<PAGE>
OPPENHEIMER INTERNATIONAL BOND FUND
Annual Report September 30, 1995
[LOGO] OPPENHEIMERFUNDS.
<PAGE>
This Fund is for people who want to take advantage of INTERNATIONAL
OPPORTUNITIES offering the potential for growth along with income.
N E W S
- --------------------
STANDARDIZED YIELDS
- --------------------
For the 30 Days Ended 9/30/95:(3)
Class A
- ----------
9.44%
- ----------
Class B
- ----------
9.06%
- ----------
Class C
- ----------
9.22%
- ----------
- --------------------------------------------------------------------------------
HOW YOUR FUND IS MANAGED
- --------------------------------------------------------------------------------
Oppenheimer International Bond Fund seeks high total return by investing
primarily in foreign debt securities. The Fund currently emphasizes investments
in government debt securities issued by developed countries such as Great
Britain and Spain and emerging market countries such as Thailand and Brazil.
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Total returns at net asset value since inception of the Fund on 6/15/95
were 5.13% for Class A shares, 4.92% for Class B shares, and 4.73% for Class C
shares.(1)
Your Fund's cumulative total returns at maximum offering price since incep-
tion of the Fund on 6/15/95 were 0.14% for Class A shares, -0.09% for Class B
shares, and 3.73% for Class C shares.(2)
- --------------------------------------------------------------------------------
OUTLOOK
- --------------------------------------------------------------------------------
"We expect international bond markets to continue to outperform the U.S. market
for the remainder of the year and into 1996. Though they've done quite well
over this period, we believe many developed and emerging markets still offer
better value than domestic bonds."
Ashwin Vasan, Portfolio Manager
September 30, 1995
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment and principal
value on an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
1. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
2. Class A returns show results of hypothetical investments on 6/15/95
(inception of class), after deducting the current maximum initial sales charge
of 4.75%. Class B returns show results of hypothetical investments on 6/15/95
(inception of class), with the 5% contingent deferred sales charge deducted.
Class C returns show results of hypothetical investments on 6/15/95 (inception
of class), with the 1% contingent deferred sales charge deducted. An explanation
of the different returns is in the Fund's prospectus.
3. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 9/30/95, divided by the maximum offering price
at the end of the period, compounded semiannually and then annualized. Falling
net asset values will tend to artificially raise yields.
2 Oppenheimer International Bond Fund
<PAGE>
JAMES C. SWAIN
Chairman
Oppenheimer International Bond Fund
JON S. FOSSEL
President
Oppenheimer International Bond Fund
DEAR OPPENHEIMERFUNDS SHAREHOLDER,
After a difficult 1994, many of the world's bond markets have had extremely
strong performance this year--driven by steadily falling long-term interest
rates and the expectation that inflation will remain low.
In the domestic market, the surging economy in 1994 caused the Fed to
increase interest rates seven times in an effort to control faster growth and
the potential for inflation that accompanied it. We believe those rate hikes
were primarily responsible for the poor performance of the U.S. bond market last
year, yet they also set the stage for the U.S. economy's "soft landing"--one in
which growth is moderate and inflation almost nonexistent.
But many fixed income investors who remained patient and stayed the course
were rewarded in 1995, when the Fed decided to cut short-term interest rates in
July for the first time in three years--in an attempt to stimulate what many
feared was a weakening U.S. economy. Both long-and short-term interest rates
began to decline, continuing what was already a strong rally in the bond market.
This huge rally in the U.S. bond market provided the backdrop for strong
performance of overseas bond markets, especially in Europe where falling inter-
est rates and low inflation have pushed bond prices higher. The trend toward
lower interest rates also continues in mature markets like Germany and Japan, as
their central banks cut rates to stimulate their still-recessionary economies.
As mature economies show signs of improvement, and with bonds in these mar-
kets selling at relatively high yields compared to domestic bonds, we antici-
pate further price appreciation. In emerging markets, confidence has been re-
stored somewhat after the volatility following the devaluation of the Mexican
peso at the end of 1994. While investors avoided many of these markets for some
time, they are now returning to markets from Latin America to Asia, drawn by
economic recovery and government attention to controlling inflation. The result:
these markets have begun to stabilize, offering prices and yields that are ex-
tremely attractive. In addition, the strengthening U.S. dollar has helped to
support investment in emerging markets and is adding to a sense of renewed
stability.
In all, we are confident that this is an excellent environment for fixed
income investors worldwide. Interest rates and inflation are low globally,
leading to stable to rising prices. And, while the American economy appears to
be maintaining a steady, sustainable growth rate, the economies of Europe, Latin
America and Asia--including Japan--are improving.
We're confident that by being able to diversify investments throughout the
world, we will be positioned to participate in any economic environment. Your
portfolio manager discusses the outlook for your Fund on the following pages.
Thank you for your confidence in OppenheimerFunds, and we look forward to
helping you reach your investment goals in the future.
/s/ James C. Swain /s/ Jon S. Fossel
James C. Swain Jon S. Fossel
October 23, 1995
3 Oppenheimer International Bond Fund
<PAGE>
ASHWIN VASAN
Portfolio Manager
Q+A
AN INTERVIEW WITH YOUR FUND'S MANAGER.
THE FUND HAS PERFORMED VERY WELL OVER THIS PERIOD, SURPASSING ITS BENCHMARKS
SINCE INCEPTION. WHAT ACCOUNTS FOR ITS SUPERIOR PERFORMANCE?
Since the start of our operations in June of this year, we've seen the advan-
tages we'd expected from our strategy of diversifying our investments among
bonds from a broad range of developed nations as well as those of emerging
economies. More specifically, our outperformance was due to a fairly heavy
weighting in the European bond market, which we set up believing that European
bonds offered great opportunities after having lagged the U.S. market throughout
the recent rally. And that weighting paid off--the Fund benefited as European
bonds began to catch up with domestic bonds over the summer.
