<PAGE> 1
[PHOTO]
SEMIANNUAL REPORT MARCH 31, 2000
Oppenheimer
INTERNATIONAL BOND FUND
[OPPENHEIMERFUNDS LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
1 President's Letter
2 An Interview
with Your Fund's
Managers
9 Financial
Statements
34 Officers and Trustees
REPORT HIGHLIGHTS
Of the various international markets we invest, EMERGING MARKET BONDS
CONTRIBUTED THE MOST TO PERFORMANCE. WE GENERALLY FOCUSED ON HIGHER YIELDING
LOWER-RATED BONDS FROM GOVERNMENTS AND COMPANIES IN COUNTRIES WITH FAST-GROWING
ECONOMIES such as Brazil and Argentina. We believe that the FUND'S HOLDINGS MAY
BENEFIT AS THE GLOBAL FIXED INCOME INVESTMENT ENVIRONMENT AND DEMAND FOR
HIGHER-YIELDING SECURITIES IMPROVES.
CUMULATIVE
TOTAL RETURNS
For the 6-Month Period
Ended 3/31/00*
CLASS A
Without With
Sales Chg. Sales Chg.
----------------------------------
10.39% 5.15%
CLASS B
Without With
Sales Chg. Sales Chg.
----------------------------------
10.03% 5.03%
CLASS C
Without With
Sales Chg. Sales Chg.
----------------------------------
10.02% 9.02%
* See Notes, page 7, for further details.
<PAGE> 3
[PHOTO]
JAMES C. SWAIN
Chariman
Oppenhiemer
International
Bond Fund
BRIDGET A. MACASKILL
President
Oppenhiemer
International
Bond Fund
PRESIDENT'S LETTER
------------------------------------------------------------------------------
DEAR SHAREHOLDER,
For many years, we have encouraged investors to consider whether they could
tolerate more risk in their long-term investments by participating in the stock
market, which has historically provided higher long-term returns than any other
asset class. Today, however, we have a very different concern: some investors
may be assuming too much risk by concentrating their investments in just a
handful of stocks or sectors or by "chasing performance."
Alan Greenspan, the Chairman of the Federal Reserve Board, has stated his
view that the recent spectacular returns of some sectors of the market are
partly responsible for pushing our economy to growth rates that could lead to
higher infla- tion. The dramatic rise in the prices of a narrow segment of the
market has created enormous wealth for some investors. In turn, those investors
are spending at a rate that the Fed believes may threaten the healthy growth of
our economy.
That's why the Fed has been raising interest rates steadily and decisively
over the past year. By making borrowing more expensive, the Fed is attempting
to slow economic growth. It is a precarious balancing act: too much tightening
creates the risk of recession, while too little opens the door to inflation.
The implications are clear: investors must be prepared for near-term market
volatility. In the bond market, higher interest rates usually lead to lower
bond prices. In the stock market, slower economic growth could reduce corporate
earnings and put downward pressure on stock prices. Highly valued stocks may be
particularly vulnerable to a correction. The Securities and Exchange Commission
Chairman, Arthur Levitt, has cautioned investors against the expectation that
the types of returns seen in the recent bull market will last forever. We
agree.
1 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 4
PRESIDENT'S LETTER
------------------------------------------------------------------------------
Because of the prospect of continued market volatility, we encourage you to
consider diversifying your investments. Indeed, diversification may help you
mitigate the effects of sharp declines in any one area. It may also help you
better position your portfolio to seek greater returns over the long run.
While "new economy" stocks have risen since our last report to you, many
"old economy" stocks are selling at unusually low prices. In the bond market,
higher interest rates over the short term may reduce inflation concerns, which
should be beneficial over the long term. By buying out-of-favor investments,
you may be able to profit when and if they return to favor in the future. Of
course, there is no assurance that value investing will return to favor in the
market, but it may be a diversification strategy to consider for part of your
portfolio.
What specific investments should you consider today so that you are prepared
for tomorrow? The answer depends on your individual investing goals, risk
tolerance and financial circumstances. We urge you to talk with your financial
advisor about ways to diversify your portfolio. This may include considering
global diversification as part of your strategy. While investing abroad has
special risks, such as the effects of foreign currency fluctuation, it also
offers opportunities to participate in global economic growth and to hedge
against the volatility in U.S. markets.
We thank you for your continued confidence in OppenheimerFunds, The Right
Way to Invest.
Sincerely,
/s/JAMES C. SWAIN /s/BRIDGET A. MACASKILL
James C. Swain Bridget A. Macaskill
April 24, 2000
2 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 5
AN INTERVIEW WITH YOUR FUND'S MANAGERS
------------------------------------------------------------------------------
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM(l to r)
Art Steinmetz
Ruggero de'Rossi
HOW DID OPPENHEIMER INTERNATIONAL BOND FUND PERFORM OVER THE SIX-MONTH PERIOD
THAT ENDED MARCH 31, 2000?
We are generally pleased with the Fund's positive returns in a very challenging
investment environment. During the six-month reporting period,
stronger-than-expected economic growth throughout the world fueled global
investors' concerns that inflationary pressures might reemerge. As a result,
interest rates in many nations and most bond yields on new issues rose. Because
bond yields and prices move in opposite directions, higher interest rates
eroded the value of many fixed income securities. However, we focused the
portfolio on high-yielding sectors of the international bond market and were
able to provide positive returns in a declining market.(1)
WHY WERE THE PAST SIX MONTHS A DIFFICULT TIME FOR MOST BONDS?
When the reporting period began on October 1, 1999, it had become apparent that
many of the world's economies were growing robustly and simultaneously. In the
emerging markets of Asia, Latin America and Eastern Europe, the recessions
caused by the 1998 global financial crisis had quickly yielded to renewed
economic growth. In the developed markets, most European economies continued to
grow moderately, while Japan's economy began to show signs of recovery after
many years of recession.
1. 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> 6
AN INTERVIEW WITH YOUR FUND'S MANAGERS
------------------------------------------------------------------------------
"Although the past six months have been difficult for many bonds, our focus on
high-yielding securities enabled us to enhance the Fund's performance."
In the United States, the Fed had already implemented two interest rate hikes
because of concerns that unsustainable economic growth might reignite
inflationary pressures. While inflation had not yet accelerated, early warning
signs included very low unemployment, high levels of consumer spending and
borrowing, and rising commodities prices. When the economy subsequently gained
momentum, the Fed raised short-term interest rates again in November, February
and March. These increases were quickly reflected in lower bond prices.
HOW DID YOU MANAGE THE FUND IN THIS ENVIRONMENT?
We have focused on maximizing income in a rising interest rate environment.
That means we generally avoided lower-yielding securities from countries with
relatively low rates of economic growth. On the other hand, we emphasized
higher-yielding lower-rated bonds from governments and companies in countries
with strong economies. By focusing on bonds providing above-average income
streams, we helped offset the effects of declining bond prices on the
portfolio.
WHERE HAVE YOU FOUND THE MOST ATTRACTIVE OPPORTUNITIES FOR INVESTMENT?
