Rochester Fund Municipals

485BPOS 1 body.htm BODY Rochester Fund Municipals

                                                         Registration      No.
33-3692
                                                         File No.  811-3614

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                   FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933           [X]

      Pre-Effective Amendment No. __
[   ]


      Post-Effective Amendment No. 27
                                   --

[X]

                                    and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940                                                             [X]


      Amendment No. 32                                                     [X]
                    --


                          Rochester Fund Municipals
              (Exact Name of Registrant as Specified in Charter)


                 350 Linden Oaks, Rochester, New York, 14625
                   (Address of Principal Executive Offices)

                                (800) 552-1149
                       (Registrant's Telephone Number)


                             Robert G. Zack, Esq.
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                            OppenheimerFunds, Inc.
                    498 Seventh Avenue, New York, NY 10018
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                   (Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box):


[   ] Immediately upon filing pursuant to paragraph (b)
[X]   On February 25, 2003 pursuant to paragraph (b)
         -----------------
[   ] 60 days after filing pursuant to paragraph (a)(1)
[   ] On ____________ pursuant to paragraph (a)(1)
[   ] 75 days after filing pursuant to paragraph (a)(2)
[   ] On _______________ pursuant to paragraph (a)(2) of Rule 485


If appropriate, check the following box:

[   ]       This post-effective  amendment designates a new effective date for
     a previously filed post-effective amendment.

Prospectus dated February 25, 2003

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the Fund's securities nor has it determined that this
Prospectus is accurate or complete. It is a criminal offense to represent
otherwise.

Rochester Fund Municipals is a diversified mutual fund. It seeks as high a
level of income exempt from federal income tax and New York State and New
York City personal income taxes as is consistent with its investment policies
and prudent investment management while seeking preservation of shareholders'
capital.

This Prospectus contains important information about the Fund's
objective, its investment policies, strategies and risks. It also contains
important information about how to buy and sell shares of the Fund and other
account features. Please read this Prospectus carefully before you invest and
keep it for future reference about your account.

[logo] OppenheimerFunds, Inc.
The Right Way to Invest

Contents

About the Fund
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The Fund's Investment Objective and Strategies

Main Risks of Investing in the Fund

The Fund's Past Performance

Fees and Expenses of the Fund

About the Fund's Investments

How the Fund is Managed

About Your Account
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How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Class Y Shares

Special Investor Services
AccountLink
PhoneLink
OppenheimerFunds Internet Website

How to Sell Shares

By Checkwriting
By Mail
By Telephone

How to Exchange Shares

Shareholder Account Rules and Policies

Dividends, Capital Gains and Taxes

Financial Highlights

ABOUT THE FUND

The Fund's Investment Objective and Strategies

WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks to provide as high a
level of income exempt from federal income tax and New York State and New
York City personal income taxes as is consistent with its investment policies
and prudent investment management while seeking preservation of shareholders'
capital.

WHAT DOES THE FUND MAINLY INVEST IN? To seek its investment objective:
o As a fundamental policy, under normal market conditions, the Fund
invests at least 80% of its net assets in tax-exempt securities, and
o At least 75% of the Fund's investments in tax-exempt obligations must

be investment grade. That means they must be securities rated in the
four highest rating categories of a nationally-recognized rating
organization or unrated securities assigned a comparable rating by the
Fund's investment Manager, OppenheimerFunds, Inc. (the "Manager").

The Fund's tax-exempt investments can include a wide variety of debt
obligations (which are referred to as "New York municipal securities" in this
Prospectus), including securities issued by:
o The State of New York or its political subdivisions (cities, towns and
counties, for example),

o Agencies, public authorities and instrumentalities (these are
state-chartered corporations) of the State of New York,
o Territories, commonwealths and possessions of the United States (for
example, Puerto Rico, Guam and the Virgin Islands) that pay interest
that is exempt from federal income tax and New York State and New York
City personal income taxes (in the opinion of the issuer's legal
counsel when the security is issued).

The Fund's investments have no maturity limitations and can include
municipal bonds (long-term obligations), municipal notes (short-term
obligations), and interests in municipal leases. At times, the Fund focuses
on longer-term securities to seek higher yields. The Fund can buy general
obligation bonds as well as industrial development bonds and "private
activity" municipal securities that pay income subject to alternative minimum
taxation. To the extent the Fund invests in securities that may pay interest
subject to alternative minimum taxation, those securities will be counted
towards the Fund's policy regarding minimum investments in tax-exempt
securities as described above. A substantial percentage of the municipal
securities the Fund buys may be "callable," allowing the issuer of the
securities to redeem them before their maturity date. The Fund also uses
certain derivative investments such as "inverse floaters" and variable rate
obligations to try to increase income. These investments are more fully
explained in "About the Fund's Investments," below.

HOW DOES THE PORTFOLIO MANAGEMENT TEAM DECIDE WHAT SECURITIES TO BUY OR SELL?
In selecting securities for the Fund, the portfolio management team generally
looks for triple tax-exempt municipal securities using a variety of factors,
which may change over time and may vary in particular cases. Currently, the
portfolio management team focuses on:

o Finding primarily investment-grade securities that offer high income
opportunities.
o Buying a wide range of securities of different issuers within the
state, including different agencies and municipalities, for portfolio
diversification to help spread credit risks.
o Looking for unrated bonds that might provide high income and securities
of smaller issuers that might be overlooked by other investors and
funds.

Investments are sold when the Manager believes better prospective
risk/return characteristics are possible from other investments.

WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors who are
seeking income exempt from federal income tax and New York State and New York
City personal income taxes from a municipal bond fund focusing primarily on
investment-grade obligations. The Fund does not seek capital appreciation.
Because it generally invests in tax-exempt securities, the Fund is not
appropriate for retirement plan accounts, nor is it designed for investors
whose main goal is capital growth. The Fund is intended to be a long-term
investment but is not a complete investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments are
subject to changes in their value from a number of factors, described below.
There is also the risk that poor security selection by the Manager will cause
the Fund to underperform other funds having a similar objective.

CREDIT RISK. Municipal securities are subject to credit risk. Credit risk is
the risk that the issuer of a debt security might not make interest and
principal payments on the security as they become due. If an issuer fails to
pay interest, the Fund's income might be reduced. If an issuer fails to repay
principal, the value of that security and of the Fund's shares might be
reduced. A downgrade in an issuer's credit rating or other adverse news about
an issuer can reduce the value of that issuer's securities. To seek higher
income the Fund can invest up to 25% of its tax-exempt investments in
securities rated below investment grade, sometimes called "junk bonds."
Therefore, it may have greater credit risks than funds that buy only
investment-grade bonds.

INTEREST RATE RISKS. Municipal securities are debt securities that are
subject to changes in value when prevailing interest rates change. When
prevailing interest rates fall, the values of already-issued municipal
securities generally rise. When prevailing interest rates rise, the values of
already-issued municipal securities generally fall, and the securities may
sell at a discount from their face amount. The magnitude of these price
changes is generally greater for securities having longer maturities. At
times the Fund may emphasize investments in long-term securities to seek
higher income. When the average maturity of the Fund's portfolio is longer,
its share price may fluctuate more if interest rates change.

Additionally, the Fund can buy variable and floating rate obligations.
When interest rates fall, the yields of these securities decline. Callable
bonds the Fund buys are more likely to be called when interest rates fall,
and the Fund might then have to reinvest the proceeds of the called
instrument in other securities that have lower yields, reducing the Fund's
income.

Risk of Focusing Investments in New York Municipal Securities. While the
Fund's fundamental policies do not allow it to concentrate its investments
(that is, to invest 25% or more of its assets in a single industry),
municipal securities are not considered an "industry" under that policy. At
times the Fund can have a relatively high portion of its portfolio holdings
in particular segments of the municipal securities market, such as general
obligation bonds or hospital bonds, for example, and therefore will be
vulnerable to economic or legislative events that affect issuers in
particular segments of the municipal securities market.

Even though the Fund is "diversified" as to 75% of its assets (which
means that, as to 75% of its assets, the Fund cannot invest more than 5% of
its assets in the securities of any one issuer), the Fund invests primarily
in New York municipal securities. Therefore, the Fund's portfolio is
vulnerable to changes in economic, regulatory and political conditions in New
York that can affect the prices of those securities or the Fund's ability to
sell them at an acceptable price.

On September 11, 2001, terrorist attacks destroyed the World Trade
Center. Those attacks resulted in substantial loss of life, damage to other
buildings in the vicinity, disruption of public transportation and business,
and displacement of residents in the immediate vicinity of the World Trade
Center. Destruction of the World Trade Center continues to have a substantial
impact on the City and its economy. The Statement of Additional Information
contains further information concerning special investment considerations for
New York municipal securities, including the effect of the events of
September 11, 2001 on New York City and New York State.

Borrowing for Leverage. As a fundamental policy, the Fund can borrow from
banks in amounts up to 5% of its total assets for emergency purposes or to
buy portfolio securities. This use of "leverage" will subject the Fund to
greater costs than funds that do not borrow for leverage, and may also make
the Fund's share price more sensitive to interest rate changes.

RISKS OF DERIVATIVE INVESTMENTS. The Fund can use derivatives to seek
increased returns. In general terms, a derivative investment is an investment
contract whose value depends on (or is derived from) the value of an
underlying asset, interest rate or index. Covered call options, "inverse
floaters" and variable rate obligations are examples of derivatives the Fund
can use. The Fund typically does not use hedging instruments, such as
options, to hedge investment risks.

If the issuer of the derivative investment does not pay the amount due,
the Fund can lose money on its investment. Also, the underlying security or
investment on which the derivative is based, and the derivative itself, might
not perform the way the Manager expected it to perform. If that happens, the
Fund will get less income than expected or its hedge might be unsuccessful,
and its share prices could fall. The Fund has limits on the amount of
particular types of derivatives it can hold. However, using derivatives can
increase the volatility of the Fund's share prices and can cause the Fund to
lose money on its investments. Some derivatives may be illiquid, making it
difficult for the Fund to sell them quickly at an acceptable price.

Inverse Floaters Have Special Risks. Variable rate bonds known as "inverse
floaters" pay interest at rates that vary as the yields generally
available on short-term tax-exempt bonds change. However, the yields on
inverse floaters move in the opposite direction of yields on short-term
bonds in response to market changes. As interest rates rise, inverse
floaters produce less current income, and their market value can become
volatile. Inverse floaters are a type of "derivative security." Some
inverse floaters have a "cap," so that if interest rates rise above the
"cap," the security pays additional interest income. If rates do not
rise above the "cap," the Fund will have paid an additional amount for
a feature that proves worthless. The Fund's investment in inverse
floaters cannot exceed 20% of its total assets.

HOW RISKY IS THE FUND OVERALL? The risks described above collectively form
the overall risk profile of the Fund and can affect the value of the Fund's
investments, its investment performance and its prices per share. Particular
investments and investment strategies also have risks. These risks mean that
you can lose money by investing in the Fund. When you redeem your shares,
they may be worth more or less than what you paid for them. There is no
assurance that the Fund will achieve its investment objective. The value of
the Fund's investments and share prices will change over time due to a number
of factors. They include changes in general bond market movements, the change
in value of particular bonds or the income they pay because of an event
affecting the issuer, or changes in interest rates that can affect bond
prices overall.

Because the Fund focuses its investments in New York municipal
securities and can buy below-investment-grade securities, it will have
greater credit risks than municipal bond funds that invest in issuers of many
states or buy only investment-grade securities. Its focus on longer-term
bonds and its use of inverse floaters as well as other derivative investments
may cause greater fluctuations in the Fund's share prices in the short term
than short-term municipal bond funds or bond funds that do not invest in
derivatives.

An investment in the Fund is not a deposit of any bank, and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in
the Fund, by showing changes in the Fund's performance (for its Class A
shares) from year to year for the last 10 calendar years and by showing how
the average annual total returns of the Fund's shares, both before and after
taxes, compare to those of a broad-based market index and the Consumer Price
-
Index.

The after-tax returns are shown for Class A shares only and are
calculated using the historical highest individual federal marginal income
tax rates in effect during the periods shown, and do not reflect the impact
of state or local taxes. The after-tax returns for the other classes of
shares will vary. In certain cases, the figure representing "Return After
Taxes on Distributions and Sale of Fund Shares" may be higher than the other
return figures for the same period. A higher after-tax return results when a
capital loss occurs upon redemption and translates into an assumed tax
deduction that benefits the shareholder. The after-tax returns are calculated
based on certain assumptions mandated by regulation and your actual after-tax
returns may differ from those shown, depending on your individual tax
situation. The Fund's past investment performance, before and after taxes, is
not necessarily an indication of how the Fund will perform in the future.

Annual Total Returns (Class A) (as of 12/31 each year)

[See appendix to prospectus for data in bar chart showing annual total
returns]

Sales charges and taxes are not included in the calculations of return in
this bar chart, and if those charges and taxes were included, the returns
would be less than those shown. During the period shown in the bar chart, the
highest return (not annualized) before taxes for a calendar quarter was 7.74%
(1Q'95) and the lowest return (not annualized) before taxes for a calendar
quarter was -5.67% (1Q'94).

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5 Years
Average Annual Total ------------------ 10 Years
Returns for the periods (or life of (or life of
ended December 31, 2002 1 Year class, if less) class, if less)

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Class A Shares (inception 0.45% 3.54% 5.58%
5/15/86)
Return Before Taxes
Return After Taxes on
Distributions
Return After Taxes on 0.45% 3.54% 5.58%
Distributions and Sale of
Fund Shares 2.62% 3.95% 5.68%

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Lehman Brothers Municipal 9.60% 6.06% 6.71%1
Bond
Index (reflects no
deduction for fees,
expenses or taxes)

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Consumer Price Index 2.38% 2.32% 2.46%1

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Class B Shares (inception -0.46% 3.33% 4.52%
3/17/97)

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Class C Shares (inception 3.57% 3.66% 4.66%
3/17/97)

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Class Y Shares (inception 5.57% 7.41% N/A
4/28/00)

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1. From 12/31/92.

The Fund's average annual total returns in the table include the applicable
sales charge: for Class A, the current maximum initial sales charge of 4.75%;
for Class B, the applicable contingent deferred sales charges of 5% (1-year),
2% (5 years) and 1% (life of class); for Class C, the 1% contingent deferred
sales charge for the 1-year period. There is no sales charge for Class Y
shares. The returns measure the performance of a hypothetical account and
assume that all dividends and capital gains distributions have been
reinvested in additional shares. The performance of the Fund's Class A shares
is compared to the Lehman Brothers Municipal Bond Index, an unmanaged index
of a broad range of investment-grade municipal bonds that is a measure of the
performance of the general municipal bond market. The Fund's performance is
also compared to the Consumer Price Index, a non-securities index that
measures changes in the inflation rate. Performance of the securities index
includes reinvestment of income, but does not consider the effects of
transaction costs and includes municipal securities from many states while
the Fund invests primarily in New York municipal securities.

Fees and Expenses of the Fund

The following tables are provided to help you understand the fees and
expenses you may pay if you buy and hold shares of the Fund. The Fund pays a
variety of expenses directly for management of its assets, administration,
distribution of its shares and other services. Those expenses are subtracted
from the Fund's assets to calculate the Fund's net asset values per share.
All shareholders therefore pay those expenses indirectly. Shareholders pay
other expenses directly, such as sales charges and account transaction
charges. The numbers below are based on the Fund's expenses during its fiscal
year ended December 31, 2002.

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Shareholder Fees (charges paid directly from your investment):

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Class A Class B Class C Class Y
Shares Shares Shares Shares
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Maximum Sales Charge 4.75% None None None
(Load) on purchases
(as % of offering price)
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Maximum Deferred Sales None1 5%2 1%3 None
Charge (Load) (as % of
the lower of the
original offering price
or redemption proceeds)
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1. A contingent deferred sales charge may apply to redemptions of
investments of $1 million or more of Class A shares. See "How to Buy
Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent
deferred sales charge declines to 1% in the sixth year and is eliminated
after that.
3. Applies to shares redeemed within 12 months of purchase.

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Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

Management Fees 0.46% 0.46% 0.46% 0.46%

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Distribution and/or 0.15% 1.00% 1.00% None
Service (12b-1) Fees

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Other Expenses 0.11% 0.12% 0.12% 0.16%

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Total Annual Operating 0.72% 1.58% 1.58% 0.62%
Expenses

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Expenses may vary in future years. "Other Expenses" include transfer agent
fees, custodial fees, accounting, administrative and legal expenses the Fund
pays. The Transfer Agent has voluntarily undertaken to the Fund to limit the
transfer agent fees to 0.35% of average daily net assets per fiscal year for
all classes. That undertaking may be amended or withdrawn at any time. For
the Fund's fiscal year ended December 31, 2002, the transfer agent fees did
not exceed the expense limitation described above.

The Total Annual Operating Expenses in the chart do not reflect interest
expense related to the Fund's borrowing activity or the reduction to
custodial expenses related to account balances maintained by the Fund at its
custodian bank, which in the aggregate resulted in lower total annual
operating expenses for each class for the fiscal year ended December 31,
2002. The Total Annual Operating expenses after considering the effect of
interest expense and the reduction to custodial expenses was 0.71% for Class
A shares, 1.57% for Class B shares, 1.57% for Class C shares and 0.61% for
Class Y shares for the fiscal year ended December 31, 2002. During the
period, the Fund's interest expense was substantially offset by the
incremental interest income generated on investments purchased with borrowed
funds.

Examples. The following examples are intended to help you compare the cost
of investing in the Fund with the cost of investing in other mutual funds.
The examples assume that you invest $10,000 in a class of shares of the Fund
for the time periods indicated and reinvest your dividends and distributions.

The first example assumes that you redeem all of your shares at the end
of those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that
the class's operating expenses remain the same. Your actual costs may be
higher or lower because expenses will vary over time. Based on these
assumptions your expenses would be as follows:

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If shares are redeemed: 1 Year 3 Years 5 Years 10 Years

Class B Shares $661 $799 $1,060 $1,4341

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Class C Shares $261 $499 $860 $1,878

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If shares are not 1 Year 3 Years 5 Years 10 Years
redeemed:

Class B Shares $161 $499 $860 $1,4341

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Class C Shares $161 $499 $860 $1,878

In the first example, expenses include the initial sales charge for Class A
and the applicable Class B or Class C contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class
B and Class C expenses do not include contingent deferred sales charges.
There is no sales charge on Class Y shares.
1. Class B expenses for years 7 through 10 are based on Class A expenses
since Class B shares automatically convert to Class A shares 72 months
after purchase.

About the Fund's Investments

THE FUND'S PRINCIPAL INVESTMENT POLICIES. The allocation of the Fund's
portfolio among different investments will vary over time based on the
Manager's evaluation of economic and market trends. The Fund's portfolio
might not always include all of the different types of investments described
below. The Statement of Additional Information contains more detailed
information about the Fund's investment policies and risks.

The Manager tries to reduce risks by diversifying investments and by
carefully researching securities before they are purchased. However, changes
in the overall market prices of municipal securities and the income they pay
can occur at any time. The yields and share prices of the Fund will change
daily based on changes in market prices of securities, interest rates and
market conditions and in response to other economic events.

Municipal Securities. The Fund buys municipal bonds and notes, certificates
of participation in municipal leases and other debt obligations.
Generally, these are debt obligations issued by the State of New York
and its political subdivisions (such as cities, towns and counties). To
seek a higher yield, the Fund also can invest in municipal securities
other than New York municipal securities. Although any interest from
those securities generally would be exempt from federal taxation, any
such interest may be subject to New York State and New York City
personal income tax. The Fund does not expect to invest a significant
portion of its assets in securities that are not New York municipal
securities.

What is a Municipal Debt Security? A municipal debt
security essentially is a loan by the buyer of the
security to the issuer of the security. The issuer
promises to pay back the principal amount of the loan
and normally pays interest exempt from federal
personal income taxes.

Municipal securities are issued to raise money for a variety of public
or private purposes, including financing state or local governments,
specific projects or public facilities. The Fund can invest in
municipal securities that are "general obligations," which are secured
by the issuer's pledge of its full faith, credit and taxing power for
the payment of principal and interest. Some debt securities, such as
zero-coupon securities, do not pay current interest. Other securities
may be subject to calls by the issuer to redeem the debt or to
prepayment prior to their stated maturity.

The Fund also can buy "revenue obligations," whose interest is payable
only from the revenues derived from a particular facility or class of
facilities, or a specific excise tax or other revenue source. Some of
these revenue obligations are industrial development bonds and private
activity bonds that pay interest that may be a tax preference item
subject to alternative minimum taxation for investors subject to the
alternative minimum tax. The Fund does not invest more than 5% of its
total assets in industrial revenue bonds for an industrial user with
less than three years' operating history if that user is responsible
for interest and principal payments.

Municipal Lease Obligations. Municipal leases are used by state and local
governments to obtain funds to acquire land, equipment or facilities.
The Fund may invest in certificates of participation that represent a
proportionate interest in payments made under municipal lease
obligations. Most municipal leases, while secured by the leased
property, are not general obligations of the issuing municipality. They
often contain "non-appropriation" clauses that provide that the
municipal government has no obligation to make lease or installment
payments in future years unless money is appropriated on a yearly
basis.

If the government stops making payments or transfers its payment
obligations to a private entity, the obligation could lose value or
become taxable. Some of these obligations may not have an active
trading market, which means that the Fund might have difficulty selling
its investment at an acceptable price when it wants to. The Fund cannot
invest more than 5% of its net assets in unrated or illiquid municipal
leases.

Floating Rate/Variable Rate Obligations. Some municipal securities have
variable or floating interest rates. Variable rates are adjustable at
stated periodic intervals. Floating rates are automatically adjusted
according to a specified market rate for those investments, such as the
percentage of the prime rate of a bank, or the 91-day U.S. Treasury
Bill rate. These obligations may be secured by bank letters of credit
or other credit support arrangements. Inverse floaters, discussed under
the Main Risks section above, are types of variable rate obligations.

Ratings of Municipal Securities the Fund Buys. Most of the municipal
securities the Fund buys are "investment grade" at the time of
purchase. The Fund does not invest more than 25% of its tax-exempt
investments in municipal securities that at the time of purchase are
below investment grade. Investment-grade securities include rated
securities within the four highest rating categories of a
nationally-recognized rating organization such as Moody's Investors
Service, Standard and Poor's, a division of McGraw Hill Companies,
Inc., Fitch, Inc., or unrated securities that are judged by the Manager
to be comparable to securities rated as investment grade. Rating
definitions of the principal national rating organizations are provided
in Appendix A to the Statement of Additional Information. All municipal
securities, including investment-grade securities, are subject to risks
of default. A reduction in the rating of a security after the Fund buys
it will not automatically require the Fund to dispose of that
security. However, the Manager will evaluate those securities to
determine whether to keep them in the Fund's portfolio.

The Manager relies to some extent on credit ratings by
nationally-recognized rating agencies when evaluating the credit risk
of securities selected for the Fund's portfolio. It may also use its
own research and analysis to evaluate risks. Many factors affect an
issuer's ability to make timely payments, and the credit risks of a
particular security may change over time.

The Fund can invest a significant portion of its assets in unrated
securities. Some of these unrated securities may not have an active
trading market, which means that the Fund might have difficulty valuing
them and selling them promptly at an acceptable price.

Special Credit Risks of Lower-Grade Securities. Municipal securities rated
below investment grade usually offer higher yields than
investment-grade securities but they are subject to greater price
fluctuations and risks of loss of income and principal than
investment-grade municipal securities. Securities that are (or that
have fallen) below investment grade have a greater risk that the
issuers may not meet their debt repayment obligations. They also may be
less liquid than investment-grade securities, making it difficult for
the Fund to sell them at an acceptable price. Those risks can reduce
the Fund's share prices and the income it earns. The Fund will not
invest more than 5% of its net assets in the securities of an issuer if
the securities are rated "B" or below by a nationally-recognized rating
organization or, if unrated, assigned an equivalent rating by the
Manager.

CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The Fund's Board of
Trustees can change non-fundamental investment policies without shareholder
approval, although significant changes will be described in amendments to
this Prospectus. Fundamental policies cannot be changed without the approval
of a majority of the Fund's outstanding voting shares. The Fund's investment
objective is a fundamental policy. Other investment restrictions that are
fundamental policies are listed in the Statement of Additional Information.
An investment policy is not fundamental unless this Prospectus or the
Statement of Additional Information says that it is.

OTHER INVESTMENT STRATEGIES. To seek its objective, the Fund can use the
investment techniques and strategies described below. The Fund might not
always use all of them. These techniques have risks, although some are
designed to help reduce overall investment or market risks.

"When-Issued" and "Delayed-Delivery" Transactions. The Fund can purchase
municipal securities on a "when-issued" basis and can purchase or sell
such securities on a "delayed-delivery" basis. These terms refer to
securities that have been created and for which a market exists, but
which are not available for immediate delivery. The Fund does not
intend to enter into these transactions for speculative purposes.
During the period between the purchase and settlement, no payment is
made for the security and no interest accrues to the Fund from the
investment until the Fund receives the security on settlement of the
trade. There is a risk of loss to the Fund if the value of the
security declines prior to the settlement date. As a fundamental
policy, securities purchased on a "when-issued" or "delayed-delivery"
basis cannot exceed 10% of the Fund's net assets.

Illiquid and Restricted Securities. Investments may be illiquid because they
do not have an active trading market, making it difficult to value them
or dispose of them promptly at an acceptable price. A restricted
security may have a contractual restriction on its resale or cannot be
sold publicly until it is registered under the Securities Act of 1933.
The Fund will not invest more than 15% of its net assets in illiquid
and restricted securities. That limit includes unrated or illiquid
tax-exempt municipal leases that cannot be more than 5% of the Fund's
net assets. Certain restricted securities that are eligible for resale
to qualified institutional purchasers may not be subject to the 15%
limit. The Manager monitors holdings of illiquid securities on an
ongoing basis to determine whether to sell any holdings to maintain
adequate liquidity.

Zero-Coupon Securities. The Fund can invest without limit in zero-coupon
securities. These debt obligations do not pay interest prior to their
maturity date or else they do not start to pay interest at a stated
coupon rate until a future date. They are issued and traded at a
discount from their face amount. The discount varies as the securities
approach their maturity date (or the date interest payments are
scheduled to begin). When interest rates change, zero-coupon securities
are subject to greater fluctuations in their value than securities that
pay current interest. The Fund accrues the discount on zero-coupon
bonds as tax-free income on a current basis. The Fund may have to pay
out the imputed income on zero-coupon securities without receiving
actual cash payments currently.

Temporary Defensive and Interim Investments. In times of unstable or adverse
market, economic or political conditions, the Fund can invest up to
100% of its assets in temporary investments that are inconsistent with
the Fund's principal investment strategies. Generally, the Fund's
defensive or interim investments would be U.S. government securities or
highly-rated corporate debt securities, prime commercial paper or
certificates of deposit of domestic banks. The Fund also might hold
these types of securities pending the investment of proceeds from the
sale of portfolio securities or to meet anticipated redemptions of Fund
shares. The income from some of these investments might not be tax
exempt, and therefore when making those investments the Fund might not
achieve its objective.

How the Fund Is Managed

THE MANAGER. The Manager chooses the Fund's investments and handles its
day-to-day business. The Manager carries out its duties, subject to the
policies established by the Fund's Board of Trustees, under an investment
advisory agreement that states the Manager's responsibilities. The agreement
sets the fees the Fund pays to the Manager and describes the expenses that
the Fund is responsible to pay to conduct its business.

The Manager has been an investment advisor since January 1960. The
Manager and its subsidiaries and controlled affiliates managed more than $120
billion in assets as of December 31, 2002, including other Oppenheimer funds
with more than 7 million shareholder accounts. The Manager is located at 498
Seventh Avenue, New York, New York 10018.

Portfolio Managers. The Fund is managed by a portfolio management team
comprised of Ronald Fielding and other investment professionals
selected from the Manager's Rochester Division. This portfolio
management team is primarily responsible for the day-to-day management
of the Fund's portfolio. Mr. Fielding is a Senior Vice President of the
Manager since January 1996 and a Vice President of the Fund. Mr.
Fielding serves in a similar capacity for other Oppenheimer funds.

Advisory Fees. Under the Investment Advisory Agreement, the Fund pays the
Manager an advisory fee at an annual rate, payable monthly, which
declines on additional assets as the Fund grows: 0.54% of the first
$100 million of average daily net assets, 0.52% on the next $150
million, 0.47% on the next $1.75 billion of average daily net assets,
0.46% on the next $ 3 billion, and 0.45% of average daily net assets
over $5 billion. The Fund's management fee for its last fiscal year
ended December 31, 2002, was 0.46% of average annual net assets for
each class of shares.

ABOUT your account

How to Buy Shares

You can buy shares several ways, as described below. The Fund's Distributor,
OppenheimerFunds Distributor, Inc., may appoint servicing agents to accept
purchase (and redemption) orders. The Distributor, in its sole discretion,
may reject any purchase order for the Fund's shares.

Buying Shares Through Your Dealer. You can buy shares through any dealer,
broker or financial institution that has a sales agreement with the
Distributor. Your dealer will place your order with the Distributor on
your behalf.
Buying Shares Through the Distributor. Complete an OppenheimerFunds New
Account Application and return it with a check payable to
"OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver,
Colorado 80217. If you don't list a dealer on the application, the
Distributor will act as your agent in buying the shares. However, we
recommend that you discuss your investment with a financial advisor
before you make a purchase to be sure that the Fund is appropriate for
you.

o Paying by Federal Funds Wire. Shares purchased through the Distributor
may be paid for by Federal Funds wire. The minimum investment is
$2,500. Before sending a wire, call the Distributor's Wire Department
at 1.800.225.5677 to notify the Distributor of the wire and to receive
further instructions.

o Buying Shares Through OppenheimerFunds AccountLink. With AccountLink,
you pay for shares by electronic funds transfers from your bank
account. Shares are purchased for your account by a transfer of money
from your bank account through the Automated Clearing House (ACH)
system. You can provide those instructions automatically, under an
Asset Builder Plan, described below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below. Please refer to
"AccountLink," below for more details.
o Buying Shares Through Asset Builder Plans. You may purchase shares of
the Fund automatically each month from your account at a bank or other
financial institution under an Asset Builder Plan with AccountLink.
Details are in the Asset Builder Application and the Statement of
Additional Information.

WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $50. There are reduced minimums
available under the following special investment plans:
By using an Asset Builder Plan or Automatic Exchange Plan (details are in
the Statement of Additional Information), or government allotment plan,
you can make subsequent investments o (after making the initial
investment of $500) for as little as $50. For any type of account
established under one of these plans prior to November 1, 2002, the
minimum additional investment will remain $25.

o The minimum investment requirement does not apply to reinvesting
dividends from the Fund or other Oppenheimer funds (a list of them
appears in the Statement of Additional Information, or you can ask your
dealer or call the Transfer Agent), or reinvesting distributions from
unit investment trusts that have made arrangements with the Distributor.

AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price which
is the net asset value per share plus any initial sales charge that applies.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the
Distributor receives the purchase order at its offices in Colorado, or after
any agent appointed by the Distributor receives the order.

Net Asset Value. The Fund calculates the net asset value of each class of
shares as of the close of The New York Stock Exchange ("the Exchange"),
on each day the Exchange is open for trading (referred to in this
Prospectus as a "regular business day"). The Exchange normally closes
at 4:00 P.M., Eastern time, but may close earlier on some days. All
references to time in this Prospectus mean "Eastern time."

The net asset value per share is determined by dividing the value of
the Fund's net assets attributable to a class by the number of shares
of that class that are outstanding. To determine net asset value, the
Fund's Board of Trustees has established procedures to value the Fund's
securities, in general, based on market value. The Board has adopted
special procedures for valuing illiquid and restricted securities and
obligations for which market values cannot be readily obtained.

If, after the close of the principal market on which a security held by
the Fund is traded, and before the time the Fund's securities are
priced that day, an event occurs that the Manager deems likely to cause
a material change in the value of such security, the Fund's Board of
Trustees has authorized the Manager, subject to the Board's review, to
ascertain a fair value for such security. A security's valuation may
differ depending on the method used for determining value.

The Offering Price. To receive the offering price for a particular day, in
most cases the Distributor or its designated agent must receive your
order by the time the Exchange closes that day. If your order is
received on a day when the Exchange is closed or after it has closed,
the order will receive the next offering price that is determined after
your order is received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must
receive the order by the close of the Exchange and transmit it to the
Distributor so that it is received before the Distributor's close of
business on a regular business day (normally 5:00 P.M.) to receive that
day's offering price, unless your dealer has made alternative
arrangements with the Distributor. Otherwise, the order will receive
the next offering price that is determined.

WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors four
different classes of shares. The different classes of shares represent
investments in the same portfolio of securities, but the classes are
subject to different expenses and will likely have different share
prices. When you buy shares, be sure to specify the class of shares.
If you do not choose a class, your investment will be made in Class A
shares
Class A Shares. If you buy Class A shares, you pay an initial sales charge
(on investments up to $1 million). The amount of that sales charge will
vary depending on the amount you invest. The sales charge rates are
listed in "How Can You Buy Class A Shares?" below.
Class B Shares. If you buy Class B shares, you pay no sales charge at the
time of purchase, but you will pay an annual asset-based sales charge.
If you sell your shares within six years of buying them, you will
normally pay a contingent deferred sales charge. That contingent
deferred sales charge varies depending on how long you own your shares,
as described in "How Can You Buy Class B Shares?" below.
Class C Shares. If you buy Class C shares, you pay no sales charge at the
time of purchase, but you will pay an annual asset-based sales charge.
If you sell your shares within 12 months of buying them, you will
normally pay a contingent deferred sales charge of 1.0%, as described
in "How Can You Buy Class C Shares?" below.
Class Y Shares. Class Y shares generally are offered only to certain
institutional investors that have special agreements with the
Distributor, as described in "Who Can Buy Class Y Shares?" below.

WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is
best suited to your needs depends on a number of factors that you should
discuss with your financial advisor. Some factors to consider are how much
you plan to invest and how long you plan to hold your investment. If your
goals and objectives change over time and you plan to purchase additional
shares, you should re-evaluate those factors to see if you should consider
another class of shares. The Fund's operating costs that apply to a class of
shares and the effect of the different types of sales charges on your
investment will vary your investment results over time.

The discussion below is not intended to be investment advice or a
recommendation, because each investor's financial considerations are
different. The discussion below assumes that you will purchase only one class
of shares and not a combination of shares of different classes. Of course,
these examples are based on approximations of the effects of current sales
charges and expenses projected over time, and do not detail all of the
considerations in selecting a class of shares. You should analyze your
options carefully with your financial advisor before making that choice.

How Long Do You Expect to Hold Your Investment? While future financial needs
cannot be predicted with certainty, knowing how long you expect to hold
your investment will assist you in selecting the appropriate class of
shares. Because of the effect of class-based expenses, your choice will
also depend on how much you plan to invest. For example, the reduced
sales charges available for larger purchases of Class A shares may,
over time, offset the effect of paying an initial sales charge on your
investment, compared to the effect over time of higher class-based
expenses on shares of Class B or Class C.

o Investing for the Shorter Term. While the Fund is meant to be a
long-term investment, if you have a relatively short-term investment
horizon (that is, you plan to hold your shares for not more than six
years), you should probably consider purchasing Class A or Class C
shares rather than Class B shares. That is because of the effect of the
Class B contingent deferred sales charge if you redeem within six
years, as well as the effect of the Class B asset-based sales charge on
the investment return for that class in the short-term. Class C shares
might be the appropriate choice (especially for investments of less
than $100,000), because there is no initial sales charge on Class C
shares, and the contingent deferred sales charge does not apply to
amounts you sell after holding them one year.

However, if you plan to invest more than $100,000 for the shorter term,
then as your investment horizon increases toward six years, Class C
shares might not be as advantageous as Class A shares. That is because
the annual asset-based sales charge on Class C shares will have a
greater impact on your account over the longer term than the reduced
front-end sales charge available for larger purchases of Class A
shares.

And for investors who invest $1 million or more, in most cases Class A
shares will be the most advantageous choice, no matter how long you
intend to hold your shares. For that reason, the Distributor normally
will not accept purchase orders of $500,000 or more of Class B shares
or $1 million or more of Class C shares from a single investor.

o Investing for the Longer Term. If you are investing less than $100,000
for the longer-term, for example for retirement, and do not expect to
need access to your money for seven years or more, Class B shares may
be appropriate.

Are There Differences in Account Features That Matter to You? Some account
features may not be available to Class B and Class C shareholders.
Other features may not be advisable (because of the effect of the
contingent deferred sales charge) for Class B and Class C shareholders.
Therefore, you should carefully review how you plan to use your
investment account before deciding which class of shares to buy.

Additionally, the dividends payable to Class B and Class C shareholders
will be reduced by the additional expenses borne by those classes that
are not borne by Class A or Class Y shares, such as the Class B and
Class C asset-based sales charge described below and in the Statement
of Additional Information. Share certificates are only available on
Class A shares, and if you are considering using your shares as
collateral for a loan, that may be a factor to consider. Also,
checkwriting is not available on accounts subject to a contingent
deferred sales charge.

How Do Share Classes Affect Payments to Your Broker? A financial advisor may
receive different compensation for selling one class of shares than for
selling another class. It is important to remember that Class B and
Class C contingent deferred sales charges and asset-based sales charges
have the same purpose as the front-end sales charge on sales of Class A
shares: to compensate the Distributor for concessions and expenses it
pays to dealers and financial institutions for selling shares. The
Distributor may pay additional compensation from its own resources to
securities dealers or financial institutions based upon the value of
shares of the Fund owned by the dealer or financial institution for its
own account or for its customers.

SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix C to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or in other special types
of transactions. To receive a waiver or special sales charge rate, you must
advise the Distributor when purchasing shares or the Transfer Agent when
redeeming shares that a special condition applies.

HOW CAN YOU BUY CLASS A SHARES? Class A shares are sold at their offering
price, which is normally net asset value plus an initial sales charge.
However, in some cases, described below, purchases are not subject to an
initial sales charge, and the offering price will be the net asset value. In
other cases, reduced sales charges may be available, as described below or in
the Statement of Additional Information. Out of the amount you invest, the
Fund receives the net asset value to invest for your account.

The sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor or allocated
to your dealer as concession. The Distributor reserves the right to reallow
the entire concession to dealers. The current sales charge rates and
concessions paid to dealers and brokers are as follows:

------------------------------------------------------------------------------
Amount of Purchase Front-End Sales Front-End Sales Concession As
Charge As a
Charge As a Percentage of
Percentage of Net Percentage of
Offering Price Amount Invested Offering Price
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Less than $50,000 4.75% 4.98% 4.00%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$50,000 or more but 4.50% 4.71% 4.00%
less than $100,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$100,000 or more but 3.50% 3.63% 3.00%
less than $250,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$250,000 or more but 2.50% 2.56% 2.25%
less than $500,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$500,000 or more but 2.00% 2.04% 1.80%
less than $1 million
------------------------------------------------------------------------------

Can You Reduce Class A Sales Charges? You may be eligible to buy Class A
shares at reduced sales charge rates under the Fund's "Right of
Accumulation" or a Letter of Intent, as described in "Reduced Sales
Charges" in the Statement of Additional Information.

Class A Contingent Deferred Sales Charge. There is no initial sales charge on
purchases of Class A shares of any one or more of the Oppenheimer funds
aggregating $1 million or more. The Distributor pays dealers of record
concessions in an amount equal to 1.0% of purchases of $1 million or
more (other than purchases by retirement plans, which are not permitted
in the Fund). That concession will not be paid on purchases of shares
by exchange or that were previously subject to a front-end sales charge
and dealer concession.

If you redeem any of those shares within a 24 month "holding period"
measured from the beginning of the calendar month of their purchase, a
contingent deferred sales charge (called the "Class A contingent
deferred sales charge") may be deducted from the redemption proceeds.
That sales charge will be equal to 1.0% of the lesser of:
o the aggregate net asset value of the redeemed shares at the time of
redemption (excluding shares purchased by reinvestment of dividends or
capital gain distributions) or
o the original net asset value of the redeemed shares.

The Class A contingent deferred sales charge will not exceed the
aggregate amount of the concessions the Distributor paid to your dealer
on all purchases of Class A shares of all Oppenheimer funds you made
that were subject to the Class A contingent deferred sales charge.

HOW CAN YOU BUY CLASS B SHARES? Class B shares are sold at net asset value
per share without an initial sales charge. However, if Class B shares are
redeemed within six years from the beginning of the calendar month of their
purchase, a contingent deferred sales charge will be deducted from the
redemption proceeds. The Class B contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class B shares.

The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule for the Class B contingent deferred sales
charge holding period:

----------------------------------------

Years Since Beginning of Month in Contingent Deferred Sales Charge on
Redemptions in That Year
Which Purchase Order was Accepted (As % of Amount Subject to Charge)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
0 - 1 5.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 - 2 4.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2 - 3 3.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3 - 4 3.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4 - 5 2.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

5 - 6 1.0%

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

More than 6 None

--------------------------------------------------------------------------------

In the table, a "year" is a 12-month period. In applying the contingent
deferred sales charge, all purchases are considered to have been made on the
first regular business day of the month in which the purchase was made.

Automatic Conversion of Class B Shares. Class B shares automatically convert
to Class A shares 72 months after you purchase them. This conversion
feature relieves Class B shareholders of the asset-based sales charge
that applies to Class B shares under the Class B Distribution and
Service Plan, described below. The conversion is based on the relative
net asset value of the two classes, and no sales load or other charge
is imposed. When any Class B shares that you hold convert, any other
Class B shares that were acquired by reinvesting dividends and
distributions on the converted shares will also convert to Class A
shares. For further information on the conversion feature and its tax
implications, see "Class B Conversion" in the Statement of Additional
Information.

How Can you Buy Class C Shares? Class C shares are sold at net asset value
per share without an initial sales charge. However, if Class C shares are
redeemed within a holding period of 12 months from the beginning of the
calendar month of their purchase, a contingent deferred sales charge of 1.0%
will be deducted from the redemption proceeds. The Class C contingent
deferred sales charge is paid to compensate the Distributor for its expenses
of providing distribution-related services to the Fund in connection with the
sale of Class C shares.

Who Can Buy Class Y Shares? Class Y shares are sold at net asset value per
share without a sales charge directly to institutional investors that have
special agreements with the Distributor for this purpose. They may include
insurance companies, registered investment companies and employee benefit
plans.

In certain circumstances, the Distributor may also accept purchase
orders from individual investors. An individual investor may not acquire
Class Y shares that would represent 10% of the Fund's total assets.

An institutional investor that buys Class Y shares for its customers'
accounts may impose charges on those accounts. The procedures for buying,
selling, exchanging and transferring the Fund's other classes of shares
(other than the time those orders must be received by the Distributor or
Transfer Agent at their Colorado office) and the special account features
available to investors buying other classes of shares do not apply to Class Y
shares. Instructions for purchasing, redeeming, exchanging or transferring
Class Y shares held by institutional investors must be submitted by the
institutional investor, not by its customers for whose benefit the shares are
held.

DISTRIBUTION AND SERVICE (12b-1) PLANS.

Service Plan for Class A Shares. The Fund has adopted a Service Plan for
Class A shares. It reimburses the Distributor for a portion of its
costs incurred for services provided to accounts that hold Class A
shares. Reimbursement is made quarterly at an annual rate of up to
0.15% of the average annual net assets of Class A shares of the Fund.
The Board of Trustees can increase that fee to 0.25% of average annual
net assets without shareholder approval. Shareholders will be notified
of any such change. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly
for providing personal service and maintenance of accounts of their
customers that hold Class A shares.

Distribution and Service Plans for Class B and Class C Shares. The Fund has
adopted Distribution and Service Plans for Class B and Class C shares
to pay the Distributor for its services and costs in distributing Class
B and Class C shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per
year on Class B shares and on Class C shares. The Distributor also
receives a service fee of 0.25% per year under each plan.

The asset-based sales charge and service fees increase Class B and
Class C expenses by 1.00% of the net assets per year of the respective
class. Because these fees are paid out of the Fund's assets on an
ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than other types of sales charges.

The Distributor uses the service fees to compensate dealers for
providing personal services for accounts that hold Class B or Class C
shares. The Distributor pays the 0.25% service fees to dealers in
advance for the first year after the shares are sold by the dealer.
After the shares have been held for a year, the Distributor pays the
service fees to dealers on a quarterly basis. The Distributor retains
the service fees for accounts for which it renders the required
personal services.

The Distributor currently pays a sales concession of 3.75% of the
purchase price of Class B shares to dealers from its own resources at
the time of sale. Including the advance of the service fee, the total
amount paid by the Distributor to the dealer at the time of sale of
Class B shares is therefore 4.00% of the purchase price. The
Distributor retains the Class B asset-based sales charge. See the
Statement of Additional Information for exceptions.

The Distributor currently pays a sales concession of 0.75% of the
purchase price of Class C shares to dealers from its own resources at
the time of sale. Including the advance of the service fee, the total
amount paid by the Distributor to the dealer at the time of sale of
Class C shares is therefore 1.00% of the purchase price. The
Distributor pays the asset-based sales charge as an ongoing concession
to the dealer on Class C shares that have been outstanding for a year
or more. See the Statement of Additional Information for exceptions.

Special Investor Services

ACCOUNTLINK. You can use our AccountLink feature to link your Fund account
with an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
o transmit funds electronically to purchase shares by telephone (through
a service representative or by PhoneLink) or automatically under Asset
Builder Plans, or
o have the Transfer Agent send redemption proceeds or transmit dividends
and distributions directly to your bank account. Please call the
Transfer Agent for more information.

You may purchase shares by telephone only after your account has been
established. To purchase shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1.800.225.5677. The purchase payment
will be debited from your bank account.

AccountLink privileges should be requested on your Application or your
dealer's settlement instructions if you buy your shares through a dealer.
After your account is established, you can request AccountLink privileges by
sending signature-guaranteed instructions and proper documentation to the
Transfer Agent. AccountLink privileges will apply to each shareholder listed
in the registration on your account as well as to your dealer representative
of record unless and until the Transfer Agent receives written instructions
terminating or changing those privileges. After you establish AccountLink for
your account, any change of bank account information must be made by
signature-guaranteed instructions to the Transfer Agent signed by all
shareholders who own the account.

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification
Number (PIN), by calling the PhoneLink number, 1.800.225.5677.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by
phone, by calling 1.800.225.5677. You must have established AccountLink
privileges to link your bank account with the Fund to pay for these
purchases.

Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
below, you can exchange shares automatically by phone from your Fund
account to another OppenheimerFunds account you have already
established by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling
the PhoneLink number and the Fund will send the proceeds directly to
your AccountLink bank account. Please refer to "How to Sell Shares,"
below for details.

CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send requests for certain
types of account transactions to the Transfer Agent by fax (telecopier).
Please call 1.800.225.5677 for information about which transactions may be
handled this way. Transaction requests submitted by fax are subject to the
same rules and restrictions as written and telephone requests described in
this Prospectus.

OPPENHEIMERFUNDS INTERNET WEBSITE. You can obtain information about the Fund,
as well as your account balance, on the OppenheimerFunds Internet website, at
www.oppenheimerfunds.com. Additionally, shareholders listed in the account
------------------------
registration (and the dealer of record) may request certain account
transactions through a special section of that website. To perform account
transactions or obtain account information online, you must first obtain a
user I.D. and password on that website. If you do not want to have Internet
account transaction capability for your account, please call the Transfer
Agent at 1.800.225.5677. At times, the website may be inaccessible or its
transaction features may be unavailable.

AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
OppenheimerFunds account on a regular basis. Please call the Transfer Agent
or consult the Statement of Additional Information for details.

REINVESTMENT PRIVILEGE. If you redeem some or all of your Class A or Class B
shares of the Fund, you have up to six months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other Oppenheimer funds
without paying a sales charge. This privilege applies only to Class A shares
that you purchased subject to an initial sales charge and to Class A or Class
B shares on which you paid a contingent deferred sales charge when you
redeemed them. This privilege does not apply to Class C or Class Y shares.
You must be sure to ask the Distributor for this privilege when you send your
payment.

How to Sell Shares

You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your
order is received in proper form (which means that it must comply with the
procedures described below) and is accepted by the Transfer Agent. The Fund
lets you sell your shares by writing a letter, by wire, by using the Fund's
checkwriting privilege, or by telephone. You can also set up Automatic
Withdrawal Plans to redeem shares on a regular basis. If you have questions
about any of these procedures, and especially if you are redeeming shares in
a special situation, such as due to the death of the owner, please call the
Transfer Agent first, at 1.800.225.5677, for assistance.

Certain Requests Require a Signature Guarantee. To protect you and the Fund
from fraud, the following redemption requests must be in writing and
must include a signature guarantee (although there may be other
situations that also require a signature guarantee):
o You wish to redeem more than $100,000 and receive a check
o The redemption check is not payable to all shareholders listed on the
account statement
o The redemption check is not sent to the address of record on your
account statement
o Shares are being transferred to a Fund account with a different owner
or name
o Shares are being redeemed by someone (such as an Executor) other than
the owners.

Where Can You Have Your Signature Guaranteed? The Transfer Agent will accept
a guarantee of your signature by a number of financial institutions,
including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal securities
or government securities, or
o a U.S. national securities exchange, a registered securities
association or a clearing agency.
If you are signing on behalf of a corporation, partnership or other
business or as a fiduciary, you must also include your title in the signature.

Sending Redemption Proceeds by Wire. While the Fund normally sends your money
by check, you can arrange to have the proceeds of shares you sell sent
by Federal Funds wire to a bank account you designate. It must be a
commercial bank that is a member of the Federal Reserve wire system.
The minimum redemption you can have sent by wire is $2,500. There is a
$10 fee for each request. To find out how to set up this feature on
your account or to arrange a wire, call the Transfer Agent at
1.800.225.5677.

Checkwriting. To write checks against your Fund account, request that
privilege on your account application, or contact the Transfer Agent for
signature cards. They must be signed (with a signature guarantee) by all
owners of the account and returned to the Transfer Agent so that checks can
be sent to you to use. Shareholders with joint accounts can elect in writing
to have checks paid over the signature of one owner. If you previously signed
a signature card to establish checkwriting in another Oppenheimer fund,
simply call 1.800.225.5677 to request checkwriting for an account in this
Fund with the same registration as the other account.

o Checks can be written to the order of whomever you wish, but may not be
cashed at the bank the checks are payable through or the Fund's
custodian bank.
o Checkwriting privileges are not available for accounts holding shares
that are subject to a contingent deferred sales charge.
o Checks must be written for at least $500. Checks written below the
stated amount on the check will not be accepted. However, if you have
existing checks indicating a $100 minimum, you may still use them for
amounts of $100 or more.
o Checks cannot be paid if they are written for more than your account
value. Remember, your shares fluctuate in value and you should not
write a check close to the total account value.
o You may not write a check that would require the Fund to redeem shares
that were purchased by check or Asset Builder Plan payments within the
prior 10 days.
o Don't use your checks if you changed your Fund account number, until
you receive new checks.

HOW DO you SELL SHARES BY MAIL? Write a letter of instruction that includes:
o Your name
o The Fund's name
o Your Fund account number (from your account statement)
o The dollar amount or number of shares to be redeemed
o Any special payment instructions
o Any share certificates for the shares you are selling
o The signatures of all registered owners exactly as the account is
registered, and
o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares.

Use the following address for Send courier or express mail
requests by mail: requests to:
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Avenue, Building D
Denver, Colorado 80217 Denver, Colorado 80231

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price calculated on a particular regular business day, your call must be
received by the Transfer Agent by the close of the Exchange that day, which
is normally 4:00 P.M., but may be earlier on some days. You may not redeem
shares under a share certificate by telephone.
o To redeem shares through a service representative or automatically on
PhoneLink, call 1.800.225.5677.
Whichever method you use, you may have a check sent to the address on

the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by
telephone in any seven-day period. The check must be payable to all
owners of record of the shares and must be sent to the address on the
account statement. This service is not available within 30 days of
changing the address on an account.

Telephone Redemptions Through AccountLink or by Wire. There are no dollar
limits on telephone redemption proceeds sent to a bank account
designated when you establish AccountLink. Normally the ACH transfer to
your bank is initiated on the business day after the redemption. You do
not receive dividends on the proceeds of the shares you redeemed while
they are waiting to be transferred.

If you have requested Federal Funds wire privileges for your account,
the wire of the redemption proceeds will normally be transmitted on the
next bank business day after the shares are redeemed. There is a
possibility that the wire may be delayed up to seven days to enable the
Fund to sell securities to pay the redemption proceeds. No dividends
are accrued or paid on the proceeds of shares that have been redeemed
and are awaiting transmittal by wire.

CAN YOU SELL SHARES THROUGH your DEALER? The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on behalf of
their customers. Brokers or dealers may charge for that service. If your
shares are held in the name of your dealer, you must redeem them through your
dealer.

HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase
shares subject to a Class A, Class B or Class C contingent deferred sales
charge and redeem any of those shares during the applicable holding period
for the class of shares, the contingent deferred sales charge will be
deducted from the redemption proceeds (unless you are eligible for a waiver
of that sales charge based on the categories listed in Appendix C to the
Statement of Additional Information and you advise the Transfer Agent of your
eligibility for the waiver when you place your redemption request.)

A contingent deferred sales charge will be based on the lesser of the
net asset value of the redeemed shares at the time of redemption or the
original net asset value. A contingent deferred sales charge is not imposed
on:
o the amount of your account value represented by an increase in net
asset value over the initial purchase price,
o shares purchased by the reinvestment of dividends or capital gains
distributions, or
o shares redeemed in the special circumstances described in Appendix C to
the Statement of Additional Information
To determine whether a contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order:
1. shares acquired by reinvestment of dividends and capital gains
distributions,
2. shares held for the holding period that applies to the class, and
3. shares held the longest during the holding period.

Contingent deferred sales charges are not charged when you
exchange shares of the Fund for shares of other Oppenheimer funds. However,
if you acquire Class B or Class C shares of this Fund by exchanging shares of
another Oppenheimer fund that are still subject to a contingent deferred
sales charge holding period, that holding period will carry over to this
Fund. If you exchange Class A shares subject to a contingent deferred sales
charge of another Oppenheimer fund for Class A shares of this Fund, the 24
month contingent deferred sales charge holding period applicable to Class A
shares of this Fund will apply. If you exchange Class A shares subject to a
contingent deferred sales charge holding period of this Fund for Class A
shares of another Oppenheimer fund, the holding period of the other
Oppenheimer fund will normally apply.

How to Exchange Shares

Shares of the Fund may be exchanged for shares of certain Oppenheimer funds
at net asset value per share at the time of exchange, without sales charge.
Shares of the Fund can be purchased by exchange of shares of other
Oppenheimer funds on the same basis. To exchange shares, you must meet
several conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of both funds must offer the exchange privilege.
o You must hold the shares you buy when you establish your account for at
least seven days before you can exchange them. After the account is
open seven days, you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund whose
shares you purchase by exchange.
o Before exchanging into a fund, you must obtain and read its prospectus.
Shares of a particular class of the Fund may be exchanged only for
shares of the same class in the other Oppenheimer funds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another fund.
In some cases, sales charges may be imposed on exchange transactions. For tax
purposes, exchanges of shares involve a sale of the shares of the fund you
own and a purchase of the shares of the other fund, which may result in a
capital gain or loss. Please refer to "How to Exchange Shares" in the
Statement of Additional Information for more details.

You can find a list of Oppenheimer funds currently available for
exchanges in the Statement of Additional Information or obtain one by calling
a service representative at 1.800.225.5677. That list can change from time to
time.

HOW DO you SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing or
by telephone:

Written Exchange Requests. Submit an OppenheimerFunds Exchange Request form,
signed by all owners of the account. Send it to the Transfer Agent at
the address on the back cover. Exchanges of shares held under
certificates cannot be processed unless the Transfer Agent receives the
certificates with the request.

Telephone Exchange Requests. Telephone exchange requests may be made either
by calling a service representative or by using PhoneLink for automated
exchanges by calling 1.800.225.5677. Telephone exchanges may be made
only between accounts that are registered with the same name(s) and
address. Shares held under certificates may not be exchanged by
telephone.

ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o Shares are redeemed from one fund and purchased from the other fund in

the exchange transaction on the same regular business day on which the
Transfer Agent receives an exchange request that conforms to the
policies described above. It must be received by the close of the
Exchange that day, which is normally 4:00 P.M. but may be earlier on
some days.

o The interests of the Fund's long-term shareholders and its ability to
manage its investments may be adversely affected when its shares are
repeatedly bought and sold in response to short-term market
fluctuations--also known as "market timing." When large dollar amounts
are involved, the Fund may have difficulty implementing long-term
investment strategies, because it cannot predict how much cash it will
have to invest. Market timing also may force the Fund to sell portfolio
securities at disadvantageous times to raise the cash needed to buy a
market timer's Fund shares. These factors may hurt the Fund's
performance and its shareholders. When the Manager believes frequent
trading would have a disruptive effect on the Fund's ability to manage
its investments, the Manager and the Fund may reject purchase orders
and exchanges into the Fund by any person, group or account that the
Manager believes to be a market timer.
o The Fund may amend, suspend or terminate the exchange privilege at any
time. The Fund will provide you notice whenever it is required to do so
by applicable law, but it may impose changes at any time for emergency
purposes.
o If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual fee is assessed on any account valued at less than $500. The fee
is automatically deducted from accounts annually on or about the second
to last business day of September. See the Statement of Additional
Information, or visit the OppenheimerFunds website, to learn how you
can avoid this fee and for circumstances when this fee will not be
assessed.

The offering of shares may be suspended during any period in which the
determination of net asset value is suspended, and the offering may be
suspended by the Board of Trustees at any time the Board believes it is
in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may
be modified, suspended or terminated by the Fund at any time. The Fund
will provide you notice whenever it is required to do so by applicable
law. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone
privileges apply to each owner of the account and the dealer
representative of record for the account unless the Transfer Agent
receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
transactions and has adopted other procedures to confirm that telephone
instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. The Transfer Agent and the
Fund will not be liable for losses or expenses arising out of telephone
instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
receives all required documents in proper form. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements
for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating
in NETWORKING through the National Securities Clearing Corporation are
responsible for obtaining their clients' permission to perform those
transactions, and are responsible to their clients who are shareholders
of the Fund if the dealer performs any transaction erroneously or
improperly.
The redemption price for shares will vary from day to day because the value
of the securities in the Fund's portfolio fluctuates. The redemption
price, which is the net asset value per share, will normally differ for
each class of shares. The redemption value of your shares may be more
or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
check, or through AccountLink or by Federal Funds wire (as elected by
the shareholder) within seven days after the Transfer Agent receives
redemption instructions in proper form. However, under unusual
circumstances determined by the Securities and Exchange Commission,
payment may be delayed or suspended. For accounts registered in the
name of a broker-dealer, payment will normally be forwarded within
three business days after redemption.

The Transfer Agent may delay processing any type of redemption payment as
described under "How to Sell Shares" for recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much
as 10 days from the date the shares were purchased. That delay may be
avoided if you purchase shares by Federal Funds wire or certified
check, or arrange with your bank to provide telephone or written
assurance to the Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the
account value has fallen below $200 for reasons other than the fact
that the market value of shares has dropped. In some cases, involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.

Shares may be "redeemed in kind" under unusual circumstances (such as a lack
of liquidity in the Fund's portfolio to meet redemptions). This means
that the redemption proceeds will be paid with liquid securities from
the Fund's portfolio.
"Backup withholding" of federal income tax may be applied against taxable
dividends, distributions and redemption proceeds (including exchanges)
if you fail to furnish the Fund your correct, certified Social Security
or Employer Identification Number when you sign your application, or if
you under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund will
mail only one copy of each prospectus, annual and semi-annual report
and annual notice of the Fund's privacy policy to shareholders having
the same last name and address on the Fund's records. The consolidation
of these mailings, called householding, benefits the Fund through
reduced mailing expense.

If you want to receive multiple copies of these materials, you may call
the Transfer Agent at 1.800.225.5677. You may also notify the Transfer
Agent in writing. Individual copies of prospectuses, reports and
privacy notices will be sent to you commencing 30 days after the
Transfer Agent receives your request to stop householding.

Dividends, Capital Gains and Taxes

DIVIDENDS. The Fund intends to declare dividends separately for each class of
shares from net tax-exempt income and/or net taxable investment income each
regular business day and to pay those dividends to shareholders monthly on a
date selected by the Board of Trustees. Daily dividends will not be declared
or paid on newly-purchased shares until Federal Funds are available to the
Fund from the purchase payment for such shares.

The Fund attempts to pay dividends on Class A shares at a constant
level. There is no assurance that it will be able to do so. The Board of
Trustees may change the targeted dividend level at any time, without prior
notice to shareholders. Additionally, the amount of those dividends and any
other distributions paid on Class B and Class C shares may vary over time,
depending on market conditions, the composition of the Fund's portfolio, and
expenses borne by the particular class of shares. Dividends and other
distributions paid on Class A and Class Y shares will generally be higher
than for Class B and Class C shares, which normally have higher expenses than
Class A and Class Y. The Fund cannot guarantee that it will pay any dividends
or other distributions.

Capital Gains. Although the Fund does not seek capital gains, it may realize
capital gains on the sale of portfolio securities. If it does, it may make
distributions out of any net short-term or long-term capital gains in
December of each year. The Fund may make supplemental distributions of
dividends and capital gains following the end of its fiscal year. There can
be no assurance that the Fund will pay any capital gains distributions in a
particular year. Long-term capital gains will be separately identified in the
tax information the Fund sends you after the end of the calendar year.

WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open your
account, specify on your application how you want to receive your dividends
and distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all
dividends and capital gains distributions in additional shares of the
Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the Fund while receiving the other types of
distributions by check or having them sent to your bank account through
AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
dividends and capital gains distributions or have them sent to your
bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
reinvest all distributions in the same class of shares of another
OppenheimerFunds account you have established.

Taxes. Dividends paid from net investment income earned by the Fund on
municipal securities will be excludable from gross income for federal
income tax purposes. All or a portion of the dividends paid by the Fund
that are derived from interest paid on certain "private activity bonds"
may be an item of tax preference if you are subject to the federal
alternative minimum tax.

Dividends and capital gains distributions may be subject to federal,
state or local taxes. Any short-term capital gain distributions are taxable
to you as ordinary income. Any long-term capital gain distributions are
taxable to you as long-term capital gains, no matter how long you have owned
shares in the Fund. The Fund may derive gains in part from municipal
obligations the Fund purchased below their principal or face values. All, or
a portion of these gains may be taxable to you as ordinary income rather than
capital gains. Whether you reinvest your distributions in additional shares
or take them in cash, the tax treatment is the same.

Exempt-interest dividends earned by residents of New York should not
be subject to federal, state, or local income taxes. The portion of the
Fund's dividends that are attributable to income earned on other
obligations (not New York municipal securities) will normally be subject
to New York State and City personal income tax.

Every year the Fund will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year as well
as the amount of your tax-exempt income.

Remember, There May be Taxes on Transactions. Because the Fund's share prices
fluctuate, you may have a capital gain or loss when you sell or
exchange your shares. A capital gain or loss is the difference between
the price you paid for the shares and the price you received when you
sold them. Any capital gain is subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by the
Fund may be considered a non-taxable return of capital to shareholders.
If that occurs, it will be identified in notices to shareholders.

This information is only a summary of certain federal and state income
tax information about your investment. You should consult with your tax
advisor about the effect of an investment in the Fund on your particular tax
situation.

Financial Highlights

The Financial Highlights Table is presented to help you understand the Fund's
financial performance for the past five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). For the fiscal years ended December 31, 2000 through 2002,
the information was audited by KPMG LLP, the Fund's independent auditors,
whose report, along with the Fund's financial statements, is included in the
Statement of Additional Information, which is available on request. Another
auditing firm audited the information for the previous fiscal years.

FINANCIAL HIGHLIGHTS

Class A Year Ended December 31, 2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 17.52 $ 17.67 $ 16.78 $ 18.81 $ 18.67
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.08 1.06 1.04 1.04 1.04
Net realized and unrealized gain (loss) (.15) (.17) .89 (2.03) .15
---------------------------------------------------------
Total from investment operations .93 .89 1.93 (.99) 1.19
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (1.07) (1.04) (1.04) (1.04) (1.04)
Undistributed net investment income -- -- -- -- (.01)
---------------------------------------------------------
Total dividends and/or distributions to shareholders (1.07) (1.04) (1.04) (1.04) (1.05)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.38 $17.52 $17.67 $16.78 $18.81
=========================================================

----------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 5.46% 5.14% 11.93% (5.51)% 6.52%

----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions) $4,299 $4,073 $3,536 $3,288 $3,435
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $4,292 $3,893 $3,341 $3,559 $3,161
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 6.18% 5.97% 6.07% 5.78% 5.50%
Expenses 0.72% 0.72% 0.78% 0.77% 0.78% 3
Expenses, net of interest expense and reduction to
custodian expense 4 0.71% 0.70% 0.74% 0.73% 0.75%
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 11% 26% 30% 25%

1. Assumes an investment 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 redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
4. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.

41 | ROCHESTER FUND MUNICIPALS
FINANCIAL HIGHLIGHTS Continued

Class B Year Ended December 31, 2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 17.51 $ 17.66 $ 16.77 $ 18.79 $ 18.65
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .93 .91 .89 .89 .89
Net realized and unrealized gain (loss) (.16) (.17) .90 (2.03) .14
----------------------------------------------------------
Total from investment operations .77 .74 1.79 (1.14) 1.03
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.92) (.89) (.90) (.88) (.89)
Undistributed net investment income -- -- -- -- --
----------------------------------------------------------
Total dividends and/or distributions to shareholders (.92) (.89) (.90) (.88) (.89)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.36 $17.51 $17.66 $16.77 $18.79
==========================================================

----------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 4.50% 4.25% 10.98% (6.27)% 5.61%

----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions) $1,342 $1,157 $803 $673 $494
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $1,275 $ 997 $711 $635 $329
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 5.32% 5.10% 5.19% 4.91% 4.57%
Expenses 1.58% 1.58% 1.65% 1.64% 1.64% 3
Expenses, net of interest expense and reduction to
custodian expense 4 1.57% 1.56% 1.60% 1.59% 1.61%
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 11% 26% 30% 25%

1. Assumes an investment 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 redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses.
4. During the periods shown above, the Fund's interest expense was substantially offset by the incremental interest income generated on bonds purchased with borrowed funds.

42 | ROCHESTER FUND MUNICIPALS

Class C Year Ended December 31, 2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 17.50 $ 17.66 $ 16.76 $ 18.79 $ 18.66
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .93 .91 .89 .89 .89
Net realized and unrealized gain (loss) (.15) (.18) .91 (2.04) .13
---------------------------------------------------------
Total from investment operations .78 .73 1.80 (1.15) 1.02
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.92) (.89) (.90) (.88) (.89)
Undistributed net investment income -- -- -- -- --
---------------------------------------------------------
Total dividends and/or distributions to shareholders (.92) (.89) (.90) (.88) (.89)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.36 $17.50 $17.66 $16.76 $18.79
=========================================================

----------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 4.57% 4.19% 11.06% (6.32)% 5.56%

----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions) $471 $429 $259 $220 $174
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $460 $356 $225 $221 $111
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 5.32% 5.09% 5.20% 4.92% 4.57%
Expenses 1.58% 1.57% 1.63% 1.63% 1.63% 3
Expenses, net of interest expense and reduction to
custodian expense 4 1.57% 1.55% 1.59% 1.58% 1.59%
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 11% 26% 30% 25%

43 | ROCHESTER FUND MUNICIPALS
FINANCIAL HIGHLIGHTS Continued

Class Y Year Ended December 31, 2002 2001 2000 1
------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 17.52 $ 17.67 $ 16.88
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.10 1.08 .70
Net realized and unrealized gain (loss) (.15) (.17) .78
-----------------------------------
Total from investment operations .95 .91 1.48
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (1.09) (1.06) (.69)
Undistributed net investment income -- -- --
-----------------------------------
Total dividends and/or distributions to shareholders (1.09) (1.06) (.69)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.38 $17.52 $17.67
===================================

------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 5.57% 5.25% 8.97%

------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions) $12 $12 $11
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $12 $12 $10
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.30% 6.08% 6.07%
Expenses 0.62% 0.62% 0.68%
Expenses, net of interest expense and reduction to custodian expense 4 0.61% 0.60% 0.64%
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 11% 26%

1. For the period from April 28, 2000 (inception of offering) to December 31,
2000.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.

INFORMATION AND SERVICES

For More Information on Rochester Fund Municipals
The following additional information about the Fund is available without
charge upon request:

STATEMENT OF ADDITIONAL INFORMATION. This document includes additional
information about the Fund's investment policies, risks, and operations. It
is incorporated by reference into this Prospectus (which means it is legally
part of this Prospectus).

ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about the Fund's
investments and performance is available in the Fund's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year.

How to Get More Information

You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, the notice explaining the Fund's privacy policy and
other information about the Fund or your account:

------------------------------------------------------------------------------

By Telephone: Call OppenheimerFunds Services toll-free:
1.800.CALL.OPP (225.5677)

On the Internet: You can send us a request by e-mail or read
or download documents on the
OppenheimerFunds website:
www.oppenheimerfunds.com
------------------------

------------------------------------------------------------------------------

Information about the Fund including the Statement of Additional Information
can be reviewed and copied at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be
obtained by calling the SEC at 1.202.942.8090. Reports and other information
about the Fund are available on the EDGAR database on the SEC's Internet
website at www.sec.gov. Copies may be obtained after payment of a duplicating
-----------
fee by electronic request at the SEC's e-mail address: publicinfo@sec.gov or
by writing to the SEC's Public Reference Section, Washington, D.C. 20549-0102.
No one has been authorized to provide any information about the Fund or to
make any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any
state or other jurisdiction where it is unlawful to make such an offer.

The Fund's shares are distributed by: [logo] OppenheimerFunds
Distributor, Inc.

SEC File No. 811-3614

PR0365.001.0203 Printed on recycled paper.

Appendix to Prospectus of
Rochester Fund Municipals

Graphic material included in the Prospectus of Rochester Fund
Municipals under the heading: "Annual Total Returns (Class A) (as of 12/31
each year)."

A bar chart will be included in the Prospectus of Rochester Fund
Municipals (the "Fund") depicting the annual total returns of a hypothetical
investment in Class A shares of the Fund for each of the last 10 calendar
years, without deducting sales charges or taxes. Set forth below are the
relevant data points that will appear in the bar chart:

Calendar Annual
Year Total
Ended: Returns

12/31/93 14.60%
12/31/94 -8.35%
12/31/95 18.61%
12/31/96 5.37%
12/31/97 10.20%
12/31/98 6.52%
12/31/99 -5.51%
12/31/00 11.93%
12/31/01 5.14%
12/31/02 5.46%


Rochester Fund Municipals
6803 S. Tucson Way, Centennial, CO 80112
1.800.225.5677

Statement of Additional Information dated February 25, 2003





This Statement of Additional Information is not a Prospectus. This document
contains additional information about the Fund and supplements information in
the Prospectus dated February 25, 2003. It should be read together with the
Prospectus, which may be obtained by writing to the Fund's Transfer Agent,
OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217 or by
calling the Transfer Agent at the toll-free number shown above or by
downloading it from the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.


Contents                                                                Page

About the Fund

Additional Information About the Fund's Investment Policies and Risks...2
     The Fund's Investment Policies.....................................2
     Municipal Securities...............................................2
     Other Investment Techniques and Strategies.........................21
     Other Investment Restrictions......................................29
How the Fund is Managed.................................................32
     Organization and History...........................................32
     Board of Trustees and Oversight Committees.........................33
     Trustees and Officers of the Fund..................................33
     The Manager........................................................39
Brokerage Policies of the Fund..........................................41
Distribution and Service Plans..........................................43
Performance of the Fund.................................................47


About Your Account

How To Buy Shares.......................................................52
How To Sell Shares......................................................60
How to Exchange Shares..................................................64
Dividends, Capital Gains and Taxes......................................68
Additional Information About the Fund...................................73


Financial Information About the Fund

Independent Auditors' Report............................................74
Financial Statements ...................................................75


Appendix A: Municipal Bond Ratings Definitions..........................A-1
Appendix B: Industry Classifications....................................B-1
Appendix C: Special Sales Charge Arrangements and Waivers...............C-1






                                      2

ABOUT The FUnd


Additional Information About the Fund's Investment Policies and Risks


The investment objective, principal investment policies and main risks of the
Fund are described in the Prospectus. This Statement of Additional
Information contains supplemental information about those policies and risks
and the types of securities that the Fund's investment Manager,
OppenheimerFunds, Inc., (the "Manager") can select for the Fund. Additional
explanations are also provided about the strategies the Fund can use to try
to achieve its objective.


The Fund's Investment Policies. The composition of the Fund's portfolio and
the techniques and strategies that the Manager uses will vary over time. The
Fund is not required to use all of the investment techniques and strategies
described below in seeking its goal. The Fund does not make investments with
the objective of seeking capital growth. However, the values of the
securities held by the Fund may be affected by changes in general interest
rates and other factors prior to their maturity. Because the current value of
debt securities varies inversely with changes in prevailing interest rates,
if interest rates increase after a security is purchased, that security will
normally fall in value. Conversely, should interest rates decrease after a
security is purchased, normally its value will rise.

      However, those fluctuations in value will not generally result in
realized gains or losses to the Fund unless the Fund sells the security prior
to the security's maturity. A debt security held to maturity is redeemable by
its issuer at full principal value plus accrued interest. The Fund does not
usually intend to dispose of securities prior to their maturity, but may do
so for liquidity purposes, or because of other factors affecting the issuer
that cause the Manager to sell the particular security. In that case, the
Fund could realize a capital gain or loss on the sale.

      There are variations in the credit quality of municipal securities,
both within a particular rating classification and between classifications.
These variations depend on numerous factors. The yields of municipal
securities depend on a number of factors, including general conditions in the
municipal securities market, the size of a particular offering, the maturity
of the obligation and rating (if any) of the issue. These factors are
discussed in greater detail below.

