-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OBBFFMytm93Y2PgcIj82Ka1V4VtdxRiJHwZ9zXsykEZlgBCgUlgFCYHl79uiekZ5 uEzs0Ir53S2yb6oOLSLhOA== 0000935069-02-000736.txt : 20020709 0000935069-02-000736.hdr.sgml : 20020709 20020709155328 ACCESSION NUMBER: 0000935069-02-000736 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020430 FILED AS OF DATE: 20020709 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER MULTI SECTOR INCOME TRUST CENTRAL INDEX KEY: 0000829801 IRS NUMBER: 133448960 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05473 FILM NUMBER: 02698814 BUSINESS ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2123230200 MAIL ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 N-30D 1 g02-0835_oppmultsector.txt OPPENHEIMER MULTI-SECTOR [GRAPHIC OMITTED] - -------------------------------------------------------------------------------- Semiannual Report April 30, 2002 Oppenheimer Multi-Sector Income Trust [GRAPHIC OMITTED] OPPENHEIMERFUNDS[REGISTRATION MARK] The Right Way to Invest REPORT HIGHLIGHTS - -------------------------------------------------------------------------------- FUND OBJECTIVE Oppenheimer Multi-Sector Income Trust is a closed-end diversified management investment company with a primary investment objective of seeking high current income consistent with the preservation of capital. The Fund's secondary investment objective is capital appreciation. CONTENTS 1 Letter to Shareholders 3 An Interview with Your Fund's Managers 6 Financial Statements 42 Officers and Trustees 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. LETTER TO SHAREHOLDERS - -------------------------------------------------------------------------------- Dear Shareholder, 2001 marked a year of unprecedented volatility, uncertainty and change. At OppenheimerFunds, we understand that these are challenging times. To look ahead, we must learn to reflect on the unimaginable year that has just past. For the first time in a decade, the United States economy slipped into a recession. Sharply reduced corporate capital spending and weakened consumer confidence contributed to the slowdown. A key factor to remember is that the recession is a natural part of the economic cycle and is following one of the longest periods of growth in U.S. history. In many ways, we are on the road to recovery. Apart from the monetary and fiscal stimulus the government and the Federal Reserve Bank have provided, the market has refocused on the importance of company fundamentals across all industries. The tragedy of September 11 brought great uncertainty to our lives. Yet "America is successful because of the hard work and creativity and enterprise of our people," declared President George W. Bush. "These were the strengths of our economy before September 11, and they are our strengths today." While the volatility of the economy is beyond anyone's control, there are steps you can take during these challenging times to help protect your investments. Most importantly, work closely with your financial advisor. Your advisor can help maintain balance in your portfolio, while ensuring that your investments have a long-term purpose and address your goals. A strategy that manages risk and the potential for rewards across many sectors of the market is one of the best ways to diversify your portfolio. You should also maintain an appropriate level of awareness about your funds. [PHOTO OMITTED] JOHN V. MURPHY President Oppenheimer Multi-Sector Income Trust 1 OPPENHEIMER MULTI-SECTOR INCOME TRUST LETTER TO SHAREHOLDERS - -------------------------------------------------------------------------------- Fund communications, including this report, can help you better understand the objectives, strategies and performance of your fund. To supplement these communications, we encourage you to use our website, WWW.OPPENHEIMERFUNDS.COM, for timely fund information. This year will be full of new challenges. At OppenheimerFunds we pledge to provide you with the seasoned expertise and management experience that should help pave the way for a brighter future. Our vision is clear and focused, we are well positioned for the future and we hold a commitment to you, our shareholders, that we shall keep your long-term interests always in mind. In the face of adversity, we stood strong and proud. And despite the challenges we faced, we came together as never before with a greater sense of strength and resolve. I thank you for your continued support and confidence. I hope that you can see the strength and spirit that has led and continues to lead us towards a bright future. And I look forward to sharing with you the strength, expertise and resolve that makes OppenheimerFunds, an integral part of THE RIGHT WAY TO INVEST. Sincerely, /S/ JOHN V. MURPHY John V. Murphy May 21, 2002 THESE GENERAL MARKET VIEWS REPRESENT OPINIONS OF OPPENHEIMERFUNDS, INC. AND ARE NOT INTENDED TO PREDICT PERFORMANCE OF THE SECURITIES MARKETS OR ANY PARTICULAR FUND. SPECIFIC INFORMATION THAT APPLIES TO YOUR FUND IS CONTAINED IN THE PAGES THAT FOLLOW. 2 OPPENHEIMER MULTI-SECTOR INCOME TRUST AN INTERVIEW WITH YOUR FUND'S MANAGERS - -------------------------------------------------------------------------------- Q HOW DID OPPENHEIMER MULTI-SECTOR INCOME TRUST PERFORM OVER THE SIX-MONTH PERIOD THAT ENDED APRIL 30, 2002? A. We are pleased with the Fund's performance in a highly volatile investment environment. In fact, we believe the period confirmed the value of the multi-sector approach to fixed-income investing, as the strong performance of emerging markets securities and domestic mortgage-backed securities more than offset continued weakness among high-yield corporate bonds. With recent economic data suggesting that an economic recovery has begun, we are increasingly optimistic that high-yield bonds are poised for a rebound. HOW HAVE RECENT ECONOMIC EVENTS AFFECTED THE BOND MARKETS' PERFORMANCE? When the period began on November 1, 2001, the U.S. economy was in recession. Consumers stopped spending in the wake of September 11, and businesses postponed plans for expansion and investment. In this uncertain environment, many central banks, led by the U.S. Federal Reserve Board, continued to reduce short-term interest rates aggressively. These moves benefited Treasury securities, but hurt other areas of the bond market. For example, mortgage-backed securities suffered in late 2001 when a record number of homeowners refinanced their mortgages, and high-yield corporate bonds generally remained depressed in a recessionary environment. Many emerging-markets foreign bonds experienced weakness when their export markets became less certain and Argentina defaulted on its sovereign debt. When signs began to appear in early 2002 that economic deterioration had stopped, investors began to look ahead to an economic recovery. And when the Fed kept interest rates stable PORTFOLIO MANAGEMENT TEAM Caleb Wong Art Steinmetz 3 OPPENHEIMER MULTI-SECTOR INCOME TRUST AN INTERVIEW WITH YOUR FUND'S MANAGERS - -------------------------------------------------------------------------------- in late January 2002, mortgage rates began to move higher and refinancing activity fell. As a result, mortgage-backed securities rallied strongly. Similarly, because Argentina's financial problems did not spread, and a potential economic recovery held positive implications for exports, emerging-markets bonds rebounded sharply. However, the high-yield corporate bond market did not improve as well, primarily because of persistent weakness among telecommunications companies, which comprise the market's largest single industry group. In March, the Fed suggested that the economy was recovering and left interest rates unchanged, which many investors interpreted as a signal that the Fed's rate-cutting campaign was finally over. Data suggesting renewed economic strength accumulated through the end of the reporting period, providing modest levels of support for high-yield bond prices. HOW WAS THE FUND MANAGED IN THIS ENVIRONMENT? During the period, we generally emphasized mortgage-backed securities, emerging-markets bonds and high-yield securities throughout the reporting period. On the other hand, because of their unattractively low yields, we maintained relatively light exposure to U.S. and developed-market foreign government securities. Emerging-markets bonds contributed positively to the Fund's performance during the six-month period. Within that area, our security selection decisions particularly benefited performance. We held no Argentina bonds, so the Fund was spared most of the direct effects of that nation's default. At the same time, many of our holdings of Russian bonds gained value as the Russian oil industry increased its global market share, largely at the expense of the major OPEC oil-producing countries. While the Fund's mortgage-backed securities holdings hurt performance early in the reporting period, they later helped as the risk of prepayments waned. 4 OPPENHEIMER MULTI-SECTOR INCOME TRUST HOW DID THE FUND'S TACTICAL ASSET ALLOCATION MODELS INFLUENCE THE FUND'S PERFORMANCE? The Fund's use of forecasting models boosted its returns significantly over the six-month period. These statistical models influence the way we position the Fund relative to three factors: interest rates, credit risk and currency fluctuations. At the start of the reporting period, the models correctly suggested a relatively aggressive posture with respect to interest rates and credit risk. In the period's latter half, the models' recommendations had changed, and the Fund benefited from a generally defensive positioning of its duration management and credit risk strategies. The models' recommendations with respect to currency exchange rates--which fluctuated greatly during the period-- had little influence on the Fund's overall performance. WHAT IS YOUR OUTLOOK FOR THE FORESEEABLE FUTURE? Our outlook is optimistic. We believe that high-yield corporate bonds generally represent attractive values after a prolonged period of weakness. In the early stages of economic recovery, we've already seen some firming of high-yield bond prices. And as the economic recovery gathers strength, we expect investors to become more comfortable assuming credit risk. We are also encouraged by the long-term prospects for emerging-market bonds, which we believe should benefit from improving export activity. Over the near term, however, we may see this market pull back as it consolidates recent gains, and we have positioned the Fund accordingly. In the meantime, we believe the high-yield corporate and emerging markets sectors should continue to produce highly competitive yields, while U.S. and foreign government securities should provide some income and a higher degree of price stability. This diversified approach to the global bond markets is an important element of what makes Oppenheimer Multi-Sector Income Trust part of THE RIGHT WAY TO INVEST. INVESTMENT BREAKDOWN(1) (AS OF 4/30/02) [GRAPHIC OMITTED] _ Asset-Backed 45.1% _ Corporate 26.6 _ International 17.7 _ Money Market 5.8 _ U.S. Government 3.7 _ Convertible 1.1 1. Portfolio composition is subject to change. Chart is based on total market value of investments. 5 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS April 30, 2002 / Unaudited - ---------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- U.S. GOVERNMENT SECTOR--5.0% - ---------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS--5.0% U.S. Treasury Bonds: 8.75%, 5/15/17 $ 800,000 $ 1,053,250 STRIPS, 5.99%, 11/15/18(1,2) 300,000 112,667 - ---------------------------------------------------------------------------------- U.S. Treasury Nts.: 5.875%, 2/15/04(3) 1,140,000 1,195,843 6.50%, 2/15/10 4,620,000 5,065,581 6.75%, 5/15/05 1,140,000 1,234,140 7%, 7/15/06 3,300,000 3,636,834 ----------- Total U.S. Government Sector (Cost $12,232,928) 12,298,315 SHARES - ---------------------------------------------------------------------------------- CONVERTIBLE SECTOR--1.4% - ---------------------------------------------------------------------------------- PREFERRED STOCKS--1.0% Crown American Realty Trust, 11% Cum., Series A, Non-Vtg. 4,000 218,800 - ---------------------------------------------------------------------------------- Dobson Communications Corp.: 12.25% Sr. Exchangeable, Non-Vtg.(4) 1,048 809,580 13% Sr. Exchangeable, Non-Vtg.(4) 440 366,300 - ---------------------------------------------------------------------------------- e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-Vtg.(4,5,6) 249 25 - ---------------------------------------------------------------------------------- Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg.(5,6) 4,000 53,000 - ---------------------------------------------------------------------------------- Global Crossing Holdings Ltd., 10.50% Sr. Exchangeable, Non-Vtg.(4,5) 4,210 -- - ---------------------------------------------------------------------------------- Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable Exchangeable, Non-Vtg.(4,5,6) 3,031 379 - ---------------------------------------------------------------------------------- Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable, Non-Vtg.(4,5) 31 287,525 - ---------------------------------------------------------------------------------- Rural Cellular Corp., 11.375% Cum. Sr., Series B, Non-Vtg.(4) 102 44,370 - ---------------------------------------------------------------------------------- Sovereign Real Estate Investment Trust, 12% Non-Cum., Series A(5,6) 5,750 645,437 ----------- 2,425,416 UNITS - ---------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.4% CellNet Data Systems, Inc. Wts., Exp. 10/1/07(5,6) 404 4 - ---------------------------------------------------------------------------------- Chesapeake Energy Corp. Wts.: Exp. 1/23/03(5,6) 6,054 -- Exp. 1/23/03(5,6) 3,456 -- Exp. 9/1/04(5,6) 10,150 -- - ---------------------------------------------------------------------------------- COLO.com, Inc. Wts., Exp. 3/15/10(5,6) 300 3 - ---------------------------------------------------------------------------------- Concentric Network Corp. Wts., Exp. 12/15/07(5,6) 600 6 - ---------------------------------------------------------------------------------- Decrane Aircraft Holdings, Inc. Wts., Exp. 9/30/08(5,6) 800 -- - ---------------------------------------------------------------------------------- e.spire Communications, Inc. Wts., Exp. 11/1/05(5,6) 700 7 - ---------------------------------------------------------------------------------- Equinix, Inc. Wts., Exp. 12/1/07(5,6) 400 54 - ---------------------------------------------------------------------------------- Grove Investors, Inc., Tranche A Wts., Exp. 9/14/08(6) 864 - - ---------------------------------------------------------------------------------- Grove Investors, Inc., Tranche B Wts., Exp. 9/14/08(6) 864 - - ---------------------------------------------------------------------------------- Horizon PCS, Inc. Wts., Exp. 10/1/10(5,6) 1,000 30,125 - ---------------------------------------------------------------------------------- ICG Communications, Inc. Wts., Exp. 9/15/05(5,6) 4,125 41
6 OPPENHEIMER MULTI-SECTOR INCOME TRUST