Additionally, the Fund's performance was boosted when the bonds we bought
in emerging markets at discounted prices began to strengthen as these markets
began to stabilize and a stronger dollar brought investors back.
WHAT MARKETS ARE YOU INVESTED IN NOW?
Roughly 50% of the portfolio is invested in developed country bonds, such as
Germany and the U.K., and 50% is in emerging market bonds. We believe this blend
offers considerable opportunities for both appreciation and income.
Currently, our largest holdings are in Mexico, Brazil, and the U.S. We
believe strongly in Mexico and Brazil, which are moving to control inflation and
rebuild reserves; this should ultimately lead to future growth and improving
credits. We feel confident that these particular markets hold excellent value.
(1)
WHAT IS YOUR STRATEGY TO LIMIT RISK?
Of course, foreign investments are always subject to adverse market changes as a
result of currency fluctuations. But over time, the long-term returns should
more than compensate for temporary risk, especially when these investments are
part of a diversified portfolio. We use a strategy that provides the
opportunity to diversify holdings geographically over different currencies,
thereby reducing overall risk because bond markets typically don't rise or fall
together--and bad performance in one region may help offset downturns in
another.
The same is true for income. Where bonds in Spain are yielding roughly
11%, those in Argentina are yielding 18%. As of September 30, 1995, Argentine
bonds represented 4.5% of net assets.
Currently, we hold bonds from 30 different countries in developed and
emerging markets--and within those countries we generally invest in government
bonds, which is another way we aim to reduce risk.
WHAT IS YOUR OUTLOOK FOR THE FUND?
In some developed markets, yields are higher than the U.S. despite lower infla-
tion, which suggests value. In many emerging markets, continued stability
against a background of growth and recovery creates great potential. We are
confident the Fund is well positioned within both sectors, and we expect it will
benefit as the year continues. / /
1. The Fund's portfolio is subject to change.
4 Oppenheimer International Bond Fund
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
STATEMENT OF INVESTMENTS September 30, 1995
FACE MARKET VALUE
AMOUNT (1) SEE NOTE 1
<S> <C> <C> <C> <C> <C>
====================================================================================================================================
CERTIFICATES OF DEPOSIT - 8.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Bank Pacific CD, Zero Coupon, 3/5/96 IDR 100,000,000 $ 40,730
----------------------------------------------------------------------------------------------------------------------
Citibank CD:
16%, 10/20/95 (2) CLP 39,050,000 97,919
29.50%, 12/22/95 (2) HUF 13,489,000 103,750
----------------------------------------------------------------------------------------------------------------------
First Boston Corp. CD:
10.40%, 10/12/95 (2)(3) CZK 1,561,260 59,206
11%, 12/27/95 (2)(3)(4) ARA 100,000 100,013
12.50%, 12/21/95 (2)(3) ARA 30,000 30,004
----------------------------------------------------------------------------------------------------------------------
Indonesia (Republic of) Bank Negara CD:
Zero Coupon, 6/17/96 (2) IDR 50,000,000 19,451
Zero Coupon, 7/18/96 (2) IDR 50,000,000 19,256
Zero Coupon, 7/8/96 (2) IDR 50,000,000 19,518
----------------------------------------------------------------------------------------------------------------------
Krungthai Thanakit CD:
Zero Coupon, 10/13/95 (2) THB 500,000 19,637
Zero Coupon, 12/1/95 (2) THB 1,250,000 49,043
----------------------------------------------------------------------------------------------------------------------
Thai Farmers Bank PLC CD, Zero Coupon, 12/7/98 (2) THB 500,000 19,139
----------------------------------------------------------------------------------------------------------------------
Thai Military Bank PLC CD, 10%, 1/31/96 (2) THB 500,000 19,928
----------------
Total Certificates of Deposit (Cost $600,309) 597,594
====================================================================================================================================
FOREIGN GOVERNMENT OBLIGATIONS - 73.0%
- ------------------------------------------------------------------------------------------------------------------------------------
ARGENTINA - 4.5%
----------------------------------------------------------------------------------------------------------------------
Argentina (Republic of):
Medium-Term Nts., 8%, 8/9/97 NLG 200,000 122,888
Sr. Unsec. Unsub. Bonds, 13.45%, 10/21/97 ITL 260,000,000 160,332
----------------------------------------------------------------------------------------------------------------------
Province of Buenos Aires Sr. Unsub. Unsec. Nts., 9.50%,
7/14/97 50,000 48,500
----------------
331,720
- ------------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA - 6.4%
----------------------------------------------------------------------------------------------------------------------
Australia (Commonwealth of) Bonds:
12%, 7/15/99 AUD 210,000 179,436
12.50%, 1/15/98 AUD 355,000 294,828
----------------
474,264
- ------------------------------------------------------------------------------------------------------------------------------------
BELGIUM - 1.3%
----------------------------------------------------------------------------------------------------------------------
Belgium (Kingdom of) Debs., 7.25%, 3/19/01 CHF 100,000 99,212
- ------------------------------------------------------------------------------------------------------------------------------------
BRAZIL - 5.0%
----------------------------------------------------------------------------------------------------------------------
Banco do Estado de Sao Paulo SA, 9.25% Nts., 10/4/96 60,000 57,450
----------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of):
Eligible Interest Bonds, 7.25%, 4/15/06 (5) 140,000 93,268
Interest Due and Unpaid Bonds, 6.688%, 1/1/01 (5) 256,500 217,692
----------------
368,410
- ------------------------------------------------------------------------------------------------------------------------------------
BULGARIA - 1.5%
----------------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds, 6.75%,
7/28/11 (5) 250,000 112,955
