-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dmqqWaJ20ZNotEFTD7QeZ1l/F7mSbBz2el9q3qG/bqIvIuMspuwbG6YwmosL31x2 4iAEcYeBS4R5hRQ51B+7zQ== 0000939800-95-000016.txt : 19950908 0000939800-95-000016.hdr.sgml : 19950908 ACCESSION NUMBER: 0000939800-95-000016 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950907 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER INTERNATIONAL BOND FUND CENTRAL INDEX KEY: 0000939800 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07255 FILM NUMBER: 95570959 BUSINESS ADDRESS: STREET 1: 3410 SOUTH GALENA STREET CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 1: 3410 SOUTH GALENA STREET CITY: DENVER STATE: CO ZIP: 80231 N-30D 1 1995 SEMIANNUAL REPORT INTERNATIONAL BOND FUND - ------------------------------------------------------------------- June 30, 1995 RS0880.001.0695 DEAR SHAREHOLDER: Thank you for your recent investment in Oppenheimer International Bond Fund -- a new fund designed to take advantage of outstanding international growth and income opportunities over the long term. As the global economy continues to develop and expand, the Fund's investment opportunities increase as well. For example, investing in international bonds was once limited primarily to developed nations such as Europe and Asia, whose markets tend to be somewhat closely correlated to ours. Today, the marketplace has expanded to include emerging growth countries with high return potential, such as the Czech Republic, Malaysia and Brazil, whose markets tend to be less closely tied to the U.S. market. By diversifying the portfolio with a carefully selected blend of developed and emerging market bonds, Oppenheimer International Bond Fund expands the concept of foreign bond investing by benefiting from the potential of each market while seeking to manage the special risks associated with foreign bonds. It's a strategy that provides the opportunity to diversify your holdings geographically, thereby reducing your overall risk because bond markets typically don't rise or fall simultaneously. This diversification is so important because international securities involve significant risks, including political and economic uncertainties as well as currency rate fluctuations. We believe the current environment offers outstanding opportunities as foreign bond markets have lagged the U.S. markets year-to-date and are poised to catch up to U.S. bonds. As you may know, bond markets usually react favorably to slower growth being experienced by many industrialized countries because it reduces the prospects for inflation -- and as central banks in developed nations cut rates to stimulate growth, bonds will benefit. And in emerging markets, international confidence has been restored a great deal after the volatile performance of emerging market debt following the Mexican peso devaluation in 1994. Oppenheimer Management's fixed income investment team will continue to monitor the economy and market conditions of a broad range of foreign countries to keep ahead of significant events. We believe a flexible total return orientation, in addition to this year's expected strong capital appreciation, justify a positive outlook for fixed income investments across the board and particularly overseas. Thank you for your confidence in OppenheimerFunds and Oppenheimer International Bond Fund. We look forward to helping you reach your investment goals in the future. Sincerely, /s/ Jon S. Fossel Jon S. Fossel President, Oppenheimer International Bond Fund /s/ James C. Swain James C. Swain Chairman, Oppenheimer International Bond Fund July 24, 1995 STATEMENT OF INVESTMENTS June 30, 1995 (Unaudited)