MARKET VALUE UNITS SEE NOTE 1 - ---------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES Continued ICO Global Communication Holdings Ltd. Wts.: Exp. 5/16/06(6) 6,035 $ 181 Exp. 5/16/06(6) 9 1 - ---------------------------------------------------------------------------------- In-Flight Phone Corp. Wts., Exp. 8/31/02(5,6) 900 -- - ---------------------------------------------------------------------------------- Insilco Corp. Wts., Exp. 8/15/07(5,6) 720 7 - ---------------------------------------------------------------------------------- KMC Telecom Holdings, Inc. Wts., Exp. 4/15/08(5,6) 920 46 - ---------------------------------------------------------------------------------- Leap Wireless International, Inc. Wts., Exp. 4/15/10(5,6) 400 250 - ---------------------------------------------------------------------------------- Long Distance International, Inc. Wts., Exp. 4/13/08(5,6) 400 -- - ---------------------------------------------------------------------------------- Loral Space & Communications Ltd. Wts., Exp. 1/15/07(5,6) 975 10 - ---------------------------------------------------------------------------------- Millenium Seacarriers, Inc. Wts., Exp. 7/15/05(5,6) 700 7 - ---------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co. Wts., Exp. 6/5/03(6) 91,275 1,015,699 - ---------------------------------------------------------------------------------- Ntelos, Inc. Wts., Exp. 8/15/10(5,6) 500 2,062 - ---------------------------------------------------------------------------------- Pathmark Stores, Inc. Wts., Exp. 9/19/10(6) 6,738 47,503 - ---------------------------------------------------------------------------------- Protection One, Inc. Wts., Exp. 6/30/05(5,6) 6,400 -- - ---------------------------------------------------------------------------------- Republic Technologies International LLC Wts., Exp. 7/15/09(5,6) 200 2 - ---------------------------------------------------------------------------------- Verado Holdings, Inc., Cl. B Wts., Exp. 4/15/08(5,6) 500 253 ----------- 1,096,261 ----------- Total Convertible Sector (Cost $4,785,314) 3,521,677 SHARES - ---------------------------------------------------------------------------------- CORPORATE SECTOR--35.5% - ---------------------------------------------------------------------------------- COMMON STOCKS--0.1% - ---------------------------------------------------------------------------------- Aurora Foods, Inc.(5,6) 5,313 15,780 - ---------------------------------------------------------------------------------- Capital Gaming International, Inc.(5,6) 18 -- - ---------------------------------------------------------------------------------- Covad Communications Group, Inc.(6) 6,198 12,457 - ---------------------------------------------------------------------------------- Grove Investors, Inc.(6) 3,111 -- - ---------------------------------------------------------------------------------- ICO Global Communication Holdings Ltd.(6) 24,061 64,965 - ---------------------------------------------------------------------------------- Orbital Sciences Corp.(6) 892 5,950 - ---------------------------------------------------------------------------------- Pioneer Cos., Inc.(6) 5,655 9,189 - ---------------------------------------------------------------------------------- Star Gas Partners LP 220 4,237 - ---------------------------------------------------------------------------------- WRC Media Corp.(5,6) 676 7 ----------- 112,585 PRINCIPAL AMOUNT - ---------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES--35.2% - ---------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--10.7% - ---------------------------------------------------------------------------------- AUTO COMPONENTS--0.5% Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07(6,7) $ 700,000 -- - ---------------------------------------------------------------------------------- Collins & Aikman Corp., 10.75% Sr. Nts., 12/31/11(8) 200,000 210,000 - ---------------------------------------------------------------------------------- Collins & Aikman Floorcoverings, Inc., 9.75% Sr. Sub. Nts., 2/15/10(8) 200,000 210,500 - ---------------------------------------------------------------------------------- Dura Operating Corp., 9% Sr. Unsec. Sub. Nts., Series D, 5/1/09 600,000 613,500 - ---------------------------------------------------------------------------------- Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12(8) 200,000 207,750 ----------- 1,241,750
7 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Unaudited / Continued - ---------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--2.5% Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 $ 400,000 $ 169,000 - ---------------------------------------------------------------------------------- Aztar Corp., 9% Sr. Unsec. Sub. Nts., 8/15/11 250,000 263,750 - ---------------------------------------------------------------------------------- Boyd Gaming Corp., 8.75% Nts., 4/15/12(8) 200,000 209,250 - ---------------------------------------------------------------------------------- Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/1995(5,6,7) 5,500 -- - ---------------------------------------------------------------------------------- Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 435,000 432,825 - ---------------------------------------------------------------------------------- Coast Hotels & Casinos, Inc., 9.50% Sr. Sub. Nts., 4/1/09(8) 200,000 212,750 - ---------------------------------------------------------------------------------- Family Restaurants, Inc., 9.75% Sr. Nts., 2/1/03(6,7) 300,000 1,500 - ---------------------------------------------------------------------------------- Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 500,000 528,000 - ---------------------------------------------------------------------------------- Isle of Capri Casinos, Inc., 9% Sr. Sub. Nts., 3/15/12(8) 200,000 206,000 - ---------------------------------------------------------------------------------- Mandalay Resort Group, 10.25% Sr. Unsec. Sub. Nts., Series B, 8/1/07 500,000 553,750 - ---------------------------------------------------------------------------------- MGM Mirage, Inc., 8.375% Sr. Unsec. Sub. Nts., 2/1/11 1,100,000 1,152,250 - ---------------------------------------------------------------------------------- Mohegan Tribal Gaming Authority: 8.375% Sr. Sub. Nts., 7/1/11 400,000 412,000 8.75% Sr. Unsec. Sub. Nts., 1/1/09 500,000 522,500 - ---------------------------------------------------------------------------------- Penn National Gaming, Inc., 8.875% Sr. Sub. Nts., 3/15/10 300,000 301,500 - ---------------------------------------------------------------------------------- Premier Parks, Inc., 0%/10% Sr. Disc. Nts., 4/1/08(9) 500,000 492,500 - ---------------------------------------------------------------------------------- Prime Hospitality Corp., 8.375% Sr. Sub. Nts., 5/1/12(8) 200,000 204,500 - ---------------------------------------------------------------------------------- Station Casinos, Inc., 9.75% Sr. Sub. Nts., 4/15/07 300,000 313,800 - ---------------------------------------------------------------------------------- Venetian Casino Resort LLC/Las Vegas Sands, Inc., 12.25% Mtg. Nts., 11/15/04 200,000 213,750 ----------- 6,189,625 - ---------------------------------------------------------------------------------- HOUSEHOLD DURABLES--1.3% Beazer Homes USA, Inc., 8.375% Sr. Nts., 4/15/12(8) 300,000 307,125 - ---------------------------------------------------------------------------------- Blount, Inc., 13% Sr. Sub. Nts., 8/1/09 400,000 276,000 - ---------------------------------------------------------------------------------- D.R. Horton, Inc., 9.75% Sr. Sub. Nts., 9/15/10 500,000 527,500 - ---------------------------------------------------------------------------------- K. Hovnanian Enterprises, Inc., 8.875% Sr. Sub. Nts., 4/1/12(8) 300,000 293,250 - ---------------------------------------------------------------------------------- KB Home: 8.625% Sr. Sub. Nts., 12/15/08 500,000 513,750 9.50% Sr. Unsec. Sub. Nts., 2/15/11 500,000 525,000 - ---------------------------------------------------------------------------------- Salton, Inc., 10.75% Sr. Unsec. Sub. Nts., 12/15/05 400,000 413,000 - ---------------------------------------------------------------------------------- Standard Pacific Corp., 9.25% Sr. Sub. Nts., 4/15/12 100,000 102,000 - ---------------------------------------------------------------------------------- WCI Communities, Inc., 9.125% Sr. Sub. Nts., 5/1/12(8) 200,000 202,000 ----------- 3,159,625 - ---------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--0.3% Amazon.com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08(9) 750,000 648,750 - ---------------------------------------------------------------------------------- MEDIA--5.0% Adelphia Communications Corp.: 8.125% Sr. Nts., Series B, 7/15/03(7) 250,000 226,250 8.375% Sr. Nts., Series B, 2/1/08(7) 100,000 80,000 9.875% Sr. Nts., Series B, 3/1/07(7) 300,000 250,875 10.25% Sr. Unsec. Nts., 11/1/06(7) 200,000 172,000 10.25% Sr. Unsec. Sub. Nts., 6/15/11(7) 500,000 420,000 10.875% Sr. Unsec. Nts., 10/1/10(7) 100,000 87,000
8 OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- MEDIA Continued AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 $ 500,000 $ 505,000 - ---------------------------------------------------------------------------------- Block Communications, Inc., 9.25% Sr. Sub. Nts., 4/15/09(8) 200,000 209,000 - ---------------------------------------------------------------------------------- Chancellor Media Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07(1) 700,000 734,125 - ---------------------------------------------------------------------------------- Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.: 0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11(9) 200,000 140,000 10% Sr. Nts., 4/1/0(9) 100,000 95,500 10.75% Sr. Unsec. Nts., 10/1/09 1,500,000 1,485,000 11.125% Sr. Unsec. Nts., 1/15/11 400,000 396,000 - ---------------------------------------------------------------------------------- Classic Cable, Inc., 10.50% Sr. Sub. Nts., 3/1/10(6,7) 300,000 52,875 - ---------------------------------------------------------------------------------- Cumulus Media, Inc., 10.375% Sr. Unsec. Sub. Nts., 7/1/08 500,000 541,250 - ---------------------------------------------------------------------------------- EchoStar Broadband Corp., 10.375% Sr. Unsec. Nts., 10/1/07 750,000 808,125 - ---------------------------------------------------------------------------------- EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09 500,000 523,750 - ---------------------------------------------------------------------------------- Emmis Communications Corp., 8.125% Sr. Unsec. Sub. Nts., Series B, 3/15/09 600,000 617,250 - ---------------------------------------------------------------------------------- Entravision Communications Corp., 8.125% Sr. Sub. Nts., 3/15/09(8) 100,000 102,625 - ---------------------------------------------------------------------------------- Key3Media Group, Inc., 11.25% Sr. Sub. Nts., 6/15/11 1,000,000 805,000 - ---------------------------------------------------------------------------------- Lamar Advertising Co., 8.625% Sr. Sub. Nts., 9/15/07 500,000 523,125 - ---------------------------------------------------------------------------------- Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec. Nts., 1/15/13 700,000 707,000 - ---------------------------------------------------------------------------------- Penton Media, Inc., 10.375% Sr. Unsec. Sub. Nts., 6/15/11 250,000 198,750 - ---------------------------------------------------------------------------------- Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11 200,000 211,250 - ---------------------------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 8% Sr. Sub. Nts., 3/15/12(8) 1,000,000 1,020,000 8.75% Sr. Sub. Nts., 12/15/11(8) 300,000 316,500 - ---------------------------------------------------------------------------------- Six Flags, Inc., 8.875% Sr. Nts., 2/1/10(8) 250,000 255,000 - ---------------------------------------------------------------------------------- Spanish Broadcasting System, Inc., 9.625% Sr. Unsec. Sub. Nts., 11/1/09 300,000 318,750 - ---------------------------------------------------------------------------------- WRC Media, Inc./Weekly Reader Corp./Compass Learning Corp., 12.75% Sr. Sub. Nts., 11/15/09 300,000 313,500 - ---------------------------------------------------------------------------------- Young Broadcasting, Inc., 8.50% Sr. Unsec. Nts., 12/15/08(8) 200,000 209,000 ----------- 12,324,500 - ---------------------------------------------------------------------------------- MULTILINE RETAIL--0.2% Saks, Inc., 9.875% Nts., 10/1/11 400,000 428,000 - ---------------------------------------------------------------------------------- SPECIALTY RETAIL--0.7% CSK Auto, Inc., 12% Sr. Nts., 6/15/06(8) 500,000 537,500 - ---------------------------------------------------------------------------------- Finlay Enterprises, Inc., 9% Debs., 5/1/08 500,000 482,500 - ---------------------------------------------------------------------------------- United Auto Group, Inc., 9.625% Sr. Sub. Nts., 3/15/12(8) 200,000 209,500 - ---------------------------------------------------------------------------------- United Rentals (North America), Inc., 10.75% Sr. Unsec. Nts., 4/15/08 500,000 552,500 - ---------------------------------------------------------------------------------- United Rentals, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 1/15/09 100,000 103,000 ----------- 1,885,000 - ---------------------------------------------------------------------------------- TEXTILES & APPAREL--0.2% Consoltex Group, Inc., 1.65% Sr. Sub. Nts., 1/31/09(4,5) 366,300 20,605 - ---------------------------------------------------------------------------------- Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 300,000 292,500
