<PAGE> 1
[PHOTO]
ANNUAL REPORT SEPTEMBER 30, 2000
Oppenheimer
INTERNATIONAL BOND FUND
[OPPENHEIMERFUNDS LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
Contents
1 President's Letter
3 An Interview
with Your Fund's
Managers
7 Fund Performance
14 FINANCIAL
STATEMENTS
38 INDEPENDENT
AUDITORS' REPORT
39 Federal
Income Tax
Information
40 Officers and Trustees
REPORT HIGHLIGHTS
--------------------------------------------------------------------------------
THE EMERGING MARKETS OF RUSSIA, BRAZIL AND MEXICO benefited from rising oil
prices and strong economic growth.
WEAKNESS IN THE EURO, HEIGHTENED BY A STRONG U.S. DOLLAR, held back European
debt securities.
OUR SUCCESSFUL NAVIGATION OF CHANGING ECONOMIC AND MARKET CONDITIONS offset a
difficult investment environment.
AVERAGE ANNUAL TOTAL RETURNS*
For the 1-Year Period
Ended 9/30/00
Class A
Without With
Sales Chg. Sales Chg.
------------------------
8.93% 3.75%
Class B
Without With
Sales Chg. Sales Chg.
------------------------
7.94% 3.00%
Class C
Without With
Sales Chg. Sales Chg.
------------------------
7.95% 6.96%
*SEE NOTES ON PAGE 12 FOR FURTHER DETAILS.
<PAGE> 3
[PHOTO][PHOTO]
JAMES C. SWAIN
Chairman
Oppenheimer
International
Bond Fund
BRIDGET A. MACASKILL
President
Oppenheimer
International
Bond Fund
PRESIDENT'S LETTER
DEAR SHAREHOLDER,
Over the past several decades, our investment teams have learned the importance
of avoiding complacency when it comes to navigating the financial
markets--especially when times are good. Right now, times appear particularly
good. The U.S. economy is in its tenth year of expansion. In the bond market,
U.S. Treasury issues have been performing favorably over the past year. In
addition, despite volatility in the second quarter, the stock market has been
providing attractive returns from a wide spectrum of industry sectors,
capitalization ranges and investment styles.
We have arrived at this juncture after months of monitoring the rapid
pace of global economic growth and its implications for inflation, as well as
the Federal Reserve Board's evolving monetary policy. At this point, economic
indicators suggest a dampening of short-term inflationary pressures. While
recent increases in oil prices are certainly taking their toll, we don't believe
this signals a return to 1970's-style inflation. Accordingly, if the Fed
continues in its diligence, the economy could maintain its healthy rate of
growth.
In the bond market, the achievement of a federal budget surplus has
prompted the Treasury to buy back many of its long-term securities. The
resulting supply shortage boosted these securities' returns, causing an
inversion of the yield curve-- an unusual situation in which shorter term
Treasuries yield more than their longer term counterparts. Other bond sectors
are offering many opportunities in the form of attractive valuations.
Perhaps most important is that we have begun to see encouraging signs in
the stock market. Formerly high-flying Internet stocks have generally come down
to earth, and investors have
1 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 4
PRESIDENT'S LETTER
begun to refocus on companies with strong business fundamentals and justifiable
valuations. Investors have also returned to long-neglected, value-oriented
companies.
What else do these various trends tell us? They tell us that the ability
to discriminate between long-term potential and short-lived fads has become more
critical than ever. Trying to generate good long-term performance requires
tracking the best companies through intensive research, combined with
hard-earned experience.
At OppenheimerFunds, our seasoned portfolio management teams fight
complacency by remaining constantly aware of the risks that face the economy and
financial markets. Virtually anything could affect the overall markets--a surge
in inflation, a decline in productivity, deteriorating corporate earnings, or
even the new Administration's proposals regarding tax reform, healthcare and
Social Security. However, by remaining vigilant in our quest for fundamentally
sound businesses, we believe we can find good investments that can weather
market volatility.
In this environment, we encourage you to consult your financial advisor
and to stay on track with your long-term financial plan. For our part, we will
continue to monitor the opportunities and risks ever present in the financial
markets. Thank you for your confidence in OppenheimerFunds, The Right Way to
Invest.
Sincerely,
/S/JAMES C. SWAIN /S/BRIDGET A. MACASKILL
James C. Swain Bridget A. Macaskill
October 20, 2000
THESE GENERAL MARKET VIEWS REPRESENT OPINIONS OF OPPENHEIMERFUNDS, INC.
AND ARE NOT INTENDED TO PREDICT OR DEPICT PERFORMANCE OF THE SECURITIES MARKETS
OR ANY PARTICULAR FUND. SPECIFIC DISCUSSION, AS IT APPLIES TO YOUR FUND, IS
CONTAINED IN THE PAGES THAT FOLLOW. STOCKS AND BONDS HAVE DIFFERENT TYPES OF
INVESTMENT RISKS; STOCKS ARE SUBJECT TO MARKET VOLATILITY AND BONDS ARE SUBJECT
TO CREDIT AND INTEREST RATE RISKS.
2 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 5
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Art Steinmetz
Ruggero de'Rossi
AN INTERVIEW WITH YOUR FUND'S MANAGERS
Q. HOW DID OPPENHEIMER INTERNATIONAL BOND FUND PERFORM DURING THE 12 MONTHS THAT
ENDED SEPTEMBER 30, 2000?(1)
A. In what has been a challenging environment for fixed income markets, the Fund
performed exceptionally well. Stronger-than-expected growth in the developed
markets of Europe fueled inflation fears during the period, prompting the
European Central Bank to raise interest rates. As a result, bond yields on new
issues reflected those increases, eroding the value of existing lower yielding
securities.
Furthermore, a strong U.S. dollar, combined with weakness in the euro,
the currency of the European Monetary Union, contributed to massive capital
flows into U.S. markets--mostly at the expense of European markets. However, by
maintaining a higher-than-usual exposure to emerging markets and emerging market
currencies, which were largely unaffected by these developments, the Fund
enjoyed positive returns during its fiscal year ended September 30, 2000. The
Fund's Class A shares generated an 8.93% average annual total return, without
sales charge, for the period ended September 30, 2000, outperforming its
benchmarks for the same one-year period. The Salomon Brothers Non-US Dollar
World Government Bond Index produced a -7.86% return and the Lipper
International Income Index produced a -3.24% return.(2)
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.
2. The Salomon Brothers Non-US Dollar World Government Bond Index is a market
capitalization weighted benchmark that tracks the performance of 13 government
bond markets including Australia, Canada, Japan and 10 European countries. Thus,
the Index does not reflect the performance of the fixed income markets in either
the United States or in any emerging market countries. In addition, it is
comprised of only government bonds and does not reflect the performance of
corporate bonds. Lipper International Income Index includes funds that state in
their prospectuses that they invest primarily in U.S. dollar and non-U.S. dollar
debt securities of issuers located in at least three countries, excluding the
United States, except in periods of market weakness. Additionally, the Index's
returns do not consider sales charge. It is an unmanaged index and cannot be
purchased directly by investors.
3 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 6
"By maintaining a
higher-than-usual
exposure to the core
emerging markets
and their currencies,
the Fund enjoyed
strong returns."
AN INTERVIEW WITH YOUR FUND'S MANAGERS
WHY DID EMERGING MARKETS PERFORM SO POSITIVELY?
Throughout the fiscal year, the core emerging-market economies of Russia, Brazil
and Mexico all benefited from rising oil prices, reduced budget deficits, and
increased treasury reserves. Russia, in particular, rebounded dramatically from
default with a successful restructuring of its debt. As a major component of the
Fund, Russian bonds exhibited impressive returns during the period, which
contributed notably to overall performance. Robust growth in Brazil and, to a
greater extent, Mexico, also boosted the performance of the Fund. In fact, the
recent election of Vicente Fox Quesada as Mexico's president, in our view, bodes
extremely well for the Mexican economy and the Mexican government's efforts to
contain inflation.
