-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JrsKmHN5nUs4KWo562R06OzPx8Wm6kiYgWBG8iEkcn82sUUCGJuzH4tmHZboqIr3 SHqrevDOaKGGSVWFhZKiuw== 0000950123-95-001925.txt : 19950717 0000950123-95-001925.hdr.sgml : 19950717 ACCESSION NUMBER: 0000950123-95-001925 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950710 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER MULTI SECTOR INCOME TRUST CENTRAL INDEX KEY: 0000829801 STANDARD INDUSTRIAL CLASSIFICATION: 0000 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: 95552926 BUSINESS ADDRESS: STREET 1: TWO WORLD TRADE CENTER STREET 2: STE 3400 CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2123230248 MAIL ADDRESS: STREET 1: TWO WORLD TRADE CENTER STREET 2: STE 3400 CITY: NEW YORK STATE: NY ZIP: 10048-0203 N-30D 1 OPPENHEIMER MULTI-SECTOR INCOME TRUST 1 REPORT TO SHAREHOLDERS: The bond market has improved substantially since our last report, issued in November 1994 at the close of one of the worst periods for bonds on record. In November, the U.S. markets began a rally which continues through this writing, with the U.S. corporate bond sector performing especially well. And although many foreign markets were affected by the devaluation of the Mexican peso in December, they are starting to show signs of recovery this year. During the past six months, the Trust's total return at net asset value was 1.78%, with a dividend yield of 9.85% for the month ended April 30, 1995.(1) INVESTMENT BREAKDOWN:(2) OPPENHEIMER MULTI-SECTOR TRUST AS OF 4/30/95 [Chart] U.S. corporate bonds & notes: 42.0% Foreign government obligations: 20.8% U.S. government obligations: Agency: 12.7% Treasury: 19.3% Foreign corporate bonds & notes: 2.4% - - - Equity securities: 2.2% - - - Short-term securities: 0.4% - - - Structured notes: 0.2% The Trust's current focus is on three major fixed income sectors -- U.S. government bonds, U.S. corporate bonds, and foreign government debt securities.2 This approach to fixed income investing allows the managers the flexibility to take advantage of opportunities in different areas of the bond market, while diversifying the portfolio to try to reduce exposure to the risks of any single sector. In 1994, this diversification helped to protect against the volatility of U.S. government bonds, which were especially hard hit in the sharply rising interest rate environment. This year, while the U.S. government and corporate sectors have performed well, the foreign fixed income sector, as a whole, has not rebounded as quickly. Again, diversification has proved an excellent benefit. Early in 1995, we increased the weighting in U.S. corporate securities, while upgrading the relative credit quality of this sector as the economy continued to show signs of a slow-down. And we increased our commitment in U.S. government obligations, shifting some assets out of the more volatile foreign markets. While we have reduced our holdings in the foreign fixed income sector for the near term, our long-term outlook remains positive. We have added to positions in some of the more developed European bond markets, like Great Britain, while continuing to look for opportunities in some of the emerging markets -- other than Mexico -- where prices were affected by the Mexican peso devaluation, but where other favorable conditions may exist. 2 By most indicators -- consumer spending, inventory levels, and housing starts, to name a few -- U.S. economic growth is slowing to a sustainable pace and, at this point, we do not anticipate a substantial threat from inflation. With inflation currently running at a low rate of around 3%, income investors are clearly being rewarded. Looking back over this period -- from the fluctuations experienced in 1994 to the quickly rising U.S. market in 1995 -- we expect many investors will be happy to see calmer weather and earn their dividend for the near term. As demonstrated last year, the bond markets are subject to fluctuations, and these shifts may sometimes be sharp. For the long term, however, we believe the outlook is excellent. Again, we thank you for your trust in allowing us to manage a portion of your investments. Sincerely, /s/ Donald W. Spiro Donald W. Spiro President -- Oppenheimer Multi-Sector Trust May 19, 1995 (1) Total return is based on the change in net asset value per share from 10/31/94 through 4/30/95 assuming all dividends are reinvested. Your brokerage costs and taxes were not considered. Dividend yield is determined by annualizing the April 1995 dividend of $0.078 and dividing by the closing price on the New York Stock Exchange of $9.50 per share on 4/30/95. Past performance does not guarantee future results. (2) Portfolio composition is subject to change. 3 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ U.S. GOVERNMENT SECTOR -- 19.1% U.S. Treasury Bonds: 8.125%, 8/15/19.................................................. $ 3,093,000 $ 3,319,176 8.875%, 8/15/17.................................................. 13,720,000 15,799,429 U.S. Treasury Nts.: 8.75%, 10/15/97.................................................. 17,135,000 17,927,494 9.375%, 4/15/96.................................................. 17,515,000 18,013,072 ------------ Total U.S. Government Sector (Cost $55,100,439).................... 55,059,171 ------------
Units -------------- CONVERTIBLE SECTOR -- 1.5% RIGHTS, WARRANTS AND CERTIFICATES -- 0.4% American Telecasting, Inc. Wts., Exp. 6/99......................... 3,750 7,500 Ames Department Stores, Inc.: Excess Cash Flow Payment Certificates, Series AG-7A.............. 40,300 403 Litigation Trust................................................. 128,889 1,289 Becker Gaming, Inc. Wts., Exp. 11/00 (5)........................... 25,000 50,000 Eye Care Centers of America, Inc. Wts., Exp. 10/03................. 1,800 9,000 Federated Department Stores, Inc. Wts., Cl. C, Exp. 12/99................................................ 26,963 121,334 Cl. D, Exp. 12/01................................................ 26,963 134,815 Foamex LP/JPS Automotive Corp. Wts., Exp. 7/99..................... 1,000 15,000 Gaylord Container Corp. Wts., Exp. 7/96............................ 90,000 815,625 OSI Specialties Corp. Wts., Exp. 4/99 (7).......................... 500 1,000 Purity Supreme, Inc. Wts., Exp. 8/97 (5)........................... 7,797 156 Terex Corp. Rts., Exp. 7/96 (7).................................... 186 93 ------------ 1,156,215 ------------
Shares -------------- PREFERRED STOCKS -- 1.1% California Federal Bank, 10.625% Non-Cum., Series B................ 1,995 207,480 First Nationwide Bank, 11.50% Non-Cum.............................. 10,000 1,050,000 Panamsat Corp., 12.75% Sr. Exchangeable Preferred Stock............ 1,200 1,218,000 SD Warren Co., 14% Sr. Exchangeable Preferred Stock (7)............ 20,000 670,000 ------------ 3,145,480 ------------ Total Convertible Sector (Cost $3,537,714)......................... 4,301,695 ------------