- ------------------------------------------------------------------------------------------------------------------------------------
CANADA - 2.1%
----------------------------------------------------------------------------------------------------------------------
Canada (Government of) Debs., 10.75%, 3/15/98 CAD 195,000 157,064
</TABLE>
5 Oppenheimer International Bond Fund
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
STATEMENT OF INVESTMENTS (CONTINUED)
FACE MARKET VALUE
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) AMOUNT (1) SEE NOTE 1
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
COSTA RICA - 1.5%
----------------------------------------------------------------------------------------------------------------------
Central Bank of Costa Rica Principal Bonds, Series A,
6.25%, 5/21/10 $ 200,000 $ 112,000
- ------------------------------------------------------------------------------------------------------------------------------------
ECUADOR - 2.2%
----------------------------------------------------------------------------------------------------------------------
Ecuador (Republic of):
Disc. Bonds, 6.812%, 2/28/25 (5) 100,000 49,370
Par Bonds, 3%, 2/28/25 (5) 350,000 114,170
----------------
163,540
- ------------------------------------------------------------------------------------------------------------------------------------
GERMANY - 1.9%
----------------------------------------------------------------------------------------------------------------------
Treuhandanstalt (German Federal Government) Bonds,
7.125%, 1/29/03 DEM 190,000 138,199
- ------------------------------------------------------------------------------------------------------------------------------------
GREAT BRITAIN - 5.4%
----------------------------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 10%, 2/26/01 GBP 230,000 398,717
- ------------------------------------------------------------------------------------------------------------------------------------
IRELAND - 4.3%
----------------------------------------------------------------------------------------------------------------------
National Treasury Management Agency (Irish Government) Bonds:
8%, 10/18/00 IEP 55,000 89,728
9%, 7/15/01 IEP 135,000 230,401
----------------
320,129
- ------------------------------------------------------------------------------------------------------------------------------------
JAMAICA - 0.6%
----------------------------------------------------------------------------------------------------------------------
Jamaica (Government of) 1990 Refinancing Agreement Nts.,
Tranche A, 6.656%, 10/16/00 (5)(6) 50,000 44,500
- ------------------------------------------------------------------------------------------------------------------------------------
MEXICO - 10.0%
----------------------------------------------------------------------------------------------------------------------
Banco Nacional de Comercio Exterior SNC International
Finance BV Gtd. Bonds, 10.875%, 6/23/97 (3)(5) 10,000 10,125
----------------------------------------------------------------------------------------------------------------------
Banco Nacional de Obras y Servicios Publicos SA Nts.,
10.75%, 8/16/96 80,000 80,800
----------------------------------------------------------------------------------------------------------------------
Bonos de la Tesoreria de la Federacion, Zero Coupon,
8/15/96 MXP 1,246,820 147,993
----------------------------------------------------------------------------------------------------------------------
United Mexican States:
Nacional Financiera SNC Nts., 13.60%, 4/2/98 ESP 10,000,000 78,842
Petroleos Mexicanos Gtd. Sr. Unsec. Nts., 6.875%, 3/8/99 (5) 100,000 89,750
Petroleos Mexicanos Gtd. Unsec. Unsub. Nts., 7.875%,
3/2/99 CAD 500,000 335,019
----------------
742,529
- ------------------------------------------------------------------------------------------------------------------------------------
MOROCCO - 2.9%
----------------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 6.688%, 1/1/09 (5) 350,000 219,188
- ------------------------------------------------------------------------------------------------------------------------------------
NEW ZEALAND - 1.9%
----------------------------------------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds, 10%, 3/15/02 NZD 130,000 94,463
----------------------------------------------------------------------------------------------------------------------
The Queen in Right of New Zealand Government Bonds, 14%,
10/15/96 NZD 70,000 48,405
----------------
142,868
- ------------------------------------------------------------------------------------------------------------------------------------
PAKISTAN - 1.4%
----------------------------------------------------------------------------------------------------------------------
Islamic (Republic of Pakistan) Debs., 11.50%, 12/22/99 100,000 102,875
- ------------------------------------------------------------------------------------------------------------------------------------
PANAMA - 4.1%
----------------------------------------------------------------------------------------------------------------------
Panama (Republic of) Debs., 7.25%, 5/10/02 (5) 380,000 302,100
- ------------------------------------------------------------------------------------------------------------------------------------
PHILIPPINES - 1.0%
----------------------------------------------------------------------------------------------------------------------
Philippines (Republic of) Front-Loaded Interest Reduction
Bonds, Series B, 5%, 6/1/08 (7) 100,000 77,188
</TABLE>
6 Oppenheimer International Bond Fund
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
STATEMENT OF INVESTMENTS (CONTINUED)
FACE MARKET VALUE
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) AMOUNT (1) SEE NOTE 1
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
POLAND - 3.6%
----------------------------------------------------------------------------------------------------------------------
Poland (Republic of) Disc. Bonds, 7.125%, 10/27/24 (5) $ 350,000 $ 270,375
- ------------------------------------------------------------------------------------------------------------------------------------
PORTUGAL - 3.1%
----------------------------------------------------------------------------------------------------------------------
Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio Prazo:
