement with the Manager or the
Distributor for that purpose.
|_| Shares issued in plans of reorganization to which the Fund is a party.
|_| Shares sold to present or former officers, directors, trustees or
employees (and their "immediate families" as defined above in Section I.A.)
of the Fund, the Manager and its affiliates and retirement plans
established by them for their employees.
<PAGE>
IV. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer
Funds Who Were Shareholders of Former Quest for Value Funds
The initial and contingent deferred sales charge rates and waivers for Class A,
Class B and Class C shares described in the Prospectus or Statement of
Additional Information of the Oppenheimer funds are modified as described below
for certain persons who were shareholders of the former Quest for Value Funds.
To be eligible, those persons must have been shareholders on November 24, 1995,
when OppenheimerFunds, Inc. became the investment advisor to those former Quest
for Value Funds. Those funds include:
<PAGE>
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Balanced Value Fund
Oppenheimer Quest Global Value Fund
ppenheimer Quest Opportunity Value Fund
These arrangements also apply to shareholders of the following funds when
they merged (were reorganized) into various Oppenheimer funds on November 24,
1995:
Quest for Value U.S. Government Income Quest for Value New York Tax-Exempt
Fund Fund
Quest for Value Investment Quality Quest for Value National Tax-Exempt
Income Fund Fund
Quest for Value Global Income Fund Quest for Value California
Tax-Exempt Fund
All of the funds listed above are referred to in this Appendix as the
"Former Quest for Value Funds." The waivers of initial and contingent deferred
sales charges described in this Appendix apply to shares of an Oppenheimer fund
that are either:
|_| acquired by such shareholder pursuant to an exchange of shares of an
Oppenheimer fund that was one of the Former Quest for Value Funds or
|_| purchased by such shareholder by exchange of shares of another Oppenheimer
fund that were acquired pursuant to the merger of any of the Former
Quest for Value Funds into that other Oppenheimer fund on November 24,
1995.
A. Reductions or Waivers of Class A Sales Charges.
|X| Reduced Class A Initial Sales Charge Rates for Certain Former Quest
for Value Funds Shareholders.
Purchases by Groups and Associations. The following table sets forth the initial
sales charge rates for Class A shares purchased by members of "Associations"
formed for any purpose other than the purchase of securities. The rates in the
table apply if that Association purchased shares of any of the Former Quest for
Value Funds or received a proposal to purchase such shares from OCC Distributors
prior to November 24, 1995.
- --------------------------------------------------------------------------------
Initial Sales Initial Sales
Number of Eligible Charge as a % of Charge as a % of Commission as %
Employees or Members Offering Price Net Amount Invested of Offering Price
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9 or Fewer 2.50% 2.56% 2.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
At least 10 but not 2.00% 2.04% 1.60%
more than 49
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
For purchases by Associations having 50 or more eligible employees or
members, there is no initial sales charge on purchases of Class A shares, but
those shares are subject to the Class A contingent deferred sales charge
described in the applicable fund's Prospectus.
Purchases made under this arrangement qualify for the lower of either the
sales charge rate in the table based on the number of members of an Association,
or the sales charge rate that applies under the Right of Accumulation described
in the applicable fund's Prospectus and Statement of Additional Information.
Individuals who qualify under this arrangement for reduced sales charge rates as
members of Associations also may purchase shares for their individual or
custodial accounts at these reduced sales charge rates, upon request to the
Distributor.
|X| Waiver of Class A Sales Charges for Certain Shareholders. Class A
shares purchased by the following investors are not subject to any Class A
initial or contingent deferred sales charges:
|_| Shareholders who were shareholders of the AMA Family of Funds on
February 28, 1991 and who acquired shares of any of the Former Quest
for Value Funds by merger of a portfolio of the AMA Family of Funds.
|_| Shareholders who acquired shares of any Former Quest for Value Fund
by merger of any of the portfolios of the Unified Funds.
|X| Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions. The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares purchased by the following investors who were
shareholders of any Former Quest for Value Fund:
Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder
with whom that dealer has a fiduciary relationship, under the Employee
Retirement Income Security Act of 1974 and regulations adopted under that law.