In addition, as capital flows into the United States showed few signs of
waning, the value of dollar-denominated assets in general moved higher. Because
the currencies of emerging markets are closely tied to movements in the U.S.
dollar, their higher yielding securities reaped the rewards.
WHAT OTHER STRATEGIES DID YOU EMPLOY IN THIS ENVIRONMENT?
Apart from emerging markets, the international fixed income landscape proved
increasingly difficult. Thus, we created opportunities through our navigation of
changing economic and market conditions. For example, in response to the sagging
euro, we maintained a lower-than-usual exposure to Europe. Similarly, we reduced
our exposure in Japan, but for different reasons. While the relationship between
the Japanese yen and the U.S. dollar has remained relatively stable, a stagnant
Japanese economy has kept bond yields unattractively low.
4 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 7
AVERAGE ANNUAL
TOTAL RETURNS
For the Periods Ended 9/30/00(3)
Class A Since
1-Year 5-Year Inception
------------------------------
3.75% 5.84% 6.51%
Class B Since
1-Year 5-Year Inception
------------------------------
3.00% 5.75% 6.51%
Class C Since
1-Year 5-Year Inception
------------------------------
6.96% 6.05% 6.64%
Another strategy that worked to our advantage throughout the period was
the Fund's emphasis on sovereign or government debt versus corporate securities.
This was done for several reasons. First, we believed that, as the U.S. Federal
Reserve's policy of monetary tightening produced visible signs of economic
slowdown, sovereign debt would become more attractive to international fixed
income investors. Second, with spreads, or differences in yield, between
corporate and sovereign bonds nearing all-time highs this spring, we anticipated
that improving economic conditions in emerging markets would bring interest
rates down, pushing government bond prices higher. Finally, because sovereign
debt is more liquid, or more easily traded, than corporate debt, it typically
performs better during a rally. Concerned over the run-up in the Nasdaq--and the
likelihood of a consequent decline in most markets--we began to reposition the
Fund for greater liquidity in early March. What resulted was a more flexible and
more agile portfolio, which helped to cushion the Fund from volatility when the
Nasdaq experienced major setbacks shortly thereafter.
WHAT IS YOUR OUTLOOK FOR THE INTERNATIONAL BOND MARKETS?
We remain optimistic, particularly with respect to the attractiveness of
emerging-market debt. However, because there appear to be fewer opportunities
for price appreciation on the horizon, we've begun to reduce our exposure in
terms of risk. In other words, while we continue to have a substantial
allocation in emerging-market debt, we are investing this portion of the
portfolio in higher quality, less-aggressive securities.
3. See page 12 for further details.
5 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 8
REGIONAL ALLOCATION
Percentage of invested
assets(4)
[PIE CHART]
<TABLE>
<S> <C>
- Latin America 33.2%
- Europe 20.6
- United States/
Canada 14.6
- Asia 11.8
- Middle East/
Africa 10.6
- Emerging
Europe 9.2
</TABLE>
STANDARDIZED YIELDS(5)
For the 30 days Ended 9/30/00
<TABLE>
<S> <C>
Class A 11.14%
Class B 10.94
Class C 10.93
</TABLE>
As for the developed markets, the jury is still out on the euro. This has
convinced us to maintain a cautious view. Although we've positioned a portion of
the Fund to take advantage of a rebound in the euro, capital flows still favor
the U.S. dollar. We will continue to monitor the situation closely, and are
prepared to adjust our asset allocation, should we see a bottoming out of the
euro.
Of course, no one can truly predict what the economy or the markets will
serve up. So our focus is on in-depth, painstaking research. By analyzing the
overall risks of each economy, as well as the changing relationships among them,
we are confident in our ability to capitalize on this wealth of investment
opportunity. In fact, uncovering fixed income opportunities the world over is an
important reason why Oppenheimer International Bond Fund is part of The Right
Way to Invest.
<TABLE>
<CAPTION>
TOP TEN COUNTRY HOLDINGS(4)
-------------------------------------------------------------
<S> <C>
United States 12.7%
-------------------------------------------------------------
Brazil 9.7
-------------------------------------------------------------
Mexico 9.0
-------------------------------------------------------------
Russia 7.7
-------------------------------------------------------------
Argentina 6.4
-------------------------------------------------------------
Japan 6.3
-------------------------------------------------------------
Turkey 5.2
-------------------------------------------------------------
Great Britain 5.0
-------------------------------------------------------------
Venezuela 3.8
-------------------------------------------------------------
The Netherlands 3.5
</TABLE>
4. Portfolio is subject to change. Percentages are as of September 30, 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 September 30, 2000. Falling share prices will tend to artificially raise
yields.
6 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 9
FUND PERFORMANCE
HOW HAS THE FUND PERFORMED?
Below is a discussion by OppenheimerFunds, Inc. of the Fund's performance during
its fiscal year ended September 30, 2000, followed by a graphical comparison of
the Fund's performance to two appropriate broad-based market indices.
MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the fiscal year that ended
September 30, 2000, Oppenheimer International Bond Fund delivered strong
performance, which, to a great extent, reflected the ongoing recovery of
emerging markets. Reduction of budget deficits, growth in treasury reserves and
rising oil prices proved advantageous for the core markets of Russia, Brazil and
Mexico. European markets were stymied by weakness in the euro, as many
currencies fell against a strong U.S. dollar. The Manager emphasized
emerging-market debt throughout the period, maintaining a smaller position in
European bonds. A widening of yield spreads between corporate securities and
sovereign debt also worked to the benefit of the Fund, which was primarily
invested in typically more-liquid sovereign issues. Investments in Japanese
markets were reduced, as economic stagnation continued to depress bond yields.
The Fund's portfolio holdings, allocations and strategies are subject to change.
7 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 10
FUND PERFORMANCE Continued
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held from the inception date of June 15, 1995 until September 30, 2000. The
Fund's performance reflects the deduction of the maximum initial sales charge on
Class A shares, the applicable contingent deferred sales charge on Class B and
Class C shares, and reinvestments of all dividends and capital gains
distributions.
The performance of each class of the Fund's shares is compared to two
indices because the Fund invests in debt securities issued by governments in
both developed countries and emerging market countries and in debt securities
issued by companies located in those countries. In the Manager's view, no single
index adequately combines both types of investments.
Performance is compared to the Salomon Brothers Non-US Dollar World
Government Bond Index, a subset of the Salomon Brothers World Government Bond
Index. The Salomon Brothers Non-US Dollar World Government Bond Index is a
market capitalization weighted benchmark that tracks the performance of 13
government bond markets including Australia, Canada, Japan and 10 European
countries. Thus, the Index does not reflect the performance of the fixed income
markets in either the United States or in any emerging market countries. In
addition, it is composed of only government bonds and does not reflect the
performance of corporate bonds.
8 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 11
Performance is also compared to the Salomon Brothers Brady Bond Index,
which provides a total return benchmark for emerging market country bonds. It is
designed to allow direct comparison of the developing country debt market with
other markets. A Brady Bond is a bond that is exchanged for debt or new money
under the debt-restructuring program initiated in 1990 by the U.S. Department of
the Treasury.
Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs that follow shows the effect of taxes. The Fund's performance
reflects the effects of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's performance, it
must be noted that the Fund's investments are not limited to the securities or
countries in the indices.