9 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Unaudited / Continued - ---------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- TEXTILES & APPAREL Continued Polymer Group, Inc., 8.75% Sr. Sub. Nts., 3/1/08(6,7) $ 500,000 $ 175,000 - ---------------------------------------------------------------------------------- Russell Corp., 9.25% Sr. Nts., 5/1/10(8) 100,000 103,500 ----------- 591,605 - ---------------------------------------------------------------------------------- CONSUMER STAPLES--1.6% - ---------------------------------------------------------------------------------- BEVERAGES--0.1% Constellation Brands, Inc., 8.125% Sr. Sub. Nts., 1/15/12 100,000 103,000 - ---------------------------------------------------------------------------------- Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05 300,000 240,750 ----------- 343,750 - ---------------------------------------------------------------------------------- FOOD & DRUG RETAILING--0.7% Fleming Cos., Inc.: 10.125% Sr. Unsec. Nts., 4/1/08 200,000 211,000 10.625% Sr. Unsec. Sub. Nts., Series D, 7/31/07 300,000 309,750 - ---------------------------------------------------------------------------------- Great Atlantic & Pacific Tea Co., Inc. (The), 9.125% Sr. Nts., 12/15/11 250,000 264,375 - ---------------------------------------------------------------------------------- Pantry, Inc. (The), 10.25% Sr. Sub. Nts. 10/15/07 775,000 685,875 - ---------------------------------------------------------------------------------- Pathmark Stores, Inc., 8.75% Sr. Sub. Nts., 2/1/12(8) 200,000 208,750 ----------- 1,679,750 - ---------------------------------------------------------------------------------- FOOD PRODUCTS--0.3% Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 300,000 288,750 - ---------------------------------------------------------------------------------- Smithfield Foods, Inc., 7.625% Sr. Unsec. Sub. Nts., 2/15/08 400,000 402,000 ----------- 690,750 - ---------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--0.5% AKI, Inc., 10.50% Sr. Unsec. Nts., 7/1/08 600,000 570,000 - ---------------------------------------------------------------------------------- Holmes Products Corp., 9.875% Sr. Unsec. Sub. Nts., Series B, 11/15/07 400,000 203,000 - ---------------------------------------------------------------------------------- Johnsondiversey, Inc., 9.625% Sr. Sub. Nts., 5/15/12(8) 100,000 103,875 - ---------------------------------------------------------------------------------- Revlon Consumer Products Corp., 12% Sr. Sec. Nts., 12/1/05(8) 500,000 502,500 - ---------------------------------------------------------------------------------- Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08(5,6,7) 400,000 -- ----------- 1,379,375 - ---------------------------------------------------------------------------------- ENERGY--2.7% - ---------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--0.8% Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 100,000 99,500 - ---------------------------------------------------------------------------------- Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08(5) 380,000 267,900 - ---------------------------------------------------------------------------------- Hornbeck-Leevac Marine Services, Inc., 10.625% Sr. Nts., 8/1/08 750,000 787,500 - ---------------------------------------------------------------------------------- Petroleum Helicopters, Inc., 9.375% Sr. Nts., 5/1/09 100,000 103,500 - ---------------------------------------------------------------------------------- Universal Compression Holdings, Inc., 0%/9.875% Sr. Disc. Nts., 2/15/08(9) 700,000 689,500 ----------- 1,947,900
10 OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- OIL & GAS--1.9% Chesapeake Energy Corp., 8.125% Sr. Unsec. Nts., 4/1/11 $ 300,000 $ 301,500 - ---------------------------------------------------------------------------------- Forest Oil Corp., 7.75% Sr. Nts., 5/1/14(8) 200,000 197,000 - ---------------------------------------------------------------------------------- Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09(5) 600,000 642,750 - ---------------------------------------------------------------------------------- Magnum Hunter Resources, Inc., 9.60% Sr. Nts., 3/15/12(8) 200,000 211,000 - ---------------------------------------------------------------------------------- Pemex Project Funding Master Trust, 9.125% Unsec. Unsub. Nts., 10/13/10(1) 1,545,000 1,699,500 - ---------------------------------------------------------------------------------- Pioneer Natural Resources Co., 7.50% Sr. Nts., 4/15/12 200,000 201,000 - ---------------------------------------------------------------------------------- Pogo Producing Co., 8.75% Sr. Sub. Nts., Series B, 5/15/07 300,000 312,000 - ---------------------------------------------------------------------------------- RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 800,000 532,000 - ---------------------------------------------------------------------------------- Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 535,000 556,400 - ---------------------------------------------------------------------------------- Swift Energy Co., 9.375% Sr. Unsec. Sub. Nts., 5/1/12 100,000 102,500 - ---------------------------------------------------------------------------------- XTO Energy, Inc., 7.50% Sr. Nts., 4/15/12 100,000 101,250 ----------- 4,856,900 - ---------------------------------------------------------------------------------- FINANCIALS--2.6% - ---------------------------------------------------------------------------------- BANKS--0.3% Tokai Preferred Capital Co. LLC, 9.98% Non-Cum. Bonds, Series A,12/29/49(8,10) 500,000 410,418 - ---------------------------------------------------------------------------------- Western Financial Bank, 9.625% Unsec. Sub. Debs., 5/15/12 300,000 303,000 ----------- 713,418 - ---------------------------------------------------------------------------------- DIVERSIFIED FINANCIALS--1.0% AmeriCredit Corp., 9.875% Gtd. Sr. Nts., 4/15/06 300,000 315,000 - ---------------------------------------------------------------------------------- AMRESCO, Inc., 9.875% Sr. Sub. Nts., Series 98-A, 3/15/05(6,7) 400,000 110,000 - ---------------------------------------------------------------------------------- AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(5,9)[ARP] 150,000 11,250 - ---------------------------------------------------------------------------------- Finova Group, Inc. (The), 7.50% Nts., 11/15/09 600,000 216,000 - ---------------------------------------------------------------------------------- Fuji JGB Investment LLC, 9.87% Non-Cum. Bonds, Series A, 12/31/49(8,10) 775,000 640,943 - ---------------------------------------------------------------------------------- IBJ Preferred Capital Co. (The) LLC, 8.79% Bonds, 12/29/49(8,10) 780,000 611,238 - ---------------------------------------------------------------------------------- IPC Acquisition Corp., 11.50% Sr. Sub. Nts., 12/15/09(8) 250,000 250,000 - ---------------------------------------------------------------------------------- LaBranche & Co., Inc., 12% Sr. Unsec. Sub. Nts., 3/2/07 250,000 286,250 ----------- 2,440,681 - ---------------------------------------------------------------------------------- REAL ESTATE--1.3% CB Richard Ellis Services, Inc., 11.25% Sr. Unsec. Sub. Nts., 6/15/11 250,000 236,875 - ---------------------------------------------------------------------------------- Corrections Corp. of America, 9.875% Sr. Nts., 5/1/09(8,11) 100,000 103,750 - ---------------------------------------------------------------------------------- Felcor Lodging LP, 8.50% Sr. Nts., 6/1/11 285,000 292,838 - ---------------------------------------------------------------------------------- Host Marriott LP, 9.50% Sr. Nts., 1/15/07(8) 400,000 424,500 - ---------------------------------------------------------------------------------- IStar Financial, Inc., 8.75% Sr. Unsec. Nts., 8/15/08 250,000 255,500 - ---------------------------------------------------------------------------------- MeriStar Hospitality Corp.: 9% Sr. Nts., 1/15/08 200,000 205,000 9.125% Sr. Nts., 1/15/11 400,000 413,000 9.125% Sr. Unsec. Nts., 1/15/11(8) 300,000 309,750 - ---------------------------------------------------------------------------------- MeriStar Hospitality Operating Partnership/Finance Corp. II, 10.50% Sr. Nts., 6/15/09(8) 300,000 324,000
11 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Unaudited / Continued - ---------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- REAL ESTATE Continued Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., Series B, 4/1/08 $ 700,000 $ 700,000 - ---------------------------------------------------------------------------------- Ventas Realty LP/Capital Appreciation Corp., 9% Sr. Nts., 5/1/12(8) 100,000 102,750 ----------- 3,367,963 - ---------------------------------------------------------------------------------- HEALTH CARE--1.7% - ---------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--0.3% Fisher Scientific International, Inc.: 8.125% Sr. Sub. Nts., 5/1/12(8) 200,000 202,500 9% Sr. Unsec. Sub. Nts., 2/1/08 185,000 193,325 - ---------------------------------------------------------------------------------- Vanguard Health Systems, Inc., 9.75% Sr. Unsec. Sub. Nts., 8/1/11 400,000 423,000 ----------- 818,825 - ---------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--1.4% aaiPharma, Inc., 11% Sr. Sub. Nts., 4/1/10(8) 200,000 207,000 - ---------------------------------------------------------------------------------- Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08 600,000 604,500 - ---------------------------------------------------------------------------------- Magellan Health Services, Inc., 9% Sr. Sub. Nts., 2/15/08 550,000 470,250 - ---------------------------------------------------------------------------------- Rotech Healthcare, Inc., 9.50% Sr. Sub. Nts., 4/1/12(8) 200,000 210,000 - ---------------------------------------------------------------------------------- Triad Hospitals, Inc., 8.75% Sr. Unsec. Nts., Series B, 5/1/09 1,500,000 1,608,750 - ---------------------------------------------------------------------------------- US Oncology, Inc., 9.625% Sr. Sub. Nts., 2/1/12(8) 200,000 197,250 ----------- 3,297,750 - ---------------------------------------------------------------------------------- INDUSTRIALS--5.6% - ---------------------------------------------------------------------------------- AEROSPACE & DEFENSE--0.5% Alliant Techsystems, Inc., 8.50% Sr. Unsec. Sub. Nts., 5/15/11 200,000 213,000 - ---------------------------------------------------------------------------------- BE Aerospace, Inc., 8.875% Sr. Unsec. Sub. Nts., 5/1/11 200,000 191,000 - ---------------------------------------------------------------------------------- Decrane Aircraft Holdings, Inc., 12% Sr. Unsec. Sub. Nts., Series B, 9/30/08 800,000 740,000 ----------- 1,144,000 - ---------------------------------------------------------------------------------- AIR FREIGHT & COURIERS--0.1% Atlas Air, Inc.: 9.25% Sr. Nts., 4/15/08 200,000 155,000 9.375% Sr. Unsec. Nts., 11/15/06 300,000 231,000 ----------- 386,000 - ---------------------------------------------------------------------------------- AIRLINES--0.8% America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05(5) 1,000,000 665,000 - ---------------------------------------------------------------------------------- Amtran, Inc., 10.50% Sr. Nts., 8/1/04(5) 1,450,000 1,225,250 ----------- 1,890,250
12 OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- BUILDING PRODUCTS--0.3% Associated Materials, Inc., 9.75% Sr. Sub. Nts., 4/15/12(8) $ 100,000 $ 103,625 - ---------------------------------------------------------------------------------- Nortek, Inc.: 9.125% Sr. Unsec. Nts., Series B, 9/1/07 300,000 307,875 9.25% Sr. Nts., Series B, 3/15/07 300,000 308,625 9.875% Sr. Unsec. Sub. Nts., 6/15/11 100,000 102,250 ----------- 822,375 - ---------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--1.9% Allied Waste North America, Inc.: 8.50% Sr. Sub. Nts., 12/1/08 500,000 510,000 8.875% Sr. Nts., Series B, 4/1/08 1,000,000 1,037,500 10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 500,000 516,250 - ---------------------------------------------------------------------------------- Buhrmann US, Inc., 12.25% Sr. Unsec. Sub. Nts., 11/1/09(5) 300,000 325,500 - ---------------------------------------------------------------------------------- Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07 200,000 105,000 - ---------------------------------------------------------------------------------- Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 600,000 621,000 - ---------------------------------------------------------------------------------- Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07(5) 600,000 453,000 - ---------------------------------------------------------------------------------- Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 250,000 248,750 - ---------------------------------------------------------------------------------- Mail-Well, Inc., 9.625% Sr. Nts., 3/15/12(8) 400,000 406,000 - ---------------------------------------------------------------------------------- Protection One, Inc./Protection One Alarm Monitoring, Inc., 7.375% Sr. Unsec. Nts., 8/15/05 400,000 341,500 - ---------------------------------------------------------------------------------- Safety-Kleen Corp., 9.25% Sr. Unsec. Nts., 5/15/09(5,6,7) 50,000 5 - ---------------------------------------------------------------------------------- Synagro Technologies, Inc., 9.50% Sr. Sub. Nts., 4/1/09(8) 100,000 102,250 ----------- 4,666,755 - ---------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--0.1% Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08(9) 600,000 222,000 - ---------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--0.1% Cherokee International LLC, 10.50% Sr. Unsec. Sub. Nts., Series B, 5/1/09 500,000 253,125 - ---------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.3% Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec. Sub. Nts., 8/15/08 610,000 653,462 - ---------------------------------------------------------------------------------- MACHINERY--1.2% Actuant Corp., 13% Sr. Sub. Nts., 5/1/09 215,000 246,444 - ---------------------------------------------------------------------------------- Agco Corp., 9.50% Sr. Unsec. Nts., 5/1/08 500,000 543,750 - ---------------------------------------------------------------------------------- Eagle-Picher Industries, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/1/08 350,000 290,500 - ---------------------------------------------------------------------------------- Insilco Corp., 12% Sr. Sub. Nts., 8/15/07(6,7) 800,000 124,000 - ---------------------------------------------------------------------------------- International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 700,000 640,500 - ---------------------------------------------------------------------------------- Joy Global, Inc., 8.75% Sr. Sub. Nts., 3/15/12(8) 100,000 104,250 - ---------------------------------------------------------------------------------- Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts., Series B, 6/15/07 500,000 463,125 - ---------------------------------------------------------------------------------- Terex Corp.: 8.875% Sr. Unsec. Sub. Nts., 4/1/08 300,000 314,250 9.25% Sr. Unsec. Sub. Nts., 7/15/11 200,000 211,500 ----------- 2,938,319
