<PAGE>
[PHOTO]
Annual Report September 30, 1999
Oppenheimer
INTERNATIONAL BOND FUND
[LOGO] OPPENHEIMERFUNDS-Registered Trademark-
The Right Way To Invest
<PAGE>
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
CONTENTS
1 President's Letter
3 An Interview
with your Fund's
Manager
8 Fund Performance
14 FINANCIAL
STATEMENTS
41 INDEPENDENT
AUDITORS' REPORT
42 Federal
Income Tax
Information
43 Officers and Trustees
44 OppenheimerFunds
Family
DECLINING BOND PRICES IN THE WAKE OF 1998'S GLOBAL FINANCIAL CRISIS were only
partially offset by stable-to-rising bond prices so far in 1999.
We believe that higher yielding bonds--SUCH AS EMERGING MARKETS DEBT AND LOWER
RATED, INVESTMENT-GRADE SECURITIES--currently offer attractive values in the
international fixed income markets.
As bond prices continue to recover from the effects of last year's financial
crisis, WE ARE OPTIMISTIC ABOUT THE POTENTIAL FOR CAPITAL APPRECIATION.
<TABLE>
<CAPTION>
- ---------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
For the 1-Year Period Ended 9/30/99 *
CLASS A
Without Sales Chg. With Sales Chg.
- ---------------------------------------
<S> <C>
10.58% 5.33%
<CAPTION>
CLASS B
Without Sales Chg. With Sales Chg.
- ---------------------------------------
<S> <C>
9.79% 4.90%
<CAPTION>
CLASS C
Without Sales Chg. With Sales Chg.
- ---------------------------------------
<S> <C>
9.80% 8.82%
- ---------------------------------------
</TABLE>
------------------
NOT FDIC INSURED
NO BANK GUARANTEE
MAY LOSE VALUE
------------------
* See page 12 for further details.
<PAGE>
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PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
[PHOTO]
JAMES C. SWAIN
Chairman
Oppenheimer International Bond Fund
BRIDGET A. MACASKILL
President
Oppenheimer International Bond Fund
DEAR SHAREHOLDER,
In many ways, the 1999 investment environment has, so far, unfolded as many
expected it would, producing both attractive opportunities and formidable
challenges for investors.
On the economic front, early worries about the effects of global weakness
in the wake of last year's credit and currency crises have abated. Instead, as
many economies around the world begin to strengthen, concerns now center around
whether the U.S. economy may be growing too quickly. Throughout the year,
consumers in the United States have continued to spend and borrow heavily, more
than offsetting any temporary slowdown in the industrial and export sectors.
The economy's strength has not gone unnoticed by the nation's monetary
policymakers. In an effort to ward off emerging inflationary pressures, the
Federal Reserve Board increased short-term interest rates this past summer.
Market reaction to robust economic growth has been mixed. The U.S. bond
market has generally declined, as fixed income investors became increasingly
concerned about the effects of rising interest rates.
In the stock market, the performance of large-capitalization growth stocks,
which has driven the market's advance over the past few years, has begun to
moderate, and many previously out-of-favor value-oriented mid-cap and small-cap
stocks have rallied. At the same time, a healthy percentage of actively managed,
diversified portfolios have once again begun to outperform unmanaged stock
indices such as Standard & Poor's 500.
1 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
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PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
At OppenheimerFunds, we applaud the Fed's pre-emptive strike against inflation.
In our view, history has repeatedly demonstrated that most financial assets do
best in a low-inflation environment. What's more, we believe that the move to
higher interest rates should be temporary.
One recent development IS quite troublesome to us however: the increasing
popularity of "day trading" among individuals seeking to make fast money in a
volatile stock market. In our opinion, day trading is not investing, it is
gambling. Experience proves that without extensive research and analysis,
attempting to time short-term price swings is a fool's errand. Instead, we
continue to encourage investors to maintain a long-term perspective that is
measured in years, not days.
Finally, while we remain alert to the potential impact of the Y2K issue, we
are encouraged by the progress made in addressing the matter. At
OppenheimerFunds, our shareholder accounting systems are already Y2K compliant,
and we have successfully participated in all required industrywide tests. We
intend to continue retesting our systems in order to help further protect
against any potential problems. After all, whether in our computer accounting
systems or the financial markets, managing risk is an important part of what
makes OppenheimerFunds THE RIGHT WAY TO INVEST.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
October 21, 1999
2 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Art Steinmetz
(Portfolio Manager)
David Negri
Q.HOW DID OPPENHEIMER INTERNATIONAL BOND FUND PERFORM DURING THE ONE-YEAR PERIOD
THAT ENDED SEPTEMBER 30, 1999?
A. Given very challenging conditions in the world's fixed income markets, we are
pleased with the Fund's performance over the past year. Poor market performance
in the wake of last year's currency and credit crises in the emerging markets
was only partially offset by greater market stability in 1999. The Fund's Class
A shares were ranked 1 of 55 among international income funds for the one-year
period ended September 30, 1999, as ranked by Lipper Analytical Services.(1)
HOW WOULD YOU CHARACTERIZE THE INVESTMENT ENVIRONMENT OVER THE PAST YEAR?(2)
The international bond markets have been highly volatile, especially in the
emerging markets of Asia, Latin America and Eastern Europe. When the reporting
period began on October 1, 1998, we were in the midst of the global financial
crisis, which had spread from Asia to Russia, and was threatening Latin America.
What's more, the bond markets were further unsettled by problems experienced by
a number of hedge funds during the summer of 1998. These large, highly
leveraged, private investment companies were forced to sell large amounts of
bonds into an already troubled market, causing many bond prices to plummet.
1. Source: Lipper Analytical Services, Inc., 9/30/99. See page 12 for further
details.
2. Investing in foreign bonds entails higher expenses and risks, such as foreign
currency fluctuations. Investing in junk bonds carries greater risk of
volatility and default.
3 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
"YIELD SPREADS HAVE NEVER BEEN MUCH WIDER THAN THEY ARE TODAY, DESPITE THE FACT
THAT THERE ARE INDIVIDUAL GOVERNMENTS AND COMPANIES THAT ARE FISCALLY STRONG."
In 1999, both the global financial crisis and hedge fund problems have appeared
to ease. Signs began to emerge early in the year that troubled emerging market
economies were stabilizing, and bond prices began to rise from depressed levels.
However, we have not yet seen enough evidence that those economies have truly
recovered. As a result of continuing economic weakness, bond prices in local
currency terms have not yet rebounded enough to retrace all of their previous
declines. On average, international bond issuers have been earning their coupon
rates so far in 1999.
HOW HAVE THE VARIOUS EMERGING MARKETS IN WHICH THE FUND INVESTS FARED OVER THE
PAST YEAR?
Just as Southeast Asian economies were the first to succumb to the global credit
and currency crisis, they have also been the first to start to recover. Many of
these emerging nations have begun to implement the reforms necessary to
strengthen their troubled banking and financial systems. As a result, overseas
investors have become more comfortable committing capital to the region, and
greater liquidity has helped these markets rally.
We've also seen signs of stabilization in certain areas of Eastern Europe.
Although Russia remains mired in the problems that led to default on its
government debt during the summer of 1998, other nations in the region have
enjoyed stronger economic conditions. For example, our investments in Turkey
have performed quite well.
Latin America was the last region to catch the so-called "Asian contagion,"
and remains in recession. However, we expect Latin American bond markets to
recover when economic conditions there improve.
4 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
HOW HAVE FIXED INCOME MARKETS FARED IN THE DEVELOPED REGIONS?
The Japanese bond market has ranked among the top performers over the past year.
This is especially true for U.S. investors, who benefited from a strengthening
of the Japanese yen relative to the U.S. dollar. While the Japanese economy has
remained in recession, the government appears to be serious about implementing
long-awaited financial reforms. As a result, investors took advantage of
attractive values in Japanese bonds based on the not-yet-realized expectation
that the recession will end.
On the other hand, European bond markets have generally languished amid
slower-than-expected economic growth. Returns for U.S. investors from European
bonds have suffered because of the weakening of Europe's new currency, the euro,
relative to the U.S. dollar.
HOW WAS THE FUND MANAGED IN THIS ENVIRONMENT?
