Rochester Fund Municipals

497 1 prospectus.htm PROSPECTUS Rochester Fund Municipals

Prospectus dated April 30, 2006

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.

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Contents

About the Fund
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The Fund's Investment Objective and Principal Investment 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
Checkwriting
By Mail
By Wire
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 Principal Investment 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 is a Municipal Security? A municipal 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.

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, and
o territories, commonwealths and possessions of the United States (for example, Puerto
Rico, Guam and the Virgin Islands) that pay interest that is exempt (in the opinion
of the issuer's legal counsel when the security is issued) from federal income tax
and New York State and New York City personal income taxes.

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 of New York,
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.

The portfolio managers may consider selling a security if any of these factors no
longer applies to a security purchased for the Fund.

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. The share prices of the Fund will change daily based on changes in
market prices of securities and market conditions and in response to other economic events.

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.

RISKS OF FOCUSING INVESTMENTS IN NEW YORK MUNICIPAL SECURITIES.
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. Having a high
percentage of its assets invested in the municipal securities of a single state and its
municipal subdivisions could result in fluctuations in the Fund's share prices and income
due to economic, regulatory or political conditions in New York. Therefore, the value of
the Fund's portfolio is vulnerable to changes in economic, regulatory or 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. The Statement of Additional Information contains
further information concerning special investment considerations for 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, tobacco settlement bonds or hospital/health care
bonds or highway/railway bonds for example, and therefore will be vulnerable to economic or
legislative events that affect issuers in particular segments of the municipal securities
market.

Tobacco Settlement Revenue Bonds. The Fund may invest a significant portion of its assets
in tobacco settlement revenue bonds. Tobacco settlement revenue bonds are secured by an
issuing state's proportionate share in the Master Settlement Agreement ("MSA"). The MSA is
an agreement, reached out of court in November 1998 between 46 states and six other U.S.
jurisdictions (including Puerto Rico and Guam), and the four largest U.S. tobacco
manufacturers (Philip Morris, RJ Reynolds, Brown & Williamson, and Lorillard).
Subsequently, a number of smaller tobacco manufacturers signed on to the MSA, bringing the
current combined market share of participating tobacco manufacturers to approximately 92%.
The MSA provides for payments annually by the manufacturers to the states and jurisdictions
in perpetuity, in exchange for releasing all claims against the manufacturers and a pledge
of no further litigation. The MSA established a base payment schedule and a formula for
adjusting payments each year. Tobacco manufacturers pay into a master escrow trust based on
their market share, and each state receives a fixed percentage of the payment as set forth
in the MSA.

A number of states have securitized the future flow of those payments by selling bonds
pursuant to indentures, some through distinct governmental entities created for such
purpose. The bonds are backed by the future revenue flow that is used for principal and
interest payments on the bonds. Annual payments on the bonds, and thus risk to the Fund,
therefore, are highly dependent on the receipt of future settlement payments to the state
or its governmental entity, as well as several other factors. The actual amount of future
settlement payments is dependent on many factors, including, but not limited to, annual
domestic cigarette shipments, cigarette consumption, inflation and the financial capability
of participating tobacco companies. As a result, payments made by tobacco manufacturers
could be reduced if the decrease in tobacco consumption is significantly greater than the
forecasted decline.

Because tobacco settlement bonds are backed by payments from the tobacco manufacturers, and
generally not by the credit of the state or local government issuing the bonds, their
creditworthiness depends on the ability of tobacco manufacturers to meet their obligations.
A market share loss by the MSA companies to non-MSA participating tobacco manufacturers
could also cause a downward adjustment in the payment amounts. A participating manufacturer
filing for bankruptcy also could cause delays or reductions in bond payments, which could
affect the fund's net asset value.

The MSA and tobacco manufacturers have been and continue to be subject to various legal
claims. An adverse outcome to any litigation matters relating to the MSA or affecting
tobacco manufacturers could adversely affect the payment streams associated with the MSA or
cause delays or reductions in bond payments by tobacco manufacturers. The MSA itself has
been subject to legal challenges and has, to date, withstood those challenges. The
Statement of Additional Information contains more detailed information about the Fund's
investments in tobacco settlement revenue bonds.

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 floating rate 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 on 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.

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 below.

o Inverse Floaters. Variable rate bonds known as "inverse floaters" pay interest at
rates that move in the opposite direction of yields on short-term bonds in response
to market changes. As short term interest rates rise, inverse floaters produce less
current income, and their market value can become volatile. As short term interest
rates fall, inverse floaters produce more current income. Inverse floaters are a type
of "derivative security." Some 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. Under certain circumstances, the Fund may enter into an agreement with the
sponsor of an inverse floater that commits the Fund to reimburse the sponsor the
difference between the liquidation value of the underlying security (which is the
basis of the inverse floater) and the principal amount due to the holders of the
floating rate security. Although entering into this type of agreement would expose
the Fund to the risk that it may be required to make a reimbursement of the type
described above, the Fund would usually receive higher interest payments than under a
typical inverse floater and would be able to defer recognizing any loss on an inverse
floater covered by the agreement. The Fund will not invest more than 20% of its total
assets in inverse floaters.

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 the general bond market, changes in the 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, compared to those of a broad-based market index
and the Consumer Price Index. The after-tax returns for the other classes of shares will
vary.

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. 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 December 31 each year)
[See appendix to prospectus for data in bar chart showing the 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 may 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 4.97% (2Qtr'05) and the lowest return (not annualized) before
taxes for a calendar quarter was -2.56% (2Qtr'04).

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Average Annual Total Returns
------------------------------ 5 Years 10 Years
for the periods ended (or life of (or life of
December 31, 2005 1 Year class, if less) class, if less)
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Class A Shares (inception
5/15/86) 3.60% 5.90% 5.71%
Return Before Taxes 3.60% 5.90% 5.71%
Return After Taxes on 4.27% 5.90% 5.73%
Distributions
Return After Taxes on
Distributions and Sale of
Fund Shares
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Lehman Brothers Municipal
Bond Index (reflects no
deduction for fees, expenses
or taxes) 3.51% 5.59% 5.71%(1)
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Consumer Price Index 3.42% 2.49% 2.52%(1)
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Class B Shares (inception 2.77% 5.69% 5.79%
3/17/97)
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Class C Shares (inception 6.78% 6.01% 5.49%
3/17/97)
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Class Y Shares (inception 8.93% 7.07% 7.83%
4/28/00)
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1. From 12/31/95.