Municipal Securities. The types of municipal securities in which the Fund can
invest are described in the Prospectus under "About the Fund's Investments."
The Fund may from time to time invest in municipal securities other than New
York municipal securities. For example, to seek a higher yield, the Fund may
invest in municipal securities issued by other states and their respective
political subdivisions. Although any interest from these securities generally
would be exempt from federal income tax, any such interest may be subject to
New York State and New York City personal income tax. Nonetheless, the Fund
does not expect to invest a significant portion of its assets in securities
other than New York municipal securities.

      Municipal securities are generally classified as general obligation
bonds, revenue bonds and notes. A discussion of the general characteristics
of these principal types of municipal securities follows below.

      The Fund is "diversified" with respect to 75% of its total assets. That
means that as to 75% of its total assets, the Fund cannot invest more than 5%
of its net assets in the securities of any one issuer (other than the U.S.
government or its agencies and instrumentalities) and the Fund cannot own
more than 10% of an issuer's voting securities. In applying its
diversification policy with respect to the remaining 25% of its total assets
not covered by that diversification requirement, the Fund will not invest
more than 10% of its assets in the securities of any one issuer.

      |X|   Municipal Bonds. Long-term municipal securities (which have a
maturity of more than one year when issued) are classified as "municipal
bonds." The principal classifications of long-term municipal bonds are
"general obligation" and "revenue" bonds (including "industrial development"
bonds). They may have fixed, variable or floating rates of interest, as
described below, or may be "zero-coupon" bonds, as described below.

      Some bonds may be "callable," allowing the issuer to redeem them before
their maturity date. To protect bondholders, callable bonds may be issued
with provisions that prevent them from being called for a period of time.
Typically, that is five to 10 years from the issuance date. When interest
rates decline, if the call protection on a bond has expired, it is more
likely that the issuer may call the bond. If that occurs, the Fund might have
to reinvest the proceeds of the called bond in bonds that pay a lower rate of
return. In turn, that could reduce the Fund's yield.

o     General Obligation Bonds. The basic security behind general obligation
bonds is the issuer's pledge of its full faith and credit and taxing, if any,
power for the repayment of principal and the payment of interest. Issuers of
general obligation bonds include states, counties, cities, towns, and
regional districts. The proceeds of these obligations are used to fund a wide
range of public projects, including construction or improvement of schools,
highways and roads, and water and sewer systems. The rate of taxes that can
be levied for the payment of debt service on these bonds may be limited or
unlimited. Additionally, there may be limits as to the rate or amount of
special assessments that can be levied to meet these obligations.

o     Revenue Bonds. The principal security for a revenue bond is generally
the net revenues derived from a particular facility, group of facilities, or,
in some cases, the proceeds of a special excise tax or other specific revenue
source. Revenue bonds are issued to finance a wide variety of capital
projects. Examples include electric, gas, water and sewer systems; highways,
bridges, and tunnels; port and airport facilities; colleges and universities;
and hospitals.

      Although the principal security for these types of bonds may vary from
bond to bond, many provide additional security in the form of a debt service
reserve fund that may be used to make principal and interest payments on the
issuer's obligations. Housing finance authorities have a wide range of
security, including partially or fully insured mortgages, rent subsidized
and/or collateralized mortgages, and/or the net revenues from housing or
other public projects. Some authorities provide further security in the form
of a state's ability (without obligation) to make up deficiencies in the debt
service reserve fund.

o     Industrial Development Bonds. Industrial development bonds are
considered municipal bonds if the interest paid is exempt from federal income
tax. They are issued by or on behalf of public authorities to raise money to
finance various privately operated facilities for business and manufacturing,
housing, sports, and pollution control. These bonds may also be used to
finance public facilities such as airports, mass transit systems, ports, and
parking. The payment of the principal and interest on such bonds is dependent
solely on the ability of the facility's user to meet its financial
obligations and the pledge, if any, of real and personal property financed by
the bond as security for those payments.


      The Fund will purchase industrial revenue bonds only if the interest
paid on the bonds is tax-exempt under the Internal Revenue Code. The Internal
Revenue Code limits the types of facilities that may be financed with
tax-exempt industrial revenue bonds and private-activity bonds (discussed
below) and the amounts of these bonds that each state can issue.

      The Fund will not invest more than 5% of its total assets in industrial
development bonds for which the underlying credit is one business or one
charitable entity. Additionally, the Fund will not invest more than 5% of its
total assets insecurities for which industrial users having less than three
years' operating history are responsible for the payments of interest and
principal on the securities.

o     Private Activity Municipal Securities. The Tax Reform Act of 1986 (the
"Tax Reform Act") reorganized, as well as amended, the rules governing tax
exemption for interest on certain types of municipal securities. The Tax
Reform Act generally did not change the tax treatment of bonds issued in
order to finance governmental operations. Thus, interest on general
obligation bonds issued by or on behalf of state or local governments, the
proceeds of which are used to finance the operations of such governments,
continues to be tax-exempt. However, the Tax Reform Act limited the use of
tax-exempt bonds for non-governmental (private) purposes. More stringent
restrictions were placed on the use of proceeds of such bonds. Interest on
certain private activity bonds is taxable under the revised rules. There is
an exception for "qualified" tax-exempt private activity bonds, for example,
exempt facility bonds including certain industrial development bonds,
qualified mortgage bonds, qualified Section 501(c)(3) bonds, and qualified
student loan bonds.

      In addition, limitations as to the amount of private activity bonds
which each state may issue were revised downward by the Tax Reform Act, which
will reduce the supply of such bonds. The value of the Fund's portfolio could
be affected if there is a reduction in the availability of such bonds.

      Interest on certain private activity bonds issued after August 7, 1986,
which continues to be tax-exempt, will be treated as a tax preference item
subject to the alternative minimum tax (discussed below) to which certain
taxpayers are subject. The Fund may hold municipal securities the interest on
which (and thus a proportionate share of the exempt-interest dividends paid
by the Fund) will be subject to the federal alternative minimum tax on
individuals and corporations.

      The federal alternative minimum tax is designed to ensure that all
persons who receive income pay some tax, even if their regular tax is zero.
This is accomplished in part by including in taxable income certain tax
preference items that are used to calculate alternative minimum taxable
income. The Tax Reform Act made tax-exempt interest from certain private
activity bonds a tax preference item for purposes of the alternative minimum
tax on individuals and corporations. Any exempt-interest dividend paid by a
regulated investment company will be treated as interest on a specific
private activity bond to the extent of the proportionate relationship the
interest the investment company receives on such bonds bears to all its
exempt interest dividends.

      In addition, corporate taxpayers subject to the alternative minimum tax
may, under some circumstances, have to include exempt-interest dividends in
calculating their alternative minimum taxable income. That could occur in
situations where the "adjusted current earnings" of the corporation exceeds
its alternative minimum taxable income.
      To determine whether a municipal security is treated as a taxable
private activity bond, it is subject to a test for: (a) a trade or business
use and security interest, or (b) a private loan restriction. Under the trade
or business use and security interest test, an obligation is a private
activity bond if: (i) more than 10% of the bond proceeds are used for private
business purposes and (ii) 10% or more of the payment of principal or
interest on the issue is directly or indirectly derived from such private use
or is secured by the privately used property or the payments related to the
use of the property. For certain types of uses, a 5% threshold is substituted
for this 10% threshold.

      The term "private business use" means any direct or indirect use in a
trade or business carried on by an individual or entity other than a state or
municipal governmental unit. Under the private loan restriction, the amount
of bond proceeds that may be used to make private loans is limited to the
lesser of 5% of the proceeds or $5.0 million. Thus, certain issues of
municipal securities could lose their tax-exempt status retroactively if the
issuer fails to meet certain requirements as to the expenditure of the
proceeds of that issue or the use of the bond-financed facility. The Fund
makes no independent investigation of the users of such bonds or their use of
proceeds of the bonds. If the Fund should hold a bond that loses its
tax-exempt status retroactively, there might be an adjustment to the
tax-exempt income previously distributed to shareholders.

      Additionally, a private activity bond that would otherwise be a
qualified tax-exempt private activity bond will not, under Internal Revenue
Code Section 147(a), be a qualified bond for any period during which it is
held by a person who is a "substantial user" of the facilities or by a
"related person" of such a substantial user. This "substantial user"
provision applies primarily to exempt facility bonds, including industrial
development bonds. The Fund may invest in industrial development bonds and
other private activity bonds. Therefore, the Fund may not be an appropriate
investment for entities which are "substantial users" (or persons related to
"substantial users") of such exempt facilities. Those entities and persons
should consult their tax advisors before purchasing shares of the Fund.

      A "substantial user" of such facilities is defined generally as a
"non-exempt person who regularly uses part of a facility" financed from the
proceeds of exempt facility bonds. Generally, an individual will not be a
"related person" under the Internal Revenue Code unless such individual or
the individual's immediate family (spouse, brothers, sisters and immediate
descendants) own directly or indirectly in the aggregate more than 50% in
value of the equity of a corporation or partnership which is a "substantial
user" of a facility financed from the proceeds of exempt facility bonds.

      |X|   Municipal Notes. Municipal securities having a maturity (when the
security is issued) of less than one year are generally known as municipal
notes. Municipal notes generally are used to provide for short-term working
capital needs. Some of the types of municipal notes the Fund can invest in
are described below.

o     Tax Anticipation Notes. These are issued to finance working capital
needs of municipalities. Generally, they are issued in anticipation of
various seasonal tax revenue, such as income, sales, use or other business
taxes, and are payable from these specific future taxes.

o     Revenue Anticipation Notes. These are notes issued in expectation of
receipt of other types of revenue, such as federal revenues available under
federal revenue-sharing programs.
o     Bond Anticipation Notes. Bond anticipation notes are issued to provide
interim financing until long-term financing can be arranged. The long-term
bonds that are issued typically also provide the money for the repayment of
the notes.

o     Construction Loan Notes. These are sold to provide project construction
financing until permanent financing can be secured. After successful
completion and acceptance of the project, it may receive permanent financing
through public agencies, such as the Federal Housing Administration.

o     Miscellaneous, Temporary and Anticipatory Instruments. These
instruments may include notes issued to obtain interim financing pending
entering into alternate financial arrangements such as receipt of anticipated
federal, state or other grants or aid, passage of increased legislative
authority to issue longer term instruments or obtaining other refinancing.

      |X|   Municipal Lease Obligations. The Fund's investments in municipal
lease obligations may be through certificates of participation that are
offered to investors by public entities. Municipal leases may take the form
of a lease or an installment purchase contract issued by a state or local
government authority to obtain funds to acquire a wide variety of equipment
and facilities.

      Some municipal lease securities may be deemed to be "illiquid"
securities. If they are illiquid, their purchase by the Fund will be subject
to the percentage limitations on the Fund's investments in illiquid
securities described in the Prospectus and below in "Illiquid and Restricted
Securities." The Fund may not invest more than 5% of its net assets in
unrated or illiquid municipal lease obligations. That limitation does not
apply to a municipal lease obligation that the Manager has determined to be
liquid under guidelines set by the Board of Trustees and that has received an
investment grade rating from a nationally-recognized rating organization .

      Those Board guidelines require the Manager to evaluate, among other
things:
o     the frequency of trades and price quotations for the obligation;
o     the number of dealers willing to purchase or sell the securities and
         the number of potential buyers;
o     the willingness of dealers to undertake to make a market in the
         obligation;
o     the nature of the marketplace trades for the securities;
o     the likelihood that the marketability of the obligation will continue
         while the Fund owns it; and
o     the likelihood that the municipality will continue to appropriate
         funding for the leased property.

      Municipal leases have special risk considerations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation is
ordinarily backed by the municipality's covenant to budget for, appropriate
and make the payments due under the lease obligation. However, certain lease
obligations contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease or installment purchase payments
in future years unless money is appropriated for that purpose on a yearly
basis. While the obligation might be secured by the lease, it might be
difficult to dispose of that property in case of a default.
      To reduce the risk of "non-appropriation," the Fund will not invest
more than 10% of its total assets in municipal leases that contain
"non-appropriation" clauses. Also, the Fund will invest in leases with
non-appropriation clauses only if certain conditions are met:

o     the nature of the leased equipment or property is such that its
         ownership or use is essential to a governmental function of a
         municipality,
o     appropriate covenants are obtained from the municipal obligor
         prohibiting the substitution or purchase of similar equipment if
         lease payments are not appropriated,
o     the lease obligor has maintained good market acceptability in the past,
o     the investment is of a size that will be attractive to institutional
         investors, and
o     the underlying leased equipment has elements of portability and/or use
         that enhance its marketability if foreclosure is ever required on
         the underlying equipment.

      Municipal leases may be subject to an "abatement" risk. The leases
underlying certain municipal lease obligations may state that lease payments
are subject to partial or full abatement. That abatement might occur, for
example, if material damage or destruction of the leased property interferes
with the lessee's use of the property. In some cases that risk might be
reduced by insurance covering the leased property, or by the use of credit
enhancements such as letters of credit to back lease payments, or perhaps by
the lessee's maintenance of reserve funds for lease payments.

      Projects financed with certificates of participation generally are not
subject to state constitutional debt limitations or other statutory
requirements that may apply to other municipal securities. Payments by the
public entity on the obligation underlying the certificates are derived from
available revenue sources. That revenue might be diverted to the funding of
other municipal service projects. Payments of interest and/or principal with
respect to the certificates are not guaranteed and do not constitute an
obligation of a state or any of its political subdivisions.

      In addition, municipal lease securities do not have as highly liquid a
market as conventional municipal bonds. Municipal leases, like other
municipal debt obligations, are subject to the risk of non-payment of
interest or repayment of principal by the issuer. The ability of issuers of
municipal leases to make timely lease payments may be adversely affected in
general economic downturns and as relative governmental cost burdens are
reallocated among federal, state and local governmental units. A default in
payment of income would result in a reduction of income to the Fund. It could
also result in a reduction in the value of the municipal lease and that, as
well as a default in repayment of principal, could result in a decrease in
the net asset value of the Fund. While the Fund holds these securities, the
Manager will evaluate their credit quality and the likelihood of a continuing
market for them.

      Subject to the foregoing percentage limitations on investments in
Illiquid Securities, the Fund may invest in a tax-exempt lease only if the
following requirements are met:
o     the Fund must receive the opinion of issuer's legal counsel that the
         tax-exempt obligation will generate interest income that is exempt
         from federal and New York State income taxes; that legal counsel
         must be experienced in municipal lease transactions;
o     the Fund must receive an opinion that, as of the effective date of the
         lease or at the date of the Fund's purchase of the obligation (if
         that occurs on a date other than the effective date of the lease),
         the lease is the valid and binding obligation of the governmental
         issuer;
o     the Fund must receive an opinion of issuer's legal counsel that the
         obligation has been issued in compliance with all applicable federal
         and state securities laws;
o     the Manager must perform its own credit analysis in instances where a
         credit rating has not been provided for the lease obligation by a
         national rating agency;
o     if a particular exempt obligation is unrated and, in the opinion of the
         Manager, not of investment- grade quality, then at the time the Fund
         makes the investment the Manager must include the investment within
         the Fund's illiquid investments; it will also be subject to the
         Fund's overall limitation on investments in unrated tax-exempt
         leases.

      Municipal lease obligations are generally not rated by rating
organizations. In those cases the Manager must perform its own credit
analysis of the obligation. In those cases, the Manager generally will rely
on current information furnished by the issuer or obtained from other sources
considered by the Manager to be reliable.


      |X|   Credit Ratings of Municipal Securities. Ratings by ratings
organizations such as Moody's Investors Service ("Moody's"), Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.
("Standard and Poor's") and Fitch, Inc. ("Fitch"), represent the respective
rating agency's opinions of the credit quality of the municipal securities
they undertake to rate. However, their ratings are general opinions and are
not guarantees of quality. Credit ratings typically evaluate the safety of
municipal and interest payments, not market risk. Municipal securities that
have the same maturity, coupon and rating may have different yields, while
other municipal securities that have the same maturity and coupon but
different ratings may have the same yield.


      After the Fund buys a municipal security, it may cease to be rated or
its rating may be reduced below the minimum required to enable the Fund to
buy it. Neither event requires the Fund to sell a security, but the Manager
will consider those events in determining whether the Fund should continue to
hold that security. If ratings given by Moody's, Standard & Poor's, or
another rating organization change as a result of changes in those rating
organizations or their rating systems, the Fund will attempt to use
comparable ratings as standards for investments in accordance with the Fund's
investment policies.

      The Fund may buy municipal securities that are "pre-refunded." The
issuer's obligation to repay the principal value of the security is generally
collateralized with U.S. government securities placed in an escrow account.
This causes the pre-refunded security to have essentially the same risks of
default as a "AAA"-rated security.

      The rating definitions of Moody's, Standard & Poor's and Fitch
municipal securities are contained in Appendix A to this Statement of
Additional Information. The Fund can purchase securities that are unrated by
nationally-recognized rating organizations. The Manager will make its own
assessment of the credit quality of unrated issues the Fund buys. The Manager
will use criteria similar to those used by the rating agencies, and assign a
rating category to a security that is comparable to what the Manager believes
a rating agency would assign to that security. However, the Manager's rating
does not constitute a guarantee of the quality of a particular issue.


      In evaluating the credit quality of a particular security, whether it
is rated or unrated, the Manager will normally take into consideration a
number of factors. Among them are the financial resources of the issuer, or
the underlying source of funds for debt service on a security, the issuer's
sensitivity to economic conditions and trends, any operating history of the
facility financed by the obligation and the degree of community support for
it, the capabilities of the issuer's management and regulatory factors
affecting the issuer and the particular facility.


o     Special Risks of Lower-Grade Securities. Lower-grade securities,
commonly called "junk bonds," may offer higher yields than securities rated
in investment grade rating categories. In addition to having a greater risk
of default than higher-grade, securities, there may be less of a market for
these securities. As a result they may be more difficult to value and harder
to sell at an acceptable price. These additional risks mean that the Fund
might not receive the anticipated level of income from these securities, and
the Fund's net asset value could be affected by declines in the value of
lower-grade securities. However, because the added risk of lower-quality
securities might not be consistent with the portion of the Fund's objective
to seek preservation of capital, the Fund limits its investments in
lower-quality securities to not more than 25% of its tax-exempt investments
(including New York municipal securities).

      While securities rated "Baa" by Moody's or "BBB" by Standard & Poor's
or Fitch are considered investment grade, they may be subject to special
risks and have some speculative characteristics. The Fund will not invest
more than 5% of its net assets in the securities of any one issuer if the
securities are rated "B" or below by a national rating organization or are
given a comparable rating by the Manager.


Special Investment Considerations - New York Municipal Securities.  As
explained in the Prospectus, the Fund's investments are highly sensitive to
the fiscal stability of New York State (referred to in this section as the
"State") and its subdivisions, agencies, instrumentalities or authorities,
including New York City (the "City"), which issue the municipal securities in
which the Fund invests.  The following information on risk factors in
concentrating in New York municipal securities is only a summary, based on
the State's Annual Information Statement dated June 3, 2002 and the update
thereto dated
publicly-publicly-publicly-publicly-publicly-publicly-publicly-publicly-February
3, 2003, and on publicly-available official statements relating to offerings
by issuers of New York municipal securities on or prior to February 11, 2002
with respect to offerings of New York State, and on or prior to 2001November
6, 20012002 with respect to offerings by the City.  No representation is made
as to the accuracy of this information.


      During the mid-1970's the State, some of its agencies,
instrumentalities and public benefit corporations (the "Authorities"), and
certain of its municipalities faced serious financial difficulties. To
address many of these financial problems, the State developed various
programs, many of which were successful in reducing the financial crisis.
Any further financial problems experienced by these Authorities or
municipalities could have a direct adverse effect on the New York municipal
securities in which the Fund invests.


      Factors Affecting Investments in New York State Securities.  andOn
January 29, 2003, the Governor Pataki submitted the 2003-04 Executive Budget
("Executive Budget") including a revised Financial Plan for 2002-03 (the
"2002-03 Financial Plan") and new Financial Plans for 2003-04 through 2005-06
(together with the 2002-03 Financial Plan, collectively, the "State Financial
Plan").

      New York is the third most populous state in the nation and has a
relatively high level of personal wealth.  The State's economy is diverse,
with a comparatively large share of the nation's finance, insurance,
transportation, communications and services employment, and a very small
share of the nation's farming and mining activity.  The State's location and
its air transport facilities and natural harbors have made it an important
link in international commerce.  Travel and tourism constitute an important
part of the economy. on Like the rest of the nation, New York has a declining
proportion of its workforce engaged in manufacturing, and an increasing
proportion engaged in service industries.

Relative to the nation, the State has a smaller share of manufacturing and
construction and a larger share of service-related industries.  The State's
afinancial, insurance, and real estate share, as measured by wages, is
particularly large relative to the nation.  The State has projected that it
is likely to be less affected than the year.nation as a whole during an
economic recession that is concentrated in manufacturing and construction,
but likely to be more affected by any economic downturn that is concentrated
in the services sector.

      The State reported that the New York economy has suffered more than the
nation as a whole during the recession, due to the September 11 devastation
of downtown New York City and the importance of the finance and tourism
industries to the State economy.  Only recently have there been signs of an
economic turnaround.  Total State employment was expected to rise 0.7 percent
in 2003, following a decline of 1.6 percent for 2002.  Private sector
employment was expected to rise 0.9 percent in 2003, following a decline of
2.1 percent for 2002.  The State reported that bonus payments paid to
financial services workers have been reduced significantly due to the
recession and the steep decline in the stock market.  On a calendar year
basis, bonuses were estimated to have fallen 23.0 percent for 2002, followed
by a 10.2 percent decline projected for 2003.  In the aftermath of the
bursting of the stock market bubble, it was expected that for the next two
years bonuses in the finance and insurance sector would remain at about
one-half of their 2001 peak level.  Wages were expected to rise 2.3 percent
in 2003, following a decline of 3.2 percent for 2002.  Total State personal
income was projected to increase 3.1 percent in 2003.

      Although the national economic recovery weakened substantially toward
the end of 2002, the New York State Division of the Budget ("DoB") expected
the national economy to continue to expand throughout 2003, with some
acceleration of growth in the second half of the year. Real U.S. GDP was
expected to grow at an annual rate of 2.4 percent in 2003, the same rate as
in 2002.  In an effort to provide additional stimulus to the economy, the
Federal Reserve reduced interest rates by 50 basis points in November 2002,
for a total reduction since the pre-recession peak of 525 basis points.  This
has resulted in the lowest short-term interest rates since the early 1960s.
In addition, a number of federal fiscal initiatives were expected to provide
additional stimulus.  These monetary and fiscal actions were expected to
provide insurance against a double dip recession.  By the second half of
2003, an expected revival of investment
spending might increase the GDP growth rate.  An expected improving economy,
along with higher oil prices, could result in higher inflation.  The CPI was
expected to rise by 2.4 percent in 2003, after an increase of 1.6 percent in
2002.  The unemployment rate was expected to average 5.8 percent in 2003.

      The State reported that it had been facing a potential $2.2 billion
shortfall in the 2002-03 Financial Plan but believed that proposals in the
Executive Budget would close the entire shortfall.  The State explained that
it faced $2.1 billion in lower-than-projected 2002-03 receipts including $1.9
billion in personal income taxes and $320 million in business taxes, offset
by higher-than-projected receipts of $83 million in all other categories.  In
addition, before savings actions commenced by the Governor, the projected
increase in spending would have been roughly $100 million more than expected,
primarily in higher costs for Medicaid ($100 million), the World Trade Center
($51 million), the Tuition Assistance Program ($33 million), and the Early
Intervention Program ($30 million), partially offset by lower than expected
spending in fringe benefit costs ($71 million) and in a variety of other
programs ($20 million).

      Nearly $700 million in savings were projected from efforts begun
earlier in 2003 to reduce costs.  This included stringent controls on
operations including a 5 percent reduction in State agency spending,
aggressive use of the targeted retirement incentive plan, and federal
maximization efforts ($328 million).  In addition, prudent debt management
actions, including efforts to take advantage of record-low interest rates and
refinance high-cost State debt, were expected to lower debt service costs
($364 million).

      To avoid disruptive mid-2003 reductions to school aid and other
programs, the Governor was reported to be seeking authorization to securitize
the State's share of receipts from the tobacco manufacturer Master Settlement
Agreement.  Roughly $1.5 billion of the first $1.9 billion installment would
be used to help balance the State Financial Plan in 2002-03 in a manner that
would permit an orderly transition to recurring structural budget balance.
The remainder would be reserved for use in 2003-04.

      The State reported most significant short-term risk to the State
Financial Plan is that the Legislature will fail to enact legislation
authorizing the State to securitize its tobacco settlement payments as
recommended in the Governor's Executive Budget.  If the Legislature does not
act on this legislation promptly, the State will need to take other actions
to increase receipts or decrease disbursements (e.g., delay certain payments
to end the 2002-03 fiscal year in balance).  Any payment delay would both add
to 2003-04 costs and create additional constraints on an already tight
2003-04 cashflow projection.  There can be no assurance that the budget
finally enacted by the Legislature will not differ materially and adversely
from the projections described in the State Financial Plan.

      In every year, many uncertainties exist in the forecast of the national
and State economies.  Two variables which stand out as being particularly
vulnerable to financial market volatility, and which are closely associated
with State personal income tax receipts, are finance sector bonus income and
capital gains realizations.  Historically, financial sector bonus income has
been closely tied to security firm profits.  Both bonus income and capital
gains realizations have historically been subject to a high degree of
variation.  Also, the United States Congress is expected to consider several
economic stimulus packages during the winter of 2003.  Several proposals
could have a detrimental impact on New York State income receipts.

      The State reported several significant risks that could adversely
affect the U.S. economic recovery or perhaps even derail it and put the
nation back into recession. By far the greatest is the risk of another
terrorist attack, or series of attacks, that could lead to a steep decline in
consumer confidence and spending, as well as a postponement of investment
plans by businesses.  Similarly, a conflict in Iraq carries the potential for
a large spike of some duration in oil prices as well as a sharp drop in
consumer sentiment and business confidence.

      Consumer spending remained relatively strong during the recession,
resulting in little pent-up demand.  If job growth is inadequate, or if
declines in the value of homes or financial assets too pronounced, or if
consumer sentiment should deteriorate, then consumer spending growth could
quickly fall.  Businesses may be reluctant to increase investment spending if
demand for their products and services remains weak or if geopolitical risks
seem too large.  Although the federal government has adopted an expansionary
policy stance, state and local governments are raising taxes and cutting back
on spending. On balance, total government spending could be weaker than
projected, reducing overall growth.
      Financial market performance also impacts the level of contributions
required for the pension funds.  The Executive Budget assumed that the
State's 2003-04 pension contribution would be toward the lower end of the
range of contributions provided by the Comptroller.  To the extent that the
required contribution is greater than such amount, the State would be
required by law to pay the deficiency, with interest, by the second fiscal
year following such underpayment.

      An ongoing risk to the State Financial Plan arises from the potential
impact of certain litigation and federal disallowances now pending against
the State, which could produce adverse effects on the State's projections of
receipts and disbursements.  The State Financial Plan assumes no significant
federal disallowances or other federal actions that could adversely affect
State finances.

|X|   The 2002-03 Fiscal Year.  The updated 2002-03 Financial Plan estimated
that General Fund (the major operating Fund of the State) receipts, including
transfers from other funds and tobacco securitization proceeds, would total
$39.94 billion in 2002-03, a decrease of $1.21 billion from the 2001-02
fiscal year.  General Fund receipts were projected to be $40 million above
mid-year projections.  Due largely to an accounting change by the State
Comptroller regarding the treatment of the Revenue Bond Tax Fund (RBTF), tax
receipts were expected to decline by $8.85 billion from 2001-02 and were
$6.56 billion below mid-year estimates.  The significant year-over-year
decline and the large revision in the estimates was attributed to continued
weakness in the economy, the multi-year impact of the September 11 attack on
the financial services sector, and the associated decline in equity markets.
The estimated impact of the World Trade Center disaster on 2002-03 receipts
remained significant, and within the range estimated in the immediate
aftermath of the September 11 attacks.

      The revisions in the estimates also reflected more up-to-date
information on the economy and tax collections.  Tax collection results were
reported to be much worse than mid-year projections and have led to
significant downward revisions to the receipts estimates, especially for
personal income and business taxes.

      After RBTF deposits, personal income tax receipts for 2002-03 were
estimated to reach $17.18 billion, a decrease of $8.67 billion (33.5 percent)
from 2001-02.  This was attributed primarily to a $4.31 billion deposit into
the RBTF, a large decrease in the net contribution from the Refund Reserve
fund, and decreases in withholding, estimated tax, and 2001 tax year
settlement payments.  Underlying income tax collections, measured by gross
payments minus refunds, were expected to decline by $2.67 billion (10.4
percent) from 2001-02 and $1.82 billion from mid-year projections.  The large
downward revision in the estimate was attributed to the significant decline
in December 2002 payments and continued weakness in the financial services
sector.

      User tax and fee receipts in 2002-03 were projected at $7.05 billion,
$46 million or 0.7 percent below 2001-02 collections and $53 million below
mid-year projections.  The decline from 2001-02 was attributed to the
increased dedication of motor vehicle fees, auto rental tax, and cigarette
tax receipts to other funds, as well as declines in cigarette consumption
($227 million).  These declines were partially offset by an increase in sales
tax and alcohol-related receipts of $181 million.

      Total business taxes were projected at $3.52 billion in 2002-03, $94
million below
2001-02 receipts.  Corporation and utility tax receipts in 2002-03 were
expected to total
$868 million, a decrease of $104 million from 2001-02.  Business tax receipts
were estimated at $320 million below mid-year projections, largely due to a
more prolonged weakness in corporate earnings than anticipated and December
collection results.

      The yield from other taxes in 2002-03 were estimated at $761 million,
$42 million below 2001-02 results.  The estimated decline was attributed to
year-to-date collection results in the estate tax, the first full-year impact
of prior year tax reductions, and the impact of the decline in equity market
values on taxable estates.

      Miscellaneous receipts for 2002-03 were estimated at $4.09 billion, a
$2.46 billion increase from 2001-02.  The main increases, other than the
$1.90 billion in tobacco proceeds, are in abandoned property ($300 million
from sales of securities); payments from authorities ($287 million); bond
issuance charges ($158million); three large fines ($87 million); and the
wireless surcharge ($38 million).  The largest decrease is in investment
income ($285 million).

      Transfers from other funds in 2002-03 were estimated at $7.34 billion,
an increase of $5.19 billion from 2001-02, reflecting changes in amounts
available for transfer to the General Fund.  Transfers from other funds are
now estimated at $4.66 billion above mid-year projections.  The increase
reflects better-than-anticipated year-to-date collection experience for the
sales and real estate transfer taxes, as well as a reduction in debt service
requirements from the Thruway Authority, and the Comptroller's classification
of the Revenue Bond Tax Fund.

      The State projects total General Fund disbursements, including
transfers to other funds, of $39.79 billion in 2002-03, a net decrease of
$266 million from restated mid-year projections.  This reflects the lower
spending associated with the aggressive savings efforts begun earlier this
year and reestimates in General State Charges and other programs ($91
million), partially offset by higher costs primarily related to Medicaid
($100 million), the World Trade Center ($51 million), the Tuition Assistance
Program ($33 million), and the Early Intervention Program ($30 million). In
addition, lower spending is reflected for the Community Projects Fund ($75
million), which was projected to occur in 2003-04 rather than 2002-03.

      Reserves and closing balances in the General Fund had been at healthy
levels as a result of seven consecutive maximum deposits to the Tax
Stabilization Reserve Fund (the State's rainy day fund) and significant
additional deposits made to other State reserve funds in recent years.  These
reserves included the Contingency Reserve Fund (a litigation reserve),
reserves set aside for revenue losses resulting from the World Trade Center
attacks, a reserve for economic uncertainties, and a reserve to fund the
multi-year STAR property tax cut.  Most of these reserves have now been used
to help maintain budget balance in the General Fund since September 11,
2001.  The rainy day fund remains available to protect against unanticipated
mid-year shortfalls.  The closing balance in the General Fund is projected to
total $1.18 billion, including $710
million in the rainy day fund, $378 million in tobacco securitization
reserves, $20 million in the Contingency Reserve Fund, and $75 million in the
Community Projects Fund. The closing balance of $1.18 billion at the end of
the 2002-03 fiscal year is an increase of $467 million from mid-year
projections.  This increase includes $378 million from the securitization of
tobacco (reserved for use in 2003-04), $75 million from slower spending in
the Community Projects Fund (which pays for legislative and gubernatorial
initiatives), and $14 million in additional moneys deposited into the
Contingency Reserve Fund.

o     State Governmental Funds Group.  Substantially all State non-pension
financial operations are accounted for in the State's governmental funds
group.  Governmental funds include the following four fund types, the State's
projections of receipts and disbursements in which comprise the State's
Financial Plan:

      o     the General Fund,  which is the major  operating fund of the State
      and receives  all receipts  that are not required by law to be deposited
      in another  fund,  including  most State tax receipts and certain  fees,
      transfers  from  other  funds  and  miscellaneous  receipts  from  other
      sources;
      o     Special Revenue Funds,  which account for the proceeds of specific
      revenue  sources  (other  than   expendable   trusts  or  major  capital
      projects),  such as  federal  grants,  that are  legally  restricted  to
      specified purposes;
            o  Capital Projects Funds, which account for financial resources
               of the State to be used for the acquisition or construction of
               major capital facilities (other than those financed by Special
               Revenue Funds, Proprietary Funds and Fiduciary Funds); and
      o     Debt  Service  Funds,   which  account  for  the  accumulation  of
      resources  (including receipts from certain taxes,  transfers from other
      funds and  miscellaneous  revenues,  such as dormitory room rental fees,
      which are  dedicated by statute for payment of  lease-purchase  rentals)
      for the payment of general  long-term debt service and related costs and
      payments  under  lease-purchase  and  contractual-obligation   financing
      arrangements.


o     Local Government Assistance Corporation.  In 1990, as part of a State
fiscal reform program, legislation was enacted creating Local Government
Assistance Corporation (LGAC), a public benefit corporation empowered to
issue long-term obligations to fund payments to local governments that had
been traditionally funded through the State's annual seasonal borrowing.  o
The legislation also dedicated revenues equal to one percent of the four
percent State sales and use tax to pay debt service on these bonds.  As of
June 1995, As of June 1995, the corporation LGAC had issued bonds and notes
to provide net proceeds of $4.7 billion, completing the program.  Thehad
issued bonds and notes to provide net proceeds of $4.7 billion, completing
the program.  The issuance of these long-term obligations, which are to be
amortized over no more than 30 years, was expected to eliminate the need for
continued short-term seasonal borrowing.

      The legislation also imposed a limitation on the annual seasonal
borrowing of the State except in cases where the Governor and the legislative
leaders have certified the need for additional seasonal borrowing, based on
emergency or extraordinary factors or factors unanticipated at the time of
adoption of the budget, and provided a schedule for iteliminating it over
time.  Any seasonal borrowing is required by law to be eliminated by the
fourth fiscal year after the limit was first exceeded (i.e., no tax and
revenue anticipation note (TRAN) borrowing in the fifth year).  This
provision thelimiting the State's seasonal borrowing practices was included
as a covenant with corporation'sAs corporation'sAs of June 1995, the
corporationhad issued bonds and notes to provide net proceeds of $4.7
billion, completing the program. TheAs of June 1995, the corporationhad
issued bonds and notes to provide net proceeds of $4.7 billion, completing
the program. Theof June 1995, the corporationhad issued bonds and notes As of
June 1995, the corporationhad issued bonds and notes to provide net proceeds
of $4.7 billion, completing the program. Theto provide net proceeds of $4.7
billion, completing the program. TheLGAC's bondholders in the resolution
authorizing such As of June 1995, the corporationhad issued bonds and notes
to provide net proceeds of $4.7 billion, completing the program. Thebonds.As
of June 1995, the corporationhad issued bonds and notes to provide net
proceeds of $4.7 billion, completing the program. TheAs of June 1995, the
corporationhad issued bonds and notes to provide net proceeds of $4.7
billion, completing the program. The  No restrictions were placed upon the
State's ability to issue deficit notes.

      The impact of the LGAC reforms, as well as other changes in revenue and
spending patterns, is that the State has been able to meet its cash flow
needs throughout the fiscal year without relying on short-term seasonal
borrowings.

      Authorities.  The fiscal stability of the State is related to the
fiscal stability of its public Authorities.  Authorities refer to public
benefit corporations created pursuant to State law, other than local
authorities.  Authorities have various responsibilities, including those
which finance, construct and/or operate revenue-producing public facilities.
Authorities are not subject to the constitutional restrictions on the
incurrence of debt that apply to the State itself, and may issue bonds and
notes within the amounts and restrictions set forth in their legislative
authorization.  The State's access to the public credit markets could be
impaired and the market price of its outstanding debt may be materially and
adversely affected if any of its Authorities were to default on their
respective obligations, especially those involving State-supported or
State-related debt. As of December 31, 2001, there were 17 public authorities
that had outstanding debt of $100 million or more, and the aggregate
outstanding debt, including refunding bonds, of these State public
authorities was almost $101 billion, only a portion of which constitutes
State-supported or State-related debt.

      Authorities generally pay their operating expenses and debt service
costs from revenues generated by the projects they finance or operate, such
as tolls charged for the use of highways, bridges or tunnels, charges for
public power, electric and gas utility services, rentals charged for housing
units and charges for occupancy at medical care facilities.  In addition,
State legislation authorizes several financing techniques for Authorities.
There are statutory arrangements providing for State local assistance
payments otherwise payable to localities to be made under certain
circumstances to Authorities.  Although the State has no obligation to
provide additional assistance to localities whose local assistance payments
have been paid to Authorities under these arrangements, the affected
localities could seek additional State assistance if local assistance
payments are diverted.  Some Authorities also receive moneys from State
appropriations to pay for the operating costs of certain of their programs.

      |X|   Ratings of the State's Securities.  As of December 31, 2002,
Standard & Poor's has rated the State's general obligation bonds "AA,"
Moody's has rated those bonds "A2" and Fitch has rated those bonds "AA".


      Ratings reflect only the views of the ratings organizations, and an
explanation of the significance of a rating must be obtained from the rating
agency furnishing the rating.  There is no assurance that a particular rating
will continue for any given period of time or that any such rating will not
be revised downward or withdrawn entirely if, in the judgment of the agency
originally establishing the rating, circumstances so warrant. A downward
revision or withdrawal of a rating may have an effect on the market price of
the State and municipal securities in which the Fund invests.


      The State's General Obligation Debt.  As of March 31, 2002, the State
had approximately $4.1 billion in general obligation bonds outstanding.
Principal and interest due on general obligation bonds were $624 million for
the 2001-02 fiscal year and are estimated to be $605 million for the State's
2002-03 fiscal year.

      Pending Litigation.  The State is a defendant in numerous legal
proceedings pertaining to matters incidental to the performance of routine
governmental operations.  That litigation includes, but is not limited to,
claims asserted against the State involving State finances and programs and
arising from alleged violations of civil rights, alleged torts, alleged
breaches of contracts, real property proceedings and other alleged violations
of State and federal laws.  These proceedings could affect adversely the
financial condition of the State in the 2002-03 fiscal year or thereafter.

      The State believes that the proposed 2002-03 Financial Plan includes
sufficient reserves for the payment of judgments that may be required during
the 2002-03 fiscal year.  There can be no assurance, however, that an adverse
decision in any of these proceedings would not exceed the amount 2001-02of
all potential 2002-03 Financial Plan resources available for the payment of
judgments and, therefore, could affect the ability of the State to maintain a
balanced 2002-03 Financial Plan.

      In addition, the State is party to other claims and litigation that
either its legal counsel has advised are not probable that the State will
suffer adverse court decisions or the State has determined are not material.
Although the amounts of potential losses, if any, are not presently
determinable, it is the State's opinion that its ultimate liability in these
cases is not expected to have a material adverse effect on the State's
financial position in the 2002-03 fiscal year or thereafter.

      Other Functions.  Certain localities in addition to the City have
experienced financial problems and have requested and received additional
State assistance during the last several State fiscal years. The potential
impact on the State of any future requests by localities for additional
oversight or financial assistance is not included in the projections of the
State's receipts and disbursements for the State's 2002-03 fiscal year or
thereafter.


      Factors Affecting Investments in New York City Municipal Securities.
The City has a highly diversified economic base, with a substantial volume of
business activity in the service, wholesale and retail trade and
manufacturing industries and is the location of many securities, banking,
law, accounting, news media and advertising firms.


      The City is a major seaport and focal point for international
business.  Many of the major corporations headquartered in the City are
multinational in scope and have extensive foreign operations.  Numerous
foreign-owned companies in the United States are also headquartered in the
City.  These firms, which have increased in number substantially over the
past decade, are found in all sectors of the City's economy, but are
concentrated in trade, manufacturing sales offices, tourism and finance.  The
City is the location of the headquarters of the United Nations, and several
affiliated organizations maintain their principal offices in the City.  A
large diplomatic community exists in the City to staff the 186 missions to
the United Nations and the 96 foreign consulates.

      Economic activity in the City has experienced periods of growth and
recession and can be expected to experience periods of growth and recession
in the future. toThe City experienced a recession in the early 1970s through
the middle of that decade, followed by a period of expansion in the late
1970s through the late 1980s.  The City fell into recession again in the
early 1990s which was followed by an expansion that lasted until 2001.  The
City's financial plan assumes negative economic growth during the latter half
of calendar year 2001 through the first half of calendar year 2002 as a
result of the September 11 attack and the national economic recession.  The
City's financial plan assumes that the City's economy will begin a slow
recovery around the middle of calendar year 2002.

      The City expects total expenditures for recovery, clean up and repair
efforts in the wake of the September 11, 2001 terrorist attacks on the World
Trade Center to be substantial.  The federal government has committed over
$21 billion for disaster assistance in New York, including disaster recovery
and related activities, values.increased security and reconstruction of
infrastructure and public facilities.  This amount includes approximately
$15.5 billion of appropriations for costs such as cleanup, economic
development, job training, transit improvements, road reconstruction and
grants to residences and businesses in lower Manhattan.  It also includes
approximately $5.5 billion for economic stimulus programs directed primarily
at businesses located in the Liberty Zone, the area surrounding the World
Trade Center site.  These programs include expanding tax credits, increasing
depreciation deductions, authorizing the issuance of tax-exempt private
activity bonds and expanding authority to advance refund some bonds issued to
finance facilities in the City.

      The City is seeking to be reimbursed by the federal government for all
of its direct costs for response and remediation of the World Trade Center
site.  These costs are now expected to be substantially below previous
estimates.  The City also expects to receive federal funds for costs of
economic revitalization and other needs, not directly payable through the
City budget, relating to the September 11 attack.

      In addition, the State authorized the New York City Transitional
Finance Authority ("TFA") to have outstanding $2.5 billion of "Recovery
Bonds" and "Recovery Notes" to pay costs related to or arising from the
September 11 attack.  The City believes it is not possible to quantify at
present with any certainty the long-term impact of the September 11 attack on
the City and its economy, any economic benefits which may result from
recovery and rebuilding activities and the amount of additional resources
from Federal, State, City and other sources which will be required.

      For each of the 1981 through 2002 fiscal years, the City's General Fund
had an operating surplus, before discretionary and other transfers, and
achieved balanced operating results as reported in accordance with then
applicable generally accepted accounting principles ("GAAP") after
discretionary and other transfers.  The City has been required to close
substantial gaps between forecast revenues and forecast expenditures in order
to maintain balanced operating results. There can be no assurance that the
City will continue to maintain balanced operating results as required by
State law without tax or other revenue increases or reductions in City
services or entitlement programs, which could adversely affect the City's
economic base.

      The Mayor is responsible for preparing the City's financial plan,
including the City's financial plan for the 2003 through 2006 fiscal years
(referred to below as the "2003-2006 Financial Plan", or "FinancialPlan").

      Plan").  The City's projections set forth in the Financial Plan are
based on various assumptions and contingencies which are uncertain and which
may not materialize.

      Implementation of the Financial Plan is dependent upon the City's
ability to market its securities successfully.  Implementation of the
Financial Plan is also dependent upon the ability to market the securities of
the TFA, which issues debt secured by personal income tax and sales revenues;
TSASC, Inc., which issues debt secured by revenues derived from the
settlement of litigation with tobacco companies, and the New York City
Municipal Water Finance Authority ("Water Authority"), which issues debt
secured by water and sewer revenues.  The TFA and TSASC were created to
assist the City in financing its capital program while keeping City
indebtedness within the forecast level of the constitutional restrictions on
the amount of debt the City is authorized to incur.

      In addition, the City issues revenue and tax anticipation notes to
finance its seasonal working capital requirements.  The success of projected
public sales of City, "Water Authority", TFA, TSASC and other bonds and notes
will be subject to prevailing market conditions.  Future developments
concerning the City and public discussion of such developments, as well as
prevailing market conditions, may affect the market for outstanding City
general obligation bonds and notes.

      |X|   actions.The City's 2003-2006 Financial Plan.  For the 2001 and
2002 fiscal years, the City's General Fund had an operating surplus of $2.949
billion and $686 million, respectively, before discretionary and other
transfers, and achieved balanced operating results in accordance with GAAP,
after discretionary and other transfers.  The 2002 fiscal year was the
twenty-second consecutive year that the City had achieved an operating
surplus, before discretionary and other transfers, and balanced operating
results, after discretionary and other transfers.
      The Financial Plan for the 2003 through 2006 fiscal years, released on
June 26, 2002, projected that revenues and expenditures for the 2003 fiscal
year would be balanced in accordance with GAAP after $677 million of
discretionary and other transfers in fiscal year 2002 to pay debt services
and other payments due in fiscal year 2003, and projected gaps of $3.7
billion, $4.2 billion and $4.6 billion for fiscal years 2004 through 2006,
respectively.

      The Financial Plan reflected changes since the financial plan submitted
on June 13, 2001 (as amended, the "2001 Financial Plan") which decreased
projected net revenues and increased projected net expenditures.  Changes in
projected revenues included a decline in projected tax revenues of $1.1
billion, $1.0 billion and $963 million in fiscal years 2003 through 2005,
respectively, reflecting primarily decreases in projected personal income,
business and sales tax revenues as a result of the September 11 attack and
the national recession.  Changes in projected revenues also included
increased projected tax revenues in fiscal years 2003 through 2005 as a
result of not extending a previously enacted reduction in the personal income
tax 14% surcharge and a delay in the receipt of $250 million from the
proposed sale of the New York City Off-Track Betting Corporation ("OTB") from
fiscal year 2002 to fiscal year 2004.  Changes in projected expenditures
since the 2001 Financial Plan included:  increased pension costs for fiscal
years 2003 through 2005, resulting primarily from investment losses in fiscal
year 2001 and a reduction in projected investment gains in fiscal year 2002;
and an increase in labor costs in fiscal years 2003 through 2005, primarily
to reflect the cost of wage increases for the uniformed forces coalition
above the settlement with District Council 37 of the American Federation of
State, Municipal and County Employees and the settlement with the United
Federation of Teachers.  Changes in projected expenditures also included
increased expenditures in fiscal years 2003 through 2005 due to increased
agency spending, increased costs for health insurance and reimbursement of
eligible City retirees for Medicare Part B Premiums, increased costs for
settling claims against the City, increased education costs resulting from a
reduction in State aid, increased health and welfare spending primarily for
Medicaid and increased debt service costs in fiscal year 2005; and debt
service savings in fiscal years 2003 and 2004.

      The Financial Plan set forth gap-closing actions to eliminate a
previously projected gap for the 2003 fiscal year and to reduce projected
gaps for fiscal years 2004 through 2006.  The gap-closing actions for the
2003 through 2006 fiscal years included:  additional City-wide agency savings
and non-tax revenue actions for fiscal years 2003 through 2006; savings
resulting from a voluntary early retirement and severance program for fiscal
years 2003 through 2006; savings in fiscal years 2003 through 2006 resulting
from a fringe benefit cost containment program, of which approximately $252
million in fiscal year 2003 growing to approximately $444 million in fiscal
year 2006, has not yet been approved by unions representing City employees;
$1.5 billion of proceeds to be used in fiscal year 2003 from the issuance of
Recovery Bonds or Notes by the TFA to mitigate a portion of the lost tax
revenues in fiscal year 2003 related to the September 11 attack; additional
initiatives requiring Federal and State actions in fiscal years 2003 through
2006; and the sale of certain tax benefits in fiscal year 2003 for $100
million.

      The assumed decline in tax revenue growth reflects the September 11
attack and the national recession, which resulted in lower wage earnings,
lower securities sector profits and corporate earnings, local job losses of
approximately 100,000 and a disruption in tourism and related spending.
However, tax revenue projections do not reflect the continuing decline in
financial services sector profits and employee income subsequent to the
preparation of the Financial Plan as a result of falling equity values, which
is expected to result in revisions to tax revenue projections in future
modifications to the Financial Plan.  Tax revenue projections may also be
subject to additional revision in the future to reflect changes in the
economic forecast.  The Financial Plan assumed that the City's costs relating
to the September 11 attack would be paid in substantial part from federal aid
and funds provided by the TFA.  The Financial Plan also assumed collection of
projected rent payments for the City's airports in the 2003 through 2005
fiscal years, which depends on the successful completion of negotiations with
The Port Authority of New York and New Jersey or the enforcement of the
City's rights under the existing leases through pending legal actions; State
and federal approval of the State and Federal actions proposed by the City in
the Financial Plan; and the successful completion of the sale of OTB in 2004,
which will require State legislature approval.  The Financial Plan did not
make any provision for wage increases, other than the pay increases discussed
above for the contract period ending in fiscal year 2002.  Each 1% wage
increase for all city employees costs approximately $200 million annually.
The Financial Plan provided for increased pension contributions, commencing
in fiscal year 2003, based on estimated losses of 3% on investment returns in
fiscal year 2002.  The City expects pension costs to increase beyond the
levels provided in the Financial Plan in fiscal years 2003 through 2006 due
to a decline in investment returns of 5.35% below the levels provided in the
Financial Plan, partially offset in fiscal years 2003 and 2004 by changes in
actuarial methodologies.

      On July 18, 2002 the Mayor announced that he was directing the Office
of Management and Budget ("OMB") to reserve 7.5% of City-funded agency
spending, and on October 28, 2002, OMB directed certain City agencies to
identify additional savings aggregating 2% in fiscal year 2003 and 4% in
fiscal year 2004.  OMB is working with agency commissioners to implement a
program that accommodates these reductions by lowering City spending, or
identifying alternative revenue sources, in an aggregate amount of
approximately $1 billion annually starting in fiscal year 2003.  As a result
of the size of the projected gaps between forecast revenues and expenditures,
further revisions to the Financial Plan were expected to reflect substantial
additional revenue initiatives, including proposed increased taxes, which
will require City Council and/or State approval, and City proposals for
additional State and Federal assistance, to eliminate the projected gap for
fiscal year 2003 and to substantially reduce or eliminate the projected gap
for fiscal year 2004.

      The Financial Plan is based on numerous assumptions, including the
condition of the City's and the region's economies and the concomitant
receipt of economically sensitive tax revenues in the amounts projected.  The
Financial Plan is subject to various other uncertainties and contingencies
relating to, among other factors, the effects on the City economy of the
September 11 attack, the extent, if any, to which wage increases for City
employees exceed the annual wage costs assumed for the wages2003 through 2006
fiscal years; realization of projected interest earnings for pension fund
assets and assumptions with respect to wages for City issued.employees
affecting the City's required pension fund contributions; the willingness and
ability of the State to provide the aid contemplated by the Financial Plan
and to take various other actions to assist the City; the ability of the
Health and Hospitals Corporation, the Board of Education and other such
agencies to maintain balanced budgets; the willingness of the federal
government to provide the amount of federal aid contemplated in the Financial
Plan; the impact on City revenues and expenditures of Federal and State
welfare reform and any future legislation affecting Medicare or other
entitlement programs; adoption of the City's budgets by the City Council in
substantially the forms submitted by the Mayor; the ability of the City to
implement cost reduction initiatives, and the success with which the City
controls expenditures; the impact of conditions in the real estate market on
real estate tax revenues; the City's ability to market its securities
successfully in the public credit markets; and unanticipated expenditures
that may be incurred as a result of the need to maintain the City's
infrastructure.  Certain of these assumptions have been questioned by the
City Comptroller and other public officials.

      The City Comptroller and other agencies and public officials issue
periodic reports and make public statements regarding the City's financial
condition, commenting on, among other matters, the City's financial plans,
projected revenues and expenditures and actions by the City to eliminate
projected operating deficits.  Some of these reports and statements have
warned that the City may have underestimated certain expenditures and
overestimated certain revenues and have suggested that the City may not have
adequately provided for future contingencies.  Certain of these reports have
analyzed the City's future economic and social conditions and have questioned
whether the City has the capacity to generate sufficient revenues in the
future to meet the costs of its expenditure increases and to provide
necessary services.  It is reasonable to expect that reports and statements
will continue to be issued and to engender public comment.

      On July 16, 2002, the City Comptroller issued a report on the adopted
budget for fiscal year 2003.  In his report, the City Comptroller identified
approximately $1.1 billion, $5.1 billion, $5.3 billion and $5.6 billion in
risks to the Financial Plan for fiscal years 2003 through 2006, respectively,
including the gaps set forth in the Financial Plan for fiscal years 2004
through 2006.  The report noted that, with appropriate monitoring and
corrective action, fiscal year 2003 can be ended in balance.  However, the
report also noted that the projected gap for fiscal year 2004 is the largest
subsequent year gap ever projected by the City since the City achieved
compliance with GAAP in 1981.


      Various actions proposed in the Financial Plan are uncertain.  If these
measures cannot be implemented, the City will be required to take other
actions to decrease expenditures or increase revenues to maintain a balanced
financial plan.  In addition, the economic and financial condition of the
City may be affected by various financial, social, economic and other factors
which could have a material effect on the City.

      The projections and assumptions contained in the Financial Plan are
subject to revision which may involve substantial change, and no assurance
can be given that these estimates and projections, which include actions
which the City expects will be taken but which are not within the City's
control, will be realized.


      Ratings of the City's Bonds.  As of October 31, 2002, Moody's, Standard
& Poor's and Fitch rated the City's general obligations bonds A2, A and A+,
respectively.  These ratings reflect only the views of Moody's, Standard &
Poor's and Fitch from which an explanation of the significance of such
ratings may be obtained.  There is no assurance that those ratings will
continue for any given period of time or that they will not be revised
downward or withdrawn entirely.  Any downward revision or withdrawal could
have an adverse effect on the market prices of the City's bonds.  On July 16,
1998, Standard & Poor's revised its rating of City bonds to "A-" from "BBB+."
On September 13, 2000, Standard & Poor's revised its rating of City Bonds
upward to "A."  Moody's rating of City bonds was revised in August 2000 to
"A2" from "A3."  On November 15, 2001, Moody's issued a negative outlook on
City bonds.  On March 8, 1999, Fitch revised its rating of City bonds upward
to "A" from "A-" and on September 15, 2000, Fitch revised its rating to
"A+."

      The11,and and City's Outstanding Indebtedness.  As of June 30, 2002,
the City and the Municipal Assistance Corporation for the City of New York
had, respectively, $27.311 billion and $2.225 billion of outstanding net
long-term debt.

      For its normal operations, the City depends on aid from the State both
to enable the City to balance its budget and to meet its cash requirements.
There can be no assurance that there will not be reductions in State aid to
the City from the amountsoriginally projected; that State budgets in future
fiscal years will be adopted by the April 1 statutory deadline, or interim
appropriations will be enacted; or that any such reductions or delays will
not have adverse effects on the City's cash flow or expenditures.  In
addition the federal budget negotiation process could result in a reduction
or a delay in the receipt of federal grants which could have adverse effects
on the City's cash flow or revenues.  The City assumes that the costs
relating to the September 11 attack will be paid in substantial part from
federal aid and borrowings by the TFA.

|X|   Pending Litigation.  The City is a defendant in lawsuits pertaining to
material matters, including claims asserted that are incidental to performing
routine governmental and other functions. That litigation includes, but is
not limited to, actions commenced and claims asserted against the City
arising out of alleged constitutional violations, torts, breaches of
contract, and other violations of law and condemnation proceedings.  The City
has received approximately than 2,200 notices of claims totaling
approximately $12 billion relating to the September 11 attack.  While the
ultimate outcome and fiscal impact, if any, on the City of such proceedings
and claims arewere notcurrently predictable, adverse determinations in
certain of them might have a material adverse effect upon the City's ability
to carry out the Financial Plan.  For the fiscal year ended on June 30, 2002,
the City paid $521.8 million for judgments and claims.  Expenditures for
fiscal year 2002 are projected to reach $389.5 million.  The Financial Plan
includes provisions for the payment of judgments and claims of $418.9
million, $440.1 million, $468.6 million and $500.1 million for the 2003
through 2006 fiscal years, respectively.  As of June 30, 2002, the City
estimated its potential future liability for outstanding claims against it to
be approximately $4.3 billion.


Other Investment Techniques and Strategies. In seeking its objective, the
Fund may from time to time employ the types of investment strategies and
investments described below. It is not required to use all of these
strategies at all times, and at times may not use them.

      |X|   Floating Rate and Variable Rate Obligations. Variable rate demand
obligations may have a demand feature that allows the Fund to tender the
obligation to the issuer or a third party prior to its maturity. The tender
may be at par value plus accrued interest, according to the terms of the
obligations.

      The interest rate on a floating rate demand note is based on a stated
prevailing market rate, such as a bank's prime rate, the 91-day U.S. Treasury
Bill rate, or some other standard, and is adjusted automatically each time
such rate is adjusted. The interest rate on a variable rate note is also
based on a stated prevailing market rate but is adjusted automatically at
specified intervals of not less than one year. Generally, the changes in the
interest rate on such securities reduce the fluctuation in their market
value. As interest rates decrease or increase, the potential for capital
appreciation or depreciation is less than that for fixed-rate obligations of
the same maturity. The Manager may determine that an unrated floating rate or
variable rate obligation meets the Fund's quality standards by reason of the
backing provided by a letter of credit or guarantee issued by a bank that
meets those quality standards.

      Floating rate and variable rate demand notes that have a stated
maturity in excess of one year may have features that permit the holder to
recover the principal amount of the underlying security at specified
intervals not exceeding one year and upon no more than 30 days' notice. The
issuer of that type of note normally has a corresponding right in its
discretion, after a given period, to prepay the outstanding principal amount
of the note plus accrued interest. Generally the issuer must provide a
specified number of days' notice to the holder.

      |X|   Inverse Floaters and Other Derivative Investments. "Inverse
floaters" are municipal obligations on which the interest rates typically
fall as market rates increase and increase as market rates fall. Changes in
market interest rates or the floating rate of the security inversely affect
the residual interest rate of an inverse floater. As a result, the price of
an inverse floater will be considerably more volatile than that of a
fixed-rate obligation when interest rates change. The Fund can invest up to
20% of its total assets in inverse floaters. Certain inverse floaters may be
illiquid and therefore subject to the Fund's limitation on illiquid
securities.

      To provide investment leverage, a municipal issuer might decide to
issue two variable rate obligations instead of a single long-term, fixed-rate
bond. The interest rate on one obligation reflects short-term interest rates.
The interest rate on the other instrument, the inverse floater, reflects the
approximate rate the issuer would have paid on a fixed-rate bond, multiplied
by a factor of two, minus the rate paid on the short-term instrument. The two
portions may be recombined to create a fixed-rate bond. The Manager might
acquire both portions of that type of offering, to reduce the effect of the
volatility of the individual securities. This provides the Manager with a
flexible portfolio management tool to vary the degree of investment leverage
efficiently under different market conditions.

      Inverse floaters may offer relatively high current income, reflecting
the spread between short-term and long-term tax-exempt interest rates. As
long as the municipal yield curve remains relatively steep and short-term
rates remain relatively low, owners of inverse floaters will have the
opportunity to earn interest at above-market rates because they receive
interest at the higher long-term rates but have paid for bonds with lower
short-term rates. If the yield curve flattens and shifts upward, an inverse
floater will lose value more quickly than a conventional long-term bond. The
Fund might invest in inverse floaters to seek higher tax-exempt yields than
are available from fixed-rate bonds that have comparable maturities and
credit ratings. In some cases, the holder of an inverse floater may have an
option to convert the floater to a fixed-rate bond, pursuant to a "rate-lock"
option.

      Some inverse floaters have a feature known as an interest rate "cap" as
part of the terms of the investment. Investing in inverse floaters that have
interest rate caps might be part of a portfolio strategy to try to maintain a
high current yield for the Fund when the Fund has invested in inverse
floaters that expose the Fund to the risk of short-term interest rate
fluctuations. "Embedded" caps can be used to hedge a portion of the Fund's
exposure to rising interest rates. When interest rates exceed a
pre-determined rate, the cap generates additional cash flows that offset the
decline in interest rates on the inverse floater, and the hedge is
successful. However, the Fund bears the risk that if interest rates do not
rise above the pre-determined rate, the cap (which is purchased for
additional cost) will not provide additional cash flows and will expire
worthless.

      Inverse floaters are a form of derivative investment. Certain
derivatives, such as options, can be used to increase or decrease the Fund's
exposure to changing security prices, interest rates or other factors that
affect the value of securities. However, these techniques could result in
losses to the Fund, if the Manager judges market conditions incorrectly or
employs a strategy that does not correlate well with the Fund's other
investments. These techniques can cause losses if the counterparty does not
perform its promises. An additional risk of investing in municipal securities
that are derivative investments is that their market value could be expected
to vary to a much greater extent than the market value of municipal
securities that are not derivative investments but have similar credit
quality, redemption provisions and maturities.

      |X|   Options Transactions. The Fund can write (that is, sell) call
options. The Fund's call writing is subject to a number of restrictions:
(1)   Calls the Fund sells must be listed on a national securities exchange.
(2)   Each call the Fund writes must be "covered" while it is outstanding.
              That means the Fund must own the investment on which the call
              was written.
(3)   As an operating policy, no more than 5% of the Fund's net assets will
              be invested in options transactions.

      When the Fund writes a call on a security, it receives cash (a
premium). The Fund agrees to sell the underlying investment to a purchaser of
a corresponding call on the same security during the call period at a fixed
exercise price regardless of market price changes during the call period. The
call period is usually not more than nine months. The exercise price may
differ from the market price of the underlying security. The Fund has
retained the risk of loss that the price of the underlying security may
decline during the call period. That risk may be offset to some extent by the
premium the Fund receives. If the value of the investment does not rise above
the call price, it is likely that the call will lapse without being
exercised. In that case the Fund would keep the cash premium and the
investment.

      The Fund's custodian bank, or a securities depository acting for the
custodian, will act as the Fund's escrow agent through the facilities of the
Options Clearing Corporation ("OCC"), as to the investments on which the Fund
has written calls traded on exchanges, or as to other acceptable escrow
securities. In that way, no margin will be required for such transactions.
OCC will release the securities on the expiration of the calls or upon the
Fund's entering into a closing purchase transaction.

      To terminate its obligation on a call it has written, the Fund may
purchase a corresponding call in a "closing purchase transaction."  The Fund
will then realize a profit or loss, depending upon whether the net of the
amount of the option transaction costs and the premium received on the call
the Fund wrote was more or less than the price of the call the Fund purchased
to close out the transaction. A profit may also be realized if the call
lapses unexercised, because the Fund retains the underlying investment and
the premium received. Any such profits are considered short-term capital
gains for federal tax purposes, as are premiums on lapsed calls. When
distributed by the Fund they are taxable as ordinary income.

o     Purchasing Calls and Puts. The Fund may buy calls only to close out a
call it has written, as discussed above. Calls the Fund buys must be listed
on a securities exchange. A call or put option may not be purchased if the
purchase would cause the value of all the Fund's put and call options to
exceed 5% of its total assets. The Fund may not sell puts other than puts it
has previously purchased, to close out a position.

      When the Fund purchases a put, it pays a premium. The Fund then has the
right to sell the underlying investment to a seller of a corresponding put on
the same investment during the put period at a fixed exercise price. Puts on
municipal bond indices are settled in cash. Buying a put on a debt security
the Fund owns enables it to protect itself during the put period against a
decline in the value of the underlying investment below the exercise price.
If the market price of the underlying investment is equal to or above the
exercise price and as a result the put is not exercised or resold, the put
will become worthless at its expiration date. In that case the Fund will lose
its premium payment and the right to sell the underlying investment. A put
may be sold prior to expiration (whether or not at a profit).


o     Risks of Hedging with Options. The use of hedging instruments requires
special skills and knowledge of investment techniques that are different than
what is required for normal portfolio management. If the Manager uses a
hedging instrument at the wrong time or judges market conditions incorrectly,
hedging strategies may reduce the Fund's returns. The Fund could also
experience losses if the prices of its options positions were not correlated
with its other investments.


      The Fund's option activities could affect its portfolio turnover rate
and brokerage commissions. The exercise of calls written by the Fund might
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate. The Fund could pay a brokerage commission each time it buys a
call or put, sells a call, or buys or sells an underlying investment in
connection with the exercise of a call or put. Such commissions might be
higher on a relative basis than the commissions for direct purchases or sales
of the underlying investments. Premiums paid for options are small in
relation to the market value of the underlying investments. Consequently, put
and call options offer large amounts of leverage. The leverage offered by
trading in options could result in the Fund's net asset value being more
sensitive to changes in the value of the underlying investment.

      If a covered call written by the Fund is exercised on an investment
that has increased in value, the Fund will be required to sell the investment
at the call price. It will not be able to realize any profit if the
investment has increased in value above the call price.

      An option position may be closed out only on a market that provides
secondary trading for options of the same series. There is no assurance that
a liquid secondary market will exist for a particular option. If the Fund
could not effect a closing purchase transaction due to a lack of a market, it
would have to hold the callable investment until the call lapsed or was
exercised, and could experience losses.

o     Regulatory Aspects of Hedging Instruments. Transactions in options by
the Fund are subject to limitations established by the option exchanges. The
exchanges limit the maximum number of options that may be written or held by
a single investor or group of investors acting in concert. Those limits apply
regardless of whether the options were written or purchased on the same or
different exchanges, or are held in one or more accounts or through one or
more different exchanges or through one or more brokers. Thus, the number of
options that the Fund may write or hold may be affected by options written or
held by other entities, including other investment companies having the same
advisor as the Fund (or an advisor that is an affiliate of the Fund's
advisor). An exchange may order the liquidation of positions found to be in
violation of those limits and may impose certain other sanctions.

      When-Issued  and  Delayed-Delivery  Transactions.  Subject to the Fund's
fundamental  policy  as  stated  in the  Prospectus,  the  Fund  can  purchase
securities,  up to 10% of the Fund's net assets, on a "when-issued" basis, and
may  purchase  or sell such  securities  on a  "delayed-delivery"  or "forward
commitment"  basis.  "When-issued" or "delayed  delivery" refers to securities
whose terms and indenture are  available  and for which a market  exists,  but
which are not available for immediate delivery.

      When such transactions are negotiated the price (which is generally
expressed in yield terms) is fixed at the time the commitment is made.
Delivery and payment for the securities take place at a later date. Normally
the settlement date is within six months of the purchase of municipal bonds
and notes. However, the Fund may, from time to time, purchase municipal
securities having a settlement date more than six months and possibly as long
as two years or more after the trade date. The securities are subject to
change in value from market fluctuation during the settlement period. The
value at delivery may be less than the purchase price. For example, changes
in interest rates in a direction other than that expected by the Manager
before settlement will affect the value of such securities and may cause loss
to the Fund. No income begins to accrue to the Fund on a when-issued security
until the Fund receives the security at settlement of the trade.

      The Fund may engage in when-issued transactions in order to secure what
is considered to be an advantageous price and yield at the time of entering
into the obligation. When the Fund engages in when-issued or delayed-delivery
transactions, it relies on the buyer or seller, as the case may be, to
complete the transaction. Its failure to do so may cause the Fund to lose the
opportunity to obtain the security at a price and yield it considers
advantageous.

      When the Fund engages in when-issued and delayed-delivery transactions,
it does so for the purpose of acquiring or selling securities consistent with
its investment objective and policies or for delivery pursuant to options
contracts it has entered into, and not for the purposes of investment
leverage. Although the Fund will enter into when-issued or delayed-delivery
purchase transactions to acquire securities, the Fund may dispose of a
commitment prior to settlement. If the Fund chooses to dispose of the right
to acquire a when-issued security prior to its acquisition or to dispose of
its right to deliver or receive against a forward commitment, it may incur a
gain or loss.

      At the time the Fund makes a commitment to purchase or sell a security
on a when-issued or forward commitment basis, it records the transaction on
its books and reflects the value of the security purchased. In a sale
transaction, it records the proceeds to be received, in determining its net
asset value. The Fund will identify on its books liquid securities at least
equal to the value of purchase commitments until the Fund pays for the
investment.

      When-issued transactions and forward commitments can be used by the
Fund as a defensive technique to hedge against anticipated changes in
interest rates and prices. For instance, in periods of rising interest rates
and falling prices, the Fund might sell securities in its portfolio on a
forward commitment basis to attempt to limit its exposure to anticipated
falling prices. In periods of falling interest rates and rising prices, the
Fund might sell portfolio securities and purchase the same or similar
securities on a when-issued or forward commitment basis, to obtain the
benefit of currently higher cash yields.

      |X|   Zero-Coupon Securities. The Fund can invest without limit in
zero-coupon and delayed interest municipal securities. Zero-coupon securities
do not make periodic interest payments and are sold at a deep discount from
their face value. The buyer recognizes a rate of return determined by the
gradual appreciation of the security, which is redeemed at face value on a
specified maturity date. This discount depends on the time remaining until
maturity, as well as prevailing interest rates, the liquidity of the security
and the credit quality of the issuer. In the absence of threats to the
issuer's credit quality, the discount typically decreases as the maturity
date approaches. Some zero-coupon securities are convertible, in that they
are zero-coupon securities until a predetermined date, at which time they
convert to a security with a specified coupon rate.

      Because zero-coupon securities pay no interest and compound
semi-annually at the rate fixed at the time of their issuance, their value is
generally more volatile than the value of other debt securities. Their value
may fall more dramatically than the value of interest-bearing securities when
interest rates rise. When prevailing interest rates fall, zero-coupon
securities tend to rise more rapidly in value because they have a fixed rate
of return.
      The Fund's investment in zero-coupon securities may cause the Fund to
recognize income and make distributions to shareholders before it receives
any cash payments on the zero-coupon investment. To generate cash to satisfy
those distribution requirements, the Fund may have to sell portfolio
securities that it otherwise might have continued to hold or to use cash
flows from other sources such as the sale of Fund shares.

      |X|   Puts and Standby Commitments. The Fund can acquire "stand-by
commitments" or "puts" with respect to municipal securities it purchases in
order to enhance portfolio liquidity. These arrangements give the Fund the
right to sell the securities at a set price on demand to the issuing
broker-dealer or bank. However, securities having this feature may have a
relatively lower interest rate.

      When the Fund buys a municipal security subject to a standby commitment
to repurchase the security, the Fund is entitled to same-day settlement from
the purchaser. The Fund receives an exercise price equal to the amortized
cost of the underlying security plus any accrued interest at the time of
exercise. A put purchased in conjunction with a municipal security enables
the Fund to sell the underlying security within a specified period of time at
a fixed exercise price.

      The Fund might purchase a standby commitment or put separately in cash
or it might acquire the security subject to the standby commitment or put (at
a price that reflects that additional feature). The Fund will enter into
these transactions only with banks and securities dealers that, in the
Manager's opinion, present minimal credit risks. The Fund's ability to
exercise a put or standby commitment will depend on the ability of the bank
or dealer to pay for the securities if the put or standby commitment is
exercised. If the bank or dealer should default on its obligation, the Fund
might not be able to recover all or a portion of any loss sustained from
having to sell the security elsewhere.

      Puts and standby commitments are not transferable by the Fund. They
terminate if the Fund sells the underlying security to a third party. The
Fund intends to enter into these arrangements to facilitate portfolio
liquidity, although such arrangements might enable the Fund to sell a
security at a pre-arranged price that may be higher than the prevailing
market price at the time the put or standby commitment is exercised. However,
the Fund might refrain from exercising a put or standby commitment if the
exercise price is significantly higher than the prevailing market price, to
avoid imposing a loss on the seller that could jeopardize the Fund's business
relationships with the seller.

      A put or standby commitment increases the cost of the security and
reduces the yield otherwise available from the security. Any consideration
paid by the Fund for the put or standby commitment will be reflected on the
Fund's books as unrealized depreciation while the put or standby commitment
is held, and a realized gain or loss when the put or commitment is exercised
or expires. Interest income received by the Fund from municipal securities
subject to puts or stand-by commitments may not qualify as tax-exempt in its
hands if the terms of the put or stand-by commitment cause the Fund not to be
treated as the tax owner of the underlying municipal securities.

      |X|                 Repurchase Agreements. The Fund can acquire
securities subject to repurchase agreements. It might do so for liquidity
purposes to meet anticipated redemptions of Fund shares, or pending the
investment of the proceeds from sales of Fund shares, or pending the
settlement of portfolio securities transactions.

       In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to an approved vendor for delivery on an agreed
upon future date. The resale price exceeds the purchase price by an amount
that reflects an agreed-upon interest rate effective for the period during
which the repurchase agreement is in effect. Approved vendors include U.S.
commercial banks, U.S. branches of foreign banks or broker-dealers that have
been designated a primary dealer in government securities, which meet the
credit requirements set by the Manager from time to time.

      The majority of these transactions run from day to day. Delivery
pursuant to resale typically will occur within one to five days of the
purchase. Repurchase agreements having a maturity beyond seven days are
subject to the Fund's limits on holding illiquid investments.