We have continued to emphasize emerging market debt over bonds from the
developed markets. Within the emerging markets, we have focused on Southeast
Asia, where we have identified attractive currency and bond values in the wake
of the global financial crisis. As these securities and currencies rebound from
depressed levels, we expect the Fund to benefit. By the same token, we have
de-emphasized investments in Latin American markets. In our view, these
economies may be slow to recover. While attractive values in Latin American
bonds and currencies exist, higher U.S. interest rates are likely to adversely
affect bond prices there. Therefore, we do not yet believe that the time is
right to increase our exposure to this region.
We have also maintained a relatively low exposure to Japanese bonds. In
hindsight, a larger position would have helped the Fund benefit from the
strengthening of the Japanese yen. From a fundamental investment standpoint,
however, we believe that other areas of the world currently offer better
potential.
5 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------
AVERAGE ANNUAL TOTAL RETURNS
For the Periods Ended 9/30/99(3)
CLASS A Since
1 year Inception
- --------------------------------
<S> <C>
5.33% 5.95%
<CAPTION>
CLASS B Since
1 year Inception
- --------------------------------
<S> <C>
4.90% 6.01%
<CAPTION>
CLASS C Since
1 year Inception
- --------------------------------
<S> <C>
8.82% 6.33%
<CAPTION>
- --------------------------------
STANDARDIZED YIELDS(4)
For the 30 Days Ended 9/30/99
- --------------------------------
<S> <C>
CLASS A 15.42%
- --------------------------------
CLASS B 15.43
- --------------------------------
CLASS C 15.43
- --------------------------------
</TABLE>
After de-emphasizing the developed markets of Europe for most of the reporting
period, we recently began to increase our exposure to European bonds and the
euro. That's because we expect European economic growth to accelerate relative
to U.S. growth, which should produce currency-related gains.
WHERE ARE YOU CURRENTLY FINDING THE MOST ATTRACTIVE VALUES IN INTERNATIONAL
BONDS?
In our opinion, the most attractive values can be found in the higher yielding
sectors of the fixed income markets. This includes securities that offer higher
income payments as an incentive for investors to accept their higher risk, such
as emerging market debt. Emerging market bonds have offered yields at the high
end of their range relative to developed market bonds, providing the potential
for capital appreciation. Although we have not yet seen that potential realized,
we believe that it will occur when and if investors become convinced that
economic recovery is truly underway.
We have also found attractive opportunities in investment-grade bonds rated
below the triple-A rated range. Double-A and single-A credits have offered
significantly higher yields than their triple-A rated counterparts, providing
both highly competitive income payments and the potential for capital
appreciation as these yield differences moderate. For example, despite their
implicit government backing, German mortgage-backed securities recently provided
yields about 50 percentage points greater than direct obligations of the German
government. Historically, the average yield difference has been just 15
percentage points.
3. See page 12 for further details.
4. Standardized yield is based on net investment income for the 30-day period
ended September 30, 1999. Falling share prices will tend to artificially raise
yields.
6 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
REGIONAL ALLOCATION(5)
[Chart]
- --------------------------------
- - Latin America 28.9%
- - Europe 24.0
- - Asia 20.5
- - Middle East/ Africa 11.4
- - United States/ Canada 7.9
- - Emerging Europe 7.3
- --------------------------------
WHAT IS YOUR OUTLOOK FOR THE FORESEEABLE FUTURE?
We are cautiously optimistic. We have attempted to position the fund to take
advantage of good values in emerging market and lower quality investment-grade
bonds. If, as we expect, many of the world's economies gain strength, these
investments should provide above-average total returns, including high yields
and price appreciation.
Nonetheless, we are prepared for continued volatility in the fixed income
markets over the short term. Higher U.S. interest rates implemented by the
Federal Reserve Board over the summer may adversely affect international bond
markets, for example. However, once this round of rate hikes is over, we believe
the stage will be set for very attractive returns over the longer term. Having
the patience and discipline to weather short-term volatility on the road to
longer term gains is the essence of our investment strategy, and is an important
reason Oppenheimer International Bond Fund is part of THE RIGHT WAY TO INVEST.
<TABLE>
<CAPTION>
TOP 10 COUNTRY HOLDINGS(5)
- -----------------------------------------------------------
<S> <C>
Germany 7.7%
- -----------------------------------------------------------
Argentina 7.4
- -----------------------------------------------------------
Mexico 7.2
- -----------------------------------------------------------
United States 6.3
- -----------------------------------------------------------
Turkey 6.2
- -----------------------------------------------------------
Brazil 6.0
- -----------------------------------------------------------
Indonesia 4.7
- -----------------------------------------------------------
Norway 4.1
- -----------------------------------------------------------
Venezuela 3.7
- -----------------------------------------------------------
Italy 3.5
</TABLE>
5. Portfolio is subject to change. Percentages are as of September 30, 1999, and
are based on total market value of investments.
7 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
FUND PERFORMANCE
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
BELOW IS A DISCUSSION, BY THE MANAGER, OF THE FUND'S PERFORMANCE DURING ITS
FISCAL YEAR ENDED SEPTEMBER 30, 1999, FOLLOWED BY A GRAPHICAL COMPARISON OF THE
FUND'S PERFORMANCE TO TWO APPROPRIATE BROAD-BASED MARKET INDICES.
MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the fiscal year that ended
September 30, 1999, Oppenheimer International Bond Fund's performance was
influenced by declining bond prices in international markets. Nevertheless, the
Fund generated good returns for the period. In this environment, the Manager
attempted to position the Fund to take advantage of depressed values and widened
yield spreads. During the period, the Manager continued to emphasize emerging
market debt over bonds from the developed markets. Within the emerging markets,
the Fund was focused on Southeast Asia, where attractive currency and bond
values were identified in the wake of the global financial crisis. At the same
time, investments in Latin American and Japanese markets were de-emphasized. In
Europe, the Fund's exposure to European bonds and the euro was recently
increased, as management expects economic growth in the region to accelerate.
The Fund's portfolio holdings, allocations and strategies are subject to change.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held from the inception date of June 15, 1995, until September 30, 1999.
The Fund's performance reflects the deduction of the maximum initial sales
charge on Class A shares, the applicable contingent deferred sales charge on
Class B and Class C shares, and reinvestments of all dividends and capital gains
distributions.
8 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
The performance of each class of the Fund's shares is compared to two indices
because the Fund invests in debt securities issued by governments in both
developed countries and emerging market countries and in debt securities issued
by companies located in those countries. In the Manager's view, no one index
adequately combines both types of investments.
Performance is compared to the Salomon Brothers Non-U.S. Dollar World
Government Bond Index, a subset of the Salomon Brothers World Government Bond
Index. The Salomon Brothers Non-U.S. Dollar World Government Bond Index is a
market-capitalization-weighted benchmark that tracks the performance of 13
government bond markets including Australia, Canada, Japan and 10 European
countries. Thus, the Index does not reflect the performance of the fixed income
markets in either the United States or in any emerging market countries. In
addition, it is comprised of only government bonds and does not reflect the
performance of corporate bonds.
Performance is also compared to the Salomon Brothers Brady Bond Index,
which provides a total return benchmark for emerging market country bonds. It is
designed to allow direct comparison of the developing country debt market with
other markets. A Brady Bond is a bond that is exchanged for debt or new money
under the debt restructuring program initiated in 1990 by the U.S. Department of
the Treasury.
Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs that follow shows the effect of taxes. The Fund's performance
reflects the effects of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's performance, it
must be noted that the Fund's investments are not limited to the securities or
countries in the indices.