Of the various international markets in which we invest, emerging market bonds
contributed the most to performance. Consistent with our contrarian investment
approach, we purchased many of our emerging market holdings in 1998, when they
were out-of-favor because of the global financial crisis. We bought many of
these bonds when they were inexpensive, and their prices have risen as market
conditions and investor interest improved. As of March 31, 2000, emerging
market bonds comprised about 60% of the Fund's assets, with the bulk of that
investment in Latin American bonds.(2)
2. The Fund's portfolio is subject to change.
4 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 7
AVERAGE ANNUAL
TOTAL RETURNS
For the Periods Ended 3/31/00(3)
Class A Since
1-Year Inception
----------------------------------
10.32% 7.51%
Class B Since
1-Year Inception
----------------------------------
10.03% 7.50%
Class C Since
1-Year Inception
----------------------------------
14.03% 7.78%
Because of ongoing market volatility, the Fund's returns may fluctuate and may
be less than the results shown.
On the other hand, our holdings of foreign bonds from developed markets were
negatively influenced by the strength of the U.S. dollar relative to most
European currencies, including the euro. European economies are generally
growing at slower rates than the U.S. economy, making U.S. investments
relatively more attractive to domestic and foreign investors alike. How-ever,
there are investment opportunities in the European markets of the United
Kingdom and Scandinavia.
In Japan, the relationship between the Japanese yen and the U.S. dollar has
been relatively stable. However, poor economic conditions in Japan have led to
unattractive bond yields.
WHAT IS YOUR OUTLOOK OVER THE FORESEEABLE FUTURE?
We remain optimistic. We expect the Fed and other central banks to continue to
tighten monetary policy by raising short-term interest rates until they see
evidence that inflation is under control. In our view, U.S. investors currently
expect to see several more modest interest rate increases, which we believe
have already been priced into the market. Because the U.S. bond market
influences other markets--particularly Latin America--we believe that any
further price erosion among longer-term bonds should be limited.
3. See notes on page 7 for further details.
5 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 8
REGIONAL ALLOCATION
Percentage of invested assets(4)
[PIE CHART]
- Latin America 34.3%
- Europe 21.0
- Emerging Europe 13.6
- Asia 11.8
- Middle East/
Africa 11.2
- United States/
Canada 8.1
STANDARDIZED YIELDS(5)
For the 30 Days Ended 3/31/00
---------------------------------
Class A 10.48%
---------------------------------
Class B 10.26
---------------------------------
Class C 10.25
Regardless of future economic events, however, we intend to continue to manage
the Fund in a way that takes advantage of the changing relationships among the
various sectors of the international bond market. In fact, adhering to our
long-term investment approach is an important part of what it means at
OppenheimerFunds to be The Right Way to Invest.
TOP TEN COUNTRY HOLDINGS(4)
-----------------------------------------------------------------------
Mexico 11.8%
-----------------------------------------------------------------------
Brazil 8.7
-----------------------------------------------------------------------
Russia 7.7
-----------------------------------------------------------------------
Argentina 6.9
-----------------------------------------------------------------------
Japan 5.5
-----------------------------------------------------------------------
France 4.7
-----------------------------------------------------------------------
Canada 4.3
-----------------------------------------------------------------------
Indonesia 4.0
-----------------------------------------------------------------------
United States 3.8
-----------------------------------------------------------------------
Poland 3.7
4. Portfolio is subject to change. Percentages are as of March 31, 2000, and
are based on total market value of investments.
5. Standardized yield is based on net investment income for the 30-day period
ended March 31, 2000. Falling share prices will tend to artificially raise
yields.
6 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 9
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. FOR QUARTERLY
UPDATES ON THE FUND'S PERFORMANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR, CALL
US AT 1.800.525.7048 OR VISIT OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares.
CLASS A shares were first publicly offered on 6/15/95. Unless otherwise noted,
Class A returns include the current maximum initial sales charge of 4.75%.
CLASS B shares of the Fund were first publicly offered on 6/15/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (since inception). 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. Unless
otherwise noted, Class C returns include the contingent deferred sales charge
of 1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
7 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 10
FINANCIALS
8 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 11
STATEMENT OF INVESTMENTS MARCH 31, 2000 / UNAUDITED
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
--------------------------------------------------------------------------------------------------
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS--68.6%
--------------------------------------------------------------------------------------------------
ARGENTINA--6.3%
Argentina (Republic of) Bonds, 12%, 2/1/20 $ 645,000 $ 662,737
--------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, Bonos de Consolidacion de Deudas,
Series I, 3.013%, 4/1/07(2) [ARP] 1,412,433 1,044,791
--------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds:
Series PRE3, 3.013%, 9/1/02(2) [ARP] 3,852,835 3,510,100
Series PRO4, 5.873%, 12/28/10(2) 1,875,473 1,423,948
--------------------------------------------------------------------------------------------------
Argentina (Republic of) Disc. Bonds, 6.875%, 3/31/23(2) 1,452,000 1,234,200
--------------------------------------------------------------------------------------------------
Argentina (Republic of) Nts., Series REGS, 11.75%, 2/12/07 [ARP] 2,985,000 2,814,488
--------------------------------------------------------------------------------------------------
Argentina (Republic of) Par Bonds, 6%, 3/31/23(2) 1,755,600 1,231,114
--------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Series PBA1, 3.013%, 4/1/07(2) [ARP] 2,503,093 1,794,865
--------------------------------------------------------------------------------------------------