      Repurchase agreements, considered "loans" under the Investment Company
Act of 1940 (the "Investment Company Act"), are collateralized by the
underlying security. The Fund's repurchase agreements require that at all
times while the repurchase agreement is in effect, the value of the
collateral must equal or exceed the repurchase price to fully collateralize
the repayment obligation. However, if the vendor fails to pay the resale
price on the delivery date, the Fund may incur costs in disposing of the
collateral and may experience losses if there is any delay in its ability to
do so. The Manager will monitor the vendor's creditworthiness to confirm that
the vendor is financially sound and will monitor the collateral's value on an
ongoing basis.

      Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission ("SEC"), the Fund, along with other affiliated entities managed by
the Manager, may transfer uninvested cash balances into one or more joint
repurchase accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities that are
pledged as collateral for repurchase agreements are held by a custodian bank
until the agreements mature. Each joint repurchase arrangement requires that
the market value of the collateral be sufficient to cover payments of
interest and principal; however, in the event of default by the other party
to the agreement, retention or sale of the collateral may be subject to legal
proceedings.


      |X|   Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Trustees, the Manager
determines the liquidity of certain of the Fund's investments. To enable the
Fund to sell its holdings of a restricted security not registered under the
Securities Act of 1933, the Fund may have to cause those securities to be
registered.  The expenses of registering restricted securities may be
negotiated by the Fund with the issuer at the time the Fund buys the
securities. When the Fund must arrange registration because the Fund wishes
to sell the security, a considerable period may elapse between the time the
decision is made to sell the security and the time the security is registered
so that the Fund could sell it. The Fund would bear the risks of any downward
price fluctuation during that period.

      The Fund may also acquire restricted securities through private
placements. Those securities have contractual restrictions on their public
resale. Those restrictions might limit the Fund's ability to dispose of the
securities and might lower the amount the Fund could realize upon the sale.

      The Fund has limitations that apply to purchases of restricted
securities, as stated in the Prospectus. Those percentage restrictions do not
limit purchases of restricted securities that are eligible for sale to
qualified institutional purchasers under Rule 144A of the Securities Act of
1933, if those securities have been determined to be liquid by the Manager
under Board-approved guidelines. Those guidelines take into account the
trading activity for such securities and the availability of reliable pricing
information, among other factors.  If there is a lack of trading interest in
a particular Rule 144A security, the Fund's holdings of that security may be
considered to be illiquid. Illiquid securities include repurchase agreements
maturing in more than seven days.


      |X|   Borrowing for Leverage. As a fundamental policy, the Fund may
borrow up to 5% of its total assets from banks on an unsecured basis for
temporary and emergency purposes or to purchase additional portfolio
securities. Borrowing to purchase portfolio securities is a speculative
investment technique known as "leveraging."  This investment technique may
subject the Fund to greater risks and costs, including the burden of interest
expense, an expense the Fund would not otherwise incur. The Fund can borrow
only if it maintains a 300% ratio of assets to borrowings at all times in the
manner required under applicable provisions of the Investment Company Act. If
the value of the Fund's assets fails to meet this 300% asset coverage
requirement, the Fund is required to reduce its bank debt within three days
to meet the requirement. To do so, the Fund might have to sell a portion of
its investments at a disadvantageous time.


      The Fund will pay interest on these loans, and that interest expense
will raise the overall expenses of the Fund and reduce its returns. If it
does borrow, its expenses will be greater than comparable funds that do not
borrow for leverage. The interest on a loan might be more (or less) than the
yield on the securities purchased with the loan proceeds. Additionally, the
Fund's net asset value per share might fluctuate more than that of funds that
do not borrow.

      The Fund has entered into an agreement enabling it to participate with
other OppenheimerFunds in an unsecured line of credit with a bank. Interest
is charged to each fund based on its respective borrowings. The Fund pays a
commitment fee equal to its pro rata share of the average amortized amount of
the credit line. This fee is described in the notes to the Financial
Statements at the end of this Statement of Additional Information.


      |X|   Taxable Investments. While the Fund can invest up to 20% of its
net assets in investments that generate income subject to income taxes, it
attempts to invest 100% of its assets in tax-exempt securities under normal
market conditions. The Fund does not anticipate investing substantial amounts
of its assets in taxable investments under normal market conditions or as
part of its normal trading strategies and policies. To the extent it invests
in taxable securities, the Fund would not be able to meet its objective of
providing tax-exempt income to its shareholders. Taxable investments include,
for example, options, repurchase agreements, and some of the types of
securities it would buy for temporary defensive purposes.

      |X|   Portfolio Turnover. A change in the securities held by the Fund
from buying and selling investments is known as "portfolio turnover."
Short-term trading increases the rate of portfolio turnover and could
increase the Fund's transaction costs. However, the Fund ordinarily incurs
little or no brokerage expense because most of the Fund's portfolio
transactions are principal trades that do not require payment of brokerage
commissions.

      The Fund ordinarily does not trade securities to achieve capital gains,
because they would not be tax-exempt income. To a limited degree, the Fund
may engage in short-term trading to attempt to take advantage of short-term
market variations. It may also do so to dispose of a portfolio security prior
to its maturity. That might be done if, on the basis of a revised credit
evaluation of the issuer or other considerations, the Manager believes such
disposition is advisable or the Fund needs to generate cash to satisfy
requests to redeem Fund shares. In those cases, the Fund may realize a
capital gain or loss on its investments. The Fund's annual portfolio turnover
rate normally is not expected to exceed 50%.


|X|   Temporary Defensive and Interim Investments.  The securities the Fund
can invest in for temporary defensive purposes include the following:
o     short-term municipal securities;
o     obligations issued or guaranteed by the U.S. government or its agencies
         or instrumentalities;
o     corporate debt securities rated within the three highest grades by a
         nationally recognized rating agency;
o     commercial paper rated "A-1" by Standard & Poors, or having a
         comparable rating by another nationally-recognized rating agency;
         and
o     certificates of deposit of domestic banks with assets of $1 billion or
         more.

      The Fund also might hold these types of securities pending the
investment of proceeds from the sale of portfolio securities or to meet
anticipated redemptions of Fund shares. The income from some of these
temporary defensive or interim investments may not be tax-exempt. Therefore
when making those investments, the Fund might not achieve its objective.

      |X|   Investments in Other Investment Companies. On a temporary basis,
the Fund can invest up to 5% of its total assets in shares of other
investment companies that have an investment objective of seeking income
exempt from federal, New York State and New York City personal income taxes.
It can invest up to 5% of its total assets in any one investment company (but
cannot own more than 3% of the outstanding voting stock of that company).
These limits do not apply to shares acquired in a merger, consolidation,
reorganization or acquisition of another investment company. Because the Fund
would be subject to its ratable share of the other investment company's
expenses, the Fund will not make these investments unless the Manager
believes that the potential investment benefits justify the added costs and
expenses.

Other Investment Restrictions

      |X|   What Are "Fundamental Policies?" Fundamental policies are those
policies that the Fund has adopted to govern its investments that can be
changed only by the vote of a "majority" of the Fund's outstanding voting
securities. Under the Investment Company Act, such a "majority" vote is
defined as the vote of the holders of the lesser of:

o     67% or more of the shares present or represented by proxy at a
            shareholder meeting, if the holders of more than 50% of the
            outstanding shares are present or represented by proxy, or
o     more than 50% of the outstanding shares.

      The Fund's investment objective is a fundamental policy. Other policies
described in the Prospectus or this Statement of Additional Information are
"fundamental" only if they are identified as such. The Fund's Board of
Trustees can change non-fundamental policies without shareholder approval.
However, significant changes to investment policies will be described in
supplements or updates to the Prospectus or this Statement of Additional
Information, as appropriate. The Fund's most significant investment policies
are described in the Prospectus.


      |X|   Does the Fund Have Additional Fundamental Policies? The following
investment restrictions are fundamental policies of the Fund:


o     The Fund cannot borrow money or mortgage or pledge any of its assets,
except that the Fund may borrow from a bank for temporary or emergency
purposes or for investment purposes in amounts not exceeding 5% of its total
assets. Where borrowings are made for a purpose other than temporary or
emergency purposes, the Investment Company Act requires that the Fund
maintain asset coverage of at least 300% for all such borrowings. Should such
asset coverage at any time fall below 300%, the Fund will be required to
reduce its borrowings within three days to the extent necessary to meet that
asset coverage requirement. To reduce its borrowings, the Fund might have to
sell investments at a time when it would be disadvantageous to do so.
Additionally, interest paid by the Fund on its borrowings will decrease the
net earnings of the Fund.


o     The Fund cannot buy any securities on margin or sell any securities
short.

o     The Fund cannot lend any of its funds or other assets, except by the
purchase of a portion of an issue of publicly distributed bonds, debentures,
notes or other debt securities.

o     The Fund cannot act as underwriter of securities issued by other
persons. A permitted exception is if the Fund technically is deemed to be an
underwriter under the federal securities laws in connection with the
disposition of its portfolio securities.

o     The Fund cannot purchase the securities of any issuer that would result
in the Fund owning more than 10% of the voting securities of that issuer.


o     The Fund cannot purchase securities from or sell them to its officers
and trustees, or any firm of which any officer or trustee is a member, as
principal. However, the Fund may deal with such persons or firms as brokers
and pay a customary brokerage commission. The Fund cannot retain securities
of any issuer, if to the knowledge of the Fund, one or more of its officers,
trustees or investment advisor, own beneficially more than1/2of 1% of the
securities of such issuer and all such officers and trustees together own
beneficially more than 5% of those securities.


o     The Fund cannot acquire, lease or hold real estate, except as may be
necessary or advisable for the maintenance of its offices or to enable the
Fund to take appropriate such action in the event of financial difficulties,
default or bankruptcy of either the issuer of or the underlying source of
funds for debt service for any obligations in the Fund's portfolio.

o     The Fund cannot invest in commodities and commodity contracts, puts,
calls, straddles, spreads or any combination thereof, or interests in oil,
gas or other mineral exploration or development programs. The Fund may,
however, write covered call options (or purchase put options) listed for
trading on a national securities exchange. The Fund can also purchase call
options (and sell put options) to the extent necessary to close out call
options it previously wrote or put options it previously purchased.

o     The Fund cannot invest in companies for the purpose of exercising
control or management.

o     The Fund cannot invest more than 25% of its total assets in securities
of  issuers of a particular industry. For the purposes of this limitation,
tax-exempt securities and United States government obligations are not
considered to be part of an industry. However, with respect to industrial
development bonds and other revenue obligations for which the underlying
credit is a business or charitable entity, the industry of that entity will
be considered for purposes of this 25% limitation.

o     The Fund cannot issue "senior securities," but this does not prohibit
certain investment activities for which assets of the Fund are designated as
segregated, or margin, collateral or escrow arrangements are established, to
cover the related obligations. Examples of those activities include borrowing
money, reverse repurchases agreements, delayed-delivery and when-issued
arrangements for portfolio securities transactions and contracts to buy or
sell derivatives, hedging instruments, options or futures.

      Unless the Prospectus or Statement of Additional Information states
that a percentage restriction applies on an ongoing basis, it applies only at
the time the Fund makes an investment. In that case the Fund need not sell
securities to meet the percentage limits if the value of the investment
increases in proportion to the size of the Fund.


Diversification. The Fund intends to be "diversified," as defined in the
Investment Company Act, with respect to 75% of its total assets, and to
satisfy the restrictions against investing too much of its assets in any
"issuer" as set forth above. Under the Investment Company Act's requirements
for diversification, as to 75% of its total assets, the Fund cannot invest
more than 5% of its total assets in the securities of any one issuer (other
than the U.S. government, its agencies or instrumentalities) nor can it own
more than 10% of an issuer's voting securities.


      In implementing this policy, the identification of the issuer of a
municipal security depends on the terms and conditions of the security. When
the assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating it
and the security is backed only by the assets and revenues of the
subdivision, agency, authority or instrumentality, the latter would be deemed
to be the sole issuer. Similarly, if an industrial development bond is backed
only by the assets and revenues of the non-governmental user, then that user
would be deemed to be the sole issuer. However, if in either case the
creating government or some other entity guarantees a security, the guarantee
would be considered a separate security and would be treated as an issue of
that government or other entity.

      In implementing the Fund's policy not to concentrate its investments,
the Manager will consider a non-governmental user of facilities financed by
industrial development bonds as being in a particular industry. That is done
even though the bonds are municipal securities, as to which the Fund has no
concentration limitation. Although this application of the concentration
restriction is not a fundamental policy of the Fund, it will not be changed
without shareholder approval.

      For the purposes of the Fund's policy not to concentrate in securities
of issuers as described in the investment restrictions listed in the
Prospectus and this Statement of Additional Information, the Fund has adopted
the industry classifications set forth in Appendix B to this Statement of
Additional Information. This is not a fundamental policy. Bonds which are
refunded with escrowed U.S. government securities are considered U.S.
government securities for purposes of the Fund's policy not to concentrate.


      Subject to the limitations stated above, from time to time the Fund may
increase the relative emphasis of its investments in a particular segment of
the municipal securities market above 25% of its net assets. For example,
these might include, among others, general obligation bonds, pollution
control bonds, hospital bonds, or any other segment of the municipal
securities market as listed in Appendix B to this Statement of Additional
Information. To the extent it does so, the Fund's exposure to market risks
from economic, business, political or other changes affecting one bond in a
particular segment (such as proposed legislation affecting the financing of a
project or decreased demand for a type of project) might also affect other
bonds in the same.


      |X|   Does the Fund Have Any Restrictions That Are Not Fundamental? The
Fund operates under certain investment restrictions which are non-fundamental
investment policies of the Fund and which can be changed by the Board without
shareholder approval. These restrictions provide that:

o     The Fund may not acquire more than 3% of the voting securities issued
by any one investment company. An exception is if the acquisition results
from a dividend or a merger, consolidation or other reorganization. Also, the
Fund cannot invest more than 5% of its assets in securities issued by any one
investment company or invest more than 5% of the Fund's assets in securities
of other investment companies.

o     For purposes of the Fund's investment restriction as to concentration
described above, its policy with respect to concentration of investments
shall be interpreted as prohibiting the Fund from making an investment in any
given industry if, upon making the proposed investment, 25% or more of the
value of its total assets would be invested in such industry.

o     For the purposes of the Fund's policy regarding minimum investments in
the tax-exempt securities, the minimum investment requirement is based on net
assets plus borrowings used for investment purposes.

How the Fund Is Managed


Organization and History. The Fund was organized as a New York corporation in
June 1965 and reorganized as Massachusetts business trust in February 1991.
The Fund is an open-end, diversified management investment company with an
unlimited number of authorized shares of beneficial interest.a


      |X|   Classes of Shares. The Trustees are authorized, without
shareholder approval, to create new series and classes of shares. The
Trustees may reclassify unissued shares of the Fund into additional series or
classes of shares.  The Trustees also may divide or combine the shares of a
class into a greater or lesser number of shares without changing the
proportionate beneficial interest of a shareholder in the Fund.  Shares do
not have cumulative voting rights or preemptive or subscription rights.
Shares may be voted in person or by proxy at shareholder meetings.

      The Fund currently has four classes of shares: Class A, Class B, Class
C, and Class Y.  All classes invest in the same investment portfolio. Only
certain institutional investors may elect to purchase Class Y shares. Each
class of shares:
o     has its own dividends and distributions,
o     pays certain expenses which may be different for the different classes,
o     may have a different net asset value,
o     may have separate voting rights on matters in which interests of one
         class are different from interests of another class, and
o     votes as a class on matters that affect that class alone.

      Shares are freely transferable, and each share of each class has one
vote at shareholder meetings, with fractional shares voting proportionally on
matters submitted to the vote of shareholders.  Each share of the Fund
represents an interest in the Fund proportionately equal to the interest of
each other share of the same class.


      Meetings of Shareholders.  As a Massachusetts business trust, the Fund
is not required to hold, and does not plan to hold, regular annual meetings
of shareholders. The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will also do so when a
shareholder meeting is called by the Trustees or upon proper request of the
shareholders.


      Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Fund, to remove a Trustee.  The
Trustees will call a meeting of shareholders to vote on the removal of a
Trustee upon the written request of the record holders of 10% of its
outstanding shares.  If the Trustees receive a request from at least 10
shareholders stating that they wish to communicate with other shareholders to
request a meeting to remove a Trustee, the Trustees will then either make the
Fund's shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants' expense. The
shareholders making the request must have been shareholders for at least six
months and must hold shares of the Fund valued at $25,000 or more or
constituting at least 1% of the Fund's outstanding shares, whichever is less.
The Trustees may also take other action as permitted by the Investment
Company Act.

      |X|   Shareholder and Trustee Liability.  The Fund's Declaration of
Trust contains an express disclaimer of shareholder or Trustee liability for
the Fund's obligations. It also provides for indemnification and
reimbursement of expenses out of the Fund's property for any shareholder held
personally liable for its obligations.  The Declaration of Trust also states
that upon request, the Fund shall assume the defense of any claim made
against a shareholder for any act or obligation of the Fund and shall satisfy
any judgment on that claim.  Massachusetts law permits a shareholder of a
business trust (such as the Fund) to be held personally liable as a "partner"
under certain circumstances. However, the risk that a Fund shareholder will
incur financial loss from being held liable as a "partner" of the Fund is
limited to the relatively remote circumstances in which the Fund would be
unable to meet its obligations.

      The Fund's contractual arrangements state that any person doing
business with the Fund (and each shareholder of the Fund) agrees under its
Declaration of Trust to look solely to the assets of the Fund for
satisfaction of any claim or demand that may arise out of any dealings with
the Fund. Additionally, the Trustees shall have no personal liability to any
such person, to the extent permitted by law.


Board of Trustees and Oversight Committees. The Fund is governed by a Board
of Trustees, which is responsible for protecting the interests of
shareholders under Massachusetts law. The Trustees meet periodically
throughout the year to oversee the Fund's activities, review its performance,
and review the actions of the Manager.  Although the Fund will not normally
hold annual meetings of its shareholders, it may hold shareholder meetings
from time to time on important matters, and shareholders have the right to
call a meeting to remove a Trustee or to take other action described in the
Fund's Declaration of Trust.

      The Board of Trustees has an Audit Committee which is comprised solely
of Independent Trustees.  The Audit Committee provides the Board with
recommendations regarding the selection of the Fund's independent auditor.
The Audit Committee also reviews the scope and results of audits and the
audit fees charged, reviews reports from the Fund's independent auditors
concerning the Fund's internal accounting procedures and controls, and
reviews reports of the Manager's internal auditor among other duties as set
forth in the Committee's charter.  The members of the Audit Committee are
Paul Clinton (Chairman), Thomas Courtney, Robert Galli, Lacy Herrmann and
Brian Wruble.  The Audit Committee met four times during the Fund's fiscal
year ended December 31, 2002.

Trustees and Officers of the Fund.The Fund's Trustees and officers and their
positions held with the Fund and length of service in such position(s) and
theprincipal occupations and business affiliations during the past five years
are listed below.  Each of the Trustees is an "Independent Trustee," as
defined in thebelow.  Each of the Trustees is an "Independent Trustee," as
defined in the Each of the Trustees is an "Independent Trustee," as defined
in the1940 Act.   Each of the Trustees is an "Independent Trustee," as
defined in the1940 Act.   Investment Company Act. The Fund's Trustees and
officers and their positions held with the Fund and length of service in such
position(s) andthebelow.  Each of the Trustees is an "Independent Trustee,"
as defined in theEach of the Trustees is an "Independent Trustee," as defined
in the 1940 Act.  ir principal occupations and business affiliations during
the past five years are listed in the chart below. The information for the
Trustees also includes the dollar range of shares of the Fund as well as the
aggregate dollar range of shares beneficially owned in any of the Oppenheimer
funds overseen by the Trustees. All of the Trustees are also trustees or
directors of the following Oppenheimer funds1funds (except for Mr. Cannon who
is only a Trustee of Rochester Fund Municipals, Limited-Term New York
Municipal Fund and Convertible Securities Fund) (referred to as "Board III
Funds"):

Oppenheimer Quest For Value Funds, a
series fund having the following three
series:
  Oppenheimer Small Cap Value Fund,
  Oppenheimer Quest Balanced Value Fund
  and
  Oppenheimer Quest Opportunity Value
  Fund                                   Oppenheimer Quest Global Value Fund, Inc.
                                         Oppenheimer Quest Capital Value Fund, Inc.
                                         Oppenheimer Quest Value Fund, Inc.
Rochester Portfolio Series, a series      Bond Fund Series, a series fund
fund having one series: Limited-Term New  having one series: Oppenheimer
York Municipal Fund                       Convertible Securities Fund
Rochester Fund Municipals                 Oppenheimer MidCap Fund

      In addition to being a ortrustee or directoror  of the Board III Funds,
Mr. Galli is also a director or trustee of 31 other portfolios in the
OppenheimerFunds complex. Present or former officers, directors, trustees and
employees (and their immediate family members) of the Fund, the Manager and
its affiliates, and retirement plans established by them for their employees
are permitted to purchase Class A shares of the Fund and the other
Oppenheimer  complex.funds at net asset value without sales charge.  The sales
charges on Class A shares is waived for that  group  because of the  economies
of sales efforts realized by the Distributor.

      Messrs. Murphy, Fielding, Mses.Masterson, Molleur, Vottiero, Wixted and
Zack, and Mses. Bechtolt, Feld and Ives who are officers of the Fund,
respectively hold the same offices of one or more of the other Board III
Funds as with the Fund. As of January 30, 2003, the Trustees and officers of
the Fund, as a group, owned of record or beneficially less than 1% of each
class of shares of the Fund. The foregoing statement does not reflect
ownership of shares of the Fund held of record by an employee benefit plan
for employees of the Manager, other than the shares beneficially owned under
the plan by the officers of the Fund listed above. In addition, each
Independent Trustee, and his or her family members, do not own securities of
either the Manager or Distributor of the Board III Funds or any person
directly or indirectly controlling, controlled by or under common control
with the Manager or Distributor.

      The address of each Trustee in the chart below is 6803 S. Tucson Way,
Centennial, CO 80112-3924. Each Trustee serves for an indefinite term, until
his or her resignation, retirement, death or removal.


-------------------------------------------------------------------------------------

  Independent
   Trustees

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Name,           Principal Occupation(s) During Past 5 Years; Dollar    Aggregate
Position(s)                                                            Dollar
Held with Fund,                                                        Range Of
Length of                                                              Shares
Service,        Oth                                           ange of  Beneficially
Age             Tru                                           hares    Owned in
                Numer Trusteeships/Directorships Held by     ReneficialAny of the
                Curstee;                                     Swned in  Oppenheimer
                   ber of Portfolios in Fund Complex         Bhe Fund  Funds
                   rently Overseen by Trustee                O         Overseen
                                                             t         by Trustee

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

                                                                As of December 31,
                                                                       2002

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Thomas W.       Principal  of  Courtney   Associates,   Inc.    $0     $10,001-$50,000
Courtney,       (venture   capital  firm);   former  General
Chairman of     Partner of  Trivest  Venture  Fund  (private
the Board of    venture capital fund);  former  President of
Trustees,       Investment  Counseling  Federated Investors,
Trustee since   Inc.;  Trustee of Cash Assets Trust, a money
1996            market fund;  Director of OCC Cash Reserves,
Age: 69         Inc. and Trustee of OCC Accumulation  Trust,
                both  of  which  are   open-end   investment
                companies;   Trustee   of  four   funds  for
                Pacific   Capital  and  Tax  Free  Trust  of
                Arizona.   Oversees  10  portfolios  in  the
                OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

John Cannon,    Director,  Neuberger  Berman Income Managers    $0     $1-$10,000
Trustee, since  Trust,  Neuberger & Berman  Income Funds and
1992            Neuberger   Berman  Trust,   (1995-present);
Age: 73         Neuberger   Berman  Equity  Funds  (November
                2000-present);   Trustee,  Neuberger  Berman
                Mutual   Funds    (October    1994-present);
                formerly   Chairman   and   Treasurer,   CDC
                Associates,  a registered investment adviser
                (December  1993-February 1996);  Independent
                Consultant;  Chief Investment  Officer,  CDC
                Associates (1996-June 2000);  Consultant and
                director,     CDC    Associates    (December
                1993-February  1999).  Oversees 3 portfolios
                in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Paul Y.         Principal of Clinton Management  Associates,
Clinton,        a financial and venture  capital  consulting
Trustee, since  firm;  Trustee  of Capital  Cash  Management
1996 Age: 71    Trust,    a    money-market     fund,    and
                Narragansett  Tax-Free  Fund,  a  tax-exempt
                bond fund;  Director  of OCC Cash  Reserves,
                Inc. and Trustee of OCC Accumulation  Trust,
                both  of  which  are   open-end   investment
                companies.   Formerly:   Director,  External
                Affairs,  Kravco  Corporation,   a  national
                real estate  owner and  property  management
                corporation;  President of Essex  Management
                Corporation,    a   management    consulting
                company;   a  general   partner  of  Capital
                Growth Fund, a venture capital  partnership;
                a   general   partner   of   Essex   Limited
                Partnership,   an  investment   partnership;    $0     Over
                President   of  Geneve   Corp.,   a  venture           $100,000
                capital fund;  Chairman of Woodland  Capital
                Corp., a small business  investment company;
                and  Vice  President  of  W.R.  Grace  & Co.
                Oversees     10     portfolios     in    the
                OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Robert G.       A trustee or director  of other  Oppenheimer    $0     Over
Galli,          funds.  Formerly  Trustee (May 2000 to 2002)
Trustee since   of Research  Foundation of AIMR  (investment
1998            research,   non-profit)  and  Vice  Chairman
Age: 69         (October    1995-December   1997)   of   the
                Manager.   Oversees  41  portfolios  in  the           $100,000
                OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Lacy B.         Chairman  and  Chief  Executive  Officer  of    $0     $10,001-$50,000
Herrmann,       Aquila    Management    Corporation,     the
Trustee since   sponsoring    organization    and   manager,
1996            administrator   and/or  sub-adviser  to  the
Age: 73         following  open-end  investment   companies,
                and  Chairman of the Board of  Trustees  and
                President of each:  Churchill  Cash Reserves
                Trust,  Aquila-Cascadia Equity Fund, Pacific
                Capital Cash Assets Trust,  Pacific  Capital
                U.S.  Treasuries Cash Assets Trust,  Pacific
                Capital  Tax-Free Cash Assets  Trust,  Prime
                Cash  Fund,  Narragansett  Insured  Tax-Free
                Income   Fund,   Tax-Free   Fund  For  Utah,
                Churchill   Tax-Free   Fund   of   Kentucky,
                Tax-Free  Fund of Colorado,  Tax-Free  Trust
                of  Oregon,   Tax-Free   Trust  of  Arizona,
                Hawaiian  Tax-Free  Trust,  and Aquila Rocky
                Mountain   Equity  Fund;   Vice   President,
                Director,  Secretary, and formerly Treasurer
                of Aquila  Distributors,  Inc.,  distributor
                of the above funds;  President  and Chairman
                of the Board of  Trustees  of  Capital  Cash
                Management  Trust  ("CCMT"),  and an Officer
                and  Trustee/Director  of its  predecessors;
                President  and  Director of STCM  Management
                Company,  Inc., sponsor and adviser to CCMT;
                Chairman,  President and a Director of InCap
                Management       Corporation,       formerly
                sub-adviser and  administrator of Prime Cash
                Fund  and   Short   Term   Asset   Reserves;
                Director  of OCC Cash  Reserves,  Inc.,  and
                Trustee of OCC Accumulation  Trust,  both of
                which  are  open-end  investment  companies;
                Trustee   Emeritus   of  Brown   University.
                Oversees     10     portfolios     in    the
                OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Brian Wruble,      Special  Limited  Partner  (since  January $10,001 -  Over
Trustee since 2001 1999) of Odyssey Investment Partners,  LLC
Age: 59            (private   equity   investment);   General
                   Partner (since  September 1996) of Odyssey
                   Partners,     L.P.    (hedge    fund    in
                   distribution   since  1/1/97);   Board  of
                   Governing  Trustees (since August 1990) of
                   The   Jackson   Laboratory   (non-profit);
                   Trustee  (since May 1992) of Institute for
                   Advanced  Study  (educational  institute);
                   Trustee   (since  May  2000)  of  Research $50,000    $100,000
                   Foundation of AIMR  (investment  research,
                   non-profit);   formerly  Governor,  Jerome
                   Levy  Economics  Institute of Bard College
                   (economics        research)        (August
                   1990-September  2001);  Director  of Ray &
                   Berendtson,  Inc.  (executive search firm)
                   (May   2000-April   2002).   Oversees   10
                   portfolios    in   the    OppenheimerFunds
                   complex.

-------------------------------------------------------------------------------------


      The address of the Officers in the chart below is as follows: for
Messrs. Molleur, Murphy and Zack and Ms. Feld, 498 Seventh Avenue, New York,
NY 10018, for Messrs. Masterson, Vottiero and Wixted and Mses. Bechtolt and
Ives, 6803 S. Tucson Way, Centennial, CO 80112-3924, for Mr. Fielding, 350
Linden Oaks, Rochester, NY 14625. Each Officer serves for an annual term or
until his or her earlier resignation, death or removal.


-------------------------------------------------------------------------------------

                                Officers of the Fund

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Name,                           Principal Occupation(s) During Past 5 Years
Position(s) Held with F
Length of Service,
Age                    und,

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Ronald H. Fielding, Vice        Senior Vice President (since January 1996) of the
President and Portfolio         Manager; Chairman of the Rochester Division of the
Manager since 1996              Manager (since January 1996); an officer of 9
Age:  53                        portfolios in the OppenheimerFunds complex; prior
                                to joining the Manager in January 1996, he was
                                President and a director of Rochester Capital
                                Advisors, Inc. (1993 - 1995), the Fund's prior
                                investment advisor, and of Rochester Fund
                                Services, Inc. (1986 - 1995), the Fund's prior
                                distributor; President and a trustee of Limited
                                Term New York Municipal Fund (1991 - 1995),
                                Oppenheimer Convertible Securities Fund (1986 -
                                1995) and Rochester Fund Municipals (1986 - 1995);
                                President and a director of Rochester Tax Managed
                                Fund, Inc. (1982 - 1995) and of Fielding
                                Management Company, Inc. (1982 - 1995), an
                                investment advisor.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

John V. Murphy,                 Chairman,  Chief  Executive  Officer  and  director
President since 2001            (since June 2001) and  President  (since  September
Age: 53                         2000) of the Manager;  President  and a director or
                                trustee of other Oppenheimer  funds;  President and
                                a  director   (since  July  2001)  of   Oppenheimer
                                Acquisition  Corp.  (the  Manager's  parent holding
                                company) and of Oppenheimer  Partnership  Holdings,
                                Inc.   (a  holding   company   subsidiary   of  the
                                Manager);  a  director  (since  November  2001)  of
                                OppenheimerFunds  Distributor,  Inc. (a  subsidiary
                                of the  Manager);  Chairman  and a director  (since
                                July 2001) of  Shareholder  Services,  Inc.  and of
                                Shareholder  Financial  Services,   Inc.  (transfer
                                agent  subsidiaries of the Manager);  President and
                                a director  (since  July 2001) of  OppenheimerFunds
                                Legacy   Program  (a   charitable   trust   program
                                established  by the  Manager);  a  director  of the
                                investment  advisory  subsidiaries  of the Manager:
                                OFI  Institutional   Asset  Management,   Inc.  and
                                Centennial  Asset  Management   Corporation  (since
                                November  2001),   HarbourView   Asset   Management
                                Corporation  and  OFI  Private  Investments,   Inc.
                                (since July  2001);  President  (since  November 1,
                                2001)  and  a   director   (since   July  2001)  of
                                Oppenheimer   Real  Asset   Management,   Inc.;   a
                                director   (since   November   2001)   of   Trinity
                                Investment  Management Corp. and Tremont  Advisers,
                                Inc.   (Investment   advisory   affiliates  of  the
                                Manager);  Executive Vice President (since February
                                1997)  of   Massachusetts   Mutual  Life  Insurance
                                Company (the Manager's parent company);  a director
                                (since  June 1995) of DLB  Acquisition  Corporation
                                (a  holding  company  that owns the shares of David
                                L.  Babson  &  Company,   Inc.);  formerly,   Chief
                                Operating  Officer  (September  2000-June  2001) of
                                the  Manager;   President  and  trustee   (November
                                1999-November  2001) of MML Series  Investment Fund
                                and  MassMutual   Institutional   Funds   (open-end
                                investment   companies);   a  director   (September
                                1999-August  2000) of C.M. Life Insurance  Company;
                                President,  Chief  Executive  Officer and  director
                                (September  1999-August 2000) of MML Bay State Life
                                Insurance   Company;  a  director  (June  1989-June
                                1998) of Emerald Isle Bancorp and Hibernia  Savings
                                Bank (a  wholly-owned  subsidiary  of Emerald  Isle
                                Bancorp).    Oversees   69    portfolios   in   the
                                OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Brian W. Wixted,                Senior Vice  President and  Treasurer  (since March
Treasurer, Principal Financial  1999) of the Manager;  Treasurer (since March 1999)
and Accounting Officer since    of  HarbourView   Asset   Management   Corporation,
1999                            Shareholder Services,  Inc., Oppenheimer Real Asset
Age: 42                         Management   Corporation,   Shareholder   Financial
                                Services,  Inc., Oppenheimer  Partnership Holdings,
                                Inc., OFI Private  Investments,  Inc.  (since March
                                2000),  OppenheimerFunds   International  Ltd.  and
                                Oppenheimer  Millennium  Funds plc (since May 2000)
                                and  OFI  Institutional   Asset  Management,   Inc.
                                (since  November 2000)  (offshore  fund  management
                                subsidiaries  of the Manager);  Treasurer and Chief
                                Financial  Officer  (since May 2000) of Oppenheimer
                                Trust  Company (a trust  company  subsidiary of the
                                Manager);  Assistant  Treasurer  (since March 1999)
                                of     Oppenheimer     Acquisition     Corp.    and
                                OppenheimerFunds   Legacy   Program   (since  April
                                2000);   formerly  Principal  and  Chief  Operating
                                Officer  (March  1995-March  1999),  Bankers  Trust
                                Company-Mutual  Fund Services Division.  An officer
                                of 85 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Connie Bechtolt,                Assistant Vice President of the Manager  (since
Assistant Treasurer since 2002  September 1998); formerly Manager/Fund Accounting
Age: 39                         (September 1994-September 1998) of the Manager. An
                                officer of 85 portfolios in the OppenheimerFunds
                                complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Philip Vottiero,                Vice  President/Fund   Accounting  of  the  Manager
Assistant Treasurer since 2002  (since      March     2002;      formerly      Vice
Age: 39                         President/Corporate   Accounting   of  the  Manager
                                (July  1999-March 2002) prior to which he was Chief
                                Financial  Officer  at Sovlink  Corporation  (April
                                1996-June  1999).  An officer of 85  portfolios  in
                                the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Robert G. Zack,                 Senior Vice President  (since May 1985) and General
Secretary since 2001            Counsel  (since  February  2002)  of  the  Manager;
Age: 54                         General  Counsel  and a  director  (since  November
                                2001)  of   OppenheimerFunds   Distributor,   Inc.;
                                Senior Vice  President and General  Counsel  (since
                                November  2001)  of  HarbourView  Asset  Management
                                Corporation;  Vice President and a director  (since
                                November   2000)   of    Oppenheimer    Partnership
                                Holdings,  Inc.;  Senior  Vice  President,  General
                                Counsel  and a director  (since  November  2001) of
                                Shareholder Services,  Inc.,  Shareholder Financial
                                Services,  Inc.,  OFI  Private  Investments,  Inc.,
                                Oppenheimer  Trust  Company  and OFI  Institutional
                                Asset  Management,  Inc.;  General  Counsel  (since
                                November  2001)  of  Centennial   Asset  Management
                                Corporation;  a director  (since  November 2001) of
                                Oppenheimer Real Asset Management,  Inc.; Assistant
                                Secretary and a director  (since  November 2001) of
                                OppenheimerFunds     International    Ltd.;    Vice
                                President      (since     November     2001)     of
                                OppenheimerFunds  Legacy Program;  Secretary (since
                                November  2001) of Oppenheimer  Acquisition  Corp.;
                                formerly   Acting   General    Counsel    (November
                                2001-February  2002) and Associate  General Counsel
                                (May 1981-October  2001) of the Manager;  Assistant
                                Secretary  of  Shareholder   Services,   Inc.  (May
                                1985-November    2001),    Shareholder    Financial
                                Services,   Inc.  (November   1989-November  2001);
                                OppenheimerFunds     International     Ltd.     and
                                Oppenheimer    Millennium    Funds   plc   (October
                                1997-November  2001).  An officer of 85  portfolios
                                in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Katherine P. Feld,              Vice  President  and  Senior  Counsel  (since  July
Assistant Secretary since 2001  1999) of the Manager;  Vice  President  (since June
Age: 44                         1990)  of   OppenheimerFunds   Distributor,   Inc.;
                                Director,  Vice  President and Assistant  Secretary
                                (since June 1999) of  Centennial  Asset  Management
                                Corporation;   Vice   President   (since  1997)  of
                                Oppenheimer Real Asset Management,  Inc.;  formerly
                                Vice   President  and  Associate   Counsel  of  the
                                Manager  (June  1990-July  1999).  An officer of 85
                                portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Kathleen T. Ives,               Vice  President and Assistant  Counsel  (since June
Assistant Secretary since 2001  1998) of the Manager;  Vice President  (since 1999)
Age: 36                         of   OppenheimerFunds   Distributor,   Inc.;   Vice
                                President and Assistant  Secretary  (since 1999) of
                                Shareholder  Services,  Inc.;  Assistant  Secretary
                                (since  December 2001) of  OppenheimerFunds  Legacy
                                Program and Shareholder  Financial Services,  Inc.;
                                formerly  Assistant  Vice  President  and Assistant
                                Counsel of the  Manager  (August  1997-June  1998);
                                Assistant    Counsel   of   the   Manager   (August
                                1994-August  1997).  An officer of 85 portfolios in
                                the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Philip T. Masterson,   Vice President and Assistant Counsel of the Manager (since
Assistant Secretary    July 1998); formerly, an associate with Davis, Graham, &
since 2002             Stubbs LLP (January 1997-June 1998). An officer of 85
Age: 38                portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Denis R. Molleur,      Vice  President and Senior Counsel of the Manager (since July
Assistant Secretary    1999);  formerly a Vice  President and  Associate  Counsel of
since 2001             the  Manager  (September  1995-July  1999).  An officer of 82
Age: 44                portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------


      Remuneration of Trustees. The officers of the Fund who are affiliated
with the Manager receive no salary or fee from the Fund. The Trustees of the
Fund received the compensation shown below from the Fund during the Fund's
fiscal year ended December 31, 2002. The compensation from all 10 of the
Board III Funds (including the Fund) represents compensation received orfor
serving as a director or trustee and member of a committee (if applicable) of
the boards of those funds during the calendar year |X|      2002. The amounts
shown for Mr. Cannon relate solely to Rochester Fund Municipals, Limited Term
New York Municipal Fund and Oppenheimer Convertible Securities Fund, as Mr.
Cannon serves as Trustee of those Board III Funds only.










---------------------------------------------------------------------------------

Trustee Name and Other Fund       Aggregate       Retirement       Estimated      Total Compensation From All Oppenheimer Funds For Which Individual Serves As
                                                                     Annual      Trustee/Director
                                                   Benefits        Retirement
                                               Accrued as Part   Benefits to be
                                Compensation       of Fund         Paid Upon
Position(s) (as applicable)      From Fund1        Expenses       Retirement2

---------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Thomas W. Courtney        $25,766      $18,588     $63,738        $103,959
Chairman and
Audit Committee Member

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

John Cannon3              $22,760      $16,530     $16,962         $36,087

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Paul Y. Clinton           $24,733      $14,138     $63,738         $99,793
Audit Committee
Chairman

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Robert G. Galli           $22,956      $26,761     $55,6784       $198,3865
Audit Committee Member

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Lacy B. Herrmann          $22,956      $5,326      $63,702         $92,626
Audit Committee Member

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Brian Wruble              $23,700      $4,459       $7,606         $95,626
Audit Committee Member

--------------------------------------------------------------------------------

Aggregate Compensation From Fund includes fees and deferred compensation, if
   any, for a Trustee.
Estimated Annual Retirement Benefits to be Paid Upon Retirement is based on a
   straight life payment plan election.
3.    Compensation for Mr. Cannon was paid by Rochester Fund Municipals,
   Limited Term New York Municipal Fund and Oppenheimer Convertible
   Securities Fund only.
4.    The amount shown for Mr. Galli includes $30,689 estimated to be paid to
   him for serving as a trustee or director of 31 other Oppenheimer funds
   that are not Board III Funds.
5.    Includes $105,760 paid to Mr. Galli for serving as trustee or director
   of 31 other Oppenheimer funds that are not Board III Funds.


|X|   Retirement Plan for Trustees. The Fund has adopted a retirement plan
that provides for payments to retired Trustees. Payments are up to 80% of the
average compensation paid during a Trustee's five years of service in which
the highest compensation was received. A Trustee must serve as Trustee for
any of the Board III Funds listed above for at least 15 years to be eligible
for the maximum payment. Each Trustee's retirement benefits will depend on
the amount of the Trustee's future compensation and length of service.


      Deferred Compensation Plan for Trustees. The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund. Under the plan, the compensation
deferred by a Trustee is periodically adjusted as though an equivalent amount
had been invested in shares of one or more Oppenheimer funds selected by the
Trustee. The amount paid to the Trustee under the plan will be determined
based upon the performance of the selected funds.
      Deferral of Trustees' fees under the plan will not materially affect
the Fund's assets, liabilities and net income per share. The plan will not
obligate the Fund to retain the services of any Trustee or to pay any
particular level of compensation to any Trustee. Pursuant to an Order issued
by the Securities and Exchange Commission, the Fund may invest in the funds
selected by the Trustee under the plan without shareholder approval for the
limited purpose of determining the value of the Trustee's deferred fee
account.

      |X|   Major Shareholders. As of January 30, 2003, the only person who
owned of record or were known by the Fund to own beneficially 5% or more of
the Fund's outstanding Class A, Class B, Class C or Class Y shares was:


      Roger W. Kirby Tr UW Gwendoline Hoguet Trust FBO Geoffrey R. Hoguet, 1
      E. 66th St. New York, NY 10021-5854, who owned 606,250.969 Class Y
      shares (representing 87.23%of the Class Y shares then outstanding); and

      Elizabeth N. Hoguet, 238 McLain Rd., Mount Kisco, NY 10549-4931, who
      owed 88,633.967 Class Y shares (representing 12.75%of the Class Y
      shares then outstanding).

The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a
holding company controlled by Massachusetts Mutual Life Insurance Company.

      |X|   Code of Ethics. The Fund, the Manager and the Distributor have a
Code of Ethics. It is designed to detect and prevent improper personal
trading by certain employees, including portfolio managers, that would
compete with or take advantage of the Fund's portfolio transactions. Covered
persons include persons with knowledge of the investments and investment
intentions of the Fund and other funds advised by the Manager. The Code of
Ethics does permit personnel subject to the Code to invest in securities,
including securities that may be purchased or held by the Fund, subject to a
number of restrictions and controls. Compliance with the Code of Ethics is
carefully monitored and enforced by the Manager.

      The Code of Ethics is an exhibit to the Fund's registration statement
filed with the Securities and Exchange Commission and can be reviewed and
copied at the SEC's Public Reference Room in Washington, D.C. You can obtain
information about the hours of operation of the Public Reference Room by
calling the SEC at 1.202.942.8090. The Code of Ethics can also be viewed as
part of the Fund's registration statement on the SEC's EDGAR database at the
SEC's Internet website at http://www.sec.gov. Copies may be obtained, after
                          ------------------
paying a duplicating fee, by electronic request at the following E-mail
address: publicinfo@sec.gov., or by writing to the SEC's Public Reference
         -------------------
Section, Washington, D.C. 20549-0102.

      |X|   The Investment Advisory Agreement. The Manager provides
investment advisory and management services to the Fund under an investment
advisory agreement between the Manager and the Fund. The Manager selects
securities for the Fund's portfolio and handles its day-to day business. That
agreement requires the Manager, at its expense, to provide the Fund with
adequate office space, facilities and equipment. It also requires the Manager
to provide and supervise the activities of all administrative and clerical
personnel required to provide effective corporate administration for the
Fund. Those responsibilities include the compilation and maintenance of
records with respect to the Fund's operations, the preparation and filing of
specified reports, and the composition of proxy materials and registration
statements for continuous public sale of shares of the Fund.

      The Fund pays expenses not expressly assumed by the Manager under the
advisory agreement. The investment advisory agreement lists examples of
expenses paid by the Fund. The major categories relate to interest, taxes,
fees to Independent Trustees, legal and audit expenses, custodian and
transfer agent expenses, share issuance costs, certain printing and
registration costs, brokerage commissions, and non-recurring expenses,
including litigation cost. The management fees paid by the Fund to the
Manager are calculated at the rates described in the Prospectus, which are
applied to the assets of the Fund as a whole. The fees are allocated to each
class of shares based upon the relative proportion of the Fund's net assets
represented by that class. The management fees paid by the Fund to the
Manager during its last three fiscal years are listed below.


      The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties, or
reckless disregard for its obligations and duties under the investment
advisory agreement, the Manager is not liable for any loss the Fund sustains
by reason of good faith errors or omissions on its part with respect to any
of its duties under the agreement. The agreement permits the Manager to act
as investment advisor for any other person, firm or corporation and to use
the name "Oppenheimer" in connection with other investment companies for
which it may act as investment advisor or general distributor. If the Manager
shall no longer act as investment advisor to the Fund, the Manager may
withdraw the Fund's right to use the name "Oppenheimer" as part of its name.


o     Accounting and Administrative Services. The Manager provides accounting
and administrative services to the Fund pursuant to an Accounting and
Administration Agreement approved by the Board of Trustees. Under that
agreement, the Manager maintains the general ledger accounts and records
relating to the Fund's business and calculates the daily net asset values of
the Fund's shares. The Accounting and Administrative Services fees paid by
the Fund to the Manager during its last three fiscal years are listed below.


-------------------------------------------------------------------------------
Fiscal Year        Management Fee Paid to       Accounting and Administrative
                                                    Services Fee Paid to
Ended 12/31        OppenheimerFunds, Inc.          OppenheimerFunds, Inc.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
    2000                $20,044,174                      $1,287,774
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

    2001                $24,490,985                      $1,579,738

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

    2002                $28,013,299                      $1,814,185

-------------------------------------------------------------------------------


         |X|      Annual Approval of Investment Advisory Agreement. Each
year, the Board of Trustees, including a majority of the Independent
Trustees, is required to approve the renewal of the investment advisory
agreement. The Investment Company Act requires that the Board request and
evaluate and the Manager provide such information as may be reasonably
necessary to evaluate the terms of the investment advisory agreement.  The
Board employs an independent consultant to prepare a report that provides
such information as the Board requests for this purpose.


      The Board also receives information about the 12b-1 distribution fees
the Fund pays. These distribution fees are reviewed and approved at a
different time of the year.

      The Board reviewed the foregoing information in arriving at its
decision to renew the investment advisory agreement.  Among other factors,
the Board considered:
o     The nature, cost, and quality of the services provided to the Fund and
         its shareholders;
o     The profitability of the Fund to the Manager;
o     The investment performance of the Fund in comparison to regular market

         indices;

o     Economies of scale that may be available to the Fund from the Manager;
o     Fees paid by other mutual funds for similar services;
o     The value and quality of any other benefits or services received by the

         Fund from its relationship with the Manager; and
o     The direct and indirect benefits the Manager received from its

         relationship with the Fund.  These included services provided by the
         Distributor and the Transfer Agent, and brokerage and soft dollar
         arrangements permissible under Section 28(e) of the Securities
         Exchange Act.

      The Board considered that the Manager must be able to pay and retain
high quality personnel at competitive rates to provide services to the Fund.
The Board also considered that maintaining the financial viability of the
Manager is important so that the Manager will be able to continue to provide
quality services to the Fund and its shareholders in adverse times.  The
Board also considered the investment performance of other mutual funds
advised by the Manager. The Board is aware that there are alternatives to the
use of the Manager.

      These matters were also considered by the Independent Trustees, meeting
separately from the full Board with experienced Counsel to the Fund who
assisted the Board in its deliberations.  The Fund's Counsel is independent
of the Manager within the meaning and intent of the SEC Rules regarding the
independence of counsel.


      After careful deliberation, the Board of concluded that it was in the
best interest of shareholders to continue the investment advisory agreement
for another year. In arriving at a decision, the Board did not single out any
one factor or group of factors as being more important than other factors,
but considered all factors together.  The Board judged the terms and
conditions of the investment advisory agreement, including the investment
advisory fee, in light of all of the surrounding circumstances.


Brokerage Policies of the Fund


Brokerage Provisions of the Investment Advisory Agreement. One of the duties
of the Manager under the investment advisory agreement is to buy and sell
portfolio securities for the Fund. The investment advisory agreement allows
the Manager to use broker-dealers to effect the Fund's portfolio
transactions. Under the agreement, the Manager may employ those
broker-dealers (including "affiliated" brokers, as that term is defined in
the Investment Company Act) that, in the Manager's best judgment based on all
relevant factors, will implement the Fund's policy to obtain, at reasonable
expense, the "best execution" of portfolio transactions. "Best execution"
refers to prompt and reliable execution at the most favorable price
obtainable. The Manager need not seek competitive commission bidding.
However, the Manager is expected to minimize the commissions paid to the
extent consistent with the interest and policies of the Fund as established
by its Board of Trustees.


      Under the investment advisory agreement, the Manager may select brokers
that provide brokerage and/or research services for the Fund and/or the other
accounts over which the Manager or its affiliates have investment discretion.
The commissions paid to such brokers may be higher than another qualified
broker would charge, if the Manager makes a good faith determination that the
commission is fair and reasonable in relation to the services provided.
Subject to those other considerations, as a factor in selecting brokers for
the Fund's portfolio transactions, the Manager may also consider sales of
shares of the Fund and other investment companies managed by the Manager or
its affiliates.

Brokerage Practices Followed by the Manager. The Manager allocates brokerage
for the Fund subject to the provisions of the investment advisory agreement
and the procedures and rules described above. Generally the Manager's
portfolio traders allocate brokerage upon
recommendations from the Manager's portfolio managers. In certain instances,
portfolio managers may directly place trades and allocate brokerage. In
either case, the Manager's executive officers supervise the allocation of
brokerage.

      Most securities purchases made by the Fund are in principal
transactions at net prices. The Fund usually deals directly with the selling
or purchasing principal or market maker without incurring charges for the
services of a broker on its behalf unless the Manager determines that a
better price or execution may be obtained by using the services of a broker.
Therefore, the Fund does not incur substantial brokerage costs. Portfolio
securities purchased from underwriters include a commission or concession
paid by the issuer to the underwriter in the price of the security. Portfolio
securities purchased from dealers include a spread between the bid and asked
price.

      The Fund seeks to obtain prompt execution of orders at the most
favorable net prices. In an option transaction, the Fund ordinarily uses the
same broker for the purchase or sale of the option and any transaction in the
investment to which the option relates. Other funds advised by the Manager
have investment objectives and policies similar to those of the Fund. Those
other funds may purchase or sell the same securities as the Fund at the same
time as the Fund, which could affect the supply and price of the securities.
When possible, the Manager tries to combine concurrent orders to purchase or
sell the same security by more than one of the accounts managed by the
Manager or its affiliates. The transactions under those combined orders are
averaged as to price and allocated in accordance with the purchase or sale
orders actually placed for each account.

      The investment advisory agreement permits the Manager to allocate
brokerage for research services. The research services provided by a
particular broker may be useful only to one or more of the advisory accounts
of the Manager and its affiliates. Investment research received by the
Manager for the commissions paid by those other accounts may be useful both
to the Fund and one or more of the Manager's other accounts. Investment
research services may be supplied to the Manager by a third party at the
instance of a broker through which trades are placed.

      Investment research services include information and analyses on
particular companies and industries as well as market or economic trends and
portfolio strategy, market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If a research
service also assists the Manager in a non-research capacity (such as
bookkeeping or other administrative functions), then only the percentage or
component that provides assistance to the Manager in the investment
decision-making process may be paid in commission dollars.

      The research services provided by brokers broaden the scope and
supplement the research activities of the Manager. That research provides
additional views and comparisons for consideration and helps the Manager to
obtain market information for the valuation of securities that are either
held in the Fund's portfolio or are being considered for purchase. The
Manager provides information to the Board of the Fund about the commissions
paid to brokers furnishing research services, together with the Manager's
representation that the amount of such commissions was reasonably related to
the value or benefit of such services.







----------------------------------------------------------------
  Fiscal Year Ended    Total Brokerage Commissions Paid by the
        12/31                           Fund1
----------------------------------------------------------------
         ----------------------------------------------------------------
                  2000                            None
         ----------------------------------------------------------------
         ----------------------------------------------------------------
                  2001                            None
         ----------------------------------------------------------------
----------------------------------------------------------------

         2002                            None

----------------------------------------------------------------

        1. Amounts do not include spreads or commissions on principal
        amounts on a net trade basis.


Distribution and Service Plans

The Distributor. Under its General Distributor's Agreement with the Fund, the
Distributor acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund. The Distributor
bears the expenses normally attributable to sales, including advertising and
the cost of printing and mailing prospectuses, other than those furnished to
existing shareholders. The Distributor is not obligated to sell a specific
number of shares. Expenses normally attributable to sales are borne by the
Distributor.

      The sales charges and concessions paid to, or retained by, the
Distributor from the sale of shares during the Fund's three most recent
fiscal years, and the contingent deferred sales charges retained by the
Distributor on the redemption of shares for the most recent fiscal year are
shown in the tables below:

-------------------------------------------------------------------------------
Fiscal    Aggregate     Class A      Concessions    Concessions  Concessions
          Front-End     Front-End
          Sales         Sales        on Class A     on Class B   on Class C
Year      Charges       Charges      Shares         Shares       Shares
Ended     on Class A    Retained by  Advanced by    Advanced by  Advanced by
12/31:    Shares        Distributor  Distributor1   Distributor1 Distributor1
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
  2000     $8,466,379    $1,294,411     $528,433     $6,994,067    $711,009
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
  2001     $17,868,015   $2,695,893    $1,143,154   $16,428,018   $2,028,152
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

  2002     $15,818,044   $2,187,155    $2,632,657   $12,022,476   $1,480,192

-------------------------------------------------------------------------------
1. The Distributor advances concession payments to dealers for certain sales
   of Class A shares and for sales of Class B and Class C shares from its own
   resources at the time of sale.

-------------------------------------------------------------------------------
Fiscal Year  Class A Contingent    Class B Contingent    Class C Contingent
             Deferred Sales        Deferred Sales        Deferred Sales
             Charges Retained by   Charges Retained by   Charges Retained by
Ended 12/31: Distributor           Distributor           Distributor
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

    2002           $163,987             $3,268,897             $134,035

-------------------------------------------------------------------------------


Distribution and Service Plans. The Fund has adopted a Service Plan for Class
A shares and Distribution and Service Plans for Class B and Class C shares
under Rule 12b-1 of the Investment Company Act. Under those plans the Fund
pays the Distributor for all or a portion of its costs incurred in connection
with the distribution and/or servicing of the shares of the particular class.
Each plan has been approved by a vote of the Board of Trustees, including a
majority of the Independent Trustees2, cast in person at a meeting called for
the purpose of voting on that plan.


      Under the plans, the Manager and the Distributor may make payments to
affiliates and, in their sole discretion, from time to time, may use their
own resources (at no direct cost to the Fund) to make payments to brokers,
dealers or other financial institutions for distribution and administrative
services they perform. The Manager may use its profits from the advisory fee
it receives from the Fund. In their sole discretion, the Distributor and the
Manager may increase or decrease the amount of payments they make from their
own resources to plan recipients.


      Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if the Fund's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose
of voting on continuing the plan. A plan may be terminated at any time by the
vote of a majority of the Independent Trustees or by the vote of the holders
of a "majority" (as defined in the Investment Company Act) of the outstanding
shares of that class.

      The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount
of payments to be made under a plan must be approved by shareholders of the
class affected by the amendment. Because Class B shares of the Fund
automatically convert into Class A shares after 72 months, the Fund must
obtain the approval of both Class A and Class B shareholders for a proposed
material amendment to the Class A Plan that would materially increase
payments under the Plan. That approval must be by a "majority" (as defined in
the Investment Company Act) of the shares of each class, voting separately by
class.


      While the Plans are in effect, the Treasurer of the Fund shall provide
separate written reports on the plans to the Board of Trustees at least
quarterly for its review. The Reports shall detail the amount of all payments
made under a plan, and the purpose for which the payments were made. Those
reports are subject to the review and approval of the Independent Trustees.

      Each plan states that while it is in effect, the selection and
nomination of those Trustees of the Fund who are not "interested persons" of
the Fund is committed to the discretion of the Independent Trustees. This
does not prevent the involvement of others in the selection and nomination
process as long as the final decision as to selection or nomination is
approved by a majority of the Independent Trustees.

      Under the plans for a class, no payment will be made to any recipient
in any quarter in which the aggregate net asset value of all Fund shares of
that class held by the recipient for itself and its customers does not exceed
a minimum amount, if any, that may be set from time to time by a majority of
the Independent Trustees. The Board of Trustees currently limits aggregate
payments under the Class A plan to 0.15% of average annual net assets.

      |X|   Class A Service Plan. Under the Class A service plan, the
Distributor currently uses the fees it receives from the Fund to pay brokers,
dealers and other financial institutions (they are referred to as
"recipients") for personal services and account maintenance services they
provide for their customers who hold Class A shares. The services include,
among others, answering customer inquiries about the Fund, assisting in
establishing and maintaining accounts in the Fund, making the Fund's
investment plans available and providing other services at the request of the
Fund or the Distributor. The Distributor makes payments to plan recipients
quarterly at an annual rate currently not to exceed 0.15% of the average
daily net assets of Class A shares held in accounts of the service provider
or their customers.


      For the fiscal year ended December 31, 2002, payments under the Plan
for Class A shares totaled $6,358,728, all of which was paid by the
Distributor to recipients. That amount included $47,208 paid to an affiliate
of the Distributor. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares for any fiscal year may not be recovered in
subsequent years. The Distributor may not use payments received under the
Class A plan to pay any of its interest expenses, carrying charges, other
financial costs, or allocation of overhead.

      |X|   Class B and Class C Service and Distribution Plans. Under each
plan, service fees and distribution fees are computed on the average of the
net asset value of shares in the respective class, determined as of the close
of each regular business day during the period. provideEach plan provides for
the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund
under the plans during that period.payrecipients the recipientsthe the The
types of services that recipients provide are similar to the services
provided under the Class A plan, described above.

      Each Plan permits the Distributor to retain both the asset-based sales
charges and the service fee on shares or to pay recipients the service fee on
a quarterly basis, without payment in advance. Class B and Class C
sharesClass B and Class C sharesHowever, the Distributor currently intends to
pay the Class B and Class C sharesClass B and Class C sharesservice fee to
recipients in advance for the first year after Class B and Class C shares are
purchased. After the first year shares are purchased, the Distributor makes
payments quarterly on those shares. The advance payment is based on the net
asset value of shares sold. Shares purchased by exchange do not qualify for
an advance service fee payment. If Class B or Class C shares are redeemed
during the first year after their purchase, the recipient of the service fees
on those shares will be obligated to repay the Distributor a pro rata portion
of the advance payment made on those shares.

      The asset-based sales charge and service fees increase Class B and
Class C expenses by 1.00% of the net assets per year of the respective class.


      The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. It pays the asset-based sales
charge as an ongoing concession to the dealer on Class C shares outstanding
for a year or more. If a dealer has a special agreement with the Distributor,
the Distributor will pay the Class B and/or Class C service fees and the
asset-based sales charge to the dealer quarterly in lieu of paying the sales
concession and service fee in advance at the time of purchase.


      The asset-based sales charge on Class B and Class C shares allows
investors to buy shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell those shares.from The Fund pays
the asset-based sales charge to the Distributor for its services rendered in
distributing Class B and Class C shares. The payments are made to the
Distributor in recognition that the Distributor:

o     pays sales concessions to authorized brokers and dealers at the time of
         sale and pays service fees as described above,
o     may finance payment of sales concessions and/or the advance of the
         service fee payment to recipients under the plans, or may provide
         such financing from its own resources or from the resources of an
         affiliate,
o     employs personnel to support distribution of Class B and Class C
         shares,

o     bears the costs of sales literature, advertising and prospectuses
         (other than those furnished to current shareholders) and state "blue
         sky" registration fees and certain other distribution expenses,

o     may not be able to adequately compensate dealers that sell Class B and
         Class C shares without receiving payment under the plans and
         therefore may not be able to offer such Classes for sale absent the
         plans,
o     receives payments under the plans consistent with the service fees and
         asset-based sales charges paid by other non-proprietary funds that
         charge 12b-1 fees,
o     may use the payments under the plan to include the Fund in various
         third-party distribution programs that may increase sales of Fund
         shares,
o     may experience increased difficulty selling the Fund's shares if
         payments under the plan are discontinued because most competitor
         funds have plans that pay dealers for rendering distribution
         services as much or more than the amounts currently being paid by
         the Fund, and
o     may not be able to continue providing, at the same or at a lesser cost,
         the same quality distribution sales efforts and services, or to
         obtain such services from brokers and dealers, if the plan payments
         were to be discontinued.

      The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from contingent deferred sales
charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board
of Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated.

---------------------------------------------------------------------------------

     Distribution Fees Paid to the Distributor for the Year Ended 12/31/02

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class:        Total          Amount         Distributor's       Distributor's
                                                                Unreimbursed
                                            Aggregate           Expenses as %
              Payments       Retained by    Unreimbursed        of Net Assets
              Under Plan     Distributor    Expenses Under Plan of Class
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class B Plan   $12,746,691    $10,362,9701      $48,072,567          3.58%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class C Plan    $4,596,060    $1,693,3152       $8,694,289            1.85

---------------------------------------------------------------------------------

1.    Includes  $11,212  paid  to an  affiliate  of the  Distributor's  parent
    company.
2.    Includes  $15,330  paid  to an  affiliate  of the  Distributor's  parent
    company.


      All payments under the Class B and the Class C plans are subject to the
limitations imposed by the Conduct Rules of the National Association of
Securities Dealers, Inc. on payments of asset-based sales charges and service
fees.








Performance of the Fund

Explanation of Performance Terminology. The Fund uses a variety of terms to
illustrate its performance. These terms include "standardized yield,"
"tax-equivalent yield," "dividend yield," "average annual total return,"
"cumulative total return," "average annual total return at net asset value"
and "total return at net asset value." An explanation of how yields and total
returns are calculated is set forth below. The charts below show the Fund's
performance as of the its most recent fiscal year end. You can obtain current
performance information by calling the Fund's Transfer Agent at
1.800.225.5677 or by visiting the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.

      The Fund's illustrations of its performance data in advertisements must
comply with rules of the Securities and Exchange Commission. Those rules
describe the types of performance data that may be used and how it is to be
calculated. In general, any advertisement by the Fund of its performance data
must include the average annual total returns for the advertised class of
shares of the Fund. Those returns must be shown for the one-, five- and
10-year periods (or the life of the class, if less) ending as of the most
recently ended calendar quarter prior to the publication of the advertisement
(or its submission for publication). Certain types of yields may also be
shown, provided that they are accompanied by standardized average annual
total returns.

      Use of standardized performance calculations enables an investor to
compare the Fund's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using the
Fund's performance information as a basis for comparison with other
investments:
o     Yields and total returns measure the performance of a hypothetical
account in the Fund over various periods and do not show the performance of
each shareholder's account. Your account's performance will vary from the
model performance data if your dividends are received in cash, or you buy or
sell shares during the period, or you bought your shares at a different time
and price than the shares used in the model.

o     The Fund's performance returns may not reflect the effect of taxes on
dividends and capital gains distributions.
o     An investment in the Fund is not insured by the FDIC or any other
government agency.

o     The principal value of the Fund's shares, and its yields and total
returns are not guaranteed and normally will fluctuate on a daily basis.
o     When an investor's shares are redeemed, they may be worth more or less
than their original cost.
o     Yields and total returns for any given past period represent historical
performance information and are not, and should not be considered, a
prediction of future yields or returns.

      The performance of each class of shares is shown separately, because
the performance of each class of shares will usually be different. That is
because of the different kinds of expenses each class bears. The yields and
total returns of each class of shares of the Fund are affected by market
conditions, the quality of the Fund's investments, the maturity of those
investments, the types of investments the Fund holds, and its operating
expenses that are allocated to the particular class.


|X|






      Yields. The Fund uses a variety of different yields to illustrate its
current returns. Each class of shares calculates its yield separately because
of the different expenses that affect each class.
o     Standardized Yield. The "standardized yield" (sometimes referred to
just as "yield") is shown for a class of shares for a stated 30-day period.
It is not based on actual distributions paid by the Fund to shareholders in
the 30-day period, but is a hypothetical yield based upon the net investment
income from the Fund's portfolio investments for that period. It may
therefore differ from the "dividend yield" for the same class of shares,
described below.

      Standardized yield is calculated using the following formula set forth
in rules adopted by the Securities and Exchange Commission, designed to
assure uniformity in the way that all funds calculate their yields:


      Standardized a-b    +1)6
                   ---
      Yield = 2 [(        -1]

                          ------

                       cd


      The symbols above represent the following factors:
      a =  dividends and interest earned during the 30-day period.
      b =  expenses accrued for the period (net of any expense assumptions).
      c =  the average daily number of shares of that class outstanding
           during the 30-day period that were entitled to receive dividends.
      d =  the maximum offering price per share of that class on the last day
           of the period, adjusted for undistributed net investment income.

      The standardized yield for a particular 30-day period may differ from
the yield for other periods. The SEC formula assumes that the standardized
yield for a 30-day period occurs at a constant rate for a six-month period
and is annualized at the end of the six-month period. Additionally, because
each class of shares is subject to different expenses, it is likely that the
standardized yields of the Fund's classes of shares will differ for any
30-day period.

o     Dividend Yield. The Fund may quote a "dividend yield" for each class of
its shares. Dividend yield is based on the dividends paid on a class of
shares during the actual dividend period. To calculate dividend yield, the
dividends of a class declared during a stated period are added together, and
the sum is multiplied by 12 (to annualize the yield) and divided by the
maximum offering price on the last day of the dividend period. The formula is
shown below:

  Dividend Yield = dividends paid x 12/maximum offering price (payment date)

      The maximum offering price for Class A shares includes the current
maximum initial sales charge. The maximum offering price for Class B and
Class C shares is the net asset value per share, without considering the
effect of contingent deferred sales charges. There is no sales charge on
Class Y shares. The Class A dividend yield may also be quoted without
deducting the maximum initial sales charge.

o     Tax-Equivalent Yield. The "tax-equivalent yield" of a class of shares
 is the equivalent yield that would have to be earned on a taxable investment
 to achieve the after-tax results represented by the Fund's tax-equivalent
 yield. It adjusts the Fund's standardized yield, as calculated above, by a
 stated tax rate. Using different tax rates to show different tax equivalent
 yields shows investors in different tax brackets the tax equivalent yield of
 the Fund based on their own tax bracket.

      The tax-equivalent yield is based on a 30-day period, and is computed
by dividing the tax-exempt portion of the Fund's current yield (as calculated
above) by one minus a stated income tax rate. The result is added to the
portion (if any) of the Fund's current yield that is not tax-exempt.


      The  tax-equivalent  yield may be used to  compare  the tax  effects  of
income  derived from the Fund with income from taxable  investments at the tax
rates  stated.  Your tax  bracket  is  determined  by your  federal  and state
taxable  income (the net amount  subject to federal and state income tax after
deductions and exemptions).The tax-equivalent


--------------------------------------------------------------------------------

            The Fund's Yields for the 30-Day Period Ended 12/31/02

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Class of    Standardized Yield      Dividend Yield       Tax-Equivalent Yield
                                                           (39.45% Combined
                                                               Federal/
Shares                                                  New York Tax Bracket)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
          Without     After      Without    After      Without      After
          Sales       Sales      Sales      Sales                   Sales
          Charge      Charge     Charge     Charge     Sales Charge Charge
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Class A      6.23%      5.93%      6.23%      5.94%       10.29%       9.79%

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Class B      5.36%       N/A       5.24%       N/A        8.86%         N/A

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Class C      5.36%       N/A       5.24%       N/A        8.86%         N/A

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Class Y      6.34%       N/A       6.35%       N/A        10.47%        N/A

--------------------------------------------------------------------------------

1. The  tax-equivalent  yield  calculation  assumes that the investor is taxed
   just below the highest federal income tax bracket  (currently 35%) and also
   assumes the 2003 combined  federal and New York State rates  (regardless of
   whether a switch to non-taxable  investments would cause a lower bracket to
   apply).


      |X|   Total Return Information. There are different types of "total
returns" to measure the Fund's performance. Total return is the change in
value of a hypothetical investment in the Fund over a given period, assuming
that all dividends and capital gains distributions are reinvested in
additional shares and that the investment is redeemed at the end of the
period. Because of differences in expenses for each class of shares, the
total returns for each class are separately measured. The cumulative total
return measures the change in value over the entire period (for example, 10
years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show actual
year-by-year performance. The Fund uses standardized calculations for its
total returns as prescribed by the SEC. The methodology is discussed below.

      In calculating total returns for Class A shares, the current maximum
sales charge of 4.75% (as a percentage of the offering price) is deducted
from the initial investment ("P") (unless the return is shown without sales
charge, as described below). For Class B shares, payment of the applicable
contingent deferred sales charge is applied, depending on the period for
which the return is shown: 5.0% in the first year, 4.0% in the second year,
3.0% in the third and fourth years, 2.0% in the fifth year, 1.0% in the sixth
year and none thereafter. For Class C shares, the 1% contingent deferred
sales charge is deducted for returns for the one-year period. There is no
sales charge on Class Y shares.

o     Average Annual Total Return. The "average annual total return" of each
class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P" in the formula
below) held for a number of years ("n" in the formula) to achieve an Ending
Redeemable Value ("ERV" in the formula) of that investment, according to the
following formula:

    ERV      - 1  Average Annual Total
          l/n     Return
    ------
      P


o     Average Annual Total Return (After Taxes on Distributions). The
"average annual total return (after taxes on distributions)" of Class A
shares is an average annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of federal taxes
(calculated using the highest individual marginal federal income tax rates in
effect on any reinvestment date) on any distributions made by the Fund during
the specified period. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below)
held for a number of years ("n" in the formula) to achieve an ending value
("ATVD" in the formula) of that investment, after taking into account the
effect of taxes on Fund distributions, but not on the redemption of Fund
shares, according to the following formula:

           - 1 = Average Annual Total Return (After Taxes on
ATVD   l/n     Distributions)
---
  P

o     Average Annual Total Return (After Taxes on Distributions and
Redemptions).  The "average annual total return (after taxes on distributions
and redemptions)" of Class A shares is an average annual compounded rate of
return for each year in a specified number of years, adjusted to show the
effect of federal taxes (calculated using the highest individual marginal
federal income tax rates in effect on any reinvestment date) on any
distributions made by the Fund during the specified period and the effect of
capital gains taxes or capital loss tax benefits (each calculated using the
highest federal individual capital gains tax rate in effect on the redemption
date) resulting from the redemption of the shares at the end of the period.
It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVDR" in the
formula) of that investment, after taking into account the effect of taxes on
fund distributions and on the redemption of Fund shares, according to the
following formula:

ATVDR       - 1  = Average Annual Total Return (After Taxes on Distributions
---
l/n              and Redemptions)
  P


o     Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as
average annual total return, but it does not average the rate of return on an
annual basis. Cumulative total return is determined as follows:








  ERV - P   = Total Return
------------
     P

o     Total Returns at Net Asset Value. From time to time the Fund may also
quote a cumulative or an average annual total return "at net asset value"
(without deducting sales charges) for each class of shares. Each is based on
the difference in net asset value per share at the beginning and the end of
the period for a hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions.

-----------------------------------------------------------------------------------

             The Fund's Total Returns for the Periods Ended 12/31/02

-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------

Class of  Cumulative Total               Average Annual Total Returns
               Returns
            (10 Years or
           life-of-class,
Shares        if less)

-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------

                                 1-Year            5-Year            10-Year
                                                 (or life of
                                                   class)       (or life of class)

-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------

          After    Without  After     Without After     Without  After    Without
          Sales    Sales    Sales     Sales   Sales     Sales    Sales    Sales
           Charge   Charge   Charge   Charge   Charge    Charge   Charge   Charge

-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------

Class A1   72.11%   80.70%    0.45%    5.46%    3.54%    4.55%    5.58%    6.09%

-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------

Class B   29.16%2  30.13%2   -0.46%    4.50%    3.33%    3.66%    4.52%2   4.65%2

-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------

Class C   30.20%3  30.20%3    3.57%    4.57%    3.66%    3.66%    4.66%3   4.66%3

-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------

Class Y     N/A    21.08%4     N/A     5.57%     N/A     7.41%4    N/A      N/A

-----------------------------------------------------------------------------------
1. Inception of Class A:      5/15/86.
2. Inception of Class B:      3/17/97.
3. Inception of Class C:      3/17/97.
4. Inception of Class Y:      4/28/00.