9 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
FUND PERFORMANCE
- --------------------------------------------------------------------------------
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class A), Salomon Brothers Non-U.S. Dollar
World Government Bond Index and Salomon Brothers Brady Bond Index
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer International Bond Fund Class A $12,818
Salomon Brothers Non-U.S. Dollar World Government Bond Index $11,331
Salomon Brothers Brady Bond Index $18,865
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES OF THE FUND AT 9/30/99(1)
1-YEAR 5.33% LIFE 5.95%
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class B), Salomon Brothers Non-U.S. Dollar
World Government Bond Index and Salomon Brothers Brady Bond Index
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer International Bond Fund Class B $12,844
Salomon Brothers Non-U.S. Dollar World Government Bond Index $11,331
Salomon Brothers Brady Bond Index $18,865
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES OF THE FUND AT 9/30/99(1)
1-YEAR 4.90% LIFE 6.01%
10 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class C), Salomon Brothers Non-U.S. Dollar
World Government Bond Index and Salomon Brothers Brady Bond Index
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer International Bond Fund Class C $13,014
Salomon Brothers Non-U.S. Dollar World Government Bond Index $11,331
Salomon Brothers Brady Bond Index $18,865
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS C SHARES OF THE FUND AT 9/30/99(1)
1 YEAR 8.82% LIFE 6.33%
The performance information for both indices in the graphs begins on 5/31/95.
1. See page 12 for further details.
Past performance is not predictive of future performance.
11 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES
- --------------------------------------------------------------------------------
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. THE FUND'S
PERFORMANCE MAY FROM TIME TO TIME BE SUBJECT TO SUBSTANTIAL SHORT-TERM CHANGES,
PARTICULARLY DURING PERIODS OF MARKET OR INTEREST RATE VOLATILITY. FOR UPDATES
ON THE FUND'S PERFORMANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR, CALL US AT
1.800.525.7048 OR VISIT OUR WEBSITE, WWW.OPPENHEIMERFUNDS.COM.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown.
CLASS A shares were first publicly offered on 6/15/95. The average annual total
returns are shown net of the applicable 4.75% maximum initial sales charge.
CLASS B shares of the Fund were first publicly offered on 6/15/95. The average
annual total returns are shown net of the applicable 5% and 2% contingent
deferred sales charges, respectively, for the one-year period and the life of
the class. The ending account value in the graph is net of the applicable 2%
contingent deferred sales charge. Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 6/15/95. The average
annual total returns are shown net of the applicable 1% contingent deferred
sales charge for the one-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
An explanation of the different performance calculations is in the Fund's
prospectus.
LIPPER RANKING. Based on the comparisons between changes in net asset value
without considering sales charges, with dividends and capital gains
distributions reinvested. The Fund's Class A shares were ranked 1 of 55
(one-year) and 25 of 38 (three-year) among international income funds for the
periods ended 9/30/99.
12 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
FINANCIALS
13 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS--1.0%
Nykredit AS, 7% Cv. Bonds, 10/1/29 [DKK] (Cost $2,624,089) 18,690,000 $ 2,599,924
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--0.7%
Federal National Mortgage Assn. Sr. Unsub. Medium-Term Nts.,
6.50%, 7/10/02 [AUD] 1,310,000 864,779
-------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Sr. Unsub. Nts., 6.375%, 8/15/07 [AUD] 1,365,000 867,944
-----------
Total U.S. Government Obligations (Cost $1,667,637) 1,732,723
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--58.7%
- -------------------------------------------------------------------------------------------------------------------
ARGENTINA--5.5%
Argentina (Republic of) Bonds, Bonos de Consolidacion de
Deudas, Series I, 2.828%, 4/1/07(2) [ARP] 5,096,437 3,390,992
- -------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Global Unsec. Unsub. Bonds,
Series BGL5, 11.375%, 1/30/17 2,450,000 2,309,125
- -------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Nts., Series REGS, 11.75%, 2/12/07 [ARP] 7,425,000 6,349,645
- -------------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Series PBA1, 2.828%, 4/1/07(2) [ARP] 2,681,784 1,667,202
-----------
13,716,964
- -------------------------------------------------------------------------------------------------------------------
BRAZIL--5.7%
Brazil (Federal Republic of) Bonds, 11.625%, 4/15/04 520,000 486,226
- -------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Capitalization Bonds, 20 yr., 8%, 4/15/14 8,797,260 5,509,285
- -------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Debt Conversion Bonds, 5.938%, 4/15/12(2) 8,342,000 5,026,055
- -------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Interest Due & Unpaid Bonds, 6.50%, 1/1/01(2) 2,127,654 2,063,824
- -------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Unsec. Bonds, 9.375%, 4/7/08 1,530,000 1,204,875
-----------
14,290,265
- -------------------------------------------------------------------------------------------------------------------
BULGARIA--1.8%
Bulgaria (Republic of) Front-Loaded Interest Reduction Bearer Bonds,
Tranche A, 2.75%, 7/28/12(3) 7,255,000 4,570,650
- -------------------------------------------------------------------------------------------------------------------
CANADA--1.5%
Canada (Government of) Bonds, Series J24, 10.25%, 2/1/04 4,650,000 3,714,652
- -------------------------------------------------------------------------------------------------------------------
COLOMBIA--0.4%
Colombia (Republic of) Nts., 7.25%, 2/23/04 665,000 536,315
- -------------------------------------------------------------------------------------------------------------------
Colombia (Republic of) Unsec. Bonds, 10.875%, 3/9/04 560,000 552,168
-----------
1,088,483
- -------------------------------------------------------------------------------------------------------------------
ECUADOR--0.1%
Ecuador (Republic of) Debs., 2/27/15(4) 110,613 18,528
- -------------------------------------------------------------------------------------------------------------------
Ecuador (Republic of) Past Due Interest Bonds, 2/27/15(4) 948,945 158,948
-----------
177,476
</TABLE>
14 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GERMANY--3.6%
Germany (Republic of) Bonds:
6.25%, 4/26/06 [EUR] 952,484 $1,090,476
6.75%, 5/13/04 [DEM] 510,000 591,490
Series 98, 5.25%, 1/4/08 [DEM] 4,645,000 4,982,048
Zero Coupon, 5.66%, 7/4/27(5)[EUR] 5,000,000 989,385
- -------------------------------------------------------------------------------------------------------------------
Germany (Republic of) Stripped Bonds, Series JA24,
Zero Coupon, 5.54%, 1/4/24(5)[EUR] 5,865,000 1,472,157
-----------
9,125,556
- -------------------------------------------------------------------------------------------------------------------
GREAT BRITAIN--1.7%
United Kingdom Treasury Bonds, 10%, 9/8/03 [GBP] 2,285,000 4,233,562
- -------------------------------------------------------------------------------------------------------------------
INDONESIA--0.4%
Bank Negara Indonesia Unsec. Nts., 6.405%, 10/25/01(2) 1,000,000 765,000
- -------------------------------------------------------------------------------------------------------------------
Perusahaan Listr, 17% Nts., 8/21/01(6) [IDR] 2,000,000,000 125,673
- -------------------------------------------------------------------------------------------------------------------
PT Hutama Karya Promissory Nts., Zero Coupon, 4/9/99(4,6) [IDR] 5,000,000,000 164,572
-----------
1,055,245
- -------------------------------------------------------------------------------------------------------------------
ITALY--3.4%
Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali:
9.50%, 2/1/06 [EUR] 5,330,000 7,040,501
10.50%, 9/1/05 [EUR] 1,044,254 1,427,309
-----------
8,467,810
- -------------------------------------------------------------------------------------------------------------------
IVORY COAST--1.8%
Ivory Coast (Government of) Front Loaded Interest Reduction Bonds:
2%, 3/29/18(3) [FRF] 21,325,000 701,114
2%, 3/29/18(3) 6,915,000 1,417,575
-----------