City of Buenos Aires Bonds, Series 3, 10.50%, 5/28/04 [ARP] 4,410,000 3,926,471
-------------
17,642,714
--------------------------------------------------------------------------------------------------
BRAZIL--6.9%
Brazil (Federal Republic of) Bonds:
12.25%, 3/6/30 315,000 304,447
Series 15 yr., 7%, 4/15/09(2) 1,334,000 1,130,565
--------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Debt Conversion Bonds:
Series 18 yr., 7%, 4/15/12(2) 7,127,000 5,407,611
Series 20 yr., 6.916%, 4/15/14 4,767,915 3,587,856
--------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Eligible Interest Bonds,
6.937%, 4/15/06(2) 1,410,000 1,283,100
--------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Unsub. Bonds, 14.50%, 10/15/09 6,922,000 7,544,980
-------------
19,258,559
--------------------------------------------------------------------------------------------------
BULGARIA--0.6%
Bulgaria (Republic of) Front-Loaded Interest Reduction Bearer Bonds,
Tranche A, 2.75%, 7/28/12(2) 2,170,000 1,562,400
--------------------------------------------------------------------------------------------------
CANADA--3.9%
Canada (Government of) Bonds:
1.90%, 3/23/09 [JPY] 316,000,000 3,115,172
7%, 12/1/06 [CAD] 10,920,000 7,937,722
-------------
11,052,894
--------------------------------------------------------------------------------------------------
COLOMBIA--0.5%
Colombia (Republic of) Bonds, 9.75%, 4/23/09 1,625,000 1,523,437
--------------------------------------------------------------------------------------------------
DENMARK--0.9%
Nykredit AS, 7% Cv. Bonds, 10/1/29 [DKK] 19,247,000 2,478,201
--------------------------------------------------------------------------------------------------
FRANCE--4.3%
France (Government of) Obligations Assimilables du Tresor Bonds,
5.50%, 4/25/10 [EUR] 6,905,000 6,673,468
--------------------------------------------------------------------------------------------------
France (Government of) Treasury Nts., 3.50%, 7/12/04 [EUR] 5,865,000 5,327,427
-------------
12,000,895
</TABLE>
9 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 12
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
====================================================================================
<S> <C> <C>
GERMANY--2.1%
Germany (Republic of) Bonds:
6.25%, 4/26/06 [EUR] 952,484 $ 966,939
Series 95, 7.375%, 1/3/05 [DEM] 840,000 883,774
Series 97, 6%, 1/4/07 [EUR] 200,000 200,413
Series 125, 5%, 11/12/02 [EUR] 4,045,000 3,905,109
------------
5,956,235
------------------------------------------------------------------------------------
GREAT BRITAIN--2.1%
United Kingdom Treasury Bonds, 5.75%, 12/7/09 [GBP] 910,000 1,509,792
------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 10%, 9/8/03 [GBP] 2,485,000 4,410,307
------------
5,920,099
------------------------------------------------------------------------------------
GREECE--0.4%
Hellenic (Republic of) Bonds, 8.60%, 3/26/08 [GRD] 362,000,000 1,188,005
------------------------------------------------------------------------------------
INDONESIA--0.2%
Perusahaan Listr, 17% Nts., 8/21/01 [IDR] 2,000,000,000 263,210
------------------------------------------------------------------------------------
PT Hutama Karya Promissory Nts., Zero Coupon,
4/9/1999 (3,4,5) [IDR] 5,000,000,000 181,638
------------
444,848
------------------------------------------------------------------------------------
ITALY--2.1%
Italy (Republic of) Treasury Bonds, Buoni del Tesoro
Poliennali:
9.50%, 2/1/06 [EUR] 4,700,000 5,450,885
10.50%, 9/1/05 [EUR] 324,254 387,260
------------
5,838,145
------------------------------------------------------------------------------------
IVORY COAST--0.4%
Ivory Coast (Government of) Past Due Interest Bonds,
Series F, 1.90%, 3/29/18(2) [FRF] 41,994,750 1,240,541
------------------------------------------------------------------------------------
JAPAN--5.1%
Japan (Government of) 10 yr. Bonds:
Series 135, 7.20%, 12/20/00 [JPY] 159,900,000 1,632,753
Series 136, 6.90%, 12/20/00 [JPY] 820,500,000 8,368,596
Series 218, 1.90%, 12/21/09 [JPY] 425,500,000 4,208,951
------------
14,210,300
------------------------------------------------------------------------------------
JORDAN--2.0%
Hashemite (Kingdom of Jordan) Disc. Bonds, 7%,
12/23/23(2) 6,815,000 5,537,188
------------------------------------------------------------------------------------
MEXICO--6.0%
Mexican Williams Sr. Nts., 6.773%, 11/15/08(2) 500,000 470,000
------------------------------------------------------------------------------------
Petroleos Mexicanos Debs., 14.50%, 3/31/06 [GBP] 1,280,000 2,566,774
------------------------------------------------------------------------------------
United Mexican States Bonds:
11.375%, 9/15/16 5,420,000 6,436,250
Series A, 6.932%, 12/31/19(2) 640,000 632,000
</TABLE>
10 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 13
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
------------------------------------------------------------------------------------
<S> <C> <C>
MEXICO Continued
United Mexican States Collateralized Fixed Rate
Par Bonds:
Series W-A, 6.25%, 12/31/19 $ 1,340,000 $ 1,144,025
Series W-B, 6.25%, 12/31/19 4,938,000 4,215,818
------------------------------------------------------------------------------------
United Mexican States Disc. Bonds:
Series B, 6.942%, 12/31/19(2) 670,000 659,531
Series C, 6.836%, 12/31/19(2) 670,000 661,625
------------
16,786,023
------------------------------------------------------------------------------------
NIGERIA--0.1%
Nigeria (Federal Republic of) Promissory Nts.,
Series RC, 5.092%, 1/5/10 547,137 323,872
------------------------------------------------------------------------------------
NORWAY--1.4%
Norway (Government of) Bonds, 9.50%, 10/31/02 [NOK] 30,475,000 3,863,181
------------------------------------------------------------------------------------
PANAMA--0.8%
Panama (Republic of) Interest Reduction Bonds,
4.25%, 7/17/14(2) 985,000 792,925
------------------------------------------------------------------------------------
Panama (Republic of) Past Due Interest Debs., 6.381%,
7/17/16(2) 1,847,930 1,568,431
------------
2,361,356
------------------------------------------------------------------------------------
PERU--1.8%
Peru (Republic of) Sr. Nts., Zero Coupon, 4.53%,
2/28/16(6) 10,864,808 5,068,433
------------------------------------------------------------------------------------
POLAND--2.3%
Poland (Republic of) Bonds:
13%, 2/12/01 [PLZ] 10,840,000 2,530,515
Series 0602, 12%, 6/12/02 [PLZ] 2,887,000 649,129
Series 1000, 13%, 10/12/00 [PLZ] 10,614,000 2,500,247
Series 5 yr., 12%, 2/12/02 [PLZ] 3,157,000 713,278
------------
6,393,169