13 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Unaudited / Continued - ---------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- MARINE--0.3% Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07(8) $ 750,000 $ 348,750 - ---------------------------------------------------------------------------------- Sea Containers Ltd., 7.875% Sr. Nts., 2/15/08 500,000 355,000 ----------- 703,750 - ---------------------------------------------------------------------------------- TRANSPORTATION INFRASTRUCTURE--0.0% Budget Group, Inc., 9.125% Sr. Unsec. Nts., 4/1/06(6,7) 400,000 90,000 - ---------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--1.0% - ---------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.1% Avaya, Inc., 11.125% Sr. Sec. Nts., 4/1/09 100,000 95,500 - ---------------------------------------------------------------------------------- CellNet Data Systems, Inc., 0%/14% Sr. Unsec. Disc. Nts., 10/1/07(5,6,7,9) 554,000 55 - ---------------------------------------------------------------------------------- OpTel, Inc., 13% Sr. Nts., Series B, 2/15/05(5,6,7) 250,000 121,250 ----------- 216,805 - ---------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--0.2% ChipPAC International Co. Ltd., 12.75% Sr. Unsec. Sub. Nts., Series B, 8/1/09 200,000 218,000 - ---------------------------------------------------------------------------------- Ingram Micro, Inc., 9.875% Sr. Unsec. Sub. Nts., 8/15/08 300,000 318,000 ----------- 536,000 - ---------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--0.1% Equinix, Inc., 13% Sr. Unsec. Nts., 12/1/07(5) 400,000 108,000 - ---------------------------------------------------------------------------------- Globix Corp., 12.50% Sr. Unsec. Nts., 2/1/10(6,7) 300,000 51,000 - ---------------------------------------------------------------------------------- PSINet, Inc.: 10.50% Sr. Unsec. Nts., 12/1/06(6,7)[EUR] 500,000 41,676 11% Sr. Nts., 8/1/09(6,7) 600,000 63,000 ----------- 263,676 - ---------------------------------------------------------------------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS--0.6% Amkor Technology, Inc., 9.25% Sr. Unsec. Sub. Nts., 2/15/08 500,000 506,250 - ---------------------------------------------------------------------------------- Fairchild Semiconductor Corp.: 10.375% Sr. Unsec. Nts., 10/1/07 500,000 533,750 10.50% Sr. Unsec. Sub. Nts., 2/1/09 350,000 385,875 ----------- 1,425,875 - ---------------------------------------------------------------------------------- MATERIALS--3.4% - ---------------------------------------------------------------------------------- CHEMICALS--1.1% Equistar Chemicals LP, 8.75% Sr. Unsec. Nts., 2/15/09 200,000 185,428 - ---------------------------------------------------------------------------------- Huntsman Corp./ICI Chemical Co. plc, Zero Coupon Sr. Unsec. Disc. Nts., 13.08%, 12/31/09(2) 500,000 125,000 - ---------------------------------------------------------------------------------- Huntsman International LLC, 9.875% Sr. Nts., 3/1/09(8) 200,000 202,000 - ---------------------------------------------------------------------------------- ISP Holdings, Inc., 10.625% Bonds, 12/15/09(8) 200,000 206,000 - ---------------------------------------------------------------------------------- Lyondell Chemical Co.: 9.50% Sec. Nts., 12/15/08(8) 200,000 197,000 9.625% Sr. Sec. Nts., Series A, 5/1/07 100,000 99,250 9.875% Sec. Nts., Series B, 5/1/07 400,000 397,000
14 OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- CHEMICALS Continued OM Group, Inc., 9.25% Sr. Sub. Nts., 12/15/11(8) $ 200,000 $ 208,000 - ---------------------------------------------------------------------------------- Pioneer Cos., Inc., 5.538% Sr. Sec. Nts., 12/31/06(5,10) 29,145 19,527 - ---------------------------------------------------------------------------------- Sterling Chemicals, Inc.: 11.75% Sr. Unsec. Sub. Nts., 8/15/06(6,7) 200,000 29,000 12.375% Sr. Sec. Nts., Series B, 7/15/06(6,7) 600,000 549,000 - ---------------------------------------------------------------------------------- Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03 525,000 532,875 ----------- 2,750,080 - ---------------------------------------------------------------------------------- CONTAINERS & PACKAGING--1.0% Ball Corp.: 7.75% Sr. Unsec. Nts., 8/1/06 300,000 312,000 8.25% Sr. Unsec. Sub. Nts., 8/1/08 400,000 418,000 - ---------------------------------------------------------------------------------- Graphic Packaging Corp., 8.625% Sr. Sub. Nts., 2/15/12(8) 200,000 210,500 - ---------------------------------------------------------------------------------- Packaging Corp. of America, 9.625% Sr. Unsec. Sub. Nts., 4/1/09 300,000 328,500 - ---------------------------------------------------------------------------------- Riverwood International Corp., 10.875% Sr. Sub. Nts., 4/1/08 400,000 419,000 - ---------------------------------------------------------------------------------- Silgan Corp., 9% Sr. Sub. Debs., 6/1/09(8) 100,000 104,375 - ---------------------------------------------------------------------------------- Stone Container Corp.: 9.25% Sr. Unsec. Nts., 2/1/08 250,000 268,750 9.75% Sr. Unsec. Nts., 2/1/11 400,000 432,000 ----------- 2,493,125 - ---------------------------------------------------------------------------------- METALS & MINING--1.2% Century Aluminum Co., 11.75% Sr. Sec. Nts., 4/15/08 400,000 432,000 - ---------------------------------------------------------------------------------- Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series B, 5/15/08 500,000 352,500 - ---------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp.: 10.875% Sr. Nts., Series B 10/15/06(6,7) 500,000 390,000 12.75% Sr. Sub. Nts. 2/1/03(6,7) 500,000 117,500 - ---------------------------------------------------------------------------------- Metallurg Holdings, Inc., 0%/12.75% Sr. Disc. Nts., 7/15/08(9) 500,000 253,125 - ---------------------------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07 200,000 191,000 - ---------------------------------------------------------------------------------- National Steel Corp., 9.875% First Mtg. Bonds, Series D, 3/1/09(6,7) 250,000 86,250 - ---------------------------------------------------------------------------------- P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 484,000 516,670 - ---------------------------------------------------------------------------------- Steel Dynamics, Inc., 9.50% Sr. Nts., 3/15/09(8) 200,000 212,000 - ---------------------------------------------------------------------------------- United States Steel LLC, 10.75% Sr. Nts., 8/1/08 400,000 415,000 ----------- 2,966,045 - ---------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.1% Georgia-Pacific Corp., 8.125% Sr. Unsec. Nts., 5/15/11 250,000 249,119 - ---------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--4.3% - ---------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--1.0% Allegiance Telecom, Inc., 0%/11.75% Sr. Unsec. Disc. Nts., Series B, 2/15/08(9) 200,000 38,500 - ---------------------------------------------------------------------------------- American Tower Corp., 9.375% Sr. Nts., 2/1/09 200,000 143,000 - ---------------------------------------------------------------------------------- COLO.com, Inc., 13.875% Sr. Nts., 3/15/10(5,6,7) 300,000 8,250 - ---------------------------------------------------------------------------------- Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07(6,7) 495,000 72,394 - ---------------------------------------------------------------------------------- Focal Communications Corp., 11.875% Sr. Unsec. Nts., Series B, 1/15/10(5) 75,000 19,875
15 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Unaudited / Continued - ---------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Continued Intermedia Communications, Inc.: 0%/11.25% Sr. Disc. Nts., Series B, 7/15/07(9) $ 100,000 $ 73,000 0%/12.25% Sr. Disc. Nts., Series B, 3/1/09(9) 100,000 50,500 8.50% Sr. Nts., Series B, 1/15/08 200,000 145,000 - ---------------------------------------------------------------------------------- KMC Telecom Holdings, Inc., 0%/12.50% Sr. Unsec. Disc. Nts., 2/15/08(9) 900,000 40,500 - ---------------------------------------------------------------------------------- Level 3 Communications, Inc.: 0%/10.50% Sr. Disc. Nts., 12/1/08(9) 800,000 216,000 0%/12.875% Sr. Unsec. Disc. Nts., 3/15/10(9) 300,000 64,500 11% Sr. Unsec. Nts., 3/15/08 100,000 45,500 - ---------------------------------------------------------------------------------- Metromedia Fiber Network, Inc., 10% Sr. Unsec. Nts., Series B, 11/15/08(7) 200,000 16,000 - ---------------------------------------------------------------------------------- NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10(5,6,7) 300,000 66,000 - ---------------------------------------------------------------------------------- Ntelos, Inc., 13% Sr. Nts., 8/15/10(5) 500,000 282,500 - ---------------------------------------------------------------------------------- Orion Network Systems, Inc., 12.50% Sr. Disc. Nts., 1/15/07 1,150,000 625,444 - ---------------------------------------------------------------------------------- PanAmSat Corp., 8.50% Sr. Nts., 2/1/12(8) 400,000 402,000 - ---------------------------------------------------------------------------------- Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts., 3/15/08(7,9) 200,000 69,000 - ---------------------------------------------------------------------------------- RCN Corp., 10.125% Sr. Unsec. Nts., 1/15/10 179,000 52,805 - ---------------------------------------------------------------------------------- Rhythms NetConnections, Inc., 14% Sr. Unsec. Nts., Series B, 2/15/10(5,7) 400,000 10,000 - ---------------------------------------------------------------------------------- Teligent, Inc., 11.50% Sr. Nts., 12/1/07(5,6,7) 200,000 20 - ---------------------------------------------------------------------------------- Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08(5,6,7) 195,000 1,463 - ---------------------------------------------------------------------------------- XO Communications, Inc.: 0%/12.25% Sr. Unsec. Disc. Nts., 6/1/09(7,9) 200,000 21,500 9% Sr. Unsec. Nts., 3/15/08(6,7) 250,000 35,000 10.75% Sr. Unsec. Nts., 11/15/08(7) 200,000 27,750 ----------- 2,526,501 - ---------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--3.3% Alamosa Delaware, Inc., 12.50% Sr. Unsec. Nts., 2/1/11 200,000 171,500 - ---------------------------------------------------------------------------------- American Cellular Corp., 9.50% Sr. Sub. Nts., 10/15/09 600,000 381,000 - ---------------------------------------------------------------------------------- Crown Castle International Corp.: 0%/10.375% Sr. Disc. Nts., 5/15/11(9) 550,000 341,000 0%/10.625% Sr. Unsec. Disc. Nts., 11/15/07(9) 800,000 716,000 - ---------------------------------------------------------------------------------- Dobson Communications Corp., 10.875% Sr. Unsec. Nts., 7/1/10 200,000 187,000 - ---------------------------------------------------------------------------------- Horizon PCS, Inc., 0%/14% Sr. Unsec. Sub. Nts., 10/1/10(9) 300,000 105,000 - ---------------------------------------------------------------------------------- Leap Wireless International, Inc.: 0%/14.50% Sr. Unsec. Disc. Nts., 4/15/10(9) 200,000 53,500 12.50% Sr. Nts. 4/15/10 400,000 227,000 - ---------------------------------------------------------------------------------- Millicom International Cellular SA, 13.50% Sr. Disc. Nts., 6/1/06 205,000 119,925 - ---------------------------------------------------------------------------------- Nextel Communications, Inc., 9.375% Sr. Unsec. Nts., 11/15/09 1,000,000 702,500 - ---------------------------------------------------------------------------------- Omnipoint Corp., 11.50% Sr. Nts., 9/15/09(8) 200,000 227,500 - ---------------------------------------------------------------------------------- Orbcomm Global LP (Escrow), 8/15/04 175,000 -- - ---------------------------------------------------------------------------------- Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 600,000 498,000 - ---------------------------------------------------------------------------------- SBA Communications Corp.: 0%/12% Sr. Unsec. Disc. Nts., 3/1/08(9) 1,300,000 799,500 10.25% Sr. Unsec. Nts., 2/1/09 500,000 362,500
16 OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES Continued TeleCorp PCS, Inc.: 0%/11.625% Sr. Unsec. Sub. Disc. Nts., 4/15/09(9) $ 122,000 $ 109,800 10.625% Sr. Unsec. Sub. Nts., 7/15/10 800,000 916,000 - ---------------------------------------------------------------------------------- Tritel PCS, Inc.: 0%/12.75% Sr. Unsec. Sub. Disc. Nts., 5/15/09(9) 400,000 360,000 10.375% Sr. Sub. Nts., 1/15/11 500,000 557,500 - ---------------------------------------------------------------------------------- Triton PCS, Inc.: 8.75% Sr. Unsec. Sub. Nts., 11/15/11 200,000 188,000 9.375% Sr. Unsec. Sub. Nts., 2/1/11 100,000 97,250 - ---------------------------------------------------------------------------------- US Unwired, Inc., 0%/13.375% Sr. Unsec. Sub. Disc. Nts., Series B, 11/1/09(9) 500,000 335,000 - ---------------------------------------------------------------------------------- VoiceStream Wireless Corp., 10.375% Sr. Unsec. Nts., 11/15/09 554,000 601,090 ----------- 8,056,565 - ---------------------------------------------------------------------------------- UTILITIES--1.6% - ---------------------------------------------------------------------------------- ELECTRIC UTILITIES--1.5% AES Corp. (The), 8.75% Sr. Unsec. Unsub. Nts., 6/15/08 250,000 210,000 - ---------------------------------------------------------------------------------- Caithness Coso Funding Corp., 9.05% Sr. Sec. Nts., Series B, 12/15/09 500,000 518,750 - ---------------------------------------------------------------------------------- Calpine Corp., 8.50% Sr. Unsec. Nts., 2/15/11 1,600,000 1,370,390 - ---------------------------------------------------------------------------------- CMS Energy Corp., 9.875% Sr. Unsec. Nts., 10/15/07 600,000 651,826 - ---------------------------------------------------------------------------------- Edison Mission Energy, 9.875% Sr. Unsec. Nts., 4/15/11 100,000 101,680 - ---------------------------------------------------------------------------------- ESI Tractebel Acquisition Corp., 7.99% Sec. Bonds, Series B, 12/30/11 500,000 490,296 - ---------------------------------------------------------------------------------- Fuji JGB Investment LLC, 9.87% Non-Cum. Bonds, Series A, 12/31/49(10) 140,000 115,783 - ---------------------------------------------------------------------------------- IBJ Preferred Capital Co. (The) LLC, 8.79% Non-Cum. Bonds, Series A, 12/29/49(10) 85,000 66,609 - ---------------------------------------------------------------------------------- Mirant Americas Generation LLC, 7.625% Sr. Unsec. Nts., 5/1/06 200,000 190,191 ----------- 3,715,525 - ---------------------------------------------------------------------------------- WATER UTILITIES--0.1% Azurix Corp.: 10.375% Sr. Unsec. Nts., Series B, 2/15/07 100,000 90,500 10.75% Sr. Unsec. Nts., Series B, 2/15/10 200,000 181,000 ----------- 271,500 ----------- 87,246,769 - ---------------------------------------------------------------------------------- STRUCTURED NOTES--0.2% - ---------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc./Redwood Capital I Ltd., Catastrophe Linked Bonds, 7.434%, 1/1/03(5,10) 500,000 497,500 ----------- Total Corporate Sector (Cost $100,220,364) 87,856,854 SHARES - ---------------------------------------------------------------------------------- INTERNATIONAL SECTOR--23.5% - ---------------------------------------------------------------------------------- COMMON STOCKS--0.0% - ---------------------------------------------------------------------------------- COLT Telecom Group plc, ADR(6) 7,020 14,180