- -------------------------------------------------------------------------------------------------------------------
Ivory Coast (Government of) Past Due Interest Bonds, Series F,
1.90%, 3/29/18(3) [FRF] 55,748,000 2,353,298
-----------
4,471,987
- -------------------------------------------------------------------------------------------------------------------
JAPAN--2.3%
Japan (Government of) Bonds, Series 141, 6.50%, 6/20/01 [JPY] 545,000,000 5,658,336
- -------------------------------------------------------------------------------------------------------------------
JORDAN--2.0%
Hashemite (Kingdom of Jordan) Bonds, Series DEF, 5.50%, 12/23/23(3) 890,000 539,563
- -------------------------------------------------------------------------------------------------------------------
Hashemite (Kingdom of Jordan) Disc. Bonds, 6.188%, 12/23/23(2) 6,815,000 4,463,825
-----------
5,003,388
</TABLE>
15 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEXICO--3.7%
Mexican Williams Sr. Nts., 5.83%, 11/15/08(2,8) $ 500,000 $ 442,500
- -------------------------------------------------------------------------------------------------------------------
Petroleos Mexicanos Debs., 14.50%, 3/31/06(6) [GBP] 1,280,000 2,382,076
- -------------------------------------------------------------------------------------------------------------------
United Mexican States Bonds, 11.375%, 9/15/16 6,000,000 6,345,000
-----------
9,169,576
- -------------------------------------------------------------------------------------------------------------------
MOROCCO--0.0%
Morocco (Kingdom of) Loan Participation Agreement, Tranche A,
2.018%, 1/1/09(2) [JPY] 18,095,235 126,299
- -------------------------------------------------------------------------------------------------------------------
NEW ZEALAND--0.7%
New Zealand (Government of) Bonds, 7%, 7/15/09 [NZD] 3,265,000 1,692,902
- -------------------------------------------------------------------------------------------------------------------
NIGERIA--1.0%
Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 4,092,394 2,401,151
- -------------------------------------------------------------------------------------------------------------------
NORWAY--4.0%
Norway (Government of) Bonds, 9.50%, 10/31/02 [NOK] 69,930,000 9,926,858
- -------------------------------------------------------------------------------------------------------------------
PANAMA--0.7%
Panama (Republic of) Interest Reduction Bonds, 4.25%, 7/17/14(2) 625,000 453,125
- -------------------------------------------------------------------------------------------------------------------
Panama (Republic of) Past Due Interest Debs., 5.819%, 7/17/16(2) 1,824,725 1,309,241
-----------
1,762,366
- -------------------------------------------------------------------------------------------------------------------
PERU--1.9%
Peru (Republic of) Sr. Nts., Zero Coupon, 4.53%, 2/28/16(5) 11,209,525 4,794,314
- -------------------------------------------------------------------------------------------------------------------
POLAND--0.4%
Poland (Republic of) Bonds, 12%, 6/12/01 [PLZ] 4,800,000 1,137,181
- -------------------------------------------------------------------------------------------------------------------
RUSSIA--1.7%
Russia (Government of) Principal Loan Debs., Series 24 yr., 12/15/20(4) 17,760,000 1,653,900
- -------------------------------------------------------------------------------------------------------------------
Russia (Government of) Sr. Unsec. Unsub. Nts., 11.75%, 6/10/03 720,000 379,080
- -------------------------------------------------------------------------------------------------------------------
Russia (Government of) Unsec. Bonds, 11%, 7/24/18 2,565,000 1,083,713
- -------------------------------------------------------------------------------------------------------------------
Russian Federation Unsec. Unsub. Nts.:
8.75%, 7/24/05 1,775,000 736,625
12.75%, 6/24/28 720,000 340,416
-----------
4,193,734
</TABLE>
16 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SLOVAKIA--1.0%
Slovenska Sporitelna AS Bank Sub. Nts., 6.61%, 12/20/06(2) $ 1,800,000 $ 1,350,000
- -------------------------------------------------------------------------------------------------------------------
Vseobenona Uverova Banka Unsec. Sub. Nts., 7.011%, 12/28/06(2) 1,640,000 1,164,400
-----------
2,514,400
- -------------------------------------------------------------------------------------------------------------------
SOUTH AFRICA--2.2%
South Africa (Republic of) Bonds:
Series 153, 13%, 8/31/10 [ZAR] 28,724,000 4,277,147
Series 175, 9%, 10/15/02 [ZAR] 8,100,000 1,199,214
-----------
5,476,361
- -------------------------------------------------------------------------------------------------------------------
SPAIN--1.8%
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado,
8.80%, 4/30/06 [EUR] 1,700,000 2,187,989
10%, 2/28/05 [EUR] 1,760,000 2,325,802
-----------
4,513,791
- -------------------------------------------------------------------------------------------------------------------
THE NETHERLANDS--2.4%
The Netherlands (Government of) Bonds:
6%, 1/15/06 [EUR] 1,070,000 1,206,214
7.75%, 3/1/05 [EUR] 3,950,000 4,797,798
-----------
6,004,012
- -------------------------------------------------------------------------------------------------------------------
TURKEY--2.6%
Turkey (Republic of) Treasury Bills, Zero Coupon,
78.57%, 8/23/00(5) [TRL] 5,610,000,000,000 6,625,225
- -------------------------------------------------------------------------------------------------------------------
VENEZUELA--3.6%
Venezuela (Republic of) Disc. Bonds, Series DL,
6.312%, 12/18/07(2) 9,452,804 7,337,739
- -------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Front-Loaded Interest Reduction Bonds,
Series A, 6.875%, 3/31/07(2) 892,857 676,339
- -------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Unsec. Bonds, 9.25%, 9/15/27 1,350,000 891,000
-----------
8,905,078
- -------------------------------------------------------------------------------------------------------------------
VIETNAM--0.8%
Vietnam (Government of) Bonds, 3%, 3/12/28(2) 7,095,000 1,995,469
-----------
Total Foreign Government Obligations (Cost $155,782,210) 146,813,091
</TABLE>
17 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LOAN PARTICIPATIONS--6.6%
Algeria (Republic of) Reprofiled Debt Loan Participation Nts.:
Tranche 1, 1.063%, 9/4/06(2) [JPY] 56,945,454 $ 248,705
Tranche 1, 6.812%, 9/4/06(2,6) 6,854,363 5,106,501
Tranche A, 2.175%, 3/4/00(2) [JPY] 9,490,909 86,468
Tranche A, 7.50%, 3/4/00(2,6) 179,424 176,060
- -------------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Unrestructured Nts.,
6.615%, 1/22/01(6) [JPY] 286,100,000 2,586,374
- -------------------------------------------------------------------------------------------------------------------
Jamaica (Government of) 1990 Refinancing
Agreement Nts., Tranche A, 6.125%, 10/16/00(2,6) 49,999 47,625
- -------------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation
Agreement, Tranche B, 5.906%, 1/1/09(2,6) 1,674,000 1,514,970
- -------------------------------------------------------------------------------------------------------------------
Panama Working Capital Loan Sinking Fund Nts.,
5.597%, 1/13/00(2,6) 250,000 228,750
- -------------------------------------------------------------------------------------------------------------------
PT Bank Negara Indonesia Gtd. Nts.:
Series 3 yr., 9.156%, 8/25/01(2,6) 1,670,000 1,411,150
Series 4 yr., 9.406%, 8/25/02(2,6) 890,000 725,350
- -------------------------------------------------------------------------------------------------------------------
PT Lippo Bank Nts.:
8.906%, 8/25/00(2,6) 1,050,000 934,500
9.156%, 8/25/01(2,6) 1,575,000 1,330,875
9.406%, 8/25/02(2,6) 350,000 285,250
- -------------------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation Agreement:
Tranche A, 1.148%, 9/30/00(2,6) [JPY] 46,763,636 399,689
Tranche B, 1.148%, 9/30/00(2,6) [JPY] 155,863,426 1,332,166
-----------
Total Loan Participations (Cost $14,825,954) 16,414,433
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--12.3%
- -------------------------------------------------------------------------------------------------------------------
CHEMICALS--1.3%
Reliance Industries Ltd.:
10.25% Unsec. Debs., Series B, 1/15/2097 3,900,000 3,126,412
10.25% Unsec. Nts., Series B, 1/15/20977 250,000 200,411
-----------
3,326,823
- -------------------------------------------------------------------------------------------------------------------
CONSUMER DURABLES--0.0%
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(6,8) 70,000 77,987
- -------------------------------------------------------------------------------------------------------------------