------------------------------------------------------------------------------------
RUSSIA--6.9%
Russia (Government of) Principal Loan Debs.,
Series 24 yr., 12/15/20(3,5) 16,821,000 4,878,090
------------------------------------------------------------------------------------
Russia (Government of) Sr. Unsec. Unsub. Nts.,
11.75%, 6/10/03 525,000 473,156
------------------------------------------------------------------------------------
Russia (Government of) Unsec. Bonds, 11%, 7/24/18 2,565,000 1,901,306
------------------------------------------------------------------------------------
Russian Federation Unsec. Unsub. Nts.:
8.75%, 7/24/05 1,775,000 1,315,719
10%, 6/26/07 4,430,000 3,289,275
12.75%, 6/24/28 4,107,000 3,529,556
------------------------------------------------------------------------------------
Russian Ministry of Finance Debs., Series V,
3%, 5/14/08 10,540,000 3,899,800
------------
19,286,902
------------------------------------------------------------------------------------
SLOVAKIA--1.0%
Slovenska Sporitelna AS Bank Sub. Nts.,
7.369%, 12/20/06(2) 1,800,000 1,512,000
------------------------------------------------------------------------------------
Vseobenona Uverova Banka Unsec. Sub. Nts.,
7.75%, 12/28/06(2) 1,640,000 1,312,000
------------
2,824,000
</TABLE>
11 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 14
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
--------------------------------------------------------------------------------------------------
<S> <C> <C>
SOUTH AFRICA--1.9%
South Africa (Republic of) Bonds, Series 150, 12%,
2/28/05 [ZAR] 36,648,000 $ 5,289,049
--------------------------------------------------------------------------------------------------
SPAIN--1.4%
Spain (Kingdom of) Gtd. Bonds:
Bonos y Obligacion del Estado, 8.80%, 4/30/06 [EUR] 1,700,000 1,923,934
Bonos y Obligacion del Estado, 10%, 2/28/05 [EUR] 1,760,000 2,032,172
------------
3,956,106
--------------------------------------------------------------------------------------------------
SWEDEN--1.1%
Sweden (Kingdom of) Bonds, Series 1034, 9%, 4/20/09 [SEK] 21,500,000 3,123,093
--------------------------------------------------------------------------------------------------
THE NETHERLANDS--2.7%
The Netherlands (Government of) Bonds:
5.75%, 1/15/04 [EUR] 2,280,000 2,246,093
6%, 1/15/06 [EUR] 1,070,000 1,069,446
7.75%, 3/1/05 [EUR] 3,950,000 4,218,207
------------
7,533,746
--------------------------------------------------------------------------------------------------
TURKEY--1.0%
Turkey (Republic of) Sr. Unsec. Unsub. Nts., 11.875%, 1/15/30 2,500,000 2,657,500
--------------------------------------------------------------------------------------------------
VENEZUELA--1.6%
Venezuela (Republic of) Bonds, 9.25%, 9/15/27 992,000 659,234
--------------------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds, Series DL, 7%, 12/18/07(2) 3,159,619 2,551,392
--------------------------------------------------------------------------------------------------
Venezuela (Republic of) New Money Bonds, Series A, 7.125%,
12/18/05(2) 1,545,882 1,268,590
------------
4,479,216
--------------------------------------------------------------------------------------------------
VIETNAM--0.8%
Vietnam (Government of) Bonds, 3.25%, 3/12/28(2) 7,095,000 2,367,956
------------
Total Foreign Government Obligations (Cost $189,348,792) 192,168,063
==================================================================================================
LOAN PARTICIPATIONS--4.2%
Algeria (Republic of) Reprofiled Debt Loan Participation Nts.:
Tranche 1, 1%, 9/4/06(2,4) [JPY] 56,945,454 396,978
Tranche 1, 7.188%, 9/4/06 (2,4) 4,727,363 3,852,801
--------------------------------------------------------------------------------------------------
Algeria (Republic of) Trust III Nts., Tranche 3, 1%,
3/4/10(2,4) [JPY] 206,500,000 1,202,981
--------------------------------------------------------------------------------------------------
Algeria (Republic of) Unrestructured Nts., 6.615%, 1/22/01(4) [JPY] 190,733,333 1,808,494
--------------------------------------------------------------------------------------------------
Deutsche Bank AG, Bank Mandiri Loans:
Series 3C, 7.382%, 6/1/03(2,4) 250,000 212,500
Series 4C, 7.382%, 6/1/04(2,4) 250,000 205,000
--------------------------------------------------------------------------------------------------
Series 5 yr., 7.382%, 6/1/05(2,4) 250,000 198,750
--------------------------------------------------------------------------------------------------
ING Barings LLC, Bank Mandiri Loans, Series 5C, 7.313%, 6/1/05(2,4) 250,000 207,500
--------------------------------------------------------------------------------------------------
PT Bank Negara Indonesia Gtd. Nts.:
Series 3 yr., 9.625%, 8/25/01(2,4) 1,670,000 1,519,700
Series 4 yr., 9.875%, 8/25/02(2,4) 890,000 778,750
--------------------------------------------------------------------------------------------------
Salomon Smith Barney, Inc., Bank Umum Loan, Series C, 9.156%,
8/25/01(2,4) 500,000 455,000
</TABLE>
12 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 15
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE (1)
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
LOAN PARTICIPATIONS Continued
Trinidad & Tobago Loan Participation Agreement:
Tranche A, 1.058%, 9/30/00(2,4) [JPY] 23,381,818 $ 207,453
Tranche B, 1.058%, 9/30/00(2,4) [JPY] 77,931,713 691,443
------------
Total Loan Participations (Cost $9,930,541) 11,737,350
=======================================================================================================
CORPORATE BONDS AND NOTES--8.8%
AB Spintab, 5.50% Bonds, Series 169, 9/17/03 [SEK] 14,300,000 1,635,120
-------------------------------------------------------------------------------------------------------
Bakrie Investindo:
Zero Coupon Promissory Nts., 3/16/1999(3,4,5) [IDR] 5,990,000,000 118,692
Zero Coupon Promissory Nts., 7/10/1998(3,4,5) [IDR] 2,000,000,000 39,630
-------------------------------------------------------------------------------------------------------
Empresa Electrica del Norte Grande SA, 7.75% Bonds, 3/15/06(7,8) 2,310,000 744,975
-------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., 6.875% Sr. Unsec. Nts., 6/7/02(9) [GBP] 2,370,000 3,782,373
-------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 6.875% Nts., Series EC, 9/9/04 [GBP] 430,000 682,789
-------------------------------------------------------------------------------------------------------
Hanvit Bank, 0%/12.75% Unsec. Sub. Nts., 3/1/10(8,10) 3,400,000 3,531,750
-------------------------------------------------------------------------------------------------------
Netia Holdings BV:
0%/11% Sr. Disc. Nts., 11/1/07(1/0) [DEM] 1,300,000 448,403