3 4 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Market Value Shares See Note 1 -------------- ------------ CORPORATE SECTOR -- 42.4% COMMON STOCKS -- 0.7% Capital Gaming, Inc. (2)........................................... 7,198 $ 38,689 Federated Department Stores, Inc. (2).............................. 40,479 855,119 Hollywood Casino Corp. (2)......................................... 63,333 546,247 Kash 'N Karry Food Stores, Inc. (2)................................ 15,057 287,965 Triangle Wire & Cable, Inc. (2)(5)................................. 84,444 168,888 ------------ 1,896,908 ------------
Face Amount(1) -------------- CORPORATE BONDS AND NOTES -- 41.7% BASIC INDUSTRY -- 7.3% Chemicals -- 2.0% Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03.............. $ 1,000,000 1,055,000 NL Industries, Inc.: 0%/13% Sr. Sec. Disc. Nts., 10/15/05 (3)......................... 650,000 455,000 11.75% Sr. Sec. Nts., 10/15/03................................... 500,000 532,500 OSI Specialties Holding Co., 0%/11.50% Sr. Sec. Disc. Debs., Series B, 4/15/04 (3)............................................ 500,000 347,500 Rexene Corp., 11.75% Sr. Nts., 12/1/04............................. 2,000,000 2,150,000 UCAR Global Enterprises, Inc., 12% Sr. Sub. Nts., 1/15/05 (7)...................................................... 1,000,000 1,078,125 ------------ 5,618,125 ------------ Containers -- 0.4% Calmar, Inc., 12% Sr. Sec. Nts., 12/15/97.......................... 1,000,000 1,025,000 ------------ Metals/Mining -- 0.5% Kaiser Aluminum & Chemical Corp., 9.875% Sr. Nts., 2/15/02.......................................................... 1,500,000 1,468,125 ------------
4 5 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ CORPORATE BONDS AND NOTES (CONTINUED) BASIC INDUSTRY (CONTINUED) Paper -- 2.9% Gaylord Container Corp.: 0%/12.75% Sr. Sub. Disc. Debs., 5/15/05 (3)...................... $ 700,000 $ 675,500 11.50% Sr. Nts., 5/15/01......................................... 1,500,000 1,597,500 Repap Wisconsin, Inc., 9.25% Fst. Priority Sr. Sec. Nts., 2/1/02... 1,250,000 1,225,000 Riverwood International Corp.: 10.75% Sr. Nts., 6/15/00......................................... 750,000 795,000 11.25% Sr. Sub. Nts., 6/15/02.................................... 650,000 702,000 SD Warren Co., 12% Sr. Sub. Nts., 12/15/04 (7)..................... 900,000 981,000 Stone Container Corp.: 10.75% Fst. Mtg. Nts., 10/1/02................................... 1,320,000 1,397,550 9.875% Sr. Nts., 2/1/01.......................................... 1,000,000 998,750 ------------ 8,372,300 ------------ Steel -- 1.5% Acme Metals, Inc., 12.50% Sr. Sec. Nts., 8/1/02.................... 1,000,000 1,035,000 AK Steel Corp., 10.75% Gtd. Sr. Nts., 4/1/04....................... 400,000 419,000 Gulf States Steel Acquisition Corp., Units (7)..................... 1,400,000 1,433,250 Republic Engineered Steels, Inc., 9.875% Fst. Mtg. Nts., 12/15/01......................................................... 1,600,000 1,496,000 ------------ 4,383,250 ------------ CONSUMER RELATED -- 8.7% Consumer Products -- 0.2% Revlon Consumer Products Corp., 10.50% Sr. Sub. Nts., Series B, 2/15/03................................................ 500,000 485,000 ------------ Food/Beverages/Tobacco -- 1.1% Consolidated Cigar Corp., 10.50% Sr. Sub. Nts., 3/1/03............. 1,000,000 965,000 Di Giorgio Corp., 12% Sr. Nts., 2/15/03............................ 1,750,000 1,513,750 Royal Crown Corp., 9.75% Sr. Sec. Nts., 8/1/00..................... 750,000 718,125 ------------ 3,196,875 ------------
5 6 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ CORPORATE BONDS AND NOTES (CONTINUED) CONSUMER RELATED (CONTINUED) Healthcare -- 2.7% Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04............... 1,100,000 1,155,000 Healthsouth Rehabilitation Corp., 9.50% Sr. Sub. Nts., 4/1/01...... 600,000 613,500 National Medical Enterprises, Inc., 10.125% Sr. Sub. Nts., 3/1/05........................................................... 2,500,000 2,612,500 Quorum Health Group, Inc., 11.875% Sr. Sub. Nts., 12/15/02......... 1,500,000 1,642,500 Surgical Health Corp., 11.50% Sr. Sub. Nts., 7/15/04............... 750,000 821,250 Total Renal Care, Inc., Units (3).................................. 1,000,000 875,000 ------------ 7,719,750 ------------ Hotel/Gaming -- 2.7% Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00 (5).............................................................. 550,000 448,250 Aztar Corp., 13.75% Sr. Sub. Nts., 10/1/04......................... 500,000 555,000 Bally's Park Place Funding, Inc., 9.25% Gtd. Fst. Mtg. Nts., 3/15/04.......................................................... 700,000 638,750 Boyd Gaming Corp., 10.75% Sr. Sub. Nts., 9/1/03.................... 500,000 505,000 Capital Gaming International, Inc. Promissory Nts.................. 5,500 -- Capitol Queen & Casino, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00 (5)..................................................... 200,000 183,000 Casino America, Inc., Zero Coupon Fst. Mtg. Nts., 11/15/01......... 750,000 746,250 Empress River Casino Finance Corp., 10.75% Gtd. Sr. Nts., 4/1/02... 1,250,000 1,243,750 GB Property Funding Corp., 10.875% Fst. Mtg. Nts., 1/15/04......... 700,000 602,000 Hollywood Casino Corp., 14% Sr. Sec. Nts., 4/1/98.................. 100,000 108,750 MGM Grand Hotel Finance Corp., 12% Fst. Mtg. Nts., 5/1/02.......... 300,000 333,750 Players International, Inc., 10.875% Sr. Nts., 4/15/05 (7)......... 700,000 708,750 Showboat, Inc.: 13% Sr. Sub. Nts., 8/1/09........................................ 750,000 787,500 9.25% Fst. Mtg. Bonds, 5/1/08.................................... 250,000 223,750 Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03................ 750,000 671,250 ------------ 7,755,750 ------------ Leisure -- 0.6% Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B, 5/27/98.......................................................... 2,300,000 1,690,500 ------------
6 7 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ CORPORATE BONDS AND NOTES (CONTINUED) CONSUMER RELATED (CONTINUED) Textile/Apparel -- 1.4% Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series B, 10/1/03... 2,500,000 2,237,500 WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05........... 2,000,000 1,910,000 ------------ 4,147,500 ------------ ENERGY -- 3.3% AmeriGas Partners, LP, 10.125% Sr. Nts., 4/15/07 (7)............... 500,000 511,250 Clark R&M Holdings, Inc., Zero Coupon Sr. Sec. Nts., Series A, 2/15/00.......................................................... 500,000 293,750 Crown Central Petroleum Corp., 10.875% Sr. Nts., 2/1/05............ 1,000,000 1,005,000 Ferrellgas LP/Ferrellgas Finance Corp., 10% Sr. Nts., 8/1/01....... 1,000,000 1,045,000 Mesa Capital Corp., 0%/12.75% Sec. Disc. Nts., 6/30/98 (3)......... 1,000,000 965,050 OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02............ 1,000,000 1,105,000 Petroleum Heat & Power Co., Inc.: 12.25% Sub. Debs., 2/1/05........................................ 750,000 795,000 9.375% Sub. Debs., 2/1/06........................................ 400,000 356,000 Presidio Oil Co., 13.30% Sr. Sub. Gas Indexed Nts., Series B, 7/15/02 (4)...................................................... 180,000 105,300 Sante Fe Energy Resources, Inc., 11% Sr. Sub. Debs., 5/15/04....... 1,800,000 1,894,500 Triton Energy Corp., Zero Coupon Sr. Sub. Disc. Nts., 11/1/97...... 500,000 398,750 Wainoco Oil Corp., 12% Sr. Nts., 8/1/02............................ 1,100,000 1,122,000 ------------ 9,596,600 ------------ FINANCIAL SERVICES -- 1.2% Diversified Financial -- 0.9% GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98...................... 1,000,000 795,000 Olympic Financial Ltd., 13% Sr. Nts., 5/1/00....................... 1,800,000 1,818,000 ------------ 2,613,000 ------------ Insurance -- 0.3% American Life Holding Co., 11.25% Sr. Sub. Nts., 9/15/04........... 940,000 963,500 ------------