FACE MARKET VALUE AMOUNT(1) SEE NOTE 1 ============================================================================================== CERTIFICATES OF DEPOSIT - 2.9% - ---------------------------------------------------------------------------------------------- First Boston Corp., 12.50% CD, 12/21/95 (2)(3)ARA 30,000 $ 30,009 ---------------------------------------------------------------------------------------- Indonesia (Republic of) CD, Bank Negara, Zero Coupon, 6/17/96 (3)IDR 50,000,000 19,168 ------------- Total Certificates of Deposit (Cost $49,381) 49,177 FOREIGN GOVERNMENT OBLIGATIONS - 83.1% ARGENTINA - 5.2% Argentina (Republic of) Par Bonds, 5%, 3/31/23 (4) 185,000 88,569 AUSTRALIA - 5.7% New South Wales Treasury Corp. Gtd. Bonds, 12%, 12/1/01 AUD 70,000 56,725 Treasury Corp. of Victoria Gtd. Bonds, 12%, 9/22/01 AUD 50,000 40,327 -------- 97,052 BRAZIL - 5.1% Banco do Estado de Sao Paulo SA, 9.25% Sr. Debs., 10/4/96 20,000 18,875 Brazil (Federal Republic of) Nts., Banco Estado Minas Gerais, 7.875%, 2/10/99 (2) 10,000 7,900 Brazil (Federal Republic of) Par Bonds, 4.25%, 4/15/24 (5) 100,000 44,625 Brazil (Federal Republic of) Interest Due and Unpaid Bonds, 7.813%, 1/1/01 (5) 19,400 15,653 ------- 87,053 BULGARIA - 3.7% Bulgaria (Republic of) Interest Arrears Bonds, 7.562%, 7/28/11 (5) 150,000 63,094 CANADA - 2.5% Canada (Government of) Bonds, Series A33, 11.50%, 9/1/00 CAD 50,000 42,394 DENMARK - 5.5% Denmark (Kingdom of) Bonds, 7%, 11/10/24 DKK 640,000 93,256 ECUADOR - 2.2% Ecuador (Republic of) Bonds, 7.25%, 2/28/25 (5) 75,000 37,500 FRANCE - 1.5% France (Government of) Bonds, Obligation Assimilable du Tresor STRIPS, Zero Coupon, 4/25/02 FRF 200,000 25,147 GERMANY - 6.1% Germany (Republic of) Debs., Bundespost Deutscheland, 7.75%, 10/1/04 DEM 140,000 104,485 GREAT BRITAIN - 4.4% United Kingdom Treasury Nts., 13%, 7/14/00 GBP 40,000 75,767 ITALY - 2.1% Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 12%, 1/17/99 ITL 35,000,000 21,402 Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 12%, 5/18/99 ITL 25,000,000 15,264 ------ 36,666 MEXICO - 5.3% Banco Nacional de Comercio Exterior SNC International Finance BV Gtd. Matador Bonds, 10.875%, 6/23/97 (2)(5) 10,000 9,988 Banco Nacional de Obras y Servicios Publicos SA Nts., 10.75%, 8/16/96 70,000 69,738 Bonos de la Tesoreria de la Federacion, Zero Coupon, 8/10/95 10,000 9,874 ------- 89,600 MOROCCO - 3.4% Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 7.375%, 1/1/09 (5) 100,000 58,250
3 Oppenheimer International Bond Fund STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
FACE MARKET VALUE AMOUNT(1) SEE NOTE 1 FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) NEW ZEALAND - 10.3% New Zealand (Republic of) Bonds, 10%, 3/15/02 NZD 30,000 $ 22,551 New Zealand (Republic of) Bonds, 10%, 7/15/97 NZD 220,000 152,111 -------- 174,662 NORWAY - 4.1% Norwegian Government Bonds, 7%, 5/31/01 NOK 440,000 69,758 POLAND - 2.3% Poland (Republic of) Disc. Bonds, 7.125%, 10/27/24 (5) 50,000 38,406 PORTUGAL - 6.0% Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio Prazo, 12.50%, 1/23/98 PTE 14,500,000 101,437 SPAIN - 6.8% Spain (Kingdom of) Bonds, 11.45%, 8/30/98 ESP 14,000,000 115,478 SWEDEN - 0.9% Sweden (Kingdom of) Bonds, Series 1030, 13%, 6/15/01 SEK 100,000 15,124 ------------ Total Foreign Government Obligations (Cost $1,410,349) 1,413,698 CORPORATE BONDS AND NOTES - 3.0% FINANCIAL SERVICES - 1.5% BANKS & THRIFTS - 1.1% Banco Ganadero SA, Zero Coupon Sr. Unsub. Unsec. Nts., 6/16/96 (2) 10,000 9,116 Morgan Stanley Group, 14.25% Indian Rupee Indexed Nts., 6/26/96 (3)INR 314,100 10,003 ---------- 19,119 DIVERSIFIED FINANCIAL - 0.4% Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98 10,000 7,550 UTILITIES - 1.5% New Zealand Electric Corp., 10% Debs., 10/15/01 NZD 35,000 25,420 ----------- Total Corporate Bonds and Notes (Cost $52,268) 52,089 TOTAL INVESTMENTS, AT VALUE (COST $1,511,998) 89.0% 1,514,964 OTHER ASSETS NET OF LIABILITIES 11.0 186,562 ----- ----------- NET ASSETS 100.0% $ 1,701,526 ===== =========== 1. Face amount is reported in local currency. Foreign currency abbreviations are as follows: ARA - Argentine Austral IDR - Indonesian Rupiah AUD - Australian Dollar INR - Indian Rupee CAD - Canadian Dollar ITL - Italian Lira DEM - German Deutsche Mark NOK - Norwegian Krone DKK - Danish Krone NZD - New Zealand Dollar ESP - Spanish Peseta PTE - Portugese Escudo FRF - French Franc SEK - Swedish Krona GBP - British Pound Sterling 2. Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $57,013 or 3.35% of the Fund's net assets, at June 30, 1995. 3. Indexed instrument for which the principal amount and/or interest due at maturity is affected by the relative value of a foreign currency. 4. Represents the current interest rate for an increasing rate security. 5. Represents the current interest rate for a variable rate security. See accompanying Notes to Financial Statements.