--------------------------------------------------------------------------

  Average Annual Total Returns for Class A Shares (After Sales Charge)
                     For the Periods Ended 12/31/02

--------------------------------------------------------------------------
--------------------------------------------------------------------------

                                 1-Year         5-Year        10-Year
                                                            (or life of
                                                               class)

--------------------------------------------------------------------------
--------------------------------------------------------------------------

After Taxes on Distributions     0.45%          3.54%          5.58%1

--------------------------------------------------------------------------
--------------------------------------------------------------------------

After Taxes on                   2.62%          3.95%          5.68%1
Distributions and
Redemption of Fund Shares

--------------------------------------------------------------------------

   1. Inception of Class A: 5/15/86


Other Performance Comparisons. The Fund compares its performance annually to
that of an appropriate broadly-based market index in its Annual Report to
shareholders. You can obtain that information by contacting the Transfer
Agent at the addresses or telephone numbers shown on the cover of this
Statement of Additional Information. The Fund may also compare its
performance to that of other investments, including other mutual funds, or
use rankings of its performance by independent ranking entities. Examples of
these performance comparisons are set forth below.


      |X|   Lipper Rankings. From time to time the Fund may publish the
ranking of the performance of its classes of shares by Lipper, Inc.
("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring
service. Lipper monitors the performance of regulated investment companies,
including the Fund, and ranks their performance for various periods in
categories based on investment styles. The Lipper performance rankings are
based on total returns that include the reinvestment of capital gain
distributions and income dividends but do not take sales charges or taxes
into consideration. Lipper also publishes "peer-group" indices of the
performance of all mutual funds in a category that it monitors and averages
of the performance of the funds in particular categories. Lipper also
publishes "Lipper Leader" awards in two categories:

o     Lipper Leaders for Consistent Return. Lipper also scores funds in their
broad asset categories and in their peer groups, based on two
characteristics: consistency, or the strength of a fund's performance trend,
and effective return, the Fund's total return adjusted for its historical
downside risk but without considering sales charges.


o     Lipper Leaders for Preservation. In addition, Lipper scores funds in
their peer groups, based on monthly returns, without considering sales
charges, and identifies funds that had fewer and less severe negative monthly
performance periods.


|X|   Morningstar Ratings. From time to time the Fund may publish the star
rating of the performance of its classes of shares by Morningstar, Inc., an
independent mutual fund monitoring service. Morningstar rates and ranks
mutual funds in broad investment categories: domestic stock funds,
international stock funds, taxable bond funds and municipal bond funds. The
Fund is ranked among muni New York long-term funds.

      Morningstar proprietary star ratings reflect historical risk-adjusted
total investment return. For each fund with at least a three-year history,
Morningstar calculates a Morningstar period,Rating(TM)based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in a fund's monthly
performance (including the risk.effects of sales charges, loads, and
redemption fees), placing more emphasis on downward variations and rewarding
consistent performance.   The top 10% of funds in each category receive 5
stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next
22.5% receive 2 stars, and the bottom 10% receive 1 star.  (Each share class
is counted as a fraction of one fund within this scale and rated separately,
which may cause slight variations in the distribution percentages.) The
Overall Morningstar Rating for a fund is derived from a weighted average of
the performance figures associated with its three-, five-and ten-year (if
applicable) Morningstar Rating metrics.


      |X|   Performance Rankings and Comparisons by Other Entities and
Publications. From time to time the Fund may include in its advertisements
and sales literature performance information about the Fund cited in
newspapers and other periodicals such as The New York Times, The Wall Street
Journal, Barron's, or similar publications. That information may include
performance quotations from other sources, including Lipper and Morningstar.
The performance of the Fund's classes of shares may be compared in
publications to the performance of various market indices or other
investments, and averages, performance rankings or other benchmarks prepared
by recognized mutual fund statistical services.

      Investors may also wish to compare the returns on the Fund's share
classes to the return on fixed-income investments available from banks and
thrift institutions. Those include certificates of deposit, ordinary
interest-paying checking and savings accounts, and other forms of fixed or
variable time deposits, and various other instruments such as Treasury bills.
However, the Fund's returns and share price are not guaranteed or insured by
the FDIC or any other agency and will fluctuate daily, while bank depository
obligations may be insured by the FDIC and may provide fixed rates of return.
Repayment of principal and payment of interest on Treasury securities is
backed by the full faith and credit of the U.S. government.

      From time to time, the Fund may publish rankings or ratings of the
Manager or Transfer Agent, and of the investor services provided by them to
shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves.  Those ratings or rankings of shareholder and
investor services by third parties may include comparisons of their services
to those provided by other mutual fund families selected by the rating or
ranking services. They may be based upon the opinions of the rating or
ranking service itself, using its research or judgment, or based upon surveys
of investors, brokers, shareholders or others.

      From time to time the Fund may include in its advertisements and sales
literature the total return performance of a hypothetical investment account
that includes shares of the Fund and other Oppenheimer funds. The combined
account may be part of an illustration of an asset allocation model or
similar presentation. The account performance may combine total return
performance of the Fund and the total return performance of other Oppenheimer
funds included in the account. Additionally, from time to time, the Fund's
advertisements and sales literature may include, for illustrative or
comparative purposes, statistical data or other information about general or
specific market and economic conditions. That may include, for example,
o     information about the performance of certain securities or commodities

         markets or segments of those markets,
o     information about the performance of the economies of particular
         countries or regions,
o     the earnings of companies included in segments of particular
         industries, sectors, securities markets, countries or regions,
o     the availability of different types of securities or offerings of
         securities,
o     information relating to the gross national or gross domestic product of
         the United States or other countries or regions,
o     comparisons of various market sectors or indices to demonstrate
         performance, risk, or other characteristics of the Fund.


about your account


How to Buy Shares

Additional information is presented below about the methods that can be used
to buy shares of the Fund. Appendix C contains more information about the
special sales charge arrangements offered by the Fund, and the circumstances
in which sales charges may be reduced or waived for certain classes of
investors.


AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $50 and shareholders must invest at least $500 before an
                     ---
Asset Builder Plan (described below) can be established on a new account.
Accounts established prior to November 1, 2002 will remain at $25 for
additional purchases. Shares will be purchased on the regular business day
the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares. Dividends will begin to accrue on shares
purchased with the proceeds of ACH transfers on the business day the Fund
receives Federal Funds for the purchase through the ACH system before the
close of The New York Stock Exchange ("the Exchange"). The Exchange normally
closes at 4:00 P.M., but may close earlier on certain days. If Federal Funds
are received on a business day after the close of the Exchange, the shares
will be purchased and dividends will begin to accrue on the next regular
business day. The proceeds of ACH transfers are normally received by the Fund
three days after the transfers are initiated. If the proceeds of the ACH
transfer are not received on a timely basis, the Distributor reserves the
right to cancel the purchase order. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from delays in ACH
transmissions.


Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge
rate may be obtained for Class A shares under Right of Accumulation and
Letters of Intent because of the economies of sales efforts and reduction in
expenses realized by the Distributor, dealers and brokers making such sales.
No sales charge is imposed in certain other circumstances described in
Appendix C to this Statement of Additional Information because the
Distributor or dealer or broker incurs little or no selling expenses.

|X|   Right of Accumulation. To qualify for the lower sales charge rates that
apply to larger purchases of Class A shares, you and your spouse can add
together:
o     Class A and Class B shares you purchase for your individual accounts
            (including IRAs and 403(b) plans), or for your joint accounts, or
            for trust or custodial accounts on behalf of your children who
            are minors, and
o     Current purchases of Class A and Class B shares of the Fund and other
            Oppenheimer funds to reduce the sales charge rate that applies to
            current purchases of Class A shares, and
o     Class A and Class B shares of Oppenheimer funds you previously
            purchased subject to an initial or contingent deferred sales
            charge to reduce the sales charge rate for current purchases of
            Class A shares, provided that you still hold your investment in
            one of the Oppenheimer funds.

      A fiduciary can count all shares purchased for a trust, estate or other
fiduciary account (including one or more employee benefit plans of the same
employer) that has multiple accounts. The Distributor will add the value, at
current offering price, of the shares you previously purchased and currently
own to the value of current purchases to determine the sales charge rate that
applies. The reduced sales charge will apply only to current purchases. You
must request it when you buy shares.


|X|   The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for
which the Distributor acts as the distributor and currently include the
following:

Oppenheimer AMT-Free New York Municipals  Oppenheimer Multiple Strategies Fund
Oppenheimer Bond Fund                     Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund     Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Appreciation Fund     Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Preservation Fund     Oppenheimer Quest Balanced Value Fund
                                          Oppenheimer  Quest  Capital  Value Fund,
Oppenheimer Capital Income Fund           Inc.
                                          Oppenheimer  Quest  Global  Value  Fund,
Oppenheimer Champion Income Fund          Inc.

Oppenheimer Convertible Securities Fund   Oppenheimer Quest Opportunity Value Fund
Oppenheimer Developing Markets Fund       Oppenheimer Quest Value Fund, Inc.
Oppenheimer Disciplined Allocation Fund   Oppenheimer Real Asset Fund
                                          Oppenheimer      Rochester      National
Oppenheimer Discovery Fund                Municipals

Oppenheimer Emerging Growth Fund          Oppenheimer Senior Floating Rate Fund
Oppenheimer Emerging Technologies Fund    Oppenheimer Small Cap Value Fund
Oppenheimer Enterprise Fund               Oppenheimer Strategic Income Fund
Oppenheimer Europe Fund                   Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Fund                   Oppenheimer Trinity Core Fund
                                          Oppenheimer  Trinity  Large  Cap  Growth
Oppenheimer Global Growth & Income Fund   Fund
Oppenheimer Gold & Special Minerals Fund  Oppenheimer Trinity Value Fund
Oppenheimer Growth Fund                   Oppenheimer U.S. Government Trust
Oppenheimer High Yield Fund               Oppenheimer Value Fund
Oppenheimer International Bond Fund       Limited-Term New York Municipal Fund
Oppenheimer International Growth Fund     Rochester Fund Municipals
Oppenheimer  International  Small Company
Fund                                      OSM1- Gartmore Millennium Growth Fund II
Oppenheimer Limited-Term Government Fund  OSM1 - Jennison Growth Fund
                                          OSM1 -  Mercury  Advisors  S&P 500 Index
Oppenheimer Limited Term Municipal Fund   Fund
Oppenheimer  Main Street  Growth & Income OSM1 -  Mercury  Advisors  Focus  Growth
Fund                                      Fund
Oppenheimer Main Street Opportunity Fund  OSM1 - QM Active Balanced Fund
Oppenheimer Main Street Small Cap Fund    OSM1 - Salomon Brothers All Cap Fund
Oppenheimer MidCap Fund
And the following money market funds:


Centennial America Fund, L. P.            Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust    Centennial Tax Exempt Trust
Centennial Government Trust               Oppenheimer Cash Reserves
Centennial Money Market Trust             Oppenheimer Money Market Fund, Inc.
1 - "OSM" stands for Oppenheimer Select
Managers


      There is an initial sales charge
on the purchase of Class A shares of
each of the Oppenheimer funds described
above except the money market funds and
Oppenheimer Senior Floating Rate Fund.
Under certain circumstances described in
this Statement of Additional
Information, redemption proceeds of
certain money market fund shares may be
subject to a contingent deferred sales
charge.

Letters of Intent. Under a Letter of
Intent, if you purchase Class A shares
or Class A and Class B shares of the
Fund and other Oppenheimer funds during
a 13-month period, you can reduce the
sales charge rate that applies to your
purchases of Class A shares. The total
amount of your intended purchases of
both Class A and Class B shares will
determine the reduced sales charge rate
for the Class A shares purchased during
that period. You can include purchases
made up to 90 days before the date of
the Letter. Letters of Intent do not
consider Class C shares you purchase or
may have purchased.


      A Letter of Intent is an
investor's statement in writing to the
Distributor of the intention to purchase
Class A shares or Class A and Class B
shares of the Fund (and other
Oppenheimer funds) during a 13-month
period (the "Letter of Intent period").
At the investor's request, this may
include purchases made up to 90 days
prior to the date of the Letter. The
Letter states the investor's intention
to make the aggregate amount of
purchases of shares which, when added to
the investor's holdings of shares of
those funds, will equal or exceed the
amount specified in the Letter.
Purchases made by reinvestment of
dividends or distributions of capital
gains and purchases made at net asset
value without sales charge do not count
toward satisfying the amount of the
Letter.

      A Letter enables an investor to
count the Class A and Class B shares
purchased under the Letter to obtain the
reduced sales charge rate on purchases
of Class A shares of the Fund (and other
Oppenheimer funds) that applies under
the Right of Accumulation to current
purchases of Class A shares. Each
purchase of Class A shares under the
Letter will be made at the offering
price (including the sales charge) that
applies to a single lump-sum purchase of
shares in the amount intended to be
purchased under the Letter.


      In submitting a Letter, the
investor makes no commitment to purchase
shares. However, if the investor's
purchases of shares within the Letter of
Intent period, when added to the value
(at offering price) of the investor's
holdings of shares on the last day of
that period, do not equal or exceed the
intended purchase amount, the investor
agrees to pay the additional amount of
sales charge applicable to such
purchases. That amount is described in
"Terms of Escrow," below (those terms
may be amended by the Distributor from
time to time). The investor agrees that
shares equal in value to 5% of the
intended purchase amount will be held in
escrow by the Transfer Agent subject to
the Terms of Escrow. Also, the investor
agrees to be bound by the terms of the
Prospectus, this Statement of Additional
Information and the application used for
a Letter of Intent. If those terms are
amended, as they may be from time to
time by the Fund, the investor agrees to
be bound by the amended terms and that
those amendments will apply
automatically to existing Letters of
Intent.


      If the total eligible purchases
made during the Letter of Intent period
do not equal or exceed the intended
purchase amount, the concessions
previously paid to the dealer of record
for the account and the amount of sales
charge retained by the Distributor will
be adjusted to the rates applicable to
actual total purchases. If total
eligible purchases during the Letter of
Intent period exceed the intended
purchase amount and exceed the amount
needed to qualify for the next sales
charge rate reduction set forth in the
Prospectus, the sales charges paid will
be adjusted to the lower rate. That
adjustment will be made only if and when
the dealer returns to the Distributor
the excess of the amount of concessions
allowed or paid to the dealer over the
amount of concessions that apply to the
actual amount of purchases. The excess
concessions returned to the Distributor
will be used to purchase additional
shares for the investor's account at the
net asset value per share in effect on
the date of such purchase, promptly
after the Distributor's receipt thereof.

      In determining the total amount of
purchases made under a Letter, shares
redeemed by the investor prior to the
termination of the Letter of Intent
period will be deducted. It is the
responsibility of the dealer of record
and/or the investor to advise the
Distributor about the Letter in placing
any purchase orders for the investor
during the Letter of Intent period. All
of such purchases must be made through
the Distributor.

      |X|   Terms of Escrow That Apply
to Letters of Intent.

         1. Out of the initial purchase
(or subsequent purchases if necessary)
made pursuant to a Letter, shares of the
Fund equal in value up to 5% of the
intended purchase amount specified in
the Letter shall be held in escrow by
the Transfer Agent. For example, if the
intended purchase amount is $50,000, the
escrow shall be shares valued in the
amount of $2,500 (computed at the
offering price adjusted for a $50,000
purchase). Any dividends and capital
gains distributions on the escrowed
shares will be credited to the
investor's account.


         2.  If the total minimum
investment specified under the Letter is
completed within the 13-month Letter of
Intent period, the escrowed shares will
be promptly released to the investor.

         3. If, at the end of the
13-month Letter of Intent period the
total purchases pursuant to the Letter
are less than the intended purchase
amount specified in the Letter, the
investor must remit to the Distributor
an amount equal to the difference
between the dollar amount of sales
charges actually paid and the amount of
sales charges which would have been paid
if the total amount purchased had been
made at a single time. That sales charge
adjustment will apply to any shares
redeemed prior to the completion of the
Letter. If the difference in sales
charges is not paid within twenty days
after a request from the Distributor or
the dealer, the Distributor will, within
sixty days of the expiration of the
Letter, redeem the number of escrowed
shares necessary to realize such
difference in sales charges. Full and
fractional shares remaining after such
redemption will be released from escrow.
If a request is received to redeem
escrowed shares prior to the payment of
such additional sales charge, the sales
charge will be withheld from the
redemption proceeds.


         4. By signing the Letter, the
investor irrevocably constitutes and
appoints the Transfer Agent as
attorney-in-fact to surrender for
redemption any or all escrowed shares.

         5. The shares eligible for
purchase under the Letter (or the
holding of which may be counted toward
completion of a Letter) include:
(a)   Class A shares sold with a
               front-end sales charge or
               subject to a Class A
               contingent deferred sales
               charge,
(b)   Class B shares of other
               Oppenheimer funds
               acquired subject to a
               contingent deferred sales
               charge, and
(c)   Class A or Class B shares acquired
               by exchange of either (1)
               Class A shares of one of
               the other Oppenheimer
               funds that were acquired
               subject to a Class A
               initial or contingent
               deferred sales charge or
               (2) Class B shares of one
               of the other Oppenheimer
               funds that were acquired
               subject to a contingent
               deferred sales charge.

         6. Shares held in escrow
hereunder will automatically be
exchanged for shares of another fund to
which an exchange is requested, as
described in the section of the
Prospectus entitled "How to Exchange
Shares" and the escrow will be
transferred to that other fund.


Asset Builder Plans. As explained in the
Prospectus, you must initially establish
your account with $500. Subsequently,
you can establish an Asset Builder Plan
to automatically purchase additional
shares directly from a bank account for
as little as $50. For those accounts
established prior to November 1, 2002
and which have previously established
Asset Builder Plans, additional
purchases will remain at $25. Shares
purchased by Asset Builder Plan payments
from bank accounts are subject to the
redemption restrictions for recent
purchases described in the Prospectus.
Asset Builder Plans are available only
if your bank is an ACH member. Asset
Builder Plans may not be used to buy
shares for OppenheimerFunds
employer-sponsored qualified retirement
accounts. Asset Builder Plans also
enable shareholders of Oppenheimer Cash
Reserves to use their fund account to
make monthly automatic purchases of
shares of up to four other Oppenheimer
funds.

      If you make payments from your
bank account to purchase shares of the
Fund, your bank account will be debited
automatically. Normally the debit will
be made two business days prior to the
investment dates you selected on your
application. Neither the Distributor,
the Transfer Agent or the Fund shall be
responsible for any delays in purchasing
shares that result from delays in ACH
transmissions.


      Before you establish Asset Builder
payments, you should obtain a prospectus
of the selected fund(s) from your
financial advisor (or the Distributor)
and request an application from the
Distributor. Complete the application
and return it. You may change the amount
of your Asset Builder payment or you can
terminate these automatic investments at
any time by writing to the Transfer
Agent. The Transfer Agent requires a
reasonable period (approximately 10
days) after receipt of your instructions
to implement them. The Fund reserves the
right to amend, suspend or discontinue
offering Asset Builder plans at any time
without prior notice.

Cancellation of Purchase Orders.
Cancellation of purchase orders for the
Fund's shares (for example, when a
purchase check is returned to the Fund
unpaid) causes a loss to be incurred
when the net asset values of the Fund's
shares on the cancellation date is less
than on the purchase date. That loss is
equal to the amount of the decline in
the net asset value per share multiplied
by the number of shares in the purchase
order. The investor is responsible for
that loss. If the investor fails to
compensate the Fund for the loss, the
Distributor will do so. The Fund may
reimburse the Distributor for that
amount by redeeming shares from any
account registered in that investor's
name, or the Fund or the Distributor may
seek other redress.

Classes of Shares. Each class of shares
of the Fund represents an interest in
the same portfolio of investments of the
Fund. However, each class has different
shareholder privileges and features. The
net income attributable to Class B or
Class C shares and the dividends payable
on Class B or Class C shares will be
reduced by incremental expenses borne
solely by that class. Those expenses
include the asset-based sales charges to
which Class B and Class C are subject.

      The availability of different
classes of shares permits an investor to
choose the method of purchasing shares
that is more appropriate for the
investor. That may depend on the amount
of the purchase, the length of time the
investor expects to hold shares, and
other relevant circumstances. Class A
shares normally are sold subject to an
initial sales charge. While Class B and
Class C shares have no initial sales
charge, the purpose of the deferred
sales charge and asset-based sales
charge on Class B and Class C shares is
the same as that of the initial sales
charge on Class A shares - to compensate
the Distributor and brokers, dealers and
financial institutions that sell shares
of the Fund. A salesperson who is
entitled to receive compensation from
his or her firm for selling Fund shares
may receive different levels of
compensation for selling one class of
shares rather than another.

      The Distributor will not accept
any order in the amount of $500,000 or
more for Class B shares or $1 million or
more for Class C shares on behalf of a
single investor (not including dealer
"street name" or omnibus accounts). That
is because generally it will be more
advantageous for that investor to
purchase Class A shares of the Fund.

      |X|   Class B Conversion. Under
current interpretations of applicable
federal income tax law by the Internal
Revenue Service, the conversion of Class
B shares to Class A shares after six
years is not treated as a taxable event
for the shareholder. If those laws or
the IRS interpretation of those laws
should change, the automatic conversion
feature may be suspended. In that event,
no further conversions of Class B shares
would occur while that suspension
remained in effect. Although Class B
shares could then be exchanged for Class
A shares on the basis of relative net
asset value of the two classes, without
the imposition of a sales charge or fee,
such exchange could constitute a taxable
event for the shareholder, and absent
such exchange, Class B shares might
continue to be subject to the
asset-based sales charge for longer than
six years.

      |X|   Allocation of Expenses. The
Fund pays expenses related to its daily
operations, such as custodian fees,
Trustees' fees, transfer agency fees,
legal fees and auditing costs. Those
expenses are paid out of the Fund's
assets and are not paid directly by
shareholders. However, those expenses
reduce the net asset values of shares,
and therefore are indirectly borne by
shareholders through their investment.

      The methodology for calculating
the net asset value, dividends and
distributions of the Fund's share
classes recognizes two types of
expenses. General expenses that do not
pertain specifically to any one class
are allocated pro rata to the shares of
all classes. The allocation is based on
the percentage of the Fund's total
assets that is represented by the assets
of each class, and then equally to each
outstanding share within a given class.
Such general expenses include management
fees, legal, bookkeeping and audit fees,
printing and mailing costs of
shareholder reports, Prospectuses,
Statements of Additional Information and
other materials for current
shareholders, fees to unaffiliated
Trustees, custodian expenses, share
issuance costs, organization and
start-up costs, interest, taxes and
brokerage commissions, and non-recurring
expenses, such as litigation costs.

      Other expenses that are directly
attributable to a particular class are
allocated equally to each outstanding
share within that class. Examples of
such expenses include distribution and
service plan (12b-1) fees, transfer and
shareholder servicing agent fees and
expenses and shareholder meeting
expenses (to the extent that such
expenses pertain only to a specific
class).


Account Fees. As stated in the
Prospectus, a $12 annual fee is assessed
on any account valued at less than $500.
This fee will not be assessed on the
following accounts:
o     Accounts that have balances below
         $500 due to the automatic
         conversion of shares from Class
         B to Class A shares;
o     Accounts with an active Asset
         Builder Plan, payroll deduction
         plan or a military allotment
         plan;
o     OppenheimerFunds-sponsored group
         retirement accounts that are
         making continuing purchases;
o     Certain accounts held by
         broker-dealers through the
         National Securities Clearing
         Corporation; and
o     Accounts that fall below the $500
         threshold due solely to market
         fluctuations within the
         12-month period preceding the
         date the fee is deducted.

      The fee is automatically deducted
from qualifying accounts annually on or
about the second to last business day of
September. This annual fee is waived for
any shareholders who elect to access
their account documents through
electronic document delivery rather than
in paper copy and who elect to utilize
the Internet or PhoneLink as their
primary source for their general
servicing needs.  To sign up to access
account documents electronically via
eDocs Direct, please visit the Service
Center on our website at
www.oppenheimerfunds.com or call
------------------------
1.888.470.0862 for instructions.

Determination of Net Asset Values Per
Share. The net asset values per share of
each class of shares of the Fund are
determined as of the close of business
of the Exchange on each day that the
Exchange is open. The calculation is
done by dividing the value of the Fund's
net assets attributable to a class by
the number of shares of that class that
are outstanding. The Exchange normally
closes at 4:00 P.M., Eastern time, but
may close earlier on some other days
(for example, in case of weather
emergencies or on days falling before a
U.S. holiday).  All references to time
in this Statement of Additional
Information mean "Eastern time." The
Exchange's most recent annual
announcement (which is subject to
change) states that it will close on New
Year's Day, Presidents' Day, Martin
Luther King, Jr. Day, Good Friday,
Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas
Day.  It may also close on other days.


      Dealers other than Exchange
members may conduct trading in municipal
securities on days on which the Exchange
is closed (including weekends and
holidays) or after 4:00 P.M. on a
regular business day. Because the Fund's
net asset values will not be calculated
on those days, the Fund's net asset
values per share may be significantly
affected on such days when shareholders
may not purchase or redeem shares.

      |X|   Securities Valuation. The
Fund's Board of Trustees has established
procedures for the valuation of the
Fund's securities. In general those
procedures are as follows:

o     Long-term debt securities having a
remaining maturity in excess of 60 days
are valued based on the mean between the
"bid" and "asked" prices determined by a
portfolio pricing service approved by
the Fund's Board of Trustees or obtained
by the Manager from two active market
makers in the security on the basis of
reasonable inquiry.
o     The following securities are
valued at the mean between the "bid" and
"asked" prices determined by a pricing
service approved by the Fund's Board of
Trustees or obtained by the Manager from
two active market makers in the security
on the basis of reasonable inquiry:
(1)   debt instruments that have a
               maturity of more than 397
               days when issued,
(2)   debt instruments that had a
               maturity of 397 days or
               less when issued and have
               a remaining maturity of
               more than 60 days, and
(3)   non-money market debt instruments
               that had a maturity of
               397 days or less when
               issued and which have a
               remaining maturity of 60
               days or less.
o     The following securities are
valued at cost, adjusted for
amortization of premiums and accretion
of discounts:
(1)   money market debt securities held
               by a non-money market
               fund that had a maturity
               of less than 397 days
               when issued that have a
               remaining maturity of 60
               days or less, and
(2)   debt instruments held by a money
               market fund that have a
               remaining maturity of 397
               days or less.

o     Securities (including restricted
securities) not having readily-available
market quotations are valued at fair
value determined under the Board's
procedures.


      If the Manager is unable to locate
two market makers willing to give
quotes, a security may be priced at the
mean between the "bid" and "asked"
prices provided by a single active
market maker (which in certain cases may
be the "bid" price if no "asked" price
is available).

      In the case of municipal
securities, when last sale information
is not generally available, the Manager
may use pricing services approved by the
Board of Trustees. The pricing service
may use "matrix" comparisons to the
prices for comparable instruments on the
basis of quality, yield and maturity.
Other special factors may be involved
(such as the tax-exempt status of the
interest paid by municipal securities).
The Manager will monitor the accuracy of
the pricing services. That monitoring
may include comparing prices used for
portfolio valuation to actual sales
prices of selected securities.


      Puts and calls are valued at the
last sale price on the principal
exchange on which they are traded or on
Nasdaq(R), as applicable, as determined by
a pricing service approved by the Board
of Trustees or by the Manager. If there
were no sales that day, they shall be
valued at the last sale price on the
preceding trading day if it is within
the spread of the closing "bid" and
"asked" prices on the principal exchange
or on Nasdaq on the valuation date. If
not, the value shall be the closing bid
price on the principal exchange or on
Nasdaq on the valuation date. If the put
or call is not traded on an exchange or
on Nasdaq, it shall be valued by the
mean between "bid" and "asked" prices
obtained by the Manager from two active
market makers. In certain cases that may
be at the "bid" price if no "asked"
price is available.


      When the Fund writes an option, an
amount equal to the premium received is
included in the Fund's Statement of
Assets and Liabilities as an asset. An
equivalent credit is included in the
liability section. The credit is
adjusted ("marked-to-market") to reflect
the current market value of the option.
In determining the Fund's gain on
investments, if a call written by the
Fund is exercised, the proceeds are
increased by the premium received. If a
call written by the Fund expires, the
Fund has a gain in the amount of the
premium. If the Fund enters into a
closing purchase transaction, it will
have a gain or loss, depending on
whether the premium received was more or
less than the cost of the closing
transaction. If the Fund exercises a put
it holds, the amount the Fund receives
on its sale of the underlying investment
is reduced by the amount of premium paid
by the Fund.


How to Sell Shares

The information below supplements the
terms and conditions for redeeming
shares set forth in the Prospectus.


Checkwriting. When a check is presented
to United Missouri Bank (the "Bank") for
clearance, the Bank will ask the Fund to
redeem a sufficient number of full and
fractional shares in the shareholder's
account to cover the amount of the
check. This enables the shareholder to
continue receiving dividends on those
shares until the check is presented to
the Fund. Checks may not be presented
for payment at the offices of the Bank
or the Fund's custodian. This limitation
does not affect the use of checks for
the payment of bills or to obtain cash
at other banks. The Fund reserves the
right to amend, suspend or discontinue
offering checkwriting privileges at any
time.  The Fund will provide you notice
whenever it is required to do so by
applicable law.

      In choosing to take advantage of
the Checkwriting privilege, by signing
the account application or by completing
a Checkwriting card, each individual who
signs:

(1)   for individual accounts,
           represents that they are the
           registered owner(s) of the
           shares of the Fund in that
           account;
(2)   for accounts for corporations,
           partnerships, trusts and
           other entities, represents
           that they are an officer,
           general partner, trustee or
           other fiduciary or agent, as
           applicable, duly authorized
           to act on behalf of the
           registered owner(s);
(3)   authorizes the Fund, its Transfer
           Agent and any bank through
           which the Fund's drafts
           (checks) are payable to pay
           all checks drawn on the Fund
           account of such person(s) and
           to redeem a sufficient amount
           of shares from that account
           to cover payment of each
           check;

(4)   specifically acknowledges that if
           they choose to permit checks
           to be honored if there is a
           single signature on checks
           drawn against joint accounts,
           or accounts for corporations,
           partnerships, trusts or other
           entities, the signature of
           any one signatory on a check
           will be sufficient to
           authorize payment of that
           check and redemption from the
           account, even if that account
           is registered in the names of
           more than one person or more
           than one authorized signature
           appears on the Checkwriting
           card or the application, as
           applicable;

(5)   understands that the Checkwriting
           privilege may be terminated
           or amended at any time by the
           Fund and/or the Fund's bank;
           and
(6)   acknowledges and agrees that
           neither the Fund nor its bank
           shall incur any liability for
           that amendment or termination
           of checkwriting privileges or
           for redeeming shares to pay
           checks reasonably believed by
           them to be genuine, or for
           returning or not paying
           checks that have not been
           accepted for any reason.

Sending Redemption Proceeds by Federal
Funds Wire. The Federal Funds wire of
redemption proceeds may be delayed if
the Fund's custodian bank is not open
for business on a day when the Fund
would normally authorize the wire to be
made, which is usually the Fund's next
regular business day following the
redemption. In those circumstances, the
wire will not be transmitted until the
next bank business day on which the Fund
is open for business. No dividends will
be paid on the proceeds of redeemed
shares awaiting transfer by Federal
Funds wire.

Reinvestment Privilege. Within six
months of a redemption, a shareholder
may reinvest all or part of the
redemption proceeds of:
o     Class A shares purchased subject
         to an initial sales charge or
         Class A shares on which a
         contingent deferred sales
         charge was paid, or
o     Class B shares that were subject
         to the Class B contingent
         deferred sales charge when
         redeemed.

      The reinvestment may be made
without sales charge only in Class A
shares of the Fund or any of the other
Oppenheimer funds into which shares of
the Fund are exchangeable as described
in "How to Exchange Shares" below.
Reinvestment will be at the net asset
value next computed after the Transfer
Agent receives the reinvestment order.
The shareholder must ask the Transfer
Agent for that privilege at the time of
reinvestment. This privilege does not
apply to Class C or Class Y shares. The
Fund may amend, suspend or cease
offering this reinvestment privilege at
any time as to shares redeemed after the
date of such amendment, suspension or
cessation.

      Any capital gain that was realized
when the shares were redeemed is
taxable, and reinvestment will not alter
any capital gains tax payable on that
gain. If there has been a capital loss
on the redemption, some or all of the
loss may not be tax deductible,
depending on the timing and amount of
the reinvestment. Under the Internal
Revenue Code, if the redemption proceeds
of Fund shares on which a sales charge
was paid are reinvested in shares of the
Fund or another of the Oppenheimer funds
within 90 days of payment of the sales
charge, the shareholder's basis in the
shares of the Fund that were redeemed
may not include the amount of the sales
charge paid. That would reduce the loss
or increase the gain recognized from the
redemption. However, in that case the
sales charge would be added to the basis
of the shares acquired by the
reinvestment of the redemption proceeds.

Payments "In Kind". The Prospectus
states that payment for shares tendered
for redemption is ordinarily made in
cash. However, under certain
circumstances, the Board of Trustees of
the Fund may determine that it would be
detrimental to the best interests of the
remaining shareholders of the Fund to
make payment of a redemption order
wholly or partly in cash. In that case,
the Fund may pay the redemption proceeds
in whole or in part by a distribution
"in kind" of liquid securities from the
portfolio of the Fund, in lieu of cash.


      The Fund has elected to be
governed by Rule 18f-1 under the
Investment Company Act. Under that rule,
the Fund is obligated to redeem shares
solely in cash up to the lesser of
$250,000 or 1% of the net assets of the
Fund during any 90-day period for any
one shareholder. If shares are redeemed
in kind, the redeeming shareholder might
incur brokerage or other costs in
selling the securities for cash. The
Fund will value securities used to pay
redemptions in kind using the same
method the Fund uses to value its
portfolio securities described above
under "Determination of Net Asset Values
Per Share." That valuation will be made
as of the time the redemption price is
determined.


Involuntary Redemptions. The Fund's
Board of Trustees has the right to cause
the involuntary redemption of the shares
held in any account if the aggregate net
asset value of those shares is less than
$200 or such lesser amount as the Board
may fix. The Board of Trustees will not
cause the involuntary redemption of
shares in an account if the aggregate
net asset value of such shares has
fallen below the stated minimum solely
as a result of market fluctuations. If
the Board exercises this right, it may
also fix the requirements for any notice
to be given to the shareholders in
question (not less than 30 days). The
Board may alternatively set requirements
for the shareholder to increase the
investment, or set other terms and
conditions so that the shares would not
be involuntarily redeemed.

Transfers of Shares. A transfer of
shares to a different registration is
not an event that triggers the payment
of sales charges. Therefore, shares are
not subject to the payment of a
contingent deferred sales charge of any
class at the time of transfer to the
name of another person or entity. It
does not matter whether the transfer
occurs by absolute assignment, gift or
bequest, as long as it does not involve,
directly or indirectly, a public sale of
the shares. When shares subject to a
contingent deferred sales charge are
transferred, the transferred shares will
remain subject to the contingent
deferred sales charge. It will be
calculated as if the transferee
shareholder had acquired the transferred
shares in the same manner and at the
same time as the transferring
shareholder.

      If less than all shares held in an
account are transferred, and some but
not all shares in the account would be
subject to a contingent deferred sales
charge if redeemed at the time of
transfer, the priorities described in
the Prospectus under "How to Buy Shares"
for the imposition of the Class B or
Class C contingent deferred sales charge
will be followed in determining the
order in which shares are transferred.


Special Arrangements for Repurchase of
Shares from Dealers and Brokers. The
Distributor is the Fund's agent to
repurchase its shares from authorized
dealers or brokers on behalf of their
customers. Shareholders should contact
their broker or dealer to arrange this
type of redemption. The repurchase price
per share will be the net asset value
next computed after the Distributor
receives an order placed by the dealer
or broker. However, if the Distributor
receives a repurchase order from a
dealer or broker after the close of the
Exchange on a regular business day, it
will be processed at that day's net
asset value if the order was received by
the dealer or broker from its customers
prior to the time the Exchange closes.
Normally, the Exchange closes at 4:00
P.M., but may do so earlier on some
days. Additionally, the order must have
been transmitted to and received by the
Distributor prior to its close of
business that day (normally 5:00 P.M.).


      Ordinarily, for accounts redeemed
by a broker-dealer under this procedure,
payment will be made within three
business days after the shares have been
redeemed upon the Distributor's receipt
of the required redemption documents in
proper form. The signature(s) of the
registered owners on the redemption
documents must be guaranteed as
described in the Prospectus.

Automatic Withdrawal and Exchange Plans.
Investors owning shares of the Fund
valued at $5,000 or more can authorize
the Transfer Agent to redeem shares
(having a value of at least $50)
automatically on a monthly, quarterly,
semi-annual or annual basis under an
Automatic Withdrawal Plan. Shares will
be redeemed three business days prior to
the date requested by the shareholder
for receipt of the payment. Automatic
withdrawals of up to $1,500 per month
may be requested by telephone if
payments are to be made by check payable
to all shareholders of record. Payments
must also be sent to the address of
record for the account and the address
must not have been changed within the
prior 30 days. Required minimum
distributions from
OppenheimerFunds-sponsored retirement
plans may not be arranged on this
basis.


      Payments are normally made by
check, but shareholders having
AccountLink privileges (see "How To Buy
Shares") may arrange to have Automatic
Withdrawal Plan payments transferred to
the bank account designated on the
account application or by
signature-guaranteed instructions sent
to the Transfer Agent. Shares are
normally redeemed pursuant to an
Automatic Withdrawal Plan three business
days before the payment transmittal date
you select in the account application.
If a contingent deferred sales charge
applies to the redemption, the amount of
the check or payment will be reduced
accordingly.

      The Fund cannot guarantee receipt
of a payment on the date requested. The
Fund reserves the right to amend,
suspend or discontinue offering these
plans at any time without prior notice.
Because of the sales charge assessed on
Class A share purchases, shareholders
should not make regular additional Class
A share purchases while participating in
an Automatic Withdrawal Plan. Class B
and Class C shareholders should not
establish automatic withdrawal plans,
because of the potential imposition of
the contingent deferred sales charge on
such withdrawals (except where the
contingent deferred sales charge is
waived as described in Appendix C to
this Statement of Additional
Information).


      By requesting an Automatic
Withdrawal or Exchange Plan, the
shareholder agrees to the terms and
conditions that apply to such plans, as
stated below. These provisions may be
amended from time to time by the Fund
and/or the Distributor. When adopted,
any amendments will automatically apply
to existing Plans.


      |X|   Automatic Exchange Plans.
Shareholders can authorize the Transfer
Agent to exchange a pre-determined
amount of shares of the Fund for shares
(of the same class) of other Oppenheimer
funds automatically on a monthly,
quarterly, semi-annual or annual basis
under an Automatic Exchange Plan. The
minimum amount that may be exchanged to
each other fund account is $50.
Instructions should be provided on the
OppenheimerFunds Application or
signature-guaranteed instructions.
Exchanges made under these plans are
subject to the restrictions that apply
to exchanges as set forth in "How to
Exchange Shares" in the Prospectus and
below in this Statement of Additional
Information.


      |X|   Automatic Withdrawal Plans.
Fund shares will be redeemed as
necessary to meet withdrawal payments.
Shares acquired without a sales charge
will be redeemed first. Shares acquired
with reinvested dividends and capital
gains distributions will be redeemed
next, followed by shares acquired with a
sales charge, to the extent necessary to
make withdrawal payments. Depending upon
the amount withdrawn, the investor's
principal may be depleted. Payments made
under these plans should not be
considered as a yield or income on your
investment.

      The Transfer Agent will administer
the investor's Automatic Withdrawal Plan
as agent for the shareholder(s) (the
"Planholder") who executed the Plan
authorization and application submitted
to the Transfer Agent. Neither the Fund
nor the Transfer Agent shall incur any
liability to the Planholder for any
action taken or not taken by the
Transfer Agent in good faith to
administer the Plan. Share certificates
will not be issued for shares of the
Fund purchased for and held under the
Plan, but the Transfer Agent will credit
all such shares to the account of the
Planholder on the records of the Fund.
Any share certificates held by a
Planholder may be surrendered unendorsed
to the Transfer Agent with the Plan
application so that the shares
represented by the certificate may be
held under the Plan.

      For accounts subject to Automatic
Withdrawal Plans, distributions of
capital gains must be reinvested in
shares of the Fund, which will be done
at net asset value without a sales
charge. Dividends on shares held in the
account may be paid in cash or
reinvested.

      Shares will be redeemed to make
withdrawal payments at the net asset
value per share determined on the
redemption date. Checks or AccountLink
payments representing the proceeds of
Plan withdrawals will normally be
transmitted three business days prior to
the date selected for receipt of the
payment, according to the choice
specified in writing by the Planholder.
Receipt of payment on the date selected
cannot be guaranteed.

      The amount and the interval of
disbursement payments and the address to
which checks are to be mailed or
AccountLink payments are to be sent may
be changed at any time by the Planholder
by writing to the Transfer Agent. The
Planholder should allow at least two
weeks' time after mailing such
notification for the requested change to
be put in effect. The Planholder may, at
any time, instruct the Transfer Agent by
written notice to redeem all, or any
part of, the shares held under the Plan.
That notice must be in proper form in
accordance with the requirements of the
then-current Prospectus of the Fund. In
that case, the Transfer Agent will
redeem the number of shares requested at
the net asset value per share in effect
and will mail a check for the proceeds
to the Planholder.

      The Planholder may terminate a
Plan at any time by writing to the
Transfer Agent. The Fund may also give
directions to the Transfer Agent to
terminate a Plan. The Transfer Agent
will also terminate a Plan upon its
receipt of evidence satisfactory to it
that the Planholder has died or is
legally incapacitated. Upon termination
of a Plan by the Transfer Agent or the
Fund, shares that have not been redeemed
will be held in uncertificated form in
the name of the Planholder. The account
will continue as a
dividend-reinvestment, uncertificated
account unless and until proper
instructions are received from the
Planholder, his or her executor or
guardian, or another authorized person.

      To use shares held under the Plan
as collateral for a debt, the Planholder
may request issuance of a portion of the
shares in certificated form. Upon
written request from the Planholder, the
Transfer Agent will determine the number
of shares for which a certificate may be
issued without causing the withdrawal
checks to stop. However, should such
uncertificated shares become exhausted,
Plan withdrawals will terminate.

      If the Transfer Agent ceases to
act as transfer agent for the Fund, the
Planholder will be deemed to have
appointed any successor transfer agent
to act as agent in administering the
Plan.


How to Exchange Shares


As stated in the Prospectus, shares of a
particular class of Oppenheimer funds
having more than one class of shares may
be exchanged only for shares of the same
class of other Oppenheimer funds. Shares
of Oppenheimer funds that have a single
class without a class designation are
deemed "Class A" shares for this
purpose. You can obtain a current list
showing which funds offer which classes
of shares by calling the Distributor.

o     All of the Oppenheimer funds
      currently offer Class A, B, C, N
      and Y shares with the following
      exceptions:
C and N shares except for:
      The following funds only offer
Class A shares:
Oppenheimer Money Market Fund,







Centennial America Fund, L.P.             Centennial New York Tax Exempt Trust


      Centennial California Tax Exempt Trust  Centennial Tax Exempt Trust
      Centennial Government Trust             Oppenheimer Money Market Fund, Inc.
      Centennial Money Market Trust

      The following funds do not offer Class N shares:
America Fund, L.P., which only offer Class A shares and
America Fund, L.P., which only offer Class A shares andOppenheimer Municipal
Bond Fund,
Fund,
Rate

Fund,




      Oppenheimer AMT-Free New York           Oppenheimer Pennsylvania Municipal
      Municipals                              Fund


      Oppenheimer California Municipal Fund   Oppenheimer Rochester National
                                              Municipals
 Oppenheimer Senior Floating Rate
Fund,
      Oppenheimer Limited Term Municipal Fund Oppenheimer Senior Floating Rate
                                              Fund
America Fund, L.P., which only offer Class A shares and
Oppenheimer Municipal Bond Fund,

      Oppenheimer Municipal Bond Fund         Limited Term New York Municipal
                                              Fund
Oppenheimer New Jersey Municipal
      Oppenheimer New Jersey Municipal Fund   Rochester Fund Municipals

      The following funds do not offer Class Y shares:
      Oppenheimer AMT-Free New York          Oppenheimer International Small
      Municipals                             Company Fund
      Oppenheimer California Municipal Fund  Oppenheimer Limited Term Municipal
                                             Fund
      Oppenheimer Capital Income Fund        Oppenheimer Multiple Strategies Fund
      Oppenheimer Cash Reserves              Oppenheimer New Jersey Municipal Fund
      Oppenheimer Champion Income Fund       Oppenheimer Pennsylvania Municipal
                                             Fund
      Oppenheimer Convertible Securities     Oppenheimer Quest Capital Value Fund,
      Fund                                   Inc.
      Oppenheimer Disciplined Allocation     Oppenheimer Quest Global Value Fund,
      Fund                                   Inc.
      Oppenheimer Developing Markets Fund    Oppenheimer Rochester National
                                             Municipals
      Oppenheimer Gold & Special Minerals    Oppenheimer Senior Floating Rate Fund
      Fund
      Oppenheimer International Bond Fund    Oppenheimer Small Cap Value Fund
      Oppenheimer International Growth Fund  Limited Term New York Municipal Fund


o     Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
      shares of any other fund.
o     Class B, Class C and Class N shares of Oppenheimer Cash Reserves are
      generally available only by exchange from the same class of shares of
      other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k)
      plans.
o     Class M shares of Oppenheimer Convertible Securities Fund may be
      exchanged only for Class A shares of other Oppenheimer funds. They may
      not be acquired by exchange of shares of any class of any other
      Oppenheimer funds except Class A shares of Oppenheimer Money Market
      Fund or Oppenheimer Cash Reserves acquired by exchange of Class M
      shares.
o     Class X shares of Limited Term New York Municipal Fund may be exchanged
      only for Class B shares of other Oppenheimer funds and no exchanges may
      be made to Class X shares.
o     Shares of Oppenheimer Capital Preservation Fund may not be exchanged
      for shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash
      Reserves or Oppenheimer Limited-Term Government Fund.  Only
      participants in certain retirement plans may purchase shares of
      Oppenheimer Capital Preservation Fund, and only those participants may
      exchange shares of other Oppenheimer funds for shares of Oppenheimer
      Capital Preservation Fund.
o     Class A shares of Oppenheimer Senior Floating Rate Fund are not
      available by exchange of shares of Oppenheimer Money Market Fund or
      Class A shares of Oppenheimer Cash Reserves.
   o  Shares of Oppenheimer Select Managers Mercury Advisors S&P Index Fund
      and Oppenheimer Select Managers QM Active Balanced Fund are only
      available to retirement plans and are available only by exchange from
      the same class of shares of other Oppenheimer funds held by retirement
      plans.
               o  Class A shares of Oppenheimer funds may be exchanged at net
      asset value for shares of any money market fund offered by the
      Distributor. Shares of any money market fund purchased without a sales
      charge may be exchanged for shares of Oppenheimer funds offered with a
      sales charge upon payment of the sales charge. They may also be used to
      purchase shares of Oppenheimer funds subject to an early withdrawal
      charge or contingent deferred sales charge.
      o     Shares of Oppenheimer Money Market Fund, Inc. purchased with the
      redemption proceeds of shares of other mutual funds (other than funds
      managed by the Manager or its subsidiaries) redeemed within the 30 days
      prior to that purchase may subsequently be exchanged for shares of
      other Oppenheimer funds without being subject to an initial sales
      charge or contingent deferred sales charge. To qualify for that
      privilege, the investor or the investor's dealer must notify the
      Distributor of eligibility for this privilege at the time the shares of
      Oppenheimer Money Market Fund, Inc. are purchased. If requested, they
      must supply proof of entitlement to this privilege.
      o     Shares of the Fund acquired by reinvestment of dividends or
      distributions from any of the other Oppenheimer funds or from any unit
      investment trust for which reinvestment arrangements have been made
      with the Distributor may be exchanged at net asset value for shares of
      any of the Oppenheimer funds.

      The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund may impose these changes at any time, it will provide
you with notice of those changes whenever it is required to do so by
applicable law. It may be required to provide 60 days' notice prior to
materially amending or terminating the exchange privilege. That 60 day notice
is not required in extraordinary circumstances.


      |X|   How Exchanges Affect Contingent Deferred Sales Charges. No
contingent deferred sales charge is imposed on exchanges of shares of any
class purchased subject to a contingent deferred sales charge, with the
following exceptions:

         When Class A shares of any Oppenheimer fund (other than Rochester
National Municipals and Rochester Fund Municipals) acquired by exchange of
Class A shares of any Oppenheimer fund purchased subject to a Class A
contingent deferred sales charge are redeemed within 18 months measured from
the beginning of the calendar month of the initial purchase of the exchanged
Class A shares, the Class A contingent deferred sales charge is imposed on
the redeemed shares.

o     When Class A shares of Rochester National Municipals and Rochester Fund
Municipals acquired by exchange of Class A shares of any Oppenheimer fund
purchased subject to a Class A contingent deferred sales charge are redeemed
within 24 months of the beginning of the calendar month of the initial
purchase of the exchanged Class A shares, the Class A contingent deferred
sales charge is imposed on the redeemed shares.

o     If any Class A shares of another Oppenheimer fund that are exchanged
for Class A shares of Oppenheimer Senior Floating Rate Fund are subject to
the Class A contingent deferred sales charge of the other Oppenheimer fund at
the time of exchange, the holding period for that Class A contingent deferred
sales charge will carry over to the Class A shares of Oppenheimer Senior
Floating Rate Fund acquired in the exchange. The Class A shares of
Oppenheimer Senior Floating Rate Fund acquired in that exchange will be
subject to the Class A Early Withdrawal Charge of Oppenheimer Senior Floating
Rate Fund if they are repurchased before the expiration of the holding period.


o     When Class A shares of Oppenheimer Cash Reserves and Oppenheimer Money
Market Fund, Inc. acquired by exchange of Class A shares of any Oppenheimer
fund purchased subject to a Class A contingent deferred sales charge are
redeemed within the Class A holding period of the fund from which the shares
were exchanged, the Class A contingent deferred sales charge of the fund from
which the shares were exchanged is imposed on the redeemed shares.


         With respect to Class B shares, the Class B contingent deferred
sales charge is imposed on Class B shares acquired by exchange if they are
redeemed within six years of the initial purchase of the exchanged Class B
shares.

         With respect to Class C shares, the Class C contingent deferred
sales charge is imposed on Class C shares acquired by exchange if they are
redeemed within 12 months of the initial purchase of the exchanged Class C
shares.

o     With respect to Class N shares, a 1% contingent deferred sales charge
will be imposed if the retirement plan (not including IRAs and 403(b) plans)
is terminated or Class N shares of all Oppenheimer funds are terminated as an
investment option of the plan and Class N shares are redeemed within 18
months after the plan's first purchase of Class N shares of any Oppenheimer
fund or with respect to an individual retirement plan or 403(b) plan, Class N
shares are redeemed within 18 months of the plan's first purchase of Class N
shares of any Oppenheimer fund.

o     When Class B, Class C or Class N shares are redeemed to effect an
exchange, the priorities described in "How To Buy Shares" in the Prospectus
for the imposition of the Class B, Class C or Class N contingent deferred
sales charge will be followed in determining the order in which the shares
are exchanged. Before exchanging shares, shareholders should take into
account how the exchange may affect any contingent deferred sales charge that
might be imposed in the subsequent redemption of remaining shares.


      Shareholders owning shares of more than one class must specify which
class of shares they wish to exchange.

      |X|   Limits on Multiple Exchange Orders. The Fund reserves the right
to reject telephone or written exchange requests submitted in bulk by anyone
on behalf of more than one account. The Fund may accept requests for
exchanges of up to 50 accounts per day from representatives of authorized
dealers that qualify for this privilege.

      |X|   Telephone Exchange Requests. When exchanging shares by telephone,
a shareholder must have an existing account in the fund to which the exchange
is to be made. Otherwise, the investors must obtain a prospectus of that fund
before the exchange request may be submitted. If all telephone lines are busy
(which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.

      |X|   Processing Exchange Requests. Shares to be exchanged are redeemed
on the regular business day the Transfer Agent receives an exchange request
in proper form (the "Redemption Date"). Normally, shares of the fund to be
acquired are purchased on the Redemption Date, but such purchases may be
delayed by either fund up to five business days if it determines that it
would be disadvantaged by an immediate transfer of the redemption proceeds.
The Fund reserves the right, in its discretion, to refuse any exchange
request that may disadvantage it. For example, if the receipt of multiple
exchange requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the Fund,
the Fund may refuse the request.

      When you exchange some or all of your shares from one fund to another,
any special account feature such as an Asset Builder Plan or Automatic
Withdrawal Plan will be switched to the new fund account unless you tell the
Transfer Agent not to do so. However, special redemption and exchange
features such as Automatic Exchange Plans and Automatic Withdrawal Plans
cannot be switched to an account in Oppenheimer Senior Floating Rate Fund.

      In connection with any exchange request, the number of shares exchanged
may be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information, or would include shares covered by a
share certificate that is not tendered with the request. In those cases, only
the shares available for exchange without restriction will be exchanged.

      The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks. A shareholder should assure that
the fund selected is appropriate for his or her investment and should be
aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of one
fund and a purchase of shares of another. "Reinvestment Privilege," above,
discusses some of the tax consequences of reinvestment of redemption proceeds
in such cases. The Fund, the Distributor, and the Transfer Agent are unable
to provide investment, tax or legal advice to a shareholder in connection
with an exchange request or any other investment transaction.



Dividends, Capital Gains and Taxes


Dividends and Distributions. Dividends will be payable on shares held of
record at the time of the previous determination of net asset value, or as
otherwise described in "How to Buy Shares."  Daily dividends will not be
declared or paid on newly purchased shares until such time as Federal Funds
(funds credited to a member bank's account at the Federal Reserve Bank) are
available from the purchase payment for such shares. Normally, purchase
checks received from investors are converted to Federal Funds on the next
business day. Shares purchased through dealers or brokers normally are paid
for by the third business day following the placement of the purchase order.

      Shares redeemed through the regular redemption procedure will be paid
dividends through and including the day on which the redemption request is
received by the Transfer Agent in proper form. Dividends will be declared on
shares repurchased by a dealer or broker for three business days following
the trade date (that is, up to and including the day prior to settlement of
the repurchase). If all shares in an account are redeemed, all dividends
accrued on shares of the same class in the account will be paid together with
the redemption proceeds.

      The Fund's practice of attempting to pay dividends on Class A shares at
a constant level requires the Manager to monitor the Fund's portfolio and, if
necessary, to select higher-yielding securities when it is deemed appropriate
to seek income at the level needed to meet the target. Those securities must
be within the Fund's investment parameters, however. The Fund expects to pay
dividends at a targeted level from its net investment income and other
distributable income without any impact on the net asset values per share.

      Dividends, distributions and proceeds of the redemption of Fund shares
represented by checks returned to the Transfer Agent by the Postal Service as
undeliverable will be invested in shares of Oppenheimer Money Market Fund,
Inc. Reinvestment will be made as promptly as possible after the return of
such checks to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds. Unclaimed accounts may be subject to state escheatment
laws, and the Fund and the Transfer Agent will not be liable to shareholders
or their representatives for compliance with those laws in good faith.

      The amount of a distribution paid on a class of shares may vary from
time to time depending on market conditions, the composition of the Fund's
portfolio, and expenses borne by the Fund or borne separately by a class.
Dividends are calculated in the same manner, at the same time and on the same
day for shares of each class. However, dividends on Class B and Class C
shares are expected to be lower than dividends on Class A shares. That is due
to the effect of the asset-based sales charge on Class B and Class C shares.
Those dividends will also differ in amount as a consequence of any difference
in net asset value among the different classes of shares.


Tax Status of the Fund's Dividends, Distributions and Redemptions of Shares.
The federal tax treatment of the Fund's distributions is briefly highlighted
in the Prospectus. The following is only a summary of certain additional tax
considerations generally affecting the Fund and its shareholders.


      The tax discussion in the Prospectus and this Statement of Additional
Information is based on tax law in effect on the date of the Prospectus and
this Statement of Additional Information. Those laws and regulations may be
changed by legislative, judicial, or administrative action, sometimes with
retroactive effect. State and local tax treatment of exempt-interest
dividends and potential capital gain distributions from regulated investment
companies may differ from the treatment under the Internal Revenue Code
described below. Potential purchasers of shares of the Fund are urged to
consult their tax advisers with specific reference to their own tax
circumstances as well as the consequences of federal, state and local tax
rules affecting an investment in the Fund.


      Qualification as a Regulated Investment Company. The Fund has elected
to be taxed as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended.  As a regulated investment
company, the Fund is not subject to federal income tax on the portion of its
net investment income (that is, taxable interest, dividends, and other
taxable ordinary income, net of expenses) and capital gain net income (that
is, the excess of net long-term capital gains over net short-term capital
losses) that it distributes to shareholders.

      If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for federal income tax on
amounts it pays as dividends and other distributions. That qualification
enables the Fund to "pass through" its income and realized capital gains to
shareholders without having to pay tax on them. The Fund qualified as a
regulated investment company in its last fiscal year and intends to qualify
in future years, but reserves the right not to qualify. The Internal Revenue
Code contains a number of complex tests to determine whether the Fund
qualifies. The Fund might not meet those tests in a particular year. If it
does not qualify, the Fund will be treated for tax purposes as an ordinary
corporation and will receive no tax deduction for payments of dividends and
other distributions made to shareholders. In such an instance, all of the
Fund's dividends would be taxable to shareholders.


      To qualify as a regulated investment company, the Fund must distribute
at least 90% of its investment company taxable income (in brief, net
investment income and the excess of net short-term capital gain over net
long-term capital loss) and at least 90% of its net tax-exempt income for the
taxable year. The Fund must also satisfy certain other requirements of the
Internal Revenue Code, some of which are described below.  Distributions by
the Fund made during the taxable year or, under specified circumstances,
within 12 months after the close of the taxable year, will be considered
distributions of income and gains for the taxable year and will therefore
count toward satisfaction of the above-mentioned requirement.


      To qualify as a regulated investment company, the Fund must derive at
least 90% of its gross income from dividends, interest, certain payments with
respect to securities loans, gains from the sale or other disposition of
stock or securities or foreign currencies (to the extent such currency gains
are directly related to the regulated investment company's principal business
of investing in stock or securities) and certain other income.

      In addition to satisfying the requirements described above, the Fund
must satisfy an asset diversification test in order to qualify as a regulated
investment company.  Under that test, at the close of each quarter of the
Fund's taxable year, at least 50% of the value of the Fund's assets must
consist of cash and cash items (including receivables), U.S. government
securities, securities of other regulated investment companies, and
securities of other issuers. As to each of those issuers, the Fund must not
have invested more than 5% of the value of the Fund's total assets in
securities of each such issuer and the Fund must not hold more than 10% of
the outstanding voting securities of each such issuer. No more than 25% of
the value of its total assets may be invested in the securities of any one
issuer (other than U.S. government securities and securities of other
regulated investment companies), or in two or more issuers which the Fund
controls and which are engaged in the same or similar trades or businesses.
For purposes of this test, obligations issued or guaranteed by certain
agencies or instrumentalities of the U.S. government are treated as U.S.
government securities.


|X|   Excise Tax on Regulated Investment Companies. Under the Internal
Revenue Code, by December 31 each year, the Fund must distribute 98% of its
taxable investment income earned from January 1 through December 31 of that
year and 98% of its capital gains realized in the period from November 1 of
the prior year through October 31 of the current year. If it does not, the
Fund must pay an excise tax on the amounts not distributed. It is presently
anticipated that the Fund will meet those requirements. To meet this
requirement, in certain circumstances the Fund might be required to liquidate
portfolio investments to make sufficient distributions to avoid excise tax
liability. However, the Board of Trustees and the Manager might determine in
a particular year that it would be in the best interests of shareholders for
the Fund not to make such distributions at the required levels and to pay the
excise tax on the undistributed amounts. That would reduce the amount of
income or capital gains available for distribution to shareholders.


|X|   Taxation of Fund Distributions. The Fund intends to qualify under the
Internal Revenue Code during each fiscal year to pay "exempt-interest
dividends" to its shareholders. To satisfy this qualification, at the end of
each quarter of its taxable year, at least 50% of the value of the Fund's
total assets consists of obligations as defined in Section 103(a) of the
Internal Revenue Code, as amended. Exempt-interest dividends that are derived
from net investment income earned by the Fund on municipal securities will be
excludable from gross income of shareholders for federal income tax purposes.
To the extent the Fund fails to qualify to pay exempt-interest dividends in
any given form, such dividends would be included in the gross income of
shareholders for federal income tax purposes.

      Net investment income includes the allocation of amounts of income from
the municipal securities in the Fund's portfolio that are free from federal
income taxes. This allocation will be made by the use of one designated
percentage applied uniformly to all income dividends paid during the Fund's
tax year. That designation will normally be made following the end of each
fiscal year as to income dividends paid in the prior year. The percentage of
income designated as tax-exempt may substantially differ from the percentage
of the Fund's income that was tax-exempt for a given period.

      A portion of the exempt-interest dividends paid by the Fund may be an
item of tax preference for shareholders subject to the federal alternative
minimum tax. The amount of any dividends attributable to tax preference items
for purposes of the alternative minimum tax will be identified when tax
information is distributed by the Fund.

      A shareholder receiving a dividend from income earned by the Fund from
one or more of the following sources must treat the dividend as ordinary
income in the computation of the shareholder's gross income, regardless of
whether the dividend is reinvested:
      (1)   certain taxable temporary investments (such as certificates of
          deposit, repurchase agreements, commercial paper and obligations of
          the U.S. government, its agencies and instrumentalities);
(2)   income from securities loans;
(3)   income or gains from options or futures,
(4)   any net short-term capital gain; and
(5)   any market discount amortization on tax-exempt bonds.


      The Fund's dividends will not be eligible for the dividends-received
deduction for corporations. Shareholders receiving Social Security or
railroad retirement benefits should be aware that exempt-interest dividends
are a factor in determining whether (and the extent to which) such benefits
are subject to federal income tax. Losses realized by shareholders on the
redemption of Fund shares within six months of purchase will be disallowed
for federal income tax purposes to the extent of exempt-interest dividends
received on such shares.


      In any year in which the Fund qualifies as a regulated investment
company under the Internal Revenue Code, the Fund will also be exempt from
New York corporate income and franchise taxes. It will also be qualified
under New York law to pay exempt-interest dividends that will be exempt from
New York State and New York City personal income taxes. That exemption
applies to the extent that the Fund's distributions are attributable to
interest on New York municipal securities. Distributions from the Fund
attributable to income from sources other than New York municipal securities
and U.S. government obligations will generally be subject to New York State
and New York City personal income taxes as ordinary income.
      Distributions by the Fund from investment income and long- and
short-term capital gains will generally not be excludable from taxable net
investment income in determining New York corporate franchise tax and New
York City general corporation tax for corporate shareholders of the Fund.
Additionally, certain distributions paid to corporate shareholders of the
Fund may be includable in income subject to the New York alternative minimum
tax.

      The Fund may either retain or distribute to shareholders its net
capital gain for each taxable year.  The Fund currently intends to distribute
any such amounts.  If the net capital gain is distributed and designated as a
capital gain distribution, it will be taxable to shareholders as a long-term
capital gain and will be properly identified in reports sent to shareholders
in January of each year. Such treatment will apply no matter how long the
shareholder has held his or her shares or whether that gain was recognized by
the Fund before the shareholder acquired his or her shares.


      If the Fund elects to retain its net capital gain, the Fund will be
subject to tax on it at the 35% corporate tax rate. If the Fund elects to
retain its net capital gain, the Fund will provide to shareholders of record
on the last day of its taxable year information regarding their pro rata
share of the gain and tax paid. As a result, each shareholder will be
required to report his or her pro rata share of such gain on their tax return
as long-term capital gain, will receive a refundable tax credit for his/her
pro rata share of tax paid by the Fund on the gain, and will increase the tax
basis for his/her shares by an amount equal to the deemed distribution less
the tax credit.


      Distributions by the Fund will be treated in the manner described above
regardless of whether the distributions are paid in cash or reinvested in
additional shares of the Fund (or of another fund).  Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the fair market value of the shares
received, determined as of the reinvestment date.

      The Fund will be required in certain cases to withhold 30% (29% for
payments after December 31, 2003) of ordinary income dividends (not including
"exempt-interest dividends"), capital gains distributions (including
short-term and long-term) and the proceeds of the redemption of shares, paid
                        -
to any shareholder (1) who has failed to provide a correct taxpayer
                                                   -------
identification number or to properly certify that number when required, (2)
who is subject to backup withholding for failure to report the receipt of
interest or dividend income properly, or (3) who has failed to certify to the
Fund that the shareholder is not subject to backup withholding or is an
"exempt recipient" (such as a corporation). All income and any tax withheld
by the Fund is remitted by the Fund to the U.S. Treasury and is identified in
reports mailed to shareholders in January of each year.

      Tax Effects of Redemptions of Shares. If a shareholder redeems all or a
portion of his/her shares, the shareholder will recognize a gain or loss on
the redeemed shares in an amount equal to the difference between the proceeds
of the redeemed shares and the shareholder's adjusted tax basis in the
shares.  All or a portion of any loss recognized in that manner may be
disallowed if the shareholder purchases other shares of the Fund within 30
days before or after the redemption.

      In general, any gain or loss arising from the redemption of shares of
the Fund will be considered capital gain or loss, if the shares were held as
a capital asset. It will be long-term capital gain or loss if the shares were
held for more than one year.  However, any capital loss arising from the
redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of the amount of capital gain dividends
received on those shares. Special holding period rules under the Internal
Revenue Code apply in this case to determine the holding period of shares and
there are limits on the deductibility of capital losses in any year.


      Foreign  Shareholders.  Under U.S.  tax law,  taxation of a  shareholder
who is a foreign person (to include,  but not limited to, a nonresident  alien
individual,  a foreign trust, a foreign estate,  a foreign  corporation,  or a
foreign partnership)  primarily depends on whether the foreign person's income
from the Fund is  effectively  connected  with the conduct of a U.S.  trade or
business.   Typically,   ordinary   income   dividends   paid  (not  including
exempt-interest  dividends  paid  by the  Fund)  from a  mutual  fund  are not
considered "effectively connected" income.


      Ordinary income dividends that are paid by the Fund (and are deemed not
"effectively connected income") to foreign persons will be subject to a U.S.
tax withheld by the Fund at a rate of 30%, provided the Fund obtains a
properly completed and signed Certificate of Foreign Status. The tax rate may
be reduced if the foreign person's country of residence has a tax treaty with
the U.S. allowing for a reduced tax rate on ordinary income dividends paid by
the Fund. All income and any tax withheld by the Fund is remitted by the Fund
to the U.S. Treasury and is identified in reports mailed to shareholders in
March of each year.

      If the ordinary income dividends from the Fund are effectively
                                                     ---
connected with the conduct of a U.S. trade or business, then the foreign
person may claim an exemption from the U.S. tax described above provided the
Fund obtains a properly completed and signed Certificate of Foreign Status.


      If the foreign person fails to provide a certification of his/her
foreign status, the Fund will be required to withhold U.S. tax at a rate of
30% (29% for payments after December 31, 2003) on ordinary income dividends
(not including "exempt-interest dividends"), capital gains distributions
(including short-term and long-term) and the proceeds of the redemption of
shares, paid to any foreign person. All income and any tax withheld (in this
situation) by the Fund is remitted by the Fund to the U.S. Treasury and is
identified in reports mailed to shareholders in January of each year.


      The tax consequences to foreign persons entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisors or the U.S.
Internal Revenue Service with respect to the particular tax consequences to
them of an investment in the Fund, including the applicability of the U.S.
withholding taxes described above.

Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the
same class of any of the other Oppenheimer funds listed above. Reinvestment
will be made without sales charge at the net asset value per share in effect
at the close of business on the payable date of the dividend or distribution.
To elect this option, the shareholder must notify the Transfer Agent in
writing and must have an existing account in the fund selected for
reinvestment. Otherwise the shareholder first must obtain a prospectus for
that fund and an application from the Distributor to establish an account.
Dividends and/or distributions from shares of certain other Oppenheimer funds
(other than Oppenheimer Cash Reserves) may be invested in shares of this Fund
on the same basis.


Additional Information About the Fund

The Distributor. The Fund's shares are sold through dealers, brokers and
other financial institutions that have a sales agreement with
OppenheimerFunds Distributor, Inc. a subsidiary of the Manager that acts as
the Fund's Distributor. The Distributor also distributes shares of the other
Oppenheimer funds and is sub-distributor for funds managed by a subsidiary of
the Manager.

The Transfer Agent. OppenheimerFunds Services, the Fund's Transfer Agent, is
a division of the Manager. It is responsible for maintaining the Fund's
shareholder registry and shareholder accounting records, and for paying
dividends and distributions to shareholders. It also handles shareholder
servicing and administrative functions. It serves as the Transfer Agent for
an annual per account fee. It also acts as shareholder servicing agent for
the other Oppenheimer funds.  Shareholders should direct inquiries about
their accounts to the Transfer Agent at the address and toll-free numbers
shown on the back cover.


The Custodian Bank. Citibank, N.A. is the custodian of the Fund's assets. The
custodian's responsibilities include safeguarding and controlling the Fund's
portfolio securities and handling the delivery of such securities to and from
the Fund. It is the practice of the Fund to deal with the custodian in a
manner uninfluenced by any banking relationship the custodian may have with
the Manager and its affiliates. The Fund's cash balances with the custodian
in excess of $100,000 are not protected by federal deposit insurance.  Those
uninsured balances at times may be substantial.


Independent Auditors. KPMG LLP are the independent auditors of the Fund. They
audit the Fund's financial statements and perform other related audit
services. They also act as auditors for certain other funds advised by the
Manager and its affiliates.

INDEPENDENT AUDITORS' REPORT


--------------------------------------------------------------------------------
The Board of Trustees and Shareholders of Rochester Fund Municipals:
We have audited the accompanying statement of assets and liabilities of
Rochester Fund Municipals, including the statement of investments, as of
December 31, 2002, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the three years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits. The financial highlights for each of the two years in the period ended
December 31, 1999, were audited by other auditors whose report dated January
24, 2000, expressed an unqualified opinion on this information.
    We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of December 31, 2002, by
correspondence with the custodian and brokers or by other appropriate auditing
procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
    In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Rochester Fund Municipals as of December 31, 2002, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the three years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.