9 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 12
FUND PERFORMANCE
[THE FOLLOWING TABLE WAS ORIGINALLY A LINE GRAPH IN THE PRINTED MATERIALS]
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF
$10,000 HYPOTHETICAL INVESTMENTS IN:
<TABLE>
<CAPTION>
Oppenheimer International Salomon Brothers Non-US Dollar Salomon Brothers
Bond Fund (Class A) World Government Bond Index Brady Bond Index
<S> <C> <C> <C>
06/15/95 $9525 $10000 $10000
06/30/95 9570 10050 10225
09/30/95 10014 9806 10898
12/31/95 10473 10009 11913
03/31/96 10860 9840 12444
06/30/96 11362 9879 13584
09/30/96 11898 10201 14997
12/31/96 12492 10418 16032
03/31/97 12584 9815 16227
06/30/97 12934 10092 17889
09/30/97 13246 10114 19130
12/31/97 12799 9974 18734
03/31/98 12978 10015 19758
06/30/98 12850 10182 18892
09/30/98 11591 11160 16045
12/31/98 12242 11748 17430
03/31/99 12216 11179 18382
06/30/99 12635 10678 18564
09/30/99 12818 11331 18865
12/31/99 13589 11152 21079
03/31/00 14150 11023 22267
06/30/00 13986 10935 22275
09/30/00 13962 10441 23610
</TABLE>
AVERAGE ANNUAL RETURN OF CLASS A SHARES OF THE FUND AT 9/30/00(1)
1-Year 3.75% 5-Year 5.84% Life 6.51%
[THE FOLLOWING TABLE WAS ORIGINALLY A LINE GRAPH IN THE PRINTED MATERIALS]
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF
$10,000 HYPOTHETICAL INVESTMENTS IN:
<TABLE>
<CAPTION>
Oppenheimer International Salomon Brothers Non-US Dollar Salomon Brothers Brady
Bond Fund (Class B) World Government Bond Index Bond Index
<S> <C> <C> <C>
06/15/95 $10000 $10000 $10000
06/30/95 10045 10050 10225
09/30/95 10492 9806 10898
12/31/95 10929 10009 11913
03/31/96 11312 9840 12444
06/30/96 11837 9879 13584
09/30/96 12350 10201 14997
12/31/96 12943 10418 16032
03/31/97 13014 9815 16227
06/30/97 13352 10092 17889
09/30/97 13649 10114 19130
12/31/97 13165 9974 18734
03/31/98 13324 10015 19758
06/30/98 13168 10182 18892
09/30/98 11852 11160 16045
12/31/98 12496 11748 17430
03/31/99 12447 11179 18382
06/30/99 12851 10678 18564
09/30/99 13013 11331 18865
12/31/99 13773 11152 21079
03/31/00 14318 11023 22267
06/30/00 14094 10935 22275
09/30/00 13963 10441 23610
</TABLE>
AVERAGE ANNUAL RETURN OF CLASS B SHARES OF THE FUND AT 9/30/00(1)
1-Year 3.00% 5-Year 5.75% Life 6.51%
10 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 13
[THE FOLLOWING TABLE WAS ORIGINALLY A LINE GRAPH IN THE PRINTED MATERIALS]
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF
$10,000 HYPOTHETICAL INVESTMENTS IN:
<TABLE>
<CAPTION>
Oppenheimer International Salomon Brothers Non-US Dollar Salomon Brothers Brady
Bond Fund (Class C) World Government Bond Index Bond Index
<S> <C> <C> <C>
06/15/95 $10000 $10000 $10000
06/30/95 10045 10050 10225
09/30/95 10473 9806 10898
12/31/95 10929 10009 11913
03/31/96 11311 9840 12444
06/30/96 11814 9879 13584
09/30/96 12350 10201 14997
12/31/96 12943 10418 16032
03/31/97 12990 9815 16227
06/30/97 13352 10092 17889
09/30/97 13649 10114 19130
12/31/97 13165 9974 18734
03/31/98 13324 10015 19758
06/30/98 13169 10182 18892
09/30/98 11853 11160 16045
12/31/98 12497 11748 17430
03/31/99 12448 11179 18382
06/30/99 12852 10678 18564
09/30/99 13014 11331 18865
12/31/99 13774 11152 21079
03/31/00 14319 11023 22267
06/30/00 14097 10935 22275
09/30/00 14048 10441 23610
</TABLE>
AVERAGE ANNUAL RETURN OF CLASS C SHARES OF THE FUND AT 9/30/00(1)
1-Year 6.96% 5-Year 6.05% Life 6.64%
THE PERFORMANCE INFORMATION FOR BOTH INDICES IN THE GRAPHS BEGINS ON 5/31/95.
1. See page 12 for further details.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
11 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 14
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. BECAUSE OF ONGOING
MARKET VOLATILITY, THE FUND'S RETURNS MAY HAVE CHANGED SUBSTANTIALLY FROM THE
RETURNS SHOWN IN THIS REPORT. FOR QUARTERLY UPDATES ON THE FUND'S PERFORMANCE,
PLEASE CONTACT YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048 OR VISIT OUR
WEBSITE, WWW.OPPENHEIMERFUNDS.COM.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. 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 1% (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.
12 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 15
FINANCIALS
13 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 16
STATEMENT OF INVESTMENTS September 30, 2000
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
==================================================================================================================================
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS--62.6%
----------------------------------------------------------------------------------------------------------------------------------
ARGENTINA--6.3%
Argentina (Republic of) Bonds:
9.75%, Series WW, 12/4/05 $ 285,000 $ 259,350
11.75%, 6/15/15 3,945,000 3,619,537
Bonos de Consolidacion de Deudas, Series PRE3, 2.696%, 9/1/02(1) [ARP] 3,084,239 2,828,868
----------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Par Bonds, 6%, 3/31/23(1) 705,000 479,400
----------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Unsec. Unsub. Nts., 11.75%, 4/7/09 510,000 481,950
----------------------------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas,
Series BPR01, 2.693%, 4/1/07(1) [ARP] 3,913,350 2,765,835
----------------------------------------------------------------------------------------------------------------------------------
City of Buenos Aires Bonds, Series 3, 10.50%, 5/28/04 [ARP] 4,410,000 3,872,098
--------------
14,307,038
----------------------------------------------------------------------------------------------------------------------------------
BELGIUM--2.2%
Belgium (Kingdom of) Bonds, Series 35, 5.75%, 9/28/10 [EUR] 5,620,000 5,018,670
----------------------------------------------------------------------------------------------------------------------------------
BRAZIL--6.6%
Brazil (Federal Republic of) Bonds:
10.125%, 5/15/27 3,310,000 2,573,525
12.25%, 3/6/30 315,000 286,650
12.75%, 1/15/20 10,510,000 10,089,600
----------------------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Gtd. Disc. Bonds, 7.375%, 4/15/24(1) 460,000 366,275
----------------------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Unsec. Unsub. Bonds, 11%, 8/17/40 1,979,000 1,581,221
--------------
14,897,271
----------------------------------------------------------------------------------------------------------------------------------
BULGARIA--1.0%
Bulgaria (Republic of) Front-Loaded Interest Reduction Bearer Bonds,
Tranche A, 3%, 7/28/12(1) 1,885,000 1,373,694
----------------------------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds, 7.75%, 7/28/11(1) 1,165,000 891,225
--------------
2,264,919
----------------------------------------------------------------------------------------------------------------------------------
CANADA--1.9%
Canada (Government of) Bonds, 7%, 12/1/06 [CAD] 5,990,000 4,235,479
----------------------------------------------------------------------------------------------------------------------------------
COLOMBIA--0.6%
Colombia (Republic of) Bonds, 9.75%, 4/23/09 1,780,000 1,432,900
----------------------------------------------------------------------------------------------------------------------------------
ECUADOR--0.6%
Ecuador (Republic of) Bonds, 4%, 8/15/30(1,2) 1,847,000 729,565
----------------------------------------------------------------------------------------------------------------------------------
Ecuador (Republic of) Unsec. Bonds:
4%, 8/15/30(1) 806,000 318,370
12%, 11/15/12(2) 114,000 80,085
12%, 11/15/12 435,000 305,587
--------------
1,433,607
----------------------------------------------------------------------------------------------------------------------------------
FRANCE--3.3%
France (Government of) Bonds, Obligations Assimilables du Tresor,
5.50%, 4/25/07 [EUR] 8,470,000 7,580,095
</TABLE>
14 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 17