4 Oppenheimer International Bond Fund STATEMENT OF ASSETS AND LIABILITIES June 30, 1995 (Unaudited) ASSETS Investments, at value (cost $1,511,998) - see accompanying statement $1,514,964 Cash 148,349 Unrealized appreciation on forward foreign exchange contracts - Note 5 94 Receivables: Investments sold 168,134 Interest and dividends 57,255 Shares of beneficial interest sold 47,678 Other 1,241 ---------- Total assets 1,937,715 ========== LIABILITIES Payables and other liabilities: Investments purchased 228,471 Dividends 6,003 Shares of beneficial interest redeemed 300 Other 1,415 ---------- Total liabilities 236,189 ---------- NET ASSETS $1,701,526 ========== COMPOSITION OF NET ASSETS Paid-in capital $1,702,293 Overdistributed net investment income (2,128) Accumulated net realized loss from investment transactions (1,702) Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 3,063 ---------- Net assets $1,701,526 ========== NET ASSET VALUE PER SHARE Class A Shares: Net asset value and redemption price per share (based on net assets of $1,661,378 and 332,505 shares of beneficial interest outstanding) $ 5.00 Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $5.25 Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $5,999 and 1,200 shares of beneficial interest outstanding) $5.00 Class C Shares: Net asset value, redemption price and offering price per share (based on net assets of $34,149 and 6,836 shares of beneficial interest outstanding) $5.00
See accompanying Notes to Financial Statements. 5 Oppenheimer International Bond Fund STATEMENT OF OPERATIONS For the Period from June 15, 1995 (commencement of operations) to June 30, 1995 (Unaudited) INVESTMENT INCOME Interest income $ 4,463 -------- EXPENSES Management fees - Note 4 410 Other 178 -------- Net expenses 588 NET INVESTMENT INCOME 3,875 -------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Net realized gain (loss) from: Investments (1,704) Foreign currency transactions 2 ------- Net realized loss (1,702) ------- Net change in unrealized appreciation or depreciation on: Investments 803 Translation of assets and liabilities denominated in foreign currencies 2,260 ----- Net change 3,063 ----- Net realized and unrealized gain on investments and foreign currency transactions 1,361 ----- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,236 =======
See accompanying Notes to Financial Statements. 6 Oppenheimer International Bond Fund STATEMENT OF CHANGES IN NET ASSETS
Period Ended June 30, 1995(1) (Unaudited) Operations Net investment income $ 3,875 Net realized loss on investments and foreign currency transactions (1,702) Net change in unrealized appreciation or depreciation on investments and translation of assets and liabilities denominated in foreign currencies 3,063 ------- Net increase in net assets resulting from operations 5,236 ------- DIVIDENDS TO SHAREHOLDERS Dividends from net investment income: Class A ($.021 per share) (5,956) Class B ($.020 per share) (11) Class C ($.020 per share) (36) BENEFICIAL INTEREST TRANSACTIONS Net increase in net assets resulting from Class A beneficial interest transactions - Note 2 1,662,165 Net increase in net assets resulting from Class B beneficial interest transactions - Note 2 6,000 Net increase in net assets resulting from Class C beneficial interest transactions - Note 2 34,128 -------- NET ASSETS Total increase 1,701,526 Beginning of period -- --------- End of period $1,701,526 ========== 1. For the period from June 15, 1995 (commencement of operations) to June 30, 1995.