7 8 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ CORPORATE BONDS AND NOTES (CONTINUED) HOUSING RELATED -- 4.3% Building Materials -- 3.7% American Standard, Inc.: 10.875% Sr. Nts., 5/15/99........................................ 400,000 423,000 9.875% Sr. Sub. Nts., 6/1/01..................................... 850,000 875,500 Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03........................ 1,500,000 1,425,000 Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01............. 2,650,000 2,961,375 Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03.................... 1,600,000 1,600,000 USG Corp.: 10.25% Sr. Sec. Nts., 12/15/02................................... 1,900,000 1,938,000 8.75% Debs., 3/1/17.............................................. 1,600,000 1,452,000 ------------ 10,674,875 ------------ Homebuilders/Real Estate -- 0.6% NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03.............................. 750,000 697,500 Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02........................................................... 1,000,000 960,000 ------------ 1,657,500 ------------ MANUFACTURING -- 2.4% Aerospace/Electronics/Computers -- 0.2% Tracor, Inc., 10.875% Sr. Sub. Nts., 8/15/01....................... 500,000 513,750 ------------ Automotive -- 1.7% Aftermarket Technology Corp., 12% Sr. Sub. Nts., 8/1/04............ 1,250,000 1,318,750 Foamex LP/JPS Automotive Corp., 0%/14% Sr. Disc. Nts., Series B, 7/1/04 (3)....................................................... 1,000,000 570,000 JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01........... 1,000,000 995,000 SPX Corp., 11.75% Sr. Sub. Nts., 6/1/02............................ 1,000,000 1,060,000 Talley Manufacturing & Technology, Inc., 10.75% Sr. Nts., 10/15/03......................................................... 1,000,000 982,500 ------------ 4,926,250 ------------ Capital Goods -- 0.5% Farley, Inc., Zero Coupon Sub. Debs., 12/30/12..................... 198,000 20,790 Imo Industries, Inc., 12.25% Sr. Sub. Debs., 8/15/97............... 1,439,000 1,451,591 ------------ 1,472,381 ------------
8 9 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ CORPORATE BONDS AND NOTES (CONTINUED) MEDIA -- 4.0% Broadcasting -- 0.5% Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01.... 1,300,000 1,384,500 ------------ Cable Television -- 2.9% Adelphia Communications Corp., 12.50% Sr. Nts., 5/15/02............ 1,400,000 1,372,000 American Telecasting, Inc., 0%/12.50% Sr. Disc. Nts., 6/15/04 (3).............................................................. 750,000 412,500 Cablevision Industries Corp., 10.75% Sr. Nts., 1/30/02............. 1,000,000 1,071,250 Cablevision Systems Corp., 9.875% Sr. Sub. Debs., 4/1/23........... 500,000 487,500 Century Communications Corp., 9.50% Sr. Nts., 3/1/05............... 1,000,000 977,500 Comcast Corp., 10.625% Sr. Sub. Debs., 7/15/12..................... 500,000 521,250 Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13............. 900,000 897,750 Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts., Series B, 11/1/03 (4)...................................................... 1,500,000 1,323,750 International CableTel, Inc.: 0%/10.875% Sr. Def. Cpn. Nts., 10/15/03 (3)...................... 1,000,000 622,500 0%/12.75% Sr. Def. Cpn. Nts., 4/15/05 (3)(7)..................... 1,000,000 555,000 ------------ 8,241,000 ------------ Diversified Media -- 0.1% Echostar Communications Corp., Units (3)........................... 700,000 367,500 ------------ Publishing/Printing -- 0.5% Bell & Howell Holdings Co., 0%/11.50% Sr. Disc. Debs., Series B, 3/1/05 (3)....................................................... 2,800,000 1,561,000 ------------ OTHER -- 1.4% Environmental -- 0.5% Envirotest Systems Corp.: 9.125% Sr. Nts., 3/15/01......................................... 500,000 397,500 9.625% Sr. Sub. Nts., 4/1/03..................................... 1,350,000 911,250 ------------ 1,308,750 ------------ Services -- 0.9% Protection One Alarm Monitoring, Inc., 12% Sr. Sub. Nts., Series B, 11/1/03.......................................................... 2,500,000 2,625,000 ------------
9 10 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ CORPORATE BONDS AND NOTES (CONTINUED) RETAIL -- 5.3% Drug Stores -- 0.5% Duane Reade, 12% Sr. Nts., Series B, 9/15/02....................... 500,000 437,500 Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03.................... 1,000,000 1,065,000 ------------ 1,502,500 ------------ Specialty Retailing -- 2.4% Brylane LP/Brylane Capital Corp., 10% Sr. Sub. Nts., Series B, 9/1/03........................................................... 1,500,000 1,455,000 Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01................ 1,000,000 966,250 Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03........... 1,800,000 1,404,000 Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03................ 1,250,000 1,193,750 United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05 (7)..... 1,900,000 1,921,375 ------------ 6,940,375 ------------ Supermarkets -- 2.4% Dominick's Finer Foods, Inc., 10.875% Sr. Sub. Nts., 5/1/05 (7).... 600,000 608,250 Grand Union Co., 12.25% Sr. Sub. Nts., 7/15/02 (11)................ 2,750,000 928,125 Kash 'N Karry Food Stores, Inc., 11.50% Sr. Nts., 2/1/03 (6)....... 200,000 198,750 Kroger Co., 9.875% Sr. Sub. Debs., 8/1/02.......................... 400,000 425,000 Penn Traffic Co., 9.625% Sr. Sub. Nts., 4/15/05.................... 1,100,000 1,045,000 Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99....... 2,000,000 2,150,000 Safeway, Inc., 10% Debs., 12/1/01.................................. 1,205,000 1,307,425 ------------ 6,662,550 ------------ TRANSPORTATION -- 1.1% Air Transportation -- 0.3% AMR Corp., 6.125% Cv. Sub. Debs., 11/1/24.......................... 1,000,000 970,000 ------------ Railroads -- 0.5% Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts., Series B, 12/15/03 (3)..................................... 2,500,000 1,462,500 ------------ Shipping -- 0.3% Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04.......... 900,000 886,500 ------------