12.50%, 1/23/98 (8) PTE 14,500,000 101,491
13%, 12/23/97 PTE 17,800,000 125,863
----------------
227,354
- ------------------------------------------------------------------------------------------------------------------------------------
SPAIN - 4.2%
----------------------------------------------------------------------------------------------------------------------
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado:
7.40%, 7/30/99 ESP 28,500,000 209,950
11.30%, 1/15/02 ESP 12,000,000 99,290
----------------
309,240
- ------------------------------------------------------------------------------------------------------------------------------------
SUPRANATIONAL - 0.7%
----------------------------------------------------------------------------------------------------------------------
International Bank for Reconstruction and Development
Bonds, 12.50%, 7/25/97 NZD 70,000 49,194
- ------------------------------------------------------------------------------------------------------------------------------------
SWEDEN - 3.4%
----------------------------------------------------------------------------------------------------------------------
Sweden (Kingdom of) Bonds, Series 1028, 11%, 1/21/99 SEK 1,700,000 256,008
----------------
Total Foreign Government Obligations (Cost $5,340,850) 5,419,629
====================================================================================================================================
CORPORATE BONDS AND NOTES - 11.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Banco Bamerindus do Brasil SA:
10.50% Debs., 6/23/97 20,000 19,150
11% Sr. Unsub. Unsec. Bonds, 10/6/97 20,000 19,775
9% Unsub. Unsec. Bonds, 10/29/98 20,000 18,350
----------------------------------------------------------------------------------------------------------------------
Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98 60,000 52,800
----------------------------------------------------------------------------------------------------------------------
Banco Ganadero SA:
Zero Coupon Nts., 7/1/96 (3) 10,000 9,308
Zero Coupon Sr. Unsub. Unsec. Nts., 6/15/96 (3) 10,000 9,348
----------------------------------------------------------------------------------------------------------------------
Banco Mexicano SA, 8% Sr. Unsub. Unsec. Exchangeable
Medium-Term Nts., 11/4/98 60,000 52,050
----------------------------------------------------------------------------------------------------------------------
Canadian Imperial Banking Corp., Zero Coupon Indexed
Nts., 12/28/95 (4) 100,000 93,830
----------------------------------------------------------------------------------------------------------------------
KfW International Finance, Inc., 11.625% Gtd. Nts.,
11/27/98 ITL 310,000,000 195,974
----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Group, 14.25% Indian Rupee Indexed Nts.,
6/26/96 INR 314,100 9,259
----------------------------------------------------------------------------------------------------------------------
New Zealand Electric Corp., 10% Debs., 10/15/01 NZD 110,000 78,212
----------------------------------------------------------------------------------------------------------------------
Pulsar Internacional SA de CV, 11.80% Nts., 9/19/96 (6) 50,000 50,375
----------------------------------------------------------------------------------------------------------------------
Rabobank Nederland:
11.05% Sr. Unsec. Debs., 12/12/97 ITL 190,000,000 118,197
5.25% Sr. Unsec. Unsub. Debs., 1/30/02 CHF 100,000 91,815
----------------------------------------------------------------------------------------------------------------------
Unibanco Leasing SA, 9.113% Nts., 12/28/97 (5) 50,000 48,125
----------------
Total Corporate Bonds and Notes (Cost $863,797) 866,568
</TABLE>
7 Oppenheimer International Bond Fund
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
STATEMENT OF INVESTMENTS (CONTINUED)
FACE MARKET VALUE
AMOUNT (1) SEE NOTE 1
<S> <C> <C> <C>
====================================================================================================================================
STRUCTURED INSTRUMENTS - 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit
Linked Nts., 12/14/95 (indexed to the Nota Do Tesouro
Nacional, Zero Coupon, 12/13/95) (Cost $38,962) $ 40,000 $ 38,962
====================================================================================================================================
REPURCHASE AGREEMENTS - 5.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 6.35%,
dated 9/29/95, to be repurchased at $400,211 on 10/2/95,
collateralized by U.S. Treasury Nts., 4.25%-8.75%, 11/30/95-
8/15/00, with a value of $272,713, U.S. Treasury Bills maturing
12/28/95-3/28/96, with a value of $61,914, and U.S. Treasury
Bonds, 8.50%-13.25%, 5/15/14-2/15/20, with a value of $74,134
(Cost $400,000) 400,000 400,000
----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $7,243,918) 98.7% 7,322,753
----------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.3 99,849
---------------- ----------------
NET ASSETS 100.0% $ 7,422,602
================ ================
</TABLE>
1. Face amount is reported in U.S. Dollars, except for those
denoted in the following currencies:
ARA - Argentine Austral IDR - Indonesian Rupiah
AUD - Australian Dollar IEP - Irish Punt
CAD - Canadian Dollar INR - Indian Rupee
CHF - Swiss Franc ITL - Italian Lira
CLP - Chilean Peso MXP - Mexican Peso
CZK - Czech Koruna NLG - Netherlands Guilder
DEM - German Deutsche Mark NZD - New Zealand Dollar
ESP - Spanish Peseta PTE - Portuguese Escudo
GBP - British Pound Sterling SEK - Swedish Krona
HUF - Hungarian Forints THB - Thai Baht
2. Indexed instrument for which the principal amount and/or
interest due at maturity is affected by the relative value of a
foreign currency.
3. Represents a security sold under Rule 144A, which is exempt
from registration under the Securities Act of 1933, as amended.
This security has been determined to be liquid under guidelines
established by the Board of Trustees. These securities amount to
$218,004 or 2.94% of the Fund's net assets, at September 30, 1995.
4. When-issued security to be delivered and settled after
September 30, 1995.
5. Represents the current interest rate for a variable rate
security.
6. Identifies issues considered to be illiquid - See Note 7 of
Notes to Financial Statements.
7. Represents the current interest rate for an increasing rate
security.