See accompanying Notes to Financial Statements. 7 Oppenheimer International Bond Fund FINANCIAL HIGHLIGHTS For the period from June 15, 1995 (commencement of operations)to June 30, 1995 (Unaudited)
CLASS A CLASS B CLASS C PERIOD ENDED PERIOD ENDED PERIOD ENDED JUNE 30, 1995 JUNE 30, 1995 JUNE 30,1995 PER SHARE OPERATING DATA: Net asset value, beginning of period $ 5.00 $ 5.00 $ 5.00 Income (loss) from investment operations: Net investment income .02 .02 .02 Net realized and unrealized loss on investments and foreign currency transactions -- -- -- ------ ------- ----- Total income from investment operations .02 .02 .02 ------ ------- ----- Dividends to shareholders from net investment income (.02) (.02) (.02) Net asset value, end of period $ 5.00 $ 5.00 $ 5.00 ======= ======= ====== TOTAL RETURN, AT NET ASSET VALUE(1) .45% .45% .45% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $1,661 $6 $34 Average net assets (in thousands) $1,343 $3 $8 Number of shares outstanding at end of period (in thousands) 333 1 7 Ratios to average net assets(2): Net investment income 6.52% 7.02% 7.73% Expenses .99% 1.58% 1.63% Portfolio turnover rate(3) 15.0% 15.0% 15.0% 1. Assumes a hypothetical initial investment on the business day before commencement of operations, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized. 3. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended June 30, 1995 were $1,628,816 and $163,873, respectively.
See accompanying Notes to Financial Statements. 8 Oppenheimer International Bond Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) 1.SIGNIFICANT ACCOUNTING POLICIES Oppenheimer International Bond Fund (the Fund), is a registered investment company organized as a Massachusetts Business Trust with a single series of the same name. The Fund is registered as a diversified, open-end management investment company under the Investment Company Act of 1940, as amended. The Fund's investment advisor is Oppenheimer Management Corporation (the Manager). The Fund offers Class A, Class B and Class C shares. Class B and Class C shares may be subject to a contingent deferred sales charge. All three classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own distribution and/or service plan, expenses directly attributable to a particular class and exclusive voting rights with respect to matters affecting a single class. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. INVESTMENT VALUATION. Portfolio securities are valued at the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or asked price or the last sale price on the prior trading day. Long- term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Such securities which cannot be valued by the approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. Short-term "money market type" debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. Forward contracts are valued based on the closing prices of the forward currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank or dealer. Options are valued based upon the last sale price on the principal exchange on which the option is traded or, in the absence of any transactions that day, the value is based upon the last sale price on the prior trading date if it is within the spread between the closing bid and asked prices. If the last sale price is outside the spread, the closing bid or asked price closest to the last reported sale price is used. FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's results of operations. REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or limited. ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class) and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. 9 Oppenheimer International Bond Fund NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued) 1.SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FEDERAL TAXES. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income tax or excise provision is required. DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately for Class A, Class B and Class C shares from net investment income each day the New York Stock Exchange is open for business and pay such dividends monthly. Distributions from net realized gains on investments, if any, will be declared at least once each year. CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of paydown gains (losses), and the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of the distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) was recorded by the Fund. OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex- dividend date. Discount on securities purchased is amortized over the life of the respective securities, in accordance with federal income tax requirements. Realized gains and losses on investments and options written