10 11 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ CORPORATE BONDS AND NOTES (CONTINUED) UTILITIES -- 2.7% Electric Utilities -- 0.1% California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04 (3)....... 500,000 402,500 ------------ Telecommunications -- 2.6% Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (3).......... 2,000,000 1,410,000 Horizon Cellular Telephone LP/Horizon Finance Corp., 0%/11.375% Sr. Sub. Disc. Nts., 10/1/00 (3)..................................... 2,000,000 1,530,000 In Flight Phone Corp., Units (3)(7)................................ 1,000,000 667,500 MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (3).... 200,000 132,500 Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (3)....................................................... 3,000,000 2,070,000 PriCellular Wireless Corp., 0%/14% Sr. Sub. Disc. Nts., 11/15/01 (3).............................................................. 2,000,000 1,540,000 ------------ 7,350,000 ------------ Total Corporate Sector (Cost $121,812,600)......................... 121,841,614 ------------ INTERNATIONAL SECTOR -- 23.3% FOREIGN CERTIFICATES OF DEPOSIT -- 3.2% Citibank CD: 10.50%, 7/14/95 (ARA)(8)......................................... 1,500,000 1,500,653 11.75%, 11/8/95 (CLP)(8)......................................... 2,483,246,287 6,407,749 16.25%, 5/30/95 (CLP)(8)......................................... 462,456,598 1,193,319 ------------ 9,101,721 ------------
Shares -------------- FOREIGN COMMON STOCKS -- 0.0% Gulfstream Holding Corp. (2)....................................... 357,150 -- ------------
11 12 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ INTERNATIONAL SECTOR (CONTINUED) FOREIGN CORPORATE BONDS AND NOTES -- 2.4% BASIC INDUSTRY -- 1.5% Paper -- 1.5% Domtar, Inc., 11.75% Sr. Nts., 3/15/99............................. $ 650,000 $ 706,875 Rainy River Forest Products, 10.75% Sr. Sec. Nts., 10/15/01........ 800,000 828,000 Repap New Brunswick, Inc.: 10.625% 2nd Priority Sr. Sec. Nts., 4/15/05...................... 500,000 510,000 9.50% Fst. Priority Sr. Sec. Nts., 7/15/00....................... 600,000 606,000 9.875% Fst. Priority Sr. Sec. Nts., 7/15/00...................... 500,000 506,250 Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00........... 1,100,000 1,127,500 ------------ 4,284,625 ------------ CONSUMER RELATED -- 0.6% Textile/Apparel -- 0.6% PT Polysindo Eka Perkasa: 13% Sr. Nts., 6/15/01............................................ 1,000,000 985,000 Zero Coupon Promissory Nts., 10/23/96 (IDR)........................ 2,000,000,000 620,261 ------------ 1,605,261 ------------ MEDIA -- 0.3% Entertainment/Film -- 0.3% Imax Corp., 7% Sr. Nts., 3/1/01.................................... 1,000,000 900,000 ------------ 6,789,886 ------------ FOREIGN GOVERNMENT OBLIGATIONS -- 17.4% Argentina (Republic of): Treasury Bills, Zero Coupon, 5/19/95............................. 1,500,000 1,491,021 Treasury Bills, Zero Coupon, 5/26/95............................. 1,000,000 993,006 Par Bonds, 5%, 3/31/23........................................... 5,000,000 2,209,375 Bonos de la Tesoreria de la Federacion, Zero Coupon, 5/4/95........................................................... 200,000 199,599 Brazil (Federal Republic of) Nts., Banco Estado Minas Gerais, 8.25%, 2/10/00................................................... 1,000,000 690,000 Corporacion Andina de Fomento Sr. Unsec. Debs., 6.625%, 10/14/98......................................................... 1,265,000 1,163,800
12 13 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ INTERNATIONAL SECTOR (CONTINUED) FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) Denmark (Kingdom of) Bonds, 7%, 11/10/24 (DKK)(12)................. $ 5,000,000 $ 724,223 Ecuador (Republic of) Par Bonds, 3%, 2/28/25 (9)................... 7,750,000 2,247,500 Financiera Energetica Nacional SA, 9% Medium-Term Nts., 11/8/99.......................................................... 500,000 480,000 First Australia National Mortgage Acceptance Corp. Ltd. Bonds, Series 22, 11.40%, 12/15/01 (AUD)................................ 4,331,310 3,305,199 International Bank for Reconstruction and Development Bonds, 12.50%, 7/25/97 (NZD)(12)........................................ 10,730,000 7,845,875 Morocco (Kingdom of) Loan Participation Agreement: Tranche A, 7.375%, 1/1/09 (4).................................... 9,500,000 5,860,313 Tranche B, 7.375%, 1/1/04 (4).................................... 1,000,000 670,000 New South Wales Treasury Corp. Gtd. Exch. Bonds, 12%, 12/1/01 (AUD)(12)........................................................ 2,450,000 1,979,393 New Zealand (Republic of) Bonds, 10%, 7/15/97 (NZD)................ 1,560,000 1,088,096 Norwegian Government Bonds, 5.75%, 11/30/04 (NOK)(12).............. 3,600,000 505,413 Poland (Republic of) Past Due Interest Bonds, 3.25%, 10/27/14......................................................... 12,250,000 5,803,438 Queensland Treasury Corp. Gtd. Nts., 8%, 8/14/01 (AUD)............. 2,763,000 1,856,285 United Kingdom Treasury Nts.: 13%, 7/14/00 (GBP)(13)........................................... 1,502,000 2,876,431 12%, 11/20/98 (GBP).............................................. 2,465,000 4,408,246 12.25%, 3/26/99 (GBP)............................................ 1,500,000 2,720,975 United Mexican States: Combined Facility 3, Loan Participation Agreement, Tranche A, 7.625%, 9/20/97 (4)(5)......................................... 528,056 322,115 Petroleos Mexicanos Gtd. Medium-Term Nts., 7.60%, 6/15/00.......... 1,000,000 750,000 ------------ 50,190,303 ------------ STRUCTURED INSTRUMENTS -- 0.3% Canadian Imperial Bank, 10% Certificate of Deposit, British Pound Sterling Maximum Rate Linked Nts., 11/8/96 (indexed to the 3-month GBP LIBOR, multiplied by 9) (5)............................................. 750,000 750,000 ------------ Total International Sector (Cost $65,003,855)...................... 66,831,910 ------------
13 14 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust
Face Market Value Amount(1) See Note 1 -------------- ------------ MORTGAGE-BACKED SECTOR -- 12.6% GOVERNMENT AGENCY -- 12.6% FHLMC/FNMA/Sponsored -- 7.3% Federal Home Loan Mortgage Corp.: Certificates of Participation, 12%, 5/1/10-6/1/15................ $ 3,296,912 $ 3,644,680 Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, 6.65%, 4/15/21..................... 4,700,000 4,396,803 Federal National Mortgage Assn.: Certificates of Participation, 13%, 6/1/15....................... 1,957,313 2,209,866 Interest-Only Stripped Mtg.-Backed Security, Trust 222, Cl. 2, 7%, 6/25/23 (10)............................................... 28,415,473 10,003,135 Interest-Only Stripped Mtg.-Backed Security, Trust 240, Cl. 2, 7%, 9/25/23 (10)............................................... 2,068,376 741,707 ------------ 20,996,191 ------------ GNMA/Guaranteed -- 5.3% Government National Mortgage Assn.: 12%, 11/20/13-9/20/15............................................ 1,006,398 1,125,116 8%, 5/15/24-9/15/24.............................................. 14,116,636 14,131,036 ------------ 15,256,152 ------------ Total Mortgage-Backed Sector (Cost $35,755,078).................... 36,252,343 ------------ MONEY MARKET SECTOR -- 0.4% Repurchase agreement with The First Boston Corp., 5.90%, dated 4/28/95, to be repurchased at $1,100,541 on 5/1/95, collateralized by U.S. Treasury Bills, 0%, 3/7/96, with a value of $923,054 and U.S. Treasury Nts., 7.50%, 1/31/97, with a value of $199,892 (Cost $1,100,000)................................................ 1,100,000 1,100,000 ------------ Total Investments, at Value (Cost $282,309,686).................... 99.3% 285,386,733 Other Assets Net of Liabilities.................................... 0.7 2,106,183 ------------ ------------ Net Assets......................................................... 100.0% $287,492,916 ============ ============