17 OPPENHEIMER MULTI-SECTOR INCOME TRUST STATEMENT OF INVESTMENTS Unaudited / Continued - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES--3.1% - ---------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--0.9% - ---------------------------------------------------------------------------------- HOTELS RESTAURANTS & LEISURE--0.2% Intrawest Corp., 9.75% Sr. Nts., 8/15/08 $ 600,000 $ 624,000 - ---------------------------------------------------------------------------------- MEDIA--0.7% Corus Entertainment, Inc., 8.75% Sr. Sub. Nts., 3/1/12(8) 200,000 208,500 - ---------------------------------------------------------------------------------- Diamond Cable Communications plc, 11.75% Sr. Disc. Nts., 12/15/05(7) 200,000 71,000 - ---------------------------------------------------------------------------------- Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08(7) 200,000 183,000 - ---------------------------------------------------------------------------------- Imax Corp., 7.875% Sr. Nts., 12/1/05 700,000 532,000 - ---------------------------------------------------------------------------------- Telewest Communications plc: 0%/9.25% Sr. Disc. Nts., 4/15/09(9) 100,000 40,250 0%/9.875% Sr. Disc. Nts., 4/15/09(9)[GBP] 200,000 119,499 11.25% Sr. Nts., 11/1/08 700,000 385,000 - ---------------------------------------------------------------------------------- United Pan-Europe Communications NV, 0%/13.75% Sr. Unsec. Disc. Nts., Series B, 2/1/10(6,7,9) 1,000,000 95,000 ----------- 1,634,249 - ---------------------------------------------------------------------------------- CONSUMER STAPLES--0.4% - ---------------------------------------------------------------------------------- FOOD PRODUCTS--0.4% Sparkling Spring Water Group Ltd., 11.50% Sr. Sec. Sub. Nts., 11/15/07 300,000 250,500 - ---------------------------------------------------------------------------------- United Biscuits Finance plc, 10.75% Sr. Sub. Nts., 4/15/11(5)[GBP] 500,000 825,196 ----------- 1,075,696 - ---------------------------------------------------------------------------------- ENERGY--0.9% - ---------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--0.4% Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08(5) 1,200,000 1,074,000 - ---------------------------------------------------------------------------------- OIL & GAS--0.5% PDVSA Finance Ltd., 9.375% Sr. Unsec. Nts., 11/15/07(8) 195,000 194,025 - ---------------------------------------------------------------------------------- Petroleos Mexicanos: 9.375% Sr. Unsec. Bonds, 12/2/08 300,000 333,000 9.50% Sr. Sub. Nts., 9/15/27 585,000 647,887 ----------- 1,174,912 - ---------------------------------------------------------------------------------- FINANCIALS--0.2% - ---------------------------------------------------------------------------------- DIVERSIFIED FINANCIALS--0.2% Eurofima, 7.50% Sr. Unsec. Unsub. Nts., 11/4/02[DEM] 770,000 361,206 - ---------------------------------------------------------------------------------- INDUSTRIALS--0.1% - ---------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.1% Tyco International Group SA, 6.375% Nts., 10/15/11 200,000 159,408 - ---------------------------------------------------------------------------------- MARINE--0.0% Pacific & Atlantic Holdings, Inc., 10.50% Sec. Nts., 12/31/07(8) 142,444 57,690 - ---------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--0.1% - ---------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--0.1% Flextronics International Ltd., 9.875% Sr. Unsec. Sub. Nts., 7/1/10 200,000 217,000
18 OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- MATERIALS--0.2% - ---------------------------------------------------------------------------------- CHEMICALS--0.0% PCI Chemicals Canada, 10% Sr. Sec. Nts., 12/31/08(5) $ 87,434 $ 61,204 - ---------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.2% Ainsworth Lumber Co. Ltd., 13.875% Sr. Sec. Nts., 7/15/07(8) 250,000 281,250 - ---------------------------------------------------------------------------------- Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04(7) 750,000 191,250 ----------- 472,500 - ---------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--0.2% - ---------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.1% 360networks, Inc., 13% Sr. Unsec. Nts., 5/1/08(5,6,7)[EUR] 600,000 54 - ---------------------------------------------------------------------------------- FLAG Telecom Holdings Ltd., 11.625% Sr. Nts., 3/30/10(6,7)[EUR] 200,000 43,253 - ---------------------------------------------------------------------------------- KPNQwest NV, 2.50% Cv. Sr. Unsec. Nts., 3/15/12(5) 56,000 7,000 - ---------------------------------------------------------------------------------- NTL Communications Corp., 0%/11.50% Sr. Nts., 11/15/09(6,7,9)[EUR] 750,000 206,127 ----------- 256,434 - ---------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--0.1% Microcell Telecommunications, Inc., 0%/12% Sr. Unsec. Disc. Nts., 6/1/09(9) 500,000 137,500 - ---------------------------------------------------------------------------------- UTILITIES--0.1% - ---------------------------------------------------------------------------------- ELECTRIC UTILITIES--0.1% AES Drax Holdings Ltd., 10.41% Sr. Sec. Sub. Nts., Series B, 12/31/20 300,000 256,500 - ---------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS--16.0% - ---------------------------------------------------------------------------------- ARGENTINA--0.5% Argentina (Republic of) Bonds: 11.375%, 3/15/10(6,7) 765,000 187,425 11.75%, 6/15/15(7) 1,510,000 362,400 - ---------------------------------------------------------------------------------- Argentina (Republic of) Bonds, Series 2018, 3.063%, 6/19/18(7) 1,225,744 275,792 - ---------------------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 6.017%, 3/31/23(6,7) 235,000 110,450 - ---------------------------------------------------------------------------------- Argentina (Republic of) Unsec. Bonds, 12.375%, 2/21/12(6,7) 260,000 61,100 - ---------------------------------------------------------------------------------- Argentina (Republic of) Unsec. Unsub. Nts., 11.75%, 4/7/09(6,7) 610,000 152,500 - ---------------------------------------------------------------------------------- Argentina (Republic of) Unsub. Bonds, Series 2031, 2.79%, 6/19/31(7) 318,000 68,370 - ---------------------------------------------------------------------------------- Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas, Series PBA1, 3.257%, 4/1/07(5,7)[ARP] 108,275 15,203 ----------- 1,233,240 - ---------------------------------------------------------------------------------- AUSTRIA--1.1% Austria (Republic of) Nts., Series EMTN, 5.50%, 10/20/07[EUR] 2,800,000 2,596,249 - ---------------------------------------------------------------------------------- Austria (Republic of) Unsub. Nts., 5.25%, 1/4/11[EUR] 110,000 99,121 ----------- 2,695,370 - ---------------------------------------------------------------------------------- BELGIUM--1.7% Belgium (Kingdom of) Bonds, 5.50%, 3/28/28[EUR] 2,530,000 2,226,892 - ---------------------------------------------------------------------------------- Belgium (Kingdom of) Treasury Bills, Zero Coupon, 3.29%, 7/18/02(2)[EUR] 2,360,000 2,111,901 ----------- 4,338,793
19 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Unaudited / Continued - ---------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- BRAZIL--1.3% Brazil (Federal Republic of) Bonds, 8.875%, 4/15/24 $3,604,000 $ 2,387,650 - ---------------------------------------------------------------------------------- Brazil (Federal Republic of) Gtd. Disc. Bonds, 3.063%, 4/15/24(10) 1,010,000 733,512 ----------- 3,121,162 - ---------------------------------------------------------------------------------- CANADA--0.3% Canada (Government of) Bonds, 5.50%, 6/1/09[CAD] 1,040,000 665,191 - ---------------------------------------------------------------------------------- COLOMBIA--0.4% Colombia (Republic of) Bonds, 10%, 1/23/12 180,000 172,350 - ---------------------------------------------------------------------------------- Colombia (Republic of) Unsec. Unsub. Bonds: 8.375%, 2/15/27 205,000 146,882 11.75%, 2/25/20 25,000 24,925 - ---------------------------------------------------------------------------------- Colombia (Republic of) Unsec. Unsub. Nts., 11.375%, 1/31/08[EUR] 695,000 625,169 ----------- 969,326 - ---------------------------------------------------------------------------------- DOMINICAN REPUBLIC--0.1% Dominican Republic Unsec. Unsub. Bonds, 9.50%, 9/27/06 360,000 382,500 - ---------------------------------------------------------------------------------- ECUADOR--0.5% Ecuador (Republic of) Unsec. Bonds, 5%, 8/15/30(10) 2,025,000 1,169,437 - ---------------------------------------------------------------------------------- FRANCE--1.0% France (Government of) Obligations Assimilables du Tresor Bonds, 5.75%, 10/25/32[EUR] 1,360,000 1,263,290 - ---------------------------------------------------------------------------------- France (Government of) Treasury Bills, Zero Coupon, 3.36%, 9/5/02(2)[EUR] 1,385,000 1,233,533 ----------- 2,496,823 - ---------------------------------------------------------------------------------- GERMANY--0.3% Germany (Republic of) Bonds: 5%, 9/13/02[EUR] 450,000 407,644 5.50%, 1/4/31[EUR] 290,000 261,241 ----------- 668,885 - ---------------------------------------------------------------------------------- GREAT BRITAIN--0.5% United Kingdom Treasury Bonds: 7.75%, 9/8/06[GBP] 470,000 751,369 8%, 12/7/15[GBP] 275,000 508,762 ----------- 1,260,131 - ---------------------------------------------------------------------------------- GREECE--0.3% Greece (Republic of) Sr. Unsub. Bonds: 4.65%, 4/19/07[EUR] 245,000 218,207 5.90%, 10/22/22[EUR] 460,000 417,877 ----------- 636,084 - ---------------------------------------------------------------------------------- GUATEMALA--0.1% Guatemala (Republic of) Nts., 10.25%, 11/8/11(5) 295,000 332,612
20 OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- ITALY--0.1% Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 6%, 5/1/31[EUR] $ 65,000 $ 61,032 - ---------------------------------------------------------------------------------- Italy (Republic of) Treasury Bonds, Cert Di Credito Del Tesoro, Zero Coupon, 3.30%, 7/15/02(2)[EUR] 90,000 80,583 ----------- 141,615 - ---------------------------------------------------------------------------------- IVORY COAST--0.1% Ivory Coast (Government of) Past Due Interest Bonds, Series F, 1.895%, 3/29/18(6,7)[FRF] 4,569,500 155,361 - ---------------------------------------------------------------------------------- MEXICO--0.9% United Mexican States Bonds: 5.01%, 12/31/19[DEM] 885,000 357,793 11.375%, 9/15/16 315,000 404,933 - ---------------------------------------------------------------------------------- United Mexican States Bonds, Series MTN, 8.30%, 8/15/31 990,000 1,013,265 - ---------------------------------------------------------------------------------- United Mexican States Collateralized Fixed Rate Par Bonds, Series A, 6.25%, 12/31/19 400,000 383,000 ----------- 2,158,991 - ---------------------------------------------------------------------------------- NEW ZEALAND--0.2% New Zealand (Government of) Treasury Bills, Zero Coupon, 5.18%, 9/18/02(2)[NZD] 1,090,000 477,376 - ---------------------------------------------------------------------------------- PANAMA--0.3% Panama (Republic of) Interest Reduction Bonds, 4.75%, 7/17/14(10) 379,630 345,463 - ---------------------------------------------------------------------------------- Panama (Republic of) Past Due Interest Debs., 2.625%, 7/17/16(10) 366,538 307,892 ----------- 653,355 - ---------------------------------------------------------------------------------- PHILIPPINES--0.5% Philippines (Republic of) Bonds, 9.375%, 1/18/17 500,000 522,500 - ---------------------------------------------------------------------------------- Philippines (Republic of) Unsec. Bonds: 8.875%, 4/15/08 400,000 418,000 9.875%, 1/15/19 320,000 330,800 ----------- 1,271,300 - ---------------------------------------------------------------------------------- POLAND--0.5% Poland (Republic of) Bonds, Series 1106, 8.50%, 11/12/06 [PLZ] 5,130,000 1,261,349 - ---------------------------------------------------------------------------------- PORTUGAL--0.1% Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Unsub. Bonds, 5.85%, 5/20/10[EUR] 305,000 285,705 - ---------------------------------------------------------------------------------- RUSSIA--3.3% Russia (Government of) Debs., Series VI, 3%, 5/14/06 3,585,000 2,895,963 - ---------------------------------------------------------------------------------- Russian Federation Unsec. Unsub. Nts., 12.75%, 6/24/28 750,000 917,813 - ---------------------------------------------------------------------------------- Russian Federation Unsub. Nts., 5%, 3/31/30(10,12) 2,949,750 2,045,467 - ---------------------------------------------------------------------------------- Russian Ministry of Finance Debs., 3%, 5/14/08 3,460,000 2,409,025 ----------- 8,268,268
21 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Unaudited / Continued - ---------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- SPAIN--0.3% Spain (Kingdom of) Bonds, Bonos y Obligacion del Estado: 4.25%, 7/30/02(5)[EUR] $ 375,000 $ 338,541 5.75%, 7/30/32[EUR] 335,000 303,213 ----------- 641,754 - ---------------------------------------------------------------------------------- THE NETHERLANDS--0.3% Netherlands (Government of) Bonds, 5.50%, 1/15/28[EUR] 450,000 402,454 - ---------------------------------------------------------------------------------- Netherlands (Government of) Treasury Bills, Zero Coupon, 3.36%, 9/30/02(2)[EUR] 525,000 466,533 ----------- 868,987 - ---------------------------------------------------------------------------------- TURKEY--0.1% Turkey (Republic of) Sr. Unsec. Unsub. Nts., 11.875%, 1/15/30 115,000 119,888 - ---------------------------------------------------------------------------------- Turkey (Republic of) Sr. Unsub. Bonds, 12.375%, 6/15/09 132,000 142,890 ----------- 262,778 - ---------------------------------------------------------------------------------- UKRAINE--0.3% Ukraine (Republic of) Sr. Unsec. Nts., 11%, 3/15/07 840,160 869,041 - ---------------------------------------------------------------------------------- VENEZUELA--0.9% Venezuela (Republic of) Bonds, 9.25%, 9/15/27 605,000 425,920 - ---------------------------------------------------------------------------------- Venezuela (Republic of) Debs., Series DL, 2.875%, 12/18/07(10) 1,814,260 1,505,835 - ---------------------------------------------------------------------------------- Venezuela (Republic of) Front-Loaded Interest Reduction Bonds, Series B, 3.313%, 3/31/07(10) 326,183 269,305 ----------- 2,201,060 - ---------------------------------------------------------------------------------- LOAN PARTICIPATIONS--0.4% - ---------------------------------------------------------------------------------- Deutsche Bank AG, OAO Gazprom Loan Participation Nts.: 9.50%, 2/19/03 360,000 366,696 10%, 12/9/02(5) 675,000 687,353 ----------- 1,054,049 DATE STRIKE CONTRACTS - ---------------------------------------------------------------------------------- OPTIONS PURCHASED--0.0% - ---------------------------------------------------------------------------------- Euro Call(5,6) 7/25/02 0.895[EUR] 1,950,000 31,395 - ---------------------------------------------------------------------------------- Japanese Yen Call(5,6) 7/29/02 $127.68 225,000,000 28,125 ----------- 59,520 SHARES - ---------------------------------------------------------------------------------- PREFERRED STOCKS--0.0% - ---------------------------------------------------------------------------------- Pacific & Atlantic Holdings, Inc., 7.50% Cum. Cv., Series A(4,5) 7,799 46,794