ENERGY--0.5%
Empresa Electrica del Norte Grande SA, 7.75%
Bonds, 3/15/06(6,8) 2,310,000 1,229,992
- -------------------------------------------------------------------------------------------------------------------
FINANCIAL--6.8%
Aktiebolaget Spintab, 5.50% Bonds, Series 169, 9/17/03 [SEK] 13,800,000 1,655,083
- -------------------------------------------------------------------------------------------------------------------
Allgemeine Hypotheken Bank AG, 5% Sec. Nts.,
Series 501, 9/2/09 [EUR] 1,400,000 1,425,023
- -------------------------------------------------------------------------------------------------------------------
Bakrie Investindo:
Zero Coupon Promissory Nts., 3/16/99(4,6) [IDR] 5,990,000,000 107,540
Zero Coupon Promissory Nts., 7/10/1998(4,6) [IDR] 2,000,000,000 35,907
</TABLE>
18 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL CONTINUED
Bayerische Vereinsbank AG, 5% Sec. Nts.,
Series 661, 7/28/04 [DEM] 4,990,208 $ 5,365,592
- -------------------------------------------------------------------------------------------------------------------
Dresdner Funding Trust II, 5.79% Sub. Nts.,
6/30/11(6,8) [EUR] 2,670,000 2,622,037
- -------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.,
6.875% Sr. Unsec. Nts., 6/7/02 [GBP] 2,370,000 3,917,790
- -------------------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50%
Gtd. Nts., 3/29/04(4,6) 365,000 12,775
- -------------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa:
11% Nts., 6/18/03(4,6) 500,000 65,000
11% Nts., 7/2/03(4,6) 1,000,000 130,000
20% Nts., 3/6/00(4) [IDR] 3,000,000,000 46,679
24% Nts., 6/16/03(4) [IDR] 2,000,000,000 31,119
24% Nts., 6/19/03(4) [IDR] 4,107,500,000 63,911
- -------------------------------------------------------------------------------------------------------------------
SanLuis Corp., SA de CV, 8.875% Sr. Unsec. Nts.,
3/18/08 1,770,000 1,500,075
-----------
16,978,531
- -------------------------------------------------------------------------------------------------------------------
HOUSING--0.5%
Internacional de Ceramica SA, 9.75% Unsec
Unsub. Nts., 8/1/02(7,9,10) 700,000 563,500
- -------------------------------------------------------------------------------------------------------------------
Internacional de Ceramica SA, 9.75% Unsec
Unsub. Nts., 8/1/02 750,000 603,750
-----------
1,167,250
- -------------------------------------------------------------------------------------------------------------------
MANUFACTURING--0.0%
Mechala Group Jamaica Ltd., 12% Bonds,
2/15/02(4,6,8) 250,000 93,125
- -------------------------------------------------------------------------------------------------------------------
MEDIA/ENTERTAINMENT: TELECOMMUNICATIONS--2.9%
Netia Holdings BV, 0%/11% Sr. Disc. Nts.,
11/1/07(11) [DEM] 1,300,000 440,657
- -------------------------------------------------------------------------------------------------------------------
Netia Holdings II BV, 13.50% Sr. Nts.,
6/15/09(7) [EUR] 2,650,000 2,804,611
- -------------------------------------------------------------------------------------------------------------------
NTL, Inc., 9.50% Sr. Unsec. Unsub. Nts., Series B,
4/1/08 [GBP] 580,000 940,874
- -------------------------------------------------------------------------------------------------------------------
Telewest Communications plc, 0%/9.875% Sr. Nts.,
4/15/09(7,11) [GBP] 3,110,000 3,073,115
-----------
7,259,257
- -------------------------------------------------------------------------------------------------------------------
TRANSPORTATION--0.3%
General Motors Acceptance Corp., 6.875% Nts., Series EC,
9/9/04 [GBP] 430,000 696,447
-----------
Total Corporate Bonds and Notes (Cost $35,178,491) 30,829,412
</TABLE>
19 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STRUCTURED INSTRUMENTS--12.5%
Citibank (New York) Mexican Linked Nts.:
27.40%, 9/20/01 $ 2,775,000 $ 2,769,450
28.60%, 9/13/01 2,570,000 2,564,860
- -------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Indonesian Rupiah Linked Nts., 13.86%, 8/3/00 2,220,000 1,777,110
Indonesian Rupiah Linked Nts., 13.667%, 6/30/00 2,665,000 2,097,355
New York, Philippine Peso/Japanese Yen Linked Nts.,
10.55%, 5/12/00 2,600,000 2,097,420
Russian OFZ Linked Nts.:
25%, 2/6/02(2) [RUR] 625,200 2,029
25%, 5/22/02(2) [RUR] 625,200 1,920
25%, 6/5/02(2) [RUR] 625,200 1,930
25%, 9/18/02(2) [RUR] 625,200 1,823
25%, 10/9/02(2) [RUR] 625,200 1,779
25%, 1/22/03(2) [RUR] 625,200 1,670
25%, 2/5/03(2) [RUR] 625,200 1,685
25%, 5/21/03(2) [RUR] 625,200 1,630
25%, 6/4/03(2) [RUR] 625,200 1,623
25%, 9/17/03(2) [RUR] 625,200 1,598
25%, 10/8/03(2) [RUR] 625,200 1,563
25%, 1/21/04(2) [RUR] 625,200 1,494
- -------------------------------------------------------------------------------------------------------------------
Deutsche Morgan Grenfell, Russian OFZ Linked Nts.,
Zero Coupon, 187.65%, 12/15/01(5) [RUR] 2,143,000 3,864
- -------------------------------------------------------------------------------------------------------------------
Hong Kong & Shanghai Banking Corp. Linked Receipt Nts.,
Linked to the Korean Exchange Bank Floating Nts.
due 12/23/99, Zero Coupon, 13.32%, 12/28/99(5) 2,900,000 2,831,125
- -------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. Russian OFZ Linked Nts.:
Series L, 25%, 2/6/02(2) [RUR] 566,080 10,812
Series L, 25%, 5/22/02(2) [RUR] 566,080 10,229
Series L, 25%, 6/5/02(2) [RUR] 566,080 10,274
Series L, 25%, 9/18/02(2) [RUR] 566,080 9,713
Series L, 25%, 10/9/02(2) [RUR] 566,080 9,473
Series L, 25%, 1/22/03(2) [RUR] 566,080 8,888
Series L, 25%, 2/5/03(2) [RUR] 566,080 8,973
Series L, 25%, 5/21/03(2) [RUR] 566,080 8,681
Series L, 25%, 6/4/03(2) [RUR] 566,080 8,636
Series L, 25%, 9/17/03(2) [RUR] 566,080 8,513
Series L, 25%, 10/8/03(2) [RUR] 566,080 8,210
Series L, 25%, 1/21/04(2) [RUR] 566,080 7,986
Series L, Zero Coupon, 53.77%, 12/15/01(5) [RUR] 1,940,000 20,588
- -------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co. Inc. Turkey Treasury Bond Linked Nts.:
81%, 1/9/01(2) [TRL] 1,926,700,000,000 4,455,825
85.25%, 1/7/01(2) [TRL] 1,110,000,000,000 2,567,066
87.165%, 1/7/01(2) [TRL] 541,348,794,013 1,237,731
</TABLE>
20 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STRUCTURED INSTRUMENTS CONTINUED
Standard Chartered Bank:
Argentine Peso Linked Nts., 13.512%, 3/10/00 $ 2,612,000 $ 2,632,635
Argentine Peso Linked Nts., 16.10%, 3/3/00 1,300,000 1,312,740
Indian Rupee/Japanese Yen Linked Nts.,
Zero Coupon, 12.73%, 8/17/01(5) 3,525,000 2,586,998
Indonesian Rupiah Linked Nts., 18.19%, 8/18/00 1,300,000 1,251,250
Philippine Peso/Japanese Yen Linked Nts.,
16.04%, 5/10/00 1,300,000 974,350
-----------
Total Structured Instruments (Cost $34,690,328) 31,311,499
DATE STRIKE CONTRACTS
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
OPTIONS PURCHASED--0.0%
European Monetary Unit Call Opt. 10/4/99 EUR 1.078 26,840,000 66,832
- -------------------------------------------------------------------------------------------------------------------
Hong Kong Dollar Put Opt. 1/11/00 HKD 7.894 22,497,900 2,025
- -------------------------------------------------------------------------------------------------------------------
Japanese Yen Call Opt. 10/6/99 JPY 100.000 259,000,000 --
- -------------------------------------------------------------------------------------------------------------------
Japanese Yen Call Opt. 10/27/99 JPY 106.600 128,000,000 25,728
- -------------------------------------------------------------------------------------------------------------------
Japanese Yen Call Opt. 10/20/99 JPY 108.500 533,000,000 15,457
- -------------------------------------------------------------------------------------------------------------------
Mexican Peso Put Opt.6 10/8/99 MXN 11.000 29,810,000 2,981
-----------
Total Options Purchased (Cost $778,039) 113,023
FACE
AMOUNT(1)
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--3.8%
Repurchase agreement with PaineWebber, Inc., 5.29%,
dated 9/30/99, to be repurchased at $9,401,381 on 10/1/99,
collateralized by U.S. Treasury Bills, 12/23/99--7/20/00, with
a value of $8,629,184, U. S. Treasury Nts., 7.875%, 11/15/04,
with a value of $964,883 (Cost $9,400,000) $ 9,400,000 9,400,000
- -------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $254,946,748) 95.6% 239,214,105
- -------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 4.4 11,110,186
----------- -----------
NET ASSETS 100.0% $250,324,291
----------- -----------
----------- -----------
</TABLE>
21 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS CONTINUED
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP Argentine Peso IDR Indonesian Rupiah