(1) Face amount is reported in local currency. Foreign currency abbreviations are as follows: ARA -- Argentine Austral AUD -- Australian Dollar CLP -- Chilean Peso DKK -- Danish Krone GBP -- British Pound Sterling IDR -- Indonesian Rupiah NOK -- Norwegian Krone NZD -- New Zealand Dollar USD -- U.S. Dollar
(2) Non-income producing security. (3) Represents a zero coupon bond that converts to a fixed rate of interest at a designated future date. (4) Represents the current interest rate for a variable rate security. 14 15 STATEMENT OF INVESTMENTS April 30, 1995 (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust (5) Identifies issues considered to be illiquid -- See Note 7 of Notes to Financial Statements. (6) Interest or dividend is paid in kind. (7) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $9,135,593 or 3.18% of the Fund's net assets, at April 30, 1995. (8) Indexed instrument for which the principal amount and/or interest due at maturity is affected by the relative value of a foreign currency. (9) Represents the current interest rate for an increasing rate security. (10) 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). (11) Non-income producing -- issuer is in default of interest payment. (12) A sufficient amount of securities has been designated to cover outstanding forward foreign currency exchange contracts. See Note 5 of Notes to Financial Statements. (13) A sufficient amount of liquid assets has been designated to cover outstanding call options, as follows:
FACE/SHARES MARKET SUBJECT EXPIRATION EXERCISE PREMIUM VALUE TO CALL DATE PRICE RECEIVED SEE NOTE 1 - - --------------------------------------------------------------------------------------------------------------------------------- Call Option on British Pound Sterling.......... 3,000,000 GBP 5/8/95 1.60 USD/GBP $29,640 $53,760 ======= =======
See accompanying Notes to Financial Statements. 15 16 STATEMENT OF ASSETS AND LIABILITIES April 30, 1995 (Unaudited) Oppenheimer Multi-Sector Income Trust ASSETS: Investments, at value (cost $282,309,686) -- see accompanying statement................. $285,386,733 Cash.................................................................................... 142,248 Unrealized appreciation on forward foreign currency exchange contracts -- Note 5........ 32,889 Receivables: Investments sold...................................................................... 7,857,891 Interest and principal paydowns....................................................... 5,672,002 Other................................................................................... 105,330 ------------ Total assets........................................................................ 299,197,093 ------------ LIABILITIES: Options written, at value (premiums received $29,640) -- see accompanying statement -- Note 4................................................................................ 53,760 Payables and other liabilities: Investments purchased................................................................. 10,972,876 Dividends............................................................................. 251,177 Deferred trustee fees -- Note 1....................................................... 109,775 Management and administrative fees -- Note 6.......................................... 82,344 Trustees' fees........................................................................ 8,133 Transfer agent and accounting services fees........................................... 6,905 Other................................................................................. 219,207 ------------ Total liabilities................................................................... 11,704,177 ------------ NET ASSETS.............................................................................. $287,492,916 ============ COMPOSITION OF NET ASSETS: Par value of shares of beneficial interest.............................................. $ 291,161 Additional paid-in capital.............................................................. 319,273,443 Overdistributed net investment income................................................... (3,353,886) Accumulated net realized loss from investment, written option and foreign currency transactions.......................................................................... (31,838,225) Net unrealized appreciation on investments, written options and translation of assets and liabilities denominated in foreign currencies..................................... 3,120,423 ------------ NET ASSETS -- Applicable to 29,116,068 shares of beneficial interest outstanding........ $287,492,916 ============ NET ASSET VALUE PER SHARE............................................................... $9.87 =====
See accompanying Notes to Financial Statements. 16 17 STATEMENT OF OPERATIONS For the Six Months Ended April 30, 1995 (Unaudited) Oppenheimer Multi-Sector Income Trust INVESTMENT INCOME Interest (net of foreign withholding taxes of $149,227)................................ $ 15,092,065 Dividends.............................................................................. 92,596 ------------ Total income.................................................................. 15,184,661 ------------ EXPENSES: Management fees -- Note 6.............................................................. 918,374 Administrative fees -- Note 6.......................................................... 282,576 Custodian fees and expenses............................................................ 149,294 Shareholder reports.................................................................... 104,908 Transfer agent and accounting services fees -- Note 6.................................. 48,344 Legal and auditing fees................................................................ 28,980 Trustees' fees and expenses............................................................ 28,588 Registration and filing fees........................................................... 21,696 Other.................................................................................. 22,848 ------------ Total expenses................................................................ 1,605,608 ------------ NET INVESTMENT INCOME.................................................................. 13,579,053 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain (loss) on: Investments and options written (including premiums on options exercised)............ (14,815,282) Closing and expiration of options written -- Note 4.................................. 41,248 Foreign currency transactions........................................................ (1,201,685) ------------ Net realized loss............................................................. (15,975,719) ------------ Net change in unrealized appreciation or depreciation on: Investments and options written...................................................... 8,257,237 Translation of assets and liabilities denominated in foreign currencies.............. (913,755) ------------ Net change.................................................................... 7,343,482 ------------ NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY TRANSACTIONS......................................................................... (8,632,237) ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................... $ 4,946,816 ============