The Fund's average annual total returns include applicable sales charges: for Class A, the
current maximum initial sales charge of 4.75%; for Class B, the contingent deferred sales
charge of 5% (1-year) and 2% (5-years); and for Class C, the 1% contingent deferred sales
charge for the 1-year period. There is no sales charge for Class Y. Because Class B shares
convert to Class A shares 72 months after purchase, Class B "life-of-class" performance
does not include any contingent deferred sales charge and uses Class A performance for the
period after conversion. 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 reflect transaction cost, fees, expenses or taxes 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 meant 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,
2005.

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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
Charge (Load) (as % of
the lower of the None(1) 5%(2) 1%(3) None
original offering price
or redemption proceeds)
------------------------------------------------------------------------------

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Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Class A Class B Class C
Class Y
Shares Shares Shares Shares
-----------------------------------------------------------------------
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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 0.12% 0.14% 0.13% 0.12%
-----------------------------------------------------------------------
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Total Annual Operating 0.73% 1.60% 1.59% 0.58%
Expenses
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Expenses may vary in future years. "Other Expenses" include transfer agent fees, custodial
fees, accounting, administrative and legal expenses that the Fund pays. The "Other
Expenses" in the table are based on among other things, the fees the Fund would have paid
if the transfer agent had not waived a portion of its fees under a voluntary undertaking to
the Fund to limit those 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, 2005, the transfer agent fees did not exceed the expense limitation
described above.

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 gradually declines from 5% to 1% in years one through six and is eliminated after
that.
3. Applies to shares redeemed within 12 months of purchase.

Examples. The following examples are intended to help you compare the cost of investing in
the Fund with the cost of investing in other 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 A Shares $546 $698 $863 $1,341
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Class B Shares $664 $809 $1,078 $1,461(1)
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Class C Shares $263 $506 $872 $1,904
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Class Y Shares $59 $186 $325 $728
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--------------------------------------------------------------------------------
If shares are not 1 Year 3 Years 5 Years 10 Years
redeemed:
--------------------------------------------------------------------------------
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Class A Shares $546 $698 $863 $1,341_
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Class B Shares $164 $509 $878 $1,461(1)
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Class C Shares $163 $506 $872 $1,904
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Class Y Shares $59 $186 $325 $728
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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 AND RISKS. 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 and also include debt securities issued by certain
territories, commonwealths, and possessions of the United States). 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. 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.

Under highly unusual circumstances, the Internal Revenue Service may determine that a
municipal bond issued as tax-exempt should in fact be taxable. If the Fund held such
a bond, it might have to distribute taxable income or reclassify as taxable income
previously distributed as tax-free.

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.

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 such as, e.g., tobacco revenue settlement bonds.
Some of these revenue obligations are industrial development bonds and private
activity bonds that pay interest that may be a tax preference for investors subject
to the alternative minimum tax. The Fund selects investments without regard to this
type of tax treatment. 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 financing 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. Although the
obligation may be secured by the leased equipment or facilities, the disposition of
the property in the event of non-appropriation or foreclosure might prove difficult,
time consuming and costly, and may result in a delay in recovering or the failure
fully to recover the original investment. 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.

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. The
Fund also 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. 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.

The Manager relies to some extent on credit ratings by nationally-recognized rating
agencies in evaluating the credit risk of securities selected for the Fund's
portfolio. It also uses 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. If the rating of a security is reduced
after the Fund buys it, the Fund is not required automatically to dispose of that
security. However, the Manager will evaluate those securities to determine whether
to keep them in the Fund's portfolio.

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 generally 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 non-principal
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.

BORROWING FOR LEVERAGE. The Fund can borrow from banks to purchase additional securities, a
technique referred to as "leverage" in amounts up to one-third of its total assets
(including the amount borrowed) less all liabilities and indebtedness other than
borrowings. It may also borrow up to 5% of its total assets for temporary purposes from any
person. 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. The interest on borrowed money is an expense that might reduce the Fund's
yield.

"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.

PORTFOLIO HOLDINGS. The Fund's portfolio holdings are included in semi-annual and annual
reports that are distributed to shareholders of the Fund within 60 days after the
close of the period for which such report is being made. The Fund also discloses its
portfolio holdings in its Statements of Investments on Form N-Q, which are filed with
the Securities and Exchange Commission (the "SEC") no later than 60 days after the
close of the first and third fiscal quarters. These required quarterly filings are
publicly available at the SEC. Therefore, portfolio holdings of the Fund are made
publicly available no later than 60 days after the close of each of the Fund's fiscal
quarters.

A description of the Fund's policies and procedures with respect to the disclosure of
the Fund's portfolio securities is available in the Fund's Statement of Additional
Information.

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 1960. The Manager and its
subsidiaries and controlled affiliates managed more than $215 billion in assets as of March
31, 2006, including other Oppenheimer funds with more than 6 million shareholder accounts.
The Manager is located at Two World Financial Center, 225 Liberty Street, 11th Floor, New
York, New York 10281-1008.

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, 0.46% on the next $3 billion, 0.45% on the
next $3 billion and 0.44% of average daily net assets over $8 billion. For the calendar
year ended December 31, 2005, under the fee schedule then in effect, was 0.46% of average
annual net assets for each class of shares.

A discussion regarding the basis for the Board of Trustees' approval of the Fund's
investment advisory contract is available in the Fund's Annual Report to shareholders for
the year ended December 31, 2005.

Portfolio Managers. The Fund's portfolio is managed by a team of investment professionals,
including Ronald H. Fielding, Daniel G. Loughran, Scott Cottier, Troy Willis, Mark
DeMitry, Marcus Franz and Michael Camarella, who are primarily responsible for the
day-to-day management of the Fund's investments.

Mr. Fielding has been a Vice President and Senior Portfolio Manager of the Fund since
January 1996. Mr. Fielding has been a Senior Vice President of the Manager since
January 1996 and Chairman of the Rochester Division of the Manager since January
1996. He is a portfolio manager and officer of other Oppenheimer Funds. Mr. Fielding
is the lead manager, chief strategist and a trader for the Fund and other Oppenheimer
Funds.