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GERMANY--1.5%
Germany (Republic of) Bonds, 7.50%, 9/9/04 [EUR] 3,690,000 $ 3,516,613
----------------------------------------------------------------------------------------------------------------------------------
GREAT BRITAIN--5.0%
United Kingdom Treasury Bonds, 8.50%, 12/7/05 [GBP] 6,750,000 11,259,295
----------------------------------------------------------------------------------------------------------------------------------
GREECE--0.5%
Hellenic (Republic of) Bonds, 8.60%, 3/26/08 [GRD] 362,000,000 1,085,110
----------------------------------------------------------------------------------------------------------------------------------
INDONESIA--0.1%
Perusahaan Listr Nts., 17%, 8/21/01 [IDR] 2,000,000,000 229,345
----------------------------------------------------------------------------------------------------------------------------------
IVORY COAST--0.5%
Ivory Coast (Government of) Past Due Interest Bonds,
Series F, 1.90%, 3/29/18(3) [FRF] 41,994,750 1,031,092
----------------------------------------------------------------------------------------------------------------------------------
JAPAN--2.4%
Japan (Government of) Bonds, Series 187, 3.30%, 6/20/06 [JPY] 537,400,000 5,476,944
----------------------------------------------------------------------------------------------------------------------------------
MEXICO--3.9%
United Mexican States Bonds:
10.375%, 2/17/09 215,000 234,458
11.375%, 9/15/16 2,335,000 2,720,275
11.50%, 5/15/26(4) 4,780,000 5,814,870
--------------
8,769,603
----------------------------------------------------------------------------------------------------------------------------------
NORWAY--1.6%
Norway (Government of) Bonds:
5.50%, 5/15/09 [NOK] 21,270,000 2,220,752
9.50%, 10/31/02 [NOK] 12,255,000 1,408,358
--------------
3,629,110
----------------------------------------------------------------------------------------------------------------------------------
PANAMA--0.8%
Panama (Republic of) Bonds, 8.875%, 9/30/27 222,000 185,925
----------------------------------------------------------------------------------------------------------------------------------
Panama (Republic of) Interest Reduction Bonds, 4.50%, 7/17/14(1) 2,140,000 1,712,000
--------------
1,897,925
----------------------------------------------------------------------------------------------------------------------------------
PERU--2.1%
Peru (Republic of) Sr. Nts., Zero Coupon, 6.12%, 2/28/16(5) 10,538,933 4,710,903
----------------------------------------------------------------------------------------------------------------------------------
PHILIPPINES--0.6%
Philippines (Republic of) Nts., 10.625%, 3/16/25 1,520,000 1,295,800
----------------------------------------------------------------------------------------------------------------------------------
RUSSIA--7.1%
Russian Federation Bonds, 8.25%, 3/31/30(6) 2,444,160 1,619,256
----------------------------------------------------------------------------------------------------------------------------------
Russian Federation Unsec. Unsub. Nts.:
8.75%, 7/24/05 1,511,000 1,201,245
12.75%, 6/24/28 350,000 304,938
----------------------------------------------------------------------------------------------------------------------------------
Russian Federation Unsub. Bonds, 2.50%, 3/31/30(1,7) 33,336,000 12,907,283
--------------
16,032,722
----------------------------------------------------------------------------------------------------------------------------------
SOUTH AFRICA--3.4%
South Africa (Republic of) Bonds, Series 153, 13%, 8/31/10 [ZAR] 58,005,000 7,770,809
----------------------------------------------------------------------------------------------------------------------------------
SPAIN--2.7%
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado,
4.95%, 7/30/05 [EUR] 7,130,000 6,180,538
</TABLE>
15 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 18
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SWEDEN--0.4%
Sweden (Kingdom of) Debs., Series 1038, 6.50%, 10/25/06 [SEK] 9,300,000 $ 1,029,710
----------------------------------------------------------------------------------------------------------------------------------
THE NETHERLANDS--3.5%
Netherlands (Government of) Bonds, 6.75%, 11/15/05 [EUR] 8,350,000 7,844,167
----------------------------------------------------------------------------------------------------------------------------------
TURKEY--0.3%
Turkey (Republic of) Bonds, 11.75%, 6/15/10 718,000 719,616
----------------------------------------------------------------------------------------------------------------------------------
VENEZUELA--3.7%
Venezuela (Republic of) Bonds, 9.25%, 9/15/27(4) 1,810,000 1,229,895
----------------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Collateralized Par Bonds:
Series W-A, 6.75%, 3/31/20 3,250,000 2,413,125
Series W-B, 6.75%, 3/31/20 375,000 278,438
----------------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds, Series DL, 7.875%, 12/18/07(1) 5,215,714 4,482,228
--------------
8,403,686
--------------
Total Foreign Government Obligations (Cost $145,898,454) 142,052,967
==================================================================================================================================
LOAN PARTICIPATIONS--3.0%
Algeria (Republic of) Reprofiled Debt Loan Participation Nts.,
Tranche 1, 1.312%, 9/4/06(1,6) [JPY] 52,565,039 383,074
----------------------------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Trust III Nts., Tranche 3, 2.387%, 3/4/10(1,6,7) [JPY] 314,532,000 1,993,841
----------------------------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Unrestructured Nts., 6.615%, 1/22/01(6) [JPY] 95,366,666 858,265
----------------------------------------------------------------------------------------------------------------------------------
ING Barings LLC, Bank Mandiri Linked Nts., Series 5C, 8.344%, 6/1/05(1,6) 250,000 189,062
----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Bank Mandiri Loan:
Series 3C, 8.344%, 6/1/03(1,6) 250,000 182,500
Series 4C, 8.344%, 6/1/04(1,6) 250,000 175,000
Series 5 yr., 8.344%, 6/1/05(1,6) 250,000 170,000
----------------------------------------------------------------------------------------------------------------------------------
PT Bank Negara Indonesia Gtd. Nts.:
Series 3 yr., 10.094%, 8/25/01(1,6) 1,670,000 1,544,750
Series 4 yr., 10.344%, 8/25/02(1,6) 890,000 764,287
----------------------------------------------------------------------------------------------------------------------------------
Salomon Smith Barney, Inc., Bank Umum Loan,
Series C, 10.094%, 8/25/01(1,6) 500,000 462,500
--------------
Total Loan Participations (Cost $6,539,357) 6,723,279
==================================================================================================================================
CORPORATE BONDS AND NOTES--11.4%
Bakrie Investindo:
Zero Coupon Promissory Nts., 3/16/1999(3,6,8) [IDR] 5,990,000,000 102,393
Zero Coupon Promissory Nts., 7/10/1998(3,6,8) [IDR] 2,000,000,000 34,188
----------------------------------------------------------------------------------------------------------------------------------
Development Bank of Japan Gtd. Unsec. Bonds,
2.875%, 12/20/06 [JPY] 860,000,000 8,607,561
----------------------------------------------------------------------------------------------------------------------------------
Empresa Electrica del Norte Grande SA, 7.75% Bonds, 3/15/06(6,9) 1,420,000 315,950
----------------------------------------------------------------------------------------------------------------------------------
Hanvit Bank:
0%/12.75% Unsec. Sub. Nts., 3/1/10(2,10) 3,400,000 3,459,500
0%/12.75% Unsec. Sub. Nts., 3/1/10(10) 765,000 778,387