22 OPPENHEIMER MULTI-SECTOR INCOME TRUST
MARKET VALUE UNITS SEE NOTE 1 - ---------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% - ---------------------------------------------------------------------------------- Mexico Value Rts., Exp. 6/30/03(6) 28,538 $ 6 - ---------------------------------------------------------------------------------- Microcell Telecommunications, Inc. Wts., Exp. 6/1/06(6,8) 2,800 3,055 - ---------------------------------------------------------------------------------- Telus Corp. Wts., Exp. 9/15/05(5,6) 539 3,503 ----------- 6,564 PRINCIPAL AMOUNT - ---------------------------------------------------------------------------------- STRUCTURED NOTES--4.0% - ---------------------------------------------------------------------------------- Credit Suisse First Boston Corp. (Nassau Branch), US Dollar/Philippine Peso Linked Nts., 12.50%, 3/15/12[PHP] $ 32,130,000 639,807 - ---------------------------------------------------------------------------------- Deutsche Bank AG, Brazilian Real Linked Nts., 2.084%, 2/8/04(10) 965,000 969,632 - ---------------------------------------------------------------------------------- Deutsche Bank AG, Colombian Peso Linked Nts., 2.201%, 4/22/04(10) 215,000 215,989 - ---------------------------------------------------------------------------------- Deutsche Bank AG, Indonesian Rupiah Linked Nts.: 10%, 5/22/05[IDR] 7,105,000,000 623,686 13%, 5/28/02 345,000 373,083 - ---------------------------------------------------------------------------------- Deutsche Bank AG, Korean Won, Thai Baht, Philippines Peso & Japanese Yen Linked Nts., 8.014%, 6/20/02 1,115,000 1,141,649 - ---------------------------------------------------------------------------------- Deutsche Bank AG, Mexican Peso Linked Nts., 1.74%, 4/9/12(10) 1,445,880 1,403,227 - ---------------------------------------------------------------------------------- Deutsche Bank AG, Venezuelan Bolivar Linked Nts., 2.33%, 4/8/04(10) 960,000 962,112 - ---------------------------------------------------------------------------------- JPMorgan Chase Bank, EMBI Plus/EMBI Global Linked Bonds, 1.20%, 4/4/03 330,000 329,425 - ---------------------------------------------------------------------------------- JPMorgan Chase Bank, EMBI Plus/EMBI Global Linked Nts., 1.02%, 3/11/03 510,000 516,067 - ---------------------------------------------------------------------------------- Salomon Smith Barney Holdings, Inc., Turkish Lira/Israeli Shekel Linked Nts.: 1.77%, 7/10/02 480,000 490,330 1.77%, 7/10/02 480,000 483,621 - ---------------------------------------------------------------------------------- Salomon Smith Barney, Inc., Chilean Peso Linked Nts., 1.79%, 7/10/02 480,000 476,496 - ---------------------------------------------------------------------------------- Standard Chartered Bank, Polish Zloty Linked Nts., 9.60%, 7/26/02[PLZ] 1,856,000 467,031 - ---------------------------------------------------------------------------------- UBS AG, Australian Dollar Property Index Linked Nts., 7%, 7/30/02[AUD] 1,550,000 897,393 ----------- 9,989,548 ----------- Total International Sector (Cost $60,454,713) 58,219,448 - ---------------------------------------------------------------------------------- ASSET-BACKED SECTOR--60.2% - ---------------------------------------------------------------------------------- ASSET-BACKED SECURITIES--2.6% - ---------------------------------------------------------------------------------- Conseco Finance Securitizations Corp., Home Equity Loan Pass-Through Certificates, Series 2001-D, Cl. M2, 3.61%, 11/15/32(5,10) 2,400,000 2,372,250 - ---------------------------------------------------------------------------------- Consumer Credit Reference Index Securities Program, Credit Card Asset-Backed Certificates, Series 2002-B, Cl. FX, 10.421%, 3/22/07(5) 1,000,000 1,015,000 - ---------------------------------------------------------------------------------- Lehman ABS Manufactured Housing Contract, Commercial Mtg. Pass-Through Certificates, Series 2001-B, Cl. A4, 5.27%, 9/15/18 2,000,000 1,973,125 - ---------------------------------------------------------------------------------- Principal Residential Mortgage Capital Resources Trust, Real Estate Mtg. Investment Conduit Participation Certificates, Series 2000-1, Cl. B, 3.508%, 6/20/05(5,10) 1,000,000 993,750 ----------- 6,354,125
23 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Unaudited / Continued - ---------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- GOVERNMENT AGENCY--47.5% - ---------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED--47.2% Federal Home Loan Mortgage Corp., 12%, 5/1/10 - 6/1/15 $ 437,013 $ 507,964 - ---------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through Certificates, Series 2430, Cl. ND, 6.50%, 1/15/31 5,000,000 5,089,063 - ---------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Participation Certificates, Series 1331, Cl. Z, 8%, 4/15/07 1,059,131 1,085,270 - ---------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 2054, Cl. TE, 6.25%, 4/15/24 534,000 546,015 - ---------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 194, Cl. IO, (1.319)%, 4/1/28(13) 1,187,116 274,335 Series 197, Cl. IO, 5.211%, 4/1/28(13) 3,397,910 855,848 Series 199, Cl. IO, 1.393%, 8/1/28(13) 8,223,916 1,878,651 Series 202, Cl. IO, 2.459%, 4/1/29(13) 28,985,874 6,933,965 Series 208, Cl. IO, 0.016%, 6/1/30(13) 3,399,826 653,404 - ---------------------------------------------------------------------------------- Federal National Mortgage Assn.: 6%, 5/25/32(11) 12,400,000 12,252,812 6.50%, 5/25/32(11) 66,000,000 66,784,080 6.50%, 1/1/29(1) 7,990,656 8,113,153 7%, 5/25/32(11) 7,000,000 7,220,920 7%, 9/1/29 - 12/1/29 1,793,076 1,851,941 7.50%, 6/1/10 - 9/1/29 2,044,243 2,142,263 11%, 7/1/16 187,103 210,784 13%, 6/1/15 365,034 431,361 ----------- 116,831,829 - ---------------------------------------------------------------------------------- GNMA/GUARANTEED--0.3% Government National Mortgage Assn.: 6.75%, 7/20/27 86,115 88,712 7%, 1/15/28 - 3/15/28 473,871 491,357 11%, 10/20/19 116,423 133,836 12%, 11/20/13 - 9/20/15 121,339 141,852 ----------- 855,757 - ---------------------------------------------------------------------------------- PRIVATE--10.1% - ---------------------------------------------------------------------------------- COMMERCIAL--5.0% Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates: Series 1995-MD4, Cl. A5, 7.384%, 8/13/29 1,500,000 1,498,008 Series 1997-D4, Cl. B2, 7.525%, 4/14/29 2,000,000 1,582,031 - ---------------------------------------------------------------------------------- Capital Lease Funding Securitization LP, Interest-Only Corporate-Backed Pass-Through Certificates, Series 1997-CTL1, 11.012%, 6/22/24(5,13) 9,840,317 298,285 - ---------------------------------------------------------------------------------- Commercial Mortgage Acceptance Corp., Interest-Only Stripped Mtg.-Backed Security, Series 1996-C1, Cl. X-2, 51.999%, 12/25/20(5,13) 3,962,343 2,476 - ---------------------------------------------------------------------------------- First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates, Series 1997-CHL1, Cl. C, 8.126%, 7/25/06(5,10) 800,000 781,000
24 OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------- COMMERCIAL Continued First Union-Lehman Brothers Commercial Mortgage Trust, Commercial Mtg. Pass-Through Certificates, Series 1997-C2, Cl. F, 7.50%, 9/18/15 $ 600,000 $ 480,844 - ---------------------------------------------------------------------------------- GMAC Commercial Mortgage Securities, Inc., Interest-Only Stripped Mtg.-Backed Security Pass-Through Certificates, Series 1997-C1, Cl. X, 8.357%, 7/15/27(13) 2,981,758 192,882 - ---------------------------------------------------------------------------------- GMAC Commercial Mortgage Securities, Inc., Mtg. Pass-Through Certificates, Series 1998-C1, Cl. F, 7.221%, 5/15/30(10) 2,000,000 1,865,070 - ---------------------------------------------------------------------------------- Mortgage Capital Funding, Inc., Commercial Mtg. Pass-Through Certificates, Series 1996-MC2, Cl. F, 5.75%, 12/21/26 1,600,000 1,361,500 - ---------------------------------------------------------------------------------- Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 3,700,000 3,885,000 - ---------------------------------------------------------------------------------- Strategic Hotel Capital, Inc., Commercial Mtg. Obligations, Series 2001-SCH1, Cl. E, 4.06%, 4/17/06(5,10) 498,957 469,643 ----------- 12,416,739 - ---------------------------------------------------------------------------------- RESIDENTIAL--5.1% Lehman Structured Securities Corp., Collateralized Mtg. Obligations, Series 2001-GE4, Cl. A, 6.542%, 10/25/30 1,228,528 1,197,048 - ---------------------------------------------------------------------------------- PNC Mortgage Securities Corp., Collateralized Mtg. Obligations Pass-Through Certificates, Series 1998-11, Cl. 1A5, 6.50%, 11/25/28 10,000,000 10,046,800 - ---------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg. Pass-Through Certificates, Series 1996-B, Cl. 1, 7.039%, 4/25/26(5,10) 1,052,517 776,231 - ---------------------------------------------------------------------------------- Structured Asset Securities Corp. NIM Trust, Collateralized Mtg. Obligations, Series 2001-1, Cl. A, 7.50%, 7/25/30(5) 475,273 471,709 ----------- 12,491,788 ----------- Total Asset-Backed Sector (Cost $149,286,126) 148,950,238 - ---------------------------------------------------------------------------------- MONEY MARKET SECTOR--7.7% - ---------------------------------------------------------------------------------- SHORT-TERM NOTES--0.7% Cooperative Assn. of Tractor Dealers, Inc., Series B, 1.83%, 6/10/02 1,000,000 997,967 - ---------------------------------------------------------------------------------- Wyeth, 1.92%, 6/18/02 1,000,000 997,440 ----------- 1,995,407 - ---------------------------------------------------------------------------------- REPURCHASE AGREEMENTS--7.0% Repurchase agreement with Banc One Capital Markets, Inc., 1.83%, dated 4/30/02, to be repurchased at $17,216,875 on 5/1/02, collateralized by U.S. Treasury Bonds, 6.625%--7.25%, 5/15/16--2/15/27, with a value of $2,438,528 and U.S. Treasury Nts., 3.375%--7%, 3/31/03--8/15/09, with a value of $15,140,197 17,216,000 17,216,000 ----------- Total Money Market Sector (Cost $19,211,407) 19,211,407 - ---------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $346,190,852) 133.3% 330,057,939 - ---------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (33.3) (82,494,108) --------------------------- NET ASSETS 100.0% $247,563,831 ===========================
25 OPPENHEIMER MULTI-SECTOR INCOME TRUST STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: ARP Argentine Peso AUD Australian Dollar GBP British Pound Sterling CAD Canadian Dollar EUR Euro FRF French Franc DEM German Mark IDR Indonesian Rupiah NZD New Zealand Dollar PHP Philippines Peso PLZ Polish Zloty 1. Securities with an aggregate market value of $9,170,521 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 2. Zero coupon bond reflects effective yield on the date of purchase. 3. A sufficient amount of securities has been designated to cover outstanding foreign currency contracts. See Note 5 of Notes to Financial Statements. 4. Interest or dividend is paid-in-kind. 5. Identifies issues considered to be illiquid or restricted--See Note 9 of Notes to Financial Statements. 6. Non-income producing security. 7. Issuer is in default. 8. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $14,221,744 or 5.74% of the Fund's net assets as of April 30, 2002. 9. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 10. Represents the current interest rate for a variable or increasing rate security. 11. When-issued security to be delivered and settled after April 30, 2002. 12. A sufficient amount of liquid assets has been designated to cover outstanding written options, as follows:
PRINCIPAL (000S) EXPIRATION EXERCISE PREMIUM MARKET VALUE SUBJECT TO CALL DATE PRICE RECEIVED SEE NOTE 1 - ---------------------------------------------------------------------------------------- Russian Federation Unsub. Nts., 5%, 3/31/30 $2,950 5/14/02 50.00% $93,810 $580,781
13. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES Unaudited - ---------------------------------------------------------------------------------- April 30, 2002 - ---------------------------------------------------------------------------------- ASSETS - ---------------------------------------------------------------------------------- Investments, at value (cost $346,190,852) -- see accompanying statement $ 330,057,939 - ---------------------------------------------------------------------------------- Cash-- foreign currencies (cost $1,900) 1,445 - ---------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 44,442 - ---------------------------------------------------------------------------------- Receivables and other assets: Interest, dividends and principal paydowns 4,202,137 Investments sold 1,214,065 Daily variation on futures contracts 77,877 Other 6,037 ------------- Total assets 335,603,942 ================================================================================== LIABILITIES - ---------------------------------------------------------------------------------- Bank overdraft 53,930 - ---------------------------------------------------------------------------------- Unrealized depreciation on foreign currency contracts 75,518 - ---------------------------------------------------------------------------------- Options written, at value (premiums received $93,810) 580,781 - ---------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased (including $85,627,759 purchased on a when-issued basis) 87,038,962 Closed foreign currency contracts 121,542 Trustees' compensation 65,451 Shareholder reports 51,476 Management and administrative fees 10,932 Swap contract 1,263 Other 40,256 ------------- Total liabilities 88,040,111 ================================================================================== NET ASSETS $247,563,831 ============= - ---------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ---------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 292,426 - ---------------------------------------------------------------------------------- Additional paid-in capital 307,549,885 - ---------------------------------------------------------------------------------- Overdistributed net investment income (1,420,274) - ---------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (42,537,306) - ---------------------------------------------------------------------------------- Net unrealized depreciation on investments and translation of assets and liabilities denominated in foreign currencies (16,320,900) ------------- NET ASSETS -- applicable to 29,242,576 shares of beneficial interest outstanding $247,563,831 ============= ================================================================================== NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE $8.47 =============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF OPERATIONS Unaudited - ---------------------------------------------------------------------------------- For