Mr. Loughran has been a Vice President of the Fund since October 2005 and a Senior
Portfolio Manager of the Fund since April 2001. Mr. Loughran has been a Vice
President of the Manager since April 2001. He is a portfolio manager and officer of
other Oppenheimer Funds. Mr. Loughran is the team leader and a trader for the Fund
and other Oppenheimer Funds.

Mr. Cottier has been a Vice President of the Fund since October 2005 and a Senior
Portfolio Manager of the Fund since 2002. Mr. Cottier has been a Vice President of
the Manager since 2002. Prior to joining the Manager in 2002, Mr. Cottier was a
portfolio manager and trader at Victory Capital Management from 1999 to 2002. He is a
senior portfolio manager and officer of other Oppenheimer Funds. Mr. Cottier is also
a trader for the Fund and other Oppenheimer Funds.

Mr. Willis has been Vice President of the Fund since October 2005 and a Senior
Portfolio Manager the Fund since 2005. Mr. Willis was an Associate Portfolio Manager
of the Fund from 2003 to 2005. Prior to joining the Manager in 2003, Mr. Willis was a
Corporate Attorney for Southern Resource Group from 1999 to 2003. He is a senior
portfolio manager and officer of other Oppenheimer Funds Mr. Willis is also a trader
for the Fund and other Oppenheimer Funds.

Mr. DeMitry is a research analyst for the Fund. He has been a research analyst of the
Manager since June 2003. Mr. DeMitry was a credit analyst of the Manager from July
2001 to May 2003 and an Associate Regional Sales Representative of the Manager from
December 2000 to June 2001. Mr. DeMitry is also a trader for the fund and other
Oppenheimer Funds.

Mr. Franz is a research analyst for the Fund. He has been a research analyst of the
Manager since June 2003. Prior to joining the Manager, Mr. Franz was a summer intern
in the Securities Division at TIAA-CREF from June 2002 to September 2002; and Senior
Commercial Credit Analyst at M&T Bank from June 1999 to September 2001. Mr. Franz is
also a trader for the fund and other Oppenheimer Funds.

Mr. Camarella is a research analyst for the Fund. He has been a research analyst of
the Manager since February 2006. Mr. Camarella was a credit analyst of the Manager
from June 2003 to January 2006. Prior to joining the Manager, he was employed as an
Investment Banking Analyst for Wachovia Securities in Charlotte, North Carolina. Mr.
Camarella is also a trader for the fund and other Oppenheimer Funds.

Additional information about the Fund's Portfolio Management Team, regarding compensation,
other accounts managed and their ownership of Fund shares, is provided in the Statement of
Additional Information.

Pending Litigation. A complaint was filed as a putative class action against the Manager
and the Transfer Agent (and other defendants) in the U.S. District Court for the Southern
District of New York on January 10, 2005 and was amended on March 4, 2005. The complaint
alleged, among other things, that the Manager charged excessive fees for distribution and
other costs, and that by permitting and/or participating in those actions, the
Directors/Trustees and the Officers of the funds breached their fiduciary duties to fund
shareholders under the Investment Company Act of 1940 and at common law. The plaintiffs
sought unspecified damages, an accounting of all fees paid, and an award of attorneys' fees
and litigation expenses. In response to motions to dismiss the suit that had been filed by
defendants, seven of the eight counts in the complaint, including the claims against
certain of the Oppenheimer funds, as nominal defendants, and against certain present and
former Directors, Trustees and officers of the funds, and the Distributor, as defendants,
were dismissed with prejudice, by court order dated March 10, 2006, and the remaining count
against the Manager and the Transfer Agent was dismissed with prejudice by court order
dated April 5, 2006. The time in which plaintiffs may file an appeal to those decisions
has not yet lapsed.

OppenheimerFunds, Inc. believes that it is premature to render any opinion as to the
likelihood of an outcome unfavorable to them, the Funds, the Directors/Trustees or the
Officers if the plaintiffs should appeal the decisions of the district court, and that no
estimate can yet be made with any degree of certainty as to the amount or range of any
potential loss. However, OppenheimerFunds believes that the allegations contained in the
complaints are without merit and that if the decisions of the district court are appealed,
there are substantial grounds to sustain the district court's ruling.

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. A broker or dealer may
charge for that service.
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,
Class A shares are your only purchase option. The Distributor will act as your agent
in buying Class A shares. Class B or Class C shares may not be purchased by a new
investor directly from the Distributor without the investor designating another
registered broker-dealer. If a current investor no longer has another broker-dealer
of record for an existing Class B or Class C account, the Distributor is
automatically designated as the broker-dealer of record, but solely for the purpose
of acting as the investor's agent to purchase the shares.
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:
o 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 (after making an 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 "NYSE"), on each day the NYSE is open for
trading (referred to in this Prospectus as a "regular business day"). The NYSE
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 for a class of shares on a "regular business day"
is determined by dividing the value of the Fund's net assets attributable to that
class by the number of shares of that class outstanding on that day. To determine
net asset values, the Fund assets are valued primarily on the basis of current market
quotations. If market quotations are not readily available or do not accurately
reflect fair value for a security (in the Manager's judgment) or if a security's
value has been materially affected by events occurring after the close of the NYSE or
market on which the security is principally traded, that security may be valued by
another method that the Board of Trustees believes accurately reflects the fair
value.

The Board has adopted valuation procedures for the Fund and has delegated the
day-to-day responsibility for fair value determinations to the Manager's Valuation
Committee. Fair value determinations by the Manager are subject to review, approval
and ratification by the Board at its next scheduled meeting after the fair valuations
are determined. In determining whether current market prices are readily available
and reliable, the Manager monitors the information it receives in the ordinary course
of its investment management responsibilities for significant events that it believes
in good faith will affect the market prices of the securities of issuers held by the
Fund. Those may include events affecting specific issuers (for example, a halt in
trading of the securities of an issuer on an exchange during the trading day) or
events affecting securities markets (for example, a foreign securities market closes
early because of a natural disaster).

If, after the close of the principal market on which a security held by the
Fund is traded and before the time as of which the Fund's net asset values are
calculated that day, a significant event occurs that the Manager learns of and
believes in the exercise of its judgment will cause a material change in the value of
that security from the closing price of the security on the principal market on which
it is traded, the Manager will use its best judgment to determine a fair value for
that security.

The Offering Price. To receive the offering price for a particular day, the Distributor or
its designated agent must receive your order, in good order, by the time the NYSE
closes that day. If your order is received on a day when the NYSE 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 NYSE (normally 4:00 p.m.) 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 6
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 most likely invest in 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.