----------------------------------------------------------------------------------------------------------------------------------
Mexican Williams Sr. Nts., 7.671%, 11/15/08(1) 500,000 470,000
----------------------------------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/04(3,6,8) 365,000 10,038
----------------------------------------------------------------------------------------------------------------------------------
Petroleos Mexicanos Bonds, 9.50%, 9/15/27 855,000 884,925
----------------------------------------------------------------------------------------------------------------------------------
Procter & Gamble Co., 1.50% Sr. Unsec. Unsub. Bonds, 12/7/05 [JPY] 895,000,000 8,281,193
</TABLE>
16 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 19
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
==================================================================================================================================
<S> <C> <C>
CORPORATE BONDS AND NOTES Continued
PT Polysindo Eka Perkasa:
11% Nts., 6/18/03(3,6,8) $ 500,000 $ 65,000
11% Nts., 7/2/03(3,6,8) 1,000,000 130,000
20% Nts., 3/6/01(3,8) [IDR] 3,000,000,000 44,444
24% Nts., 6/16/03(3,8) [IDR] 2,000,000,000 29,630
24% Nts., 6/19/03(3,8) [IDR] 4,107,500,000 60,852
----------------------------------------------------------------------------------------------------------------------------------
Reliance Industries Ltd.:
10.25% Unsec. Nts., Series B, 1/15/97(4,11) 2,605,000 2,240,975
10.25% Unsec. Nts., Series B, 1/15/97(2) 250,000 215,065
----------------------------------------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(6) 70,000 74,683
--------------
Total Corporate Bonds and Notes (Cost $29,465,687) 25,804,784
</TABLE>
<TABLE>
<CAPTION>
UNITS
==================================================================================================================================
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
Mexico Value Rts., Exp. 6/30/03 (Cost $0) 984,000 --
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
==================================================================================================================================
<S> <C> <C>
STRUCTURED INSTRUMENTS--12.6%
Citibank NA (Nassau Branch), Mexican Nuevo Peso Linked Nts.:
18.70%, 3/3/03 [MXN] 29,160,361 3,151,011
27.40%, 9/20/01 [MXN] 32,103,244 3,518,643
----------------------------------------------------------------------------------------------------------------------------------
Citibank NA, Brazilian Real Linked Nts.:
24.10%, 5/26/03 [BRR] 2,400,000 1,332,033
24.25%, 5/23/03 [BRR] 4,794,118 2,663,659
----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (New York Branch),
Russian Obligatzii Federal'nogo Zaima Linked Nts.:
Series 25030, Zero Coupon, 146.53%, 12/15/01(5,6) [RUR] 2,143,000 53,085
Series 27001, 20.11%, 2/6/02(1,6) [RUR] 1,378,970 41,699
Series 27002, 20.11%, 5/22/02(1,6) [RUR] 625,200 18,453
Series 27003, 20.11%, 6/5/02(1,6) [RUR] 1,185,010 34,921
Series 27004, 20.11%, 9/18/02(1,6) [RUR] 686,610 19,937
Series 27005, 20.11%, 10/9/02(1,6) [RUR] 1,395,980 39,665
Series 27006, 20.11%, 1/22/03(1,6) [RUR] 1,973,290 54,911
Series 27007, 20.11%, 2/5/03(1,6) [RUR] 2,144,860 59,555
Series 27008, 20.11%, 5/21/03(1,6) [RUR] 625,200 17,051
Series 27009, 20.11%, 6/4/03(1,6) [RUR] 2,949,470 80,345
Series 27009, 20.11%, 6/4/03(1,6) [RUR] 6,363,674 173,351
Series 27010, 20.11%, 9/17/03(1,6) [RUR] 625,200 16,788
Series 27011, 20.11%, 10/8/03(1,6) [RUR] 3,635,620 95,229
Series 28001, 20.11%, 1/21/04(1,6) [RUR] 625,200 16,007
Series L, 20.11%, 2/6/02(1,6) [RUR] 566,080 17,118
Series L, 20.11%, 5/22/02(1,6) [RUR] 566,080 16,708
Series L, 20.11%, 6/5/02(1,6) [RUR] 566,080 16,682
Series L, 20.11%, 9/18/02(1,6) [RUR] 566,080 16,437
Series L, 20.11%, 10/9/02(1,6) [RUR] 566,080 16,085
Series L, 20.11%, 1/22/03(1,6) [RUR] 566,080 15,752
Series L, 20.11%, 2/5/03(1,6) [RUR] 566,080 15,718
Series L, 20.11%, 5/21/03(1,6) [RUR] 566,080 15,439
Series L, 20.11%, 6/4/03(1,6) [RUR] 566,080 15,420
Series L, 20.11%, 9/17/03(1,6) [RUR] 566,080 15,200
</TABLE>
17 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 20
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
==================================================================================================================================
<S> <C> <C>
STRUCTURED INSTRUMENTS Continued
Credit Suisse First Boston Corp. (New York Branch),
Russian Obligatzii Federal'nogo Zaima Linked Nts.: Continued
Series L, 20.11%, 10/8/03(1,6) [RUR] 566,080 $ 14,827
Series L, 20.11%, 1/21/04(1,6) [RUR] 566,080 14,493
Series L, Zero Coupon, 53.77%, 12/15/01(5,6) [RUR] 1,940,000 48,057
----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Turkish Lira Linked Nts., 11%, 12/11/00 8,500,000 8,573,950
----------------------------------------------------------------------------------------------------------------------------------
ING Barings LLC, Zero Coupon USD Russian Equity Linked Nts., 4/19/01 3,500 264,495
----------------------------------------------------------------------------------------------------------------------------------
Salomon Smith Barney, Inc. Brazilian Real Linked Nts., 23.30%, 5/30/03 [BRR] 4,760,000 2,689,258
----------------------------------------------------------------------------------------------------------------------------------
Salomon Smith Barney, Inc. Mexican Nuevo Peso Linked Nts.,
18.65%, 8/25/03 [MXN] 31,390,088 3,273,291
----------------------------------------------------------------------------------------------------------------------------------
Salomon Smith Barney, Inc. Turkish Lira Linked Nts., 11%, 1/16/01 2,209,261 2,230,735
--------------
Total Structured Instruments (Cost $28,684,723) 28,656,008
</TABLE>
<TABLE>
<CAPTION>
DATE STRIKE CONTRACTS
==================================================================================================================================
<S> <C> <C> <C> <C>
OPTIONS PURCHASED--0.1%
European Monetary Unit Call 12/5/00 EUR0.937 5,029,005 22,766
----------------------------------------------------------------------------------------------------------------------------------
European Monetary Unit/
Japanese Yen Call(6) 10/24/00 $97.86 6,435,000 28,333
----------------------------------------------------------------------------------------------------------------------------------
South Korean Won Call 11/28/00 KRW1,100.00 8,700,000 52,200
----------------------------------------------------------------------------------------------------------------------------------
Thailand Baht Call(6) 12/6/00 THB38.00 649,040,000 64,904
--------------
Total Options Purchased (Cost $543,758) 168,203
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
==================================================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENTS--8.7%
Repurchase agreement with PaineWebber, Inc., 6.50%,
dated 9/29/00, to be repurchased at $19,837,740 on 10/2/00,
collateralized by U.S. Treasury Nts., 4.25%-5.50%,
7/31/01-11/15/03, with a value of $20,241,415 (Cost $19,827,000) 19,827,000 19,827,000
----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $230,958,979) 98.4% 223,232,241
----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.6 3,630,364
--------------------------------------
NET ASSETS 100.0% $226,862,605
======================================
</TABLE>
18 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 21
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
<TABLE>
<S> <C> <C> <C>
ARP Argentine Peso JPY Japanese Yen
BRR Brazilian Real KRW South Korean Won
CAD Canadian Dollar MXN Mexican Nuevo Peso
EUR Euro NOK Norwegian Krone
FRF French Franc RUR Russian Ruble
GBP British Pound Sterling SEK Swedish Krona
GRD Greek Drachma THB Thai Baht
IDR Indonesian Rupiah ZAR South African Rand
</TABLE>
1. Represents the current interest rate for a variable or increasing rate
security.