KPMG LLP

Denver, Colorado
January 23, 2003



STATEMENT OF INVESTMENTS

   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 Municipal Bonds and Notes--100.5%
---------------------------------------------------------------------------------------------------------------------------
 New York--91.0%
  $   40,001   Albany County IDA (Upper Hudson Library)                           8.750%    05/01/2007    $        40,056
---------------------------------------------------------------------------------------------------------------------------
     955,000   Albany County IDA (Upper Hudson Library)                           8.750     05/01/2022            961,274
---------------------------------------------------------------------------------------------------------------------------
     620,000   Albany Hsg. Authority (Lark Drive)                                 5.500     12/01/2028            638,116
---------------------------------------------------------------------------------------------------------------------------
   1,420,000   Albany IDA (Albany Medical Center)                                 6.000     05/01/2019          1,262,692
---------------------------------------------------------------------------------------------------------------------------
   2,460,000   Albany IDA (Albany Medical Center)                                 6.000     05/01/2029          2,080,397
---------------------------------------------------------------------------------------------------------------------------
     875,000   Albany IDA (Albany Medical Center)                                 8.250     08/01/2004            885,185
---------------------------------------------------------------------------------------------------------------------------
     400,000   Albany IDA (Albany Municipal Golf Course Clubhouse)                7.500     05/01/2012            409,396
---------------------------------------------------------------------------------------------------------------------------
     955,000   Albany IDA (Albany Rehab.)                                         8.375     06/01/2023            995,377
---------------------------------------------------------------------------------------------------------------------------
   4,005,000   Albany IDA (Charitable Leadership)                                 5.750     07/01/2026          4,060,149
---------------------------------------------------------------------------------------------------------------------------
   2,660,000   Albany IDA (Daughters of Sarah Nursing Home)                       5.250     10/20/2021          2,778,636
---------------------------------------------------------------------------------------------------------------------------
   3,730,000   Albany IDA (Daughters of Sarah Nursing Home)                       5.375     10/20/2030          3,890,315
---------------------------------------------------------------------------------------------------------------------------
   1,670,000   Albany IDA (MARA Mansion Rehab.)                                   6.500     02/01/2023          1,671,637
---------------------------------------------------------------------------------------------------------------------------
   1,395,000   Albany IDA (Port of Albany)                                        7.250     02/01/2024          1,426,122
---------------------------------------------------------------------------------------------------------------------------
   1,285,000   Albany IDA (Sage Colleges)                                         5.250     04/01/2019          1,287,017
---------------------------------------------------------------------------------------------------------------------------
   1,760,000   Albany IDA (Sage Colleges)                                         5.300     04/01/2029          1,724,413
---------------------------------------------------------------------------------------------------------------------------
     125,000   Albany IDA (University Heights-Albany Pharmacy)                    6.750     12/01/2029            142,831
---------------------------------------------------------------------------------------------------------------------------
   1,770,000   Albany Parking Authority                                           0.000 Z   11/01/2017            860,096
---------------------------------------------------------------------------------------------------------------------------
   2,510,000   Albany Parking Authority                                           5.625     07/15/2020          2,617,152
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   Albany Parking Authority                                           5.625     07/15/2025          2,053,400
---------------------------------------------------------------------------------------------------------------------------
   2,010,000   Allegany County IDA (Cuba Memorial Hospital) a,b,d                 6.500     11/01/2009          1,044,115
---------------------------------------------------------------------------------------------------------------------------
   4,230,000   Allegany County IDA (Cuba Memorial Hospital) a,b,d                 7.250     11/01/2019          2,142,537
---------------------------------------------------------------------------------------------------------------------------
   4,250,000   Allegany County IDA (Houghton College)                             5.250     01/15/2018          4,338,825
---------------------------------------------------------------------------------------------------------------------------
   5,700,000   Allegany County IDA (Houghton College)                             5.250     01/15/2024          5,667,567
---------------------------------------------------------------------------------------------------------------------------
     920,000   Amherst IDA (Asbury Pointe)                                        5.800     02/01/2015            864,920
---------------------------------------------------------------------------------------------------------------------------
   3,000,000   Amherst IDA (Asbury Pointe)                                        6.000     02/01/2029          2,569,440
---------------------------------------------------------------------------------------------------------------------------
   2,880,000   Amherst IDA (Daemen College)                                       6.000     10/01/2021          2,968,301
---------------------------------------------------------------------------------------------------------------------------
  10,570,000   Amherst IDA (Daemen College)                                       6.125     10/01/2031         10,869,765
---------------------------------------------------------------------------------------------------------------------------
   3,000,000   Appleridge Retirement Community                                    5.750     09/01/2041          3,226,770
---------------------------------------------------------------------------------------------------------------------------
   1,165,000   Babylon IDA (WWH Ambulance)                                        7.375     09/15/2008          1,211,600
---------------------------------------------------------------------------------------------------------------------------
   1,750,000   Battery Park City Authority                                        5.250     11/01/2017          1,767,045
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   Battery Park City Authority                                        5.500     11/01/2026          2,115,280
---------------------------------------------------------------------------------------------------------------------------
     720,000   Battery Park City Authority                                       10.000     06/01/2023            723,823
---------------------------------------------------------------------------------------------------------------------------
   1,385,000   Bayshore HDC                                                       7.500     02/01/2023          1,401,551
---------------------------------------------------------------------------------------------------------------------------
     415,000   Beacon IDA (Craig House) b,d                                       9.000     07/01/2011            319,832
---------------------------------------------------------------------------------------------------------------------------
     755,000   Bethany Retirement Home                                            7.450     02/01/2024            833,505
---------------------------------------------------------------------------------------------------------------------------
   1,065,000   Blauvelt Volunteer Fire Company                                    6.250     10/15/2017          1,029,525
---------------------------------------------------------------------------------------------------------------------------
      45,000   Bleeker Terrace HDC                                                8.350     07/01/2004             45,399
---------------------------------------------------------------------------------------------------------------------------
     900,000   Bleeker Terrace HDC                                                8.750     07/01/2007            909,369
---------------------------------------------------------------------------------------------------------------------------
     580,000   Brookhaven IDA (Brookhaven Memorial Hospital)                      8.250     11/15/2030            598,461
---------------------------------------------------------------------------------------------------------------------------
   7,005,000   Brookhaven IDA (Dowling College)                                   6.750     03/01/2023          6,597,099
---------------------------------------------------------------------------------------------------------------------------
     490,000   Brookhaven IDA (Farber) a                                          3.188 v   12/01/2004            489,510
---------------------------------------------------------------------------------------------------------------------------
     185,000   Brookhaven IDA (Interdisciplinary School)                          8.500     12/01/2004            188,826
---------------------------------------------------------------------------------------------------------------------------
   3,220,000   Brookhaven IDA (Interdisciplinary School)                          9.500     12/01/2019          3,399,161
---------------------------------------------------------------------------------------------------------------------------
   1,250,000   Brookhaven IDA (St. Joseph's College)                              6.000     12/01/2020          1,313,362


                         10 | ROCHESTER FUND MUNICIPALS
   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 2,425,000   Brookhaven IDA (Stony Brook Foundation)                            6.500%    11/01/2020      $   2,480,896
---------------------------------------------------------------------------------------------------------------------------
     880,000   Brookhaven IDA (TDS Realty)                                        6.550     12/01/2019            945,349
---------------------------------------------------------------------------------------------------------------------------
     560,000   Brookhaven IDA (United Baking Company)                             8.750     12/01/2011            568,137
---------------------------------------------------------------------------------------------------------------------------
   3,240,000   Brookhaven IDA (United Baking Company)                             8.750     12/01/2030          3,289,442
---------------------------------------------------------------------------------------------------------------------------
   3,615,000   Canandaigua Recreation Devel. Corp. (Roseland Water Park) a,b,d    8.750     11/01/2030          1,446,000
---------------------------------------------------------------------------------------------------------------------------
   3,185,000   Canandaigua Recreation Devel. Corp. (Roseland Water Park) a,b,d    8.750     11/01/2030              6,370
---------------------------------------------------------------------------------------------------------------------------
   3,295,000   Canandaigua Recreation Devel. Corp. (Roseland Water Park) a,b,d    8.750     11/01/2030              6,590
---------------------------------------------------------------------------------------------------------------------------
   4,715,000   Canandaigua Recreation Devel. Corp. (Roseland Water Park) a,b,d    8.750     11/01/2030              9,430
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Canton Human Services Initiatives                                  5.700     09/01/2024          1,030,140
---------------------------------------------------------------------------------------------------------------------------
   1,260,000   Canton Human Services Initiatives                                  5.750     09/01/2032          1,297,876
---------------------------------------------------------------------------------------------------------------------------
     600,000   Capital District Youth Center                                      6.000     02/01/2017            649,890
---------------------------------------------------------------------------------------------------------------------------
     500,000   Carnegie Redevelopment Corp. a                                     7.000     09/01/2021            506,185
---------------------------------------------------------------------------------------------------------------------------
   1,430,000   Cattaraugus County IDA (Cherry Creek)                              9.800     09/01/2010          1,447,560
---------------------------------------------------------------------------------------------------------------------------
     570,000   Cattaraugus County IDA (Jamestown Community College)               6.400     07/01/2019            616,421
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Cattaraugus County IDA (Jamestown Community College)               6.500     07/01/2030          1,075,910
---------------------------------------------------------------------------------------------------------------------------
   4,360,000   Cattaraugus County IDA (Olean General Hospital)                    5.250     08/01/2023          4,407,350
---------------------------------------------------------------------------------------------------------------------------
   1,465,000   Cattaraugus County IDA (St. Bonaventure University)                5.450     09/15/2019          1,502,738
---------------------------------------------------------------------------------------------------------------------------
   2,900,000   Chautauqua County IDA (Jamestown Community College)                5.250     08/01/2028          2,948,459
---------------------------------------------------------------------------------------------------------------------------
   1,160,000   Chautauqua County IDA (Jamestown Devel. Corp.)                     7.125     11/01/2008          1,204,718
---------------------------------------------------------------------------------------------------------------------------
   3,395,000   Chautauqua County IDA (Jamestown Devel. Corp.)                     7.125     11/01/2018          3,525,334
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   Chautauqua County Tobacco Asset Securitization Corp.               6.750     07/01/2040          2,701,000
---------------------------------------------------------------------------------------------------------------------------
   8,145,000   Chemung County IDA (St. Joseph's Hospital)                         6.000     01/01/2013          7,588,371
---------------------------------------------------------------------------------------------------------------------------
   8,435,000   Chemung County IDA (St. Joseph's Hospital)                         6.350     01/01/2013          8,068,668
---------------------------------------------------------------------------------------------------------------------------
   4,910,000   Chemung County IDA (St. Joseph's Hospital)                         6.500     01/01/2019          4,582,159
---------------------------------------------------------------------------------------------------------------------------
   1,960,000   Clifton Springs Hospital & Clinic                                  7.650     01/01/2012          1,961,862
---------------------------------------------------------------------------------------------------------------------------
   3,345,000   Clifton Springs Hospital & Clinic                                  8.000     01/01/2020          3,348,679
---------------------------------------------------------------------------------------------------------------------------
      35,000   Cohoes GO                                                          6.200     03/15/2012             37,060
---------------------------------------------------------------------------------------------------------------------------
      25,000   Cohoes GO                                                          6.200     03/15/2013             26,365
---------------------------------------------------------------------------------------------------------------------------
      25,000   Cohoes GO                                                          6.250     03/15/2014             26,246
---------------------------------------------------------------------------------------------------------------------------
      25,000   Cohoes GO                                                          6.250     03/15/2015             26,112
---------------------------------------------------------------------------------------------------------------------------
      25,000   Cohoes GO                                                          6.250     03/15/2016             25,992
---------------------------------------------------------------------------------------------------------------------------
     295,000   Columbia County IDA (ARC)                                          7.750     06/01/2005            302,307
---------------------------------------------------------------------------------------------------------------------------
   2,650,000   Columbia County IDA (ARC)                                          8.650     06/01/2018          2,746,592
---------------------------------------------------------------------------------------------------------------------------
     230,000   Columbia County IDA (Berkshire Farms)                              6.900     12/15/2004            234,699
---------------------------------------------------------------------------------------------------------------------------
   1,855,000   Columbia County IDA (Berkshire Farms)                              7.500     12/15/2014          1,927,827
---------------------------------------------------------------------------------------------------------------------------
   3,300,000   Corinth IDA (International Paper Company)                          5.750     02/01/2022          3,335,541
---------------------------------------------------------------------------------------------------------------------------
   5,370,000   Cortland County IDA (Cortland Memorial Hospital)                   5.250     07/01/2032          5,428,318
---------------------------------------------------------------------------------------------------------------------------
     120,000   Dutchess County IDA (Bard College)                                 5.750     08/01/2030            127,807
---------------------------------------------------------------------------------------------------------------------------
   3,500,000   Dutchess County IDA (Bard College)                                 7.000     11/01/2017          3,725,890
---------------------------------------------------------------------------------------------------------------------------
   2,660,000   Dutchess County IDA (Vassar Brothers Hospital)                     6.500     04/01/2020          2,882,216
---------------------------------------------------------------------------------------------------------------------------
   5,595,000   Dutchess County IDA (Vassar Brothers Hospital)                     6.500     04/01/2030          6,034,263
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Dutchess County Water & Wastewater Authority                       0.000 z   06/01/2027            293,440
---------------------------------------------------------------------------------------------------------------------------
   3,350,000   East Rochester Hsg. Authority (Episcopal Senior Hsg.)              7.750     10/01/2032          3,356,633
---------------------------------------------------------------------------------------------------------------------------
   1,355,000   East Rochester Hsg. Authority (Gates Senior Hsg.)                  6.125     04/20/2043          1,473,007
---------------------------------------------------------------------------------------------------------------------------
   1,400,000   East Rochester Hsg. Authority (Genesee Valley Nursing Home)        5.200     12/20/2024          1,448,146



                         11 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued

   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 2,000,000   East Rochester Hsg. Authority (Linden Knoll)                       5.350%    02/01/2038      $   2,027,660
---------------------------------------------------------------------------------------------------------------------------
   1,620,000   East Rochester Hsg. Authority (North Park Nursing Home)            5.200     10/20/2024          1,668,422
---------------------------------------------------------------------------------------------------------------------------
   4,095,000   East Rochester Hsg. Authority (St. John's Meadows)                 5.950     08/01/2027          4,231,200
---------------------------------------------------------------------------------------------------------------------------
   3,210,000   Erie County IDA (Affordable Hospitality) a                         9.250     12/01/2015          2,831,252
---------------------------------------------------------------------------------------------------------------------------
     815,000   Erie County IDA (Air Cargo)                                        8.250     10/01/2007            818,676
---------------------------------------------------------------------------------------------------------------------------
   2,380,000   Erie County IDA (Air Cargo)                                        8.500     10/01/2015          2,430,694
---------------------------------------------------------------------------------------------------------------------------
  44,000,000   Erie County IDA (Canfibre Lackawanna) a,b,d                        9.050     12/01/2025          8,800,000
---------------------------------------------------------------------------------------------------------------------------
     785,000   Erie County IDA (DePaul Properties)                                5.750     09/01/2028            667,807
---------------------------------------------------------------------------------------------------------------------------
   3,055,000   Erie County IDA (DePaul Properties)                                6.500     09/01/2018          2,899,562
---------------------------------------------------------------------------------------------------------------------------
   3,230,000   Erie County IDA (Medaille College)                                 8.000     12/30/2022          3,299,348
---------------------------------------------------------------------------------------------------------------------------
   3,515,000   Erie County IDA (Medaille College)                                 8.250     11/01/2026          3,539,324
---------------------------------------------------------------------------------------------------------------------------
   2,655,000   Erie County IDA (Mercy Hospital)                                   6.250     06/01/2010          2,485,770
---------------------------------------------------------------------------------------------------------------------------
      25,000   Erie County IDA (The Episcopal Church Home)                        5.875     02/01/2018             24,715
---------------------------------------------------------------------------------------------------------------------------
   9,495,000   Erie County IDA (The Episcopal Church Home)                        6.000     02/01/2028          9,207,396
---------------------------------------------------------------------------------------------------------------------------
     480,000   Erie County Tobacco Asset Securitization Corp.                     6.125     07/15/2030            500,707
---------------------------------------------------------------------------------------------------------------------------
  19,490,000   Erie County Tobacco Asset Securitization Corp.                     6.250     07/15/2040         20,495,294
---------------------------------------------------------------------------------------------------------------------------
  45,490,000   Erie County Tobacco Asset Securitization Corp.                     6.750     07/15/2040         49,305,246
---------------------------------------------------------------------------------------------------------------------------
   1,850,000   Essex County IDA (International Paper Company)                     5.500     08/15/2022          1,789,542
---------------------------------------------------------------------------------------------------------------------------
     625,000   Essex County IDA (International Paper Company)                     5.500     10/01/2026            614,369
---------------------------------------------------------------------------------------------------------------------------
     310,000   Essex County IDA (International Paper Company)                     5.800     12/01/2019            312,523
---------------------------------------------------------------------------------------------------------------------------
   2,300,000   Essex County IDA (International Paper Company)                     6.450     11/15/2023          2,403,730
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   Essex County IDA (Moses Ludington Nursing Home)                    6.375     02/01/2050          5,613,300
---------------------------------------------------------------------------------------------------------------------------
     325,000   Essex County IDA (Moses Ludington Nursing Home)                    9.000     02/01/2008            329,621
---------------------------------------------------------------------------------------------------------------------------
   5,680,000   Franklin County IDA (Adirondack Medical Center)                    5.500     12/01/2029          5,925,660
---------------------------------------------------------------------------------------------------------------------------
   4,245,000   Franklin County SWMA                                               6.250     06/01/2015          4,354,818
---------------------------------------------------------------------------------------------------------------------------
   1,570,000   Fulton County IDA (Nathan Littauer)                                7.000     11/01/2004          1,578,823
---------------------------------------------------------------------------------------------------------------------------
     240,000   Geneva IDA (Finger Lakes Cerebral Palsy)                           8.250     11/01/2004            242,647
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Geneva IDA (Finger Lakes Cerebral Palsy)                           8.500     11/01/2016          1,011,030
---------------------------------------------------------------------------------------------------------------------------
     635,000   Glen Cove IDA (SLCD)                                               6.875     07/01/2008            622,808
---------------------------------------------------------------------------------------------------------------------------
   3,775,000   Glen Cove IDA (SLCD)                                               7.375     07/01/2023          3,709,881
---------------------------------------------------------------------------------------------------------------------------
   2,280,000   Glen Cove IDA (The Regency at Glen Cove)                           0.000 z   10/15/2019 p        1,038,266
---------------------------------------------------------------------------------------------------------------------------
   2,375,000   Grand Central BID (Grand Central District Management)              5.250     01/01/2022          2,408,844
---------------------------------------------------------------------------------------------------------------------------
   2,795,000   Green Island Power Authority                                       6.000     12/15/2020          2,921,669
---------------------------------------------------------------------------------------------------------------------------
   1,695,000   Green Island Power Authority                                       6.000     12/15/2025          1,739,002
---------------------------------------------------------------------------------------------------------------------------
     690,000   Hamilton EHC (Hamilton Apartments)                                11.250     01/01/2015            707,429
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   Hempstead IDA (Adelphi University)                                 5.500     06/01/2032          2,559,850
---------------------------------------------------------------------------------------------------------------------------
     405,000   Hempstead IDA (Dentaco Corp.)                                      7.250     11/01/2012            380,882
---------------------------------------------------------------------------------------------------------------------------
   1,270,000   Hempstead IDA (Dentaco Corp.)                                      8.250     11/01/2025          1,163,104
---------------------------------------------------------------------------------------------------------------------------
   5,220,000   Hempstead IDA (Engel Burman Senior Hsg.)                           6.250     11/01/2010          5,248,867
---------------------------------------------------------------------------------------------------------------------------
  18,825,000   Hempstead IDA (Engel Burman Senior Hsg.)                           6.750     11/01/2024         18,936,820
---------------------------------------------------------------------------------------------------------------------------
   3,465,000   Hempstead IDA (Franklin Hospital Medical Center)                   5.750     11/01/2008          3,329,588
---------------------------------------------------------------------------------------------------------------------------
   9,375,000   Hempstead IDA (Franklin Hospital Medical Center)                   6.375     11/01/2018          8,551,219
---------------------------------------------------------------------------------------------------------------------------
  10,000,000   Hempstead IDA (Franklin Hospital Medical Center)                   7.750     11/01/2022         10,084,800
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   Hempstead IDA (Hungry Harbor Associates)                           8.000     05/01/2044          2,554,800
---------------------------------------------------------------------------------------------------------------------------
   4,770,000   Hempstead IDA (Hungry Harbor Associates)                           8.000     05/01/2044          4,785,693



                         12 | ROCHESTER FUND MUNICIPALS
   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $12,530,000   Hempstead IDA (Hungry Harbor Associates)                           8.000%    05/01/2044      $  12,804,658
---------------------------------------------------------------------------------------------------------------------------
   5,700,000   Hempstead IDA (Hungry Harbor Associates)                           8.000     05/01/2044          5,700,570
---------------------------------------------------------------------------------------------------------------------------
   6,355,000   Hempstead IDA (South Shore Y JCC)                                  6.750     11/01/2024          5,868,461
---------------------------------------------------------------------------------------------------------------------------
  11,460,000   Herkimer County IDA (Burrows Paper) a                              8.000     01/01/2009         11,001,142
---------------------------------------------------------------------------------------------------------------------------
   1,285,000   Herkimer County IDA (College Foundation)                           6.400     11/01/2020          1,343,904
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   Herkimer County IDA (College Foundation)                           6.500     11/01/2030          2,078,540
---------------------------------------------------------------------------------------------------------------------------
     355,000   Herkimer Hsg. Authority                                            7.150     03/01/2011            360,243
---------------------------------------------------------------------------------------------------------------------------
      60,000   Hsg. NY Corp.                                                      5.500     11/01/2020             61,690
---------------------------------------------------------------------------------------------------------------------------
     990,000   Hudson IDA (Have, Inc.)                                            8.125     12/01/2017            996,871
---------------------------------------------------------------------------------------------------------------------------
     125,000   Huntington Hsg. Authority (GJSR)                                   5.875     05/01/2019            115,074
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Huntington Hsg. Authority (GJSR)                                   6.000     05/01/2029            879,820
---------------------------------------------------------------------------------------------------------------------------
   8,500,000   Huntington Hsg. Authority (GJSR)                                   6.000     05/01/2039          7,352,840
---------------------------------------------------------------------------------------------------------------------------
     885,000   Islip IDA (Leeway School)                                          9.000     08/01/2021            895,133
---------------------------------------------------------------------------------------------------------------------------
  20,000,000   Islip IDA (Southside Hospital Civic Facilities)                    7.750     12/01/2022         20,129,600
---------------------------------------------------------------------------------------------------------------------------
   3,000,000   Kenmore Hsg. Authority (SUNY at Buffalo)                           5.500     08/01/2024          3,145,110
---------------------------------------------------------------------------------------------------------------------------
  21,000,000   L.I. Power Authority RITES a                                      14.355 f   12/01/2022         23,395,680
---------------------------------------------------------------------------------------------------------------------------
   7,905,000   L.I. Power Authority RITES a                                      14.389 f   12/01/2022          8,806,802
---------------------------------------------------------------------------------------------------------------------------
   3,750,000   L.I. Power Authority RITES a                                      14.820 f   12/01/2026          4,218,375
---------------------------------------------------------------------------------------------------------------------------
   2,915,000   L.I. Power Authority RITES a                                      14.896 f   09/01/2028          3,328,638
---------------------------------------------------------------------------------------------------------------------------
  13,000,000   L.I. Power Authority RITES a                                      15.855 f   12/01/2029         13,983,060
---------------------------------------------------------------------------------------------------------------------------
  11,250,000   L.I. Power Authority RITES a                                      16.660 f   12/01/2029         12,100,725
---------------------------------------------------------------------------------------------------------------------------
  25,630,000   L.I. Power Authority, Series A                                     5.125     09/01/2029         25,681,516
---------------------------------------------------------------------------------------------------------------------------
  49,530,000   L.I. Power Authority, Series A                                     5.375     09/01/2025         50,557,747
---------------------------------------------------------------------------------------------------------------------------
   3,215,000   L.I. Power Authority, Series A                                     5.500     12/01/2029          3,251,876
---------------------------------------------------------------------------------------------------------------------------
   2,255,000   L.I. Power Authority, Series A                                     5.500     12/01/2029          2,297,642
---------------------------------------------------------------------------------------------------------------------------
  86,300,000   L.I. Power Authority, Series L                                     5.375     05/01/2033         88,035,493
---------------------------------------------------------------------------------------------------------------------------
      75,000   Lowville GO                                                        7.200     09/15/2007             89,060
---------------------------------------------------------------------------------------------------------------------------
     100,000   Lowville GO                                                        7.200     09/15/2012            125,982
---------------------------------------------------------------------------------------------------------------------------
     100,000   Lowville GO                                                        7.200     09/15/2013            126,816
---------------------------------------------------------------------------------------------------------------------------
     100,000   Lowville GO                                                        7.200     09/15/2014            127,648
---------------------------------------------------------------------------------------------------------------------------
   5,350,000   Lyons Community Health Initiatives Corp.                           6.800     09/01/2024          5,626,220
---------------------------------------------------------------------------------------------------------------------------
   4,525,000   Macleay Hsg. Corp. (Larchmont Woods)                               8.500     01/01/2031          4,834,781
---------------------------------------------------------------------------------------------------------------------------
   1,290,000   Madison County IDA (Oneida Healthcare Center)                      5.300     02/01/2021          1,323,901
---------------------------------------------------------------------------------------------------------------------------
   5,500,000   Madison County IDA (Oneida Healthcare Center)                      5.350     02/01/2031          5,604,940
---------------------------------------------------------------------------------------------------------------------------
   2,410,000   Mechanicsville HDC                                                 6.900     08/01/2022          2,418,001
---------------------------------------------------------------------------------------------------------------------------
     120,000   Middleton IDA (Flanagan Design & Display)                          7.000     11/01/2006            116,322
---------------------------------------------------------------------------------------------------------------------------
     690,000   Middleton IDA (Flanagan Design & Display)                          7.500     11/01/2018            631,688
---------------------------------------------------------------------------------------------------------------------------
     905,000   Middleton IDA (Fleurchem, Inc.) a                                  8.000     12/01/2016            899,389
---------------------------------------------------------------------------------------------------------------------------
   3,955,000   Middletown IDA (Southwinds Retirement Home)                        6.375     03/01/2018          3,683,885
---------------------------------------------------------------------------------------------------------------------------
     500,000   Middletown IDA (YMCA)                                              6.250     11/01/2009            474,655
---------------------------------------------------------------------------------------------------------------------------
   1,255,000   Middletown IDA (YMCA)                                              7.000     11/01/2019          1,150,835
---------------------------------------------------------------------------------------------------------------------------
     330,000   Monroe County COP                                                  8.050     01/01/2011            339,636
---------------------------------------------------------------------------------------------------------------------------
   4,260,000   Monroe County IDA (Al Sigl Center)                                 6.600     12/15/2017          4,145,150
---------------------------------------------------------------------------------------------------------------------------
   1,590,000   Monroe County IDA (Al Sigl Center)                                 7.250     12/15/2015          1,620,067
---------------------------------------------------------------------------------------------------------------------------
   3,145,000   Monroe County IDA (Brazill Merk)                                   7.900     12/15/2014          3,211,359




                         13 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $   900,000   Monroe County IDA (Canal Ponds)                                    7.000%    06/15/2013      $     930,492
---------------------------------------------------------------------------------------------------------------------------
      10,000   Monroe County IDA (Cohber Press)                                   7.700     12/01/2003             10,037
---------------------------------------------------------------------------------------------------------------------------
     190,000   Monroe County IDA (Cohber Press)                                   7.850     12/01/2009            191,279
---------------------------------------------------------------------------------------------------------------------------
   1,965,000   Monroe County IDA (Collegiate Hsg. Foundation--RIT)                5.375     04/01/2029          1,970,011
---------------------------------------------------------------------------------------------------------------------------
   1,698,220   Monroe County IDA (Cottrone Devel.)                                9.500     12/01/2010          1,737,941
---------------------------------------------------------------------------------------------------------------------------
     950,000   Monroe County IDA (Dayton Rogers Manufacturing)                    6.100     12/01/2009            906,281
---------------------------------------------------------------------------------------------------------------------------
   2,595,000   Monroe County IDA (Depaul Community Facilities)                    5.875     02/01/2028          2,322,058
---------------------------------------------------------------------------------------------------------------------------
   5,750,000   Monroe County IDA (DePaul Community Facilities)                    5.950     08/01/2028          5,192,825
---------------------------------------------------------------------------------------------------------------------------
     880,000   Monroe County IDA (DePaul Community Facilities)                    6.450     02/01/2014            943,686
---------------------------------------------------------------------------------------------------------------------------
   1,285,000   Monroe County IDA (DePaul Community Facilities)                    6.500     02/01/2024          1,337,389
---------------------------------------------------------------------------------------------------------------------------
   4,485,000   Monroe County IDA (DePaul Properties)                              6.150     09/01/2021          4,122,074
---------------------------------------------------------------------------------------------------------------------------
  14,154,302   Monroe County IDA (Genesee Hospital) b,d                           7.000     11/01/2018          1,701,913
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Monroe County IDA (Jewish Home of Rochester Senior Hsg.)           6.875     04/01/2017          1,010,200
---------------------------------------------------------------------------------------------------------------------------
   4,955,000   Monroe County IDA (Jewish Home of Rochester Senior Hsg.)           6.875     04/01/2027          4,967,982
---------------------------------------------------------------------------------------------------------------------------
     350,000   Monroe County IDA (Machine Tool Research)                          7.750     12/01/2006            347,126
---------------------------------------------------------------------------------------------------------------------------
     600,000   Monroe County IDA (Machine Tool Research)                          8.000     12/01/2011            582,558
---------------------------------------------------------------------------------------------------------------------------
     300,000   Monroe County IDA (Machine Tool Research)                          8.500     12/01/2013            294,330
---------------------------------------------------------------------------------------------------------------------------
   1,060,000   Monroe County IDA (Melles Groit)                                   9.500     12/01/2009          1,073,716
---------------------------------------------------------------------------------------------------------------------------
   1,325,000   Monroe County IDA (Morrell/Morrell)                                7.000     12/01/2007          1,336,501
---------------------------------------------------------------------------------------------------------------------------
   4,330,000   Monroe County IDA (Piano Works)                                    7.625     11/01/2016          4,505,798
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Monroe County IDA (Southview Towers)                               6.125     02/01/2020          1,109,630
---------------------------------------------------------------------------------------------------------------------------
   1,465,000   Monroe County IDA (St. John Fisher College)                        5.200     06/01/2019          1,552,109
---------------------------------------------------------------------------------------------------------------------------
   2,190,000   Monroe County IDA (St. John Fisher College)                        5.250     06/01/2026          2,250,948
---------------------------------------------------------------------------------------------------------------------------
   3,075,000   Monroe County IDA (St. John Fisher College)                        5.375     06/01/2024          3,182,133
---------------------------------------------------------------------------------------------------------------------------
   4,345,000   Monroe County IDA (St. Joseph's Parking Garage) a                  7.500     11/01/2022          4,126,403
---------------------------------------------------------------------------------------------------------------------------
   7,420,000   Monroe County IDA (The Children's Beverage Group) a,b,d            8.750     11/01/2010            107,590
---------------------------------------------------------------------------------------------------------------------------
     910,000   Monroe County IDA (Volunteers of America)                          5.700     08/01/2018            831,376
---------------------------------------------------------------------------------------------------------------------------
   2,710,000   Monroe County IDA (Volunteers of America)                          5.750     08/01/2028          2,339,245
---------------------------------------------------------------------------------------------------------------------------
     175,000   Monroe County IDA (West End Business)                              6.750     12/01/2004            175,397
---------------------------------------------------------------------------------------------------------------------------
      40,000   Monroe County IDA (West End Business)                              6.750     12/01/2004             40,091
---------------------------------------------------------------------------------------------------------------------------
      25,000   Monroe County IDA (West End Business)                              6.750     12/01/2004             25,057
---------------------------------------------------------------------------------------------------------------------------
   1,375,000   Monroe County IDA (West End Business)                              8.000     12/01/2014          1,416,181
---------------------------------------------------------------------------------------------------------------------------
     345,000   Monroe County IDA (West End Business)                              8.000     12/01/2014            355,333
---------------------------------------------------------------------------------------------------------------------------
     170,000   Monroe County IDA (West End Business)                              8.000     12/01/2014            175,091
---------------------------------------------------------------------------------------------------------------------------
     515,000   Monroe County IDA (West End Business)                              8.000     12/01/2014            530,424
---------------------------------------------------------------------------------------------------------------------------
  12,000,000   Monroe County IDA (Woodlawn Village)                               8.550     11/15/2032         12,857,400
---------------------------------------------------------------------------------------------------------------------------
  30,000,000   Monroe County Tobacco Asset Securitization Corp.                   6.375     06/01/2035         31,779,000
---------------------------------------------------------------------------------------------------------------------------
  13,740,000   Monroe County Tobacco Asset Securitization Corp.                   6.625     06/01/2042         14,775,172
---------------------------------------------------------------------------------------------------------------------------
  10,000,000   Monroe County Tobacco Asset Securitization Corp. RITES a          14.829 f   06/01/2042         12,260,200
---------------------------------------------------------------------------------------------------------------------------
   1,215,000   Monroe IDA (St. Joseph) a                                          7.000     11/01/2008          1,184,613
---------------------------------------------------------------------------------------------------------------------------
   5,860,000   Montgomery County IDA (ASMF) a,b,d                                 7.250     01/15/2019          3,193,700
---------------------------------------------------------------------------------------------------------------------------
   2,295,000   Mount Vernon IDA (Meadowview)                                      6.150     06/01/2019          2,114,613
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   Mount Vernon IDA (Meadowview)                                      6.200     06/01/2029          2,214,200
---------------------------------------------------------------------------------------------------------------------------
  10,000,000   MTA IVRC a                                                         8.929 f   07/01/2011         10,728,800
---------------------------------------------------------------------------------------------------------------------------
  14,200,000   MTA RITES a                                                       13.785 f   11/15/2025         15,238,304




                         14 | ROCHESTER FUND MUNICIPALS

   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 1,910,000   MTA RITES a                                                       13.785% f  11/15/2028      $   2,016,005
---------------------------------------------------------------------------------------------------------------------------
  10,000,000   MTA RITES a                                                       13.785 f   11/15/2030         10,511,000
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   MTA RITES a                                                       13.785 f   11/15/2030          5,255,500
---------------------------------------------------------------------------------------------------------------------------
   2,890,000   MTA RITES a                                                       13.785 f   11/15/2030          3,037,679
---------------------------------------------------------------------------------------------------------------------------
   7,500,000   MTA RITES a                                                       13.785 f   11/15/2031          7,883,250
---------------------------------------------------------------------------------------------------------------------------
   2,125,000   MTA RITES a                                                       13.785 f   11/15/2032          2,233,587
---------------------------------------------------------------------------------------------------------------------------
   2,220,000   MTA Service Contract RITES a                                      14.285 f   01/01/2024          2,448,349
---------------------------------------------------------------------------------------------------------------------------
 131,525,000   MTA Service Contract, Series A                                     5.125     01/01/2029        133,601,780
---------------------------------------------------------------------------------------------------------------------------
  33,275,000   MTA Service Contract, Series B                                     5.250     01/01/2031         34,342,462
---------------------------------------------------------------------------------------------------------------------------
  20,850,000   MTA, Series A                                                      5.125     11/15/2031         21,074,137
---------------------------------------------------------------------------------------------------------------------------
  34,620,000   MTA, Series E                                                      5.250     11/15/2031         35,516,658
---------------------------------------------------------------------------------------------------------------------------
     802,824   Municipal Assistance Corp. for Troy, NY                            0.000 z   07/15/2021            333,517
---------------------------------------------------------------------------------------------------------------------------
   1,218,573   Municipal Assistance Corp. for Troy, NY                            0.000 z   01/15/2022            487,076
---------------------------------------------------------------------------------------------------------------------------
   2,725,000   Nassau County IDA (ACLD)                                           8.125     10/01/2022          2,798,902
---------------------------------------------------------------------------------------------------------------------------
   1,380,000   Nassau County IDA (ALIA - ACDS)                                    7.500     06/01/2015          1,436,456
---------------------------------------------------------------------------------------------------------------------------
     270,000   Nassau County IDA (ALIA - ACLD)                                    7.125     06/01/2017            268,496
---------------------------------------------------------------------------------------------------------------------------
     445,000   Nassau County IDA (ALIA - ACLD)                                    7.500     06/01/2015            463,205
---------------------------------------------------------------------------------------------------------------------------
   6,795,000   Nassau County IDA (ALIA - CSMR)                                    7.000     11/01/2016          6,843,720
---------------------------------------------------------------------------------------------------------------------------
   4,025,000   Nassau County IDA (ALIA - CSMR)                                    7.125     06/01/2017          4,094,431
---------------------------------------------------------------------------------------------------------------------------
   2,215,000   Nassau County IDA (ALIA - CSMR)                                    7.500     06/01/2015          2,305,616
---------------------------------------------------------------------------------------------------------------------------
     430,000   Nassau County IDA (ALIA - FREE)                                    7.125     06/01/2012            437,994
---------------------------------------------------------------------------------------------------------------------------
   2,745,000   Nassau County IDA (ALIA - FREE)                                    7.500     06/01/2015          2,799,927
---------------------------------------------------------------------------------------------------------------------------
   4,030,000   Nassau County IDA (ALIA - FREE)                                    8.150     06/01/2030          4,113,824
---------------------------------------------------------------------------------------------------------------------------
   6,610,000   Nassau County IDA (ALIA - FREE)                                    8.250     06/01/2032          6,587,923
---------------------------------------------------------------------------------------------------------------------------
   1,080,000   Nassau County IDA (ALIA - HH)                                      7.125     06/01/2017          1,098,630
---------------------------------------------------------------------------------------------------------------------------
     830,000   Nassau County IDA (ALIA - HHS)                                     7.125     06/01/2017            837,752
---------------------------------------------------------------------------------------------------------------------------
     295,000   Nassau County IDA (ALIA - LVH)                                     7.500     06/01/2015            307,068
---------------------------------------------------------------------------------------------------------------------------
     670,000   Nassau County IDA (CNGCS)                                          7.500     06/01/2030            697,410
---------------------------------------------------------------------------------------------------------------------------
   2,245,000   Nassau County IDA (CNGCS)                                          8.150     06/01/2030          2,291,696
---------------------------------------------------------------------------------------------------------------------------
   1,165,000   Nassau County IDA (Leo D. Bernstein & Sons)                        8.000     11/01/2010          1,076,693
---------------------------------------------------------------------------------------------------------------------------
   6,060,000   Nassau County IDA (Leo D. Bernstein & Sons)                        8.875     11/01/2026          5,609,863
---------------------------------------------------------------------------------------------------------------------------
   4,000,000   Nassau County IDA (Little Village School)                          7.500     12/01/2031          3,981,080
---------------------------------------------------------------------------------------------------------------------------
   1,500,000   Nassau County IDA (Little Village School)                          7.500     12/01/2031          1,492,905
---------------------------------------------------------------------------------------------------------------------------
   2,290,000   Nassau County IDA (North Shore CFGA)                               6.750     05/01/2024          2,132,013
---------------------------------------------------------------------------------------------------------------------------
     135,000   Nassau County IDA (RJS Scientific)                                 8.050     12/01/2005            138,058
---------------------------------------------------------------------------------------------------------------------------
   2,700,000   Nassau County IDA (RJS Scientific)                                 9.050     12/01/2025          2,873,367
---------------------------------------------------------------------------------------------------------------------------
   2,759,599   Nassau County IDA (Sharp International) a,b,d                      7.375     12/01/2007            173,855
---------------------------------------------------------------------------------------------------------------------------
   1,752,588   Nassau County IDA (Sharp International) a,b,d                      7.375     12/01/2007            110,413
---------------------------------------------------------------------------------------------------------------------------
   2,527,212   Nassau County IDA (Sharp International) a,b,d                      7.875     12/01/2012            159,214
---------------------------------------------------------------------------------------------------------------------------
   1,597,663   Nassau County IDA (Sharp International) a,b,d                      7.875     12/01/2012            100,653
---------------------------------------------------------------------------------------------------------------------------
   2,050,000   Nassau County IDA (United Cerebral Palsy)                          6.250     11/01/2014          2,007,360
---------------------------------------------------------------------------------------------------------------------------
  24,890,000   Nassau County IDA (Westbury Senior Living)                         7.900     11/01/2031         25,033,615
---------------------------------------------------------------------------------------------------------------------------
   4,375,000   Nassau County IFA RITES a                                         14.412 f   11/15/2021          4,836,300
---------------------------------------------------------------------------------------------------------------------------
   2,040,000   Nassau County Tobacco Settlement Corp.                             6.250     07/15/2021          2,157,157
---------------------------------------------------------------------------------------------------------------------------
   4,900,000   Nassau County Tobacco Settlement Corp.                             6.300     07/15/2021          5,196,450


                         15 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 1,320,000   Nassau County Tobacco Settlement Corp.                             6.300%    07/15/2022      $   1,393,154
---------------------------------------------------------------------------------------------------------------------------
  35,385,000   Nassau County Tobacco Settlement Corp.                             6.400     07/15/2033         37,361,252
---------------------------------------------------------------------------------------------------------------------------
  21,070,000   Nassau County Tobacco Settlement Corp.                             6.500     07/15/2027         22,438,918
---------------------------------------------------------------------------------------------------------------------------
  35,185,000   Nassau County Tobacco Settlement Corp.                             6.600     07/15/2039         37,562,450
---------------------------------------------------------------------------------------------------------------------------
   7,155,000   Nassau IDA (EBS North Hills LLC)                                   7.800     05/01/2045          7,194,138
---------------------------------------------------------------------------------------------------------------------------
   3,340,000   Nassau IDA (EBS North Hills LLC) w                                 7.800     05/01/2045          3,339,866
---------------------------------------------------------------------------------------------------------------------------
   4,290,000   Nassau IDA (EBS North Hills LLC) w                                 7.800     05/01/2045          4,289,828
---------------------------------------------------------------------------------------------------------------------------
   6,195,000   Nassau IDA (EBS North Hills LLC) w                                 7.800     05/01/2045          6,194,752
---------------------------------------------------------------------------------------------------------------------------
   4,775,000   Nassau IDA (EBS North Hills LLC) w                                 7.800     05/01/2045          4,774,809
---------------------------------------------------------------------------------------------------------------------------
   4,775,000   Nassau IDA (EBS North Hills LLC) w                                 7.800     05/01/2045          4,774,809
---------------------------------------------------------------------------------------------------------------------------
      20,000   New Hartford HDC (Village Point)                                   7.375     01/01/2024             20,033
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   New Hartford-Sunset Wood Funding Corp.                             5.500     02/01/2029          2,089,720
---------------------------------------------------------------------------------------------------------------------------
  13,010,000   New Rochelle IDA (College of New Rochelle)                         5.250     07/01/2027         13,065,813
---------------------------------------------------------------------------------------------------------------------------
   6,500,000   New Rochelle IDA (College of New Rochelle)                         5.500     07/01/2019          6,747,910
---------------------------------------------------------------------------------------------------------------------------
   4,950,000   Newark-Wayne Community Hospital                                    5.875     01/15/2033          5,053,306
---------------------------------------------------------------------------------------------------------------------------
   2,790,000   Newark-Wayne Community Hospital                                    7.600     09/01/2015          2,737,687
---------------------------------------------------------------------------------------------------------------------------
   3,300,000   Niagara County IDA (American Ref-Fuel Company)                     5.550     11/15/2024          3,458,202
---------------------------------------------------------------------------------------------------------------------------
   1,500,000   Niagara County IDA (Niagara University)                            5.350     11/01/2023          1,551,000
---------------------------------------------------------------------------------------------------------------------------
   5,400,000   Niagara County IDA (Niagara University)                            5.400     11/01/2031          5,540,022
---------------------------------------------------------------------------------------------------------------------------
   1,900,000   Niagara County IDA (Sevenson Hotel)                                6.600     05/01/2007          1,901,007
---------------------------------------------------------------------------------------------------------------------------
   6,500,000   Niagara County IDA (Solid Waste Disposal)                          5.625     11/15/2024          6,849,375
---------------------------------------------------------------------------------------------------------------------------
     225,000   Niagara County Tobacco Asset Securitization Corp.                  6.250     05/15/2034            236,414
---------------------------------------------------------------------------------------------------------------------------
   5,085,000   Niagara County Tobacco Asset Securitization Corp.                  6.250     05/15/2040          5,342,962
---------------------------------------------------------------------------------------------------------------------------
   1,700,000   Niagara Falls CSD COP (High School Facility)                       5.375     06/15/2028          1,703,366
---------------------------------------------------------------------------------------------------------------------------
     750,000   Niagara Falls CSD COP (High School Facility)                       6.625     06/15/2028            812,392
---------------------------------------------------------------------------------------------------------------------------
     715,000   North Babylon Volunteer Fire Company                               5.750     08/01/2022            757,485
---------------------------------------------------------------------------------------------------------------------------
   1,555,000   North Country Devel. Authority (Clarkson University)               5.500     07/01/2019          1,646,683
---------------------------------------------------------------------------------------------------------------------------
   3,145,000   North Country Devel. Authority (Clarkson University)               5.500     07/01/2029          3,247,307
---------------------------------------------------------------------------------------------------------------------------
     585,000   North Tonawanda HDC (Bishop Gibbons Associates)                    6.800     12/15/2007            620,433
---------------------------------------------------------------------------------------------------------------------------
   3,295,000   North Tonawanda HDC (Bishop Gibbons Associates)                    7.375     12/15/2021          3,832,546
---------------------------------------------------------------------------------------------------------------------------
      25,000   Nunda GO                                                           8.000     05/01/2010             32,105
---------------------------------------------------------------------------------------------------------------------------
  20,000,000   NY Convention Center COP (Yale Building Acquisition)               6.500     12/01/2004         20,450,000
---------------------------------------------------------------------------------------------------------------------------
  17,815,000   NY Counties Tobacco Trust I (TASC)                                 6.500     06/01/2035         19,020,007
---------------------------------------------------------------------------------------------------------------------------
  59,090,000   NY Counties Tobacco Trust I (TASC)                                 6.625     06/01/2042         63,541,841
---------------------------------------------------------------------------------------------------------------------------
  13,240,000   NY Counties Tobacco Trust I (TASC) RITES a                        14.825 f   06/01/2028         15,401,165
---------------------------------------------------------------------------------------------------------------------------
     435,000   NY Counties Tobacco Trust II (TASC)                                5.250     06/01/2025            429,058
---------------------------------------------------------------------------------------------------------------------------
  29,455,000   NY Counties Tobacco Trust II (TASC)                                5.625     06/01/2035         29,453,527
---------------------------------------------------------------------------------------------------------------------------
  52,905,000   NY Counties Tobacco Trust II (TASC)                                5.750     06/01/2043         53,111,859
---------------------------------------------------------------------------------------------------------------------------
     270,000   NYC GO                                                             0.000 z   05/15/2011            186,629
---------------------------------------------------------------------------------------------------------------------------
     200,000   NYC GO                                                             0.000 z   05/15/2012            130,640
---------------------------------------------------------------------------------------------------------------------------
      40,000   NYC GO                                                             0.000 z   10/01/2012             25,654
---------------------------------------------------------------------------------------------------------------------------
     500,000   NYC GO                                                             5.000     03/15/2018            502,345
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   NYC GO                                                             5.125     03/15/2025          5,095,150
---------------------------------------------------------------------------------------------------------------------------
   1,015,000   NYC GO                                                             5.250     08/15/2023          1,028,611
---------------------------------------------------------------------------------------------------------------------------
     500,000   NYC GO                                                             5.250     08/01/2024            505,130


                         16 | ROCHESTER FUND MUNICIPALS


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $33,420,000   NYC GO                                                             5.250%    06/01/2027      $  33,801,991
---------------------------------------------------------------------------------------------------------------------------
  26,350,000   NYC GO                                                             5.250     03/15/2032         26,625,884
---------------------------------------------------------------------------------------------------------------------------
  20,825,000   NYC GO                                                             5.375     12/01/2026         21,237,751
---------------------------------------------------------------------------------------------------------------------------
     500,000   NYC GO                                                             5.375     08/01/2027            508,690
---------------------------------------------------------------------------------------------------------------------------
   2,465,000   NYC GO                                                             5.375     03/15/2028          2,515,015
---------------------------------------------------------------------------------------------------------------------------
  55,765,000   NYC GO                                                             5.375     06/01/2032         56,876,954
---------------------------------------------------------------------------------------------------------------------------
      85,000   NYC GO                                                             5.500     10/01/2018             89,013
---------------------------------------------------------------------------------------------------------------------------
   1,255,000   NYC GO                                                             5.500     06/01/2028          1,292,863
---------------------------------------------------------------------------------------------------------------------------
  23,215,000   NYC GO                                                             5.500     12/01/2031         23,864,324
---------------------------------------------------------------------------------------------------------------------------
   6,770,000   NYC GO                                                             5.500     11/15/2037          6,922,934
---------------------------------------------------------------------------------------------------------------------------
      20,000   NYC GO                                                             5.625     08/01/2016             20,525
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   NYC GO                                                             5.625     03/15/2019          5,271,300
---------------------------------------------------------------------------------------------------------------------------
      35,000   NYC GO                                                             5.750     02/01/2020             36,287
---------------------------------------------------------------------------------------------------------------------------
   4,845,000   NYC GO                                                             6.000     02/01/2011          5,172,280
---------------------------------------------------------------------------------------------------------------------------
     397,000   NYC GO                                                             6.500     08/01/2014            451,234
---------------------------------------------------------------------------------------------------------------------------
   1,580,000   NYC GO                                                             6.500     08/01/2015          1,795,844
---------------------------------------------------------------------------------------------------------------------------
   1,580,000   NYC GO                                                             6.625     08/01/2025          1,800,821
---------------------------------------------------------------------------------------------------------------------------
       5,000   NYC GO                                                             7.000     02/01/2010              5,021
---------------------------------------------------------------------------------------------------------------------------
       5,000   NYC GO                                                             7.250     08/15/2024              5,021
---------------------------------------------------------------------------------------------------------------------------
      15,000   NYC GO                                                             7.750     08/15/2028             15,103
---------------------------------------------------------------------------------------------------------------------------
       5,000   NYC GO                                                             8.250     08/01/2014              5,063
---------------------------------------------------------------------------------------------------------------------------
   1,750,000   NYC GO CAB                                                         0.000 v   05/15/2014          1,838,760
---------------------------------------------------------------------------------------------------------------------------
     500,000   NYC GO CAB                                                         0.000 v   08/01/2014            509,970
---------------------------------------------------------------------------------------------------------------------------
  16,387,000   NYC GO CARS                                                       10.570 f   08/12/2010         16,994,794
---------------------------------------------------------------------------------------------------------------------------
   8,387,000   NYC GO CARS                                                       10.570 f   09/01/2011          8,696,648
---------------------------------------------------------------------------------------------------------------------------
     100,000   NYC GO DIAMONDS                                                    0.000 v   08/01/2025             79,813
---------------------------------------------------------------------------------------------------------------------------
     351,012   NYC HDC (Albert Einstein Staff Hsg.)                               6.500     12/15/2017            369,016
---------------------------------------------------------------------------------------------------------------------------
   1,333,934   NYC HDC (Atlantic Plaza Towers)                                    7.034     02/15/2019          1,403,312
---------------------------------------------------------------------------------------------------------------------------
   1,045,000   NYC HDC (Barclay Avenue)                                           6.450     04/01/2017          1,098,295
---------------------------------------------------------------------------------------------------------------------------
   4,055,000   NYC HDC (Barclay Avenue)                                           6.600     04/01/2033          4,257,588
---------------------------------------------------------------------------------------------------------------------------
     330,269   NYC HDC (Bay Towers)                                               6.500     08/15/2017            347,401
---------------------------------------------------------------------------------------------------------------------------
   2,469,495   NYC HDC (Boulevard Towers)                                         6.500     08/15/2017          2,597,242
---------------------------------------------------------------------------------------------------------------------------
     420,441   NYC HDC (Bridgeview III)                                           6.500     12/15/2017            442,249
---------------------------------------------------------------------------------------------------------------------------
     448,122   NYC HDC (Cadman Plaza North)                                       7.000     12/15/2018            470,971
---------------------------------------------------------------------------------------------------------------------------
   1,165,927   NYC HDC (Cadman Towers)                                            6.500     11/15/2018          1,226,252
---------------------------------------------------------------------------------------------------------------------------
     167,266   NYC HDC (Candia House)                                             6.500     06/15/2018            175,897
---------------------------------------------------------------------------------------------------------------------------
   3,199,988   NYC HDC (Clinton Towers)                                           6.500     07/15/2017          3,365,524
---------------------------------------------------------------------------------------------------------------------------
     275,182   NYC HDC (Contello III)                                             7.000     12/15/2018            289,472
---------------------------------------------------------------------------------------------------------------------------
   1,313,196   NYC HDC (Cooper Gramercy)                                          6.500     08/15/2017          1,381,128
---------------------------------------------------------------------------------------------------------------------------
   1,001,958   NYC HDC (Court Plaza)                                              6.500     08/15/2017          1,053,930
---------------------------------------------------------------------------------------------------------------------------
   1,540,310   NYC HDC (Crown Gardens)                                            7.250     01/15/2019          1,620,992
---------------------------------------------------------------------------------------------------------------------------
   3,229,084   NYC HDC (East Midtown Plaza)                                       6.500     11/15/2018          3,396,157
---------------------------------------------------------------------------------------------------------------------------
   3,117,165   NYC HDC (Esplanade Gardens)                                        7.000     01/15/2019          3,279,694
---------------------------------------------------------------------------------------------------------------------------
      74,671   NYC HDC (Essex Terrace)                                            6.500     07/15/2018             78,524
---------------------------------------------------------------------------------------------------------------------------
     451,408   NYC HDC (Forest Park Crescent)                                     6.500     12/15/2017            474,760



                         17 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued

   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 1,487,395   NYC HDC (Gouverneur Gardens)                                       7.034%    02/15/2019      $   1,564,992
---------------------------------------------------------------------------------------------------------------------------
     325,494   NYC HDC (Heywood Towers)                                           6.500     10/15/2017            342,332
---------------------------------------------------------------------------------------------------------------------------
   3,673,790   NYC HDC (Hudsonview Terrace)                                       6.500     09/15/2017          3,863,835
---------------------------------------------------------------------------------------------------------------------------
   1,035,993   NYC HDC (Janel Towers)                                             6.500     09/15/2017          1,089,730
---------------------------------------------------------------------------------------------------------------------------
     362,204   NYC HDC (Kingsbridge Arms)                                         6.500     08/15/2017            380,991
---------------------------------------------------------------------------------------------------------------------------
     206,543   NYC HDC (Kingsbridge Arms)                                         6.500     11/15/2018            217,200
---------------------------------------------------------------------------------------------------------------------------
   1,116,258   NYC HDC (Leader House)                                             6.500     03/15/2018          1,173,857
---------------------------------------------------------------------------------------------------------------------------
   1,571,633   NYC HDC (Lincoln-Amsterdam)                                        7.250     11/15/2018          1,651,818
---------------------------------------------------------------------------------------------------------------------------
     184,226   NYC HDC (Middagh St. Studio Apartments)                            6.500     01/15/2018            193,732
---------------------------------------------------------------------------------------------------------------------------
   2,393,679   NYC HDC (Montefiore Hospital Hsg. Sec. II)                         6.500     10/15/2017          2,517,504
---------------------------------------------------------------------------------------------------------------------------
   3,000,000   NYC HDC (Multifamily Hsg.), Series A                               5.500     11/01/2034          3,092,490
---------------------------------------------------------------------------------------------------------------------------
  10,470,000   NYC HDC (Multifamily Hsg.), Series A                               5.600     11/01/2042         10,914,975
---------------------------------------------------------------------------------------------------------------------------
     100,000   NYC HDC (Multifamily Hsg.), Series A                               5.850     05/01/2025            101,770
---------------------------------------------------------------------------------------------------------------------------
   9,880,000   NYC HDC (Multifamily Hsg.), Series A                               6.600     04/01/2030         10,210,190
---------------------------------------------------------------------------------------------------------------------------
     775,000   NYC HDC (Multifamily Hsg.), Series C                               5.700     05/01/2031            802,233
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYC HDC (Multifamily Hsg.), Series E                               5.200     11/01/2033          1,010,210
---------------------------------------------------------------------------------------------------------------------------
   2,155,000   NYC HDC (Multifamily Hsg.), Series F                               5.200     11/01/2032          2,177,003
---------------------------------------------------------------------------------------------------------------------------
     788,301   NYC HDC (New Amsterdam House)                                      6.500     08/15/2018            828,977
---------------------------------------------------------------------------------------------------------------------------
     805,820   NYC HDC (New Amsterdam House)                                      6.500     08/15/2018            807,456
---------------------------------------------------------------------------------------------------------------------------
     972,923   NYC HDC (Riverbend)                                                6.500     11/15/2018          1,023,262
---------------------------------------------------------------------------------------------------------------------------
   6,048,487   NYC HDC (Riverside Park Community)                                 7.250     11/15/2018          6,365,004
---------------------------------------------------------------------------------------------------------------------------
     425,908   NYC HDC (RNA House)                                                7.000     12/15/2018            448,094
---------------------------------------------------------------------------------------------------------------------------
     605,785   NYC HDC (Robert Fulton Terrace)                                    6.500     12/15/2017            637,207
---------------------------------------------------------------------------------------------------------------------------
     222,405   NYC HDC (Rosalie Manning Apartments)                               7.034     11/15/2018            233,961
---------------------------------------------------------------------------------------------------------------------------
     591,883   NYC HDC (Scott Tower)                                              7.000     12/15/2018            622,619
---------------------------------------------------------------------------------------------------------------------------
     811,503   NYC HDC (Seaview Towers)                                           6.500     01/15/2018            853,376
---------------------------------------------------------------------------------------------------------------------------
     334,706   NYC HDC (St. Martin Tower)                                         6.500     11/15/2018            352,024
---------------------------------------------------------------------------------------------------------------------------
   1,546,490   NYC HDC (Stevenson Commons)                                        6.500     05/15/2018          1,626,289
---------------------------------------------------------------------------------------------------------------------------
     441,545   NYC HDC (Strycker's Bay Apartments)                                7.034     11/15/2018            458,571
---------------------------------------------------------------------------------------------------------------------------
   1,544,589   NYC HDC (Tivoli Towers)                                            6.500     01/15/2018          1,623,657
---------------------------------------------------------------------------------------------------------------------------
     209,816   NYC HDC (Town House West)                                          6.500     01/15/2018            220,534
---------------------------------------------------------------------------------------------------------------------------
     322,811   NYC HDC (Tri-Faith House)                                          7.000     01/15/2019            339,590
---------------------------------------------------------------------------------------------------------------------------
   1,362,971   NYC HDC (University River View)                                    6.500     08/15/2017          1,433,669
---------------------------------------------------------------------------------------------------------------------------
     411,372   NYC HDC (Washington Square Southeast)                              7.000     01/15/2019            432,488
---------------------------------------------------------------------------------------------------------------------------
     370,311   NYC HDC (West Side Manor)                                          6.500     11/15/2018            389,419
---------------------------------------------------------------------------------------------------------------------------
   3,806,444   NYC HDC (West Village)                                             6.500     11/15/2013          4,003,618
---------------------------------------------------------------------------------------------------------------------------
     234,940   NYC HDC (Westview Apartments)                                      6.500     10/15/2017            247,126
---------------------------------------------------------------------------------------------------------------------------
     549,308   NYC HDC (Woodstock Terrace)                                        7.034     02/15/2019            577,883
---------------------------------------------------------------------------------------------------------------------------
  27,600,000   NYC Health & Hospital Corp.                                        5.250     02/15/2017         28,123,572
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYC Health & Hospital Corp.                                        5.375     02/15/2026            997,960
---------------------------------------------------------------------------------------------------------------------------
      25,000   NYC Health & Hospital Corp.                                        5.750     02/15/2022             25,609
---------------------------------------------------------------------------------------------------------------------------
   5,875,000   NYC Health & Hospital Corp. RITES a                               13.924 f   02/15/2020          6,633,697
---------------------------------------------------------------------------------------------------------------------------
   1,275,000   NYC IDA (A Very Special Place)                                     5.750     01/01/2029          1,044,977
---------------------------------------------------------------------------------------------------------------------------
     525,000   NYC IDA (A-Lite Vertical Products)                                 6.750     11/01/2009            498,083
---------------------------------------------------------------------------------------------------------------------------
   1,330,000   NYC IDA (A-Lite Vertical Products)                                 7.500     11/01/2019          1,258,725




                         18 | ROCHESTER FUND MUNICIPALS
   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 3,600,000   NYC IDA (Acme Architectural Products)                              6.375%    11/01/2019      $   3,256,668
---------------------------------------------------------------------------------------------------------------------------
   1,065,000   NYC IDA (Ahava Dairy Manufacturing Corp.)                          8.000     11/01/2010          1,011,888
---------------------------------------------------------------------------------------------------------------------------
   5,985,000   NYC IDA (Ahava Dairy Manufacturing Corp.)                          8.500     11/01/2026          5,469,093
---------------------------------------------------------------------------------------------------------------------------
  22,850,000   NYC IDA (Airis JFK I/JFK International Airport)                    5.500     07/01/2028         21,409,993
---------------------------------------------------------------------------------------------------------------------------
  20,745,000   NYC IDA (Airis JFK I/JFK International Airport)                    6.000     07/01/2027         20,626,546
---------------------------------------------------------------------------------------------------------------------------
   1,035,000   NYC IDA (ALA Realty)                                               7.500     12/01/2010          1,084,639
---------------------------------------------------------------------------------------------------------------------------
   1,450,000   NYC IDA (ALA Realty)                                               8.375     12/01/2015          1,550,934
---------------------------------------------------------------------------------------------------------------------------
     375,000   NYC IDA (Allied Metal)                                             6.375     12/01/2014            353,179
---------------------------------------------------------------------------------------------------------------------------
     940,000   NYC IDA (Allied Metal)                                             7.125     12/01/2027            882,077
---------------------------------------------------------------------------------------------------------------------------
     825,000   NYC IDA (Alrue Import Corp.)                                       8.000     11/01/2011            823,309
---------------------------------------------------------------------------------------------------------------------------
   3,845,000   NYC IDA (Alrue Import Corp.)                                       8.875     02/01/2026          3,836,887
---------------------------------------------------------------------------------------------------------------------------
   3,420,000   NYC IDA (Amboy Properties)                                         6.750     06/01/2020          3,238,535
---------------------------------------------------------------------------------------------------------------------------
   2,595,000   NYC IDA (American Airlines)                                        5.400     07/01/2019          1,263,116
---------------------------------------------------------------------------------------------------------------------------
  29,935,000   NYC IDA (American Airlines)                                        5.400     07/01/2020         14,569,963
---------------------------------------------------------------------------------------------------------------------------
  38,410,000   NYC IDA (American Airlines)                                        6.900     08/01/2024         21,185,420
---------------------------------------------------------------------------------------------------------------------------
 330,800,000   NYC IDA (American Airlines)                                        8.500     08/01/2028        202,280,892
---------------------------------------------------------------------------------------------------------------------------
   1,110,000   NYC IDA (Atlantic Paste & Glue Company)                            6.000     11/01/2007          1,066,410
---------------------------------------------------------------------------------------------------------------------------
   4,620,000   NYC IDA (Atlantic Paste & Glue Company)                            6.625     11/01/2019          4,222,865
---------------------------------------------------------------------------------------------------------------------------
   1,160,000   NYC IDA (Atlantic Veal & Lamb)                                     8.375     12/01/2016          1,205,866
---------------------------------------------------------------------------------------------------------------------------
     730,000   NYC IDA (Baco Enterprises)                                         7.500     11/01/2011            724,751
---------------------------------------------------------------------------------------------------------------------------
   1,685,000   NYC IDA (Baco Enterprises)                                         8.500     11/01/2021          1,668,807
---------------------------------------------------------------------------------------------------------------------------
     355,000   NYC IDA (Bark Frameworks)                                          6.000     11/01/2007            342,184
---------------------------------------------------------------------------------------------------------------------------
   1,500,000   NYC IDA (Bark Frameworks)                                          6.750     11/01/2019          1,386,105
---------------------------------------------------------------------------------------------------------------------------
  11,305,000   NYC IDA (Berkeley Carroll School)                                  6.100     11/01/2028         10,559,661
---------------------------------------------------------------------------------------------------------------------------
  31,395,000   NYC IDA (British Airways)                                          5.250     12/01/2032         19,186,112
---------------------------------------------------------------------------------------------------------------------------
   8,000,000   NYC IDA (British Airways)                                          7.625     12/01/2032          6,850,160
---------------------------------------------------------------------------------------------------------------------------
   3,075,000   NYC IDA (Brooklyn Heights Montessori School)                       8.500     01/01/2027          3,264,973
---------------------------------------------------------------------------------------------------------------------------
     660,000   NYC IDA (Brooklyn Heights Montessori School)                       8.900     09/01/2011            674,038
---------------------------------------------------------------------------------------------------------------------------
   1,690,000   NYC IDA (Brooklyn Heights Montessori School)                       9.200     09/01/2021          1,760,372
---------------------------------------------------------------------------------------------------------------------------
  67,000,000   NYC IDA (Brooklyn Navy Yard Cogeneration Partners)                 5.650     10/01/2028         63,735,760
---------------------------------------------------------------------------------------------------------------------------
 125,515,000   NYC IDA (Brooklyn Navy Yard Cogeneration Partners)                 5.750     10/01/2036        120,894,793
---------------------------------------------------------------------------------------------------------------------------
     700,000   NYC IDA (Brooklyn Navy Yard Cogeneration Partners)                 6.200     10/01/2022            732,340
---------------------------------------------------------------------------------------------------------------------------
     380,000   NYC IDA (Cellini Furniture Crafters) a                             6.625     11/01/2009            351,397
---------------------------------------------------------------------------------------------------------------------------
     885,000   NYC IDA (Cellini Furniture Crafters) a                             7.125     11/01/2019            799,058
---------------------------------------------------------------------------------------------------------------------------
   2,235,000   NYC IDA (Chardan Corp.)                                            7.750     11/01/2020          2,213,343
---------------------------------------------------------------------------------------------------------------------------
   1,055,000   NYC IDA (CNC Associates NY)                                        6.500     11/01/2007          1,034,934
---------------------------------------------------------------------------------------------------------------------------
   4,685,000   NYC IDA (CNC Associates NY)                                        7.500     11/01/2019          4,536,204
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   NYC IDA (College of Aeronautics)                                   5.450     05/01/2018          2,505,925
---------------------------------------------------------------------------------------------------------------------------
   9,600,000   NYC IDA (College of Aeronautics)                                   5.500     05/01/2028          9,324,672
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   NYC IDA (College of New Rochelle)                                  5.750     09/01/2017          2,607,150
---------------------------------------------------------------------------------------------------------------------------
   2,900,000   NYC IDA (College of New Rochelle)                                  5.800     09/01/2026          3,003,501
---------------------------------------------------------------------------------------------------------------------------
   3,001,000   NYC IDA (Community Hospital of Brooklyn)                           6.875     11/01/2010          2,920,063
---------------------------------------------------------------------------------------------------------------------------
   3,975,000   NYC IDA (Comprehensive Care Management)                            6.375     11/01/2028          3,737,772
---------------------------------------------------------------------------------------------------------------------------
   1,575,000   NYC IDA (Comprehensive Care Management)                            6.375     11/01/2028          1,481,146
---------------------------------------------------------------------------------------------------------------------------
   1,770,000   NYC IDA (Comprehensive Care Management)                            7.875     12/01/2016          1,932,309



                         19 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 1,500,000   NYC IDA (Comprehensive Care Management)                            8.000%    12/01/2011      $   1,570,920
---------------------------------------------------------------------------------------------------------------------------
   8,495,000   NYC IDA (Crowne Plaza-LaGuardia)                                   6.000     11/01/2028          6,211,119
---------------------------------------------------------------------------------------------------------------------------
     870,000   NYC IDA (Dioni)                                                    6.000     11/01/2007            838,445
---------------------------------------------------------------------------------------------------------------------------
   3,600,000   NYC IDA (Dioni)                                                    6.625     11/01/2019          3,314,664
---------------------------------------------------------------------------------------------------------------------------
   1,300,000   NYC IDA (Display Creations)                                        7.000     06/01/2008          1,326,910
---------------------------------------------------------------------------------------------------------------------------
     135,000   NYC IDA (Eden II School)                                           7.750     06/01/2004            136,307
---------------------------------------------------------------------------------------------------------------------------
   2,505,000   NYC IDA (Eden II School)                                           8.750     06/01/2019          2,593,326
---------------------------------------------------------------------------------------------------------------------------
  10,055,000   NYC IDA (Elmhurst Parking Garage)                                  7.500     07/30/2003         10,336,037
---------------------------------------------------------------------------------------------------------------------------
     840,000   NYC IDA (Excel Paint Applicators) a                                8.250     11/01/2010            794,858
---------------------------------------------------------------------------------------------------------------------------
   4,825,000   NYC IDA (Excel Paint Applicators) a                                8.625     11/01/2026          4,396,202
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   NYC IDA (Field Hotel Associates/JFK International Airport)         6.000     11/01/2028          3,655,750
---------------------------------------------------------------------------------------------------------------------------
   7,315,000   NYC IDA (Friends Seminary School)                                  7.125     09/15/2031          7,756,607
---------------------------------------------------------------------------------------------------------------------------
   3,280,000   NYC IDA (Gabrielli Truck Sales)                                    8.125     12/01/2017          3,440,490
---------------------------------------------------------------------------------------------------------------------------
   1,935,000   NYC IDA (Gateway School of NY)                                     6.200     11/01/2012          1,837,224
---------------------------------------------------------------------------------------------------------------------------
   2,265,000   NYC IDA (Gateway School of NY)                                     6.500     11/01/2019          2,124,230
---------------------------------------------------------------------------------------------------------------------------
   2,175,000   NYC IDA (Good Shepherd Services)                                   5.875     06/01/2014          1,901,776
---------------------------------------------------------------------------------------------------------------------------
   1,175,000   NYC IDA (Graphic Artists)                                          8.250     12/30/2023          1,207,876
---------------------------------------------------------------------------------------------------------------------------
     530,000   NYC IDA (Herbert G. Birch Childhood Project)                       7.375     02/01/2009            538,824
---------------------------------------------------------------------------------------------------------------------------
   2,195,000   NYC IDA (Herbert G. Birch Childhood Project)                       8.375     02/01/2022          2,308,899
---------------------------------------------------------------------------------------------------------------------------
     535,000   NYC IDA (HiTech Res Rec)                                           9.250     08/01/2008            539,002
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYC IDA (Institute of International Education)                     5.250     09/01/2021          1,023,340
---------------------------------------------------------------------------------------------------------------------------
   3,000,000   NYC IDA (Institute of International Education)                     5.250     09/01/2031          3,050,970
---------------------------------------------------------------------------------------------------------------------------
   6,040,000   NYC IDA (JBFS)                                                     6.750     12/15/2012          6,108,916
---------------------------------------------------------------------------------------------------------------------------
   1,605,000   NYC IDA (Julia Gray)                                               7.500     11/01/2020          1,581,150
---------------------------------------------------------------------------------------------------------------------------
     950,000   NYC IDA (Just Bagels Manufacturing)                                8.500     11/01/2016            949,107
---------------------------------------------------------------------------------------------------------------------------
   1,080,000   NYC IDA (Just Bagels Manufacturing)                                8.750     11/01/2026          1,079,190
---------------------------------------------------------------------------------------------------------------------------
   1,675,000   NYC IDA (Koenig Iron Works)                                        8.375     12/01/2025          1,748,281
---------------------------------------------------------------------------------------------------------------------------
   1,830,000   NYC IDA (L&M Optical Disc)                                         7.125     11/01/2010          1,835,032
---------------------------------------------------------------------------------------------------------------------------
   3,025,000   NYC IDA (Little Red Schoolhouse)                                   6.750     11/01/2018          3,028,600
---------------------------------------------------------------------------------------------------------------------------
     615,000   NYC IDA (Lucky Polyethylene Manufacturing Company)                 7.000     11/01/2009            575,382
---------------------------------------------------------------------------------------------------------------------------
   2,995,000   NYC IDA (Lucky Polyethylene Manufacturing Company)                 7.800     11/01/2024          2,665,700
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   NYC IDA (Lycee Francais De New York)                               5.375     06/01/2023          2,032,180
---------------------------------------------------------------------------------------------------------------------------
  23,000,000   NYC IDA (Magen David Yeshivah)                                     5.700     06/15/2027         23,486,450
---------------------------------------------------------------------------------------------------------------------------
   3,875,000   NYC IDA (Marymount School of NY)                                   5.250     09/01/2031          3,920,492
---------------------------------------------------------------------------------------------------------------------------
  19,335,000   NYC IDA (MediSys Health Network)                                   6.250     03/15/2024         17,905,563
---------------------------------------------------------------------------------------------------------------------------
   2,325,000   NYC IDA (Mesorah Publications)                                     6.450     02/01/2011          2,302,075
---------------------------------------------------------------------------------------------------------------------------
   4,790,000   NYC IDA (Mesorah Publications)                                     6.950     02/01/2021          4,697,840
---------------------------------------------------------------------------------------------------------------------------
   2,275,000   NYC IDA (Morrisons Pastry)                                         6.500     11/01/2019          1,911,500
---------------------------------------------------------------------------------------------------------------------------
  17,050,000   NYC IDA (Northwest Airlines)                                       6.000     06/01/2027         10,646,361
---------------------------------------------------------------------------------------------------------------------------
     500,000   NYC IDA (NY Blood Center)                                          7.200     05/01/2012 p          537,315
---------------------------------------------------------------------------------------------------------------------------
     205,000   NYC IDA (NY Hostel Company)                                        6.750     01/01/2004            206,146
---------------------------------------------------------------------------------------------------------------------------
   4,400,000   NYC IDA (NY Hostel Company)                                        7.600     01/01/2017          4,542,384
---------------------------------------------------------------------------------------------------------------------------
     530,000   NYC IDA (NY Vanities & Manufacturing)                              7.000     11/01/2009            511,667
---------------------------------------------------------------------------------------------------------------------------
   1,405,000   NYC IDA (NY Vanities & Manufacturing)                              7.500     11/01/2019          1,329,706
---------------------------------------------------------------------------------------------------------------------------
   1,720,000   NYC IDA (NYC Outward Bound Center)                                 7.250     11/01/2010          1,741,827