If you 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. The
Distributor will not accept purchase orders of more than $100,000 for Class B shares
or $1 million or more of Class C shares from a single investor. Dealers or other
financial intermediaries purchasing shares for their customers in omnibus accounts
are responsible for compliance with those limits.

o Investing for the Longer Term. If you are investing less than $100,000 for the
longer-term, and do not expect to need access to your money for six 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. 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.

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 a
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
------------------------------------------------------------------------------

Due to rounding, the actual sales charge for a particular transaction may be higher or
lower than the rates listed above.

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.

Can You Reduce Class A Sales Charges? You and your spouse may be eligible to buy Class A
shares of the Fund at reduced sales charge rates set forth in the table above under the
Fund's "Right of Accumulation" or a "Letter of Intent." The Fund reserves the right to
modify or to cease offering these programs at any time.

o Right of Accumulation. To qualify for the reduced Class A sales charge that would
apply to a larger purchase than you are currently making (as shown in the table
above), you can add the value of any Class A, Class B or, Class C shares of the
Fund or other Oppenheimer funds that you or your spouse currently own, or are
currently purchasing, to the value of your Class A share purchase. Your Class A
shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves on
which you have not paid a sales charge will not be counted for this purpose. In
totaling your holdings, you may count shares held in your individual accounts
(including IRAs and 403(b) plans), your joint accounts with your spouse, or
accounts you or your spouse hold as trustees or custodians on behalf of your
children who are minors. A fiduciary can count all shares purchased for a trust,
estate or other fiduciary account that has multiple accounts (including employee
benefit plans for the same employer). If you are buying shares directly from the
Fund, you must inform the Distributor of your eligibility and holdings at the time
of your purchase in order to qualify for the Right of Accumulation. If you are
buying shares through your financial intermediary you must notify your
intermediary of your eligibility for the Right of Accumulation at the time of your
purchase.

To count shares of eligible Oppenheimer funds held in accounts at other
intermediaries under this Right of Accumulation, you may be requested to provide
the Distributor or your current intermediary with a copy of all account statements
showing your current holdings of the Fund or other eligible Oppenheimer funds,
including statements for accounts held by you and your spouse or in retirement
plans or trust or custodial accounts for minor children as described above. The
Distributor or intermediary through which you are buying shares will calculate the
value of your eligible Oppenheimer fund shares, based on the current offering
price, to determine which Class A sales charge rate you qualify for on your
current purchase.

o Letters of Intent. You may also qualify for reduced Class A sales charges by
submitting a Letter of Intent to the Distributor. A Letter of Intent is a written
statement of your intention to purchase a specified value of Class A, Class B or
Class C shares of the Fund or other Oppenheimer funds over a 13-month period. The
total amount of your intended purchases of Class A, Class B and Class C shares
will determine the reduced sales charge rate that will apply to your Class A share
purchases of the Fund during that period. You can choose to include purchases made
up to 90 days before the date that you submit a Letter of Intent. Your Class A
shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves on
which you have not paid a sales charge will not be counted for this purpose.
Submitting a Letter of Intent does not obligate you to purchase the specified
amount of shares. You may also be able to apply the Right of Accumulation to
these purchases.

If you do not complete the Letter of Intent, the front-end sales charge
you paid on your purchases will be recalculated to reflect the actual value
of shares you purchased. A certain portion of your shares will be held in
escrow by the Fund's Transfer Agent for this purpose. Please refer to "How
to Buy Shares - Letters of Intent" in the Fund's Statement of Additional
Information for more complete information.

Other Special Sales Charge Arrangements and Waivers. The Fund and the Distributor offer
other opportunities to purchase shares without front-end or contingent deferred sales
charges under the programs described below. The Fund reserves the right to amend or
discontinue these programs at any time without prior notice.
o Dividend Reinvestment. Dividends and/or capital gains distributions received by a
shareholder from the Fund may be reinvested in shares of the Fund or any of the
other Oppenheimer funds into which shares of the Fund may be exchanged without a
sales charge, at the net asset value per share in effect on the payable date. You
must notify the Transfer Agent in writing to elect this option and must have an
existing account in the fund selected for reinvestment.
o Exchanges of Shares. Shares of the Fund may be exchanged for shares of certain other
Oppenheimer funds at net asset value per share at the time of exchange, without
sales charge, and shares of the Fund can be purchased by exchange of shares of
certain other Oppenheimer funds on the same basis. Please refer to "How to
Exchange Shares" in this Prospectus and in the Statement of Additional Information
for more details, including a discussion of circumstances in which sales charges
may apply on exchanges.
o Reinvestment Privilege. Within six months of a redemption of certain Class A and
Class B shares, the proceeds may be reinvested in Class A shares of the Fund, or
any of the other Oppenheimer funds into which shares of the Fund may be exchanged,
without a sales charge. This privilege applies to redemptions of Class A shares
that were subject to an initial sales charge or Class A or Class B shares that
were subject to a contingent deferred sales charge when redeemed. The investor
must ask the Transfer Agent or his or her financial intermediary for that
privilege at the time of reinvestment and must identify the account from which the
redemption was made.
Other Special Reductions and Waivers. The Fund and the Distributor offer additional
arrangements to reduce or eliminate front-end sales charges or to waive contingent
deferred sales charges for certain types of transactions and for certain classes of
investors (primarily retirement plans that purchase shares in special programs
through the Distributor). These are described in greater detail in Appendix C to the
Statement of Additional Information, which may be ordered by calling 1.800.225.5677
or through the OppenheimerFunds website, at www.oppenheimerfunds.com (follow the
hyperlinks: "Access Accounts and Services" - "Forms & Literature" - "Order
Literature" - "Statements of Additional Information"). A description of these waivers
and special sales charge arrangements is also available for viewing on the
OppenheimerFunds website (follow the hyperlinks: "Research Funds" - "Fund Documents"
- "View a description . . ."). To receive a waiver or special sales charge rate under
these programs, the purchaser must notify the Distributor (or other financial
intermediary through which shares are being purchased) at the time of purchase, or
notify the Transfer Agent at the time of redeeming shares for those waivers that
apply to contingent deferred sales charges.

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
Which Purchase Order was Accepted Redemptions in That Year
(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, employee benefit plans and Section 529 plans, among others.