2. 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 $4,484,215 or 1.98% of the Fund's net
assets as of September 30, 2000.
3. Issuer is in default.
4. A sufficient amount of liquid assets has been designated to cover outstanding
written options, as follows:
<TABLE>
<CAPTION>
PRINCIPAL/CONTRACTS EXPIRATION EXERCISE PREMIUM MARKET VALUE
SUBJECT TO CALL/PUT DATE PRICE RECEIVED SEE NOTE 1
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
European Monetary Unit Put 4,594,035 12/5/00 EUR0.856 $ 47,778 $ 37,359
European Monetary Unit/Japanese Yen Put $6,435,000 10/24/00 $ 91.00 44,897 19,157
United Mexican States Bonds Call 4,780 10/10/00 128.00% 35,850 110
United Mexican States Bonds Put 4,780 10/10/00 124.50 169,690 157,023
Venezuela (Republic of) Bonds Call 840 11/13/00 68.80 9,912 6,888
-------------------------
$308,127 $220,537
=========================
</TABLE>
5. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
6. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
7. When-issued security to be delivered and settled after September 30, 2000.
8. Non-income-producing security.
9. Securities with an aggregate market value of $315,950 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 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.
11. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
19 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 22
STATEMENT OF INVESTMENTS Continued
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC DIVERSIFICATION, AS A
PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
<TABLE>
<CAPTION>
GEOGRAPHICAL DIVERSIFICATION MARKET VALUE PERCENT
--------------------------------------------------------------------------------------------------
<S> <C> <C>
United States $28,276,396 12.7%
Brazil 21,582,220 9.7
Mexico 20,067,473 9.0
Russia 17,256,149 7.7
Argentina 14,307,039 6.4
Japan 14,084,505 6.3
Turkey 11,524,301 5.2
Great Britain 11,259,295 5.0
Venezuela 8,403,686 3.8
The Netherlands 7,844,167 3.5
South Africa 7,770,809 3.5
France 7,580,095 3.4
Spain 6,180,538 2.8
Belgium 5,018,670 2.2
Peru 4,710,903 2.1
Korea, Republic of (South) 4,237,888 1.9
Canada 4,235,479 1.9
Indonesia 4,193,989 1.9
Norway 3,629,111 1.6
Germany 3,516,613 1.6
Algeria 3,235,179 1.4
India 2,456,039 1.1
Bulgaria 2,264,919 1.0
Panama 1,897,925 0.9
Ecuador 1,433,608 0.6
Colombia 1,432,900 0.6
Philippines 1,295,800 0.6
Greece 1,085,110 0.5
Ivory Coast 1,031,092 0.5
Sweden 1,029,710 0.5
Chile 315,950 0.1
Switzerland 74,683 0.0
---------------------------------
Total $223,232,241 100.0%
=================================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 23
STATEMENT OF ASSETS AND LIABILITIES September 30, 2000
<TABLE>
<S> <C>
==========================================================================================================
ASSETS
Investments, at value (cost $230,958,979)--see accompanying statement $223,232,241
----------------------------------------------------------------------------------------------------------
Cash 351,989
----------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $937,567) 937,567
----------------------------------------------------------------------------------------------------------
Cash--collateral for futures 410,000
----------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 103,418
----------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 4,747,027
Shares of beneficial interest sold 277,576
Other 3,425
--------------
Total assets 230,063,243
==========================================================================================================
LIABILITIES
Unrealized depreciation on foreign currency contracts 254,961
----------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $308,127)--see accompanying statement 220,537
----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased on a when-issued basis 795,117
Shares of beneficial interest redeemed 717,385
Dividends 687,702
Closed foreign currency contracts 249,618
Distribution and service plan fees 146,250
Daily variation on futures contracts 26,248
Trustees' compensation 1,571
Other 101,249
--------------
Total liabilities 3,200,638
==========================================================================================================
NET ASSETS $226,862,605
==============
==========================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $286,287,868
----------------------------------------------------------------------------------------------------------
Overdistributed net investment income (565,330)
----------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (50,944,836)
----------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of
assets and liabilities denominated in foreign currencies (7,915,097)
--------------
NET ASSETS $226,862,605
==============
</TABLE>
21 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 24
STATEMENT OF ASSETS AND LIABILITIES Continued
<TABLE>
<S> <C>
==========================================================================================================
NET ASSET VALUE PER SHARE
----------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$100,928,119 and 24,106,571 shares of beneficial interest outstanding) $4.19
Maximum offering price per share (net asset value plus sales charge of 4.75% of
offering price) $4.40
----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $98,271,661
and 23,551,443 shares of beneficial interest outstanding) $4.17
----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $27,662,825
and 6,631,791 shares of beneficial interest outstanding) $4.17
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 25
STATEMENT OF OPERATIONS For the Year Ended September 30, 2000
<TABLE>
<S> <C>
==========================================================================================================
INVESTMENT INCOME
Interest (net of foreign withholding taxes of $151,591) $29,787,397
----------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $72) 410
-------------
Total income 29,787,807
==========================================================================================================
EXPENSES
Management fees 1,910,655
----------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 277,421
Class B 1,152,536
Class C 307,355
----------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 388,411
----------------------------------------------------------------------------------------------------------
Shareholder reports 185,088
----------------------------------------------------------------------------------------------------------
Custodian fees and expenses 145,027
----------------------------------------------------------------------------------------------------------
Trustees' compensation 2,773
----------------------------------------------------------------------------------------------------------
Other 90,651
-------------
Total expenses 4,459,917
Less expenses paid indirectly (39,430)
-------------
Net expenses 4,420,487
==========================================================================================================
NET INVESTMENT INCOME 25,367,320
==========================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 7,287,599
Closing of futures contracts 329,009
Closing and expiration of option contracts written 118,557
Foreign currency transactions (19,029,644)
-------------
Net realized loss (11,294,479)
----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 8,460,132
Translation of assets and liabilities denominated in foreign currencies (1,785,490)
-------------
Net change 6,674,642
-------------
Net realized and unrealized loss (4,619,837)
==========================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $20,747,483
=============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 26
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 2000 1999
================================================================================================
<S> <C> <C>
OPERATIONS
------------------------------------------------------------------------------------------------
Net investment income $ 25,367,320 $ 33,032,068
------------------------------------------------------------------------------------------------
Net realized loss (11,294,479) (26,122,910)
------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 6,674,642 17,536,670
-------------------------------
Net increase in net assets resulting from operations 20,747,483 24,445,828
================================================================================================
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (5,798,494) (12,490,131)
Class B (5,737,841) (14,069,900)
Class C (1,454,587) (3,315,800)
------------------------------------------------------------------------------------------------
Return of capital distribution:
Class A (4,694,873) --
Class B (4,486,212) --
Class C (1,251,966) --
================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 16,710 7,013,720
Class B (19,365,519) 1,272,305
Class C (1,436,387) 2,430,203
================================================================================================
NET ASSETS
------------------------------------------------------------------------------------------------
Total increase (decrease) (23,461,686) 5,286,225
------------------------------------------------------------------------------------------------
Beginning of period 250,324,291 245,038,066
-------------------------------
End of period [including undistributed (overdistributed) net
investment income of $(565,330) and $744,959, respectively] $226,862,605 $250,324,291
===============================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 27
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A YEAR ENDED SEPTEMBER 30, 2000 1999 1998 1997 1996
===================================================================================================================
<S> <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
-------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .45 .58 .56 .52 .52
Net realized and unrealized gain (loss) (.08) (.14) (1.20) .08 .40
----------------------------------------------------------------
Total income (loss) from
investment operations .37 .44 (.64) .60 .92
-------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.21) (.53) (.53) (.53) (.53)
Return of capital distribution (.20) -- -- -- --
Distributions from net realized gain -- -- (.02) (.05) --
----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.41) (.53) (.55) (.58) (.53)
-------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.19 $ 4.23 $ 4.32 $ 5.51 $ 5.49
================================================================
===================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) 8.93% 10.58% (12.50)% 11.33% 18.82%