                         20 | ROCHESTER FUND MUNICIPALS


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $   660,000   NYC IDA (Paradise Products)                                        7.125%    11/01/2007      $     656,693
---------------------------------------------------------------------------------------------------------------------------
   4,475,000   NYC IDA (Paradise Products)                                        8.250     11/01/2022          4,583,295
---------------------------------------------------------------------------------------------------------------------------
   1,055,000   NYC IDA (Petrocelli Electric)                                      7.250     11/01/2007          1,078,537
---------------------------------------------------------------------------------------------------------------------------
     310,000   NYC IDA (Petrocelli Electric)                                      7.250     11/01/2008            315,837
---------------------------------------------------------------------------------------------------------------------------
   3,780,000   NYC IDA (Petrocelli Electric)                                      8.000     11/01/2017          3,924,056
---------------------------------------------------------------------------------------------------------------------------
     940,000   NYC IDA (Petrocelli Electric)                                      8.000     11/01/2018            979,095
---------------------------------------------------------------------------------------------------------------------------
      70,000   NYC IDA (Polytechnic University)                                   6.000     11/01/2020             73,086
---------------------------------------------------------------------------------------------------------------------------
  14,200,000   NYC IDA (Polytechnic University)                                   6.125     11/01/2030         14,790,436
---------------------------------------------------------------------------------------------------------------------------
     345,000   NYC IDA (Pop Display)                                              6.750     12/30/2014            346,483
---------------------------------------------------------------------------------------------------------------------------
   2,645,000   NYC IDA (Pop Display)                                              7.900     12/30/2014          2,671,794
---------------------------------------------------------------------------------------------------------------------------
   2,240,000   NYC IDA (Precision Gear)                                           6.375     11/01/2024          2,046,486
---------------------------------------------------------------------------------------------------------------------------
   1,910,000   NYC IDA (Precision Gear)                                           6.375     11/01/2024          1,744,995
---------------------------------------------------------------------------------------------------------------------------
     930,000   NYC IDA (Precision Gear)                                           7.625     11/01/2024            922,616
---------------------------------------------------------------------------------------------------------------------------
     815,000   NYC IDA (PRFF)                                                     7.000     10/01/2016            825,155
---------------------------------------------------------------------------------------------------------------------------
   1,290,000   NYC IDA (Priority Mailers)                                         9.000     03/01/2010          1,294,528
---------------------------------------------------------------------------------------------------------------------------
     710,000   NYC IDA (Promotional Slideguide)                                   7.500     12/01/2010            752,131
---------------------------------------------------------------------------------------------------------------------------
   1,065,000   NYC IDA (Promotional Slideguide)                                   7.875     12/01/2015          1,129,912
---------------------------------------------------------------------------------------------------------------------------
     545,000   NYC IDA (Psycho Therapy)                                           9.625     04/01/2010            545,905
---------------------------------------------------------------------------------------------------------------------------
   3,210,000   NYC IDA (Riverdale Terrace Hsg. Devel. Fund)                       6.250     11/01/2014          3,027,158
---------------------------------------------------------------------------------------------------------------------------
   8,595,000   NYC IDA (Riverdale Terrace Hsg. Devel. Fund)                       6.750     11/01/2028          7,944,015
---------------------------------------------------------------------------------------------------------------------------
   1,650,000   NYC IDA (Sahadi Fine Foods)                                        6.250     11/01/2009          1,595,154
---------------------------------------------------------------------------------------------------------------------------
   4,085,000   NYC IDA (Sahadi Fine Foods)                                        6.750     11/01/2019          3,895,211
---------------------------------------------------------------------------------------------------------------------------
   4,295,000   NYC IDA (Sequins International)                                    8.950     01/30/2016          4,356,676
---------------------------------------------------------------------------------------------------------------------------
   4,380,000   NYC IDA (Showman Fabricators)                                      7.500     11/01/2028          4,414,821
---------------------------------------------------------------------------------------------------------------------------
   3,600,000   NYC IDA (South Bronx Overall Economic Devel.)                      8.625     12/01/2025          3,560,040
---------------------------------------------------------------------------------------------------------------------------
   4,255,000   NYC IDA (Special Needs Facilities Pooled Program)                  6.650     07/01/2023          3,869,072
---------------------------------------------------------------------------------------------------------------------------
   1,450,000   NYC IDA (Special Needs Facilities Pooled Program)                  7.125     08/01/2006          1,478,681
---------------------------------------------------------------------------------------------------------------------------
   7,010,000   NYC IDA (Special Needs Facilities Pooled Program)                  7.875     08/01/2025          7,287,947
---------------------------------------------------------------------------------------------------------------------------
   5,115,000   NYC IDA (St. Bernard's School)                                     7.000     12/01/2021          5,392,898
---------------------------------------------------------------------------------------------------------------------------
      10,000   NYC IDA (Staten Island University Hospital)                        6.375     07/01/2031             10,099
---------------------------------------------------------------------------------------------------------------------------
   2,045,000   NYC IDA (Staten Island University Hospital)                        6.375     07/01/2031          2,065,286
---------------------------------------------------------------------------------------------------------------------------
     585,000   NYC IDA (Streamline Plastics)                                      7.750     12/01/2015            593,646
---------------------------------------------------------------------------------------------------------------------------
   1,275,000   NYC IDA (Streamline Plastics)                                      8.125     12/01/2025          1,310,407
---------------------------------------------------------------------------------------------------------------------------
      60,000   NYC IDA (Summit School)                                            7.250     12/01/2004             60,307
---------------------------------------------------------------------------------------------------------------------------
   1,485,000   NYC IDA (Summit School)                                            8.250     12/01/2024          1,530,679
---------------------------------------------------------------------------------------------------------------------------
   1,120,000   NYC IDA (Surprise Plastics)                                        7.500     11/01/2013          1,113,526
---------------------------------------------------------------------------------------------------------------------------
   2,480,000   NYC IDA (Surprise Plastics)                                        8.500     11/01/2023          2,463,012
---------------------------------------------------------------------------------------------------------------------------
   3,510,000   NYC IDA (Terminal One Group Association)                           6.000     01/01/2015          3,604,700
---------------------------------------------------------------------------------------------------------------------------
  25,460,000   NYC IDA (Terminal One Group Association)                           6.000     01/01/2019         26,122,724
---------------------------------------------------------------------------------------------------------------------------
     210,000   NYC IDA (Terminal One Group Association)                           6.100     01/01/2009            216,495
---------------------------------------------------------------------------------------------------------------------------
   9,460,000   NYC IDA (Terminal One Group Association)                           6.125     01/01/2024          9,721,285
---------------------------------------------------------------------------------------------------------------------------
     380,000   NYC IDA (The Bank Street College)                                  5.250     12/01/2021            386,460
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYC IDA (The Bank Street College)                                  5.250     12/01/2030          1,009,470
---------------------------------------------------------------------------------------------------------------------------
     465,000   NYC IDA (Therapy & Learning Center)                                7.500     10/01/2011            455,533
---------------------------------------------------------------------------------------------------------------------------
   3,735,000   NYC IDA (Therapy & Learning Center)                                8.250     10/01/2031          3,627,395




                         21 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $   435,000   NYC IDA (THR Products Corp.)                                       7.250%    11/01/2010      $     431,642
---------------------------------------------------------------------------------------------------------------------------
   1,085,000   NYC IDA (THR Products Corp.)                                       8.250     11/01/2020          1,073,640
---------------------------------------------------------------------------------------------------------------------------
   4,450,000   NYC IDA (Touro College)                                            6.350     06/01/2029          3,969,534
---------------------------------------------------------------------------------------------------------------------------
   4,485,000   NYC IDA (Ulano)                                                    6.900     11/01/2019          4,310,534
---------------------------------------------------------------------------------------------------------------------------
   1,815,000   NYC IDA (Ultimate Display) a                                       9.000     10/15/2011          1,827,251
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYC IDA (United Nations School)                                    6.350     12/01/2015          1,060,540
---------------------------------------------------------------------------------------------------------------------------
   1,555,000   NYC IDA (Urban Health Plan)                                        6.250     09/15/2009          1,511,273
---------------------------------------------------------------------------------------------------------------------------
   9,830,000   NYC IDA (Urban Health Plan)                                        7.050     09/15/2026          9,263,497
---------------------------------------------------------------------------------------------------------------------------
     145,000   NYC IDA (Utleys)                                                   6.625     11/01/2006            142,908
---------------------------------------------------------------------------------------------------------------------------
   1,335,000   NYC IDA (Utleys)                                                   7.375     11/01/2023          1,292,534
---------------------------------------------------------------------------------------------------------------------------
     820,000   NYC IDA (Van Blarcom Closures)                                     7.125     11/01/2007            821,870
---------------------------------------------------------------------------------------------------------------------------
   2,965,000   NYC IDA (Van Blarcom Closures)                                     8.000     11/01/2017          3,037,405
---------------------------------------------------------------------------------------------------------------------------
     860,000   NYC IDA (Visual Display) a                                         7.250     11/01/2008            825,050
---------------------------------------------------------------------------------------------------------------------------
   2,375,000   NYC IDA (Visual Display) a                                         8.325     11/01/2018          2,242,950
---------------------------------------------------------------------------------------------------------------------------
     600,000   NYC IDA (Visy Paper)                                               7.550     01/01/2005            600,282
---------------------------------------------------------------------------------------------------------------------------
  17,300,000   NYC IDA (Visy Paper)                                               7.800     01/01/2016         17,384,943
---------------------------------------------------------------------------------------------------------------------------
  48,250,000   NYC IDA (Visy Paper)                                               7.950     01/01/2028         48,727,193
---------------------------------------------------------------------------------------------------------------------------
     685,000   NYC IDA (W & W Jewelers)                                           7.250     02/01/2011            682,650
---------------------------------------------------------------------------------------------------------------------------
   1,555,000   NYC IDA (W & W Jewelers)                                           8.250     02/01/2021          1,548,111
---------------------------------------------------------------------------------------------------------------------------
   4,840,000   NYC IDA (Westchester Square Medical Center)                        8.000     11/01/2010          5,014,192
---------------------------------------------------------------------------------------------------------------------------
   6,160,000   NYC IDA (Westchester Square Medical Center)                        8.375     11/01/2015          6,469,355
---------------------------------------------------------------------------------------------------------------------------
   1,660,000   NYC IDA (World Casing Corp.)                                       6.700     11/01/2019          1,476,354
---------------------------------------------------------------------------------------------------------------------------
   3,745,000   NYC IDA (YMCA of Greater NY)                                       5.250     08/01/2021          3,792,786
---------------------------------------------------------------------------------------------------------------------------
   8,500,000   NYC IDA Special Facilities (JFK International Airport)             8.000     08/01/2012          5,503,920
---------------------------------------------------------------------------------------------------------------------------
     530,000   NYC Municipal Water Finance Authority                              0.000 z   06/15/2018            251,989
---------------------------------------------------------------------------------------------------------------------------
     530,000   NYC Municipal Water Finance Authority                              0.000 z   06/15/2019            236,878
---------------------------------------------------------------------------------------------------------------------------
   6,030,000   NYC Municipal Water Finance Authority                              0.000 z   06/15/2020          2,527,776
---------------------------------------------------------------------------------------------------------------------------
   3,500,000   NYC Municipal Water Finance Authority                              5.000     06/15/2022          3,585,995
---------------------------------------------------------------------------------------------------------------------------
   9,600,000   NYC Municipal Water Finance Authority                              5.000     06/15/2023          9,802,176
---------------------------------------------------------------------------------------------------------------------------
     450,000   NYC Municipal Water Finance Authority                              5.000     06/15/2024            457,592
---------------------------------------------------------------------------------------------------------------------------
  22,190,000   NYC Municipal Water Finance Authority                              5.000     06/15/2029         22,410,347
---------------------------------------------------------------------------------------------------------------------------
     795,000   NYC Municipal Water Finance Authority                              5.125     06/15/2031            810,828
---------------------------------------------------------------------------------------------------------------------------
   4,750,000   NYC Municipal Water Finance Authority                              5.125     06/15/2032          4,851,175
---------------------------------------------------------------------------------------------------------------------------
   6,325,000   NYC Municipal Water Finance Authority                              5.125     06/15/2033          6,472,373
---------------------------------------------------------------------------------------------------------------------------
  39,500,000   NYC Municipal Water Finance Authority                              5.125     06/15/2034         40,348,065
---------------------------------------------------------------------------------------------------------------------------
   6,875,000   NYC Municipal Water Finance Authority                              5.125     06/15/2034          7,033,125
---------------------------------------------------------------------------------------------------------------------------
  18,970,000   NYC Municipal Water Finance Authority                              5.250     06/15/2025         19,751,374
---------------------------------------------------------------------------------------------------------------------------
     550,000   NYC Municipal Water Finance Authority                              5.250     06/15/2034            569,932
---------------------------------------------------------------------------------------------------------------------------
   2,160,000   NYC Municipal Water Finance Authority                              5.375     06/15/2026          2,231,518
---------------------------------------------------------------------------------------------------------------------------
      75,000   NYC Municipal Water Finance Authority                              5.500     06/15/2023             78,887
---------------------------------------------------------------------------------------------------------------------------
  10,850,000   NYC Municipal Water Finance Authority                              5.500     06/15/2033         11,531,380
---------------------------------------------------------------------------------------------------------------------------
      40,000   NYC Municipal Water Finance Authority                              5.750     06/15/2020 p           43,028
---------------------------------------------------------------------------------------------------------------------------
  4,000,000    NYC Municipal Water Finance Authority CAB                          0.000     06/15/2021          1,659,280
---------------------------------------------------------------------------------------------------------------------------
  10,000,000   NYC Municipal Water Finance Authority LEVRRS                       9.855 f   06/15/2019         10,798,700
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   NYC Municipal Water Finance Authority RITES a,w                    0.000 f   06/15/2029          2,599,400




                         22 | ROCHESTER FUND MUNICIPALS



   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 2,930,000   NYC Municipal Water Finance Authority RITES a                     13.716% f  06/15/2032      $   3,046,438
---------------------------------------------------------------------------------------------------------------------------
  14,425,000   NYC Municipal Water Finance Authority RITES a                     13.809 f   06/15/2026         15,157,790
---------------------------------------------------------------------------------------------------------------------------
   7,850,000   NYC Municipal Water Finance Authority RITES a                     13.820 f   06/15/2034          8,196,656
---------------------------------------------------------------------------------------------------------------------------
   2,805,000   NYC Municipal Water Finance Authority RITES a                     13.935 f   06/15/2027          2,912,544
---------------------------------------------------------------------------------------------------------------------------
  11,210,000   NYC Municipal Water Finance Authority RITES a                     14.216 f   06/15/2032         12,102,764
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   NYC Municipal Water Finance Authority RITES a                     14.320 f   06/15/2030          5,274,700
---------------------------------------------------------------------------------------------------------------------------
   3,555,000   NYC Municipal Water Finance Authority RITES a                     14.389 f   06/15/2021          3,949,250
---------------------------------------------------------------------------------------------------------------------------
  18,240,000   NYC Municipal Water Finance Authority RITES a                     14.424 f   06/15/2030         19,242,106
---------------------------------------------------------------------------------------------------------------------------
   4,030,000   NYC Municipal Water Finance Authority RITES a                     14.435 f   06/15/2030          4,251,408
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   NYC Municipal Water Finance Authority RITES a                     14.435 f   06/15/2030          5,274,700
---------------------------------------------------------------------------------------------------------------------------
  17,300,000   NYC Municipal Water Finance Authority RITES a                     15.785 f   06/15/2033         21,645,760
---------------------------------------------------------------------------------------------------------------------------
   3,140,000   NYC Municipal Water Finance Authority RITES a                     15.889 f   06/15/2027          3,867,161
---------------------------------------------------------------------------------------------------------------------------
   2,150,000   NYC TFA RITES a                                                   13.820 f   08/15/2027          2,233,979
---------------------------------------------------------------------------------------------------------------------------
   8,000,000   NYC TFA, Series A                                                  5.375     02/15/2022          9,237,440
---------------------------------------------------------------------------------------------------------------------------
   2,930,000   NYC TFA, Series B                                                  4.750     11/15/2023          2,934,366
---------------------------------------------------------------------------------------------------------------------------
   7,545,000   NYC TFA, Series B                                                  5.000     05/01/2030          7,629,278
---------------------------------------------------------------------------------------------------------------------------
  19,914,689   NYS Certificate of Lease a                                         5.875     01/02/2023         20,459,356
---------------------------------------------------------------------------------------------------------------------------
     350,000   NYS DA (Augustana Lutheran Home)                                   5.400     02/01/2031            365,166
---------------------------------------------------------------------------------------------------------------------------
   1,500,000   NYS DA (Augustana Lutheran Home)                                   5.500     02/01/2041          1,565,415
---------------------------------------------------------------------------------------------------------------------------
      35,000   NYS DA (Bethel Springvale Home)                                    6.000     02/01/2035             38,210
---------------------------------------------------------------------------------------------------------------------------
  14,360,000   NYS DA (Buena Vida Nursing Home)                                   5.250     07/01/2028         14,690,424
---------------------------------------------------------------------------------------------------------------------------
  20,000,000   NYS DA (Catholic Health Services)                                  6.000     07/01/2030         21,109,200
---------------------------------------------------------------------------------------------------------------------------
   8,435,000   NYS DA (Center for Nursing)                                        5.550     08/01/2037          8,848,062
---------------------------------------------------------------------------------------------------------------------------
   2,855,000   NYS DA (Chapel Oaks)                                               5.450     07/01/2026          2,893,742
---------------------------------------------------------------------------------------------------------------------------
      35,000   NYS DA (City University)                                           5.000     07/01/2023             35,735
---------------------------------------------------------------------------------------------------------------------------
  18,280,000   NYS DA (City University)                                           5.250     07/01/2031         18,714,150
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   NYS DA (Concord Nursing Home)                                      6.500     07/01/2029          2,727,300
---------------------------------------------------------------------------------------------------------------------------
  15,000,000   NYS DA (Court Facilities)                                          5.250     05/15/2021         15,254,700
---------------------------------------------------------------------------------------------------------------------------
   1,250,000   NYS DA (D'Youville College)                                        5.250     07/01/2025          1,292,325
---------------------------------------------------------------------------------------------------------------------------
     525,000   NYS DA (Dept. of Health)                                           5.500     07/01/2021            553,245
---------------------------------------------------------------------------------------------------------------------------
      20,000   NYS DA (Ellis Hospital)                                            5.600     08/01/2025             20,753
---------------------------------------------------------------------------------------------------------------------------
  16,970,000   NYS DA (FHA Insured Mtg.), Series B                                0.000 z   08/15/2040          1,722,116
---------------------------------------------------------------------------------------------------------------------------
   6,480,000   NYS DA (Frances Schervier Home & Hospital Obligated Group)         5.500     07/01/2027          6,688,721
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYS DA (Grace Manor Health Care Facility)                          6.150     07/01/2018          1,113,620
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   NYS DA (Highland Hospital)                                         5.450     08/01/2037          2,077,200
---------------------------------------------------------------------------------------------------------------------------
 140,510,000   NYS DA (Insured Hospital)                                          0.000 z   08/15/2036         23,105,464
---------------------------------------------------------------------------------------------------------------------------
  38,650,000   NYS DA (Interfaith Medical Center)                                 5.400     02/15/2028         39,758,096
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYS DA (Iona College)                                              5.125     07/01/2032          1,021,880
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYS DA (Jones Memorial Hospital)                                   5.375     08/01/2034          1,036,400
---------------------------------------------------------------------------------------------------------------------------
      30,000   NYS DA (KMH Homes) a                                               6.950     08/01/2031             30,930
---------------------------------------------------------------------------------------------------------------------------
   3,450,000   NYS DA (L.I. University)                                           5.125     09/01/2023          3,544,496
---------------------------------------------------------------------------------------------------------------------------
   1,400,000   NYS DA (L.I. University)                                           5.250     09/01/2028          1,443,638
---------------------------------------------------------------------------------------------------------------------------
      25,000   NYS DA (Lakeside Memorial Hospital)                                6.000     02/01/2021             27,682
---------------------------------------------------------------------------------------------------------------------------
   9,415,000   NYS DA (Lutheran Social Services of Upstate NY) RITES a            8.563 f   02/01/2038          9,923,692
---------------------------------------------------------------------------------------------------------------------------
   3,115,000   NYS DA (Menorah Home & Hospital) RITES a                          14.301 f   08/01/2038          3,282,151





                         23 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 5,825,000   NYS DA (Menorah Home) RITES a                                     14.489% f  08/01/2038      $   6,161,336
---------------------------------------------------------------------------------------------------------------------------
   4,625,000   NYS DA (Mental Health) RITES a                                    13.935 f   02/15/2023          4,946,530
---------------------------------------------------------------------------------------------------------------------------
   3,465,000   NYS DA (Millard Hospital)                                          5.375     02/01/2032          3,573,212
---------------------------------------------------------------------------------------------------------------------------
   3,180,000   NYS DA (Miriam Osborn Memorial Home Association)                   6.375     07/01/2029          3,478,888
---------------------------------------------------------------------------------------------------------------------------
   2,430,000   NYS DA (Miriam Osborn Memorial Home Association)                   6.875     07/01/2019          2,772,727
---------------------------------------------------------------------------------------------------------------------------
   6,860,000   NYS DA (Miriam Osborn Memorial Home Association)                   6.875     07/01/2025          7,679,976
---------------------------------------------------------------------------------------------------------------------------
   2,375,000   NYS DA (Montefiore Medical) RITES a                               15.889 f   08/01/2038          2,829,385
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   NYS DA (MSH/NYU Hospital Center/HJDOI Obligated Group)             6.000     07/01/2013          2,609,825
---------------------------------------------------------------------------------------------------------------------------
   6,800,000   NYS DA (MSH/NYU Hospital Center/HJDOI Obligated Group)             6.000     07/01/2014          7,044,732
---------------------------------------------------------------------------------------------------------------------------
   3,000,000   NYS DA (MSH/NYU Hospital Center/HJDOI Obligated Group)             6.500     07/01/2017          3,302,250
---------------------------------------------------------------------------------------------------------------------------
  26,920,000   NYS DA (MSH/NYU Hospital Center/HJDOI Obligated Group)             6.500     07/01/2025         28,756,482
---------------------------------------------------------------------------------------------------------------------------
  42,630,000   NYS DA (MSH/NYU Hospital Center/HJDOI Obligated Group)             6.600     07/01/2026         44,096,898
---------------------------------------------------------------------------------------------------------------------------
   8,820,000   NYS DA (MSH/NYU Hospital Center/HJDOI Obligated Group)             6.625     07/01/2019          9,669,631
---------------------------------------------------------------------------------------------------------------------------
  15,000,000   NYS DA (MSH/NYU Hospital Center/HJDOI Obligated Group)             6.750     07/01/2020         16,481,850
---------------------------------------------------------------------------------------------------------------------------
   2,850,000   NYS DA (Municipal Health Facilities) RITES a                      13.935 f   01/15/2023          3,057,423
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYS DA (Norwegian Christian Home & Health Center)                  5.200     08/01/2036          1,024,250
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   NYS DA (Norwegian Christian Home & Health Center)                  6.100     08/01/2041          2,177,980
---------------------------------------------------------------------------------------------------------------------------
   4,215,000   NYS DA (Nursing Homes) w                                           5.200     02/01/2032          4,269,584
---------------------------------------------------------------------------------------------------------------------------
   2,200,000   NYS DA (NY & Presbyterian Hospital)                                6.500     08/01/2034          2,349,908
---------------------------------------------------------------------------------------------------------------------------
   6,860,000   NYS DA (NY Hospital Medical Center)                                5.600     02/15/2039          7,227,490
---------------------------------------------------------------------------------------------------------------------------
     585,000   NYS DA (NYS ARC)                                                   5.000     07/01/2026            595,284
---------------------------------------------------------------------------------------------------------------------------
   8,501,468   NYS DA (Our Lady of Mercy Medical Center) Computer Lease a         6.200     08/15/2006          8,346,997
---------------------------------------------------------------------------------------------------------------------------
   6,000,000   NYS DA (Personal Income Tax) w                                     5.000     03/15/2032          6,040,080
---------------------------------------------------------------------------------------------------------------------------
   1,650,000   NYS DA (Personal Income Tax) w                                     5.050     03/15/2032          1,668,645
---------------------------------------------------------------------------------------------------------------------------
  11,835,000   NYS DA (Rochester General Hospital) RITES a                        9.311 f   08/01/2033         12,419,057
---------------------------------------------------------------------------------------------------------------------------
     600,000   NYS DA (Sarah Neumann Home)                                        5.450     08/01/2027            623,856
---------------------------------------------------------------------------------------------------------------------------
   9,000,000   NYS DA (St. Agnes Hospital)                                        5.400     02/15/2025          9,276,570
---------------------------------------------------------------------------------------------------------------------------
   2,400,000   NYS DA (St. Barnabas Hospital)                                     5.450     08/01/2035          2,477,280
---------------------------------------------------------------------------------------------------------------------------
   1,750,000   NYS DA (St. Clare's Hospital)                                      5.300     02/15/2019          1,834,473
---------------------------------------------------------------------------------------------------------------------------
   2,970,000   NYS DA (St. Clare's Hospital)                                      5.400     02/15/2025          3,061,268
---------------------------------------------------------------------------------------------------------------------------
   2,580,000   NYS DA (St. James Mercy Hospital)                                  5.400     02/01/2038          2,667,075
---------------------------------------------------------------------------------------------------------------------------
   1,500,000   NYS DA (St. Thomas Aquinas College)                                5.250     07/01/2028          1,525,095
---------------------------------------------------------------------------------------------------------------------------
   3,885,000   NYS DA (St. Vincent Depaul Residence)                              5.300     07/01/2018          4,029,172
---------------------------------------------------------------------------------------------------------------------------
     130,000   NYS DA (St. Vincent's Hospital & Medical Center)                   7.400     08/01/2030            133,848
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYS DA (State University Dormitory Facilities)                     5.100     07/01/2031          1,015,230
---------------------------------------------------------------------------------------------------------------------------
      50,000   NYS DA (State University Educational Facilities)                   0.000 z   05/15/2007             43,842
---------------------------------------------------------------------------------------------------------------------------
      95,000   NYS DA (State University Educational Facilities)                   6.000     05/15/2017             96,615
---------------------------------------------------------------------------------------------------------------------------
   3,315,000   NYS DA (Suffolk County Judicial Facilities)                        9.500     04/15/2014          3,803,300
---------------------------------------------------------------------------------------------------------------------------
      55,000   NYS DA (Upstate Community Colleges)                                5.700     07/01/2021             57,009
---------------------------------------------------------------------------------------------------------------------------
   1,700,000   NYS DA (Vassar Brothers)                                           5.375     07/01/2025          1,763,155
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   NYS DA (Willow Towers)                                             5.400     02/01/2034          2,574,800
---------------------------------------------------------------------------------------------------------------------------
  26,040,000   NYS DA (Wyckoff Heights Medical Center)                            5.300     08/15/2021         26,957,389
---------------------------------------------------------------------------------------------------------------------------
   1,715,000   NYS EFC (Consolidated Water)                                       7.150     11/01/2014          1,746,676
---------------------------------------------------------------------------------------------------------------------------
   7,500,000   NYS EFC (NYS Water Services)                                       5.950     01/15/2020          7,919,775
---------------------------------------------------------------------------------------------------------------------------
   2,340,000   NYS EFC (NYS Water Services)                                       6.000     01/15/2031          2,439,356




                         24 | ROCHESTER FUND MUNICIPALS


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $    45,000   NYS EFC (NYS Water Services)                                       7.500%    03/15/2011      $      45,232
---------------------------------------------------------------------------------------------------------------------------
  11,830,000   NYS EFC (Occidental Petroleum)                                     5.700     09/01/2028         11,765,763
---------------------------------------------------------------------------------------------------------------------------
  15,300,000   NYS EFC (Occidental Petroleum)                                     6.100     11/01/2030         15,409,548
---------------------------------------------------------------------------------------------------------------------------
      40,000   NYS ERDA (Brooklyn Union Gas)                                      8.250     12/01/2018             40,464
---------------------------------------------------------------------------------------------------------------------------
   4,700,000   NYS ERDA (Brooklyn Union Gas) RIBS                                 9.820 f   07/08/2026          4,938,854
---------------------------------------------------------------------------------------------------------------------------
   7,000,000   NYS ERDA (Brooklyn Union Gas) RIBS                                10.829 f   04/01/2020          8,741,740
---------------------------------------------------------------------------------------------------------------------------
  16,300,000   NYS ERDA (Brooklyn Union Gas) RIBS                                12.385 f   07/01/2026         20,512,246
---------------------------------------------------------------------------------------------------------------------------
     210,000   NYS ERDA (Central Hudson Gas & Electric)                           5.450     08/01/2027            220,912
---------------------------------------------------------------------------------------------------------------------------
  34,865,000   NYS ERDA (Con Ed)                                                  4.700     06/01/2036         35,106,266
---------------------------------------------------------------------------------------------------------------------------
   9,350,000   NYS ERDA (Con Ed) RITES a                                          8.463 f   08/15/2020          9,744,009
---------------------------------------------------------------------------------------------------------------------------
  23,000,000   NYS ERDA (LILCO)                                                   5.300     11/01/2023         23,187,680
---------------------------------------------------------------------------------------------------------------------------
     300,000   NYS ERDA (LILCO)                                                   5.300     10/01/2024            301,656
---------------------------------------------------------------------------------------------------------------------------
  11,740,000   NYS ERDA (LILCO)                                                   7.150     09/01/2019         12,028,687
---------------------------------------------------------------------------------------------------------------------------
  12,625,000   NYS ERDA (LILCO)                                                   7.150     06/01/2020         12,935,449
---------------------------------------------------------------------------------------------------------------------------
   4,355,000   NYS ERDA (LILCO)                                                   7.150     12/01/2020          4,462,089
---------------------------------------------------------------------------------------------------------------------------
   4,180,000   NYS ERDA (LILCO)                                                   7.150     02/01/2022          4,282,786
---------------------------------------------------------------------------------------------------------------------------
   3,485,000   NYS ERDA (NIMO) RITES a                                           14.535 f   11/01/2025          3,807,781
---------------------------------------------------------------------------------------------------------------------------
   4,430,000   NYS ERDA (NIMO), Series A                                          5.150     11/01/2025          4,532,555
---------------------------------------------------------------------------------------------------------------------------
     425,000   NYS ERDA (NYSEG)                                                   5.700     12/01/2028            436,254
---------------------------------------------------------------------------------------------------------------------------
      25,000   NYS ERDA (NYSEG)                                                   5.950     12/01/2027             25,005
---------------------------------------------------------------------------------------------------------------------------
      30,000   NYS ERDA (NYSEG)                                                   5.950     12/01/2027             30,898
---------------------------------------------------------------------------------------------------------------------------
   3,625,000   NYS ERDA (RG&E) Residual Certificates a                           18.250 f   09/01/2033          4,771,733
---------------------------------------------------------------------------------------------------------------------------
   3,440,000   NYS HFA (Children's Rescue)                                        7.625     05/01/2018          3,477,118
---------------------------------------------------------------------------------------------------------------------------
   2,200,000   NYS HFA (Dominican Village)                                        6.600     08/15/2027          2,283,666
---------------------------------------------------------------------------------------------------------------------------
      20,000   NYS HFA (General Hsg.)                                             6.600     11/01/2008             20,239
---------------------------------------------------------------------------------------------------------------------------
   7,335,000   NYS HFA (HELP-Bronx Hsg.)                                          8.050     11/01/2005          7,654,073
---------------------------------------------------------------------------------------------------------------------------
     940,000   NYS HFA (HELP-Suffolk Hsg.)                                        8.100     11/01/2005            980,890
---------------------------------------------------------------------------------------------------------------------------
       2,000   NYS HFA (Hospital & Nursing Home)                                  6.875     11/01/2010 p            2,491
---------------------------------------------------------------------------------------------------------------------------
     205,000   NYS HFA (Hospital & Nursing Home)                                  7.000     11/01/2017 p          257,687
---------------------------------------------------------------------------------------------------------------------------
       5,000   NYS HFA (Meadow Manor)                                             7.750     11/01/2019              5,022
---------------------------------------------------------------------------------------------------------------------------
      50,000   NYS HFA (Multifamily Hsg.)                                         0.000 z   11/01/2016             23,298
---------------------------------------------------------------------------------------------------------------------------
  12,695,000   NYS HFA (Multifamily Hsg.)                                         0.000 z   11/01/2017          5,562,949
---------------------------------------------------------------------------------------------------------------------------
     745,000   NYS HFA (Multifamily Hsg.)                                         5.250     11/15/2028            759,379
---------------------------------------------------------------------------------------------------------------------------
   1,340,000   NYS HFA (Multifamily Hsg.)                                         5.300     08/15/2024          1,374,224
---------------------------------------------------------------------------------------------------------------------------
   1,700,000   NYS HFA (Multifamily Hsg.)                                         5.300     11/15/2039          1,730,209
---------------------------------------------------------------------------------------------------------------------------
   1,070,000   NYS HFA (Multifamily Hsg.)                                         5.350     08/15/2020          1,119,648
---------------------------------------------------------------------------------------------------------------------------
   2,860,000   NYS HFA (Multifamily Hsg.)                                         5.350     08/15/2031          2,930,184
---------------------------------------------------------------------------------------------------------------------------
   2,080,000   NYS HFA (Multifamily Hsg.)                                         5.375     02/15/2035          2,137,990
---------------------------------------------------------------------------------------------------------------------------
   3,250,000   NYS HFA (Multifamily Hsg.)                                         5.450     08/15/2032          3,368,528
---------------------------------------------------------------------------------------------------------------------------
   2,075,000   NYS HFA (Multifamily Hsg.)                                         5.500     08/15/2030          2,118,824
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   NYS HFA (Multifamily Hsg.)                                         5.500     08/15/2033          2,080,160
---------------------------------------------------------------------------------------------------------------------------
   1,215,000   NYS HFA (Multifamily Hsg.)                                         5.550     08/15/2019          1,230,686
---------------------------------------------------------------------------------------------------------------------------
   1,385,000   NYS HFA (Multifamily Hsg.)                                         5.600     08/15/2019          1,407,617
---------------------------------------------------------------------------------------------------------------------------
   1,240,000   NYS HFA (Multifamily Hsg.)                                         5.600     02/15/2026          1,280,399
---------------------------------------------------------------------------------------------------------------------------
   1,665,000   NYS HFA (Multifamily Hsg.)                                         5.600     08/15/2033          1,745,769





                         25 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued

   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 1,230,000   NYS HFA (Multifamily Hsg.)                                         5.650%    08/15/2030      $   1,250,885
---------------------------------------------------------------------------------------------------------------------------
   3,200,000   NYS HFA (Multifamily Hsg.)                                         5.650     08/15/2030          3,254,336
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYS HFA (Multifamily Hsg.)                                         5.650     08/15/2031          1,016,980
---------------------------------------------------------------------------------------------------------------------------
   1,710,000   NYS HFA (Multifamily Hsg.)                                         5.650     02/15/2034          1,765,370
---------------------------------------------------------------------------------------------------------------------------
   1,470,000   NYS HFA (Multifamily Hsg.)                                         5.700     02/15/2034          1,522,229
---------------------------------------------------------------------------------------------------------------------------
      95,000   NYS HFA (Multifamily Hsg.)                                         5.950     08/15/2024             97,219
---------------------------------------------------------------------------------------------------------------------------
      10,000   NYS HFA (Multifamily Hsg.)                                         6.000     08/15/2027             10,532
---------------------------------------------------------------------------------------------------------------------------
   1,285,000   NYS HFA (Multifamily Hsg.)                                         6.100     11/15/2036          1,357,204
---------------------------------------------------------------------------------------------------------------------------
   4,700,000   NYS HFA (Multifamily Hsg.)                                         6.125     08/15/2038          4,961,038
---------------------------------------------------------------------------------------------------------------------------
      50,000   NYS HFA (Multifamily Hsg.)                                         6.200     08/15/2012             51,014
---------------------------------------------------------------------------------------------------------------------------
      25,000   NYS HFA (Multifamily Hsg.)                                         6.200     08/15/2016             26,451
---------------------------------------------------------------------------------------------------------------------------
     765,000   NYS HFA (Multifamily Hsg.)                                         6.250     02/15/2031            807,741
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   NYS HFA (Multifamily Hsg.)                                         6.300     08/15/2026          5,245,900
---------------------------------------------------------------------------------------------------------------------------
   1,255,000   NYS HFA (Multifamily Hsg.)                                         6.400     11/15/2027          1,335,973
---------------------------------------------------------------------------------------------------------------------------
   2,905,000   NYS HFA (Multifamily Hsg.)                                         6.500     08/15/2024          2,966,208
---------------------------------------------------------------------------------------------------------------------------
   3,240,000   NYS HFA (Multifamily Hsg.)                                         6.700     08/15/2025          3,310,178
---------------------------------------------------------------------------------------------------------------------------
   5,550,000   NYS HFA (Multifamily Hsg.)                                         6.750     11/15/2036          5,810,850
---------------------------------------------------------------------------------------------------------------------------
      75,000   NYS HFA (Multifamily Hsg.)                                         6.950     08/15/2012             76,634
---------------------------------------------------------------------------------------------------------------------------
   5,400,000   NYS HFA (Multifamily Hsg.)                                         7.050     08/15/2024          5,514,966
---------------------------------------------------------------------------------------------------------------------------
   1,486,000   NYS HFA (Multifamily Hsg.)                                         7.450     11/01/2028          1,488,511
---------------------------------------------------------------------------------------------------------------------------
     900,000   NYS HFA (Multifamily Hsg.)                                         7.550     11/01/2029            909,999
---------------------------------------------------------------------------------------------------------------------------
   2,900,000   NYS HFA (NH&HC) RITES a                                           14.541 f   11/01/2016          3,599,364
---------------------------------------------------------------------------------------------------------------------------
      40,000   NYS HFA (Nonprofit Hsg.)                                           6.400     11/01/2010             40,584
---------------------------------------------------------------------------------------------------------------------------
      25,000   NYS HFA (Nonprofit Hsg.)                                           6.400     11/01/2013             26,024
---------------------------------------------------------------------------------------------------------------------------
      20,000   NYS HFA (Nonprofit Hsg.)                                           6.600     11/01/2010             20,239
---------------------------------------------------------------------------------------------------------------------------
      20,000   NYS HFA (Nonprofit Hsg.)                                           6.600     11/01/2013             20,434
---------------------------------------------------------------------------------------------------------------------------
   2,055,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2009          2,135,946
---------------------------------------------------------------------------------------------------------------------------
   2,220,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2010          2,307,446
---------------------------------------------------------------------------------------------------------------------------
   2,410,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2011          2,504,930
---------------------------------------------------------------------------------------------------------------------------
   2,610,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2012          2,712,808
---------------------------------------------------------------------------------------------------------------------------
   2,830,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2013          2,941,474
---------------------------------------------------------------------------------------------------------------------------
   1,395,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2014          1,449,949
---------------------------------------------------------------------------------------------------------------------------
   1,510,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2015          1,569,479
---------------------------------------------------------------------------------------------------------------------------
   1,630,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2016          1,694,206
---------------------------------------------------------------------------------------------------------------------------
   1,780,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2017          1,850,114
---------------------------------------------------------------------------------------------------------------------------
   1,885,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2018          1,959,250
---------------------------------------------------------------------------------------------------------------------------
   1,155,000   NYS HFA (Nonprofit Hsg.)                                           8.400     11/01/2019          1,200,495
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   NYS HFA (Phillips Village)                                         7.750     08/15/2017          5,404,350
---------------------------------------------------------------------------------------------------------------------------
   3,985,000   NYS HFA (Service Contract)                                         5.375     03/15/2023          4,024,571
---------------------------------------------------------------------------------------------------------------------------
   5,600,000   NYS HFA (Service Contract)                                         5.500     09/15/2022          5,789,280
---------------------------------------------------------------------------------------------------------------------------
   5,525,000   NYS HFA (Service Contract)                                         5.500     03/15/2025          5,688,319
---------------------------------------------------------------------------------------------------------------------------
       5,000   NYS HFA (Service Contract)                                         6.125     03/15/2020 p            5,272
---------------------------------------------------------------------------------------------------------------------------
      20,000   NYS HFA (Service Contract)                                         6.125     03/15/2020             21,006
---------------------------------------------------------------------------------------------------------------------------
     255,000   NYS HFA (Service Contract)                                         6.500     03/15/2025            282,974
---------------------------------------------------------------------------------------------------------------------------
     715,000   NYS HFA (Shorehill Hsg.)                                           7.500     05/01/2008            716,123




                         26 | ROCHESTER FUND MUNICIPALS
   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 2,120,000   NYS HFA, Series E                                                  5.700%    08/15/2033      $   2,223,074
---------------------------------------------------------------------------------------------------------------------------
     500,000   NYS HFA, Series F                                                  5.700     08/15/2032            524,310
---------------------------------------------------------------------------------------------------------------------------
      80,000   NYS LGAC                                                           5.500     04/01/2023             82,670
---------------------------------------------------------------------------------------------------------------------------
     435,000   NYS LGSC (SCSB)                                                    7.250     12/15/2011            433,312
---------------------------------------------------------------------------------------------------------------------------
     810,000   NYS LGSC (SCSB) a                                                  7.375     12/15/2016            825,471
---------------------------------------------------------------------------------------------------------------------------
     980,000   NYS LGSC (SCSB)                                                    7.750     12/15/2021            975,237
---------------------------------------------------------------------------------------------------------------------------
     275,000   NYS Medcare (Beth Israel Medical Center)                           7.125     11/01/2006            272,297
---------------------------------------------------------------------------------------------------------------------------
   2,025,000   NYS Medcare (Beth Israel Medical Center)                           7.200     11/01/2014          1,935,961
---------------------------------------------------------------------------------------------------------------------------
   1,015,000   NYS Medcare (Central Suffolk Hospital)                             6.125     11/01/2016            791,243
---------------------------------------------------------------------------------------------------------------------------
      35,000   NYS Medcare (Hospital & Nursing Home)                              5.750     08/15/2019             40,436
---------------------------------------------------------------------------------------------------------------------------
       5,000   NYS Medcare (Hospital & Nursing Home)                              6.200     08/15/2022              5,182
---------------------------------------------------------------------------------------------------------------------------
      95,000   NYS Medcare (Hospital & Nursing Home)                              6.200     02/15/2023             97,478
---------------------------------------------------------------------------------------------------------------------------
      65,000   NYS Medcare (Hospital & Nursing Home)                              6.375     08/15/2029             70,286
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYS Medcare (Hospital & Nursing Home)                              6.375     08/15/2033          1,025,530
---------------------------------------------------------------------------------------------------------------------------
   1,945,000   NYS Medcare (Hospital & Nursing Home)                              6.500     02/15/2034          2,082,025
---------------------------------------------------------------------------------------------------------------------------
   2,410,000   NYS Medcare (Hospital & Nursing Home)                              6.650     08/15/2032          2,471,985
---------------------------------------------------------------------------------------------------------------------------
   4,560,000   NYS Medcare (Hospital & Nursing Home)                              7.400     11/01/2016          4,734,648
---------------------------------------------------------------------------------------------------------------------------
   1,745,000   NYS Medcare (Hospital & Nursing Home)                              9.000     02/15/2026          1,799,270
---------------------------------------------------------------------------------------------------------------------------
   4,790,000   NYS Medcare (Hospital & Nursing Home)                              9.375     11/01/2016          5,108,535
---------------------------------------------------------------------------------------------------------------------------
   1,935,000   NYS Medcare (Hospital & Nursing Home)                             10.000     11/01/2006          2,057,486
---------------------------------------------------------------------------------------------------------------------------
      70,000   NYS Medcare (Insured Mtg. Nursing)                                 6.500     11/01/2015             71,560
---------------------------------------------------------------------------------------------------------------------------
   1,650,000   NYS Medcare (M.G. Nursing Home)                                    6.375     02/15/2035          1,808,945
---------------------------------------------------------------------------------------------------------------------------
      40,000   NYS Medcare (Mental Health)                                        5.500     08/15/2021             40,866
---------------------------------------------------------------------------------------------------------------------------
     250,000   NYS Medcare (Mental Health)                                        5.500     08/15/2024            258,748
---------------------------------------------------------------------------------------------------------------------------
      25,000   NYS Medcare (Montefiore Medical Center)                            5.750     02/15/2025             26,864
---------------------------------------------------------------------------------------------------------------------------
     650,000   NYS Medcare (Our Lady of Victory Hospital)                         6.625     11/01/2016            659,204
---------------------------------------------------------------------------------------------------------------------------
      25,000   NYS Medcare (Secured Hospital)                                     6.250     02/15/2024             26,585
---------------------------------------------------------------------------------------------------------------------------
  22,000,000   NYS Medcare (St. Luke's Hospital) IVRC a                           9.384 f   02/15/2029         23,497,320
---------------------------------------------------------------------------------------------------------------------------
  12,500,000   NYS Medcare (St. Luke's Hospital) RITES a                          9.133 f   02/15/2029         13,353,125
---------------------------------------------------------------------------------------------------------------------------
   8,400,000   NYS Medcare (St. Luke's Hospital) RITES a                          9.190 f   02/15/2029          8,973,300
---------------------------------------------------------------------------------------------------------------------------
   5,750,000   NYS Medcare (St. Luke's Hospital) RITES a                          9.190 f   02/15/2029          6,142,438
---------------------------------------------------------------------------------------------------------------------------
  10,000,000   NYS Medcare (St. Luke's Hospital) RITES a                          9.248 f   02/15/2029         10,682,500
---------------------------------------------------------------------------------------------------------------------------
   5,925,000   NYS Medcare RITES a                                                8.463 f   02/15/2019          6,258,755
---------------------------------------------------------------------------------------------------------------------------
  10,000,000   NYS Medcare RITES a                                                8.713 f   02/15/2025         10,360,500
---------------------------------------------------------------------------------------------------------------------------
     260,000   NYS Thruway Authority                                              0.000 z   01/01/2005            248,893
---------------------------------------------------------------------------------------------------------------------------
  25,000,000   NYS Thruway Authority Convertible INFLOS                           7.945 f   01/01/2024         25,090,500
---------------------------------------------------------------------------------------------------------------------------
   7,140,000   NYS Thruway Authority RITES a                                     13.924 f   01/01/2025          7,501,570
---------------------------------------------------------------------------------------------------------------------------
      15,000   NYS UDC (Correctional Facilities)                                  0.000 z   01/01/2003             15,000
---------------------------------------------------------------------------------------------------------------------------
       5,000   NYS UDC (Correctional Facilities)                                  0.000 z   01/01/2013              3,390
---------------------------------------------------------------------------------------------------------------------------
   1,550,000   NYS UDC (Correctional Facilities)                                  5.000     01/01/2028          1,563,206
---------------------------------------------------------------------------------------------------------------------------
  12,140,000   NYS UDC (Correctional Facilities)                                  5.250     01/01/2021         12,235,299
---------------------------------------------------------------------------------------------------------------------------
  10,045,000   NYS UDC (Correctional Facilities)                                  5.375     01/01/2023         10,663,872
---------------------------------------------------------------------------------------------------------------------------
      80,000   NYS UDC (South Mall) CAB                                           0.000 z   01/01/2011             52,537
---------------------------------------------------------------------------------------------------------------------------
     345,000   NYS UDC (South Mall) CAB                                           0.000 z   01/01/2011            226,565
---------------------------------------------------------------------------------------------------------------------------
   5,480,000   Oneida County IDA (Bonide Products)                                6.250     11/01/2018          5,177,285



                         27 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $   875,000   Oneida County IDA (Mobile Climate Control)                         8.000%    11/01/2008      $     903,831
---------------------------------------------------------------------------------------------------------------------------
   2,825,000   Oneida County IDA (Mobile Climate Control)                         8.750     11/01/2018          2,916,022
---------------------------------------------------------------------------------------------------------------------------
     450,000   Oneida County IDA (Mohawk Valley Handicapped Services)             5.300     03/15/2019            457,353
---------------------------------------------------------------------------------------------------------------------------
     740,000   Oneida County IDA (Mohawk Valley Handicapped Services)             5.350     03/15/2029            739,415
---------------------------------------------------------------------------------------------------------------------------
   1,190,000   Oneida County IDA (Presbyterian Home)                              5.250     03/01/2019          1,231,483
---------------------------------------------------------------------------------------------------------------------------
   1,015,000   Oneida County IDA (Presbyterian Home)                              6.100     06/01/2020          1,100,514
---------------------------------------------------------------------------------------------------------------------------
   4,000,000   Onondaga County IDA (Air Cargo)                                    6.125     01/01/2032          4,047,680
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   Onondaga County IDA (Air Cargo)                                    7.250     01/01/2032          2,006,480
---------------------------------------------------------------------------------------------------------------------------
  85,750,000   Onondaga County IDA (Coltec Industries)                            7.000     05/01/2015         68,762,925
---------------------------------------------------------------------------------------------------------------------------
     540,000   Onondaga County IDA (Coltec Industries)                            7.250     06/01/2008            549,558
---------------------------------------------------------------------------------------------------------------------------
     770,000   Onondaga County IDA (Coltec Industries)                            9.875     10/01/2010            800,723
---------------------------------------------------------------------------------------------------------------------------
   1,595,000   Onondaga County IDA (Community General Hospital)                   5.500     11/01/2018          1,220,255
---------------------------------------------------------------------------------------------------------------------------
   8,345,000   Onondaga County IDA (Community General Hospital)                   6.625     01/01/2018          7,241,708
---------------------------------------------------------------------------------------------------------------------------
   1,305,000   Onondaga County IDA (Gear Motion)                                  8.900     12/15/2011          1,317,371
---------------------------------------------------------------------------------------------------------------------------
   4,200,000   Onondaga County IDA (Le Moyne College)                             5.625     12/01/2021          4,368,084
---------------------------------------------------------------------------------------------------------------------------
  11,500,000   Onondaga County IDA (Solvay Paperboard)                            6.800     11/01/2014         11,839,135
---------------------------------------------------------------------------------------------------------------------------
  67,200,000   Onondaga County IDA (Solvay Paperboard)                            7.000     11/01/2030         70,137,312
---------------------------------------------------------------------------------------------------------------------------
     750,000   Onondaga County IDA (Syracuse Home)                                5.200     12/01/2018            768,195
---------------------------------------------------------------------------------------------------------------------------
  19,980,000   Onondaga County Res Rec                                            6.875     05/01/2006         16,389,994
---------------------------------------------------------------------------------------------------------------------------
     712,000   Ontario County IDA (Ontario Design)                                6.500     11/01/2005            718,622
---------------------------------------------------------------------------------------------------------------------------
     430,000   Orange County IDA (Adult Homes at Erie Station)                    7.000     08/01/2021            432,516
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   Orange County IDA (Arden Hill Life Care Center)                    7.000     08/01/2021          2,514,625
---------------------------------------------------------------------------------------------------------------------------
   2,300,000   Orange County IDA (Arden Hill Life Care Center)                    7.000     08/01/2031          2,296,987
---------------------------------------------------------------------------------------------------------------------------
   2,090,000   Orange County IDA (Arden Hill Life Care Center)                    7.000     08/01/2031          2,087,262
---------------------------------------------------------------------------------------------------------------------------
   2,705,000   Orange County IDA (Glen Arden)                                     5.625     01/01/2018          2,409,479
---------------------------------------------------------------------------------------------------------------------------
   5,590,000   Orange County IDA (Glen Arden)                                     5.700     01/01/2028          4,663,402
---------------------------------------------------------------------------------------------------------------------------
  22,450,000   Orange County IDA (Glen Arden)                                     8.875     01/01/2025 p       25,865,768
---------------------------------------------------------------------------------------------------------------------------
   3,000,000   Orange County IDA (Kingston Manufacturing) a                       8.000     11/01/2017          2,532,330
---------------------------------------------------------------------------------------------------------------------------
     460,000   Orange County IDA (Mental Retardation Project)                     7.800     07/01/2011            462,834
---------------------------------------------------------------------------------------------------------------------------
   1,715,000   Orange County IDA (St. Luke's Cornwall Hospital Obligated Group)   5.375     12/01/2021          1,788,574
---------------------------------------------------------------------------------------------------------------------------
   6,330,000   Orange County IDA (St. Luke's Cornwall Hospital Obligated Group)   5.375     12/01/2026          6,511,038
---------------------------------------------------------------------------------------------------------------------------
   2,235,000   Orange County IDA (St. Luke's Cornwall Hospital Obligated Group)   5.375     12/01/2026          2,298,921
---------------------------------------------------------------------------------------------------------------------------
   7,920,000   Orange County IDA (Tuxedo Place) a                                 7.000     08/01/2032          6,389,935
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   Orange County IDA (Tuxedo Place) a                                 7.000     08/01/2033          2,016,750
---------------------------------------------------------------------------------------------------------------------------
   2,755,000   Oswego County IDA (Bishop's Common)                                5.375     02/01/2049          2,856,026
---------------------------------------------------------------------------------------------------------------------------
   3,260,000   Oswego County IDA (Seneca Hill Manor)                              5.650     08/01/2037          3,424,434
---------------------------------------------------------------------------------------------------------------------------
   2,970,000   Otsego County IDA (Bassett Healthcare Project)                     5.350     11/01/2020          3,114,906
---------------------------------------------------------------------------------------------------------------------------
   3,000,000   Otsego County IDA (Hartwick College)                               5.500     07/01/2019          3,479,100
---------------------------------------------------------------------------------------------------------------------------
   5,700,000   Otsego County IDA (Hartwick College)                               5.900     07/01/2022          5,825,514
---------------------------------------------------------------------------------------------------------------------------
  11,400,000   Peekskill IDA (Drum Hill)                                          6.375     10/01/2028         10,169,826
---------------------------------------------------------------------------------------------------------------------------
     762,716   Peekskill IDA (Karta)                                              9.000     07/01/2010            771,464
---------------------------------------------------------------------------------------------------------------------------
   1,020,000   Pilgrim Village HDC (Multifamily Hsg.)                             6.800     02/01/2021          1,021,510
---------------------------------------------------------------------------------------------------------------------------
   5,445,000   Port Authority NY/NJ (Continental Airlines)                        9.000     12/01/2006          5,413,637
---------------------------------------------------------------------------------------------------------------------------
   1,260,000   Port Authority NY/NJ (Continental Airlines)                        9.000     12/01/2010          1,252,894
---------------------------------------------------------------------------------------------------------------------------
  50,285,000   Port Authority NY/NJ (Continental Airlines)                        9.125     12/01/2015         50,194,990




                         28 | ROCHESTER FUND MUNICIPALS


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $    10,000   Port Authority NY/NJ (JFK International Air Terminal)              5.750%    12/01/2025      $      10,695
---------------------------------------------------------------------------------------------------------------------------
     285,000   Port Authority NY/NJ (KIAC)                                        6.750     10/01/2011            299,806
---------------------------------------------------------------------------------------------------------------------------
  15,250,000   Port Authority NY/NJ (KIAC)                                        6.750     10/01/2019         15,736,933
---------------------------------------------------------------------------------------------------------------------------
   2,755,000   Poughkeepsie IDA (Eastman & Bixby Redevelopment Corp.)             6.000     08/01/2032          2,944,709
---------------------------------------------------------------------------------------------------------------------------
   1,990,000   Putnam County IDA (Brewster Plastics)                              8.500     12/01/2016          2,058,118
---------------------------------------------------------------------------------------------------------------------------
   6,365,000   Rensselaer County Tobacco Asset Securitization Corp.               5.625     06/01/2035          6,364,682
---------------------------------------------------------------------------------------------------------------------------
   7,000,000   Rensselaer County Tobacco Asset Securitization Corp.               5.750     06/01/2043          7,027,370
---------------------------------------------------------------------------------------------------------------------------
       5,000   Rensselaer Hsg. Authority (Renwyck)                                7.650     01/01/2011              5,160
---------------------------------------------------------------------------------------------------------------------------
  20,000,000   Rensselaer Municipal Leasing Corp.
               (Rensselaer County Nursing Home)                                   6.900     06/01/2024         20,405,800
---------------------------------------------------------------------------------------------------------------------------
   1,855,000   Riverhead IDA (Michael Reilly Design)                              8.625     02/01/2012          1,829,846
---------------------------------------------------------------------------------------------------------------------------
     550,000   Riverhead IDA (Michael Reilly Design)                              8.625     02/01/2012            542,438
---------------------------------------------------------------------------------------------------------------------------
   4,535,000   Riverhead IDA (Michael Reilly Design)                              8.875     02/01/2032          4,439,448
---------------------------------------------------------------------------------------------------------------------------
  14,990,000   Rochester Hsg. Authority (Crossroads Apartments)                   7.700     01/01/2017         16,316,315
---------------------------------------------------------------------------------------------------------------------------
   6,790,000   Rochester Museum & Science Center                                  6.125     12/01/2015          6,676,743
---------------------------------------------------------------------------------------------------------------------------
   2,090,000   Rockland County IDA (Dominican College)                            5.900     05/01/2010          2,061,137
---------------------------------------------------------------------------------------------------------------------------
   5,000,000   Rockland County IDA (Dominican College)                            6.250     05/01/2028          4,884,600
---------------------------------------------------------------------------------------------------------------------------
     740,000   Rockland County Tobacco Asset Securitization Corp.                 5.500     08/15/2025            730,054
---------------------------------------------------------------------------------------------------------------------------
   9,225,000   Rockland County Tobacco Asset Securitization Corp.                 5.625     08/15/2035          9,224,354
---------------------------------------------------------------------------------------------------------------------------
  10,100,000   Rockland County Tobacco Asset Securitization Corp.                 5.750     08/15/2043         10,154,843
---------------------------------------------------------------------------------------------------------------------------
   1,325,000   Saratoga County IDA (ARC)                                          8.400     03/01/2013          1,355,263
---------------------------------------------------------------------------------------------------------------------------
   1,635,000   Schenectady IDA (Schaffer Heights Hsg.)                            6.000     11/01/2030          1,739,558
---------------------------------------------------------------------------------------------------------------------------
   3,335,000   Schenectady Metroplex Devel. Authority, Series A                   5.375     12/15/2021          3,414,973
---------------------------------------------------------------------------------------------------------------------------
     380,000   Schroon Lake Fire District a                                       7.250     03/01/2009            381,524
---------------------------------------------------------------------------------------------------------------------------
     175,000   Scotia Hsg. Authority (Holyrood House)                             7.000     06/01/2009            181,494
---------------------------------------------------------------------------------------------------------------------------
   5,060,000   SONYMA, Series 24                                                  6.125     10/01/2030          5,422,195
---------------------------------------------------------------------------------------------------------------------------
   2,450,000   SONYMA, Series 29                                                  5.450     04/01/2031          2,522,128
---------------------------------------------------------------------------------------------------------------------------
      15,000   SONYMA, Series 30-C2                                               5.800     10/01/2025             15,359
---------------------------------------------------------------------------------------------------------------------------
  11,595,000   SONYMA, Series 38 RITES a                                         10.006 f   04/01/2025         12,011,724
---------------------------------------------------------------------------------------------------------------------------
      75,000   SONYMA, Series 40-B                                                6.400     10/01/2012             77,893
---------------------------------------------------------------------------------------------------------------------------
     100,000   SONYMA, Series 46                                                  6.500     04/01/2013            105,466
---------------------------------------------------------------------------------------------------------------------------
     100,000   SONYMA, Series 54                                                  6.100     10/01/2015            106,010
---------------------------------------------------------------------------------------------------------------------------
      55,000   SONYMA, Series 54                                                  6.200     10/01/2026             60,943
---------------------------------------------------------------------------------------------------------------------------
      45,000   SONYMA, Series 54                                                  6.200     10/01/2026             49,862
---------------------------------------------------------------------------------------------------------------------------
   5,535,000   SONYMA, Series 58                                                  6.400     04/01/2027          6,109,810
---------------------------------------------------------------------------------------------------------------------------
     160,000   SONYMA, Series 60                                                  6.000     10/01/2022            169,619
---------------------------------------------------------------------------------------------------------------------------
      15,000   SONYMA, Series 63                                                  6.125     04/01/2027             15,916
---------------------------------------------------------------------------------------------------------------------------
  10,080,000   SONYMA, Series 65                                                  5.850     10/01/2028         10,588,133
---------------------------------------------------------------------------------------------------------------------------
  19,570,000   SONYMA, Series 67                                                  5.800     10/01/2028         21,289,225
---------------------------------------------------------------------------------------------------------------------------
   3,295,000   SONYMA, Series 69                                                  5.400     10/01/2019          3,417,574
---------------------------------------------------------------------------------------------------------------------------
   6,320,000   SONYMA, Series 69                                                  5.500     10/01/2028          6,519,396
---------------------------------------------------------------------------------------------------------------------------
   4,670,000   SONYMA, Series 69 RITES a                                          8.928 f   10/01/2028          4,962,762
---------------------------------------------------------------------------------------------------------------------------
  13,000,000   SONYMA, Series 71                                                  5.400     04/01/2029         13,344,760
---------------------------------------------------------------------------------------------------------------------------
  10,150,000   SONYMA, Series 71 RITES a                                          8.728 f   04/01/2029         10,688,458
---------------------------------------------------------------------------------------------------------------------------
   5,500,000   SONYMA, Series 73 RITES a                                         15.032 f   10/01/2028          5,979,160





                         29 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued

   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 1,675,000   SONYMA, Series 73-A                                                5.300%    10/01/2028      $   1,711,482
---------------------------------------------------------------------------------------------------------------------------
  10,525,000   SONYMA, Series 79                                                  5.300     04/01/2029         10,759,287
---------------------------------------------------------------------------------------------------------------------------
      20,000   SONYMA, Series 82                                                  5.650     04/01/2030             20,740
---------------------------------------------------------------------------------------------------------------------------
     990,000   SONYMA, Series 88                                                  6.250     04/01/2030          1,114,295
---------------------------------------------------------------------------------------------------------------------------
   6,035,000   SONYMA, Series 97                                                  5.500     04/01/2031          6,240,552
---------------------------------------------------------------------------------------------------------------------------
     300,000   St. Lawrence County IDA (Clarkson University)                      5.125     07/01/2021            305,808
---------------------------------------------------------------------------------------------------------------------------
   1,315,000   St. Lawrence County IDA (Clarkson University)                      5.250     07/01/2031          1,332,687
---------------------------------------------------------------------------------------------------------------------------
   2,370,000   St. Lawrence County IDA (Clarkson University)                      5.500     07/01/2029          2,450,414
---------------------------------------------------------------------------------------------------------------------------
   2,805,000   St. Lawrence County IDA (Hepburn Medical Center)                   5.375     12/01/2019          2,967,438
---------------------------------------------------------------------------------------------------------------------------
   3,595,000   St. Lawrence County IDA (Hepburn Medical Center)                   5.500     12/01/2024          3,759,795
---------------------------------------------------------------------------------------------------------------------------
     640,000   Suffolk County IDA (ALIA - ACDS)                                   7.125     06/01/2017            645,978
---------------------------------------------------------------------------------------------------------------------------
     425,000   Suffolk County IDA (ALIA - ACLD)                                   6.375     06/01/2014            417,261
---------------------------------------------------------------------------------------------------------------------------
   1,310,000   Suffolk County IDA (ALIA - ACLD)                                   6.500     03/01/2018          1,229,435
---------------------------------------------------------------------------------------------------------------------------
     745,000   Suffolk County IDA (ALIA - ACLD)                                   7.500     09/01/2015            780,149
---------------------------------------------------------------------------------------------------------------------------
     345,000   Suffolk County IDA (ALIA - ADD)                                    6.950     12/01/2014            353,597
---------------------------------------------------------------------------------------------------------------------------
     530,000   Suffolk County IDA (ALIA - ADD)                                    7.500     09/01/2015            555,005
---------------------------------------------------------------------------------------------------------------------------
     580,000   Suffolk County IDA (ALIA - CDD)                                    7.125     06/01/2017            585,417
---------------------------------------------------------------------------------------------------------------------------
   1,805,000   Suffolk County IDA (ALIA - DDI) a                                  6.375     06/01/2014          1,701,808
---------------------------------------------------------------------------------------------------------------------------
     300,000   Suffolk County IDA (ALIA - DDI) a                                  6.950     12/01/2014            294,543
---------------------------------------------------------------------------------------------------------------------------
     100,000   Suffolk County IDA (ALIA - DDI) a                                  7.500     09/01/2015             93,145
---------------------------------------------------------------------------------------------------------------------------
     935,000   Suffolk County IDA (ALIA - FREE)                                   6.375     06/01/2014            917,974
---------------------------------------------------------------------------------------------------------------------------
   2,140,000   Suffolk County IDA (ALIA - FREE)                                   6.950     12/01/2014          2,177,685
---------------------------------------------------------------------------------------------------------------------------
   5,110,000   Suffolk County IDA (ALIA - FREE)                                   7.125     06/01/2017          5,157,727
---------------------------------------------------------------------------------------------------------------------------
     755,000   Suffolk County IDA (ALIA - IGHL)                                   6.375     06/01/2014            741,251
---------------------------------------------------------------------------------------------------------------------------
     730,000   Suffolk County IDA (ALIA - IGHL)                                   6.950     12/01/2014            742,855
---------------------------------------------------------------------------------------------------------------------------
   1,345,000   Suffolk County IDA (ALIA - IGHL)                                   7.125     06/01/2017          1,357,562
---------------------------------------------------------------------------------------------------------------------------
     320,000   Suffolk County IDA (ALIA - IGHL)                                   7.500     09/01/2015            335,098
---------------------------------------------------------------------------------------------------------------------------
     445,000   Suffolk County IDA (ALIA - L.I. Head Injury Association)           6.375     06/01/2014            436,897
---------------------------------------------------------------------------------------------------------------------------
     870,000   Suffolk County IDA (ALIA - L.I. Head Injury Association)           6.950     12/01/2014            885,321
---------------------------------------------------------------------------------------------------------------------------
     315,000   Suffolk County IDA (ALIA - L.I. Head Injury Association)           7.500     09/01/2015            329,862
---------------------------------------------------------------------------------------------------------------------------
     735,000   Suffolk County IDA (ALIA - MCH)                                    6.375     06/01/2014            721,616
---------------------------------------------------------------------------------------------------------------------------
   1,830,000   Suffolk County IDA (ALIA - MCH)                                    6.950     12/01/2014          1,862,226
---------------------------------------------------------------------------------------------------------------------------
   1,640,000   Suffolk County IDA (ALIA - MCH)                                    7.125     06/01/2017          1,655,318
---------------------------------------------------------------------------------------------------------------------------
     805,000   Suffolk County IDA (ALIA - NYS ARC)                                7.500     09/01/2015            842,980
---------------------------------------------------------------------------------------------------------------------------
     540,000   Suffolk County IDA (ALIA - Pederson-Krag Center)                   8.375     06/01/2016            536,312
---------------------------------------------------------------------------------------------------------------------------
     565,000   Suffolk County IDA (ALIA - SMCFS)                                  7.500     09/01/2015            591,657
---------------------------------------------------------------------------------------------------------------------------
     770,000   Suffolk County IDA (ALIA - Suffolk Hostels)                        7.500     09/01/2015            806,329
---------------------------------------------------------------------------------------------------------------------------
     315,000   Suffolk County IDA (ALIA - UCPAGS)                                 6.375     06/01/2014            309,264
---------------------------------------------------------------------------------------------------------------------------
   1,265,000   Suffolk County IDA (ALIA - UCPAGS)                                 6.950     12/01/2014          1,287,277
---------------------------------------------------------------------------------------------------------------------------
   1,480,000   Suffolk County IDA (ALIA - UCPAGS)                                 7.000     06/01/2016          1,484,854
---------------------------------------------------------------------------------------------------------------------------
     525,000   Suffolk County IDA (ALIA - UCPAGS)                                 7.500     09/01/2015            549,770
---------------------------------------------------------------------------------------------------------------------------
     450,000   Suffolk County IDA (ALIA - WORCA)                                  6.950     12/01/2014            457,925
---------------------------------------------------------------------------------------------------------------------------
   1,035,000   Suffolk County IDA (ALIA - WORCA)                                  7.125     06/01/2017          1,044,667
---------------------------------------------------------------------------------------------------------------------------
     635,000   Suffolk County IDA (ALIA - WORCA)                                  7.500     09/01/2015            664,959
---------------------------------------------------------------------------------------------------------------------------
   7,293,119   Suffolk County IDA (Camelot Village) b,d                           7.900     11/01/2031          3,658,010



                         30 | ROCHESTER FUND MUNICIPALS


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $   345,000   Suffolk County IDA (CCSSVD)                                        7.000%    04/01/2010      $     344,610
---------------------------------------------------------------------------------------------------------------------------
   2,595,000   Suffolk County IDA (CCSSVD)                                        8.000     04/01/2030          2,593,002
---------------------------------------------------------------------------------------------------------------------------
   1,090,000   Suffolk County IDA (DDI) a                                         6.250     03/01/2009            988,379
---------------------------------------------------------------------------------------------------------------------------
   5,025,000   Suffolk County IDA (DDI) a                                         7.250     03/01/2024          4,646,618
---------------------------------------------------------------------------------------------------------------------------
      80,000   Suffolk County IDA (DDI) a                                         7.375     03/01/2003             79,898
---------------------------------------------------------------------------------------------------------------------------
   9,275,000   Suffolk County IDA (DDI) a                                         8.750     03/01/2023          9,211,466
---------------------------------------------------------------------------------------------------------------------------
   2,605,000   Suffolk County IDA (Dowling College)                               6.625     06/01/2024          2,407,854
---------------------------------------------------------------------------------------------------------------------------
   3,240,000   Suffolk County IDA (Dowling College)                               6.700     12/01/2020          3,061,022
---------------------------------------------------------------------------------------------------------------------------
     280,000   Suffolk County IDA (Federation of Organizations)                   7.625     04/01/2010            281,039
---------------------------------------------------------------------------------------------------------------------------
   2,195,000   Suffolk County IDA (Federation of Organizations)                   8.125     04/01/2030          2,206,260
---------------------------------------------------------------------------------------------------------------------------
     445,000   Suffolk County IDA (Fil-Coil Corp.) a,b,d                          9.000     12/01/2015            267,000
---------------------------------------------------------------------------------------------------------------------------
   1,060,000   Suffolk County IDA (Fil-Coil Corp.) a,b,d                          9.250     12/01/2025            636,000
---------------------------------------------------------------------------------------------------------------------------
   3,860,000   Suffolk County IDA (Huntington First Aid Squad)                    6.650     11/01/2017          3,768,981
---------------------------------------------------------------------------------------------------------------------------
   3,250,000   Suffolk County IDA (Jefferson's Ferry)                             6.125     11/01/2029          3,269,663
---------------------------------------------------------------------------------------------------------------------------
   6,500,000   Suffolk County IDA (Jefferson's Ferry)                             7.200     11/01/2019          6,805,760
---------------------------------------------------------------------------------------------------------------------------
  10,000,000   Suffolk County IDA (Jefferson's Ferry)                             7.250     11/01/2028         10,489,900
---------------------------------------------------------------------------------------------------------------------------
   3,500,000   Suffolk County IDA (Nissequogue Cogeneration Partners)             5.300     01/01/2013          3,351,985
---------------------------------------------------------------------------------------------------------------------------
   7,485,000   Suffolk County IDA (Nissequogue Cogeneration Partners)             5.500     01/01/2023          6,849,074
---------------------------------------------------------------------------------------------------------------------------
     715,000   Suffolk County IDA (OBPWC)                                         7.500     11/01/2022            730,680
---------------------------------------------------------------------------------------------------------------------------
   1,600,000   Suffolk County IDA (Peconic Landing Retirement Home)               8.000     10/01/2030          1,620,720
---------------------------------------------------------------------------------------------------------------------------
     325,000   Suffolk County IDA (Pederson-Krag Center)                          7.625     04/01/2010            326,206
---------------------------------------------------------------------------------------------------------------------------
   2,545,000   Suffolk County IDA (Pederson-Krag Center)                          8.125     04/01/2030          2,558,056
---------------------------------------------------------------------------------------------------------------------------
     230,000   Suffolk County IDA (Rainbow Chimes)                                7.000     05/01/2007            220,181
---------------------------------------------------------------------------------------------------------------------------
   2,210,000   Suffolk County IDA (Rainbow Chimes)                                8.000     11/01/2024          2,111,169
---------------------------------------------------------------------------------------------------------------------------
   1,670,000   Suffolk County IDA (Rimland Facilities) a                          3.188 v   12/01/2009          1,667,495
---------------------------------------------------------------------------------------------------------------------------
   5,635,000   Suffolk County IDA (United Cerebral Palsy)                         7.875     09/01/2041          5,489,166
---------------------------------------------------------------------------------------------------------------------------
   1,620,000   Suffolk County IDA (Windmill Village)                              5.700     12/01/2026          1,690,875
---------------------------------------------------------------------------------------------------------------------------
   1,305,000   Suffolk County IDA (Windmill Village)                              5.750     12/01/2031          1,368,762
---------------------------------------------------------------------------------------------------------------------------
   1,065,000   Suffolk County IDA (Wireless Boulevard Realty)                     7.875     12/01/2012          1,112,254
---------------------------------------------------------------------------------------------------------------------------
   4,005,000   Suffolk County IDA (Wireless Boulevard Realty)                     8.625     12/01/2026          4,247,583
---------------------------------------------------------------------------------------------------------------------------
   3,035,000   Sullivan County IDA (Center Discovery Civic Facility)              7.250     02/01/2012          3,065,168
---------------------------------------------------------------------------------------------------------------------------
   9,965,000   Sullivan County IDA (Center Discovery Civic Facility)              7.750     02/01/2027         10,075,910
---------------------------------------------------------------------------------------------------------------------------
   8,725,000   Sullivan County IDA (SCCC Dorm Corp. Civic Facility)               7.250     06/01/2027          8,658,428
---------------------------------------------------------------------------------------------------------------------------
   2,615,000   Sunnybrook EHC                                                    11.250     12/01/2014          2,791,408
---------------------------------------------------------------------------------------------------------------------------
     495,000   Syracuse Hsg. Authority (Loretto Sedgwick Heights Corp.)           7.375     11/01/2008            500,351
---------------------------------------------------------------------------------------------------------------------------
   6,995,000   Syracuse Hsg. Authority (Loretto Sedgwick Heights Corp.)           8.500     11/01/2031          7,177,150
---------------------------------------------------------------------------------------------------------------------------
   6,590,000   Syracuse Hsg. Authority (LRRHCF)                                   5.800     08/01/2037          7,033,046
---------------------------------------------------------------------------------------------------------------------------
     550,000   Syracuse Hsg. Authority (LRRHCF)                                   7.500     08/01/2010            557,161
---------------------------------------------------------------------------------------------------------------------------
   2,435,000   Syracuse Hsg. Authority (Pavilion on James)                        7.500     11/01/2042          2,434,927
---------------------------------------------------------------------------------------------------------------------------
     325,000   Syracuse IDA (Anoplate Corp.)                                      7.250     11/01/2007            328,790
---------------------------------------------------------------------------------------------------------------------------
   2,195,000   Syracuse IDA (Anoplate Corp.)                                      8.000     11/01/2022          2,248,602
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Syracuse IDA (Crouse Irving Health Hospital) a                     5.375     01/01/2023            513,610
---------------------------------------------------------------------------------------------------------------------------
  24,795,000   Syracuse IDA (James Square)                                        0.000 z   08/01/2025          5,908,401
---------------------------------------------------------------------------------------------------------------------------
     725,000   Syracuse IDA (Jewish Home of Central NY)                           7.375     03/01/2021            754,065
---------------------------------------------------------------------------------------------------------------------------
   2,050,000   Syracuse IDA (Jewish Home of Central NY)                           7.375     03/01/2031          2,117,015