8. A sufficient amount of liquid assets has been designated to
cover outstanding written call options, as follows:
<TABLE>
<CAPTION>
FACE SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE
TO CALL DATE PRICE RECEIVED SEE NOTE 1
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Call option on Sweden (Kingdom of)
Bonds, Series 1028, 11%, 1/21/99 245 1/21/99 $105.00 $1,350 $ 1,350
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer International Bond Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================
STATEMENT OF ASSETS AND LIABILITIES September 30, 1995
<S> <C> <C>
====================================================================================================================================
ASSETS Investments, at value (cost $7,243,918) - see accompanying statement $ 7,322,753
----------------------------------------------------------------------------------------------------
Cash 238,118
----------------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency
exchange contracts - Note 6 9,130
----------------------------------------------------------------------------------------------------
Receivables:
Investments sold 527,402
Shares of beneficial interest sold 278,607
Interest 220,485
Deferred organization costs 14,399
----------------------------------------------------------------------------------------------------
Other 1,159
-------------------
Total assets 8,612,053
====================================================================================================================================
LIABILITIES Options written, at value (premiums received $1,350) -
see accompanying statement - Note 5 1,350
----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 863,349
Shares of beneficial interest redeemed 301,855
Dividends 15,989
Distribution and service plan fees - Note 4 2,656
Other 4,252
-------------------
Total liabilities 1,189,451
====================================================================================================================================
NET ASSETS $ 7,422,602
===================
====================================================================================================================================
COMPOSITION OF Paid-in capital $ 7,334,740
NET ASSETS ----------------------------------------------------------------------------------------------------
Accumulated net realized loss from investments, written options
and foreign currency transactions (189)
----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 88,051
-------------------
Net assets $ 7,422,602
==================
===================================================================================================================================
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $3,983,778 and 781,299 shares of beneficial interest outstanding) $5.10
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $5.35
----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $3,237,933 and 635,325 shares of beneficial interest outstanding) $5.10
----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $200,891 and 39,431 shares of beneficial interest outstanding) $5.09
See accompanying Notes to Financial Statements.
</TABLE>
9 Oppenheimer International Bond Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================
STATEMENT OF OPERATIONS For the Period from June 15, 1995
(commencement of operations)
to September 30, 1995
<S> <C> <C>
====================================================================================================================================
INVESTMENT INCOME Interest (net of foreign withholding taxes of $1,013) $ 115,114
====================================================================================================================================
EXPENSES Management fees - Note 4 8,252
----------------------------------------------------------------------------------------------------
Distribution and service plan fees - Note 4:
Class A 1,750
Class B 3,267
Class C 282
----------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 1,623
Class B 444
Class C 45
----------------------------------------------------------------------------------------------------
Custodian fees and expenses 1,886
----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees - Note 4 860
----------------------------------------------------------------------------------------------------
Shareholder reports 546
----------------------------------------------------------------------------------------------------
Legal and auditing fees 520
----------------------------------------------------------------------------------------------------
Other 600
-------------------
Total expenses 20,075
-------------------
Less reimbursement of expenses by Oppenheimer Management
Corporation - Note 4 (13,764)
-------------------
Net expenses 6,311
====================================================================================================================================
NET INVESTMENT INCOME 108,803
====================================================================================================================================
REALIZED AND Net realized gain (loss) on:
UNREALIZED GAIN (LOSS) Investments 27,645
ON INVESTMENTS, Closing of options written (4,542)
OPTIONS WRITTEN AND Foreign currency transactions (23,292)
FOREIGN CURRENCY -------------------
TRANSACTIONS Net realized loss (189)
----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments and options written 46,609
Translation of assets and liabilities denominated in foreign currencies 41,442
-------------------
Net change 88,051
-------------------
Net realized and unrealized gain on investments, options written and
foreign currency transactions 87,862
====================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 196,665
===================
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer International Bond Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================
STATEMENT OF CHANGES IN NET ASSETS
Period Ended
September 30,
1995 (1)
<S> <C> <C>
====================================================================================================================================
OPERATIONS Net investment income $ 108,803
----------------------------------------------------------------------------------------------------
Net realized loss on investments, options written and
foreign currency transactions (189)
----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments, options written and translation of assets
and liabilities denominated in foreign currencies 88,051
-------------------
Net increase in net assets resulting
from operations 196,665
====================================================================================================================================
DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income:
TO SHAREHOLDERS Class A ($.1523 per share) (76,404)
Class B ($.1419 per share) (29,790)
Class C ($.1429 per share) (2,609)
====================================================================================================================================
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS Class A beneficial interest transactions - Note 2 3,923,812
----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
Class B beneficial interest transactions - Note 2 3,212,495
----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
Class C beneficial interest transactions - Note 2 198,433
====================================================================================================================================
NET ASSETS Total increase 7,422,602
----------------------------------------------------------------------------------------------------
Beginning of period --
-------------------
End of period $ 7,422,602
===================
</TABLE>
1. For the period from June 15, 1995 (commence-
ment of operations) to September 30, 1995.
See accompanying Notes to Financial Statements.
11 Oppenheimer International Bond Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================
FINANCIAL HIGHLIGHTS For the period from June 15, 1995 (commencement of
operations) to September 30, 1995
CLASS A CLASS B CLASS C
----------------- --------------- ---------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1995 1995 1995
<S> <C> <C> <C>
====================================================================================================
PER SHARE OPERATING DATA:
Net asset value, beginning of period $5.00 $5.00 $5.00
----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .15 .14 .14
Net realized and unrealized gain on
investments, options written and
foreign currency transactions .10 .10 .09
----------------------------------------------------------------------------------------------------
Total income from investment operations .25 .24 .23
----------------------------------------------------------------------------------------------------
Dividends to shareholders from net
investment income (.15) (.14) (.14)
=========================================================
Net asset value, end of period $5.10 $5.10 $5.09
=========================================================
====================================================================================================
TOTAL RETURN, AT NET ASSET VALUE (1) 5.13% 4.92% 4.73%
====================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,984 $3,238 $201
----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,566 $1,125 $97
----------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 781 635 39
----------------------------------------------------------------------------------------------------
Ratios to average net assets (2):
Net investment income 9.94% 9.20% 9.36%
Expenses, before voluntary reimbursement
by the Manager 1.59% 2.21% 2.26%
Expenses, net of voluntary reimbursement
by the Manager .41% .89% .85%
----------------------------------------------------------------------------------------------------
Portfolio turnover rate (3) 122.0% 122.0% 122.0%
</TABLE>
1. Assumes a hypothetical initial investment on
the business day before the first day of the
fiscal period, with all dividends and distribu-
tions 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.