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 periodically 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 up to 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 normally
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 periodically.

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 normally 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. The Distributor
normally retains the Class C asset-based sales charge during the first year after
Class C shares are purchased. See the Statement of Additional Information for
exceptions.

Under certain circumstances, the Distributor will pay the full Class B or Class C
asset-based sales charge and the service fee to the dealer beginning in the first
year after purchase of such shares in lieu of paying the dealer the sales concession
and the advance of the first year's service fee at the time of purchase, if there is
a special agreement between the dealer and the Distributor. In those circumstances,
the sales concession will not be paid to the dealer.

OTHER PAYMENTS TO FINANCIAL INTERMEDIARIES AND SERVICE PROVIDERS. The Manager and the
Distributor, in their discretion, also may pay dealers or other financial intermediaries
and service providers for distribution and/or shareholder servicing activities. These
payments are made out of the Manager's and/or the Distributor's own resources, including
from the profits derived from the advisory fees the Manager receives from the Fund. These
cash payments, which may be substantial, are paid to many firms having business
relationships with the Manager and Distributor. These payments are in addition to any
distribution fees, servicing fees, or transfer agency fees paid directly or indirectly by
the Fund to these financial intermediaries and any commissions the Distributor pays to
these firms out of the sales charges paid by investors. These payments by the Manager or
Distributor from their own resources are not reflected in the tables in the section called
"Fees and Expenses of the Fund" in this Prospectus because they are not paid by the Fund.

"Financial intermediaries" are firms that offer and sell Fund shares to their clients,
or provide shareholder services to the Fund, or both, and receive compensation for doing
so. Your securities dealer or financial adviser, for example, is a financial intermediary,
and there are other types of financial intermediaries that receive payments relating to the
sale or servicing of the Fund's shares. In addition to dealers, the financial
intermediaries that may receive payments include sponsors of fund "supermarkets," sponsors
of fee-based advisory or wrap fee programs, sponsors of college and retirement savings
programs, banks and trust companies offering products that hold Fund shares, and insurance
companies that offer variable annuity or variable life insurance products.

In general, these payments to financial intermediaries can be categorized as
"distribution-related" or "servicing" payments. Payments for distribution-related expenses,
such as marketing or promotional expenses, are often referred to as "revenue sharing."
Revenue sharing payments may be made on the basis of the sales of shares attributable to
that dealer, the average net assets of the Fund and other Oppenheimer funds attributable to
the accounts of that dealer and its clients, negotiated lump sum payments for distribution
services provided, or sales support fees. In some circumstances, revenue sharing payments
may create an incentive for a dealer or financial intermediary or its representatives to
recommend or offer shares of the Fund or other Oppenheimer funds to its customers. These
payments also may give an intermediary an incentive to cooperate with the Distributor's
marketing efforts. A revenue sharing payment may, for example, qualify the Fund for
preferred status with the intermediary receiving the payment or provide representatives of
the Distributor with access to representatives of the intermediary's sales force, in some
cases on a preferential basis over funds of competitors. Additionally, as firm support, the
Manager or Distributor may reimburse expenses related to educational seminars and "due
diligence" or training meetings (to the extent permitted by applicable laws or the rules of
the NASD) designed to increase sales representatives' awareness about Oppenheimer funds,
including travel and lodging expenditures. However, the Manager does not consider a
financial intermediary's sale of shares of the Fund or other Oppenheimer funds when
selecting brokers or dealers to effect portfolio transactions for the funds.

Various factors are used to determine whether to make revenue sharing payments.
Possible considerations include, without limitation, the types of services provided by the
intermediary, sales of Fund shares, the redemption rates on accounts of clients of the
intermediary or overall asset levels of Oppenheimer funds held for or by clients of the
intermediary, the willingness of the intermediary to allow the Distributor to provide
educational and training support for the intermediary's sales personnel relating to the
Oppenheimer funds, the availability of the Oppenheimer funds on the intermediary's sales
system, as well as the overall quality of the services provided by the intermediary and the
Manager or Distributor's relationship with the intermediary. The Manager and Distributor
have adopted guidelines for assessing and implementing each prospective revenue sharing
arrangement. To the extent that financial intermediaries receiving distribution-related
payments from the Manager or Distributor sell more shares of the Oppenheimer funds or
retain more shares of the funds in their client accounts, the Manager and Distributor
benefit from the incremental management and other fees they receive with respect to those
assets.

Payments may also be made by the Manager, the Distributor or the Transfer Agent to
financial intermediaries to compensate or reimburse them for administrative or other client
services provided such as sub-transfer agency services for shareholders or retirement plan
participants, omnibus accounting or sub-accounting, participation in networking
arrangements, account set-up, recordkeeping and other shareholder services. Payments may
also be made for administrative services related to the distribution of Fund shares through
the intermediary. Firms that may receive servicing fees include retirement plan
administrators, qualified tuition program sponsors, banks and trust companies, and others.
These fees may be used by the service provider to offset or reduce fees that would
otherwise be paid directly to them by certain account holders, such as retirement plans.

The Statement of Additional Information contains more information about revenue sharing and
service payments made by the Manager or the Distributor. Your dealer may charge you fees or
commissions in addition to those disclosed in this Prospectus. You should ask your dealer
or financial intermediary for details about any such payments it receives from the Manager
or the Distributor and their affiliates, or any other fees or expenses it charges.

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.

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.

Receiving 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
NYSE 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 exchange them within the applicable
contingent deferred sales charge holding period, the holding period will carry over to the
fund whose shares you acquire. Similarly, if you acquire 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.

How to Exchange Shares

If you want to change all or part of your investment from one Oppenheimer fund to another,
you can exchange your shares for shares of the same class of another Oppenheimer fund that
offers the exchange privilege. For example, you can exchange Class A shares of the Fund
only for Class A shares of another fund. 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 prospectus of the selected fund must offer the exchange privilege.
o When you establish an account, you must hold the shares you buy for at least seven
days before you can exchange them. After your account is open for seven days, you can
exchange shares on any regular business day, subject to the limitations described
below.
o You must meet the minimum purchase requirements for the selected fund.
o Generally, exchanges may be made only between identically registered accounts, unless
all account owners send written exchange instructions with a signature guarantee.
o Before exchanging into a fund, you must obtain its prospectus and should read it
carefully.