                         31 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued

   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $ 8,085,000   Syracuse IDA (Spectrum Medsystems Corp.) a,b,d                     8.500%    11/01/2010      $   6,023,325
---------------------------------------------------------------------------------------------------------------------------
     100,000   34th Street BID (34th Street Partnership)                          5.500     01/01/2023            102,102
---------------------------------------------------------------------------------------------------------------------------
   3,750,000   Tompkins County IDA (Ithacare Center)                              6.200     02/01/2037          4,224,675
---------------------------------------------------------------------------------------------------------------------------
   2,790,000   Tompkins County IDA (Kendall at Ithaca)                            7.875     06/01/2015          2,858,829
---------------------------------------------------------------------------------------------------------------------------
   5,760,000   Tompkins County IDA (Kendall at Ithaca)                            7.875     06/01/2024          5,901,581
---------------------------------------------------------------------------------------------------------------------------
     155,000   Tompkins Healthcare Corp. (Reconstruction Home)                   10.800     02/01/2007            178,839
---------------------------------------------------------------------------------------------------------------------------
      75,000   Tompkins Healthcare Corp. (Reconstruction Home)                   10.800     02/01/2028             87,646
---------------------------------------------------------------------------------------------------------------------------
     690,000   Tonawanda SCHC                                                     6.500     12/01/2010            687,005
---------------------------------------------------------------------------------------------------------------------------
 114,050,000   Triborough Bridge & Tunnel Authority                               5.000     01/01/2032        115,244,104
---------------------------------------------------------------------------------------------------------------------------
  20,680,000   Triborough Bridge & Tunnel Authority                               5.000     11/15/2032         20,911,823
---------------------------------------------------------------------------------------------------------------------------
  10,050,000   Triborough Bridge & Tunnel Authority                               5.125     01/01/2031         10,231,302
---------------------------------------------------------------------------------------------------------------------------
   4,190,000   Triborough Bridge & Tunnel Authority RITES a                      13.889 f   01/01/2032          4,389,863
---------------------------------------------------------------------------------------------------------------------------
   8,265,000   Triborough Bridge & Tunnel Authority RITES a                      13.785 f   01/01/2027          8,707,508
---------------------------------------------------------------------------------------------------------------------------
  12,875,000   TSASC, Inc. (TFABs)                                                5.750     07/15/2032         12,926,243
---------------------------------------------------------------------------------------------------------------------------
  23,250,000   TSASC, Inc. (TFABs)                                                6.250     07/15/2034         24,335,543
---------------------------------------------------------------------------------------------------------------------------
   4,000,000   TSASC, Inc. (TFABs)                                                6.375     07/15/2039          4,217,280
---------------------------------------------------------------------------------------------------------------------------
  11,970,000   TSASC, Inc. (TFABs) RITES a                                       18.353 f   07/15/2034         14,571,081
---------------------------------------------------------------------------------------------------------------------------
  30,875,000   TSASC, Inc. (TFABs) RITES a                                       18.853 f   07/15/2039         36,641,215
---------------------------------------------------------------------------------------------------------------------------
      50,000   Tupper Lake HDC                                                    8.125     10/01/2010             50,361
---------------------------------------------------------------------------------------------------------------------------
     995,000   UCP/HCA of Chemung County                                          6.600     08/01/2022          1,161,812
---------------------------------------------------------------------------------------------------------------------------
     725,000   Ulster County IDA (Benedictine Hospital)                           6.400     06/01/2014            673,924
---------------------------------------------------------------------------------------------------------------------------
   1,945,000   Ulster County IDA (Benedictine Hospital)                           6.450     06/01/2024          1,697,188
---------------------------------------------------------------------------------------------------------------------------
   1,915,000   Ulster County IDA (Brooklyn Bottling)                              8.600     06/30/2022          1,956,785
---------------------------------------------------------------------------------------------------------------------------
   4,000,000   Ulster County IDA (Kingston Hospital)                              5.650     11/15/2024          4,045,600
---------------------------------------------------------------------------------------------------------------------------
   1,465,000   Ulster County IDA (Mid-Hudson Family Health Services)              5.350     07/01/2023          1,510,693
---------------------------------------------------------------------------------------------------------------------------
   2,250,000   Ulster County Res Rec                                              6.000     03/01/2014          2,307,218
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   Ulster County Tobacco Asset Securitization Corp.                   0.000 v   06/01/2025          1,940,660
---------------------------------------------------------------------------------------------------------------------------
   1,635,000   Ulster County Tobacco Asset Securitization Corp.                   0.000 v   06/01/2040          1,117,882
---------------------------------------------------------------------------------------------------------------------------
     815,000   Ulster County Tobacco Asset Securitization Corp.                   6.000     06/01/2040            840,061
---------------------------------------------------------------------------------------------------------------------------
   2,470,000   Union Hsg. Authority (Methodist Homes)                             7.625     11/01/2016          2,566,182
---------------------------------------------------------------------------------------------------------------------------
   2,010,000   Union Hsg. Authority (Methodist Homes)                             8.500     04/01/2012          2,079,687
---------------------------------------------------------------------------------------------------------------------------
     795,000   United Nations Devel. Corp., Series B                              5.500     07/01/2017            795,429
---------------------------------------------------------------------------------------------------------------------------
  20,280,000   United Nations Devel. Corp., Series B                              5.600     07/01/2026         20,289,937
---------------------------------------------------------------------------------------------------------------------------
  17,150,000   United Nations Devel. Corp., Series C                              5.600     07/01/2026         17,154,288
---------------------------------------------------------------------------------------------------------------------------
     500,000   Utica GO                                                           6.100     01/15/2013            553,430
---------------------------------------------------------------------------------------------------------------------------
     500,000   Utica GO                                                           6.200     01/15/2014            552,845
---------------------------------------------------------------------------------------------------------------------------
     500,000   Utica GO                                                           6.250     01/15/2015            551,640
---------------------------------------------------------------------------------------------------------------------------
   3,550,000   Utica IDA (Utica College Civic Facility)                           6.850     12/01/2031          3,591,855
---------------------------------------------------------------------------------------------------------------------------
     950,000   Vigilant EHL (Thomaston Volunteer Fire Dept.)                      7.500     11/01/2012            962,892
---------------------------------------------------------------------------------------------------------------------------
   8,440,000   Warren & Washington Counties IDA (Adirondack Res Rec)              8.000     12/15/2012          7,650,776
---------------------------------------------------------------------------------------------------------------------------
   8,645,000   Warren & Washington Counties IDA (Adirondack Res Rec)              8.200     12/15/2010          8,024,375
---------------------------------------------------------------------------------------------------------------------------
   8,965,000   Warren & Washington Counties IDA (Adirondack Res Rec)              8.200     12/15/2010          8,337,898
---------------------------------------------------------------------------------------------------------------------------
     100,000   Watervliet EHC                                                     8.000     11/15/2003            100,314
---------------------------------------------------------------------------------------------------------------------------
      95,000   Watervliet EHC                                                     8.000     11/15/2004             95,307
---------------------------------------------------------------------------------------------------------------------------
      95,000   Watervliet EHC                                                     8.000     11/15/2005             95,235
---------------------------------------------------------------------------------------------------------------------------
     100,000   Watervliet EHC                                                     8.000     11/15/2006            100,247




                         32 | ROCHESTER FUND MUNICIPALS


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 New York Continued
 $   100,000   Watervliet EHC                                                     8.000%    11/15/2007      $     100,242
---------------------------------------------------------------------------------------------------------------------------
     100,000   Watervliet EHC                                                     8.000     11/15/2008            100,242
---------------------------------------------------------------------------------------------------------------------------
     100,000   Watervliet EHC                                                     8.000     11/15/2009            100,242
---------------------------------------------------------------------------------------------------------------------------
      90,000   Wayne County IDA (ARC)                                             7.250     03/01/2003             90,004
---------------------------------------------------------------------------------------------------------------------------
   2,925,000   Wayne County IDA (ARC)                                             8.375     03/01/2018          2,989,058
---------------------------------------------------------------------------------------------------------------------------
   7,195,000   Westchester County IDA (Ardsley Hsg.)                              7.900     11/01/2044          7,078,153
---------------------------------------------------------------------------------------------------------------------------
   3,145,000   Westchester County IDA (Ardsley Hsg.) w                            7.900     11/01/2044          3,174,060
---------------------------------------------------------------------------------------------------------------------------
   6,330,000   Westchester County IDA (Ardsley Hsg.) w                            7.900     11/01/2044          6,388,489
---------------------------------------------------------------------------------------------------------------------------
  10,295,000   Westchester County IDA (Ardsley Hsg.) w                            7.900     11/01/2044         10,390,126
---------------------------------------------------------------------------------------------------------------------------
   6,625,000   Westchester County IDA (Ardsley Hsg.) w                            7.900     11/01/2044          6,686,215
---------------------------------------------------------------------------------------------------------------------------
   6,860,000   Westchester County IDA (Ardsley Hsg.) w                            7.900     11/01/2044          6,923,386
---------------------------------------------------------------------------------------------------------------------------
   3,735,000   Westchester County IDA (Ardsley Hsg.) w                            7.900     11/01/2044          3,769,511
---------------------------------------------------------------------------------------------------------------------------
   5,815,000   Westchester County IDA (Ardsley Hsg.) w                            7.900     11/01/2044          5,868,731
---------------------------------------------------------------------------------------------------------------------------
   1,870,000   Westchester County IDA (Beth Abraham Hospital)                     8.375     12/01/2025          1,988,708
---------------------------------------------------------------------------------------------------------------------------
   4,720,000   Westchester County IDA (Childrens Village)                         6.000     06/01/2022          4,700,978
---------------------------------------------------------------------------------------------------------------------------
   1,101,600   Westchester County IDA (Clearview School)                          9.375     01/01/2021          1,153,915
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   Westchester County IDA (Hebrew Hospital Senior Hsg.)               7.375     07/01/2030          2,032,160
---------------------------------------------------------------------------------------------------------------------------
   2,220,000   Westchester County IDA (JBFS)                                      6.750     12/15/2012          2,241,578
---------------------------------------------------------------------------------------------------------------------------
   1,560,000   Westchester County IDA (JDAM)                                      6.750     04/01/2016          1,652,882
---------------------------------------------------------------------------------------------------------------------------
   3,250,000   Westchester County IDA (Lawrence Hospital)                         5.000     01/01/2028          3,007,810
---------------------------------------------------------------------------------------------------------------------------
     800,000   Westchester County IDA (Lawrence Hospital)                         5.125     01/01/2018            800,000
---------------------------------------------------------------------------------------------------------------------------
   1,275,000   Westchester County IDA (Living Independently for the Elderly)      5.375     08/20/2021          1,339,235
---------------------------------------------------------------------------------------------------------------------------
   3,035,000   Westchester County IDA (Living Independently for the Elderly)      5.400     08/20/2032          3,148,964
---------------------------------------------------------------------------------------------------------------------------
   1,700,000   Westchester County IDA (Rippowam-Cisqua School)                    5.750     06/01/2029          1,739,151
---------------------------------------------------------------------------------------------------------------------------
      85,000   Westchester County IDA (Westchester Airport)                       5.950     08/01/2024             85,969
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   Westchester County IDA (Winward School)                            5.250     10/01/2031          2,551,650
---------------------------------------------------------------------------------------------------------------------------
  76,375,000   Westchester County Tobacco Asset Securitization Corp.              0.000 v   07/15/2039         59,619,089
---------------------------------------------------------------------------------------------------------------------------
  24,110,000   Westchester County Tobacco Asset Securitization Corp.              6.750     07/15/2029         26,209,981
---------------------------------------------------------------------------------------------------------------------------
   1,635,000   Yates County IDA (Keuka College)                                   8.750     08/01/2015          1,749,597
---------------------------------------------------------------------------------------------------------------------------
     815,000   Yates County IDA (Keuka College)                                   9.000     08/01/2011            832,702
---------------------------------------------------------------------------------------------------------------------------
   3,825,000   Yates County IDA (SSMH)                                            5.650     02/01/2039          4,045,129
---------------------------------------------------------------------------------------------------------------------------
  15,175,000   Yonkers IDA (Community Devel. Properties)                          6.625     02/01/2026         16,245,445
---------------------------------------------------------------------------------------------------------------------------
   4,685,000   Yonkers IDA (Hudson Scenic Studio)                                 6.625     11/01/2019          4,335,686
---------------------------------------------------------------------------------------------------------------------------
   1,590,000   Yonkers IDA (Philipsburgh Hall Associates)                         7.500     11/01/2030          1,614,025
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   Yonkers IDA (St. John's Riverside Hospital)                        7.125     07/01/2031          2,516,775
---------------------------------------------------------------------------------------------------------------------------
     205,000   Yonkers IDA (St. Joseph's Hospital)                                7.500     12/30/2003            206,130
---------------------------------------------------------------------------------------------------------------------------
   3,270,000   Yonkers IDA (St. Joseph's Hospital)                                8.500     12/30/2013          3,400,342
---------------------------------------------------------------------------------------------------------------------------
   2,200,000   Yonkers IDA (St. Joseph's Hospital), Series 98-A                   6.150     03/01/2015          1,768,580
---------------------------------------------------------------------------------------------------------------------------
   2,100,000   Yonkers IDA (St. Joseph's Hospital), Series 98-B                   6.150     03/01/2015          1,688,190
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Yonkers IDA (St. Joseph's Hospital), Series 98-C                   6.200     03/01/2020            766,140
---------------------------------------------------------------------------------------------------------------------------
      70,000   Yonkers IDA (Westchester School)                                   7.375     12/30/2003             70,271
---------------------------------------------------------------------------------------------------------------------------
   3,375,000   Yonkers IDA (Westchester School)                                   8.750     12/30/2023          3,570,379
---------------------------------------------------------------------------------------------------------------------------
     800,000   Yonkers Parking Authority                                          6.000     06/15/2018            836,360
---------------------------------------------------------------------------------------------------------------------------
   1,215,000   Yonkers Parking Authority                                          6.000     06/15/2024          1,247,756
---------------------------------------------------------------------------------------------------------------------------
     290,000   Yonkers Parking Authority                                          7.750     12/01/2004            300,054
                                                                                                          -----------------
                                                                                                            5,572,940,018




                         33 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued


   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 Other States--0.7%
 $22,085,000   Alliance Airport Authority, TX (American Airlines)                 7.500%    12/01/2029      $   9,517,973
---------------------------------------------------------------------------------------------------------------------------
  31,330,000   Dallas-Fort Worth, TX International Airport (American Airlines)    7.250     11/01/2030         13,181,784
---------------------------------------------------------------------------------------------------------------------------
  11,730,000   Lake Charles, LA Harbor & Terminal District Port Facilities
               (Duke Energy Corp.)                                                7.750     08/15/2022         12,264,888
---------------------------------------------------------------------------------------------------------------------------
   5,500,000   Richland County, SC Solid Waste (Union Camp Corp.)                 6.750     05/01/2022          5,606,535
---------------------------------------------------------------------------------------------------------------------------
   2,483,695   Robbins, IL Res Rec (Robbins Res Rec Partners) a                   7.250     10/15/2009          1,381,555
                                                                                                            ---------------
                                                                                                               41,952,735

---------------------------------------------------------------------------------------------------------------------------
 U.S. Possessions--8.8%
     500,001   American Samoa Power Authority                                     6.950     09/01/2003            514,435
---------------------------------------------------------------------------------------------------------------------------
     500,000   American Samoa Power Authority                                     7.000     09/01/2004            534,825
---------------------------------------------------------------------------------------------------------------------------
   4,225,000   Guam Airport Authority, Series A                                   6.500     10/01/2023          4,312,753
---------------------------------------------------------------------------------------------------------------------------
   3,675,000   Guam Airport Authority, Series B                                   6.600     10/01/2010          3,787,234
---------------------------------------------------------------------------------------------------------------------------
  65,750,000   Guam Airport Authority, Series B                                   6.700     10/01/2023         68,334,632
---------------------------------------------------------------------------------------------------------------------------
   2,480,000   Guam EDA (Royal Socio Apartments)                                  9.500     11/01/2018          2,495,748
---------------------------------------------------------------------------------------------------------------------------
     290,000   Guam Power Authority, Series A                                     5.250     10/01/2023            286,186
---------------------------------------------------------------------------------------------------------------------------
  20,000,000   Guam Power Authority, Series A                                     5.250     10/01/2034         19,423,800
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   Northern Mariana Islands, Series A                                 6.000     06/01/2020          1,059,700
---------------------------------------------------------------------------------------------------------------------------
   4,790,000   Northern Mariana Islands, Series A                                 6.250     03/15/2028          4,881,681
---------------------------------------------------------------------------------------------------------------------------
  20,000,000   Northern Mariana Islands, Series A                                 6.600     03/15/2028         21,177,600
---------------------------------------------------------------------------------------------------------------------------
  10,000,000   Northern Mariana Islands, Series A                                 7.375     06/01/2030         10,246,900
---------------------------------------------------------------------------------------------------------------------------
     234,231   Puerto Rico Dept. of Corrections Equipment Lease a,d               8.000     04/17/2003            234,154
---------------------------------------------------------------------------------------------------------------------------
     450,129   Puerto Rico Family Dept. Furniture Lease a,d                       8.000     08/18/2003            450,444
---------------------------------------------------------------------------------------------------------------------------
   1,800,989   Puerto Rico Family Dept. Furniture Lease a,d                      12.725     08/12/2003          1,831,786
---------------------------------------------------------------------------------------------------------------------------
     750,000   Puerto Rico HBFA                                                   6.250     04/01/2029            783,720
---------------------------------------------------------------------------------------------------------------------------
   2,900,340   Puerto Rico Health Dept. Computer Lease a,d                        7.438     03/26/2003          2,895,642
---------------------------------------------------------------------------------------------------------------------------
   2,225,000   Puerto Rico HFC                                                    5.500     12/01/2023          2,322,321
---------------------------------------------------------------------------------------------------------------------------
      10,000   Puerto Rico HFC                                                    7.300     10/01/2006             10,032
---------------------------------------------------------------------------------------------------------------------------
     175,000   Puerto Rico HFC                                                    7.500     10/01/2015            175,525
---------------------------------------------------------------------------------------------------------------------------
   4,315,000   Puerto Rico HFC                                                    7.500     04/01/2022          4,432,584
---------------------------------------------------------------------------------------------------------------------------
     185,000   Puerto Rico IMEPCF (Instituto Medico)                              9.500     04/01/2003            185,342
---------------------------------------------------------------------------------------------------------------------------
     155,979   Puerto Rico Industrial Commission Computer Lease a                 8.000     03/26/2003            155,837
---------------------------------------------------------------------------------------------------------------------------
     905,000   Puerto Rico Infrastructure                                         7.500     07/01/2009            924,186
---------------------------------------------------------------------------------------------------------------------------
     335,000   Puerto Rico Infrastructure                                         7.750     07/01/2008            342,203
---------------------------------------------------------------------------------------------------------------------------
      60,000   Puerto Rico Infrastructure                                         7.900     07/01/2007             61,458
---------------------------------------------------------------------------------------------------------------------------
   1,080,000   Puerto Rico ITEMECF (Ana G. Mendez University)                     5.375     02/01/2019          1,110,586
---------------------------------------------------------------------------------------------------------------------------
   1,575,000   Puerto Rico ITEMECF (Ana G. Mendez University)                     5.375     12/01/2021          1,612,832
---------------------------------------------------------------------------------------------------------------------------
   5,750,000   Puerto Rico ITEMECF (Ana G. Mendez University)                     5.375     02/01/2029          5,775,875
---------------------------------------------------------------------------------------------------------------------------
   2,750,000   Puerto Rico ITEMECF (Ana G. Mendez University)                     5.500     12/01/2031          2,793,863
---------------------------------------------------------------------------------------------------------------------------
  42,800,000   Puerto Rico ITEMECF (Congeneration Facilities)                     6.625     06/01/2026         44,430,252
---------------------------------------------------------------------------------------------------------------------------
   3,685,000   Puerto Rico ITEMECF (Mennonite General Hospital)                   5.625     07/01/2017          3,280,387
---------------------------------------------------------------------------------------------------------------------------
     985,000   Puerto Rico ITEMECF (Mennonite General Hospital)                   5.625     07/01/2027            819,382
---------------------------------------------------------------------------------------------------------------------------
   8,735,000   Puerto Rico ITEMECF (Mennonite General Hospital)                   6.500     07/01/2018          8,461,944
---------------------------------------------------------------------------------------------------------------------------
  12,340,000   Puerto Rico ITEMECF (Mennonite General Hospital)                   6.500     07/01/2026         11,593,060
---------------------------------------------------------------------------------------------------------------------------
     375,000   Puerto Rico ITEMECF (Polytechnic University of Puerto Rico)        5.500     08/01/2024            361,230
---------------------------------------------------------------------------------------------------------------------------
      35,000   Puerto Rico ITEMECF (Polytechnic University of Puerto Rico)        5.700     08/01/2013             35,707



                         34 | ROCHESTER FUND MUNICIPALS
   Principal                                                                                                 Market Value
      Amount                                                                     Coupon       Maturity         See Note 1
---------------------------------------------------------------------------------------------------------------------------
 U.S. Possessions Continued
 $   920,000   Puerto Rico ITEMECF (Polytechnic University of Puerto Rico)        6.500%    08/01/2024      $     954,932
---------------------------------------------------------------------------------------------------------------------------
     750,000   Puerto Rico ITEMECF (Ryder Memorial Hospital)                      6.400     05/01/2009            773,543
---------------------------------------------------------------------------------------------------------------------------
   2,450,000   Puerto Rico ITEMECF (Ryder Memorial Hospital)                      6.600     05/01/2014          2,486,995
---------------------------------------------------------------------------------------------------------------------------
   5,250,000   Puerto Rico ITEMECF (Ryder Memorial Hospital)                      6.700     05/01/2024          5,272,628
---------------------------------------------------------------------------------------------------------------------------
   7,000,000   Puerto Rico ITEMECF (San Lucas & Cristo Redentor Hospitals)        5.750     06/01/2029          6,095,740
---------------------------------------------------------------------------------------------------------------------------
     500,000   Puerto Rico ITEMECF (University of the Sacred Heart)               5.250     09/01/2021            513,090
---------------------------------------------------------------------------------------------------------------------------
   8,000,000   Puerto Rico ITEMECF (University of the Sacred Heart)               5.250     09/01/2031          8,096,640
---------------------------------------------------------------------------------------------------------------------------
      91,649   Puerto Rico Medical Services Equipment Lease a,d                   7.300     02/27/2003             91,585
---------------------------------------------------------------------------------------------------------------------------
      94,199   Puerto Rico Medical Services Ventilator Lease a,d                  7.500     04/01/2003             94,136
---------------------------------------------------------------------------------------------------------------------------
  12,470,000   Puerto Rico Port Authority (American Airlines), Series A           6.300     06/01/2023          6,120,401
---------------------------------------------------------------------------------------------------------------------------
   6,628,464   Puerto Rico Public Buildings Authority Computer Lease a            6.528     05/01/2004          6,586,108
---------------------------------------------------------------------------------------------------------------------------
 182,410,000   Puerto Rico Public Finance Corp., Series E                         5.500     08/01/2029        192,745,351
---------------------------------------------------------------------------------------------------------------------------
     870,874   Puerto Rico Rio Grande Computer Lease a,b,d                        0.000 z   09/02/2003            330,932
---------------------------------------------------------------------------------------------------------------------------
   2,247,808   Puerto Rico Rio Grande Equipment Lease a,b,d                       0.000 z   10/13/2003          1,949,973
---------------------------------------------------------------------------------------------------------------------------
     142,664   Puerto Rico Rio Grande Vehicle Lease a,b,d                         0.000 z   01/23/2003             54,926
---------------------------------------------------------------------------------------------------------------------------
     307,659   Puerto Rico San Sebastian Garage Lease a,d                        10.000     09/16/2005            317,867
---------------------------------------------------------------------------------------------------------------------------
      99,246   Puerto Rico State Courts Vehicle Lease a,d                         8.000     03/26/2003             99,218
---------------------------------------------------------------------------------------------------------------------------
   2,000,000   University of V.I.                                                 6.250     12/01/2029          2,146,000
---------------------------------------------------------------------------------------------------------------------------
     530,000   University of V.I.                                                 7.250     10/01/2004 p          584,277
---------------------------------------------------------------------------------------------------------------------------
   1,250,000   V.I. Government Refinery Facilities (Hovensa Coker)                6.500     07/01/2021          1,263,725
---------------------------------------------------------------------------------------------------------------------------
      50,000   V.I. Hsg. Finance Authority                                        6.450     03/01/2016             51,967
---------------------------------------------------------------------------------------------------------------------------
   1,000,000   V.I. Public Finance Authority                                      5.500     10/01/2018          1,021,090
---------------------------------------------------------------------------------------------------------------------------
  16,220,000   V.I. Public Finance Authority                                      5.500     10/01/2022         16,325,268
---------------------------------------------------------------------------------------------------------------------------
      50,000   V.I. Public Finance Authority                                      5.625     10/01/2025             51,482
---------------------------------------------------------------------------------------------------------------------------
     505,000   V.I. Public Finance Authority                                      7.125     10/01/2004 p          538,911
---------------------------------------------------------------------------------------------------------------------------
  27,733,000   V.I. Public Finance Authority (Hovensa Coker)                      6.500     07/01/2021         28,037,508
---------------------------------------------------------------------------------------------------------------------------
   7,295,000   V.I. Public Finance Authority Computer Lease a                     6.250     01/01/2005          7,599,639
---------------------------------------------------------------------------------------------------------------------------
   7,500,000   V.I. Public Finance Authority, Series A                            5.625     10/01/2025          7,588,425
---------------------------------------------------------------------------------------------------------------------------
   3,830,000   V.I. Public Finance Authority, Series E                            6.000     10/01/2022          3,894,765
---------------------------------------------------------------------------------------------------------------------------
   1,575,000   V.I. Water & Power Authority                                       5.300     07/01/2018          1,576,827
---------------------------------------------------------------------------------------------------------------------------
   3,515,000   V.I. Water & Power Authority                                       5.300     07/01/2021          3,445,614
---------------------------------------------------------------------------------------------------------------------------
   2,500,000   V.I. Water & Power Authority                                       5.500     07/01/2017          2,520,625
                                                                                                           ----------------
                                                                                                              541,366,034

---------------------------------------------------------------------------------------------------------------------------
 Total Investments, at Value (Cost $6,240,905,060)--100.5%                                                  6,156,258,787
---------------------------------------------------------------------------------------------------------------------------
 Liabilities in Excess of Other Assets--(0.5%)                                                                (32,092,421)
                                                                                                           ----------------
 Net Assets--100.0%                                                                                        $6,124,166,366
                                                                                                           ================






                         35 | ROCHESTER FUND MUNICIPALS
STATEMENT OF INVESTMENTS  Continued




Footnotes to Statements of Investments
a. Identifies issues considered to be illiquid or restricted--See Note 5 of
Notes to Financial Statements.
b. Non-income-accruing security.
d. Issuer is in default.
f. Represents the current interest rate for a variable rate bond known as an
"inverse floater". See Note 1 of Notes to Financial Statements.
p. This issue has been prerefunded to an earlier date.
v. Represents the current interest rate for a variable or increasing rate
security.
w. When-issued security to be delivered and settled after December 31, 2002.
z. Represents a zero coupon bond.
See accompanying Notes to Financial Statements.

To simplify the listing of securities, abbreviations are used per the table
below:
ACDS     Association for Children with Down Syndrome
ACLD     Adults and Children with Learning and Developmental Disabilities
ADD      Aid to the Developmentally Disabled
ALIA     Alliance of Long Island Agencies
ARC      Association of Retarded Citizens
ASMF     Amsterdam Sludge Management Facility
BID      Business Improvement District
CAB      Capital Appreciation Bond
CARS     Complimentary Auction Rate Security
CCSSVD   Central Council of the Society of St. Vincent dePaul
CFGA     Child and Family Guidance Association
CNGCS    Central Nassau Guidance and Counseling Services
COP      Certificates of Participation
CSD      Central School District
CSMR     Community Services for the Mentally Retarded
Con Ed   Consolidated Edison Company
DA       Dormitory Authority
DDI      Developmental Disabilities Institute
DIAMONDS Direct Investment of Accrued Municipals
EDA      Economic Development Authority
EFC      Environmental Facilities Corporation
EHC      Elderly Housing Corporation
EHL      Engine Hook and Ladder
ERDA     Energy Research and Development Authority
FHA      Federal Housing Authority
FREE     Family Residences and Essential Enterprises
GJSR     Gurwin Jewish Senior Residences
GO       General Obligation
HBFA     Housing Bank and Finance Agency
HDC      Housing Development Corporation
HELP     Homeless Economic Loan Program
HFA      Housing Finance Agency
HFC      Housing Finance Corporation
HH       Harmony Heights, Inc.
HHS      Harmony Heights School
HJDOI    Hospital for Joint Diseases Orthopaedic Institute
IDA      Industrial Development Agency
IFA      Interim Finance Authority
IGHL     Independent Group Home for Living
IMEPCF   Industrial, Medical and Environmental Pollution Control Facilities
INFLOS   Inverse Floating Rate Securities
ITEMECF  Industrial, Tourist, Educational, Medical and Environmental
         Community Facilities
IVRC     Inverse Variable Rate Certificate
JBFS     Jewish Board of Family Services
JCC      Jewish Community Center
JDAM     Julia Dyckman Andrus Memorial
LEVRRS   Leveraged Reverse Rate Security
LGAC     Local Government Assistance Corporation
LGSC     Local Government Services Corporation
L.I.     Long Island
LILCO    Long Island Lighting Corporation
LRRHCF   Loretto Rest Residential Health Care Facility
LVH      Little Village House
MCH      Maryhaven Center of Hope
MSH      Mount Sinai Hospital
MTA      Metropolitan Transportation Authority
NH&HC    Nursing Home and Health Care
NIMO     Niagara Mohawk Power Corporation
NYC      New York City
NYS      New York State
NYSEG    New York State Electric and Gas
NYU      New York University
OBPWC    Ocean Bay Park Water Corporation
PRFF     Puerto Rican Family Foundation
RG&E     Rochester Gas and Electric
RIBS     Residual Interest Bonds
RIT      Rochester Institute of Technology
RITES    Residual Interest Tax Exempt Security
Res Rec  Resource Recovery Facility
SCCC     Sullivan County Community College
SCHC     Senior Citizen Housing Corporation
SCSB     Schuyler Community Services Board
SLCD     School for Language and Communication Development
SMCFS    St. Mary's Children and Family Services
SONYMA   State of New York Mortgage Agency
SSMH     Soldiers and Sailors Memorial Hospital
SUNY     State University of New York
SWMA     Solid Waste Management Authority
TASC     Tobacco Settlement Asset-Backed Bonds
TFA      Transitional Finance Authority
TFABs    Tobacco Flexible Amortization Bonds
UCPAGS   United Cerebral Palsy Association of Greater Suffolk
UCP/HCA  United Cerebral Palsy and Handicapped Children's Association
UDC      Urban Development Corporation
V.I.     United States Virgin Islands
WORCA    Working Organization for Retarded Children and Adults
WWH      Wyandach/Wheatley Heights
YMCA     Young Men's Christian Association





                         36 | ROCHESTER FUND MUNICIPALS
Distribution of investments by industry of issue, as a percentage of total
investments at value, is as follows:

Industry                                              Market Value    Percent
------------------------------------------------------------------------------
Hospital/Health Care                            $      726,704,340       11.8%
Electric Utilities                                     645,807,414       10.5
Tobacco                                                640,383,171       10.4
Highways/Railways                                      476,213,074        7.7
Airlines                                               406,832,827        6.6
Adult Living Facilities                                354,607,090        5.8
Multifamily Housing                                    341,385,748        5.5
Water Utilities                                        268,668,879        4.4
Not-for-Profit Organization                            253,071,566        4.1
Sales Tax Revenue                                      251,216,283        4.1
Higher Education                                       247,339,231        4.0
General Obligation                                     244,994,964        4.0
Municipal Leases                                       191,251,231        3.1
Paper, Containers & Packaging                          173,752,246        2.8
Marine/Aviation Facilities                             155,356,755        2.5
Resource Recovery                                      155,231,449        2.5
Single Family Housing                                  126,512,239        2.1
Manufacturing, Non-Durable Goods                       120,066,393        1.9
Manufacturing, Durable Goods                           115,973,138        1.9
Education                                              105,403,807        1.7
Special Assessment                                      40,750,600        0.7
Pollution Control                                       37,687,247        0.6
Gas Utilities                                           31,080,843        0.5
Parking Fee Revenue                                     29,900,734        0.5
Hotels, Restaurants &Leisure                            16,067,518        0.3
                                                    --------------------------
Total                                               $6,156,258,787      100.0%
                                                    ==========================


----------------------------------------------------------------
Summary of Ratings  December 31, 2002 / Unaudited

Distribution of investments by rating category, as a percentage of total
investments at value, is as follows:

Rating                                                 Percent
---------------------------------------------------------------
AAA                                                       10.4%
AA                                                        19.0
A                                                         22.4
BBB                                                       24.6
BB                                                         6.9
B                                                          0.9
CCC                                                        0.0
D                                                          0.0
Not Rated                                                 15.8
                                                         ------
                                                         100.0%
                                                         ======

Bonds rated by any nationally recognized statistical rating organization are
included in the equivalent Standard & Poor's rating category.As a general
matter, unrated bonds may be backed by mortgage liens or equipment liens on the
underlying property, and also may be guaranteed. Bonds which are backed by a
letter of credit or by other financial institutions or agencies may be assigned
an investment-grade rating by the Manager, which reflects the quality of the
guarantor, institution or agency. Unrated bonds may also be assigned a rating
when the issuer has rated bonds outstanding with comparable credit
characteristics, or when, in the opinion of the Manager, the bond itself
possesses credit characteristics which allow for rating. The unrated bonds in
the portfolio are predominantly smaller issuers which have not applied for a
bond rating. Only those unrated bonds which subsequent to purchase have not
been designated investment grade by the Manager are included in the "Not Rated"
category.


                         37 | ROCHESTER FUND MUNICIPALS
STATEMENT OF ASSETS AND LIABILITIES  December 31, 2002


-------------------------------------------------------------------------------------------------------------------------
Assets
Investments, at value (cost $6,240,905,060)--see accompanying statement                                   $6,156,258,787
-------------------------------------------------------------------------------------------------------------------------
Cash                                                                                                           1,324,348
-------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest                                                                                                     115,350,153
Investments sold                                                                                              10,163,021
Shares of beneficial interest sold                                                                             7,937,836
Other                                                                                                             80,842
                                                                                                          --------------
Total assets                                                                                               6,291,114,987

-------------------------------------------------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Investments purchased on a when-issued or forward commitment basis                                            80,518,393
Notes payable to bank (interest rate 1.9375% at December 31, 2002)                                            70,400,000
Shares of beneficial interest redeemed                                                                        11,736,947
Distribution and service plan fees                                                                             2,801,569
Trustees' compensation                                                                                           869,557
Shareholder reports                                                                                              249,228
Transfer and shareholder servicing agent fees                                                                    118,032
Other                                                                                                            254,895
                                                                                                          --------------
Total liabilities                                                                                            166,948,621

-------------------------------------------------------------------------------------------------------------------------
Net Assets                                                                                                $6,124,166,366
                                                                                                          ==============

-------------------------------------------------------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital                                                                                           $6,313,580,543
-------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income                                                                           11,733,215
-------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions                                                    (116,501,119)
-------------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments                                                                   (84,646,273)
                                                                                                          --------------
Net Assets                                                                                                $6,124,166,366
                                                                                                          ==============

-------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of $4,299,023,654 and
247,398,516 shares of beneficial interest outstanding)                                                            $17.38
Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price)                   $18.25
-------------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering
price per share (based on net assets of $1,341,921,104 and 77,281,122 shares of beneficial interest outstanding)  $17.36
-------------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering
price per share (based on net assets of $471,146,910 and 27,143,556 shares of beneficial interest outstanding)    $17.36
-------------------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of $12,074,698 and
694,944 shares of beneficial interest outstanding)                                                                $17.38



See accompanying Notes to Financial Statements.




                         38 | ROCHESTER FUND MUNICIPALS
STATEMENT OF OPERATIONS  For the Year Ended December 31, 2002

-------------------------------------------------------------------------------------------------------------------------
Investment Income
Interest                                                                                                    $416,992,141

-------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees                                                                                               28,013,299
-------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                                                                        6,358,728
Class B                                                                                                       12,746,691
Class C                                                                                                        4,596,060
-------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                                                                        1,820,984
Class B                                                                                                          669,168
Class C                                                                                                          230,512
Class Y                                                                                                           10,383
-------------------------------------------------------------------------------------------------------------------------
Accounting service fees                                                                                        1,814,185
-------------------------------------------------------------------------------------------------------------------------
Interest expense                                                                                                 753,887
-------------------------------------------------------------------------------------------------------------------------
Shareholder reports                                                                                              509,343
-------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses                                                                                      356,553
-------------------------------------------------------------------------------------------------------------------------
Trustees' compensation                                                                                           228,673
-------------------------------------------------------------------------------------------------------------------------
Other                                                                                                            463,373
                                                                                                            -------------
Total expenses                                                                                                58,571,839
Less reduction to custodian expenses                                                                             (32,946)
                                                                                                            -------------
Net expenses                                                                                                  58,538,893

-------------------------------------------------------------------------------------------------------------------------
Net Investment Income                                                                                        358,453,248

-------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain on investments                                                                               4,858,580
-------------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation on investments                                                         (67,362,355)
                                                                                                            -------------
Net realized and unrealized loss                                                                             (62,503,775)

-------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations                                                        $295,949,473
                                                                                                            =============



See accompanying Notes to Financial Statements.


                         39 | ROCHESTER FUND MUNICIPALS
STATEMENTS OF CHANGES IN NET ASSETS


Year Ended December 31,                                                                            2002             2001
-------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income                                                                    $  358,453,248   $  301,995,430
-------------------------------------------------------------------------------------------------------------------------
Net realized gain                                                                             4,858,580        6,259,805
-------------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation                                                       (67,362,355)     (72,326,254)
                                                                                         --------------------------------
Net increase in net assets resulting from operations                                        295,949,473      235,928,981

-------------------------------------------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A                                                                                    (262,145,612)    (227,307,655)
Class B                                                                                     (66,778,356)     (49,388,897)
Class C                                                                                     (24,126,061)     (17,568,908)
Class Y                                                                                        (758,014)        (737,793)

-------------------------------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase in net assets resulting from beneficial interest transactions:
Class A                                                                                     266,560,700      577,995,182
Class B                                                                                     197,188,318      367,588,703
Class C                                                                                      47,416,054      174,807,039
Class Y                                                                                              --        1,572,367

-------------------------------------------------------------------------------------------------------------------------
Net Assets
Total increase                                                                              453,306,502    1,062,889,019
-------------------------------------------------------------------------------------------------------------------------
Beginning of period                                                                       5,670,859,864    4,607,970,845
                                                                                         --------------------------------
End of period [including undistributed net investment income
of $11,733,215 and $7,088,010, respectively]                                             $6,124,166,366   $5,670,859,864
                                                                                         ================================



See accompanying Notes to Financial Statements.


                         40 | ROCHESTER FUND MUNICIPALS
FINANCIAL HIGHLIGHTS


Class A        Year Ended December 31,                               2002         2001        2000          1999       1998
----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period                              $ 17.52      $ 17.67     $ 16.78       $ 18.81    $ 18.67
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                                1.08         1.06        1.04          1.04       1.04
Net realized and unrealized gain (loss)                              (.15)        (.17)        .89         (2.03)       .15
                                                                   ---------------------------------------------------------
Total from investment operations                                      .93          .89        1.93          (.99)      1.19
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                                (1.07)       (1.04)      (1.04)        (1.04)     (1.04)
Undistributed net investment income                                    --           --          --            --       (.01)
                                                                   ---------------------------------------------------------
Total dividends and/or distributions to shareholders                (1.07)       (1.04)      (1.04)        (1.04)     (1.05)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                                     $17.38       $17.52      $17.67        $16.78     $18.81
                                                                   =========================================================

----------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1                                   5.46%        5.14%      11.93%        (5.51)%     6.52%

----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions)                            $4,299       $4,073      $3,536        $3,288     $3,435
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions)                                   $4,292       $3,893      $3,341        $3,559     $3,161
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                                                6.18%        5.97%       6.07%         5.78%      5.50%
Expenses                                                             0.72%        0.72%       0.78%         0.77%      0.78% 3
Expenses, net of interest expense and reduction to
custodian expense 4                                                  0.71%        0.70%       0.74%         0.73%      0.75%
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                                29%          11%         26%           30%        25%



1. Assumes an investment 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 redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
4. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.

See accompanying Notes to Financial Statements.


                         41 | ROCHESTER FUND MUNICIPALS
FINANCIAL HIGHLIGHTS  Continued


Class B        Year Ended December 31,                               2002         2001        2000          1999       1998
----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period                              $ 17.51      $ 17.66     $ 16.77       $ 18.79    $ 18.65
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                                 .93          .91         .89           .89        .89
Net realized and unrealized gain (loss)                              (.16)        (.17)        .90         (2.03)       .14
                                                                  ----------------------------------------------------------
Total from investment operations                                      .77          .74        1.79         (1.14)      1.03
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                                 (.92)        (.89)       (.90)         (.88)      (.89)
Undistributed net investment income                                    --           --          --            --         --
                                                                  ----------------------------------------------------------
Total dividends and/or distributions to shareholders                 (.92)        (.89)       (.90)         (.88)      (.89)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                                     $17.36       $17.51      $17.66        $16.77     $18.79
                                                                  ==========================================================

----------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1                                   4.50%        4.25%      10.98%        (6.27)%     5.61%

----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions)                            $1,342       $1,157        $803          $673       $494
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions)                                   $1,275       $  997        $711          $635       $329
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                                                5.32%        5.10%       5.19%         4.91%      4.57%
Expenses                                                             1.58%        1.58%       1.65%         1.64%      1.64% 3
Expenses, net of interest expense and reduction to
custodian expense 4                                                  1.57%        1.56%       1.60%         1.59%      1.61%
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                                29%          11%         26%           30%        25%


1. Assumes an investment 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 redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
4. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.

See accompanying Notes to Financial Statements.


                         42 | ROCHESTER FUND MUNICIPALS



Class C        Year Ended December 31,                               2002         2001        2000          1999       1998
----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period                              $ 17.50      $ 17.66     $ 16.76       $ 18.79    $ 18.66
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                                 .93          .91         .89           .89        .89
Net realized and unrealized gain (loss)                              (.15)        (.18)        .91         (2.04)       .13
                                                                   ---------------------------------------------------------
Total from investment operations                                      .78          .73        1.80         (1.15)      1.02
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                                 (.92)        (.89)       (.90)         (.88)      (.89)
Undistributed net investment income                                    --           --          --            --         --
                                                                   ---------------------------------------------------------
Total dividends and/or distributions to shareholders                 (.92)        (.89)       (.90)         (.88)      (.89)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                                     $17.36       $17.50      $17.66        $16.76     $18.79
                                                                   =========================================================

----------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1                                   4.57%        4.19%      11.06%        (6.32)%     5.56%

----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions)                              $471         $429        $259          $220       $174
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions)                                     $460         $356        $225          $221       $111
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                                                5.32%        5.09%       5.20%         4.92%      4.57%
Expenses                                                             1.58%        1.57%       1.63%         1.63%      1.63% 3
Expenses, net of interest expense and reduction to
custodian expense 4                                                  1.57%        1.55%       1.59%         1.58%      1.59%
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                                29%          11%         26%           30%        25%


1. Assumes an investment 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 redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
4. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.

See accompanying Notes to Financial Statements.



                         43 | ROCHESTER FUND MUNICIPALS
FINANCIAL HIGHLIGHTS  Continued

Class Y        Year Ended December 31,                                                        2002          2001       2000 1
------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period                                                       $ 17.52       $ 17.67    $ 16.88
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                                                         1.10          1.08        .70
Net realized and unrealized gain (loss)                                                       (.15)         (.17)       .78
                                                                                           -----------------------------------
Total from investment operations                                                               .95           .91       1.48
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                                                         (1.09)        (1.06)      (.69)
Undistributed net investment income                                                             --            --         --
                                                                                           -----------------------------------
Total dividends and/or distributions to shareholders                                         (1.09)        (1.06)      (.69)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                                                              $17.38        $17.52     $17.67
                                                                                           ===================================

------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2                                                            5.57%         5.25%      8.97%

------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions)                                                        $12           $12        $11
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions)                                                               $12           $12        $10
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                                                         6.30%         6.08%      6.07%
Expenses                                                                                      0.62%         0.62%      0.68%
Expenses, net of interest expense and reduction to custodian expense 4                        0.61%         0.60%      0.64%
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                                                         29%           11%        26%



1. For the period from April 28, 2000 (inception of offering) to December 31,
2000.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.
See accompanying Notes to Financial Statements.


                         44 | ROCHESTER FUND MUNICIPALS
NOTES TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------
1. Significant Accounting Policies
Rochester Fund Municipals (the Fund) is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Fund's investment objective is to provide as high a level of
income exempt from federal income tax and New York State and New York City
personal income taxes as is consistent with its investment policies and prudent
investment management while seeking preservation of shareholders' capital. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
     The Fund offers Class A, Class B, Class C and Class Y shares. Class A
shares are sold at their offering price, which is normally net asset value plus
a front-end sales charge. Class B and Class C shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per
share may differ by minor amounts due to each class having its own expenses
directly attributable to that class. Classes A, B and C have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase.
     The following is a summary of significant accounting policies consistently
followed by the Fund.
--------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges
or other domestic or foreign exchanges are valued based on the last sale price
of the security traded on that exchange prior to the time when the Fund's
assets are valued. In the absence of a sale, the security is valued at the last
sale price on the prior trading day, if it is within the spread of the closing
bid and asked prices, and if not, at the closing bid price. Securities
(including restricted securities) for which quotations are not readily
available are valued primarily using dealer-supplied valuations, a portfolio
pricing service authorized by the Board of Trustees, or at their fair value.
Fair value is determined in good faith under consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
Securities Purchased on a When-Issued or Forward Commitment 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 executes such
transactions while remaining substantially fully invested. As of December 31,
2002, the Fund had entered into when-issued purchase commitments or forward
commitments of $80,518,393.
--------------------------------------------------------------------------------
Inverse Floating Rate Securities. The Fund invests in inverse floating rate
securities that pay interest at a rate that varies inversely with short-term
interest rates. Certain of these securities may be leveraged, whereby the
interest rate varies inversely at a multiple of the change in short-term rates.
As interest rates rise, inverse floaters produce less current income. The price
of such securities is more volatile than comparable fixed rate securities. The
Fund intends to invest no more than 20% of its total assets in inverse
floaters. Inverse floaters amount to $619,108,995 as of December 31, 2002.
Including the effect of leverage, inverse floaters represent 19.88% of the
Fund's total assets as of December 31, 2002.




                         45 | ROCHESTER FUND MUNICIPALS
NOTES TO FINANCIAL STATEMENTS  Continued



--------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Security Credit Risk. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and
risk of loss of income and principal, and may be more sensitive to economic
conditions than lower-yielding, higher-rated fixed-income securities. The Fund
may acquire securities in default, and is not obligated to dispose of
securities whose issuers subsequently default. As of December 31, 2002,
securities with an aggregate market value of $38,257,210, representing 0.62% of
the Fund's net assets, were in default.
     There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by capital loss carryforwards, if any, to shareholders.
Therefore, no federal income or excise tax provision is required.

As of December 31, 2002, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:

                              Expiring
                              -------------------------
                              2003         $ 10,726,285
                              2004            3,560,645
                              2005            5,760,047
                              2006            4,332,921
                              2007           41,458,446
                              2008           48,591,026
                                           ------------
                              Total        $114,429,370
                                           ============

During the fiscal year ended December 31, 2002, the Fund utilized $4,773,145 of
capital loss carryforward to offset capital gains realized in the current
fiscal year.
     During the fiscal year ended December 31, 2002, $32,923,254 of unused
capital loss carryforward expired.
--------------------------------------------------------------------------------
Trustees' Compensation. In June 1998, the Fund adopted an unfunded retirement
plan for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During the
year ended December 31, 2002, the Fund's projected benefit obligations were
increased by $85,802 and payments of $14,819 were made to retired trustees,
resulting in an accumulated liability of $589,078 as of December 31, 2002.
     In January 1995, the then existing Board of Trustees of the Fund adopted
an unfunded retirement plan for its independent trustees. The retirement plan,
as amended and restated in October 1995, provides that no independent trustee
of the Fund who is elected after September 1995 may be eligible to receive
benefits thereunder. Upon retirement, eligible trustees receive annual payments
based upon their years of service. In connection with the sale of certain
assets of Rochester Capital Advisors, L.P. (the Fund's former investment
advisor) to the Manager, all but one of the existing independent trustees
retired effective January 4, 1996. During the year ended December 31, 2002,
payments of $67,500 were made to retired trustees. As of December 31, 2002, the
Fund had recognized an accumulated liability of $246,375.


                         46 | ROCHESTER FUND MUNICIPALS


     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. 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 net realized
gain was recorded by the Fund.
     The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended December 31, 2002, amounts have been reclassified to reflect a
decrease in paid-in capital of $32,923,254. Accumulated net realized loss on
investments was decreased by the same amount. Net assets of the Fund were
unaffected by the reclassifications.

The tax character of distributions paid during the years ended December 31,
2002 and December 31, 2001 was as follows:
                                                        Year Ended               Year Ended
                                                 December 31, 2002        December 31, 2001
                 --------------------------------------------------------------------------
                 Distributions paid from:
                 Exempt-interest dividends            $353,808,043             $295,003,253
                 Long-term capital gain                         --                       --
                 Return of capital                              --                       --
                                                      -------------------------------------
                 Total                                $353,808,043             $295,003,253
                                                      =====================================

As of December 31, 2002, the components of distributable earnings on a tax basis
were as follows:

                 Undistributed net investment income      $  11,733,215
                 Accumulated net realized loss             (116,501,119)
                 Net unrealized depreciation                (84,646,273)
                                                          -------------
                 Total                                    $(189,414,177)
                                                          =============

--------------------------------------------------------------------------------
Investment Income. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
--------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded on the trade date.
Realized 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.



                         47 | ROCHESTER FUND MUNICIPALS
NOTES TO FINANCIAL STATEMENTS  Continued


--------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:

                                                       Year Ended December 31, 2002          Year Ended December 31, 2001
                                                           Shares            Amount              Shares            Amount
--------------------------------------------------------------------------------------------------------------------------
Class A
Sold                                                   46,250,617      $812,053,894          53,000,765      $943,692,565
Dividends and/or distributions reinvested               8,272,468       144,484,462           6,676,206       118,599,440
Redeemed                                              (39,608,309)     (689,977,656)        (27,245,218)     (484,296,823)
                                                     ---------------------------------------------------------------------
Net increase                                           14,914,776      $266,560,700          32,431,753      $577,995,182
                                                     ======================================================================

--------------------------------------------------------------------------------------------------------------------------
Class B
Sold                                                   18,018,394      $316,028,022          23,916,274      $425,551,014
Dividends and/or distributions reinvested               2,312,130        40,363,248           1,656,577        29,408,447
Redeemed                                               (9,146,731)     (159,202,952)         (4,914,828)      (87,370,758)
                                                     ---------------------------------------------------------------------
Net increase                                           11,183,793      $197,188,318          20,658,023      $367,588,703
                                                     ======================================================================

---------------------------------------------------------------------------------------------------------------------------
Class C
Sold                                                    8,867,195      $155,513,477          11,747,789      $209,106,320
Dividends and/or distributions reinvested                 915,923        15,983,379             649,451        11,524,802
Redeemed                                               (7,127,719)     (124,080,802)         (2,582,206)      (45,824,083)
                                                     ---------------------------------------------------------------------
Net increase                                            2,655,399      $ 47,416,054           9,815,034      $174,807,039
                                                     ======================================================================

--------------------------------------------------------------------------------------------------------------------------
Class Y
Sold                                                           --      $         --              88,634      $  1,572,367
Dividends and/or distributions reinvested                      --                --                  --                --
Redeemed                                                       --                --                  --                --
                                                     ---------------------------------------------------------------------
Net increase                                                   --      $         --              88,634      $  1,572,367
                                                     ======================================================================


--------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended December 31, 2002, were
$2,215,417,766 and $1,762,621,169, respectively.

As of December 31, 2002, unrealized appreciation (depreciation) based on cost
of securities for federal income tax purposes of $6,242,976,807 was composed
of:

                    Gross unrealized appreciation             $253,164,614
                    Gross unrealized depreciation             (339,882,634)
                                                              ------------
                    Net unrealized depreciation               $(86,718,020)
                                                              ============

The difference between book-basis and tax-basis unrealized appreciation and
depreciation, if applicable, is attributable primarily to the tax deferral of
losses on wash sales, or return of capital dividends, and the realization for
tax purposes of unrealized gain (loss) on certain futures contracts,
investments in passive foreign investment companies, and forward foreign
currency exchange contracts.



                         48 | ROCHESTER FUND MUNICIPALS





--------------------------------------------------------------------------------
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 a fee of
0.54% of the first $100 million of average daily net assets, 0.52% on the next
$150 million, 0.47% on the next $1.75 billion of average daily net assets,
0.46% on the next $3 billion, and 0.45% of average daily net assets over $5
billion.
-------------------------------------------------------------------------------
Accounting Fees. Accounting fees paid to the Manager were in accordance with
the accounting services agreement with the Fund, which provides for an annual
fee of $12,000 for the first $30 million of average daily net assets and $9,000
for each additional $30 million of average daily net assets. During the year
ended, the Fund paid $1,814,185 to the Manager for accounting and pricing
services.
-------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a $22.50 per account fee.
     Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.
     OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees up to an annual rate of 0.35% of average annual net assets for all
classes. This undertaking may be amended or withdrawn at any time.
-------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the different classes of shares of the Fund.

The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.

                                 Aggregate            Class A        Concessions         Concessions         Concessions
                                 Front-End          Front-End         on Class A          on Class B          on Class C
                             Sales Charges      Sales Charges             Shares              Shares              Shares
                                on Class A        Retained by        Advanced by         Advanced by         Advanced by
Year Ended                          Shares        Distributor      Distributor 1       Distributor 1       Distributor 1
------------------------------------------------------------------------------------------------------------------------
December 31, 2002              $15,818,044         $2,187,155         $2,632,657         $12,022,476          $1,480,192

1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.

                                   Class A                               Class B                                 Class C
                       Contingent Deferred                   Contingent Deferred                     Contingent Deferred
                             Sales Charges                         Sales Charges                           Sales Charges
Year Ended         Retained by Distributor               Retained by Distributor                 Retained by Distributor
------------------------------------------------------------------------------------------------------------------------
December 31, 2002                 $163,987                            $3,268,897                                $134,035

--------------------------------------------------------------------------------
Class A Service Plan Fees. The Fund has adopted a Service Plan for Class A
Shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the year ended December 31, 2002, payments
under the Class A Plan totaled $6,358,728, all of which were paid by the
Distributor to recipients, and included $47,208 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years.


                         49 | ROCHESTER FUND MUNICIPALS
NOTES TO FINANCIAL STATEMENTS  Continued


--------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
Distribution and Service Plans for Class B and Class C Shares. The Fund has
adopted Distribution and Service Plans for Class B and Class C shares. Under
the plans, the Fund pays the Distributor an annual asset-based sales charge of
0.75% per year on Class B shares and on Class C shares. The Distributor also
receives a service fee of 0.25% per year under each plan.

Distribution fees paid to the Distributor for the year ended December 31, 2002,
were as follows:
                                                                                     Distributor's
                                                                Distributor's            Aggregate
                                                                    Aggregate         Unreimbursed
                                                                 Unreimbursed        Expenses as %
                    Total Payments      Amount Retained              Expenses        of Net Assets
                        Under Plan       by Distributor            Under Plan             of Class
---------------------------------------------------------------------------------------------------
 Class B Plan          $12,746,691          $10,362,970           $48,072,567                 3.58%
 Class C Plan            4,596,060            1,693,315             8,694,289                 1.85

--------------------------------------------------------------------------------
5. Illiquid Securities
As of December 31, 2002, investments in securities included issues that are
illiquid. A security may 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 15% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of
December 31, 2002 was $664,091,621, which represents 10.84% of the Fund's net
assets.

--------------------------------------------------------------------------------
6. Bank Borrowings
The Fund may borrow up to 5% of its total assets from a bank to purchase
portfolio securities, or for temporary and emergency purposes. The purchase of
securities with borrowed funds creates leverage in the Fund. The Fund has
entered into an agreement which enables it to participate with certain other
Oppenheimer funds in an unsecured line of credit with a bank, which permits
borrowings up to $350 million, collectively. Interest is charged to each fund,
based on its borrowings, at a rate equal to the Federal Funds Rate plus 0.625%.
The Fund also pays a commitment fee equal to its pro rata share of the average
unutilized amount of the credit facility at a rate of 0.09% per annum.
     The Fund had borrowings outstanding of $70,400,000 at December 31, 2002 at
an interest rate of 1.9375%. For the year ended December 31, 2002, the average
monthly loan balance was $30,942,467 at an average interest rate of 2.334%. The
Fund had gross borrowings and gross loan repayments of $1,110,700,000 and
$1,117,300,000, respectively, during the year ended December 31, 2002. The
maximum amount of borrowings outstanding at any month-end was $75,700,000. The
Fund paid $22,537 in commitment fees during the year ended December 31, 2002.









                                     A-1

                                  Appendix A

                      MUNICIPAL BOND RATINGS DEFINITIONS
                      ----------------------------------


Below are summaries of the rating definitions used by the
nationally-recognized rating agencies listed below for municipal securities.
Those ratings represent the opinion of the agency as to the credit quality of
issues that they rate. The summaries below are based upon publicly available
information provided by the rating organizations.

Moody's Investors Service, Inc. ("Moody's")
Municipal Ratings are opinions of the investment quality of issuers and
issues in the U.S. municipal and tax-exempt markets. As such, these ratings
incorporate Moody's assessment of the default probability and loss severity
of these issuers and issues.

Municipal Ratings are based upon the analysis of four primary factors
relating to municipal finance: economy, debt, finances, and
administration/management strategies. Each of the factors is evaluated
individually and for its effect on the other factors in the context of the
municipality's ability to repay its debt.

MUNICIPAL LONG-TERM RATING DEFINITIONS

Aaa:  Issuers or issues rated Aaa demonstrate the strongest creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

Aa:  Issuers or issues rated Aa demonstrate very strong creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

A:  Issuers or issues rated A present above-average creditworthiness relative
to other US municipal or tax-exempt issuers or issues.

Baa:  Issuers or issues rated Baa represent average creditworthiness relative
to other US municipal or tax- exempt issuers or issues.

Ba:  Issuers or issues rated Ba demonstrate below-average creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

B:  Issuers or issues rated B demonstrate weak creditworthiness relative to
other US municipal or tax- exempt issuers or issues.

Caa:  Issuers or issues rated Caa demonstrate very weak creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

Ca:  Issuers or issues rated Ca demonstrate extremely weak creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

C:  Issuers or issues rated C demonstrate the weakest creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid- range ranking; and the modifier 3 indicates a
ranking in the lower end of that generic rating category.

MIG/VMIG RATINGS: U.S. SHORT-TERM RATINGS
In municipal debt issuance, there are three rating categories for short-term
obligations that are considered investment grade. These ratings are
designated as Moody's Investment Grade (MIG) and are divided into three
levels -- MIG 1 through MIG 3.
In addition, those short-term obligations that are of speculative quality are
designated SG, or speculative grade.

In the case of  variable  rate demand  obligations  (VRDOs),  a  two-component
rating is assigned.  The first element  represents  Moody's  evaluation of the
degree of risk associated with scheduled principal and interest payments.  The
second element  represents Moody's evaluation of the degree of risk associated
with the demand feature, using the MIG rating scale.

The short-term rating assigned to the demand feature of VRDOs is designated
as VMIG. When either the long- or short-term aspect of a VRDO is not rated,
that piece is designated NR, e.g., Aaa/NR or NR/VMIG 1.

MIG ratings expire at note maturity. By contrast, VMIG rating expirations
will be a function of each issue's specific structural or credit features.


MIG 1/VMIG 1: Denotes superior credit quality. Excellent protection is
afforded by established cash flows, highly reliable liquidity support or
demonstrated broad-based access to the market for refinancing.

MIG 2/VMIG 2: Denotes strong credit quality. Margins of protection are ample
although not as large as in the preceding group.

MIG 3/VMIG 3: Denotes acceptable credit quality. Liquidity and cash-flow
protection may be narrow, and market access for refinancing is likely to be
less well established.

SG:  Denotes speculative-grade credit quality. Debt instruments in this
category may lack margins of protection.



Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The
McGraw-Hill Companies, Inc.

LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based in varying degrees, on the following
considerations:
o     Likelihood of payment-capacity and willingness of the obligor to meet
      its financial commitment on an obligation in accordance with the terms
      of the obligation;
o     Nature of and provisions of the obligation; and
o     Protection afforded by, and relative position of, the obligation in the
      event of bankruptcy, reorganization, or other arrangement under the
      laws of bankruptcy and other laws affecting creditors' rights.
   The issue ratings definitions are expressed in terms of default risk. As
such, they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority
in bankruptcy, as noted above.

AAA: An obligation rated `AAA' has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.


AA: An obligation rated `AA' differs from the highest-rated obligations only
in small degree. The obligor's capacity to meet its financial commitment on
the obligation is very strong.

A: An obligation rated `A' are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations
in higher-rated categories. However, the obligor's capacity to meet its
financial commitment on the obligation is still strong.

BBB: An obligation rated `BBB' exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.


BB, B, CCC, CC, and C


An obligation rated `BB', `B', `CCC', `CC', and `C' are regarded as having
significant speculative characteristics. `BB' indicates the least degree of
speculation and `C' the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: An obligation rated `BB' are less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions, which could lead to
the obligor's inadequate capacity to meet its financial commitment on the
obligation.

B: An obligation rated `B' are more vulnerable to nonpayment than obligations
rated `BB', but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet
its financial commitment on the obligation.

CCC: An obligation rated `CCC' are currently vulnerable to nonpayment and are
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not
likely to have the capacity to meet its financial commitment on the
obligation.

CC: An obligation rated `CC' are currently highly vulnerable to nonpayment.


C: The `C' rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but payments on
this obligation are being continued.


D: An obligation rated `D' are in payment default. The `D' rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes
that such payments will be made during such grace period. The `D' rating also
will be used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.

The ratings  from "AA" to "CCC" may be modified by the  addition of a plus (+)
or  minus  (-)  sign  to  show  relative  standing  within  the  major  rating
categories.


c: The `c' subscript is used to provide additional information to investors
that the bank may terminate its obligation to purchase tendered bonds if the
long-term credit rating of the issuer is below an investment-grade level
and/or the issuer's bonds are deemed taxable.

p: The letter `p' indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project financed by the debt
being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful, timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of or the risk
of default upon failure of such completion. The investor should exercise his
own judgment with respect to such likelihood and risk.


Continuance of the ratings is contingent  upon Standard & Poor's receipt of an
executed  copy of the escrow  agreement  or closing  documentation  confirming
investments and cash flows.


r: The `r' highlights derivative, hybrid, and certain other obligations that
Standard & Poor's believes may experience high volatility or high variability
in expected returns as a result of noncredit risks. Examples of such
obligations are securities with principal or interest return indexed to
equities, commodities, or currencies; certain swaps and options; and
interest-only and principal-only mortgage securities. The absence of an `r'
symbol should not be taken as an indication that an obligation will exhibit
no volatility or variability in total return.


N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are
rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.

Bond Investment Quality Standards

Under present  commercial  bank  regulations  issued by the Comptroller of the
Currency,  bonds rated in the top four  categories  (`AAA',  `AA', `A', `BBB',
commonly  known  as  investment-grade   ratings)  generally  are  regarded  as
eligible  for bank  investment.  Also,  the laws of various  states  governing
legal  investments  impose certain rating or other  standards for  obligations
eligible  for  investment  by  savings  banks,   trust  companies,   insurance
companies, and fiduciaries in general


SHORT-TERM ISSUE CREDIT RATINGS

Short-term  ratings are  generally  assigned to those  obligations  considered
short-term  in the  relevant  market.  In the U.S.,  for  example,  that means
obligations  with an  original  maturity  of no more  than 365  days-including
commercial paper.

A-1: A short-term obligation rated "A-1" is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.

A-3: A short-term obligation rated "A-3" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

B: A short-term obligation rated "B" is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet
its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.

C: A short-term obligation rated "C" is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.

Notes. A Standard & Poor's note rating reflects the liquidity factors and
market access risks unique to notes. Notes due in three years or less will
likely receive a note rating. Notes maturing beyond three years will most
likely receive a long-term debt rating. The following criteria will be used
in making that assessment:
o.....Amortization schedule-the larger the final maturity relative to other
      maturities, the more likely it will
      be treated as a note; and
o     Source of payment-the more dependent the issue is on the market for its
      refinancing, the more likely
      it will be treated as a note.


SP-1: Strong capacity to pay principal and interest. An issue with a very
strong capacity to pay debt service is given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.

International credit ratings assess the capacity to meet foreign currency or
local currency commitments. Both "foreign currency" and "local currency"
ratings are internationally comparable assessments. The local currency rating
measures the probability of payment within the relevant sovereign state's
currency and jurisdiction and therefore, unlike the foreign currency rating,
does not take account of the possibility of foreign exchange controls
limiting transfer into foreign currency.


INTERNATIONAL LONG-TERM CREDIT RATINGS

The following ratings scale applies to foreign currency and local currency
ratings.


Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.

AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.

B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk.  Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are
based on their prospects for achieving partial or full recovery in a
reorganization or liquidation of the obligor. While expected recovery values
are highly speculative and cannot be estimated with any precision, the
following serve as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding amounts and accrued
interest. "DD" indicates potential recoveries in the range of 50%-90%, and
"D" the lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy
a higher portion of their outstanding obligations, while entities rated "D"
have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the major rating categories.  Plus and minus signs are
not added to the "AAA" category or to categories below "CCC," nor to
short-term ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS

The following ratings scale applies to foreign currency and local currency
ratings. A short-term rating has a time horizon of less than 12 months for
most obligations, or up to three years for U.S. public finance securities,
and thus places greater emphasis on the liquidity necessary to meet financial
commitments in a timely manner.


F1: Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.

F3: Fair credit quality. Capacity for timely payment of financial commitments
is adequate. However, near-term adverse changes could result in a reduction
to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business
and economic environment.

D: Default. Denotes actual or imminent payment default.







                                     B-1

                                  Appendix B

                   Municipal Bond Industry Classifications


Adult Living Facilities
Airlines
Education
Electric Utilities
Gas Utilities
General Obligation
Higher Education
Highways/Railways
Hospital/Healthcare
Hotels, Restaurants & Leisure
Manufacturing, Durable Goods
Manufacturing, Non Durable Goods
Marine/Aviation Facilities
Multi-Family Housing
Municipal Leases
Non Profit Organization
Paper, Containers & Packaging
Parking Fee Revenue
Pollution Control
Resource Recovery
Sales Tax Revenue
Sewer Utilities
Single Family Housing
Special Assessment
Special Tax
Sports Facility Revenue
Student Loans
Telephone Utilities
Tobacco
Water Utilities










                                  Appendix C
OppenheimerFunds Special Sales Charge Arrangements and Waivers
--------------------------------------------------------------

In certain cases, the initial sales charge that applies to purchases of Class
A shares1 of the Oppenheimer funds or the contingent deferred sales charge
that may apply to Class A, Class B or Class C shares may be waived.2  That is
because of the economies of sales efforts realized by OppenheimerFunds
Distributor, Inc., (referred to in this document as the "Distributor"), or by
dealers or other financial institutions that offer those shares to certain
classes of investors.

Not all waivers apply to all funds. For example, waivers relating to
Retirement Plans do not apply to Oppenheimer municipal funds, because shares
of those funds are not available for purchase by or on behalf of retirement
plans. Other waivers apply only to shareholders of certain funds.

For the purposes of some of the waivers described below and in the Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds,
the term "Retirement Plan" refers to the following types of plans:
         1) plans qualified under Sections 401(a) or 401(k) of the Internal
            Revenue Code,
         2) non-qualified deferred compensation plans,
         3) employee benefit plans3
         4) Group Retirement Plans4
         5) 403(b)(7) custodial plan accounts
         6) Individual Retirement Accounts ("IRAs"), including traditional
            IRAs, Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

The interpretation of these provisions as to the applicability of a special
arrangement or waiver in a particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this document as the
"Transfer Agent") of the particular Oppenheimer fund. These waivers and
special arrangements may be amended or terminated at any time by a particular
fund, the Distributor, and/or OppenheimerFunds, Inc. (referred to in this
document as the "Manager").


Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request.
I.







 Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
------------------------------------------------------------------------------

Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to
Initial Sales Charge but May Be Subject to the Class A Contingent Deferred
Sales Charge (unless a waiver applies).

      There is no initial sales charge on purchases of Class A shares of any
of the Oppenheimer funds in the cases listed below. However, these purchases
may be subject to the Class A contingent deferred sales charge if redeemed
within 18 months (24 months in the case of Oppenheimer Rochester National
Municipals and Rochester Fund Municipals) of the beginning of the calendar
month of their purchase, as described in the Prospectus (unless a waiver
described elsewhere in this Appendix applies to the redemption).
Additionally, on shares purchased under these waivers that are subject to the
Class A contingent deferred sales charge, the Distributor will pay the
applicable concession described in the Prospectus under "Class A Contingent
Deferred Sales Charge."5 This waiver provision applies to:
|_|   Purchases of Class A shares aggregating $1 million or more.
|_|   Purchases of Class A shares by a Retirement Plan that was permitted to
         purchase such shares at net asset value but subject to a contingent
         deferred sales charge prior to March 1, 2001. That included plans
         (other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares
         costing $500,000 or more, 2) had at the time of purchase 100 or more
         eligible employees or total plan assets of $500,000 or more, or 3)
         certified to the Distributor that it projects to have annual plan
         purchases of $200,000 or more.

|_|   Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
         purchases are made:
         1) through a broker, dealer, bank or registered investment adviser

            that has made special arrangements with the Distributor for those
            purchases, or
         2) by a direct rollover of a distribution from a qualified
            Retirement Plan if the administrator of that Plan has made
            special arrangements with the Distributor for those purchases.
|_|   Purchases of Class A shares by Retirement Plans that have any of the
         following record-keeping arrangements:
         1) The record keeping is performed by Merrill Lynch Pierce Fenner &
            Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the
            Retirement Plan. On the date the plan sponsor signs the
            record-keeping service agreement with Merrill Lynch, the Plan
            must have $3 million or more of its assets invested in (a) mutual
            funds, other than those advised or managed by Merrill Lynch
            Investment Management, L.P. ("MLIM"), that are made available
            under a Service Agreement between Merrill Lynch and the mutual
            fund's principal underwriter or distributor, and  (b)  funds
            advised or managed by MLIM (the funds described in (a) and (b)
            are referred to as "Applicable Investments").
         2) The record keeping for the Retirement Plan is performed on a
            daily valuation basis by a record keeper whose services are
            provided under a contract or arrangement between the Retirement
            Plan and Merrill Lynch. On the date the plan sponsor signs the
            record keeping service agreement with Merrill Lynch, the Plan
            must have $3 million or more of its assets (excluding assets
            invested in money market funds) invested in Applicable
            Investments.
         3) The record keeping for a Retirement Plan is handled under a
            service agreement with Merrill Lynch and on the date the plan
            sponsor signs that agreement, the Plan has 500 or more eligible
            employees (as determined by the Merrill Lynch plan conversion
            manager).
   II.






            Waivers of Class A Sales Charges of Oppenheimer Funds
------------------------------------------------------------------------------

A. Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers.

Class A shares purchased by the following investors are not subject to any
Class A sales charges (and no concessions are paid by the Distributor on such
purchases):
|_|   The Manager or its affiliates.
|_|   Present or former officers, directors, trustees and employees (and
         their "immediate families") of the Fund, the Manager and its
         affiliates, and retirement plans established by them for their
         employees. The term "immediate family" refers to one's spouse,
         children, grandchildren, grandparents, parents, parents-in-law,
         brothers and sisters, sons- and daughters-in-law, a sibling's
         spouse, a spouse's siblings, aunts, uncles, nieces and nephews;
         relatives by virtue of a remarriage (step-children, step-parents,
         etc.) are included.
|_|   Registered management investment companies, or separate accounts of
         insurance companies having an agreement with the Manager or the
         Distributor for that purpose.
|_|   Dealers or brokers that have a sales agreement with the Distributor, if
         they purchase shares for their own accounts or for retirement plans
         for their employees.
|_|   Employees and registered representatives (and their spouses) of dealers
         or brokers described above or financial institutions that have
         entered into sales arrangements with such dealers or brokers (and
         which are identified as such to the Distributor) or with the
         Distributor. The purchaser must certify to the Distributor at the
         time of purchase that the purchase is for the purchaser's own
         account (or for the benefit of such employee's spouse or minor
         children).
|_|   Dealers, brokers, banks or registered investment advisors that have
         entered into an agreement with the Distributor providing
         specifically for the use of shares of the Fund in particular
         investment products made available to their clients. Those clients
         may be charged a transaction fee by their dealer, broker, bank or
         advisor for the purchase or sale of Fund shares.
|_|   Investment advisors and financial planners who have entered into an
         agreement for this purpose with the Distributor and who charge an
         advisory, consulting or other fee for their services and buy shares
         for their own accounts or the accounts of their clients.
|_|   "Rabbi trusts" that buy shares for their own accounts, if the purchases
         are made through a broker or agent or other financial intermediary
         that has made special arrangements with the Distributor for those
         purchases.
|_|   Clients of investment advisors or financial planners (that have entered
         into an agreement for this purpose with the Distributor) who buy
         shares for their own accounts may also purchase shares without sales
         charge but only if their accounts are linked to a master account of
         their investment advisor or financial planner on the books and
         records of the broker, agent or financial intermediary with which
         the Distributor has made such special arrangements . Each of these
         investors may be charged a fee by the broker, agent or financial
         intermediary for purchasing shares.
|_|   Directors, trustees, officers or full-time employees of OpCap Advisors
         or its affiliates, their relatives or any trust, pension, profit
         sharing or other benefit plan which beneficially owns shares for
         those persons.
|_|   Accounts for which Oppenheimer Capital (or its successor) is the
         investment advisor (the Distributor must be advised of this
         arrangement) and persons who are directors or trustees of the
         company or trust which is the beneficial owner of such accounts.
|_|   A unit investment trust that has entered into an appropriate agreement
         with the Distributor.

|_|   Dealers, brokers, banks, or registered investment advisers that have
         entered into an agreement with the Distributor to sell shares to
         defined contribution employee retirement plans for which the dealer,
         broker or investment adviser provides administration services.

      Retirement Plans and deferred compensation plans and trusts used to
         fund those plans (including, for example, plans qualified or created
         under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue
         Code), in each case if those purchases are made through a broker,
         agent or other financial intermediary that has made special
         arrangements with the Distributor for those purchases.
|_|   A TRAC-2000 401(k) plan (sponsored by the former Quest for Value
         Advisors) whose Class B or Class C shares of a Former Quest for
         Value Fund were exchanged for Class A shares of that Fund due to the
         termination of the Class B and Class C TRAC-2000 program on November
         24, 1995.
|_|   A qualified Retirement Plan that had agreed with the former Quest for
         Value Advisors to purchase shares of any of the Former Quest for
         Value Funds at net asset value, with such shares to be held through
         DCXchange, a sub-transfer agency mutual fund clearinghouse, if that
         arrangement was consummated and share purchases commenced by
         December 31, 1996.

B. Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions.

Class A shares issued or purchased in the following transactions are not
subject to sales charges (and no concessions are paid by the Distributor on
such purchases):
|_|   Shares issued in plans of reorganization, such as mergers, asset
         acquisitions and exchange offers, to which the Fund is a party.
|_|   Shares purchased by the reinvestment of dividends or other
         distributions reinvested from the Fund or other Oppenheimer funds
         (other than Oppenheimer Cash Reserves) or unit investment trusts for
         which reinvestment arrangements have been made with the Distributor.
|_|   Shares purchased through a broker-dealer that has entered into a
         special agreement with the Distributor to allow the broker's
         customers to purchase and pay for shares of Oppenheimer funds using
         the proceeds of shares redeemed in the prior 30 days from a mutual
         fund (other than a fund managed by the Manager or any of its
         subsidiaries) on which an initial sales charge or contingent
         deferred sales charge was paid. This waiver also applies to shares
         purchased by exchange of shares of Oppenheimer Money Market Fund,
         Inc. that were purchased and paid for in this manner. This waiver
         must be requested when the purchase order is placed for shares of
         the Fund, and the Distributor may require evidence of qualification
         for this waiver.
|_|   Shares purchased with the proceeds of maturing principal units of any
         Qualified Unit Investment Liquid Trust Series.
|_|   Shares purchased by the reinvestment of loan repayments by a
         participant in a Retirement Plan for which the Manager or an
         affiliate acts as sponsor.

C. Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions.

The Class A contingent deferred sales charge is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are
redeemed in the following cases:
|_|   To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|   Involuntary redemptions of shares by operation of law or involuntary
         redemptions of small accounts (please refer to "Shareholder Account
         Rules and Policies," in the applicable fund Prospectus).
|_|   For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes:
         1) Following the death or disability (as defined in the Internal

            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established.

         2) To return excess contributions.
         3) To return contributions made due to a mistake of fact.
         Hardship withdrawals, as defined in the plan.6
         5) Under a Qualified Domestic Relations Order, as defined in the
            Internal Revenue Code, or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.
         9) Separation from service.7
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) if the plan has made special
            arrangements with the Distributor.
         11)      Plan termination or "in-service distributions," if the
            redemption proceeds are rolled over directly to an
            OppenheimerFunds-sponsored IRA.
|_|   For distributions from 401(k) plans sponsored by broker-dealers that
         have entered into a special agreement with the Distributor allowing
         this waiver.
|_|   For distributions from retirement plans that have $10 million or more
         in plan assets and that have entered into a special agreement with
         the Distributor.
|_|   For distributions from retirement plans which are part of a retirement
         plan product or platform offered by certain banks, broker-dealers,
         financial advisors, insurance companies or record keepers which have
         entered into a special agreement with the Distributor.

   Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer Funds
---------------------------------------------------------------------------------

The Class B, Class C and Class N contingent deferred sales charges will not
be applied to shares purchased in certain types of transactions or redeemed
in certain circumstances described below.

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases:
|_|   Shares redeemed involuntarily, as described in "Shareholder Account
         Rules and Policies," in the applicable Prospectus.
|_|   Redemptions from accounts other than Retirement Plans following the

         death or disability of the last surviving shareholder. The death or
         disability must have occurred after the account was established, and
         for disability you must provide evidence of a determination of
         disability by the Social Security Administration.
      The contingent deferred sales charges are generally not waived
         following the death or disability of a grantor or trustee for a
         trust account. The contingent deferred sales charges will only be
         waived in the limited case of the death of the trustee of a grantor
         trust or revocable living trust for which the trustee is also the
         sole beneficiary. The death or disability must have occurred after
         the account was established, and for disability you must provide
         evidence of a determination of disability by the Social Security
         Administration.

|_|   Distributions from accounts for which the broker-dealer of record has
         entered into a special agreement with the Distributor allowing this
         waiver.
|_|   Redemptions of Class B shares held by Retirement Plans whose records
         are maintained on a daily valuation basis by Merrill Lynch or an
         independent record keeper under a contract with Merrill Lynch.
|_|   Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
         accounts of clients of financial institutions that have entered into
         a special arrangement with the Distributor for this purpose.
|_|   Redemptions requested in writing by a Retirement Plan sponsor of Class
         C shares of an Oppenheimer fund in amounts of $500,000 or more and
         made more than 12 months after the Retirement Plan's first purchase
         of Class C shares, if the redemption proceeds are invested in Class
         N shares of one or more Oppenheimer funds.
|_|   Distributions8 from Retirement Plans or other employee benefit plans
         for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established in an Oppenheimer fund.
         2) To return excess contributions made to a participant's account.
         3) To return contributions made due to a mistake of fact.
         4) To make hardship withdrawals, as defined in the plan.9
         5) To make distributions required under a Qualified Domestic
            Relations Order or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.10
         9) On account of the participant's separation from service.11
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) offered as an investment option in a
            Retirement Plan if the plan has made special arrangements with
            the Distributor.
         11)      Distributions made on account of a plan termination or
            "in-service" distributions, if the redemption proceeds are rolled
            over directly to an OppenheimerFunds-sponsored IRA.

         12)      For distributions from a participant's account under an
            Automatic Withdrawal Plan after the participant reaches age 59 1/2,
            as long as the aggregate value of the distributions does not
            exceed 10% of the account's value, adjusted annually.

         13)      Redemptions of Class B shares under an Automatic Withdrawal
            Plan for an account other than a Retirement Plan, if the
            aggregate value of the redeemed shares does not exceed 10% of the
            account's value, adjusted annually.
         14)      For distributions from 401(k) plans sponsored by
            broker-dealers that have entered into a special arrangement with
            the Distributor allowing this waiver.

|_|   Redemptions of Class B shares or Class C shares under an Automatic
         Withdrawal Plan from an account other than a Retirement Plan if the
         aggregate value of the redeemed shares does not exceed 10% of the
         account's value annually.


B. Waivers for Shares Sold or Issued in Certain Transactions.

The contingent deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases:
|_|   Shares sold to the Manager or its affiliates.
|_|   Shares sold to registered management investment companies or separate
         accounts of insurance companies having an agreement with the Manager
         or the Distributor for that purpose.
|_|   Shares issued in plans of reorganization to which the Fund is a party.
|_|   Shares sold to present or former officers, directors, trustees or
         employees (and their "immediate families" as defined above in
         Section I.A.) of the Fund, the Manager and its affiliates and
         retirement plans established by them for their employees.
IV.






   Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer
           Funds Who Were Shareholders of Former Quest for Value Funds
-------------------------------------------------------------------------------

The initial and contingent deferred sales charge rates and waivers for Class
A, Class B and Class C shares described in the Prospectus or Statement of
Additional Information of the Oppenheimer funds are modified as described
below for certain persons who were shareholders of the former Quest for Value
Funds.  To be eligible, those persons must have been shareholders on November
24, 1995, when OppenheimerFunds, Inc. became the investment advisor to those
former Quest for Value Funds.  Those funds include:
   Oppenheimer Quest Value Fund, Inc.           Oppenheimer Small Cap Value
   Fund
   Oppenheimer Quest Balanced Value Fund        Oppenheimer Quest Global
   Value Fund, Inc.
   Oppenheimer Quest Opportunity Value Fund

      These arrangements also apply to shareholders of the following funds
when they merged (were reorganized) into various Oppenheimer funds on
November 24, 1995:

   Quest for Value U.S. Government Income Fund  Quest for Value New York
   Tax-Exempt Fund
   Quest for Value Investment Quality Income Fund     Quest for Value
   National Tax-Exempt Fund
   Quest for Value Global Income Fund     Quest for Value California
   Tax-Exempt Fund

      All of the funds listed above are referred to in this Appendix as the
"Former Quest for Value Funds."  The waivers of initial and contingent
deferred sales charges described in this Appendix apply to shares of an
Oppenheimer fund that are either:
|_|   acquired by such shareholder pursuant to an exchange of shares of an
         Oppenheimer fund that was one of the Former Quest for Value Funds,
         or
|_|   purchased by such shareholder by exchange of shares of another
         Oppenheimer fund that were acquired pursuant to the merger of any of
         the Former Quest for Value Funds into that other Oppenheimer fund on
         November 24, 1995.

A. Reductions or Waivers of Class A Sales Charges.

|X|   Reduced Class A Initial Sales Charge Rates for Certain Former Quest for
Value Funds Shareholders.

Purchases by Groups and Associations.  The following table sets forth the
initial sales charge rates for Class A shares purchased by members of
"Associations" formed for any purpose other than the purchase of securities.
The rates in the table apply if that Association purchased shares of any of
the Former Quest for Value Funds or received a proposal to purchase such
shares from OCC Distributors prior to November 24, 1995.

--------------------------------------------------------------------------------
                      Initial Sales       Initial Sales Charge   Concession as
Number of Eligible    Charge as a % of    as a % of Net Amount   % of Offering
Employees or Members  Offering Price      Invested               Price
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
9 or Fewer                   2.50%                2.56%              2.00%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
At  least  10 but not        2.00%                2.04%              1.60%
more than 49
--------------------------------------------------------------------------------

------------------------------------------------------------------------------
      For purchases by Associations having 50 or more eligible employees or
members, there is no initial sales charge on purchases of Class A shares, but
those shares are subject to the Class A contingent deferred sales charge
described in the applicable fund's Prospectus.







      Purchases made under this arrangement qualify for the lower of either
the sales charge rate in the table based on the number of members of an
Association, or the sales charge rate that applies under the Right of
Accumulation described in the applicable fund's Prospectus and Statement of
Additional Information. Individuals who qualify under this arrangement for
reduced sales charge rates as members of Associations also may purchase
shares for their individual or custodial accounts at these reduced sales
charge rates, upon request to the Distributor.

|X|   Waiver of Class A Sales Charges for Certain Shareholders.  Class A
shares purchased by the following investors are not subject to any Class A
initial or contingent deferred sales charges:
o     Shareholders who were shareholders of the AMA Family of Funds on
            February 28, 1991 and who acquired shares of any of the Former
            Quest for Value Funds by merger of a portfolio of the AMA Family
            of Funds.
o     Shareholders who acquired shares of any Former Quest for Value Fund by
            merger of any of the portfolios of the Unified Funds.

|X|   Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions.  The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares purchased by the following investors who were
shareholders of any Former Quest for Value Fund:

      Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder
with whom that dealer has a fiduciary relationship, under the Employee
Retirement Income Security Act of 1974 and regulations adopted under that law.

B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.

|X|   Waivers for Redemptions of Shares Purchased Prior to March 6, 1995.  In
the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The
shares must have been acquired by the merger of a Former Quest for Value Fund
into the fund or by exchange from an Oppenheimer fund that was a Former Quest
for Value Fund or into which such fund merged. Those shares must have been
purchased prior to March 6, 1995 in connection with:
o     withdrawals under an automatic withdrawal plan holding only either
            Class B or Class C shares if the annual withdrawal does not
            exceed 10% of the initial value of the account value, adjusted
            annually, and
o     liquidation of a shareholder's account if the aggregate net asset value
            of shares held in the account is less than the required minimum
            value of such accounts.

|X|   Waivers for Redemptions of Shares Purchased on or After March 6, 1995
but Prior to November 24, 1995. In the following cases, the contingent
deferred sales charge will be waived for redemptions of Class A, Class B or
Class C shares of an Oppenheimer fund. The shares must have been acquired by
the merger of a Former Quest for Value Fund into the fund or by exchange from
an Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on
or after March 6, 1995, but prior to November 24, 1995:
o     redemptions following the death or disability of the shareholder(s) (as
            evidenced by a determination of total disability by the U.S.
            Social Security Administration);
o     withdrawals under an automatic withdrawal plan (but only for Class B or
            Class C shares) where the annual withdrawals do not exceed 10% of
            the initial value of the account value; adjusted annually, and

o     liquidation of a shareholder's account if the aggregate net asset value
            of shares held in the account is less than the required minimum
            account value.


      A shareholder's account will be credited with the amount of any
contingent deferred sales charge paid on the redemption of any Class A, Class
B or Class C shares of the Oppenheimer fund described in this section if the
proceeds are invested in the same Class of shares in that fund or another
Oppenheimer fund within 90 days after redemption.

 Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer
          Funds Who Were Shareholders of Connecticut Mutual Investment
                                 Accounts, Inc.
---------------------------------------------------------------------------

The initial and contingent deferred sale charge rates and waivers for Class A
and Class B shares described in the respective Prospectus (or this Appendix)
of the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
   Oppenheimer U. S. Government Trust,
   Oppenheimer Bond Fund,
   Oppenheimer Value Fund and
   Oppenheimer Disciplined Allocation Fund

are modified as described below for those Fund shareholders who were
shareholders of the following funds (referred to as the "Former Connecticut
Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment adviser to the Former Connecticut Mutual Funds:

   Connecticut Mutual Liquid Account      Connecticut Mutual Total Return
   Account
   Connecticut Mutual Government Securities Account   CMIA LifeSpan Capital
   Appreciation Account
   Connecticut Mutual Income Account      CMIA LifeSpan Balanced Account
   Connecticut Mutual Growth Account      CMIA Diversified Income Account

A. Prior Class A CDSC and Class A Sales Charge Waivers.

|X|   Class A Contingent Deferred Sales Charge. Certain shareholders of a
Fund and the other Former Connecticut Mutual Funds are entitled to continue
to make additional purchases of Class A shares at net asset value without a
Class A initial sales charge, but subject to the Class A contingent deferred
sales charge that was in effect prior to March 18, 1996 (the "prior Class A
CDSC"). Under the prior Class A CDSC, if any of those shares are redeemed
within one year of purchase, they will be assessed a 1% contingent deferred
sales charge on an amount equal to the current market value or the original
purchase price of the shares sold, whichever is smaller (in such redemptions,
any shares not subject to the prior Class A CDSC will be redeemed first).

      Those shareholders who are eligible for the prior Class A CDSC are:
         1) persons whose purchases of Class A shares of a Fund and other
            Former Connecticut Mutual Funds were $500,000 prior to March 18,
            1996, as a result of direct purchases or purchases pursuant to
            the Fund's policies on Combined Purchases or Rights of
            Accumulation, who still hold those shares in that Fund or other
            Former Connecticut Mutual Funds, and
         2) persons whose intended purchases under a Statement of Intention
            entered into prior to March 18, 1996, with the former general
            distributor of the Former Connecticut Mutual Funds to purchase
            shares valued at $500,000 or more over a 13-month period entitled
            those persons to purchase shares at net asset value without being
            subject to the Class A initial sales charge

      Any of the Class A shares of a Fund and the other Former Connecticut
Mutual Funds that were purchased at net asset value prior to March 18, 1996,
remain subject to the prior Class A CDSC, or if any additional shares are
purchased by those shareholders at net asset value pursuant to this
arrangement they will be subject to the prior Class A CDSC.

|X|   Class A Sales Charge Waivers. Additional Class A shares of a Fund may
be purchased without a sales charge, by a person who was in one (or more) of
the categories below and acquired Class A shares prior to March 18, 1996, and
still holds Class A shares:
         1) any purchaser, provided the total initial amount invested in the
            Fund or any one or more of the Former Connecticut Mutual Funds
            totaled $500,000 or more, including investments made pursuant to
            the Combined Purchases, Statement of Intention and Rights of
            Accumulation features available at the time of the initial
            purchase and such investment is still held in one or more of the
            Former Connecticut Mutual Funds or a Fund into which such Fund
            merged;
         2) any participant in a qualified plan, provided that the total
            initial amount invested by the plan in the Fund or any one or
            more of the Former Connecticut Mutual Funds totaled $500,000 or
            more;
         3) Directors of the Fund or any one or more of the Former
            Connecticut Mutual Funds and members of their immediate families;
         4) employee benefit plans sponsored by Connecticut Mutual Financial
            Services, L.L.C. ("CMFS"), the prior distributor of the Former
            Connecticut Mutual Funds, and its affiliated companies;
         5) one or more members of a group of at least 1,000 persons (and
            persons who are retirees from such group) engaged in a common
            business, profession, civic or charitable endeavor or other
            activity, and the spouses and minor dependent children of such
            persons, pursuant to a marketing program between CMFS and such
            group; and
         6) an institution acting as a fiduciary on behalf of an individual
            or individuals, if such institution was directly compensated by
            the individual(s) for recommending the purchase of the shares of
            the Fund or any one or more of the Former Connecticut Mutual
            Funds, provided the institution had an agreement with CMFS.

      Purchases of Class A shares made pursuant to (1) and (2) above may be
subject to the Class A CDSC of the Former Connecticut Mutual Funds described
above.

      Additionally, Class A shares of a Fund may be purchased without a sales
charge by any holder of a variable annuity contract issued in New York State
by Connecticut Mutual Life Insurance Company through the Panorama Separate
Account which is beyond the applicable surrender charge period and which was
used to fund a qualified plan, if that holder exchanges the variable annuity
contract proceeds to buy Class A shares of the Fund.

B. Class A and Class B Contingent Deferred Sales Charge Waivers.

In addition to the waivers set forth in the Prospectus and in this Appendix,
above, the contingent deferred sales charge will be waived for redemptions of
Class A and Class B shares of a Fund and exchanges of Class A or Class B
shares of a Fund into Class A or Class B shares of a Former Connecticut
Mutual Fund provided that the Class A or Class B shares of the Fund to be
redeemed or exchanged were (i) acquired prior to March 18, 1996 or (ii) were
acquired by exchange from an Oppenheimer fund that was a Former Connecticut
Mutual Fund. Additionally, the shares of such Former Connecticut Mutual Fund
must have been purchased prior to March 18, 1996:
   1) by the estate of a deceased shareholder;
   2) upon the disability of a shareholder, as defined in Section 72(m)(7) of
      the Internal Revenue Code;
   3) for retirement distributions (or loans) to participants or
      beneficiaries from retirement plans qualified under Sections 401(a) or
      403(b)(7)of the Code, or from IRAs, deferred compensation plans created
      under Section 457 of the Code, or other employee benefit plans;
   as tax-free returns of excess contributions to such retirement or employee
      benefit plans;
   5) in whole or in part, in connection with shares sold to any state,
      county, or city, or any instrumentality, department, authority, or
      agency thereof, that is prohibited by applicable investment laws from
      paying a sales charge or concession in connection with the purchase of
      shares of any registered investment management company;
   6) in connection with the redemption of shares of the Fund due to a
      combination with another investment company by virtue of a merger,
      acquisition or similar reorganization transaction;
   7) in connection with the Fund's right to involuntarily redeem or
      liquidate the Fund;
   8) in connection with automatic redemptions of Class A shares and Class B
      shares in certain retirement plan accounts pursuant to an Automatic
      Withdrawal Plan but limited to no more than 12% of the original value
      annually; or

   9) as involuntary redemptions of shares by operation of law, or under
      procedures set forth in the Fund's Articles of Incorporation, or as
      adopted by the Board of Directors of the Fund.


   Special Reduced Sales Charge for Former Shareholders of Advance America
                                    Funds, Inc.
------------------------------------------------------------------------------

Shareholders of Oppenheimer Municipal Bond Fund, Oppenheimer U.S. Government
Trust, Oppenheimer Strategic Income Fund and Oppenheimer Capital Income Fund
who acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those
Oppenheimer funds on October 18, 1991, and who held shares of Advance America
Funds, Inc. on March 30, 1990, may purchase Class A shares of those four
Oppenheimer funds at a maximum sales charge rate of 4.50%.

      Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer
                            Convertible Securities Fund
------------------------------------------------------------------------------

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to
purchase those shares at net asset value without sales charge:
|_|   the Manager and its affiliates,
|_|   present or former officers, directors, trustees and employees (and
         their "immediate families" as defined in the Fund's Statement of
         Additional Information) of the Fund, the Manager and its affiliates,
         and retirement plans established by them or the prior investment
         advisor of the Fund for their employees,
|_|   registered management investment companies or separate accounts of
         insurance companies that had an agreement with the Fund's prior
         investment advisor or distributor for that purpose,
|_|   dealers or brokers that have a sales agreement with the Distributor, if
         they purchase shares for their own accounts or for retirement plans
         for their employees,
|_|   employees and registered representatives (and their spouses) of dealers
         or brokers described in the preceding section or financial
         institutions that have entered into sales arrangements with those
         dealers or brokers (and whose identity is made known to the
         Distributor) or with the Distributor, but only if the purchaser
         certifies to the Distributor at the time of purchase that the
         purchaser meets these qualifications,
|_|   dealers, brokers, or registered investment advisors that had entered
         into an agreement with the Distributor or the prior distributor of
         the Fund specifically providing for the use of Class M shares of the
         Fund in specific investment products made available to their
         clients, and
|_|   dealers, brokers or registered investment advisors that had entered
      into an agreement with the Distributor or prior distributor of the
      Fund's shares to sell shares to defined contribution employee
      retirement plans for which the dealer, broker, or investment advisor

                            provides administrative C-1
|_|   services.









Rochester Fund Municipals

Internet Website
   www.oppenheimerfunds.com
   ------------------------

Investment Advisor
     OppenheimerFunds, Inc.
     498 Seventh Avenue
     New York, New York 10018

Distributor
     OppenheimerFunds Distributor, Inc.
     498 Seventh Avenue
     New York, New York 10018

Transfer Agent
      OppenheimerFunds Services

      P.O. Box 5270
      Denver, Colorado 80217
      1.800.CALL.OPP(225.5677)


Custodian Bank
     Citibank, N.A.
     399 Park Avenue
     New York, New York 10043


Independent Auditors
      KPMG LLP

      707 Seventeenth Street
      Denver, Colorado 80202

Legal Counsel
      Mayer, Brown, Rowe & Maw
      1675 Broadway
      New York, New York 10019

1234




PX0365.001.0203



--------

1 Mr. Cannon is a Trustee of Rochester Fund Municipals, Limited-Term New York
Municipal Fund and Convertible Securities Fund.
2 In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to
those Trustees who are not "interested persons" of the Fund and who do not
have any direct or indirect financial interest in the operation of the
distribution plan or any agreement under the plan.

1 Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
2 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to contingent deferred sales
charges mean the Fund's Early Withdrawal Charges and references to
"redemptions" mean "repurchases" of shares.
3 An "employee benefit plan" means any plan or arrangement, whether or not it
is "qualified" under the Internal Revenue Code, under which Class N shares of
an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single
employer or of affiliated employers. These may include, for example, medical
savings accounts, payroll deduction plans or similar plans. The fund accounts
must be registered in the name of the fiduciary or administrator purchasing
the shares for the benefit of participants in the plan.
4 The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship,
members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the
group has made special arrangements with the Distributor and all members of
the group participating in (or who are eligible to participate in) the plan
purchase shares of an Oppenheimer fund or funds through a single investment
dealer, broker or other financial institution designated by the group. Such
plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans
other than plans for public school employees. The term "Group Retirement
Plan" also includes qualified retirement plans and non-qualified deferred
compensation plans and IRAs that purchase shares of an Oppenheimer fund or
funds through a single investment dealer, broker or other financial
institution that has made special arrangements with the Distributor.
5 However, that concession will not be paid on purchases of shares in amounts
of $1 million or more (including any right of accumulation) by a Retirement
Plan that pays for the purchase with the redemption proceeds of Class C
shares of one or more Oppenheimer funds held by the Plan for more than one
year.
6 This provision does not apply to IRAs.
7 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.
8 The distribution must be requested prior to Plan termination or the
elimination of the Oppenheimer funds as an investment option under the Plan.
9 This provision does not apply to IRAs.

10 This provision does not apply to loans from 403(b)(7) custodial plans and
loans from the OppenheimerFunds-sponsored Single K retirement plan.
11 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.

ROCHESTER FUND MUNICIPALS

FORM N-1A

PART C

OTHER INFORMATION



Item 23. Exhibits
-----------------


(a)   (i)   Amended and Restated Agreement and Declaration of Trust dated
1/26/95: Previously filed with Registrant's Post Effective Amendment No. 16
filed 1/11/96, and incorporated herein by reference.

Amendment dated 11/1/95 to the Amended and Restated Agreement and Declaration
of Trust dated 1/26/95: Previously filed with Registrant's Post Effective
Amendment No. 16 filed 1/11/96, and incorporated herein by reference.

Amendment dated 6/17/97 to the Amended and Restated Agreement and Declaration
of Trust dated 1/26/95: Previously filed with Registrant's Post Effective
Amendment No. 22 filed 4/30/99, and incorporated herein by reference.

Amendment dated 6/10/98 to the Amended and Restated Agreement and Declaration
of Trust dated 1/26/95: Previously filed with Registrant's Post Effective
Amendment No. 22 filed 4/30/99, and incorporated herein by reference.

Amendment No. 4 dated 6/10/02 to the Amended and Restated Agreement and
Declaration of Trust dated 1/26/95: Filed herewith.


(b)   (i)   Bylaws: Previously filed with Registrant's Post Effective
Amendment No. 13 filed 5/1/93, and incorporated herein by reference.


      (ii)  Amendment No. 1 to By-laws dated 7/22/98: Previously filed with
Registrant's Post Effective Amendment No. 24 filed 4/27/00 and incorporated
by reference.

(c)   (i)   Class A Specimen Share Certificate: Previously filed with
Registrant's Post Effective Amendment No. 26 filed 4/29/02, and incorporated
herein by reference.

(ii)  Class B Specimen Share Certificate: Previously filed with Registrant's
Post Effective Amendment No. 26 filed 4/29/02, and incorporated herein by
reference.

(iii) Class C Specimen Share Certificate: Previously filed with Registrant's
Post Effective Amendment No. 26 filed 4/29/02, and incorporated herein by
reference.

(iv)  Class Y Specimen Share Certificate: Previously filed with Registrant's
Post Effective Amendment No. 26 filed 4/29/02, and incorporated herein by
reference.

(d)   Investment Advisory Agreement dated 1/4/96 with Oppenheimer Management
Corporation: Previously filed with Registrant's Post Effective Amendment No.
16 filed 1/11/96, and incorporated herein by reference.

(e)   (i)   General Distributor's Agreement dated 1/4/96 with Oppenheimer
Funds Distributor, Inc.: Filed with Registrant's Post Effective Amendment No.
16 filed 1/11/96, and incorporated herein by reference.

(ii)  Form of Dealer Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
incorporated herein by reference.

(iii) Form of Broker Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
incorporated herein by reference.

(iv)  Form of Agency Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
incorporated herein by reference.

(v)   Form of Trust Company Fund/SERV Purchase Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Post-Effective Amendment No. 45 to
the Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
10/26/01, and incorporated herein by reference.

(vi)  Form of Trust Company Agency Agreement of OppenheimerFunds Distributor,
Inc.: Previously filed with Post-Effective Amendment No. 45 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
10/26/01, and incorporated herein by reference.

(f)   (i)   Amended and Restated Retirement Plan for Independent Trustees of
Registrant adopted on 1/26/95, as amended and restated 10/16/95: Previously
filed with Registrant's Post Effective Amendment No. 16 filed 1/11/96, and
incorporated herein by reference.


      (ii)  Form of Deferred Compensation Plan for Disinterested
Trustees/Directors: Previously filed with Post-Effective Amendment No. 43 to
the Registration Statement of Oppenheimer Quest For Value Funds (Reg. No.
33-15489), 12/21/98, and incorporated herein by reference.

(g)   (i)   Amendment dated December 6, 2002 to the Global Custodial Services
Agreement dated May 3, 2001 between Registrant and Citibank, N.A.: Previously
filed with the Initial Registration Statement of Oppenheimer Total Return
Bond Fund (Reg. No. 333-101878), 12/16/02, and incorporated herein by
reference.

(ii)  Amendment dated August 28, 2002 to the Global Custodial Services
Agreement dated May 3, 2001 between Registrant and Citibank, N.A.: Previously
filed with Post-Effective Amendment No. 29 to the Registration Statement of
Oppenheimer Discovery Fund (Reg. No. 33-371), 11/21/02, and incorporated
herein by reference.

(ii)  Global Custodial Services Agreement dated May 3, 2001 between
Registrant and Citibank, N.A.: Previously filed with Post-Effective Amendment
No. 33 to the Registration Statement of Centennial Money Market Trust (Reg.
No. 2-65245), 10/25/01, and incorporated herein by reference.


(h)   Not applicable.

(i)   Opinion and Consent of Counsel: Incorporated herein by reference to the
Registrant's Rule 24f-2 Notice filed on 2/27/97.

(j)   Independent Auditor's Consent for KPMG LLP, the Fund's Independent
Auditors: Filed herewith.

(k)   Not applicable.

(l)   (i)   Form of Investment Letter regarding Class B shares from
OppenheimerFunds, Inc.: Previously filed with Registrant's Post-Effective
Amendment No. 19 filed 3/16/97, and incorporated herein by reference.

Form of Investment Letter regarding Class C shares from OppenheimerFunds,
Inc.: Previously filed with Registrant's Post-Effective Amendment No. 19
filed 3/16/97, and incorporated herein by reference.


(m)   (i)   Amended and Restated Service Plan and Agreement with Oppenheimer
Funds Distributor, Inc. dated 6/14/02 for Class A Shares: Filed herewith.


(ii)  Amended and Restated Distribution and Service Plan and Agreement for
Class B Shares dated 2/3/98 under Rule 12b-1 of the Investment Company Act of
1940: Previously filed with Registration's Post-Effective Amendment No. 20,
3/31/98, and incorporated herein by reference.

(iii) Amended and Restated Distribution and Service Plan and Agreement for
Class C Shares dated 2/3/98 under Rule 12b-1 of the Investment Company Act of
1940: Previously filed with Registration's Post-Effective Amendment No. 20,
3/31/98, and incorporated herein by reference.


(n)   Oppenheimer Funds Multiple Class Plan under Rule 18f-3 updated through
10/22/02: Previously filed with Post-Effective Amendment No. 22 to the
Registration Statement of Oppenheimer 9/27/01,Global Growth & Income Fund
(Reg. No. 33-33799), 11/20/02, and incorporated herein by reference.

(o)   Power of Attorney (including Certified Board resolution) for Robert G.
Galli: Previously filed with Post-Effective Amendment No. 43 to the
Registration Statement of Oppenheimer Quest For Value Funds (Reg. No.
33-15489), 12/21/98, and incorporated herein by reference.


(i)   Power of Attorney for Brian W. Wixted: Previously filed with
Post-Effective Amendment No. 20 to the Registration Statement of Oppenheimer
Convertible Securities Fund (Reg. No. 33-3076), 4/28/99, and incorporated
herein by reference.

(ii)  Power of Attorney for Brian Wruble and John V. Murphy: Previously filed
with Post Effective Amendment No. 49 to the Registration Statement of
Oppenheimer Quest Value Fund, Inc., (Reg. 2-65223), 2/26/02, and incorporated
herein by reference.


(p)   Amended and Restated Code of Ethics of the Oppenheimer Funds dated May
15, 2002 under Rule 17j-1 of the Investment Company Act of 1940: Previously
filed with Post-Effective Amendment No. 29 to the Registration Statement of
Oppenheimer Discovery Fund (Reg. No. 333-33-371), 11/21/02, and incorporated
herein by reference.


Item 24.    Persons Controlled by or under Common Control with Registrant
--------    -------------------------------------------------------------

None.

Item 25.    Indemnification
--------    ---------------

Registrant's Amended and Restated Agreement and Declaration of Trust (the
"Declaration of Trust"), which is referenced herein, (see Item 23(a)),
contains certain provisions relating to the indemnification of Registrant's
officers and trustees.  Section 6.4 of Registrant's Declaration of Trust
provides that Registrant shall indemnify (from the assets of the Fund or
Funds in question) each of its trustees and officers (including persons who
served at Registrant's request as directors, officers or trustees of another
organization in which Registrant has any interest as a shareholder, creditor
or otherwise hereinafter referred to as a "Covered Person") against all
liabilities, including but not limited to, amounts paid for satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or  administrative or
legislative body, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such person may be or may have
been threatened, while in office or thereafter, by reason of being or having
been such a trustee or officer, director or trustee, except with respect to
any matter as to which it has been determined in one of the manners described
below, that such Covered Person (i) did not act in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to
the best interest of Registrant or (ii) had acted with willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved in
the conduct described in (i) and (ii) being referred to hereafter as
"Disabling Conduct".

Section 6.4 provides that a determination that the Covered Conduct may be
made by (i) a final decision on the merits by a court or other body before
whom the proceeding was brought that the person to be indemnified was not
liable by reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of
evidence of Disabling Conduct, or (iii) a reasonable determination, based
upon a review of the facts, that the indemnity was not liable by reason of
Disabling Conduct by (a) a vote of a majority of a quorum of trustees who are
neither "interested persons" of Registrant as defined in Section 2(a)(19) of
the 1940 Act nor parties to the proceeding, or (b) an independent legal
counsel in a written opinion.

In addition, Section 6.4 provides that expenses, including accountants' and
counsel fees so incurred by any such Covered Person (but excluding amounts
paid in satisfaction of judgments, in compromise or as fines or penalties),
may be paid from time to time in advance of the final disposition of any such
action, suit or proceeding, provided that the Covered Person shall have
undertaken to repay the amounts so paid to the Sub-trust in question if it is
ultimately determined that indemnification of such expenses is not authorized
under Article 6 and (i) the Covered Person shall have provided security for
such undertaking, (ii) Registrant shall be insured against losses arising by
reason of any lawful advances, or (iii) a majority of a quorum of
disinterested trustees who are not a party to the proceeding, by an
independent legal counsel in a written opinion, based upon a review of
readily available facts (as opposed to a full trial-type inquiry), that there
is reason to believe that the Covered Person ultimately will be  found
entitled to indemnification.

Section 6.1 of Registrant's Agreement and Declaration of Trust provides,
among other things, that nothing in the Agreement and Declaration of Trust
shall protect any trustee or officer against any liability to Registrant or
the shareholders to which such trustee or officer would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of trustee or
such officer.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable.  In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.

Item 26.   Business and Other Connections of Investment Adviser
-------    ----------------------------------------------------

(a)   OppenheimerFunds, Inc. is the investment adviser of the Registrant; it
and certain subsidiaries and affiliates act in the same capacity to other
registered investment companies as described in Parts A and B hereof and
listed in Item 26(b) below.

(b)   There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of OppenheimerFunds, Inc. is, or at any time during the
past two fiscal years has been, engaged for his/her own account or in the
capacity of director, officer, employee, partner or trustee.


Name and Current Position with OppenheimerFunds, Inc. During
                                                      ------
Other Business and Connections During the Past Two Years

Timothy L. Abbuhl,
Assistant Vice President      None

Amy B. Adamshick,
Vice President    None
Charles E. Albers,
Senior Vice President         None
Erik Anderson,
Assistant Vice President      None

Janette Aprilante,

Vice President & Secretary    As of January 2002: Secretary of
OppenheimerFunds, Distributor, Inc., Centennial Asset Management Corporation,
Oppenheimer Partnership Holdings, Inc., Oppenheimer Real Asset Management,
Inc., Shareholder Financial Services, Inc., Shareholder Services, Inc.;
Assistant Secretary of HarbourView Asset Management Corporation, OFI Private
Investments, Inc., Oppenheimer Trust Company and OFI Institutional Asset
Management, Inc.
Patricia Avelino,
Assistant Vice President      None

Hany S. Ayad,
Assistant Vice President      None
Victor W. Babin,
Senior Vice President         None
Bruce L. Bartlett,
Senior Vice President         None
John Michael Banta,
Assistant Vice President      None

Joanne Bardell,
Assistant Vice President      None

Lerae A. Barela,
Assistant Vice President      None
George Batejan,
Executive Vice President/

Chief Information Officer     None
Mark Bartling,
Assistant Vice President      None
Kevin Baum,
Vice President    None
Jeff Baumgartner,
Assistant Vice President      None
Connie Bechtolt,
Assistant Vice President      None
Robert Behal
Assistant Vice President      Assistant Vice President of HarbourView Asset
Management Corporation. Formerly.

Kathleen Beichert,
Vice President                Vice President of OppenheimerFunds Distributor,
Inc.

Gerald Bellamy,
Assistant Vice President      None

Erik S. Berg,

Assistant Vice President      None
Victoria Best,
Vice President                None
Rajeev Bhaman,
Vice President    None
Craig Billings,
Assistant Vice President      Formerly President of Lorac Technologies, Inc.
(June 1997-July 2001).

Mark Binning,

Assistant Vice President      None
Robert J. Bishop,
Vice President    None
Tracey Blinzer,
Assistant Vice President      None

John R. Blomfield,
Vice President    None
Chad Boll,

Assistant Vice President      None
Kevin Bonner,
Vice President                Formerly Manager, Sales Support for Prudential
Insurance Company (August 1995-September 2001).
Robert Bonomo,
Senior Vice President         None

Lowell Scott Brooks,
Vice President                Vice President of OppenheimerFunds Distributor,
Inc.

Richard Buckmaster,
Vice President    None
Paul Burke,
Assistant Vice President      None
Mark Burns,
Assistant Vice President      Formerly a Marketing Manager with Alliance
Capital Management (October 1999-April 2001).
Bruce Burroughs
Vice President    None

Claudia Calich,
Assistant Vice President      None
Michael A. Carbuto,
Vice President                None

Debra Casey,
Assistant Vice President      None
Ronald G. Chibnik,
Assistant Vice President      Formerly Director of technology for Sapient
Corporation (July, 2000-August 2001); software architect for Sapient
Corporation (March 1997-July 2000).
Brett Clark,
Assistant Vice President      None
H.C. Digby Clements,
Vice President: Rochester Division
None
Peter V. Cocuzza,
Vice President    None
Laura Coulston,
Assistant Vice President      None

Julie C. Cusker,
Assistant Vice President:

Rochester Division            None
George Curry,
Vice President                None.

John Damian,
Vice President                Formerly senior analyst/director for Citigroup
Asset Management (November 1999-September 2001).
O. Leonard Darling,
Vice Chairman, Executive Vice
President, Chief Investment

Officer & Director            Chairman of the Board and a director (since
June 1999) and Senior Managing Director (since December 1998) of HarbourView
Asset Management Corporation; a director (since July 2001) of Oppenheimer
Acquisition Corp.; a director (since March 2000) of OFI Private Investments,
Inc.; Chairman of the Board, Senior Managing Director and director (since
February 2001) of OFI Institutional Asset Management, Inc.; Trustee (since
1993) of Awhtolia College - Greece.

John M. Davis,
Assistant Vice President      Assistant Vice President of OppenheimerFunds
Distributor, Inc.
Ruggero de'Rossi,

Vice President    Vice President of HarbourView Asset Management Corporation.
Craig P. Dinsell,
Executive Vice President      None

Randall C. Dishmon,

Assistant Vice President      Formerly an Associate with Booz Allen &
Hamilton (1998-June 2001).
Rebecca K. Dolan
Vice President    None

Steven D. Dombrower,

Vice President                Vice President of OppenheimerFunds Distributor,
Inc.

Bruce C. Dunbar,
Vice President    None
Richard Edmiston,
Assistant Vice President      None
Daniel R. Engstrom,
Assistant Vice President      None

Armand B. Erpf,
Assistant Vice President      None
James Robert Erven
Assistant Vice President      Formerly an Assistant Vice President/Senior
Trader with Morgan Stanley Investment Management (1999-April 2002).
George R. Evans,
Vice President    None
Edward N. Everett,
Vice President    None
Kathy Faber,
Assistant Vice President      None
David Falicia,
Assistant Vice President      None

Scott T. Farrar,

Vice President    Vice President of OFI Private Investments, Inc.
Katherine P. Feld,
Vice President, Senior Counsel
Vice President of OppenheimerFunds, Distributor, Inc.; Vice President,
Assistant Secretary and Director of Centennial Asset Management Corporation;
Vice President of Oppenheimer Real Asset Management, Inc.
Emmanuel Ferreira,
Vice President                Formerly a portfolio manager with Lashire
Investments (July 1999-December 2002).

Ronald H. Fielding,
Senior Vice President;
Chairman: Rochester Division  Vice President of OppenheimerFunds Distributor,
Inc.; Director of ICI Mutual Insurance Company; Governor of St. John's
College; Chairman of the Board of Directors of International Museum of
Photography at George Eastman House.

Brian Finley,
Assistant Vice President      None
John Forrest,
Senior Vice President         None
J. Hayes Foster,
Vice President                None

P. Lyman Foster,
Senior Vice President         Senior Vice President of OppenheimerFunds
Distributor, Inc.
David Foxhoven,
Assistant Vice President      Assistant Vice President of OppenheimerFunds
Legacy Program.
Colleen M. Franca,
Assistant Vice President      None

Crystal French,
Vice President    None
Hazem Gamal,
Assistant Vice President      None
Dan P. Gangemi,
Vice President    None

Dan Gagliardo,

Assistant Vice President      Formerly an Assistant Vice President with
Mitchell Hutchins (January 2000-October 2000).
Subrata Ghose,
Assistant Vice President      None

Charles W. Gilbert,
Assistant Vice President      None

Alan C. Gilston,
Vice President    None
Sharon M. Giordano-Auleta,
Assistant Vice President      None
Jill E. Glazerman,
Vice President    None

Paul M. Goldenberg,
Vice President    None
Mike Goldverg,
Assistant Vice President      None

Bejamin J. Gord,
Vice President                Vice President of HarbourView Asset Management
Corporation. Formerly Executive Director with Miller Anderson Sherrerd, a
division of Morgan Stanley Investment Management. (April 1992-March 2002).
Laura Granger,
Vice President    None

Robert Grill,

Senior Vice President         None
Satish Gupta,
Vice President                None

Robert Guy,
Senior Vice President         None
David Hager,
Vice President    None
Robert Haley,

Assistant Vice President      None
Marilyn Hall,
Vice President    None
Ping Han,
Assistant Vice President      None
Kelly Haney,
Assistant Vice President      None
Neil Hanson,
Vice President                None
Shari Harley,
Assistant Vice President      None
Steve Hauenstein,
Assistant Vice President      None
Thomas B. Hayes,
Vice President    None
Saba Hekmat,
Assistant Vice President      Formerly Director, Credit Research Analyst at
MetLife Investments (July 1996-October 2002).
Michael Henry,
Assistant Vice President      None
Catherine Heron,
Assistant Vice President      None
Dennis Hess,
Assistant Vice President      None
Dorothy F. Hirshman,
Vice President    None
Daniel Hoelscher,
Assistant Vice President      None

Scott T. Huebl,
Vice President                Assistant Vice President of OppenheimerFunds
Legacy Program.
Margaret Hui,

Assistant Vice President      None
John Huttlin,
Vice President                None
Edward Hrybenko,
Vice President                None

James G. Hyland,
Assistant Vice President      None

Steve P. Ilnitzki,
Senior Vice President         None

Kathleen T. Ives,

Vice President & Assistant Counsel  Vice President of OppenheimerFunds
Distributor, Inc.;Shareholder Financial Services, Vice President and
Assistant Secretary of Shareholder Services, Inc.; Assistant Secretary
ofandProgram;  OppenheimerFunds Legacy Program and Shareholder Financial
Services, Inc.

William Jaume,

Vice President                Senior Vice President and Chief Compliance
Officer (since April 2000) of HarbourView Asset Management Corporation; and
of OFI Institutional Asset Management, Inc. (since February 2001).

Frank V. Jennings,
Vice President    None

John Jennings,
Vice President    None
John Michael Johnson,
Assistant Vice President      Formerly Vice President, Senior
Analyst/Portfolio Manager at Aladdin Capital Holdings Inc. (February 2001-May
2002) prior to which he was Vice President and Senior Analyst at Merrill
Lynch Investment Managers (October 1996-February 2001).
Lewis A. Kamman,
Vice President    None
Charles Kandilis,
Assistant Vice President      Formerly managing director of Kandilis Capital
Management (September 1993-August 2002); CFO of Kandi Corp. (October
1989-August 1993).

Jennifer E. Kane,
Assistant Vice President      None.
Lynn O. Keeshan,
Senior Vice President         None
Thomas W. Keffer,
Senior Vice President         None
Cristina J. Keller,
Vice President                Vice President of OppenheimerFunds Distributor,
Inc.
Michael Keogh,
Vice President    None
Garrett K. Kolb,
Assistant Vice President      None
Walter G. Konops,
Assistant Vice President      None
Avram D. Kornberg,
Senior Vice President         None

James Kourkoulakos,
Vice President                None
Brian Kramer,
Assistant Vice President      None
Tracey Lange,
Vice President                None
John Latino,
Assistant Vice President      Formerly a Senior Trader/Portfolio Engineer at
Jacobs Levy Equity Management (June 1996-August 2002)..

Guy E. Leaf,

Vice President                Formerly a Vice President of Merrill Lynch
(January 2000-September 2001).
Christopher M. Leavy,
Senior Vice President         None

Dina C. Lee,

Assistant Vice President & Assistant Counsel
None
Dana Lehrer,
Assistant Vice President      None
Laura Leitzinger,

Vice President                Vice President of Shareholder Financial
Services, Inc.
Michael S. Levine,
Vice President    None
Gang Li,
Assistant Vice President      None
Shanquan Li,
Vice President    None
Mitchell J. Lindauer,

Vice President & Assistant General Counsel
None

Bill Linden,
Assistant Vice President      None
Malissa B. Lischin,
Assistant Vice President      Assistant Vice President of OppenheimerFunds
Distributor, Inc.
Reed Litcher,
Vice President    None
David P. Lolli,
Assistant Vice President      None
Daniel G. Loughran
Vice President: Rochester Division
None
Patricia Lovett,
Vice President                Vice President of Shareholder Financial
Services, Inc. and Senior Vice President of Shareholder Services, Inc.

Steve Macchia,
Vice President    None
Michael Magee,
Vice President                None
Jerry Madzij,
Assistant Vice President      None
Angelo G. Manioudakis
Senior Vice President         Senior Vice President of HarbourView Asset
Management Corporation. Formerly Executive Director and portfolio manager for
Miller, Anderson & Sherrerd, a division of Morgan Stanley Investment
Management (August 1993-April 2002).
Marianne Manzolillo,
Assistant Vice President      None
LuAnn Mascia,
Vice President                None
Philip T. Masterson,
Vice President & Assistant Counsel
None
Elizabeth McCormack,
Assistant Vice President      Assistant Secretary of HarbourView Asset
Management Corporation.
Charles L. McKenzie,
Senior Vice President         Senior Vice President of HarbourView Asset
Management Corporation and OFI Institutional Asset Management Corporation.
Joseph McGovern,
Assistant Vice President      None

Lisa Migan,
Assistant Vice President      None
Andrew J. Mika,
Senior Vice President         None
Joy Milan,
Vice President    None
Denis R. Molleur,

Vice President & Senior Counsel
None
Nikolaos D. Monoyios,
Vice President    None
Charles Moon,
Vice President                Vice President of HarbourView Asset Management
Corporation. Formerly an Executive Director and Portfolio Manager with Miller
Anderson & Sherrerd, a division of Morgan Stanley Investment Management (June
1999-March 2002).
Stacey Morrell,
Vice President                None

John Murphy,

Chairman, President, Chief Executive Officer & DirectorDirector of
OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation,
HarbourView Asset Management Corporation, OFI Private Investments, Inc., OFI
Institutional Asset Management, Inc. and Tremont Advisers, Inc.; Director
(Class A) of Trinity Investments Management Corporation; President and
Director of Oppenheimer Acquisition Corp., Oppenheimer Partnership Holdings,
Inc., Oppenheimer Real Asset Management, Inc.; Chairman and Director of
Shareholder Financial Services, Inc. and Shareholder Services, Inc.;
Executive Vice President of MassMutual Life Insurance Company; director of
DLB Acquisition Corp.

Thomas J. Murray,
Vice President    None

Kenneth Nadler,
Vice President    None
Christina Nasta,
Assistant Vice President      None
David Negri,

Senior Vice President         Senior Vice President of HarbourView Asset
Management Corporation.
Richard Nichols,
Vice President    None
Barbara Niederbrach,

Assistant Vice President      None
William Norman,
Assistant Vice President      None

Raymond C. Olson,
Assistant Vice President      Assistant Vice President and Treasurer of
OppenheimerFunds Distributor, Inc.; Treasurer of Centennial Asset Management
Corporation.
Frank J. Pavlak,
Vice President    None
David P. Pellegrino,
Vice President    None
Allison C. Pells,

Assistant Vice President      None
Susan Pergament,
Assistant Vice President      None
Brian Petersen,
Assistant Vice President      None
James F. Phillips,
Vice President    None
Gary Pilc,
Assistant Vice President
Peter E. Pisapia,
Assistant Vice President & Assistant CounselFormerly, Associate Counsel at
SunAmerica Asset Management Corp. (December 2000-December 2002).
Raghaw Prasad,
Assistant Vice President      Formerly Associate Vice President with
Prudential Securities New York (January 2001-November 2001) prior to which he
was a Director/Analytics with Prudential Investments New Jersey (April
1997-November 2001).
Jane C. Putnam,
Vice President    None
Michael E. Quinn,
Vice President                None
Heather Rabinowitz,
Assistant Vice President      None

Julie S. Radtke,
Vice President    None
Norma J. Rapini,
Assistant Vice President:
Rochester Division            None
Thomas P. Reedy,
Vice President                Vice President (since April 1999) of
HarbourView Asset Management Corporation.

Brian N. Reid,
Assistant Vice President      Formerly an Assistant Vice President with Eaton
Vance Management (January 2000-January 2002).
Marc Reinganum,
Vice President                Formerly (until August 2002) Vaughn Rauscher
Chair in Financial Investments and Director, Finance Institute of Southern
Methodist University, Texas.

Kristina Richardson,
Assistant Vice President      None

Claire Ring,
Assistant Vice President      None
David Robertson,

Senior Vice President         Senior Vice President of OppenheimerFunds
Distributor, Inc.
Rob Robis,
Assistant Vice President      None
Antoinette Rodriguez,
Assistant Vice President      None

Stacey Roode,
Vice President                Formerly, Assistant Vice President of Human
Resources of OFI (200-July 2002)

Jeffrey S. Rosen,
Vice President    None
Richard H. Rubinstein,
Senior Vice President         None
James H. Ruff,

Executive Vice President      President and Director of OppenheimerFunds
Distributor, Inc. and Centennial Asset Management Corporation; Executive Vice
President of OFI Private Investments, Inc.

Andrew Ruotolo

Executive Vice President and Director     Director, Treasurer and Chief
Financial Officer of Oppenheimer Acquisition Corp.; President and director of
Shareholder Services, Inc. and Shareholder Financial Services, Inc.; Director
(Class A) of Trinity Investment Management Corporation; Chairman of the
Board, Chief Executive Officer, President and Director or OFI Trust Company.

Rohit Sah,

Assistant Vice President      None
Valerie Sanders,
Vice President    None
Karen Sandler,
Assistant Vice President      None
Tricia Scarlata,
Assistant Vice President      Formerly, Marketing Manager of
OppenheimerFunds, Inc. (April 2001-August 2002); Client Service Support
Manager for Sanford C. Bernstein (December 1999-April 2001)
Rudi Schadt,
Vice President                Formerly a consultant for Arthur Andersen
(August 2001-February 2002); director, senior quantitative analyst at Brinson
Partners (September 2000,April 2001).
Jeffrey R. Schneider,
Vice President    None
Ellen P. Schoenfeld,
Vice President    None
Maria Schulte,
Assistant Vice President      None
David Schultz,
Senior Vice President         Chief Executive Officer, President & Senior
Managing Director & Director of OFI Institutional Asset Management, Inc. and
HarbourView Asset Management Corporation; Director (Class A) and Chairman of
Trinity Investment Management Corporation; Director of Oppenheimer Trust
Company.
Scott A. Schwegel,
Assistant Vice President      None
Allan P. Sedmak
Assistant Vice President      None
Jennifer L. Sexton,
Vice President                Vice President of OFI Private Investments, Inc.
Martha A. Shapiro,
Vice President    None
Navin Sharma,
Vice President                Formerly, Manager at BNP Paribas Cooper Neff
Advisors (May 2001-April 2002) prior to which he was Development Manager at
Reality Online/Reuters America Inc. (June 2000-May 2001).
Steven J. Sheerin,
Vice President                Formerly consultant with Pricewaterhouse
Coopers (November 2000-May 2001).
Bonnie Sherman,
Assistant Vice President      None
David C. Sitgreaves,
Assistant Vice President      None
Edward James Sivigny
Assistant Vice President      Formerly a Director for ABN Amro Securities
(July 2001-July 2002) prior to which he was Associate Director for Barclays
Capital (1998-July 2001).
Enrique H. Smith,
Assistant Vice President      Formerly a business analyst with Goldman Sachs
(August 1999-August 2001).
Richard A. Soper,
Vice President    None
Louis Sortino,
Assistant Vice President:
Rochester Division            None
Keith J. Spencer,
Vice President    None
Marco Antonio Spinar,
Assistant Vice President      Formerly, Director of Business Operations at
AOL Time Warner, AOL Time Warner Book Group (June 2000-December 2001).
Richard A. Stein,
Vice President: Rochester Division
None
Arthur P. Steinmetz,
Senior Vice President         Senior Vice President of HarbourView Asset
Management Corporation.
Jayne M. Stevlingson,
Vice President    None
Gregory J. Stitt,
Vice President    None
John P. Stoma,
Senior Vice President         Senior Vice President of OppenheimerFunds
Distributor, Inc.
Wayne Strauss,
Assistant Vice President:
Rochester Division            None
Michael Stricker,
Vice President    None
Deborah A. Sullivan,
Assistant Vice President,
Assistant Counsel             Since December 2001, Secretary of Oppenheimer
Trust Company.
Mary Sullivan,
Assistant Vice President      None
Kevin L. Surrett,
Assistant Vice President      None
Michael Sussman,
Vice President                None
Susan B. Switzer,
Vice President    None
Anthony A. Tanner,
Vice President: Rochester Division
None
Martin Telles,
Senior Vice President         None
Paul Temple,
Vice President    Formerly a Vice President of Merrill Lynch (October
2001-January 2002) prior to which he was a Vice President with
OppenheimerFunds, Inc. (May 2000-October 5, 2001).
Vincent Toner,
Assistant Vice President      None
Eamon Tubridy,
Assistant Vice President      None
Keith Tucker,
Assistant Vice President      None
James F. Turner,
Vice President                Formerly portfolio manager for Technology
Crossover Ventures (May 2000-March 2001).
Cameron Ullyat,
Assistant Vice President      None
Angela Utaro,
Assistant Vice President:
Rochester Division            None
Tanya Valency,
Vice President                None
Mark S. Vandehey,
Vice President                Vice President of OppenheimerFunds Distributor,
Inc., Centennial Asset Management Corporation and Shareholder Services, Inc.
Maureen Van Norstrand,
Assistant Vice President      None
Vincent Vermette,
Assistant Vice President      Assistant Vice President of OppenheimerFunds
Distributor, Inc.
Phillip F. Vottiero,
Vice President    None
Samuel Sloan Walker,
Vice President                Vice President of HarbourView Asset Management
Corporation.
Teresa M. Ward,
Vice President                Vice President of OppenheimerFunds Distributor,
Inc.
Jerry A. Webman,
Senior Vice President         Senior Vice President of HarbourView Asset
Management Corporation.
Christopher D. Weiler,
Assistant Vice President:
Rochester Division            None
Barry D. Weiss,
Vice President    None
Melissa Lynn Weiss,
Vice President                Formerly an Associate at Hoguet Newman & Regal,
LLP (January 1998-May 2002).
Christine Wells,
Vice President    None
Joseph J. Welsh,
Vice President    Vice President of HarbourView Asset Management Corporation.
Diederick Wermolder,
Vice President                Director of OppenheimerFunds International
Ltd.; Senior Vice President (Managing Director of the International Division)
of OFI Institutional Asset Management, Inc.
Catherine M. White,
Assistant Vice President      Assistant Vice President of OppenheimerFunds
Distributor, Inc. Formerly, Assistant Vice President with Gruntal & Co. LLC
(September 1998 - October 2000); member of the American Society of Pension
Actuaries (ASPA) since 1995.
William L. Wilby,
Senior Vice President         Formerly Senior Vice President of HarbourView
Asset Management Corporation (May 1999-July 2002).
Donna M. Winn,
Senior Vice President         President, Chief Executive Officer and Director
of OFI Private Investments, Inc.; Director and President of OppenheimerFunds
Legacy Program; Senior Vice President of OppenheimerFunds Distributor, Inc.
Kenneth Winston,
Senior Vice President         Formerly, principal at Richards & Tierney, Inc.
(until June 2001).
Philip Witkower,
Senior Vice President         None
Brian W. Wixted,
Senior Vice President and
Treasurer                     Treasurer of HarbourView Asset Management
Corporation; OppenheimerFunds International Ltd., Oppenheimer Partnership
Holdings, Inc., Oppenheimer Real Asset Management Corporation, Shareholder
Services, Inc., Shareholder Financial Services, Inc., OFI Private
Investments, Inc. and OFI Institutional Asset Management, Inc.; Treasurer and
Chief Financial Officer of Oppenheimer Trust Company; Assistant Treasurer of
Oppenheimer Acquisition Corp. and OppenheimerFunds Legacy Program.
Carol Wolf,
Senior Vice President         Serves on the Board of the Colorado Ballet.
Kurt Wolfgruber,
Senior Vice President         Director of Tremont Advisers, Inc. (as of
January 2002).
Caleb C. Wong,
Vice President    None
Edward C. Yoensky,
Assistant Vice President      None
Jill Zachman,
Vice President: Rochester Division
None
Lucy Zachman,
Assistant Vice President      None
Robert G. Zack
Senior Vice President and
General Counsel               General Counsel and Director of
OppenheimerFunds Distributor, Inc.; General Counsel of Centennial Asset
Management Corporation; Senior Vice President and General Counsel of
HarbourView Asset Management Corporation and OFI Institutional Asset
Management, Inc.; Senior Vice President, General Counsel and Director of
Shareholder Financial Services, Inc., Shareholder Services, Inc., OFI Private
Investments, Inc. and Oppenheimer Trust Company; Vice President and Director
of Oppenheimer Partnership Holdings, Inc.; Secretary of OAC Acquisition
Corp.; Director and Assistant Secretary of OppenheimerFunds International
Ltd.; Director of Oppenheimer Real Asset Management, Inc.; Vice President of
OppenheimerFunds Legacy Program.
Neal A. Zamore,
Vice President    None
Mark D. Zavanelli,
Vice President    None
Alex Zhou,
Assistant Vice President      None
Arthur J. Zimmer,
Senior Vice President         Senior Vice President (since April 1999) of
HarbourView Asset Management Corporation.


The Oppenheimer Funds include the following:

Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust

Limited Term New York Municipal Fund (Rochester Portfolio Series)
Oppenheimer AMT-Free New York Municipals
Oppenheimer Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Capital Preservation Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Concentrated Growth Fund
Oppenheimer Convertible Securities Fund (Bond Fund Series)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Europe Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer High Yield Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Limited Term Municipal Fund (a series of Oppenheimer Municipal
Fund)
Oppenheimer Main Street Growth & Income Fund (a series of Oppenheimer Main

   Street Funds, Inc.
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer MidCap Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multiple Strategies Fund
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust (3 series):
     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals
Oppenheimer Municipal Bond Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)
     Oppenheimer Quest Balanced Value Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small Cap Value Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Select Managers (6 series):
     Gartmore Millennium Growth Fund II
     Jennison Growth Fund
     Mercury Advisors Focus Growth Fund
     Mercury Advisors S&P 500 Index Fund
     QM Active Balanced Fund
     Salomon Brothers Capital Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (2 series):
     Oppenheimer Disciplined Allocation Fund
     Oppenheimer Value Fund
Oppenheimer Special Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Tremont Market Neutral Fund LLC
Oppenheimer Tremont Opportunity Fund LLC
Oppenheimer Trinity Core Fund
Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Trinity Value Fund
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (10 series):
     Oppenheimer Aggressive Growth Fund/VA
     Oppenheimer Bond Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Growth & Income Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Multiple Strategies Fund/VA
     Oppenheimer Strategic Bond Fund/VA

Panorama Series Fund, Inc. (4 series):
     Growth Portfolio
     Government Securities Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio

Rochester Fund Municipals


The address of the Oppenheimer funds listed above, Shareholder Financial
Services, Inc., Shareholder Services, Inc., OppenheimerFunds Services,
Centennial Asset Management Corporation, Centennial Capital Corp.,
Oppenheimer Real Asset Management, Inc. and OppenheimerFunds Legacy Program
is 6803 South Tucson Way, Centennial, Colorado 80112-3924.

The address of OppenheimerFunds, Inc., OppenheimerFunds Distributor, Inc.,
HarbourView Asset Management Corporation, Oppenheimer Partnership Holdings,
Inc., Oppenheimer Acquisition Corp., OFI Private Investments, Inc., OFI
Institutional Asset Management, Inc. and Oppenheimer Trust Company is 498
Seventh Avenue, New York, New York 10018.


The address of Tremont Advisers, Inc. is 555 Theodore Fremd Avenue, Suite
206-C, Rye, New York 10580.

The address of OppenheimerFunds International Ltd. is Bloc C, Irish Life
Center, Lower Abbey Street, Dublin 1, Ireland.

The address of Trinity Investment Management Corporation is 301 North Spring
Street, Bellefonte, Pennsylvania 16823.

Item 27. Principal Underwriter

(a)   OppenheimerFunds Distributor, Inc. is the Distributor of the
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which OppenheimerFunds, Inc. is
the investment adviser, as described in Part A and B of this Registration
Statement and listed in Item 26(b) above (except Oppenheimer Multi-Sector
Income Trust and Panorama Series Fund, Inc.) and for MassMutual Institutional
Funds.

(b)   The directors and officers of the Registrant's principal underwriter
are:


Name & Principal
Business Address  Position & Office
with Underwriter  Position and Office
with Registrant
Robert Agan(1)                 Vice President            None
Janette Aprilante(1)           Secretary                 None
Jason R. Bach
3264 Winthrop Cricle
Marietta, GA 30067             Vice President            None
James Barker                   Vice President            None
Kathleen Beichert(1)           Vice President            None
Gabriella Bercze(2)            Vice President            None
Douglas S. Blankenship
17011 Woodbark
Spring, TX 77379               Vice President            None
Tracey Blinzler(1)             Assistant Vice President  None
Kevin Bonner(1)                Vice President            None
L. Scott Brooks(2)             Vice President            None
Kevin E. Brosmith
170 Phillip Court
Lake Bluff, IL 60044           Senior Vice President     None
Jeffrey W. Bryan(2)            Vice President            None
Susan Burton
412 Towne Green Circle
Addison, TX 75001              Vice President            None
Kathleen Mary Byron
6 Dahlia Drive
Irvine, CA 92618               Vice President            None
Andrew Chonofsky               Vice President            None
Robert A. Coli
12 White Tail Lane
Bedminster, NJ 07921           Vice President            None
Jill E. Crockett(2)            Assistant Vice President  None
Jeffrey D. Damia(2)            Vice President            None
John Davis(2)                  Assistant Vice President  None
Stephen J. Demetrovits(2)      Vice President            None
Joseph A. DiMauro
244 McKinley Avenue
Grosse Pointe Farms, MI 48236  Vice President            None
Steven Dombrower(w)            Vice President            None
George P. Dougherty
4090 Redbud Circle
Doylestown, PA 18901           Vice President            None
Cliff H. Dunteman
1196 Fieldstone Dr.
Crystal Lake, IL 60014-1642    Vice President            None
John Eiler(2)                  Vice President            None
Kent M. Elwell
35 Crown Terrace
Yardley, PA 19067              Vice President            None
Gregg A. Everett
7124 Trysail Circle
Tampa, FL 33607                Vice President            None
George R. Fahey
9 Townview Court
Flemington, NJ 08822           Vice President            None
Eric C. Fallon
10 Worth Circle
Newton, MA 02458               Vice President            None
Katherine P. Feld(2)           Vice President            Assistant Secretary
Mark J. Ferro(2)               Vice President            None
Ronald H. Fielding(3)          Vice President            None
Patrick W. Flynn (1)           Senior Vice President     None
John E. Forrest(2)             Senior Vice President     None
John ("J) Fortuna(2)           Vice President            None
P. Lyman Foster(2)             Senior Vice President     None
Luiggino J. Galleto
10302 Riesling Court
Charlotte, NC 28277            Vice President            None
Michelle M. Gans

2700 Polk Street, Apt. #9

San Francisco, CA 94109        Vice President            None
Lucio Giliberti
6 Cyndi Court
Flemington, NJ 08822           Vice President            None
Raquel Granahan(2)             Vice President            None
Ralph Grant(2)                 Senior Vice President     None
Michael D. Guman
3913 Pleasant Avenue
Allentown, PA 18103            Vice President            None
Clifford W. Heidinger
90 Gates Street
Portsmouth, NH 03801           Vice President            None
Phillipe D. Hemery
184 Park Avenue
Rochester, NY 14607            Vice President            None
Elyse R. Jurman Herman

1194 Hillsboro Mile, Villa 51

Hillsboro Beach, FL  33062     Vice President            None
Wendy G. Hetson
4 Craig Street
Jericho, NY 11753              Vice President            None
Kristen L. Heyburn

2315 Mimosa Drive #2

Houston, TX 77019              Vice President            None
William E. Hortz(2)            Vice President            None
Edward Hrybenko(2)             Vice President            None
Brian F. Husch(2)              Vice President            None
Richard L. Hymes(2)            Assistant Vice President  None
Kathleen T. Ives(1)            Vice President            Assistant Secretary
Eric K. Johnson
28 Oxford Avenue
Mill Valley, CA 94941          Vice President            None
Mark D. Johnson
15792 Scenic Green Court
Chesterfield, MO 63017         Vice President            None
John S. Kavanaugh

2 Cervantes, Apt. #301

San Francisco, CA 94123        Vice President            None
Christina J. Keller(2)         Vice President            None
Brian G. Kelly
60 Larkspur Road
Fairfield, CT 06430            Vice President            None
Michael Keogh(2)               Vice President            None
Lisa Klassen(1)                Assistant Vice President  None
Richard Klein
4820 Fremont Avenue So.
Minneapolis, MN 55409          Senior Vice President     None
Richard Knott(2)               Vice President            None
Dean Kopperud(2)               Senior Vice President     None
Brent A. Krantz

P. O. Box 1313

Seahurst, WA 98062             Senior Vice President     None
David T. Kuzia
9697 S. Golden Eagle Dr.
Highlands, CO 80126            Vice President            None
Tracey Lange(2)                Vice President            None
Paul R. LeMire                 Vice President            None
Dawn Lind
21 Meadow Lane
Rockville Centre, NY 11570     Vice President            None
Malissa Lischin(2)             Assistant Vice President  None
James V. Loehle
30 Wesley Hill Lane
Warwick, NY 10990              Vice President            None
Montana Low                    Vice President            None
John J. Lynch
5341 Ellsworth
Dallas, TX 75206               Vice President            None
Mark Macken
462 Lincoln Avenue
Sayville, NY 11782             Vice President            None
Michael Magee(2)               Vice President            None
Steven C. Manns
1941 W. Wolfram
Chicago, IL 60657              Vice President            None
Todd A. Marion
3 St. Marks Place
Cold Spring Harbor, NY 11724   Vice President            None
LuAnn Mascia(2)                Assistant Vice President  None
Theresa-Marie Maynier
2421 Charlotte Drive
Charlotte, NC 28203            Vice President            None
Anthony P. Mazzariello
704 Beaver Road
Leetsdale, PA 15056            Vice President            None
John C. McDonough
3812 Leland Street
Chevy Chase, MD 20815          Vice President            None
Kent C. McGowan
18424 12th Avenue West
Lynnwood, WA 98037             Vice President            None
Mark Mezzanotte                Vice President            None
Robert Moser                   Vice President            None
John V. Murphy(2)              Director                  President, Principal
Executive Officer, Chairman & Manager
Wendy Jean Murray
32 Carolin Road
Upper Montclair, NJ 07043      Vice President            None
Christina Nasta(2)             Assistant Vice President  None
Kevin P. Neznek(2)             Vice President            None
Chad V. Noel
2408 Eagleridge Drive
Henderson, NV 89014            Vice President            None
Bradford Norford               Vice President            None
Raymond C. Olson(1)            Assistant Vice President & Treasurer
None
Brian C. Perkes
8734 Shady Shore Drive
Frisco, TX 75034               Vice President            None
Charles K. Pettit
22 Fall Meadow Drive
Pittsford, NY 14534            Vice President            None
Gazell Pettway                 Vice President            None
Elaine Puleo-Carter(2)         Senior Vice President     None
Christopher L. Quinson
19 Cayuga Street
Rye, NY 10580                  Vice President            None
Minnie Ra
100 Dolores Street, #203
Carmel, CA 93923               Vice President            None
Heather Rabinowitz(2)          Assistant Vice President  None
Gary D. Rakan
25031 Woodridge Triangle
Farmington, MI 48335           Vice President            None
Dusting Raring                 Vice President            None
Michael A. Raso
16 N. Chatsworth Ave., Apt. 301
Larchmont, NY 10538            Vice President            None
Douglas Rentschler
677 Middlesex Road
Grosse Pointe Park, MI 48230   Vice President            None
Louis H. Reynolds(2)           Vice President            None
Michelle Simone Richter(2)     Vice President            None
Ruxandra Risko(2)              Vice President            None
David R. Robertson(2)          Senior Vice President     None
Kenneth A. Rosenson
24753 Bantage Point Terr.
Malibu, CA 90265               Vice President            None
James H. Ruff(2)               President & Director      None
William R. Rylander
85 Evergreen Road
Vernon, CT 06066               Vice President            None
Thomas Sabow(2)                Vice President            None
John Saunders                  Vice President            None
Tonya Sax                      Vice President            None
Alfredo Scalzo
9616 Lake Chase Island Way
Tampa, FL 33626                Vice President            None
Thomas Schmitt                 Vice President            None
Michael Sciortino
785 Beau Chene Drive
Mandeville, LA 70471           Vice President            None
Eric Sharp
862 McNeill Circle
Woodland, CA 95695             Vice President            None
Debbie Simon(2)                Vice President            None
Douglas Bruce Smith
808 South 194th Street
Seattle,WA 98148               Vice President            None
Bryan Stein(2)                 Vice President            None
John Stoma(2)                  Senior Vice President     None
Brian C. Summe
239 N. Colony Drive
Edgewood, KY 41017             Vice President            None
Michael Sussman(2)             Vice President            None
George T. Sweeney
5 Smoke House Lane
Hummelstown, PA 17036          Senior Vice President     None
Scott McGregor Tatum
704 Inwood
Southlake, TX 76092            Vice President            None
James Taylor(2)                Assistant Vice President  None
Martin Telles(2)               Senior Vice President     None
David G. Thomas
1328 N. Cleveland Street
Arlington, VA 22201            Vice President            None
Bryan K.Toma
14575 S. Gallery
Olathe, KS 66062               Vice President            None
Floyd A. Tucker
1930 W. Barry Ave., #2
Chicago, IL 60657              Vice President            None
Tanya Valency(2)               Vice President            None
Mark Vandehey(1)               Vice President            None
Vincent Vermete                Assistant Vice President  None
Teresa Ward(1)                 Vice President            None
Michael J. Weigner
4905 W. San Nicholas Street
Tampa, FL 33629                Vice President            None
Donn Weise
3249 Earlmar Drive
Los Angeles, CA 90064          Vice President            None
Catherine White(2)             Assistant Vice President  None
Thomas Wilson(2)               Vice President            None
Donna Winn(2)                  Senior Vice President     None
Philip Witkower(2)             Senior Vice President     None
Cary Patrick Wozniak
18808 Bravata Court
San Diego, CA 92128            Vice President            None
Gregor D. Yuska
16035 Canterbury Estates Dr.
Ellisville, MO 63021           Vice President            None
Robert G. Zack(2)              General Counsel & Director
Secretary

(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)498 Seventh Avenue, New York, NY 10018
(3)350 Linden Oaks, Rochester, NY 14623


(c)   Not applicable.








SIGNATURES


Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on
the 21st day of February, 2003.


            ROCHESTER FUND MUNICIPALS

      By:  /s/ John V. Murphy*
      -------------------------------------------
      John V. Murphy, President

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:

Signatures  Title Date
----------  ----- ----


/s/ Thomas W. Courtney* Chairman of the   February 21, 2003
------------------------------      Board of Trustees
Thomas W. Courtney

/s/ John V. Murphy*     President & Principal
------------------------------      Executive Officer February 21, 2003
John V. Murphy


/s/ Brian W. Wixted*    Treasurer and Chief

--------------------------    Financial and     February 21, 2003
Brian W. Wixted   Accounting Officer


/s/ John Cannon*

---------------------   Trustee     February 21, 2003
John Cannon

/s/ Paul Y. Clinton*    Trustee     February 21, 2003

-----------------------
Paul Y. Clinton

/s/ Robert G. Galli*

------------------------      Trustee     February 21, 2003
Robert G. Galli

/s/ Lacy B. Herrmann*   Trustee     February 21, 2003

---------------------------
Lacy B. Herrmann


/s/ Brian Wruble* Trustee     February 21, 2003

---------------------
Brian Wruble

*By: /s/ Robert G. Zack
-----------------------------------------

Robert G. Zack, Attorney-in-Fact

FORM N-1A

ROCHESTER FUND MUNICIPALS


Registration Statement No. 27


EXHIBIT INDEX


Item No.          Description
----------        --------------


23(a)(iv)   Amendment No. 4 dated 6/10/02 to the Amended and Restated
Agreement and Declaration of Trust dated 1/26/95


23(j) Independent Auditor's Consent for KPMG LLP


23(m)(i)    Amended and Restated Service Plan and Agreement with Oppenheimer
Funds Distributor, Inc. dated 6/14/02 for Class A Shares



























365_PartC-B(Feb03).doc