See accompanying Notes to Financial Statements. 17 18 STATEMENTS OF CHANGES IN NET ASSETS Oppenheimer Multi-Sector Income Trust
Six Months Ended April 30, Year Ended 1995 October 31, (Unaudited) 1994 ------------ ------------ OPERATIONS: Net investment income................................................. $ 13,579,053 $ 28,123,352 Net realized loss on investments, options written and foreign currency transactions........................................................ (15,975,719) (7,693,213) Net change in unrealized appreciation or depreciation on investments, options written and translation of assets and liabilities denominated in foreign currencies................................... 7,343,482 (15,068,472) ------------ ------------ Net increase in net assets resulting from operations.............. 4,946,816 5,361,667 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income ($.468 and $.845 per share, respectively)....................................................... (13,608,328) (24,512,388) Tax return of capital distribution ($.126 per share).................. -- (3,638,975) BENEFICIAL INTEREST TRANSACTIONS: Proceeds from shares issued to shareholders in reinvestment of dividends -- Note 2................................................. 496,299 1,801,323 ------------ ------------ Total decrease in net assets.......................................... (8,165,213) (20,988,373) NET ASSETS: Beginning of period................................................... 295,658,129 316,646,502 ------------ ------------ End of period (including overdistributed net investment income of $3,353,886 and $3,324,611, respectively)............................ $287,492,916 $295,658,129 ============ ============
See accompanying Notes to Financial Statements. 18 19 FINANCIAL HIGHLIGHTS Oppenheimer Multi-Sector Income Trust
Six Months Ended April 30, Year Ended October 31, 1995 ---------------------------------------------------------------- (Unaudited) 1994 1993 1992 1991 1990 -------- -------- -------- -------- -------- -------- PER SHARE OPERATING DATA: Net asset value, beginning of period............................ $ 10.17 $ 10.96 $ 10.46 $ 10.64 $ 9.88 $ 10.63 -------- -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income............. .47 1.00 1.08 1.06 1.11 1.15 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions.................... (.30) (.82) .43 (.08) .82 (.78) -------- -------- -------- -------- -------- -------- Total income from investment operations.................... .17 .18 1.51 .98 1.93 .37 -------- -------- -------- -------- -------- -------- Dividends and distributions to shareholders: Dividends from net investment income.......................... (.47) (.84) (1.01) (1.16) (1.07) (1.10) Distributions from net realized gain on investments, options written and foreign currency transactions.................... -- -- -- -- (.10) (.02) Tax return of capital............. -- (.13) -- -- -- -- -------- -------- -------- -------- -------- -------- Total dividends and distributions to shareholders.................. (.47) (.97) (1.01) (1.16) (1.17) (1.12) -------- -------- -------- -------- -------- -------- Net asset value, end of period...... $ 9.87 $ 10.17 $ 10.96 $ 10.46 $ 10.64 $ 9.88 ======== ======== ======== ======== ======== ======== Market value, end of period......... $ 9.50 $ 9.50 $ 11.25 $ 11.13 $ 11.13 $ 9.38 TOTAL RETURN, AT MARKET VALUE(1).... 4.88% (7.46)% 11.10% 11.48% 33.05% 4.09% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands)........................ $287,493 $295,658 $316,647 $299,368 $301,568 $278,511 Average net assets (in thousands)... $285,815 $306,686 $307,244 $303,773 $289,681 $290,533 Number of shares outstanding at end of period (in thousands).......... 29,116 29,065 28,896 28,625 28,347 28,194 Ratios to average net assets: Net investment income............... 9.58%(2) 9.17% 10.13% 9.95% 10.80% 11.16% Expenses............................ 1.13%(2) 1.02% 1.00% 1.11% 1.16%(3) 1.03% Portfolio turnover rate(4).......... 126.5% 187.6% 131.3% 95.9% 59.7% 85.7%
(1) Assumes a 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. Total returns are not annualized for periods of less than one full year. (2) Annualized. (3) Includes $.01 per share of federal excise tax expense. The expense ratio, exclusive of federal excise tax expense, was 1.10%. (4) The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the six months ended April 30, 1995 were $334,548,600 and $333,883,105, respectively. See accompanying Notes to Financial Statements. 19 20 NOTES TO FINANCIAL STATEMENTS (Unaudited) Oppenheimer Multi-Sector Income Trust 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Multi-Sector Income Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company. The Trust's investment advisor is Oppenheimer Management Corporation (the "Manager"). The following is a summary of significant accounting policies consistently followed by the Trust. Investment Valuation -- Portfolio securities are valued at the close of the New York Stock Exchange on the last day of each week on which day the New York Stock Exchange is open. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or asked price or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Such securities which cannot be valued by the approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. "Money-market" instruments having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. Forward contracts are valued based on the closing prices of the forward currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank or dealer. Options are valued based upon the last sale price on the principal exchange on which the option is traded or, in the absence of any transactions that day, the value is based upon the last sale price on the prior trading date if it is within the spread between the closing bid and asked prices. If the last sale price is outside the spread, the closing bid or asked price closest to the last reported sale price is used. Security Credit Risk -- The Trust 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 Trust may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. At April 30, 1995, securities with an aggregate market value of $928,125, representing .32% of the Trust's net assets, were in default. Foreign Currency Translation -- The accounting records of the Trust