AUD Australian Dollar JPY Japanese Yen
CAD Canadian Dollar MXN Mexican Nuevo Peso
DEM German Mark NOK Norwegian Krone
DKK Danish Krone NZD New Zealand Dollar
EUR Euro PLZ Polish Zloty
FRF French Franc RUR Russian Ruble
GBP British Pound Sterling SEK Swedish Krona
HKD Hong Kong Dollar TRL Turkish Lira
2. Represents the current interest rate for a variable rate security.
3. Represents the current interest rate for an increasing rate security.
4. Non-income-producing--issuer is in default.
5. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
6. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $6,641,637 or 2.65% of the Fund's net
assets as of September 30, 1999.
8. Securities with an aggregate market value of $479,250 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
9. A sufficient amount of liquid assets has been designated to cover outstanding
written options, as follows:
<TABLE>
<CAPTION>
FACE CONTRACTS EXPIRATION EXERCISE PREMIUM MARKET VALUE
SUBJECT TO PUT DATE PRICE RECEIVED SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mexican Nuevo Peso Put Option 29,810,000 10/8/99 MXN 11.00 $ 66,937 $ --
Polish Zloty Put Option 22,273,537 11/4/99 PLZ 4.18 121,790 54,080
----------------------------
$188,727 $54,080
----------------------------
----------------------------
</TABLE>
10. A sufficient amount of securities has been designated to cover outstanding
foreign currency exchange contracts. See Note 5 of Notes to Financial
Statements.
11. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
22 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
FOOTNOTES TO STATEMENT OF INVESTMENTS CONTINUED
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC DIVERSIFICATION, AS A
PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
<TABLE>
<CAPTION>
GEOGRAPHIC DIVERSIFICATION MARKET VALUE PERCENT
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Germany $ 18,538,210 7.7%
Argentina 17,662,338 7.4
Mexico 17,171,211 7.2
United States 15,068,133 6.3
Turkey 14,885,847 6.2
Brazil 14,290,265 6.0
Indonesia 11,361,016 4.7
Norway 9,926,858 4.1
Venezuela 8,905,079 3.7
Italy 8,467,809 3.5
Algeria 8,204,107 3.4
Great Britain 7,306,678 3.1
The Netherlands 6,004,012 2.5
India 5,913,820 2.5
Japan 5,658,336 2.4
South Africa 5,476,361 2.3
Jordan 5,003,388 2.1
Peru 4,794,314 2.0
Bulgaria 4,570,650 1.9
Spain 4,513,792 1.9
Ivory Coast 4,471,986 1.9
Poland 4,382,450 1.8
Russia 4,349,319 1.8
Canada 3,714,652 1.6
Philippines 3,071,770 1.3
Korea, Republic of (South) 2,831,125 1.2
Denmark 2,599,924 1.1
Slovakia 2,514,400 1.1
Nigeria 2,401,151 1.0
Vietnam 1,995,469 0.8
Panama 1,991,116 0.8
Australia 1,732,723 0.7
Trinidad & Tobago 1,731,855 0.7
New Zealand 1,692,902 0.7
Sweden 1,655,083 0.7
Morocco 1,641,269 0.7
Chile 1,229,992 0.5
Colombia 1,088,482 0.5
Ecuador 177,476 0.1
Jamaica 140,750 0.1
Switzerland 77,987 0.0
--------------------------------
Total $239,214,105 100.0%
--------------------------------
--------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
23 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at value (cost $254,946,748)--see accompanying statement $ 239,214,105
- ----------------------------------------------------------------------------------------------------
Cash 195,474
- ----------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency exchange contracts--Note 5 1,271,564
- ----------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and principal paydowns 6,194,641
Investments sold 5,428,257
Shares of beneficial interest sold 1,718,895
Daily variation on futures contracts--Note 6 99,997
Other 302,339
---------------
Total assets 254,425,272
- ----------------------------------------------------------------------------------------------------
LIABILITIES
Unrealized depreciation on foreign currency exchange contracts--Note 5 139,602
- ----------------------------------------------------------------------------------------------------
Options written, at value (premiums received $188,727)--
see accompanying statement--Note 7 54,080
- ----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,717,292
Dividends 1,289,101
Shares of beneficial interest redeemed 564,799
Distribution and service plan fees 148,440
Closed foreign currency exchange contracts 75,197
Transfer and shareholder servicing agent fees 37,037
Daily variation on futures contracts--Note 6 10,507
Other 64,926
---------------
Total liabilities 4,100,981
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
NET ASSETS $250,324,291
---------------
---------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $317,506,115
- ----------------------------------------------------------------------------------------------------
Undistributed net investment income 744,959
- ----------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (53,337,044)
- ----------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and
liabilities denominated in foreign currencies (14,589,739)
---------------
Net assets $250,324,291
---------------
---------------
</TABLE>
24 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$102,236,116 and 24,151,631 shares of beneficial interest outstanding) $4.23
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $4.44
- -------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $118,632,046
and 28,102,977 shares of beneficial interest outstanding) $4.22
- -------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $29,456,129 and 6,980,102 shares of beneficial interest outstanding) $4.22
</TABLE>
See accompanying Notes to Financial Statements.
25 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended September 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest (net of foreign withholding taxes of $89,821) $ 37,345,712
- ----------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $1,627) 9,222
---------------
Total income 37,354,934
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
EXPENSES
Management fees--Note 4 1,886,864
- ----------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 248,547
Class B 1,228,808
Class C 289,134
- ----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 414,642
- ----------------------------------------------------------------------------------------------------
Shareholder reports 127,249
- ----------------------------------------------------------------------------------------------------
Custodian fees and expenses 68,597
- ----------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 18,327
- ----------------------------------------------------------------------------------------------------
Trustees' compensation 2,423
- ----------------------------------------------------------------------------------------------------
Other 78,633
---------------
Total expenses 4,363,224
Less expenses paid indirectly--Note 1 (40,358)
---------------
Net expenses 4,322,866
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 33,032,068
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (12,342,461)
Closing of futures contracts (1,258,647)
Closing and expiration of option contracts written--Note 7 1,080,328
Foreign currency transactions (13,602,130)
---------------
Net realized loss (26,122,910)
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 15,641,368
Translation of assets and liabilities denominated in foreign currencies 1,895,302
---------------
Net change 17,536,670
---------------
Net realized and unrealized loss (8,586,240)
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $24,445,828
---------------
---------------
</TABLE>
See accompanying Notes to Financial Statements.