B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.
|X| Waivers for Redemptions of Shares Purchased Prior to March 6, 1995. In
the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The
shares must have been acquired by the merger of a Former Quest for Value Fund
into the fund or by exchange from an Oppenheimer fund that was a Former Quest
for Value Fund or into which such fund merged. Those shares must have been
purchased prior to March 6, 1995 in connection with:
|_| withdrawals under an automatic withdrawal plan holding only either
Class B or Class C shares if the annual withdrawal does not exceed 10%
of the initial value of the account value, adjusted annually, and
|_| liquidation of a shareholder's account if the aggregate net asset value
of shares held in the account is less than the required minimum value
of such accounts.
|X| Waivers for Redemptions of Shares Purchased on or After March 6, 1995
but Prior to November 24, 1995. In the following cases, the contingent deferred
sales charge will be waived for redemptions of Class A, Class B or Class C
shares of an Oppenheimer fund. The shares must have been acquired by the merger
of a Former Quest for Value Fund into the fund or by exchange from an
Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on or
after March 6, 1995, but prior to November 24, 1995:
|_| redemptions following the death or disability of the shareholder(s) (as
evidenced by a determination of total disability by the U.S. Social
Security Administration);
|_| withdrawals under an automatic withdrawal plan (but only for Class B or
Class C shares) where the annual withdrawals do not exceed 10% of the
initial value of the account value; adjusted annually, and
|-|
<PAGE>
liquidation of a shareholder's account if the aggregate net asset value of
shares held in the account is less than the required minimum account
value.
A shareholder's account will be credited with the amount of any contingent
deferred sales charge paid on the redemption of any Class A, Class B or Class C
shares of the Oppenheimer fund described in this section if the proceeds are
invested in the same Class of shares in that fund or another Oppenheimer fund
within 90 days after redemption.
V. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer
Funds Who Were Shareholders of Connecticut Mutual Investment Accounts, Inc.
The initial and contingent deferred sale charge rates and waivers for Class A
and Class B shares described in the respective Prospectus (or this Appendix) of
the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
o Oppenheimer U. S. Government Trust,
o Oppenheimer Bond Fund,
o Oppenheimer Disciplined Value Fund and
o Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were
shareholders of the following funds (referred to as the "Former Connecticut
Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment advisor to the Former Connecticut Mutual Funds:
Connecticut Mutual Liquid Account Connecticut Mutual Total Return
Account
Connecticut Mutual Government Securities CMIA LifeSpan Capital Appreciation
Account Account
Connecticut Mutual Income Account CMIA LifeSpan Balanced Account
Connecticut Mutual Growth Account CMIA Diversified Income Account
A. Prior Class A CDSC and Class A Sales Charge Waivers.
|_| Class A Contingent Deferred Sales Charge. Certain shareholders of a
Fund and the other Former Connecticut Mutual Funds are entitled to continue to
make additional purchases of Class A shares at net asset value without a Class A
initial sales charge, but subject to the Class A contingent deferred sales
charge that was in effect prior to March 18, 1996 (the "prior Class A CDSC").
Under the prior Class A CDSC, if any of those shares are redeemed within one
year of purchase, they will be assessed a 1% contingent deferred sales charge on
an amount equal to the current market value or the original purchase price of
the shares sold, whichever is smaller (in such redemptions, any shares not
subject to the prior Class A CDSC will be redeemed first).
Those shareholders who are eligible for the prior Class A CDSC are:
(1) persons whose purchases of Class A shares of a Fund and other Former
Connecticut Mutual Funds were $500,000 prior to March 18, 1996, as a result
of direct purchases or purchases pursuant to the Fund's policies on
Combined Purchases or Rights of Accumulation, who still hold those shares
in that Fund or other Former Connecticut Mutual Funds, and
(2) persons whose intended purchases under a Statement of Intention entered
into prior to March 18, 1996, with the former general distributor of
the Former Connecticut Mutual Funds to purchase shares valued at
$500,000 or more over a 13-month period entitled those persons to
purchase shares at net asset value without being subject to the Class A
initial sales charge.
<PAGE>
Any of the Class A shares of a Fund and the other Former Connecticut
Mutual Funds that were purchased at net asset value prior to March 18, 1996,
remain subject to the prior Class A CDSC, or if any additional shares are
purchased by those shareholders at net asset value pursuant to this arrangement
they will be subject to the prior Class A CDSC.
|_| Class A Sales Charge Waivers. Additional Class A shares of a Fund may
be purchased without a sales charge, by a person who was in one (or more) of the
categories below and acquired Class A shares prior to March 18, 1996, and still
holds Class A shares:
(1) any purchaser, provided the total initial amount invested in the Fund
or any one or more of the Former Connecticut Mutual Funds totaled
$500,000 or more, including investments made pursuant to the Combined
Purchases, Statement of Intention and Rights of Accumulation features
available at the time of the initial purchase and such investment is
still held in one or more of the Former Connecticut Mutual Funds or a
Fund into which such Fund merged;
(2) any participant in a qualified plan, provided that the total initial
amount invested by the plan in the Fund or any one or more of the
Former Connecticut Mutual Funds totaled $500,000 or more;
(3) Directors of the Fund or any one or more of the Former Connecticut
Mutual Funds and members of their immediate families;
(4) employee benefit plans sponsored by Connecticut Mutual Financial
Services, L.L.C. ("CMFS"), the prior distributor of the Former
Connecticut Mutual Funds, and its affiliated companies;
(5) one or more members of a group of at least 1,000 persons (and
persons who are retirees from such group) engaged in a common
business, profession, civic or charitable endeavor or other activity,
and the spouses and minor dependent children of such persons, pursuant
to a marketing program between CMFS and such group; and
(6) an institution acting as a fiduciary on behalf of an individual or
individuals, if such institution was directly compensated by the
individual(s) for recommending the purchase of the shares of the Fund
or any one or more of the Former Connecticut Mutual Funds, provided the
institution had an agreement with CMFS.