the Six Months Ended April 30, 2002 ================================================================================== INVESTMENT INCOME - ---------------------------------------------------------------------------------- Interest (net of foreign withholding taxes of $4,375) $ 10,559,433 - ---------------------------------------------------------------------------------- Dividends 227,888 ------------ Total income 10,787,321 ================================================================================== EXPENSES - ---------------------------------------------------------------------------------- Management fees 791,041 - ---------------------------------------------------------------------------------- Shareholder reports 43,739 - ---------------------------------------------------------------------------------- Legal, auditing and other professional fees 35,089 - ---------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 26,526 - ---------------------------------------------------------------------------------- Custodian fees and expenses 25,146 - ---------------------------------------------------------------------------------- Trustees' compensation 5,984 - ---------------------------------------------------------------------------------- Accounting service fees 4,000 - ---------------------------------------------------------------------------------- Other 5,579 ------------ Total expenses 937,104 Less reduction to custodian expenses (2,648) ------------ Net expenses 934,456 ================================================================================== NET INVESTMENT INCOME 9,852,865 - ---------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - ---------------------------------------------------------------------------------- Net realized gain (loss) on: Investments (including premiums on options exercised) (5,042,072) Closing of futures contracts (567,694) Closing and expiration of option contracts written 34,771 Foreign currency transactions (1,417,056) ------------ Net realized loss (6,992,051) - ---------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments 9,788,656 Translation of assets and liabilities denominated in foreign currencies 861,562 ------------ Net change 10,650,218 ------------ Net realized and unrealized gain 3,658,167 ================================================================================== NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $13,511,032 ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENTS OF CHANGES IN NET ASSETS - ----------------------------------------------------------------------------------- SIX MONTHS YEAR ENDED ENDED APRIL 30, 2002 OCTOBER 31, (UNAUDITED) 2001 =================================================================================== OPERATIONS - ----------------------------------------------------------------------------------- Net investment income $ 9,852,865 $ 22,602,538 - ----------------------------------------------------------------------------------- Net realized loss (6,992,051) (7,951,443) - ----------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 10,650,218 (4,900,186) ----------------------------- Net increase in net assets resulting from operations 13,511,032 9,750,909 =================================================================================== DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ----------------------------------------------------------------------------------- Dividends from net investment income (10,576,185) (22,861,344) - ----------------------------------------------------------------------------------- Tax return of capital distribution -- (959,803) =================================================================================== BENEFICIAL INTEREST TRANSACTIONS - ----------------------------------------------------------------------------------- Proceeds from shares issued to shareholders in reinvestment of dividends 462,675 607,802 =================================================================================== NET ASSETS - ----------------------------------------------------------------------------------- Total increase (decrease) 3,397,522 (13,462,436) - ----------------------------------------------------------------------------------- Beginning of period 244,166,309 257,628,745 ----------------------------- End of period (including overdistributed net investment income of $1,420,274 and $696,954, respectively) $247,563,831 $244,166,309 =============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 OPPENHEIMER MULTI-SECTOR INCOME TRUST
FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------ SIX MONTHS YEAR ENDED ENDED APRIL 30, 2002 OCT. 31, (UNAUDITED) 2001 2000 1999 1998 1997 ====================================================================================================== PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 8.37 $ 8.85 $ 9.45 $ 9.82 $10.61 $ 10.52 - ------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .34 .78(1) .86 .87 .79 .89 Net realized and unrealized gain (loss) .12 (.44)(1) (.62) (.43) (.75) .08 --------------------------------------------------------- Total income from investment operations .46 .34 .24 .44 .04 .97 - ------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.36) (.79) (.68) (.81) (.78) (.88) Tax return of capital distribution -- (.03) (.16) -- (.05) -- --------------------------------------------------------- Total dividends and/or distributions to shareholders (.36) (.82) (.84) (.81) (.83) (.88) - ------------------------------------------------------------------------------------------------------ Net asset value, end of period $8.47 $8.37 $8.85 $9.45 $9.82 $10.61 ========================================================= Market value, end of period $8.15 $8.08 $7.88 $8.06 $9.38 $10.13 ========================================================= ====================================================================================================== TOTAL RETURN, AT MARKET VALUE(2) 5.63% 12.79% 6.93% (6.64)% 0.17% 11.40% - ------------------------------------------------------------------------------------------------------ ====================================================================================================== RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $247,564 $244,166 $257,629 $275,181 $285,907 $308,972 - ------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $245,543 $251,362 $269,849 $285,213 $304,773 $308,712 - ------------------------------------------------------------------------------------------------------ Ratios to average net assets:(3) Net investment income 8.09% 8.99%(1) 9.27% 8.86% 7.56% 8.42% Expenses 0.77% 0.75% 0.84% 1.03% 1.01%(4) 0.99%(4) - ------------------------------------------------------------------------------------------------------ Portfolio turnover rate 34% 133% 104% 159% 402% 259%
1. Without the adoption of the change in amortization method for fiscal years beginning after December 15, 2000, these amounts would have been: Net investment income $ .79 Net realized and unrealized loss (.45) Net investment income ratio 9.19% 2. Assumes a $1,000 hypothetical purchase at the current market price on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and a sale at the current market price on the last business day of the period. Total return does not reflect sales charges or brokerage commissions. 3. Annualized for periods of less than one full year. 4. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 OPPENHEIMER MULTI-SECTOR INCOME TRUST NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- ================================================================================ 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Multi-Sector Income Trust (the Fund) is registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company. The Fund's investment objective is to seek high current income consistent with preservation of capital. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). 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 values and redemption prices are linked to foreign currency exchange rates. The structured notes are leveraged, which increases the volatility of each note's market value relative to the change in the underlying foreign currency exchange rate. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying financial statements. The Fund records a realized gain or loss when a structured note is sold or matures. As of April 30, 2002, the market value of these securities comprised 4.24% of the Fund's net assets and resulted in unrealized gains in the current period of $147,914. 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 six months or more beyond trade date. During this period, such securities do not earn interest, are subject to 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 commitments. These transactions of securities on a when-issued basis may increase the volatility of the Fund's net asset value to the extent the Fund makes such transactions while remaining substantially fully invested. As of April 30, 2002, the Fund had entered into net outstanding when-issued transactions of $85,627,759. 31 OPPENHEIMER MULTI-SECTOR INCOME TRUST NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- ================================================================================ 1. SIGNIFICANT ACCOUNTING POLICIES Continued In connection with its ability to purchase securities on a when-issued basis, the Fund may enter into forward roll transactions with respect to mortgage-related securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The forward roll may not extend for a period of greater than one year. The Fund generally records the incremental difference between the forward purchase and sell of each forward roll as interest income. Risks to the Fund of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities to what was sold to the counterparty at redelivery; counterparty credit risk; and the potential pay down speed variance between the mortgage-related pools. - -------------------------------------------------------------------------------- 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 April 30, 2002, securities with an aggregate market value of $5,743,898, representing 2.32% 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 its custodian bank 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. - -------------------------------------------------------------------------------- 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 32 OPPENHEIMER MULTI-SECTOR INCOME TRUST taxable income, including any net realized gain on investments not offset by loss carryovers to shareholders. Therefore, no federal income or excise tax provision is required. As of April 30, 2002, the Fund had available for federal income tax purposes an estimated unused capital loss carryover of $38,948,586. This estimated capital loss carryover represents carryover as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. As of October 31, 2001, the Fund had available for federal income tax purposes unused capital loss carryovers as follows: EXPIRING -------------------------- 2003 $ 7,982,990 2006 1,509,541 2007 11,561,894 2008 5,440,197 2009 5,461,913 ----------- Total $31,956,535 =========== - -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the Fund's independent Board of Trustees. Benefits are based on years of service and fees paid to each trustee during the years of service. During the six months ended April 30, 2002, the Fund's projected benefit obligations were increased by $2,898 and payments of $13,676 were made to retired trustees, resulting in an accumulated liability of $64,557 as of April 30, 2002. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of annual compensation they are entitled to receive from the Fund. Under the plan, the compensation deferred is periodically adjusted as though an equivalent amount had been invested for the Board of Trustees in shares of one or more Oppenheimer funds selected by the trustee. The amount paid to the Board of Trustees under the plan will be determined based upon the performance of the selected funds. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. - -------------------------------------------------------------------------------- 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 their 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. 33 OPPENHEIMER MULTI-SECTOR INCOME TRUST NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- ================================================================================ 1. SIGNIFICANT ACCOUNTING POLICIES Continued INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 $.01 par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED APRIL 30, 2002 YEAR ENDED OCTOBER 31, 2001 SHARES AMOUNT SHARES AMOUNT - --------------------------------------------------------------------------------------------- Net increase from dividends reinvested 55,092 $462,675 71,416 $607,802
================================================================================ 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended April 30, 2002, were $104,115,830 and $117,930,638, respectively. ================================================================================ 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 0.65% on the Fund's average annual net assets. - -------------------------------------------------------------------------------- ACCOUNTING FEES. The Manager acts as the accounting agent for the Fund at an annual fee of $24,000, plus out-of-pocket costs and expenses reasonably incurred. Effective January 1, 2002, the Fund no longer pays accounting service fees. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. Shareholder Financial Services, Inc. (SFSI), a wholly-owned subsidiary of the Manager, is the transfer agent and registrar for the Fund. Fees paid to SFSI are based on the number of accounts and the number of shareholder transactions, plus out-of-pocket costs and expenses. 34 OPPENHEIMER MULTI-SECTOR INCOME TRUST ================================================================================ 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 as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign currency transactions. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of April 30, 2002, the Fund had outstanding foreign currency contracts as follows:
CONTRACT EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED CONTRACT DESCRIPTION DATES (000S) APRIL 30, 2002 APPRECIATION DEPRECIATION - ------------------------------------------------------------------------------------------------ CONTRACTS TO PURCHASE Canadian Dollar (CAD) 4/17/03 510 CAD $ 322,500 $ 2,853 $ -- Euro (EUR) 5/8/02- 5/13/02 7,365 EUR 6,633,700 34,987 10,996 Japanese Yen (JPY) 5/8/02- 4/30/03 1,061,645 JPY 8,395,818 6,602 15,932 --------------------- 44,442 26,928 --------------------- CONTRACTS TO SELL Australian Dollar (AUD) 4/15/03 1,645 AUD 862,179 -- 5,602 British Pound Sterling (GBP) 7/5/02- 10/28/02 1,065 GBP 1,541,997 -- 17,980 Euro (EUR) 5/5/03 4,275 EUR 3,825,014 -- 23,150 Japanese Yen (JPY) 5/2/03 126,720 JPY 1,012,545 -- 1,858 --------------------- -- 48,590 --------------------- Total Unrealized Appreciation and Depreciation $44,442 $75,518 =====================