13.50% Sr. Nts., 6/15/09 [EUR] 2,650,000 2,637,217
-------------------------------------------------------------------------------------------------------
NTL, Inc., 9.50% Sr. Unsec. Unsub. Nts., Series B, 4/1/08 [GBP] 580,000 874,384
-------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50% Gtd. Nts., 3/29/04(3,4,5) 365,000 12,775
-------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa:
11% Nts., 6/18/03(3,4,5) 500,000 65,000
11% Nts., 7/2/03(3,4,5) 1,000,000 130,000
20% Nts., 3/6/00(3,5) [IDR] 3,000,000,000 51,519
24% Nts., 6/16/03(3,5) [IDR] 2,000,000,000 34,346
24% Nts., 6/19/03(3,5) [IDR] 4,107,500,000 70,538
-------------------------------------------------------------------------------------------------------
Reliance Industries Ltd.:
10.25% Unsec. Debs., Series B, 1/15/97 3,900,000 3,649,378
10.25% Unsec. Nts., Series B, 1/15/97(8) 250,000 233,935
-------------------------------------------------------------------------------------------------------
SanLuis Corp., SA de CV, 8.875% Sr. Unsec. Nts., 3/18/08 1,770,000 1,632,825
-------------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(4) 70,000 75,972
-------------------------------------------------------------------------------------------------------
Telewest Communications plc, 0%/9.875% Sr. Nts., 4/15/09(8,10) [GBP] 1,555,000 1,463,608
-------------------------------------------------------------------------------------------------------
Transportacion Maritima Mexicana SA de CV, 10% Sr. Unsec. Nts.,
11/15/06 1,580,000 1,362,750
-------------------------------------------------------------------------------------------------------
TV Azteca SA de CV, 10.125% Sr. Nts., Series A, 2/15/04 1,320,000 1,267,200
------------
Total Corporate Bonds and Notes (Cost $27,902,371) 24,545,179
UNITS
-------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
Mexico Value Rts., Exp. 6/30/03 (Cost $0) 984,000 --
</TABLE>
13 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 16
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
===================================================================================================
<S> <C> <C>
STRUCTURED INSTRUMENTS--8.6%
Citibank NA (Nassau Branch), Chiliean Peso Linked Nts., 10.17%,
10/6/00(4) [CLP] 1,420,235,500 $ 2,943,671
---------------------------------------------------------------------------------------------------
Citibank NA (Nassau Branch), Mexican Peso Linked Nts.:
18.85%, 3/3/03 [MXN] 29,450,165 3,180,466
26.10%, 10/29/01 [MXN] 12,368,125 1,444,170
27.40%, 9/20/01 [MXN] 222,140 26,632
27.40%, 9/20/01 2,775,000 3,045,840
---------------------------------------------------------------------------------------------------
Citibank NA (New York), Mexican Peso Linked Nts., 23.95%,
11/5/01 [MXN] 12,231,200 1,397,607
---------------------------------------------------------------------------------------------------
Citibank NA, Brazilian Real Linked Nts., 23.75%, 10/25/00 [BRR] 2,534,020 1,484,834
---------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Indonesia Rupiah Linked Nts., 13.667%, 6/30/00 2,725,000 2,408,083
Indonesia Rupiah Linked Nts., 13.86%, 8/3/00 2,220,000 2,006,658
Indian Rupee/Japanese Yen Linked Nts., Zero Coupon,
12.73%, 8/17/01(6) 3,525,000 2,655,383
---------------------------------------------------------------------------------------------------
Deutsche Morgan Grenfell, Brazilian Real Linked Nts.,
20%, 11/9/00 [BRR] 2,467,200 1,556,103
---------------------------------------------------------------------------------------------------
Standard Chartered Bank, Indonesia Rupiah Linked Nts.,
18.19%, 8/18/00 1,300,000 1,395,160
---------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (New York Branch):
Russian OFZ Linked Nts., Series 25030, Zero Coupon, 146.53%,
12/15/01(4,6) [RUR] 2,143,000 31,710
Russian OFZ Linked Nts., Series 27001, 25%, 2/6/02(2,4) [RUR] 1,378,970 28,372
Russian OFZ Linked Nts., Series 27002, 25%, 5/22/02(2,4) [RUR] 625,200 12,406
Russian OFZ Linked Nts., Series 27003, 25%, 6/5/02(2,4) [RUR] 625,200 12,384
Russian OFZ Linked Nts., Series 27004, 24.868%, 9/18/02(2,4) [RUR] 686,610 13,232
Russian OFZ Linked Nts., Series 27005, 24.868%, 10/9/02(2,4) [RUR] 690,150 12,870
Russian OFZ Linked Nts., Series 27006, 24.868%, 1/22/03(2,4) [RUR] 687,290 12,354
Russian OFZ Linked Nts., Series 27007, 25%, 2/5/03(2,4) [RUR] 688,370 12,330
Russian OFZ Linked Nts., Series 27008, 25%, 5/21/03(2,4) [RUR] 625,200 10,856
Russian OFZ Linked Nts., Series 27009, 25%, 6/4/03(2,4) [RUR] 2,949,470 51,386
Russian OFZ Linked Nts., Series 27009, 25%, 6/4/03(2,4) [RUR] 6,363,674 110,869
Russian OFZ Linked Nts., Series 27010, 24.868%, 9/17/03(2,4) [RUR] 625,200 10,649
Russian OFZ Linked Nts., Series 27011, 24.868%, 10/8/03(2,4) [RUR] 3,466,720 57,080
Russian OFZ Linked Nts., Series 28001, 24.868%, 1/21/04(2,4) [RUR] 625,200 10,030
Russian OFZ Linked Nts., Series L, 24.868%, 1/21/04(2,4) [RUR] 566,080 9,082
Russian OFZ Linked Nts., Series L, 24.868%, 1/22/03(2,4) [RUR] 566,080 10,175
Russian OFZ Linked Nts., Series L, 24.868%, 10/8/03(2,4) [RUR] 566,080 9,321
Russian OFZ Linked Nts., Series L, 24.868%, 10/9/02(24) [RUR] 566,080 10,556
Russian OFZ Linked Nts., Series L, 24.868%, 9/17/03(2,4) [RUR] 566,080 9,642
Russian OFZ Linked Nts., Series L, 24.868%, 9/18/02(2,4) [RUR] 566,080 10,909
Russian OFZ Linked Nts., Series L, 25%, 2/5/03(2,4) [RUR] 566,080 10,140
Russian OFZ Linked Nts., Series L, 25%, 2/6/02(2,4) [RUR] 566,080 11,647
Russian OFZ Linked Nts., Series L, 25%, 5/21/03(2,4) [RUR] 566,080 9,830
Russian OFZ Linked Nts., Series L, 25%, 5/22/02(2,4) [RUR] 566,080 11,233
Russian OFZ Linked Nts., Series L, 25%, 6/4/03(2,4) [RUR] 566,080 9,862
Russian OFZ Linked Nts., Series L, 25%, 6/5/02(2,4) [RUR] 566,080 11,213
Russian OFZ Linked Nts., Series L, Zero Coupon, 53.77%,
12/15/01(4,6) [RUR] 1,940,000 28,706
----------
538,844
----------
Total Structured Instruments (Cost $24,021,685) 24,083,451
</TABLE>
14 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 17
<TABLE>
<CAPTION>
MARKET VALUE
DATE STRIKE CONTRACTS SEE NOTE 1
=========================================================================================================
<S> <C> <C> <C> <C>
OPTIONS PURCHASED--0.9%
European Monetary Unit Call 4/25/00 EUR 1.040 2,370,000 $ 277
--------------------------------------------------------------------------------------------------------
South Korean Won Call 6/1/00 KRW 1100.0 4,697,000,000 40,488
--------------------------------------------------------------------------------------------------------
Thailand Baht Call 12/6/00(4) THB 38.00 649,040,000 553,196
--------------------------------------------------------------------------------------------------------
Argentina (Republic of) Global Unsec.
