ROCHESTER FUND MUNICIPALS
SUPPLEMENT DATED DECEMBER 29, 1997 TO THE
STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 16, 1997
This Supplement changes the Statement of Additional Information as follows:
1. The second paragraph under the heading "Municipal Leases" on page 4 is
deleted and replaced with the following:
In addition to the "non-appropriation" and "abatement" risks,
investments in Municipal Leases represent a relatively new type of
financing. As such, Municipal Leases have not yet developed the depth of
marketability associated with more conventional Municipal Obligations. The
Fund will seek to minimize these risks by investing not more than 10% of
its total assets in Municipal Leases that contain "non-appropriation"
clauses, and by investing only in those "non-appropriation" lease
obligations where (1) the nature of the leased equipment or property is
such that its ownership or use is essential to a governmental function of
the municipality, (2) appropriate covenants will be obtained from the
municipal obligor prohibiting the substitution or purchase of similar
equipment if lease payments are not appropriated, (3) the lease obligor
has maintained good market acceptability in the past, (4) the investment
is of a size that will be attractive to institutional investors, and (5)
the underlying leased equipment has elements of portability and/or use
that enhance its marketability in the event foreclosure on the underlying
equipment is ever required.
2. The paragraph following item (11) under "Fundamental Investment Restrictions"
on page 20 is deleted and replaced with the following:
For the purposes of the Fund's policy not to concentrate in
securities of issuers as described in the investment restrictions listed
in the Prospectus and this Statement of Additional Information, the Fund
has adopted the industry classifications set forth in Appendix A to this
Statement of Additional Information. This is not a fundamental policy.
Bonds which are refunded with escrowed U.S. government securities are
considered U.S. government securities for purposes of the Fund's policy
not to concentrate.
Subject to the limitations stated above, the Fund may from time to
time invest more than 25% of its total assets in a particular segment of
the municipal securities market, including but not limited to general
obligation bonds, pollution control bonds, hospital bonds, or any other
municipal segment listed in Appendix A to this Statement of Additional
Information. In these circumstances, economic, business, political or
other changes affecting one bond (such as proposed legislation affecting
the financing of a project or decreased demand for a type of project )
might also affect other bonds in the same municipal market segment,
thereby potentially increasing market risk to the Fund.
December 29, 1997 PX0365.003