-------------------------------------------------------------------------------------------------------------------
===================================================================================================================
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $100,928 $102,236 $ 97,404 $114,847 $52,128
-------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $110,968 $101,948 $108,264 $ 89,112 $19,817
-------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 10.23% 13.47% 11.09% 9.24% 9.60%
Expenses 1.31% 1.26% 1.24%(3) 1.28%(3) 1.59%(3)
Expenses, net of indirect
and waiver of expenses 1.29% 1.25% N/A N/A 1.49%
-------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 288% 285% 446% 280% 273%
</TABLE>
1. 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 28
FINANCIAL HIGHLIGHTS CONTINUED
<TABLE>
<CAPTION>
CLASS B YEAR ENDED SEPTEMBER 30, 2000 1999 1998 1997 1996
============================================================================================================================
<S> <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
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .42 .55 .52 .48 .48
Net realized and unrealized gain (loss) (.09) (.14) (1.20) .07 .39
------------------------------------------------------------------
Total income (loss) from
investment operations .33 .41 (.68) .55 .87
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.20) (.50) (.49) (.48) (.49)
Return of capital distribution (.18) -- -- -- --
Distributions from net realized gain -- -- (.02) (.05) --
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.38) (.50) (.51) (.53) (.49)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.17 $ 4.22 $ 4.31 $ 5.50 $ 5.48
==================================================================
----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 7.94% 9.79% (13.16)% 10.52% 17.71%
----------------------------------------------------------------------------------------------------------------------------
============================================================================================================================
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 98,272 $118,632 $119,998 $122,874 $45,207
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $115,116 $122,878 $128,789 $ 87,557 $17,891
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 9.63% 12.70% 10.33% 8.57% 8.81%
Expenses 2.05% 2.02% 2.00%(3) 2.04%(3) 2.36%(3)
Expenses, net of indirect
and waiver of expenses 2.03% 2.01% N/A N/A 2.26%
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 288% 285% 446% 280% 273%
</TABLE>
1. 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 29
<TABLE>
<CAPTION>
CLASS C YEAR ENDED SEPTEMBER 30, 2000 1999 1998 1997 1996
======================================================================================================================
<S> <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
----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .41 .55 .52 .48 .48
Net realized and unrealized gain (loss) (.08) (.14) (1.20) .07 .39
-----------------------------------------------------------
Total income (loss) from
investment operations .33 .41 (.68) .55 .87
----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.19) (.50) (.49) (.48) (.48)
Return of capital distribution (.19) -- -- -- --
Distributions from net realized gain -- -- (.02) (.05) --
-----------------------------------------------------------
Total dividends and/or distributions
to shareholders (.38) (.50) (.51) (.53) (.48)
----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.17 $4.22 $ 4.31 $ 5.50 $ 5.48
===========================================================
======================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) 7.95% 9.80% (13.16)% 10.52% 17.92%
----------------------------------------------------------------------------------------------------------------------
======================================================================================================================
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $27,663 $29,456 $27,636 $28,684 $10,282
----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $30,710 $28,918 $29,336 $19,883 $ 4,039
----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 9.55% 12.76% 10.33% 8.62% 8.76%
Expenses 2.05% 2.02% 2.00%(3) 2.04%(3) 2.36%(3)
Expenses, net of indirect
and waiver of expenses 2.03% 2.01% N/A N/A 2.25%
----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 288% 285% 446% 280% 273%
</TABLE>
1. 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer International Bond Fund (the Fund) is a registered investment
company organized as a Massachusetts Business Trust with a single series of the
same name. The Fund is registered as 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 a front-end
sales charge. Class B and Class C shares are sold without a front-end 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 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 listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued 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. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
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 are leveraged, which increases the notes' volatility
relative to the principal of the security. Fluctuations in value of these
securities are recorded as unrealized gains and losses in the accompanying
financial statements. As of September 30, 2000, the market value of these
securities comprised 12.6% of the Fund's net assets and resulted in unrealized
losses at September 30, 2000, of $28,715. The Fund also hedges a portion of the
foreign currency exposure generated by these securities, as discussed in Note 5.
--------------------------------------------------------------------------------
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for securities
that have been purchased by the Fund on a when-issued basis can take place a
month or more after the trade date. Normally the settlement date occurs within
six months after the trade date; however, the Fund may, from time to time,
purchase securities whose settlement date extends beyond six months and possibly
as long as two years or more beyond trade date. During this period, such
securities do not earn interest, are subject to
28 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 31
market fluctuation and may increase or decrease in value prior to their
delivery. The Fund maintains segregated assets with a market value equal to or
greater than the amount of its purchase commitments. The purchase of securities
on a when-issued or forward commitment basis may increase the volatility of the
Fund's net asset value to the extent the Fund makes such purchases while
remaining substantially fully invested. As of September 30, 2000, the Fund had
entered into outstanding net when-issued or forward commitments of $795,117.
In connection with its ability to purchase securities on a when-issued
basis, the Fund may enter into mortgage dollar-rolls in which the Fund sells
securities for delivery in the current month and simultaneously contracts with
the same counterparty to repurchase similar (same type, coupon and maturity) but
not identical securities on a specified future date. The Fund records each
dollar-roll as a sale and a new purchase transaction.
--------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. As of September 30, 2000, securities with an
aggregate market value of $1,507,637, representing 0.66% 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.
29 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, 2000, the Fund had available for federal tax purposes unused
capital loss carryovers as follows:
<TABLE>
<CAPTION>
EXPIRING
-------------------------------
<S> <C>
2006 $ 3,413,515
2007 24,055,190
2008 4,438,059
</TABLE>
--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
--------------------------------------------------------------------------------
CLASSIFICATION OF DIVIDENDS AND 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 dividends and distributions made during the fiscal 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
dividends and distributions, the fiscal year in which amounts are distributed
may differ from the fiscal year in which the income or realized gain was
recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended September 30, 2000, amounts have been reclassified to reflect a
decrease in paid-in capital of $10,433,051, a decrease in undistributed net
investment income of $3,253,636, and a decrease in accumulated net realized loss
on investments of $13,686,687. Net assets of the Fund were unaffected by the
reclassifications.
--------------------------------------------------------------------------------
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
accreted 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.
30 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 33
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
================================================================================
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 2000 YEAR ENDED SEPTEMBER 30, 1999
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Sold 17,212,754 $ 74,398,275 11,247,933 $ 48,852,991
Dividends and/or
distributions reinvested 1,563,403 6,713,788 1,806,309 7,837,034
Redeemed (18,821,217) (81,095,353) (11,446,723) (49,676,305)
---------------------------------------------------------------
Net increase (decrease) (45,060) $ 16,710 1,607,519 $ 7,013,720
===============================================================
------------------------------------------------------------------------------------------------
CLASS B
Sold 6,037,848 $ 25,959,092 7,369,029 $ 32,003,600
Dividends and/or
distributions reinvested 1,114,634 4,770,337 1,549,542 6,704,118
Redeemed (11,704,016) (50,094,948) (8,655,920) (37,435,413)
---------------------------------------------------------------
Net increase (decrease) (4,551,534) $(19,365,519) 262,651 $ 1,272,305
===============================================================
------------------------------------------------------------------------------------------------
CLASS C
Sold 3,016,468 $ 12,968,071 2,727,759 $ 11,829,225
Dividends and/or
distributions reinvested 343,343 1,468,887 450,539 1,948,375
Redeemed (3,708,122) (15,873,345) (2,613,007) (11,347,397)
---------------------------------------------------------------
Net increase (decrease) (348,311) $ (1,436,387) 565,291 $ 2,430,203
===============================================================
</TABLE>
================================================================================
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended September 30, 2000, were
$651,136,495 and $676,300,522, respectively.