Unsub. Bonds, Series BGL5, 11.375%,
1/30/17 Put 6/28/00 96.75% 26,920 823,483
--------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of)
Capitalization Bonds, 6.916%, 4/15/14
Put 6/29/00 74.50% 26,920 1,191,870
=========
Total Options Purchased (Cost $2,518,548) 2,609,314
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(1)
========================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENTS--0.6%
Repurchase agreement with Banc One Capital Markets, Inc.,
6.05%, dated 3/31/00, to be repurchased at $1,700,857 on 4/3/00,
collateralized by U.S. Treasury Nts., 5%-7.50%, 5/31/00-2/15/07,
with a value of $1,137,269 and U.S. Treasury Bonds, 5.25%-12%
11/15/09-2/15/29, with a value of $598,219 (Cost $1,700,000) $1,700,000 1,700,000
----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $255,421,937) 91.7% 256,843,357
----------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 8.3 23,205,987
----------------------------
NET ASSETS 100.0% $280,049,344
============================
</TABLE>
15 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 18
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
FOOTNOTES TO STATEMENT OF INVESTMENTS
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>
Mexico $ 30,143,511 11.8%
Brazil 22,299,497 8.7
Russia 19,825,747 7.7
Argentina 17,642,716 6.9
Japan 14,210,299 5.5
France 12,000,895 4.7
Canada 11,052,894 4.3
Indonesia 10,354,449 4.0
United States 9,648,861 3.8
Poland 9,478,787 3.7
The Netherlands 7,533,746 2.9
Great Britain 7,383,707 2.9
Algeria 7,261,254 2.8
India 6,538,695 2.5
Germany 5,956,235 2.3
Italy 5,838,145 2.3
Jordan 5,537,188 2.2
South Africa 5,289,049 2.1
Peru 5,068,433 2.0
Sweden 4,758,213 1.9
Venezuela 4,479,216 1.7
Spain 3,956,106 1.5
Norway 3,863,181 1.5
Chile 3,688,646 1.4
Korea, Republic of (South) 3,531,750 1.4
Slovakia 2,824,000 1.1
Turkey 2,657,500 1.0
Denmark 2,478,201 1.0
Vietnam 2,367,956 0.9
Panama 2,361,356 0.9
Bulgaria 1,562,400 0.6
Colombia 1,523,438 0.6
Ivory Coast 1,240,541 0.5
Greece 1,188,005 0.5
Trinidad & Tobago 898,896 0.3
Nigeria 323,872 0.1
Switzerland 75,972 0.0
-------------------------------
Total $256,843,357 100.0%
===============================
</TABLE>
16 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 19
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
1. Principal amount is reported in U.S. Dollars, except for those denoted in
the following currencies:
ARP Argentine Peso IDR Indonesian Rupiah
BRR Brazilian Real JPY Japanese Yen
CAD Canadian Dollar KRW South Korean Won
CLP Chilean Peso MXN Mexican Nuevo Peso
DEM German Mark NOK Norwegian Krone
DKK Danish Krone PLZ Polish Zloty
EUR Euro RUR Russian Ruble
FRF French Franc SEK Swedish Krona
GBP British Pound Sterling THB Thai Baht
GRD Greek Drachma ZAR South African Rand
2. Represents the current interest rate for a variable or increasing rate
security.
3. Non-income-producing security.
4. Identifies issues considered to be illiquid or restricted. See Note 8 of
Notes to Financial Statements.
5. Issuer is in default.
6. For zero coupon bonds, the interest rate shown is the effective yield on
the date of purchase.
7. Securities with an aggregate market value of $276,750 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
8. 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 $5,974,268 or 2.13% of the Fund's net
assets as of March 31, 2000.
9. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
10. Denotes a step bond: a zero coupon bond that converts to a fixed or
variable interest rate at a designated future date.
See accompanying Notes to Financial Statements.
17 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 20
STATEMENT OF ASSETS AND LIABILITIES UNAUDITED
<TABLE>
<CAPTION>
MARCH 31, 2000
=============================================================================================
<S> <C>
ASSETS
Investments, at value (cost $255,421,937)--see accompanying statement $ 256,843,357
---------------------------------------------------------------------------------------------
Cash 107,445
---------------------------------------------------------------------------------------------
Cash--collateral for futures 300,000
---------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 1,034,576
---------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 39,268,911
Interest, dividends and principal paydowns 7,960,521
Shares of beneficial interest sold 474,202
Daily variation on futures contracts 4,122
Other 4,013
-------------
Total assets 305,997,147
=============================================================================================
LIABILITIES
Unrealized depreciation on foreign currency contracts 710,308
---------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 23,543,272
Dividends 735,208
Shares of beneficial interest redeemed 694,770
Distribution and service plan fees 169,228
Transfer and shareholder servicing agent fees 59,152
Trustees' compensation 341
Other 35,524
-------------
Total liabilities 25,947,803
=============================================================================================
NET ASSETS $280,049,344
=============
=============================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $335,587,392
---------------------------------------------------------------------------------------------
Undistributed net investment income 2,355,987
---------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (59,710,294)
---------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 1,816,259
-------------
Net assets $280,049,344
=============
</TABLE>
18 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 21
<TABLE>
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$124,080,235 and 28,065,503 shares of beneficial interest outstanding) $4.42
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $4.64
----------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $122,764,914
and 27,858,896 shares of beneficial interest outstanding) $4.41
----------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $33,204,195
and 7,536,971 shares of beneficial interest outstanding) $4.41
</TABLE>
See accompanying Notes to Financial Statements.
19 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 22
STATEMENT OF OPERATIONS UNAUDITED
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED MARCH 31, 2000
------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest (net of foreign withholding taxes of $166,433) $ 17,689,748
====================================================================================
EXPENSES
Management fees 990,427
------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 149,849
Class B 611,644
Class C 159,133
------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 251,352
------------------------------------------------------------------------------------
Custodian fees and expenses 54,226
------------------------------------------------------------------------------------
Trustees' compensation 1,391
------------------------------------------------------------------------------------
Other 79,466
--------------
Total expenses 2,297,488
Less expenses paid indirectly (18,402)
--------------
Net expenses 2,279,086
====================================================================================
NET INVESTMENT INCOME 15,410,662
====================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 2,238,829
Closing of futures contracts 108,174
Closing and expiration of option contracts written (1,220,194)
Foreign currency transactions (7,500,059)
--------------
Net realized loss (6,373,250)
------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 18,535,882
Translation of assets and liabilities denominated in foreign
currencies (2,129,884)
--------------
Net change 16,405,998
--------------
Net realized and unrealized gain 10,032,748
====================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $25,443,410
==============
</TABLE>
See accompanying Notes to Financial Statements.
20 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 23
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2000 SEPT. 30,
(UNAUDITED) 1999
====================================================================================
OPERATIONS
<S> <C> <C>
Net investment income $ 15,410,662 $ 33,032,068
------------------------------------------------------------------------------------
Net realized loss (6,373,250) (26,122,910)
------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 16,405,998 17,536,670
----------------------------
Net increase in net assets resulting from operations 25,443,410 24,445,828
====================================================================================
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (6,025,082) (12,490,131)
Class B (6,177,197) (14,069,900)
Class C (1,597,355) (3,315,800)
====================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 16,807,804 7,013,720
Class B (1,123,196) 1,272,305
Class C 2,396,669 2,430,203
====================================================================================
Net Assets
Total increase 29,725,053 5,286,225
------------------------------------------------------------------------------------
Beginning of period 250,324,291 245,038,066
----------------------------
End of period (including undistributed net investment
income of $2,355,987 and $744,959, respectively) $280,049,344 $250,324,291
============================
</TABLE>
See accompanying Notes to Financial Statements.