26 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1999 1998
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 33,032,068 $ 28,345,575
- ----------------------------------------------------------------------------------------------------------------
Net realized loss (26,122,910) (32,072,921)
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 17,536,670 (33,393,415)
--------------------------------------
Net increase (decrease) in net assets resulting from operations 24,445,828 (37,120,761)
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (12,490,131) (11,278,509)
Class B (14,069,900) (12,501,126)
Class C (3,315,800) (2,851,020)
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (464,690)
Class B -- (544,637)
Class C -- (123,007)
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial
interest transactions--Note 2:
Class A 7,013,720 8,857,621
Class B 1,272,305 28,481,664
Class C 2,430,203 6,178,227
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase (decrease) 5,286,225 (21,366,238)
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 245,038,066 266,404,304
--------------------------------------
End of period (including undistributed net investment
income of $744,959 and $1,061,401, respectively) $250,324,291 $245,038,066
--------------------------------------
--------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
27 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A YEAR ENDED SEPTEMBER 30, 1999 1998 1997 1996 1995(1)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $4.32 $5.51 $5.49 $5.10 $5.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .58 .56 .52 .52 .15
Net realized and unrealized gain (loss) (.14) (1.20) .08 .40 .10
----------------------------------------------------------------
Total income (loss) from
investment operations .44 (.64) .60 .92 .25
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.53) (.53) (.53) (.53) (.15)
Distributions from net realized gain -- (.02) (.05) -- --
----------------------------------------------------------------
Total dividends and distributions
to shareholders (.53) (.55) (.58) (.53) (.15)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.23 $4.32 $5.51 $5.49 $5.10
----------------------------------------------------------------
----------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 10.58% (12.50)% 11.33% 18.82% 5.13%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $102,236 $ 97,404 $114,847 $52,128 $3,984
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $101,948 $108,264 $ 89,112 $19,817 $2,566
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 13.47% 11.09% 9.24% 9.60% 9.94%
Expenses, before voluntary assumption
and indirect expenses 1.26% 1.24%(4) 1.28%(4) 1.59%(4) 1.59%(4)
Expenses, net of voluntary assumption
and indirect expenses 1.25% N/A N/A 1.49% 0.41%
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 285% 446% 280% 273% 122%
</TABLE>
1. For the period from June 15, 1995 (commencement of operations) to
September 30, 1995.
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 reflects the effect of expenses paid indirectly by the Fund.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended September 30, 1999, were $628,527,274 and $544,904,486, respectively.
See accompanying Notes to Financial Statements
28 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
<TABLE>
<CAPTION>
CLASS B YEAR ENDED SEPTEMBER 30, 1999 1998 1997 1996 1995(1)
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $4.31 $5.50 $5.48 $5.10 $5.00
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .55 .52 .48 .48 .14
Net realized and unrealized gain (loss) (.14) (1.20) .07 .39 .10
----------------------------------------------------------------
Total income (loss) from
investment operations .41 (.68) .55 .87 .24
- -----------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.50) (.49) (.48) (.49) (.14)
Distributions from net realized gain -- (.02) (.05) -- --
----------------------------------------------------------------
Total dividends and distributions
to shareholders (.50) (.51) (.53) (.49) (.14)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.22 $4.31 $5.50 $5.48 $5.10
----------------------------------------------------------------
----------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 9.79% (13.16)% 10.52% 17.71% 4.92%
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $118,632 $119,998 $122,874 $45,207 $3,238
- -----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $122,878 $128,789 $ 87,557 $17,891 $1,125
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 12.70% 10.33% 8.57% 8.81% 9.20%
Expenses, before voluntary assumption
and indirect expenses 2.02% 2.00%(4) 2.04%(4) 2.36%(4) 2.21%(4)
Expenses, net of voluntary assumption
and indirect expenses 2.01% N/A N/A 2.26% 0.89%
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 285% 446% 280% 273% 122%
</TABLE>
1. For the period from June 15, 1995 (commencement of operations) to
September 30, 1995.
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 reflects the effect of expenses paid indirectly by the Fund.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended September 30, 1999, were $628,527,274 and $544,904,486, respectively.
See accompanying Notes to Financial Statements
29 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
CLASS C YEAR ENDED SEPTEMBER 30, 1999 1998 1997 1996 1995(1)
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $4.31 $5.50 $5.48 $5.09 $5.00
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .55 .52 .48 .48 .14
Net realized and unrealized gain (loss) (.14) (1.20) .07 .39 .09
----------------------------------------------------------------
Total income (loss) from
investment operations .41 (.68) .55 .87 .23
- -----------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.50) (.49) (.48) (.48) (.14)
Distributions from net realized gain -- (.02) (.05) -- --
----------------------------------------------------------------
Total dividends and distributions
to shareholders (.50) (.51) (.53) (.48) (.14)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.22 $4.31 $5.50 $5.48 $5.09
----------------------------------------------------------------
----------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 9.80% (13.16)% 10.52% 17.92% 4.73%
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $29,456 $27,636 $28,684 $10,282 $201
- -----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $28,918 $29,336 $19,883 $ 4,039 $ 97
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 12.76% 10.33% 8.62% 8.76% 9.36%
Expenses, before voluntary assumption
and indirect expenses 2.02% 2.00%(4) 2.04%(4) 2.36%(4) 2.26%(4)
Expenses, net of voluntary assumption
and indirect expenses 2.01% N/A N/A 2.25% 0.85%
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 285% 446% 280% 273% 122%
</TABLE>
1. For the period from June 15, 1995 (commencement of operations) to September
30, 1995.
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 reflects the effect of expenses paid indirectly by the Fund.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended September 30, 1999, were $628,527,274 and $544,904,486,
respectively.
See accompanying Notes to Financial Statements
30 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer International Bond Fund (the Fund) is a registered investment
company organized as a Massachusetts 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 objective is to seek total return. The Fund's investment
advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class
B and Class C shares. Class A shares are sold with a front-end sales charge on
investments up to $1 million. Class B and Class C shares may be subject to a
contingent deferred sales charge (CDSC). All classes of shares have identical
rights to earnings, assets and voting privileges, except that each class has its
own expenses directly attributable to that class and exclusive voting rights
with respect to matters affecting that class. Classes A, B and C have separate
distribution and/or service plans. Class B shares will automatically convert to
Class A shares six years after the date of purchase. The following is a summary
of significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. 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
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 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. 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. Foreign currency exchange contracts are valued based on the
closing prices of the foreign 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 is used.
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in foreign currency-linked structured notes
whose market value and redemption price are linked to foreign currency exchange
rates. The structured notes may be leveraged, which increases the notes'
volatility relative to the face of the security. Fluctuations in value of these
securities are recorded as unrealized gains and losses in the accompanying
financial statements. As of September 30, 1999, the market value of these
securities comprised 12.50% of the Fund's net assets and resulted in realized
and unrealized losses of $4,894,003. The Fund also hedges a portion of the
foreign currency exposure generated by these securities, as discussed in Note 5.
31 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
SECURITY CREDIT RISK. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. As of September 30, 1999, securities with an
aggregate market value of $2,581,104, representing 1.03% of the Fund's net
assets, were in default.
- --------------------------------------------------------------------------------
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 foreign 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 Statement 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 an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
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 to shareholders. Therefore, no federal
income or excise tax provision is required. As of September 30, 1999, the Fund
had available for federal tax purposes an unused capital loss carryover of
approximately $27,469,000, which expires between 2006 and 2007.
32 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
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.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended September 30, 1999, amounts have been reclassified to reflect a
decrease in undistributed net investment income of $3,472,679. Accumulated net
realized loss on investments was decreased by the same amount.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of trade date 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. Dividends-in-kind are recognized as income on the ex-dividend date, at
the current market value of the underlying security. Interest on payment-in-kind
debt instruments is accrued as income at the coupon rate and a market adjustment
is made periodically.
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.
33 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1999 YEAR ENDED SEPTEMBER 30, 1998
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------
CLASS A
<S> <C> <C> <C> <C>
Sold 11,247,933 $ 48,852,991 11,871,238 $ 60,193,894
Dividends and/or
distributions reinvested 1,806,309 7,837,034 1,567,641 7,767,951
Redeemed (11,446,723) (49,676,305) (11,744,939) (59,104,224)
-----------------------------------------------------------
Net increase 1,607,519 $ 7,013,720 1,693,940 $ 8,857,621
-----------------------------------------------------------
-----------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------
CLASS B
<S> <C> <C> <C> <C>
Sold 7,369,029 $ 32,003,600 12,461,105 $ 62,756,778
Dividends and/or
distributions reinvested 1,549,542 6,704,118 1,334,005 6,596,728
Redeemed (8,655,920) (37,435,413) (8,302,252) (40,871,842)
-----------------------------------------------------------
Net increase 262,651 $ 1,272,305 5,492,858 $ 28,481,664
-----------------------------------------------------------
-----------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------
CLASS C
<S> <C> <C> <C> <C>
Sold 2,727,759 $ 11,829,225 3,210,030 $ 16,168,643
Dividends and/or
distributions reinvested 450,539 1,948,375 387,861 1,917,981
Redeemed (2,613,007) (11,347,397) (2,401,923) (11,908,397)
-----------------------------------------------------------
Net increase 565,291 $ 2,430,203 1,195,968 $ 6,178,227
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON SECURITIES
As of September 30, 1999, net unrealized depreciation on securities and options
written of $15,597,996 was composed of gross appreciation of $5,185,272, and
gross depreciation of $20,783,268.