2. Annualized.
3. The lesser of purchases or sales of portfolio
securities for a period, divided by the monthly
average of the market value of portfolio
securities owned during the period. Securities
with a maturity or expiration date at the time
of acquisition of one year or less are excluded
from the calculation. Purchases and sales of
investment securities (excluding short-term
securities) for the period ended September 30,
1995 were $10,314,730 and $4,358,100,
respectively.
See accompanying Notes to Financial Statements.
12 Oppenheimer International Bond Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT Oppenheimer International Bond Fund (the Fund), is a
ACCOUNTING registered investment company organized as a Massa-
POLICIES chusetts Business Trust with a single series of the
same name. The Fund is registered as a diversified,
open-end management investment company under the
Investment Company Act of 1940, as amended. The
Fund's investment advisor is Oppenheimer Management
Corporation (the Manager). The Fund offers Class A,
Class B and Class C shares. Class B and Class C
shares may be subject to a contingent deferred sales
charge. All three classes of shares have identical
rights to earnings, assets and voting privileges,
except that each class has its own distribution
and/or service plan, expenses directly attributable
to a particular class and exclusive voting rights
with respect to matters affecting a single class.
Class B shares will automatically convert to Class A
shares six years after the date of purchase. The
following is a summary of significant accounting
policies consistently followed by the Fund.
-----------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued
at the close of the New York Stock Exchange on each
trading day. Listed and unlisted securities for which
such information is regularly reported are valued at
the last sale price of the day or, in the absence of
sales, at values based on the closing bid or asked
price or the last sale price on the prior trading
day. Long-term and short-term "non-money market" debt
securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities
which cannot be valued by the approved portfolio
pricing service are valued using dealer-supplied
valuations provided the Manager is satisfied that the
firm rendering the quotes is reliable and that the
quotes reflect current market value, or are valued
under consistently applied procedures established by
the Board of Trustees to determine fair value in good
faith. Short-term "money market type" debt securities
having a remaining maturity of 60 days or less are
valued at cost (or last determined market value)
adjusted for amortization to maturity of any premium
or discount. Forward contracts are valued based on
the closing prices of the forward currency contract
rates in the London foreign exchange markets on a
daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on
the principal exchange on which the option is traded
or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior
trading date if it is within the spread between the
closing bid and asked prices. If the last sale price
is outside the spread, the closing bid or asked price
closest to the last reported sale price is used.
-----------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records
of the Fund are maintained in U.S. dollars. Prices
of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of
exchange. Amounts related to the purchase and sale
of securities and investment income are translated at
the rates of exchange prevailing on the respective
dates of such transactions.
The effect of changes in foreign currency exchange
rates on investments is separately identified from
the fluctuations arising from changes in market
values of securities held and reported with all other
foreign currency gains and losses in the Fund's
results of operations.
-----------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the
custodian to take possession, to have legally
segregated in the Federal Reserve Book Entry System
or to have segregated within the custodian's vault,
all securities held as collateral for repurchase
agreements. The market value of the underlying
securities is required to be at least 102% of the
resale price at the time of purchase. If the seller
of the agreement defaults and the value of the
collateral declines, or if the seller enters into an
insolvency proceeding, realization of the value of
the collateral by the Fund may be delayed or limited.
13 Oppenheimer International Bond Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
1. SIGNIFICANT ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES.
ACCOUNTING Income, expenses (other than those attributable to a
POLICIES specific class) and gains and losses are allocated
(CONTINUED) 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.
-----------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to
declare dividends separately for Class A, Class B and
Class C shares from net investment income each day
the New York Stock Exchange is open for business and
pay such dividends monthly. Distributions from net
realized gains on investments, if any, will be
declared at least once each year.
-----------------------------------------------------
ORGANIZATION COSTS. The Manager advanced $14,488 for
organization and start-up costs of the Fund. Such
expenses are being amortized over a five-year period
from the date operations commenced. In the event that
all or part of the Manager's initial investment in
shares of the Fund is withdrawn during the
amortization period, the redemption proceeds will be
reduced to reimburse the Fund for any unamortized
expenses, in the same ratio as the number of shares
redeemed bears to the number of initial shares
outstanding at the time of such redemption.
-----------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net
investment income (loss) and net realized gain (loss)
may differ for financial statement and tax purposes
primarily because of paydown gains (losses), and the
recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes.
The character of the distributions made during the
year from net investment income or net realized gains
may differ from their ultimate characterization for
federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that
the income or realized gain (loss) was recorded by
the Fund.
-----------------------------------------------------
OTHER. Investment transactions are accounted for on
the date the investments are purchased or sold (trade
date) and dividend income is recorded on the ex-
dividend date. Discount on securities purchased is
amortized over the life of the respective securities,
in accordance with federal income tax requirements.
Realized gains and losses on investments and options
written and unrealized appreciation and depreciation
are determined on an identified cost basis, which is
the same basis used for federal income tax purposes.
Interest on payment-in-kind debt instruments is
accrued as income at the coupon rate and a market
adjustment is made on the ex-date.