For tax purposes, an exchange of shares of the Fund is considered a sale of those
shares and a purchase of the shares of the fund into which you are exchanging. An exchange
may result in a capital gain or loss.

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

A contingent deferred sales charge (CDSC) is not charged when you exchange shares of the
Fund for shares of another Oppenheimer fund. However, if you exchange your shares during
the applicable CDSC holding period, the holding period will carry over to the fund shares
that you acquire. Similarly, if you acquire shares of the Fund in exchange for shares of
another Oppenheimer fund that are subject to a CDSC holding period, that holding period
will carry over to the acquired shares of the Fund. In either of these situations, a CDSC
may be imposed if the acquired shares are redeemed before the end of the CDSC holding
period that applied to the exchanged shares.

There are a number of other special conditions and limitations that apply to certain types
of exchanges. These conditions and circumstances are described in detail in the "How to
Exchange Shares" section in the Statement of Additional Information.

HOW DO YOU SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing, by telephone or
the internet, or by establishing an Automatic Exchange Plan.

Written Exchange Requests. Send a request letter, signed by all owners of the account, to
the Transfer Agent at the address on the back cover. Exchanges of shares for which
share certificates have been issued cannot be processed unless the Transfer Agent
receives the certificates with the request letter.

Telephone and Internet Exchange Requests. Telephone exchange requests may be made either by
calling a service representative or by using PhoneLink by calling 1.800.225.5677. You
may submit internet exchange requests on the OppenheimerFunds internet website, at
www.oppenheimerfunds.com. You must have obtained a user I.D. and password to make
transactions on that website. Telephone and/or internet exchanges may be made only
between accounts that are registered with the same name(s) and address. Shares for
which share certificates have been issued may not be exchanged by telephone or the
internet.

Automatic Exchange Plan. Shareholders can authorize the Transfer Agent to exchange a
pre-determined amount of shares automatically on a monthly, quarterly, semi-annual or
annual basis.

Please refer to "How to Exchange Shares" in the Statement of Additional Information for
more details.

ARE THERE LIMITATIONS ON FREQUENT PURCHASES, REDEMPTIONS AND EXCHANGES?

Risks from Excessive Purchase, Redemption and Short-Term Exchange Activity. The
OppenheimerFunds exchange privilege affords investors the ability to switch their
investments among Oppenheimer funds if their investment needs change. However, there
are limits on that privilege. Frequent purchases, redemptions and exchanges of Fund
shares may interfere with the Manager's ability to manage the Fund's investments
efficiently, increase the Fund's transaction and administrative costs and/or affect
the Fund's performance, depending on various factors, such as the size of the Fund,
the nature of its investments, the amount of Fund assets the portfolio manager
maintains in cash or cash equivalents, the aggregate dollar amount and the number and
frequency of trades. If large dollar amounts are involved in exchange and/or
redemption transactions, the Fund might be required to sell portfolio securities at
unfavorable times to meet redemption or exchange requests, and the Fund's brokerage
or administrative expenses might be increased.

Therefore, the Manager and the Fund's Board of Trustees have adopted the following
policies and procedures to detect and prevent frequent and/or excessive exchanges,
and/or purchase and redemption activity, while balancing the needs of investors who
seek liquidity from their investment and the ability to exchange shares as investment
needs change. There is no guarantee that the policies and procedures described below
will be sufficient to identify and deter excessive short-term trading.

o Timing of Exchanges. Exchanged shares are normally redeemed from one fund and the
proceeds are reinvested in the fund selected for exchange on the same regular
business day on which the Transfer Agent or its agent (such as a financial
intermediary holding the investor's shares in an "omnibus" or "street name"
account) receives an exchange request that conforms to these policies. The request
must be received by the close of the NYSE that day, which is normally 4:00 p.m.
Eastern time, but may be earlier on some days, in order to receive that day's net
asset value on the exchanged shares. Exchange requests received after the close of
the NYSE will receive the next net asset value calculated after the request is
received. However, the Transfer Agent may delay transmitting the proceeds from an
exchange for up to five business days if it determines, in its discretion, that an
earlier transmittal of the redemption proceeds to the receiving fund would be
detrimental to either the fund from which the exchange is being made or the fund
into which the exchange is being made. The proceeds will be invested in the fund
into which the exchange is being made at the next net asset value calculated after
the proceeds are received. In the event that such a delay in the reinvestment of
proceeds occurs, the Transfer Agent will notify you or your financial
representative.

o Limits on Disruptive Activity. The Transfer Agent may, in its discretion, limit or
terminate trading activity by any person, group or account that it believes would
be disruptive, even if the activity has not exceeded the policy outlined in this
Prospectus. The Transfer Agent may review and consider the history of frequent
trading activity in all accounts in the Oppenheimer funds known to be under common
ownership or control as part of the Transfer Agent's procedures to detect and
deter excessive trading activity.

o Exchanges of Client Accounts by Financial Advisers. The Fund and the Transfer Agent
permit dealers and financial intermediaries to submit exchange requests on behalf
of their customers (unless the customer has revoked that authority). The
Distributor and/or the Transfer Agent have agreements with a number of financial
intermediaries that permit them to submit exchange orders in bulk on behalf of
their clients. Those intermediaries are required to follow the exchange policies
stated in this Prospectus and to comply with additional, more stringent
restrictions. Those additional restrictions include limitations on the funds
available for exchanges, the requirement to give advance notice of exchanges to
the Transfer Agent, and limits on the amount of client assets that may be invested
in a particular fund. A fund or the Transfer Agent may limit or refuse bulk
exchange requests submitted by such financial intermediaries if, in the Transfer
Agent's judgment, exercised in its discretion, the exchanges would be disruptive
to any of the funds involved in the transaction.

o Redemptions of Shares. These exchange policy limits do not apply to redemptions of
shares. Shareholders are permitted to redeem their shares on any regular business
day, subject to the terms of this Prospectus. Further details are provided under
"How to Sell Shares."

o Right to Refuse Exchange and Purchase Orders. The Distributor and/or the Transfer
Agent may refuse any purchase or exchange order in their discretion and are not
obligated to provide notice before rejecting an order. The Fund may amend, suspend
or terminate the exchange privilege at any time. You will receive 60 days' notice
of any material change in the exchange privilege unless applicable law allows
otherwise.

o Right to Terminate or Suspend Account Privileges. The Transfer Agent may send a
written warning to direct shareholders that the Transfer Agent believes may be
engaging in excessive purchases, redemptions and/or exchange activity and reserves
the right to suspend or terminate the ability to purchase shares and/or exchange
privileges for any account that the Transfer Agent determines, in carrying out
these policies and in the exercise of its discretion, has engaged in disruptive or
excessive trading activity, with or without such warning.

o Omnibus Accounts. If you hold your shares of the Fund through a financial
intermediary such as a broker-dealer, a bank, an insurance company separate
account, an investment adviser, an administrator or trustee of a retirement plan
or 529 plan, that holds your shares in an account under its name (these are
sometimes referred to as "omnibus" or "street name" accounts), that financial
intermediary may impose its own restrictions or limitations to discourage
short-term or excessive trading. You should consult your financial intermediary to
find out what trading restrictions, including limitations on exchanges, they may
apply.