34 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
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 an annual fee of
0.75% of the first $200 million of average annual net assets of the Fund, 0.72%
of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200
million, 0.60% of the next $200 million and 0.50% of average annual net assets
in excess of $1 billion. The Fund's management fee for the year ended September
30, 1999 was 0.74% of average annual net assets for each class of shares.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B ON CLASS C
SALES CHARGES SALES CHARGES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
YEAR ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
September 30, 1999 $427,421 $118,394 $41,586 $887,632 $83,883
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
CONTINGENT DEFERRED CONTINGENT DEFERRED CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES
YEAR ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
September 30, 1999 $-- $435,700 $8,730
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
35 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
CLASS A SERVICE PLAN FEES. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% 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 September 30, 1999, payments under
the Class A Plan totaled $248,547, all of which was paid by the Distributor to
recipients. That included $15,717 paid to an affiliate of the Distributor's
parent company. Any unreimbursed expenses the Distributor incurs with respect to
Class A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares may
be more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and from the Fund under the plans. If either the
Class B or the Class C 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 September 30, 1999,
were as follows:
<TABLE>
<CAPTION>
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
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $1,228,808 $1,008,649 $5,605,885 4.73%
Class C Plan 289,134 154,968 554,577 1.88
</TABLE>
36 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
5. 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
foreign 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 Statement of Operations.
As of September 30, 1999, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
VALUATION
CONTRACT AS OF
EXPIRATION AMOUNT SEPTEMBER UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000'S) 30, 1999 APPRECIATION DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRACTS TO PURCHASE
Euro (EUR) 11/19/99 EUR 2,481 $ 2,653,276 $ 54,716 $ --
Euro (EUR) 11/24/99 EUR 2,430 2,599,383 52,572 --
Japanese Yen (JPY) 10/4/99 JPY 1,725,000 16,211,683 1,056,522 --
-----------------------------
1,163,810 --
-----------------------------
CONTRACTS TO SELL
Australian Dollar (AUD) 11/17/99 AUD 1,450 947,010 -- 5,771
British Pound Sterling (GBP) 10/12/99 GBP 3,505 5,772,481 -- 93,961
British Pound Sterling (GBP) 11/29/99 GBP 1,480 2,437,606 -- 3,213
British Pound Sterling (GBP) 11/19/99 GBP 1,600 2,635,217 -- 36,657
Japanese Yen (JPY) 11/24/99 JPY 262,829 2,489,801 157,010 --
New Zealand Dollar (NZD) 11/15/99 NZD 3,320 1,716,077 50,744 --
-----------------------------
107,754 139,602
-----------------------------
Total Unrealized Appreciation and Depreciation $1,271,564 $139,602
-----------------------------
-----------------------------
</TABLE>
37 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
The Fund may buy and sell futures contracts in order to gain exposure to or to
seek to protect against changes in interest rates. The Fund may also buy or
write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund may recognize a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable
and/or payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of September 30, 1999, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
VALUATION AS OF UNREALIZED
EXPIRATION NUMBER OF SEPTEMBER 30, APPRECIATION
CONTRACT DESCRIPTION DATE CONTRACTS 1999 (DEPRECIATION)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONTRACTS TO PURCHASE
Euro-German Foreign Government 12/8/99 384 $42,875,367 $ (75,764)
U.S. Long Bond 12/20/99 49 5,582,938 (80,774)
U.S. Treasury 10 yr. 12/20/99 1 110,125 266
----------
(156,272)
----------
CONTRACTS TO SELL
U.K. Long Gilt 12/24/99 11 1,928,438 44,746
----------
$(111,526)
----------
----------
</TABLE>
38 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements 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.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
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 year ended September 30, 1999, was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
-----------------------------------------------------------------------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
OPTIONS PREMIUMS OPTIONS PREMIUMS
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding as of
September 30, 1998 1,783,440,000 $ 404,348 2,105,362,820 $ 318,516
Options written 2,687,021,594 1,262,262 2,240,924,421 1,734,986
Options closed or expired (2,686,295,380) (935,602) (4,281,896,081) (1,324,600)
Options exercised (1,784,166,214) (731,008) (12,307,623) (540,175)
-----------------------------------------------------------------------------------------
Options outstanding as of
September 30, 1999 -- $ -- 52,083,537 $ 188,727
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
</TABLE>
39 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. ILLIQUID OR RESTRICTED SECURITIES
As of September 30, 1999, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may also be
considered illiquid if it lacks a readily available market or if its valuation
has not changed for a certain period of time. The Fund intends to invest no more
than 10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of September 30, 1999, was $23,128,925,
which represents 9.24% of the Fund's net assets, of which $77,987 is considered
restricted. Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SEPTEMBER 30,
SECURITY ACQUISITION DATE COST PER UNIT 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS
Tag Heuer International SA, 12% Sr. Sub. Nts.,
12/15/05 5/14/96 105.25% 111.41%
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
9. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. 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
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended September 30,
1999.
40 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
TO 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, 1999, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended September 30, 1999
and September 30, 1998, and the financial highlights for the period June 15,
1995, to September 30, 1999. 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 audits 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 as of
September 30, 1999, 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 audits provide 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 as of September 30, 1999, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
October 21, 1999
41 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION UNAUDITED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2000, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1999. Regulations of
the U.S. Treasury Department require the Fund to report information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the fiscal year ended
September 30, 1999, are eligible for the corporate dividend-received deduction.
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 regulations, we recommend that
you consult your tax advisor for specific guidance.
42 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
A SERIES OF OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES James C. Swain, Trustee and Chairman of the Board
Bridget A. Macaskill, Trustee and President
William H. Armstrong, Trustee
Robert G. Avis, Trustee
William A. Baker, Trustee
George C. Bowen, Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Arthur P. Steinmetz, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR OppenheimerFunds, Inc.
- --------------------------------------------------------------------------------
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
- --------------------------------------------------------------------------------
TRANSFER AND OppenheimerFunds 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, ARE NOT INSURED BY THE FDIC OR ANY
OTHER AGENCY, AND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED.
43 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
OPPENHEIMERFUNDS FAMILY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S><C>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
GLOBAL EQUITY
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
EQUITY
STOCK STOCK & BOND
Enterprise Fund(1) Main Street-Registered TradeMark-
Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street-Registered Trademark- Total Return Fund
Small Cap Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund SPECIALTY
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
FIXED INCOME
TAXABLE MUNICIPAL
International Bond Fund California Municipal Fund(3)
World Bond Fund Main Street California Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
ROCHESTER DIVISION
Rochester Fund Municipals
Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
MONEY MARKET(4)
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund."
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
- -C- Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
44 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
INFORMATION AND SERVICES
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to help.
- --------------------------------------------------------------------------------
INTERNET
24-hr access to account information and transactions
www.oppenheimerfunds.com
GENERAL INFORMATION
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
TELEPHONE TRANSACTIONS
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
PHONELINK
24-hr automated information and automated transactions
1.800.533.3310
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
OPPENHEIMERFUNDS INFORMATION
Hotline 24 hours a day, timely and insightful
messages on the economy and issues that may affect your investments
1.800.835.3104
TRANSFER AND SHAREHOLDER SERVICING AGENT
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
- --------------------------------------------------------------------------------
[LOGO] OPPENHEIMERFUNDS-REGISTERED TRADEMARK-
DISTRIBUTOR, INC.
RA0880.001.0999 November 29, 1999