2. SHARES OF The Fund has authorized an unlimited number of no par
BENEFICIAL value shares of beneficial interest. Transactions in
INTEREST shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED SEPTEMBER 30, 1995(1)
----------------------------------
SHARES AMOUNT
<S> <C> <C>
CLASS A:
SOLD 909,822 $4,576,888
DIVIDENDS REINVESTED 6,117 30,991
REDEEMED (134,640) (684,067)
--------- -----------
NET INCREASE 781,299 $3,923,812
========= ==========
CLASS B:
SOLD 633,620 $3,203,816
DIVIDENDS REINVESTED 4,019 20,381
REDEEMED (2,314) (11,702)
--------- -----------
NET INCREASE 635,325 $3,212,495
========= ==========
</TABLE>
14 Oppenheimer International Bond Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
<TABLE>
<CAPTION>
PERIOD ENDED SEPTEMBER 30, 1995(1)
----------------------------------
SHARES AMOUNT
<S> <C> <C>
CLASS C:
SOLD 39,665 $ 199,624
DIVIDENDS REINVESTED 392 1,981
REDEEMED (626) (3,172)
--------- -----------
NET INCREASE 39,431 $ 198,433
========= ==========
</TABLE>
1. For the period from June 15, 1995 (commencement
of operations) to September 30, 1995.
3. UNREALIZED GAINS At September 30, 1995, net unrealized appreciation on
AND LOSSES ON investments and options written of $78,835 was
INVESTMENTS composed of gross appreciation of $104,694, and gross
depreciation of $25,859.
4. MANAGEMENT FEES Management fees paid to the Manager were in accord-
AND OTHER ance with the investment advisory agreement with the
TRANSACTIONS WITH Fund which provides for an annual fee of .75% on the
AFFILIATES first $200 million of net assets with a reduction of
.03% on each $200 million thereafter to $800 million,
.60% on the next $200 million and .50% on net assets
in excess of $1 billion. The Manager has agreed to
reimburse the Fund if aggregate expenses (with
specified exceptions) exceed the most stringent
state regulatory limit on Fund expenses. In
addition, the Manager has voluntarily undertaken to
reimburse Fund expenses to the level needed to main-
tain a stable dividend.
For the period ended September 30, 1995, commissions
(sales charges paid by investors) on sales of Class A
shares totaled $38,181, of which $11,736 was retained
by Oppenheimer Funds Distributor, Inc. (OFDI), a
subsidiary of the Manager, as general distributor,
and by an affiliated broker/dealer.
Oppenheimer Shareholder Services (OSS), a division of
the Manager, is the transfer and shareholder
servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of
providing such services are allocated ratably to
these companies.
Under separate approved plans, each class may expend
up to .25% of its net assets annually to reimburse
OFDI for costs incurred in connection with the
personal service and maintenance of accounts that
hold shares of the Fund, including amounts paid to
brokers, dealers, banks and other institutions. In
addition, Class B and Class C shares are subject to
an asset-based sales charge of .75% of net assets
annually, to reimburse OFDI for sales commissions
paid from its own resources at the time of sale and
associated financing costs. In the event of
termination or discontinuance of the Class B or Class
C plan, the Board of Trustees may allow the Fund to
continue payment of the asset-based sales charge to
OFDI for distribution expenses incurred on Class B or
Class C shares sold prior to termination or
discontinuance of the plan. At September 30, 1995,
OFDI had incurred unreimbursed expenses of $151,296.
During the period ended September 30, 1995, OFDI
retained $3,267 and $282, respectively, as
reimbursement for Class B and Class C sales
commissions and service fee advances, as well as
financing costs.
5. OPTION ACTIVITY The Fund may buy and sell put and call options, or
write covered put and call options on portfolio
securities in order to produce incremental earnings
or protect against changes in the value of portfolio
securities.
15 Oppenheimer International Bond Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
The Fund generally purchases put options or writes
covered call options to hedge against adverse move-
ments in the value of portfolio holdings. When an
option is written, the Fund receives a premium and
becomes obligated to sell or purchase the underlying
security at a fixed price, upon exercise of the
option.
Options are valued daily based upon the last sale
price on the principal exchange on which the option
is traded and unrealized appreciation or depreciation
is recorded. The Fund will realize a gain or loss
upon the expiration or closing of the option
transaction. When an option is exercised, the
proceeds on sales for a written call option, the
purchase cost for a written put option, or the cost
of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
In this report, securities designated to cover
outstanding call options are noted in the Statement
of Investments. Shares subject to call, expiration
date, exercise price, premium received and market
value are detailed in a footnote to the Statement of
Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities.
Gains and losses are reported in the Statement of
Operations.
The risk in writing a call option is that the Fund
gives up the opportunity for profit if the market
price of the security increases and the option is
exercised. The risk in writing a put option is that
the Fund may incur a loss if the market price of the
security decreases and the option is exercised. The
risk in buying an option is that the Fund pays a
premium whether or not the option is exercised. The
Fund also has the additional risk of not being able
to enter into a closing transaction if a liquid
secondary market does not exist.
Written option activity for the period ended
September 30, 1995 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS
------------
NUMBER OF AMOUNT OF
OPTIONS PREMIUMS
<S> <C> <C>
Options written 570 $ 4,430
Options canceled in closing purchase
transactions (325) (3,080)
-------- --------
Options outstanding at September 30,
1995 245 $ 1,350
======== =======
</TABLE>
6. FORWARD CONTRACTS A forward foreign currency exchange contract
(forward contract) is a commitment to purchase or
sell a foreign currency at a future date, at a
negotiated rate.