are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Trust's results of operations. Repurchase Agreements -- The Trust requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Trust may be delayed or limited. Federal Taxes -- The Trust intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment 20 21 NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. At April 30, 1995, the Trust had available for federal income tax purposes an unused capital loss carryover of approximately $13,700,000, $6,700,000 of which will expire in 1998, $2,500,000 in 1999 and $4,500,000 in 2002. Trustees' Fees and Expenses -- The Trust has adopted a nonfunded retirement plan for the Trust's independent 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, 1995, the Trust's projected benefit obligations were reduced by $5,940. In addition, one retired trustee is eligible for payments under the Trust's retirement plan and a payment of $2,026 was made. The accumulated liability for the Trust's projected benefit obligations was $109,775 at April 30, 1995. Distributions to Shareholders -- The Trust intends to declare and pay dividends from net investment income monthly. Distributions from net realized gains on investments, if any, will be made at least once each year. Classification of Distributions to Shareholders -- Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of premium amortization, paydown gains and losses and the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of the distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) was recorded by the Trust. Other -- Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Discount on securities purchased is amortized over the life of the respective securities, in accordance with federal income tax requirements. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. Dividends in kind are recognized as income on the ex-dividend date, at the current market value of the underlying security. Interest on payment-in-kind debt instruments is accrued as income at the coupon rate and a market adjustment is made on the ex-date. 2. SHARES OF BENEFICIAL INTEREST The Trust 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 Year Ended April 30, 1995 October 31, 1994 ------------------ --------------------- Shares Amount Shares Amount ------ -------- ------- ---------- Net increase from dividends reinvested....... 51,219 $496,299 168,788 $1,801,323
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS At April 30, 1995, net unrealized appreciation on investments, options written and foreign currency transactions of $3,052,927 was composed of gross appreciation of $7,941,852, and gross depreciation of $4,888,925. 4. OPTION ACTIVITY The Trust may buy and sell put and call options, or write covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Trust 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 Trust receives a premium and becomes obligated to sell 21 22 NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust 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 Trust will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. In this report, securities designated to cover outstanding call options are noted in the Statement of Investments. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a footnote to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Trust 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 Trust 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 Trust pays a premium whether or not the option is exercised. The Trust 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, 1995 was as follows:
Call Options Put Options -------------------- ---------------------- Number Amount Number Amount of of of of Options Premiums Options Premiums ------ -------- -------- -------- Options outstanding at October 31, 1994.............................. -- $ -- -- $ -- Options written.................... 21,511 117,914 856,164 8,850 Options canceled in closing purchase transactions............. (6,653) (34,203) (856,164) (8,850) Options expired prior to exercise.......................... (6,874) (22,375) -- -- Options exercised.................. (3,184) (31,696) -- -- ------ -------- -------- ------- Options outstanding at April 30, 1995.............................. 4,800 $ 29,640 -- $ -- ====== ======== ========= =======
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS A forward foreign currency exchange contract (forward contract) is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Trust uses forward contracts to seek to manage foreign currency risks. They may also be used to tactically shift portfolio currency risk. The Trust generally enters into forward contracts as a hedge upon the purchase or sale of a security denominated in a foreign currency. In addition, the Trust may enter into such contracts as a hedge against changes in foreign currency exchange rates on portfolio positions. Forward contracts are valued based on the closing prices of the forward currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank or dealer. The Trust will realize a gain or loss upon the closing or settlement of the forward transaction. In this report, securities held in segregated accounts to cover net exposure on outstanding forward contracts are noted in the Statement of Investments where applicable. Gains and losses on outstanding contracts (unrealized appreciation or depreciation on forward contracts) are reported in the Statement of Assets and Liabilities. Realized gains and losses are reported with all other foreign currency gains 22 23 NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust and losses in the Trust's Statement of Operations. Risks include the potential inability of the counterparty to meet the terms of the contract and unanticipated movements in the value of a foreign currency relative to the U.S. dollar. At April 30, 1995, the Trust had outstanding forward contracts to purchase and sell foreign currencies as follows:
Valuation Contract as of Unrealized Contracts Expiration Amount April 30, Appreciation to Purchase Date (000s) 1995 (Depreciation) - - --------------- -------- ----- ---------- ------- Danish Krone... 5/4/95 4,103 $ 757,690 $(1,841) New Zealand Dollar........ 5/4/95 1,401 943,345 27,095 ---------- ------- $1,701,035 $25,254 ------- Contracts to Sell - - --------------- Australian 5/4/95- Dollar........ 5/5/95 1,535 $1,117,498 $ 6,120 Norwegian 7/7/95- Krone......... 7/20/95 3,189 512,824 1,515 ---------- ------- $1,630,322 $ 7,635 ------- $32,889 =======