Purchases of Class A shares made pursuant to (1) and (2) above may be
subject to the Class A CDSC of the Former Connecticut Mutual Funds described
above.
Additionally, Class A shares of a Fund may be purchased without a sales
charge by any holder of a variable annuity contract issued in New York State by
Connecticut Mutual Life Insurance Company through the Panorama Separate Account
which is beyond the applicable surrender charge period and which was used to
fund a qualified plan, if that holder exchanges the variable annuity contract
proceeds to buy Class A shares of the Fund.
B. Class A and Class B Contingent Deferred Sales Charge Waivers.
In addition to the waivers set forth in the Prospectus and in this Appendix,
above, the contingent deferred sales charge will be waived for redemptions of
Class A and Class B shares of a Fund and exchanges of Class A or Class B shares
of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund
provided that the Class A or Class B shares of the Fund to be redeemed or
exchanged were (i) acquired prior to March 18, 1996 or (ii) were acquired by
exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund.
Additionally, the shares of such Former Connecticut Mutual Fund must have been
purchased prior to March 18, 1996:
(1) by the estate of a deceased shareholder;
(2) upon the disability of a shareholder, as defined in Section
72(m)(7) of the Internal Revenue Code;
(3) for retirement distributions (or loans) to participants or
beneficiaries from retirement plans qualified under Sections
401(a) or 403(b)(7)of the Code, or from IRAs, deferred
compensation plans created under Section 457 of the Code, or
other employee benefit plans;
(4) as tax-free returns of excess contributions to such
retirement or employee benefit plans;
(5)
<PAGE>
in whole or in part, in connection with shares sold to any state,
county, or city, or any instrumentality, department, authority,
or agency thereof, that is prohibited by applicable investment
laws from paying a sales charge or commission in connection with
the purchase of shares of any registered investment management
company;
(6) in connection with the redemption of shares of the Fund due
to a combination with another investment company by virtue of a
merger, acquisition or similar reorganization transaction;
(7) in connection with the Fund's right to involuntarily redeem
or liquidate the Fund;
(8) in connection with automatic redemptions of Class A shares
and Class B shares in certain retirement plan accounts pursuant
to an Automatic Withdrawal Plan but limited to no more than 12%
of the original value annually; or
(9) as involuntary redemptions of shares by operation of law, or
under procedures set forth in the Fund's Articles of
Incorporation, or as adopted by the Board of Directors of the
Fund.
VI. Special Reduced Sales Charge for Former Shareholders of Advance America
Funds, Inc.
Shareholders of Oppenheimer Municipal Bond Fund, Oppenheimer U.S. Government
Trust, Oppenheimer Strategic Income Fund and Oppenheimer Equity Income Fund who
acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those Oppenheimer
funds on October 18, 1991, and who held shares of Advance America Funds, Inc. on
March 30, 1990, may purchase Class A shares of those four Oppenheimer funds at a
maximum sales charge rate of 4.50%.
VII. Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer
Convertible Securities Fund
Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to purchase
those shares at net asset value without sales charge:
|_| the Manager and its affiliates,
|_| present or former officers, directors, trustees and employees (and
their "immediate families" as defined in the Fund's Statement of
Additional Information) of the Fund, the Manager and its affiliates,
and retirement plans established by them or the prior investment
advisor of the Fund for their employees,
|_| registered management investment companies or separate accounts of
insurance companies that had an agreement with the Fund's prior
investment advisor or distributor for that purpose,
|_| dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans for
their employees,
|_| employees and registered representatives (and their spouses) of dealers
or brokers described in the preceding section or financial institutions
that have entered into sales arrangements with those dealers or brokers
(and whose identity is made known to the Distributor) or with the
Distributor, but only if the purchaser certifies to the Distributor at
the time of purchase that the purchaser meets these qualifications,
|_| dealers, brokers, or registered investment advisors that had entered
into an agreement with the Distributor or the prior distributor of the
Fund specifically providing for the use of Class M shares of the Fund
in specific investment products made available to their clients, and
|_| dealers, brokers or registered investment advisors that had entered
into an agreement with the Distributor or prior distributor of the
Fund's shares to sell shares to defined contribution employee
retirement plans for which the dealer, broker, or investment advisor
provides administrative services.
<PAGE>
Limited Term New York Municipal Fund
Internet Web Site
www.oppenheimerfunds.com
Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian Bank
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
KPMG LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
12345
PX0355.0400