================================================================================ 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. 35 OPPENHEIMER MULTI-SECTOR INCOME TRUST NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- ================================================================================ 6. FUTURES CONTRACTS Continued 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 market changes 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. 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. Realized gains and losses are reported on the Statement of Operations as closing and expiration of futures contracts. 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 April 30, 2002, the Fund had outstanding futures contracts as follows:
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION CONTRACT DESCRIPTION DATES CONTRACTS APRIL 30, 2002 (DEPRECIATION) - ------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE DAX Index 6/21/02 4 $ 456,002 $ 1,918 FTSE 100 Index 6/21/02 1 75,299 14 Japan (Government of) Bonds, 10 yr. 6/11/02 1 1,079,673 9,235 NASDAQ 100 Index 6/20/02 10 1,280,000 16,300 Nikkei 225 Index 6/13/02 2 116,200 (3) U.S. Long Bonds 6/19/02 153 15,653,813 352,531 U.S. Treasury Nts., 2 yr. 6/27/02 65 13,592,109 5,219 U.S. Treasury Nts., 10 yr. 9/19/02 63 6,568,734 (18,703) ----------- 366,511 ----------- CONTRACTS TO SELL Australian (Commonwealth of) Bonds, 10 yr. 6/17/02 15 797,165 (18,076) Euro-Bundesobligation 6/6/02 25 2,387,464 1,868 United Kingdom Long Gilt 6/26/02 2 326,202 (290) U.S. Treasury Nts., 5 yr. 6/19/02 26 2,757,219 (27,625) U.S. Treasury Nts., 10 yr. 6/19/02 13 1,372,313 -- ----------- (44,123) ----------- $322,388 ===========
36 OPPENHEIMER MULTI-SECTOR INCOME TRUST ================================================================================ 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. 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 six months ended April 30, 2002 was as follows: CALL OPTIONS - ----------------------------------------------------- PRINCIPAL (000S)/ NUMBER OF AMOUNT OF CONTRACTS PREMIUMS - ----------------------------------------------------- Options outstanding as of October 31, 2001 4,800 $ 26,666 Options written 969,703 379,967 Options closed or expired (964,155) (166,801) Options exercised (7,398) (146,022) ----------------------- Options outstanding as of April 30, 2002 2,950 $ 93,810 ======================= 37 OPPENHEIMER MULTI-SECTOR INCOME TRUST NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- ================================================================================ 8. CREDIT SWAP TRANSACTIONS The Fund may enter into a credit swap transaction to seek to maintain a total return on a particular investment or portion of its portfolio, or for other non-speculative purposes. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as a notional principal amount. The Fund records an increase or decrease to interest income, in the amount due to or owed by the Fund at termination or settlement. The Fund enters into swaps only on securities it owns. Credit swaps are subject to credit risks (if the counterparty fails to meet its obligations). The Fund segregates liquid assets to cover any amounts it could owe under swaps that exceed the amounts it is entitled to receive. As of April 30, 2002, the Fund had entered into the following credit swap agreements:
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED CONTRACT DESCRIPTION DATE CONTRACTS APRIL 30, 2002 DEPRECIATION - --------------------------------------------------------------------------------------------- J.P. Morgan Chase Bank, Jordon (Kingdom of ) Credit Nts. 6/6/06 175,000 $(1,263) $1,263
================================================================================ 9. ILLIQUID OR RESTRICTED SECURITIES As of April 30, 2002, 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 April 30, 2002 was $16,412,054, which represents 6.63% of the Fund's net assets, of which $15,780 is considered restricted. Information concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED SECURITY DATE COST APRIL 30, 2002 APPRECIATION - ---------------------------------------------------------------------------------------- STOCKS AND/OR WARRANTS Aurora Foods, Inc. 9/18/00 $-- $15,780 $15,780
38 OPPENHEIMER MULTI-SECTOR INCOME TRUST GENERAL INFORMATION CONCERNING THE FUND Unaudited - -------------------------------------------------------------------------------- ================================================================================ Oppenheimer Multi-Sector Income Trust (the Fund) is a closed-end diversified management investment company with a primary investment objective of seeking high current income consistent with preservation of capital. The Fund's secondary investment objective is capital appreciation. In seeking its objectives under normal market conditions, the Fund may invest any percentage of its assets in at least three of the following seven fixed-income sectors: U.S. Government, Corporate, International, Asset-Backed, Municipal, Convertible and Money Market. Current income, preservation of capital and, secondarily, possible capital appreciation may be considerations in the allocation of assets among such sectors. The Fund can invest in a number of different kinds of "derivative investments" and can also engage in certain special investment techniques, including repurchase transactions, when-issued and delayed delivery transactions and hedging. Although, the Fund is not required to invest in any of these types of securities at all times. The investment advisor to the Fund is OppenheimerFunds, Inc. (the Manager). The Portfolio Managers of the Fund are Arthur Steinmetz and Caleb Wong. Mr. Steinmetz is a Vice President of the Fund and a Senior Vice President of the Advisor and Mr. Wong is Vice President of the Advisor and the Fund. Messrs. Steinmetz and Wong have been the persons principally responsible for the day-to-day management of the Fund's portfolio since February 1, 1999. Prior to February 1999, Mr. Steinmetz served as a portfolio manager and officer of other Oppenheimer funds. Mr. Wong worked on fixed-income quantitative research and risk management for the Advisor since July 1996, prior to which we was enrolled in the Ph.D. program for Economics as the University of Chicago. Other members of the Advisor's fixed-income portfolio department, particularly portfolio analysts, traders and other portfolio managers provide the Fund's Portfolio Managers with support in managing the Fund's portfolio. ================================================================================ DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN. Pursuant to the Fund's Dividend Reinvestment and Cash Purchase Plan (the Plan), as to shares of the Fund (Shares) not registered in nominee name, all dividends and capital gains distributions (Distributions) declared by the Fund will be automatically reinvested in additional full and fractional Shares unless a shareholder elects to receive cash. If Shares are registered in nominee name, the shareholder should consult the nominee if the shareholder desires to participate in the Plan. Shareholders that participate in the Plan (Participants) may, at their option, make additional cash investments in Shares, semi-annually in amounts of at least $100, through payment to Shareholder Financial Services, Inc., the agent for the Plan (the Agent), accompanied by a service fee of $0.75. Depending upon the circumstances hereinafter described, Plan Shares will be acquired by the Agent for the Participant's account through receipt of newly issued Shares or the purchase of outstanding Shares on the open market. If the market price of Shares on the relevant date (normally the payment date) equals or exceeds their net asset value, the Agent will ask the Fund for payment of the Distribution in additional Shares at the greater of the Fund's net asset value determined as of the date of purchase or 95% of the then-current market price. If the market price is lower than net asset value, the 39 OPPENHEIMER MULTI-SECTOR INCOME TRUST GENERAL INFORMATION CONCERNING THE FUND Unaudited / Continued - -------------------------------------------------------------------------------- ================================================================================ Distribution will be paid in cash, which the Agent will use to buy Shares on The New York Stock Exchange (the NYSE), or otherwise on the open market to the extent available. If the market price exceeds the net asset value before the Agent has completed its purchases, the average purchase price per Share paid by the Agent may exceed the net asset value, resulting in fewer Shares being acquired than if the Distribution had been paid in Shares issued by the Fund. Participants may elect to withdraw from the Plan at any time and thereby receive cash in lieu of Shares by sending appropriate written instructions to the Agent. Elections received by the Agent will be effective only if received more than ten days prior to the record date for any Distribution; otherwise, such termination will be effective shortly after the investment of such Distribution with respect to any subsequent Distribution. Upon withdrawal from or termination of the Plan, all Shares acquired under the Plan will remain in the Participant's account unless otherwise requested. For full Shares, the Participant may either: (1) receive without charge a share certificate for such Shares; or (2) request the Agent (after receipt by the Agent of signature guaranteed instructions by all registered owners) to sell the Shares acquired under the Plan and remit the proceeds less any brokerage commissions and a $2.50 service fee. Fractional Shares may either remain in the Participant's account or be reduced to cash by the Agent at the current market price with the proceeds remitted to the Participant. Shareholders who have previously withdrawn from the Plan may rejoin at any time by sending written instructions signed by all registered owners to the Agent. There is no direct charge for participation in the Plan; all fees of the Agent are paid by the Fund. There are no brokerage charges for Shares issued directly by the Fund. However, each Participant will pay a pro rata share of brokerage commissions incurred with respect to open market purchases of Shares to be issued under the Plan. Participants will receive tax information annually for their personal records and to assist in federal income tax return preparation. The automatic reinvestment of Distributions does not relieve Participants of any income tax that may be payable on Distributions. The Plan may be terminated or amended at any time upon 30 days' prior written notice to Participants which, with respect to a Plan termination, must precede the record date of any Distribution by the Fund. Additional information concerning the Plan may be obtained by shareholders holding Shares registered directly in their names by writing the Agent, Shareholder Financial Services, Inc., P.O. Box 173673, Denver, CO 80217-3673 or by calling 1-800-647-7374. Shareholders holding Shares in nominee name should contact their brokerage firm or other nominee for more information. - -------------------------------------------------------------------------------- SHAREHOLDER INFORMATION. The Shares are traded on the NYSE. Daily market prices for the Fund's shares are published in the New York Stock Exchange Composite Transaction section of newspapers under the designation "OppenMlti." The Fund's NYSE trading symbol is OMS. Weekly net asset value (NAV) and market price information about the Fund is generally published each Monday in THE WALL STREET Journal and each Sunday in THE NEW YORK TIMES and each Saturday in BARRON'S, and other newspapers in a table called "Closed-End Bond Funds." 40 OPPENHEIMER MULTI-SECTOR INCOME TRUST SHAREHOLDER MEETING Unaudited - -------------------------------------------------------------------------------- ================================================================================ On May 3, 2003, a special shareholder meeting was held at which the four Trustees identified below were elected and the selection of KPMG LLP as the independent certified public accountants and auditors of the Fund for the fiscal year beginning November 1, 2001 was ratified (Proposal No. 1) as described in the Fund's proxy statement for that meeting. The following is a report of the votes cast:
NOMINEE/PROPOSAL FOR WITHHELD TOTAL - ---------------------------------------------------------------------------------------- TRUSTEES Phillip A. Griffiths 23,421,956.195 343,067.220 23,765,023.415 Elizabeth B. Moynihan 23,419,603.023 345,420.392 23,765,023.415 John V. Murphy 23,412,930.232 352,093.183 23,765,023.415 Donald W. Spiro 23,419,649.221 345,374.194 23,765,023.415 FOR AGAINST ABSTAIN TOTAL - ----------------------------------------------------------------------------------------- Proposal No. 1 23,444,589.154 145,000.819 175,433.442 23,765,023.415
41 OPPENHEIMER MULTI-SECTOR INCOME TRUST OPPENHEIMER MULTI-SECTOR INCOME TRUST - -------------------------------------------------------------------------------- ================================================================================ OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees Donald W. Spiro, Vice Chairman of the Board of Trustees John V. Murphy, Trustee and President Robert G. Galli, Trustee Phillip A. Griffiths, Trustee Benjamin Lipstein, Trustee Elizabeth B. Moynihan, Trustee Kenneth A. Randall, Trustee Edward V. Regan, Trustee Russell S. Reynolds, Jr., Trustee Clayton K. Yeutter, Trustee Arthur P. Steinmetz, Vice President Caleb Wong, Vice President Robert G. Zack, Secretary Brian W. Wixted, Treasurer Katherine P. Feld, Assistant Secretary Kathleen T. Ives, Assistant Secretary Denis R. Molleur, Assistant Secretary ================================================================================ INVESTMENT ADVISOR OppenheimerFunds, Inc. ================================================================================ TRANSFER AGENT AND Shareholder Financial Services, Inc. REGISTRAR ================================================================================ CUSTODIAN OF The Bank of New York PORTFOLIO SECURITIES ================================================================================ INDEPENDENT AUDITORS KPMG LLP ================================================================================ LEGAL COUNSEL Mayer, Brown, Rowe and Maw For more information about Oppenheimer Multi-Sector Income Trust, please refer to the Prospectus. To obtain a copy, call your financial advisor. The financial statements included herein have been taken from the records of the Fund without examination of the independent auditors. OPPENHEIMER FUNDS ARE DISTRIBUTED BY OPPENHEIMERFUNDS DISTRIBUTOR, INC., 498 SEVENTH AVENUE, NEW YORK, NY 10018 [COPYRIGHT MARK]Copyright 2002 OppenheimerFunds, Inc. All rights reserved. 42 OPPENHEIMER MULTI-SECTOR INCOME TRUST THIS PAGE INTENTIONALLY LEFT BLANK. THIS PAGE INTENTIONALLY LEFT BLANK. [GRAPHIC OMITTED] OPPENHEIMERFUNDS[REGISTRATION MARK] Distributor, Inc. RS0680.001.0402 June 28, 2002 -----END PRIVACY-ENHANCED MESSAGE-----