21 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 24
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2000 SEPT. 30,
CLASS A (UNAUDITED) 1999 1998 1997 1996 1995(1)
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $4.23 $4.32 $5.51 $5.49 $5.10 $5.00
-------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .26 .58 .56 .52 .52 .15
Net realized and unrealized gain (loss) .17 (.14) (1.20) .08 .40 .10
------------------------------------------------------------------------
Total income (loss) from
investment operations .43 .44 (.64) .60 .92 .25
-------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.24) (.53) (.53) (.53) (.53) (.15)
Distributions from net realized gain -- -- (.02) (.05) -- --
------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.24) (.53) (.55) (.58) (.53) (.15)
-------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.42 $4.23 $4.32 $5.51 $5.49 $5.10
========================================================================
=========================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 10.39% 10.58% (12.50)% 11.33% 18.82% 5.13%
=========================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $124,080 $102,236 $97,404 $114,847 $52,128 $3,984
-------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $112,599 $101,948 $108,264 $ 89,112 $19,817 $2,566
-------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 11.93% 13.47% 11.09% 9.24% 9.60% 9.94%
Expenses 1.31% 1.26% 1.24%(4) 1.28%(4) 1.59%(4) 1.59%(4)
Expenses, net of indirect expenses and
voluntary assumption of expenses N/A 1.25% N/A N/A 1.49% 0.41%
-------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 92% 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 has not been grossed up to reflect the effect of expenses
paid indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended March 31, 2000, were $222,643,785 and $224,892,663,
respectively.
See accompanying Notes to Financial Statements.
22 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 25
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2000 SEPT. 30,
CLASS B (UNAUDITED) 1999 1998 1997 1996 1995(1)
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $4.22 $4.31 $5.50 $5.48 $5.10 $5.00
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .25 .55 .52 .48 .48 .14
Net realized and unrealized gain (loss) .16 (.14) (1.20) .07 .39 .10
--------------------------------------------------------------------
Total income (loss) from
investment operations .41 .41 (.68) .55 .87 .24
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.22) (.50) (.49) (.48) (.49) (.14)
Distributions from net realized gain -- -- (.02) (.05) -- --
--------------------------------------------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.22) (.50) (.51) (.53) (.49) (.14)
--------------------------------------------------------------------
Net asset value, end of period $4.41 $4.22 $4.31 $5.50 $5.48 $5.10
====================================================================
=========================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 10.03% 9.79% (13.16)% 10.52% 17.71% 4.92%
=========================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $122,765 $118,632 $119,998 $122,874 $45,207 $3,238
-------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $122,186 $122,878 $128,789 $ 87,557 $17,891 $1,125
-------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 11.28% 12.70% 10.33% 8.57% 8.81% 9.20%
Expenses 2.05% 2.02% 2.00%(4) 2.04%(4) 2.36%(4) 2.21%(4)
Expenses, net of indirect expenses and
voluntary assumption of expenses N/A 2.01% N/A N/A 2.26% 0.89%
-------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 92% 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 has not been grossed up to reflect the effect of expenses paid
indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended March 31, 2000, were $222,643,785 and $224,892,663,
respectively.
See accompanying Notes to Financial Statements.
23 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 26
FINANCIAL HIGHLIGHTS CONTINUED
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2000 SEPT. 30,
CLASS C (UNAUDITED) 1999 1998 1997 1996 1995(1)
============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $4.22 $4.31 $5.50 $5.48 $5.09 $5.00
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .25 .55 .52 .48 .48 .14
Net realized and unrealized gain (loss) .16 (.14) (1.20) .07 .39 .09
--------------------------------------------------------------------
Total income (loss) from
investment operations .41 .41 (.68) .55 .87 .23
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.22) (.50) (.49) (.48) (.48) (.14)
Distributions from net realized gain -- -- (.02) (.05) -- --
-------- --------- --------- --------- ------------------------
Total dividends and/or distributions
to shareholders (.22) (.50) (.51) (.53) (.48) (.14)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.41 $4.22 $4.31 $5.50 $5.48 $5.09
====================================================================
============================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 10.02% 9.80% (13.16)% 10.52% 17.92% 4.73%
============================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $33,204 $29,456 $27,636 $28,684 $10,282 $201
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $31,805 $28,918 $29,336 $19,883 $ 4,039 $ 97
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 11.22% 12.76% 10.33% 8.62% 8.76% 9.36%
Expenses 2.05% 2.02% 2.00%(4) 2.04%(4) 2.36%(4) 2.26%(4)
Expenses, net of indirect expenses and
voluntary assumption of expenses N/A 2.01% N/A N/A 2.25% 0.85%
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 92% 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 has not been grossed up to reflect the effect of expenses paid
indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended March 31, 2000, were $222,643,785 and $224,892,663,
respectively.
See accompanying Notes to Financial Statements.
24 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 27
NOTES TO FINANCIAL STATEMENTS UNAUDITED
--------------------------------------------------------------------------------
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 an 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 at their offering price, which is normally net asset value plus an initial
sales charge. Class B and Class C shares are sold without an initial sales
charge but may be subject to a contingent deferred sales charge (CDSC). All
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own expenses directly attributable
to that class and exclusive voting rights with respect to matters affecting
that class. Classes A, B and C shares have separate distribution and/or service
plans. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
--------------------------------------------------------------------------------
SECURITIES VALUATION. Securities for which quotations are readily available are
valued at the last sale price, or if in the absence of a sale, at the last sale
price on the prior trading day if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are
valued primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Foreign currency contracts are valued
based on the closing prices of the forward currency contract rates in the
London foreign exchange markets on a daily basis as provided by a reliable
bank, dealer or pricing service. Short-term "money market type" debt securities
with remaining maturities of sixty days or less are valued at cost (or last
determined market value) and adjusted for amortization or accretion to maturity
of any premium or discount.
--------------------------------------------------------------------------------
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 March 31, 2000, the market value of these
securities comprised 8.60% of the Fund's net assets and resulted in realized
and unrealized losses of $1,231,489. The Fund also hedges a portion of the
foreign currency exposure generated by these securities, as discussed in Note
5.
25 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS UNAUDITED / 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 March 31, 2000, securities
with an aggregate market value of $5,582,228, representing 1.99% 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.
The Manager believes that for the Fund's fiscal year ending September 30,
2000, a tax return of capital is likely to occur. The dollar and per share
amounts for the fiscal year are not estimable as of March 31, 2000.
26 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 29
--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
share- holders, 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 primarily because of the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes. The character of
distributions made during the year from net investment income or net realized
gains may differ from its ultimate characterization for federal income tax
purposes. Also, due to timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the fiscal year in which the
income or realized gain was recorded by the Fund.