As of September 30, 2000, unrealized appreciation (depreciation) based on cost
of securities for federal income tax purposes of $231,514,255 was:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation $ 2,930,214
Gross unrealized depreciation $(11,212,228)
------------
Net unrealized depreciation $ (8,282,014)
============
</TABLE>
31 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
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 year ended September
30, 2000, was an annualized rate of 0.74%, before any waiver by the Manager if
applicable.
--------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund on an
"at-cost" basis. OFS also acts as the transfer and shareholder servicing agent
for the other Oppenheimer funds.
--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B ON CLASS C
SALES CHARGES SALES CHARGES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
YEAR ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
September 30, 2000 $255,294 $70,759 $32,659 $551,662 $95,774
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
CONTINGENT DEFERRED CONTINGENT DEFERRED CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES
YEAR ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
September 30, 2000 $-- $482,771 $18,769
</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 year ended September 30, 2000, payments
under the Class A plan totaled $277,421 prior to Manager waiver if applicable,
all of which were paid by the Distributor to recipients, and included $14,953
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.
32 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 35
--------------------------------------------------------------------------------
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The asset-based sales charges on
Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the Fund
under the plans. If any plan is terminated by the Fund, the Board of Trustees
may allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended September 30, 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 $1,152,536 $919,820 $5,139,502 5.23%
Class C Plan 307,355 82,214 701,203 2.53
</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.
33 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
5. FOREIGN CURRENCY CONTRACTS Continued
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.
As of September 30, 2000, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATE (000s) SEPT. 30, 2000 APPRECIATION DEPRECIATION
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRACTS TO PURCHASE
Japanese Yen (JPY) 10/5/00-10/26/00 JPY695,798 $ 6,468,529 $ -- $ 31,873
------------------------------
CONTRACTS TO SELL
Brazilian Real (BRR) 10/4/00 BRR12,618 6,831,428 -- 80,224
British Pound Sterling (GBP) 11/27/00 GBP5,120 7,577,299 -- 102,406
Canadian Dollar (CAD) 10/31/00 CAD6,390 4,250,014 3,860 --
Euro (EUR) 10/26/00 EUR6,435 5,686,250 -- 14,762
Japanese Yen (JPY) 10/2/00-9/10/01 JPY416,714 3,918,937 50,050 --
Mexican Nuevo Peso (MXN) 10/4/00 MXN95,539 10,103,988 -- 25,696
South African Rand (ZAR) 10/19/00 ZAR56,232 7,772,442 49,508 --
------------------------------
103,418 223,088
------------------------------
Total Unrealized Appreciation and Depreciation $ 103,418 $254,961
==============================
</TABLE>
================================================================================
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a particular price on a stipulated future
date at a negotiated price. Futures contracts are traded on a commodity
exchange. The Fund may buy and sell futures contracts that relate to
broadly-based securities indices "financial futures" or debt securities
"interest rate futures" in order to gain exposure to or to seek to protect
against changes in market value of stock and bonds or 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 decreases in market value of 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 recognizes a realized gain or loss when the contract is
closed or expires.
34 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 37
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable
and/or payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include
the possibility that there may be an illiquid market and that a change in the
value of the contract or option may not correlate with changes in the value of
the underlying securities.
As of September 30, 2000, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATE CONTRACTS SEPT. 30, 2000 (DEPRECIATION)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONTRACTS TO PURCHASE
U.S. Long Bond 12/19/00 47 $ 4,636,844 $ 5,875
---------------
CONTRACTS TO SELL
Japan (Government of) Bonds, 10 yr. 12/11/00 6 7,353,137 (89,395)
U.S. Treasury Nts., 10 yr. 12/19/00 200 20,043,750 (39,062)
---------------
(128,457)
---------------
$ (122,582)
===============
</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. Realized gains and losses are reported
in the Statement of Operations.
35 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 38
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
7. OPTION ACTIVITY Continued
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
Written option activity for the year ended September 30, 2000, was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
---------------------------------------------------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding as of
September 30, 1999 -- $ -- 52,083,537 $188,728
Options written 537,007,416 127,135 13,908,815 275,059
Options closed or expired (537,000,000) (55,603) (32,685,000) (79,631)
Options exercised (1,796) (25,770) (22,273,537) (121,791)
Options outstanding as of
September 30, 2000 5,620 $45,762 11,033,815 $262,365
=====================================================================
</TABLE>
================================================================================
8. ILLIQUID AND RESTRICTED SECURITIES
As of September 30, 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 September 30, 2000, was $10,126,957,
which represents 4.46% of the Fund's net assets, of which $74,683 is considered
restricted. Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SECURITY ACQUISITION DATE COST PER UNIT SEPT. 30, 2000
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS
Tag Heuer International SA, 12% Sr. Sub.
Nts., 12/15/05 5/14/96 105.25% 106.69%
</TABLE>
36 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 39
================================================================================
9. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. 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 year ended September
30, 2000.
================================================================================
10. OTHER MATTERS
On April 13, 2000, the Board of Trustees approved the reorganization of
Oppenheimer World Bond Fund with and into Oppenheimer International Bond Fund.
Shareholders of Oppenheimer World Bond Fund will be asked to approve a
reorganization whereby shareholders would receive shares of Oppenheimer
International Bond Fund. If shareholder approval is received, it is expected
that the reorganization will occur during the fourth quarter of calendar 2000.
37 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 40
INDEPENDENT AUDITORS' REPORT
================================================================================
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER INTERNATIONAL BOND FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer International Bond Fund, including the statement of investments, as
of September 30, 2000, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 2000, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Oppenheimer International Bond Fund as of September 30, 2000, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
October 20, 2000
38 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 41
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
In early 2001 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 2000. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax advisor for specific
guidance.
39 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 42
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 L. Armstrong, Trustee
Robert G. Avis, 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
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.
For more complete information about Oppenheimer
International Bond Fund, please refer to the
Prospectus. To obtain a copy, call your financial
advisor, or call OppenheimerFunds Distributor, Inc.
at 1.800.525.7048, or visit the OppenheimerFunds
Internet website, at WWW.OPPENHEIMERFUNDS.COM.
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.
OPPENHEIMER FUNDS ARE DISTRIBUTED BY
OPPENHEIMERFUNDS DISTRIBUTOR, INC., TWO WORLD TRADE
CENTER, NEW YORK, NY 10048-0203.
(C)Copyright 2000 OppenheimerFunds, Inc. All rights
reserved.
40 OPPENHEIMER INTERNATIONAL BOND FUND
<PAGE> 43
INFORMATION AND SERVICES
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to
help.
--------------------------------------------------------------------------------
INTERNET
24-hr access to account information and transactions(1)
WWW.OPPENHEIMERFUNDS.COM
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GENERAL INFORMATION
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
--------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
--------------------------------------------------------------------------------
PHONELINK
24-hr automated information and automated transactions
1.800.533.3310
--------------------------------------------------------------------------------
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
Mon-Fri 9am-6:30pm ET
1.800.843.4461
--------------------------------------------------------------------------------
OPPENHEIMERFUNDS MARKET HOTLINE
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
--------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER SERVICING AGENT
OppenheimerFunds Services
P.O. BOX 5270, DENVER, CO 80217-5270
--------------------------------------------------------------------------------
TICKER SYMBOLS Class A: OIBAX Class B: OIBBX Class C:
OIBCX
--------------------------------------------------------------------------------
1. At times this website may be inaccessible or its
transaction feature may be unavailable.
--------------------------------------------------------------------------------
[OPPENHEIMERFUNDS(R)LOGO]
RA0880.007.0900 November 29, 2000