While the Fund, the Distributor, the Manager and the Transfer Agent encourage
financial intermediaries to apply the Fund's policies to their customers who
invest indirectly in the Fund, the Transfer Agent may not be able to detect
excessive short term trading activity facilitated by, or in accounts maintained
in, the "omnibus" or "street name" accounts of a financial intermediary. Therefore
the Transfer Agent might not be able to apply this policy to accounts such as (a)
accounts held in omnibus form in the name of a broker-dealer or other financial
institution, or (b) omnibus accounts held in the name of a retirement plan or 529
plan trustee or administrator, or (c) accounts held in the name of an insurance
company for its separate account(s), or (d) other accounts having multiple
underlying owners but registered in a manner such that the underlying beneficial
owners are not identified to the Transfer Agent.

However, the Transfer Agent will attempt to monitor overall purchase and
redemption activity in those accounts to seek to identify patterns that may
suggest excessive trading by the underlying owners. If evidence of possible
excessive trading activity is observed by the Transfer Agent, the financial
intermediary that is the registered owner will be asked to review account
activity, and to confirm to the Transfer Agent and the Fund that appropriate
action has been taken to curtail any excessive trading activity. However, the
Transfer Agent's ability to monitor and deter excessive short-term trading in
omnibus or street name accounts ultimately depends on the capability and
cooperation of the financial intermediaries controlling those accounts.

Additional Policies and Procedures. The Fund's Board has adopted the following additional
policies and procedures to detect and prevent frequent and/or excessive exchanges and
purchase and redemption activity:

o 30-Day Limit. A direct shareholder may exchange some or all of the shares of the
Fund held in his or her account to another eligible Oppenheimer fund once in a 30
calendar-day period. When shares are exchanged into a fund account, that account
will be "blocked" from further exchanges into another fund for a period of 30
calendar days from the date of the exchange. The block will apply to the full
account balance and not just to the amount exchanged into the account. For
example, if a shareholder exchanged $1,000 from one fund into another fund in
which the shareholder already owned shares worth $10,000, then, following the
exchange, the full account balance ($11,000 in this example) would be blocked from
further exchanges into another fund for a period of 30 calendar days. A "direct
shareholder" is one whose account is registered on the Fund's books showing the
name, address and tax ID number of the beneficial owner.

o Exchanges Into Money Market Funds. A direct shareholder will be permitted to
exchange shares of a stock or bond fund for shares of a money market fund at any
time, even if the shareholder has exchanged shares into the stock or bond fund
during the prior 30 days. However, all of the shares held in that money market
fund would then be blocked from further exchanges into another fund for 30
calendar days.

o Dividend Reinvestments/B Share Conversions. Reinvestment of dividends or
distributions from one fund to purchase shares of another fund and the conversion
of Class B shares into Class A shares will not be considered exchanges for
purposes of imposing the 30-day limit.

o Asset Allocation. Third-party asset allocation and rebalancing programs will be
subject to the 30-day limit described above. Asset allocation firms that want to
exchange shares held in accounts on behalf of their customers must identify
themselves to the Transfer Agent and execute an acknowledgement and agreement to
abide by these policies with respect to their customers' accounts. "On-demand"
exchanges outside the parameters of portfolio rebalancing programs will be subject
to the 30-day limit. However, investment programs by other Oppenheimer
"funds-of-funds" that entail rebalancing of investments in underlying Oppenheimer
funds will not be subject to these limits.

Automatic Exchange Plans. Accounts that receive exchange proceeds through automatic or
systematic exchange plans that are established through the Transfer Agent will not be
subject to the 30-day block as a result of those automatic or systematic exchanges
(but may be blocked from exchanges, under the 30-day limit, if they receive proceeds
from other exchanges).

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 "Minimum Balance Fee" is assessed on each Fund account with a value of less
than $500. The fee is automatically deducted from each applicable Fund account
annually in September. See the Statement of Additional Information to learn how you
can avoid this fee and for circumstances under which 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 SEC, 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. If the Fund redeems
your shares in kind, you may bear transaction costs and will bear market risks until
such time as such securities are converted into cash.
Federal regulations may require the Fund to obtain your name, your date of birth (for a
natural person), your residential street address or principal place of business and
your Social Security Number, Employer Identification Number or other government
issued identification when you open an account. Additional information may be
required in certain circumstances or to open corporate accounts. The Fund or the
Transfer Agent may use this information to attempt to verify your identity. The Fund
may not be able to establish an account if the necessary information is not
received. The Fund may also place limits on account transactions while it is in the
process of attempting to verify your identity. Additionally, if the Fund is unable
to verify your identity after your account is established, the Fund may be required
to redeem your shares and close your account.
"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 monthly. 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. The amount of those
dividends and any other distributions paid on other classes of 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 dividends 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 annually. 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. The Fund will also send you a
separate statement summarizing the total distributions paid by the Fund.

The Fund intends each year to qualify as a "regulated investment company" under the
Internal Revenue Code, but reserves the right not to qualify. It qualified during its last
fiscal year. The Fund, as a regulated investment company, will not be subject to federal
income taxes on any of its income, provided that it satisfies certain income,
diversification and distribution requirements.

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). This information has been audited by KPMG LLP, the Fund's
independent registered public accounting firm, whose report, along with the Fund's
financial statements, is included in the Statement of Additional Information, which is
available upon request.