--------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
--------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of trade date 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 lia-bilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
27 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS UNAUDITED/CONTINUED
================================================================================
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31, 2000 YEAR ENDED SEPTEMBER 30, 1999
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Sold 12,615,647 $ 54,732,852 11,247,933 $ 48,852,991
Dividends and/or
distributions reinvested 877,724 3,800,442 1,806,309 7,837,034
Redeemed (9,579,499) (41,725,490) (11,446,723) (49,676,305)
-------------------------------------------------------------------
Net increase 3,913,872 $16,807,804 1,607,519 $ 7,013,720
===================================================================
----------------------------------------------------------------------------------------------
CLASS B
Sold 4,172,683 $ 18,020,033 7,369,029 $ 32,003,600
Dividends and/or
distributions reinvested 671,195 2,893,992 1,549,542 6,704,118
Redeemed (5,087,959) (22,037,221) (8,655,920) (37,435,413)
-------------------------------------------------------------------
Net increase (decrease) (244,081) $ (1,123,196) 262,651 $ 1,272,305
===================================================================
----------------------------------------------------------------------------------------------
CLASS C
Sold 2,016,738 $ 8,734,838 2,727,759 $ 11,829,225
Dividends and/or
distributions reinvested 209,591 903,273 450,539 1,948,375
Redeemed (1,669,460) (7,241,442) (2,613,007) (11,347,397)
-------------------------------------------------------------------
Net increase 556,869 $ 2,396,669 565,291 $ 2,430,203
===================================================================
</TABLE>
-------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON SECURITIES
As of March 31, 2000, net unrealized appreciation on securities of $1,421,420
was composed of gross appreciation of $17,057,892, and gross depreciation of
$15,636,472.
-------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for 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
six months ended March 31, 2000, was 0.74% of average annual net assets for
each class of shares, annualized for periods of less than one full year.
-------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing agent for the Fund and for
other Oppenheimer funds. OFS's total costs of providing such services are
allocated ratably to these funds.
28 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 31
-------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B ON CLASS C
SALES CHARGES SALES CHARGES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
SIX MONTHS ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 31, 2000 $152,187 $43,774 $10,232 $342,085 $59,519
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
CONTINGENT DEFERRED CONTINGENT DEFERRED CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
March 31, 2000 $-- $254,630 $8,877
</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.
-------------------------------------------------------------------------------
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 purchased. 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 six months
ended March 31, 2000, payments under the Class A plan totaled $149,849, all of
which was paid by the Distributor to recipients. That included $7,945 paid to
an affiliate of the Manager. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
-------------------------------------------------------------------------------
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan,
service fees and distribution fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The Class B and Class C plans provide
for the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
29 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS UNAUDITED/CONTINUED
-------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the
Fund under the plans. If any plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carryforward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the distributor for the six months ended March 31,
2000, 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 $611,644 $489,674 $5,417,592 4.41%
Class C Plan 159,133 42,263 642,824 1.94
------------------------------------------------------------------------------------------
</TABLE>
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency contracts for operational purposes and to seek to protect
against adverse exchange rate fluctuations. Risks to the Fund include the
potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided
by a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Realized gains and losses are reported with all
other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of
Investments where applicable.
30 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 33
As of March 31, 2000, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATE (000S) MARCH 31, 2000 APPRECIATION DEPRECIATION
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRACTS TO PURCHASE
British Pound Sterling (GBP) 4/26/00 GBP 2,420 $ 3,861,172 $ -- $ 30,841
Euro (EUR) 4/25/00-5/15/00 EUR 5,320 5,103,304 -- 130,502
Japanese Yen (JPY) 4/10/00-6/5/00 JPY 2,977,200 29,243,862 972,037 --
-------------- -----------------
972,037 161,343
-------------- -----------------
CONTRACTS TO SELL
British Pound Sterling (GBP) 5/15/00 GBP1,550 2,473,227 -- 21,127
Euro (EUR) 5/30/00-6/28/00 EUR4,635 4,461,133 62,539 --
Japanese Yen (JPY) 4/25/00-6/5/00 JPY1,426,660 14,027,895 -- 527,838
-------------- -----------------
62,539 548,965
-------------- -----------------
Total Unrealized Appreciation and Depreciation $1,034,576 $710,308
============== ================
</TABLE>
================================================================================
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.
31 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS UNAUDITED/CONTINUED
================================================================================
6. FUTURES CONTRACTS Continued
As of March 31, 2000, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATE CONTRACTS MARCH 31, 2000 (DEPRECIATION)
-------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
<S> <C> <C> <C> <C>
Euro-Bobl 6/8/00 101 $10,022,284 $ 91,815
Euro-Bund 6/8/00 7 706,068 17,148
----------------
108,963
----------------
CONTRACTS TO SELL
Euro-Schatz 6/8/00 64 6,277,264 (22,659)
United Kingdom Long Gilt 6/28/00 5 905,413 (7,721)
----------------
(30,380)
----------------
$78,583
================
</TABLE>
================================================================================
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.
32 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 35
Written option activity for the six months ended March 31, 2000 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, 1999 -- $ -- 52,083,537 $ 188,727
Options written 537,000,000 55,602 -- --
Options closed or expired (537,000,000) (55,602) (29,810,000) (66,937)
Options exercised -- -- (22,273,537) (121,790)
------------------------------------------------------------
Options outstanding as of
March 31, 2000 -- $ -- -- $ --
===========================================================
</TABLE>
================================================================================
8. ILLIQUID OR RESTRICTED SECURITIES
As of March 31, 2000, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 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 March 31, 2000 was
$16,396,768, which represents 5.85% of the Fund's net assets, of which $75,972
is considered restricted. Information concerning restricted securities is as
follows:
<TABLE>
<CAPTION>
VALUATION
ACQUISITION COST PER UNIT AS OF
SECURITY DATE PER UNIT MARCH 31, 2000
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS
Tag Heuer International SA, 12% Sr. Sub. Nts., 12/15/05 5/14/96 105.25% 108.53%
-------------------------------------------------------------------------------------------------------------------------
</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 bor-rowings 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 0.45%. 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
0.08% per annum.
The Fund had no borrowings outstanding during the six months ended March
31, 2000.
33 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 36
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
Edward L. Cameron, Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Ruggero de'Rossi, Vice President
Arthur P. Steinmetz, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
INVESTMENT ADVISOR OppenheimerFunds, Inc.
================================================================================
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
================================================================================
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
================================================================================
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
================================================================================
INDEPENDENT AUDITORS Deloitte & Touche llp
================================================================================
LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been
taken from the records of the Fund without
examination of those records by the independent
auditors.
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 more
complete 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.
34 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 37
OPPENHEIMERFUNDS FAMILY
<TABLE>
<CAPTION>
==============================================================================================
GLOBAL EQUITY
<S> <C>
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
==============================================================================================
EQUITY
Stock Stock & Bond
Enterprise Fund(1) Main Street(R) Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R) Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund Specialty
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
=============================================== ===============================================
FIXED INCOME
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund MainStreet(R) California Municipal Fund(1)
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, NY10048-0203.
(C) Copyright 2000 OppenheimerFunds, Inc. All rights reserved.
35 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 38
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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
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information and transactions
WWW.OPPENHEIMERFUNDS.COM
GENERAL INFORMATION
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TELEPHONE TRANSACTIONS
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PHONELINK
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OPPENHEIMERFUNDS
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1.800.835.3104
TRANSFER AND SHAREHOLDER SERVICING AGENT
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P.O. Box 5270, Denver, CO 80217-5270
TICKER SYMBOLS
Class A: OIBAX Class B: OIBBX Class C: OIBCX
[OPPENHEIMERFUNDS LOGO]
RS0880.001.0300 MAY 30, 2000