The Fund uses forward contracts to seek to manage
foreign currency risks. They may also be used to
tactically shift portfolio currency risk. The Fund
generally enters into forward contracts as a hedge
upon the purchase or sale of a security denominated
in a foreign currency. In addition, the Fund may
enter into such contracts as a hedge against changes
in foreign currency exchange rates on portfolio
positions.
Forward contracts are valued based on the closing
prices of the forward currency contract rates in the
London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Fund will
realize a gain or loss upon the closing or settlement
of the forward transaction.
16 Oppenheimer International Bond Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
In this report, securities held in segregated
accounts to cover net exposure on outstanding forward
contracts are noted in the Statement of Investments
where applicable. Gains and losses on outstanding
contracts (unrealized appreciation or depreciation on
forward contracts) are reported in the Statement of
Assets and Liabilities. Realized gains and losses are
reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
Risks include the potential inability of the
counterparty to meet the terms of the contract and
unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At September 30, 1995, the Fund had outstanding
forward contracts to purchase and sell foreign
currencies as follows:
<TABLE>
<CAPTION>
CONTRACT VALUATION AS OF UNREALIZED
EXCHANGE AMOUNT SEPTEMBER 30, APPRECIATION
CONTRACTS TO PURCHASE DATE (000S) 1995 (DEPRECIATION)
--------------------- ------------- ----------- --------------- --------------
<S> <C> <C> <C> <C>
Australian Dollar (AUD) 10/3/95 243 AUD $ 183,504 $ 1,468
Canadian Dollar (CAD) 10/12/95 740 CAD 549,394 7,194
German Deutsche Mark (DEM) 10/23/95-10/26/95 1,100 DEM 773,043 2,547
Italian Lira (ITL) 10/4/95 173,129 ITL 107,379 (138)
Swiss Franc (CHF) 10/25/95 110 CHF 95,731 944
----------- --------
$1,709,051 $12,015
=========== --------
CONTRACTS TO SELL
-----------------
Canadian Dollar (CAD) 10/2/95-10/12/95 986 CAD $ 731,974 $ 996
German Deutsche Mark (DEM) 10/23/95-10/26/95 1,100 DEM 773,043 (4,432)
Swedish Krona (SEK) 10/4/95 600 SEK 86,642 2
Swiss Franc (CHF) 10/25/95 110 CHF 95,731 549
----------- -------
$1,687,390 $(2,885)
=========== --------
Net unrealized appreciation $ 9,130
=======
</TABLE>
7. ILLIQUID AND At September 30, 1995, investments in securities
RESTRICTED included issues that are illiquid or restricted.
SECURITIES The securities are often purchased in private place-
ment transactions, are not registered under the
Securities Act of 1933, may have contractual restric-
tions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair
value. The Fund intends to invest no more than 10% of
its net assets (determined at the time of purchase)
in illiquid and restricted securities. The aggregate
value of these securities subject to this limitation
at September 30, 1995 was $94,875 which represents
1.28% of the Fund's net assets. Information
concerning these securities is as follows:
<TABLE>
<CAPTION>
VALUATION PER
COST UNIT AS OF
SECURITY ACQUISITION DATE PER UNIT SEPTEMBER 30, 1995
<S> <C> <C> <C>
Jamaica (Government of) 1990 Refinancing
Agreement Nts., Tranche A, 6.656%, 10/16/00 7/12/95-8/15/95 $ 89.19 $ 89.00
Pulsar Internacional SA de CV, 11.80% Nts.,
9/19/96 9/14/95 $100.00 $100.75
</TABLE>
Pursuant to guidelines adopted by the Board of
Trustees, certain unregistered securities are
determined to be liquid and are not included within
the 10% limitation specified above.
17 Oppenheimer International Bond Fund
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer
International Bond Fund:
We have audited the accompanying statement of assets
and liabilities, including the statement of
investments, of Oppenheimer International Bond Fund
as of September 30, 1995, the related statement of
operations, changes in net assets and the financial
highlights for the period from June 15, 1995
(commencement of operations) to September 30, 1995.
These financial statements and financial highlights
are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based
on our audits.
We conducted our audit in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements and financial highlights are free of
material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our
procedures included confirmation of securities owned
at September 30, 1995 by correspondence with the
custodian and brokers; where replies were not
received from brokers, we performed other auditing
procedures. An audit also includes assessing the
accounting principles used and significant estimates
made by management, as well as evaluating the overall
financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and
financial highlights present fairly, in all material
respects, the financial position of Oppenheimer
International Bond Fund at September 30, 1995, the
results of its operations, the changes in its net
assets, and the financial highlights for the stated
period, in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
October 20, 1995
18 Oppenheimer International Bond Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1996, shareholders will receive information
regarding all dividends and distributions paid to
them by the Fund during calendar year 1995.
Regulations of the U.S. Treasury Department require
the Fund to report this information to the Internal
Revenue Service.
The foregoing information is presented to assist
shareholders in reporting distributions received from
the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may
affect your individual tax return and the many
variations in state and local tax regulations, we
recommend that you consult your tax advisor for
specific guidance.
19 Oppenheimer International Bond Fund
<PAGE>
OPPENHEIMER INTERNATIONAL BOND FUND
OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee and President
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Andrew J. Donohue, Vice President
Ashwin Vasan, Vice President
George C. Bowen, Vice President, Secretary, and
Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISOR Oppenheimer Management Corporation
DISTRIBUTOR Oppenheimer Funds Distributor, Inc.
TRANSFER AND Oppenheimer Shareholder Services
SHAREHOLDER SERVICING
AGENT
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
INDEPENDENT AUDITORS Deloitte & Touche LLP
LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of
Oppenheimer International Bond Fund. This report must
be preceded or accompanied by a Prospectus of
Oppenheimer International Bond Fund. For material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including
possible loss of the principal amount invested.
20 Oppenheimer International Bond Fund