FINANCIAL HIGHLIGHTS

CLASS A     YEAR ENDED DECEMBER 31,                       2005        2004        2003        2002        2001
---------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                   $ 17.76      $17.62      $17.38      $17.52      $17.67
---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .99 1      1.07 1      1.11        1.08        1.06
Net realized and unrealized gain (loss)                    .53         .16         .23        (.15)       (.17)
                                                       --------------------------------------------------------
Total from investment operations                          1.52        1.23        1.34         .93         .89
---------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (1.00)      (1.09)      (1.10)      (1.07)      (1.04)
---------------------------------------------------------------------------------------------------------------
Net asset value, end of period                         $ 18.28      $17.76      $17.62      $17.38      $17.52
                                                       ========================================================

---------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        8.76%       7.25%       8.12%       5.46%       5.14%
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------
Net assets, end of period (in millions)                $ 5,937      $4,699      $4,228      $4,299      $4,073
---------------------------------------------------------------------------------------------------------------
Average net assets (in millions)                       $ 5,327      $4,387      $4,100      $4,292      $3,893
---------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                     5.44%       6.09%       6.49%       6.18%       5.97%
Total expenses                                            0.73%       0.72%       0.71%       0.72%       0.72%
Expenses after payments and waivers and
reduction to custodian expenses                           0.73%       0.72%       0.71%       0.71%       0.70%
---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     29%         14%         18%         29%         11%

1. Per share amounts calculated based on the average shares outstanding during
the period.

2. 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 full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                         61 | ROCHESTER FUND MUNICIPALS

FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------

CLASS B          YEAR ENDED DECEMBER 31,              2005          2004         2003         2002        2001
---------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                 $17.75       $17.60       $17.36       $17.51      $17.66
---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                   .83 1        .91 1        .96          .93         .91
Net realized and unrealized gain (loss)                 .52          .18          .23         (.16)       (.17)
                                                     ----------------------------------------------------------
Total from investment operations                       1.35         1.09         1.19          .77         .74
---------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                   (.84)        (.94)        (.95)        (.92)       (.89)
---------------------------------------------------------------------------------------------------------------
Net asset value, end of period                       $18.26       $17.75       $17.60       $17.36      $17.51
                                                     ==========================================================

---------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                     7.77%        6.40%        7.19%        4.50%       4.25%
---------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------
Net assets, end of period (in millions)              $  955       $1,073       $1,231       $1,342      $1,157
---------------------------------------------------------------------------------------------------------------
Average net assets (in millions)                     $1,006       $1,130       $1,259       $1,275      $  997
---------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                  4.60%        5.23%        5.62%        5.32%       5.10%
Total expenses                                         1.60%        1.59%        1.58%        1.58%       1.58%
Expenses after payments and waivers and
reduction to custodian expenses                        1.60%        1.59%        1.58%        1.57%       1.56%
---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                  29%          14%          18%          29%         11%

1. Per share amounts calculated based on the average shares outstanding during
the period.

2. 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 full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                         62 | ROCHESTER FUND MUNICIPALS

CLASS C          YEAR ENDED DECEMBER 31,             2005           2004           2003         2002         2001
------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period               $17.74         $17.59         $17.36       $17.50       $17.66
------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                 .82 1          .91 1          .96          .93          .91
Net realized and unrealized gain (loss)               .53            .18            .22         (.15)        (.18)
                                                   ---------------------------------------------------------------
Total from investment operations                     1.35           1.09           1.18          .78          .73
------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                 (.84)          (.94)          (.95)        (.92)        (.89)
------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                     $18.25         $17.74         $17.59       $17.36       $17.50
                                                   ===============================================================

------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                   7.78%          6.40%          7.14%        4.57%        4.19%
------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in millions)            $  712         $  498         $  443       $  471       $  429
------------------------------------------------------------------------------------------------------------------
Average net assets (in millions)                   $  600         $  459         $  436       $  460       $  356
------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                4.56%          5.22%          5.62%        5.32%        5.09%
Total expenses                                       1.59%          1.59%          1.58%        1.58%        1.57%
Expenses after payments and waivers and
reduction to custodian expenses                      1.59%          1.59%          1.58%        1.57%        1.55%
------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                29%            14%            18%          29%          11%

1. Per share amounts calculated based on the average shares outstanding during
the period.

2. 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 full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                         63 | ROCHESTER FUND MUNICIPALS

FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------

CLASS Y           YEAR ENDED DECEMBER 31,           2005             2004            2003             2002           2001
------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                 $ 17.76           $17.61        $17.38        $17.52        $17.67
------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                   1.01 1           1.10 1        1.14          1.10          1.08
Net realized and unrealized gain (loss)                  .54              .17           .21          (.15)         (.17)
                                                     -------------------------------------------------------------------
Total from investment operations                        1.55             1.27          1.35           .95           .91
------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                   (1.03)           (1.12)        (1.12)        (1.09)        (1.06)
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                       $ 18.28           $17.76        $17.61        $17.38        $17.52
                                                     ===================================================================

------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                      8.93%            7.50%         8.16%         5.57%         5.25%
------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in millions)              $    11           $    8        $    9        $   12        $   12
------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions)                     $    10           $    8        $   11        $   12        $   12
------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                   5.59%            6.27%         6.79%         6.30%         6.08%
Total expenses                                          0.58%            0.55%         0.61%         0.62%         0.62%
Expenses after payments and waivers and
reduction to custodian expenses                         0.58%            0.55%         0.61%         0.61%         0.60%
------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                   29%              14%           18%           29%           11%

1. Per share amounts calculated based on the average shares outstanding during
the period.

2. 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 full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
By Mail:                      Write to:
                              OppenheimerFunds Services
                              P.O. Box 5270
                              Denver, Colorado 80217-5270
------------------------------------------------------------------------------
------------------------------------------------------------------------------
On the Internet:              You can request these documents by e-mail or
                              through the OppenheimerFunds website. You may
                              also read or download certain documents on the
                              OppenheimerFunds website at:
                              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.
The Fund's SEC File No.: 811-3614
PR0365.001.0406
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 December 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:

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                                                Rochester Fund
                  Calendar Year Ended:            Municipals
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                        12/31/96                    5.37%
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                        12/31/97                    10.20%
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                        12/31/98                    6.52%
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                        12/31/99                    -5.51%
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                        12/31/00                    11.93%
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                        12/31/01                    5.14%
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                        12/31/02                    5.46%
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                        12/31/03                    8.12%
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                        12/31/04                    7.25%
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                        12/31/05                    8.76%
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