6. MANAGEMENT AND ADMINISTRATIVE FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreement with the Trust which provides for an annual fee of .65% on the Trust's average annual net assets. Mitchell Hutchins Asset Management Inc. serves as the Trust's Administrator. The Trust pays the Administrator an annual fee of .20% of the Trust's average annual net assets. The Manager acts as the accounting agent for the Trust at an annual fee of $24,000, plus out-of-pocket costs and expenses reasonably incurred. Shareholder Financial Services, Inc. ("SFSI"), a wholly-owned subsidiary of the Manager, is the transfer agent and registrar for the Trust. Fees paid to SFSI are based on the number of accounts and the number of shareholder transactions, plus out-of-pocket costs and expenses. 7. ILLIQUID AND RESTRICTED SECURITIES At April 30, 1995, investments in securities included issues that are illiquid or restricted. The 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. The Trust intends to invest no more than 10% of its net assets (determined at the time of purchase) in illiquid or restricted securities. The aggregate value of these securities subject to this limitation at April 30, 1995 was $1,922,409 which represents .67% of the Trust's net assets. Information concerning these securities is as follows:
Valuation Per Unit Cost as of Acquisition Per April 30, Security Date Unit 1995 - - -------------------------- --------- ------- ------- Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00....... 11/18/93 $100.00 $ 81.50 Becker Gaming, Inc. Wts., Exp. 11/00............... 11/18/93 $ 2.00 $ 2.00 Canadian Imperial Bank, 10% Certificate of Deposit, British Pound Sterling Maximum Rate Linked Nts., 11/8/96 (indexed to the 3-month GBP LIBOR, multiplied by 9)....................... 4/28/95 $100.00 $100.00 Capitol Queen & Casino, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00....... 11/13/94 $ 87.50 $ 91.50 Purity Supreme, Inc. Wts., Exp. 8/97................ 7/29/92 $ -- $ .02 Triangle Wire & Cable, Inc. Common Stock........ 1/13/92 $ 9.50 $ 2.00 United Mexican States Combined Facility 3, Loan Participation Agreement, Tranche A, 7.625%, 9/20/97.................. 10/25/94 $ 89.00 $ 61.00
Pursuant to guidelines adopted by the Board of Trustees, certain unregistered securities are determined to be liquid and are not included within the 10% limitation specified above. 23 24 NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued) Oppenheimer Multi-Sector Income Trust 8. QUARTERLY RESULTS OF OPERATIONS:
Net Realized and Unrealized Gain (Loss) Net Increase on Investments, (Decrease) in Net Options and Foreign Assets Resulting from Net Investment Income Currency Transactions Operations Market Price ---------------------- ---------------------- ---------------------- on NYSE Quarter Total Per Total Per Total Per ------------------- ended (000) Share (000) Share (000) Share High Low ------- ------- ----- -------- ----- -------- ----- ------- ------- January 31, 1995... $ 7,063 $ .24 $(13,660) $(.47) $ (6,597) $(.23) $ 10.00 $ 8.875 April 30, 1995... 6,516 .23 5,028 .17 11,544 .40 10.00 9.25 ------- ----- -------- ----- -------- ----- Totals... $13,579 $ .47 $ (8,632) $(.30) $ 4,947 $ .17 ======= ====== ======== ====== ========= ====== January 31, 1994... $ 7,203 $ .26 $ 7,561 $ .25 $ 14,764 $ .51 11.375 10.625 April 30, 1994... 7,073 .26 (24,698) (.87) (17,625) (.61) 11.375 10.00 July 31, 1994... 7,104 .25 (2,081) (.08) 5,023 .17 10.625 10.00 October 31, 1994... 6,743 .23 (3,543) (.12) 3,200 .11 10.375 9.125 ------- ----- -------- ----- -------- ----- Totals... $28,123 $1.00 $(22,761) $(.82) $ 5,362 $ .18 ======= ====== ======== ===== ======== ===== January 31, 1993... $ 8,200 $ .29 $ (1,263) $(.04) $ 6,937 $ .25 11.00 10.00 April 30, 1993... 7,782 .27 9,342 .31 17,124 .58 11.25 10.75 July 31, 1993... 7,175 .25 4,200 .16 11,375 .41 11.375 11.00 October 31, 1993... 7,974 .27 (3) .00 7,971 .27 11.375 11.00 ------- ----- -------- ----- -------- ----- Totals... $31,131 $1.08 $ 12,276 $ .43 $ 43,407 $1.51 ======= ===== ======== ===== ======== =====
24 25 GENERAL INFORMATION CONCERNING THE TRUST Oppenheimer Multi-Sector Income Trust (the "Trust") is a closed-end diversified management investment company whose shares trade on the New York Stock Exchange (the "NYSE"). The Trust seeks to provide high current income consistent with preservation of capital. The Trust's secondary investment objective is capital appreciation. The investment advisor to the Trust is Oppenheimer Management Corporation (the "Manager"). Dividend Reinvestment and Cash Purchase Plan -- A Dividend Reinvestment and Cash Purchase Plan (the "Plan") is available to shareholders in the Trust, which provides automatic reinvestment of dividends and capital gains distributions in additional Trust shares. The Plan also allows optional cash investments in Trust shares through the Plan Agent. For a brochure describing the Plan, call the Plan Agent, Shareholder Financial Services, Inc., at 1-800-647-7374, or contact them in writing at P.O. Box 173673, Denver, CO 80217-3673. The Plan is described in the Trust's Annual Report sent to shareholders. If you wish to participate in the Plan and your shares are registered directly in your name, simply complete and mail the enrollment form in the brochure. If your shares are held in the name of your brokerage firm, bank or other nominee, you should ask them whether or how you can participate in the Plan. Shareholder Information -- Daily market prices for the Trust's shares are published in the New York Stock Exchange Composite Transaction section of newspapers under the designation "OppenGvt." The Trust's NYSE trading symbol is OGT. Weekly net asset value (NAV) and market price information about the Trust is published each Monday in The Wall Street Journal and The New York Times and each Saturday in Barron's, and other newspapers in a table called "Closed-End Bond Funds." 25 26 (This Page Intentionally Left Blank) 27 (This Page Intentionally Left Blank) 28 OPPENHEIMER MULTI-SECTOR INCOME TRUST Officers and Trustees Leon Levy, Chairman of the Board of Trustees Leo Cherne, Trustee Robert G. Galli, Trustee Benjamin Lipstein, Trustee Elizabeth B. Moynihan, Trustee Kenneth A. Randall, Trustee Edward V. Regan, Trustee Russell S. Reynolds, Jr., Trustee Sidney M. Robbins, Trustee Donald W. Spiro, Trustee and President Pauline Trigere, Trustee Clayton K. Yeutter, Trustee Thomas P. Reedy, Vice President David Rosenberg, Vice President Ashwin K. Vasan, Vice President Carol Wolf, Vice President Robert E. Patterson, Vice President Arthur Zimmer, Vice President George C. Bowen, Treasurer Robert J. Bishop, Assistant Treasurer Scott Farrar, Assistant Treasurer Andrew J. Donohue, Secretary Robert G. Zack, Assistant Secretary Investment Advisor Oppenheimer Management Corporation Administrator Mitchell Hutchins Asset Management Inc. Transfer Agent and Registrar Shareholder Financial Services, Inc. Custodian of Portfolio Securities The Bank of New York Independent Auditors KPMG Peat Marwick LLP Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein The financial statements included herein have been taken from the records of the Trust without examination by the independent auditors. This is a copy of a report to shareholders of Oppenheimer Multi-Sector Income Trust. It does not offer for sale or solicit orders to buy any securities. Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that periodically the Trust may purchase its shares of beneficial interest in the open market at prevailing market prices. RS0680.001.0695 [Recycled logo] Printed on recycled paper 1995 SEMIANNUAL REPORT OPPENHEIMER MULTI-SECTOR INCOME TRUST APRIL 30, 1995 [LOGO OPPENHEIMERFUNDS(R)] -----END PRIVACY-ENHANCED MESSAGE-----