and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. Dividends in kind are recognized as income on the ex-dividend date, at the current market value of the underlying security. Interest on payment-in-kind debt instruments is accrued as income at the coupon rate and a market adjustment is made on the ex-date. 2.SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows: PERIOD ENDED JUNE 30, 1995(1) SHARES AMOUNT Class A: Sold 332,565 $1,662,465 Redeemed (60) (300) -------- --------- Net increase 332,505 $1,662,165 ======== ========= Class B: Sold 1,200 $ 6,000 Redeemed -- -- ------ ------- Net increase 1,200 $ 6,000 ====== ======= Class C: Sold 6,836 $34,128 Redeemed -- -- ----- ------- Net increase 6,836 $34,128 ===== ======= 1. For the period from June 15, 1995 (commencement of operations) to June 30, 1995. 3.UNREALIZED GAINS AND LOSSES ON INVESTMENTS At June 30, 1995, net unrealized appreciation of investments of $2,966 was composed of gross appreciation of $9,174, and gross depreciation of $6,208. 10 Oppenheimer International Bond Fund NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued) 4.MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for an annual fee of .75% on the first $200 million of net assets with a reduction of .03% on each $200 million thereafter to $800 million, .60% on the next $200 million and .50% on net assets in excess of $1 billion. The Manager has agreed to reimburse the Fund if aggregate expenses (with specified exceptions) exceed the most stringent state regulatory limit on Fund expenses. For the period ended June 30, 1995, commissions (sales charges paid by investors) on sales of Class A shares totaled $1,078, of which $24 was retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an affiliated broker/dealer. Oppenheimer Shareholder Services (OSS), a division of the Manager, is the transfer and shareholder servicing agent for the Fund, and for other registered investment companies. OSS's total costs of providing such services are allocated ratably to these companies. Under separate approved plans, each class may expend up to .25% of its net assets annually to reimburse OFDI for costs incurred in connection with the personal service and maintenance of accounts that hold shares of the Fund, including amounts paid to brokers, dealers, banks and other institutions. In addition, Class B and Class C shares are subject to an asset-based sales charge of .75% of net assets annually, to reimburse OFDI for sales commissions paid from its own resources at the time of sale and associated financing costs. In the event of termination or discontinuance of the Class B or Class C plan, the Board of Trustees may allow the Fund to continue payment of the asset-based sales charge to OFDI for distribution expenses incurred on Class B or Class C shares sold prior to termination or discontinuance of the plan. 5.FORWARD FOREIGN CURRENCY CONTRACTS A forward foreign currency exchange contract (forward contract) is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund uses forward contracts to seek to manage foreign currency risks. They may also be used to tactically shift portfolio currency risk. The Fund generally enters into forward contracts as a hedge upon the purchase or sale of a security denominated in a foreign currency. In addition, the Fund may enter into such contracts as a hedge against changes in foreign currency exchange rates on portfolio positions. Forward contracts are valued based on the closing prices of the forward currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank or dealer. The Fund will realize a gain or loss upon the closing or settlement of the forward transaction. In this report, securities held in segregated accounts to cover net exposure on outstanding forward contracts are noted in the Statement of Investments where applicable. Gains and losses on outstanding contracts (unrealized appreciation or depreciation on forward contracts) are reported in the Statement of Assets and Liabilities. Realized gains and losses are reported with all other foreign currency gains and losses in the Fund's Statement of Operations. 11 Oppenheimer International Bond Fund NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued) 5.FORWARD FOREIGN CURRENCY CONTRACTS (CONTINUED) Risks include the potential inability of the counterparty to meet the terms of the contract and unanticipated movements in the value of a foreign currency relative to the U.S. dollar. At June 30, 1995, the Fund had outstanding forward contracts to purchase and sell foreign currencies as follows: VALUATION UNREALIZED CONTRACTS EXPIRATION CONTRACT AS OF APPRECIATION TO PURCHASE DATE AMOUNT(000s) JUNE 30, 1995 (DEPRECIATION) Australian Dollar 7/7/95 55 $ 39,302 $ (115) German Deutsche Mark 8/3/95 114 82,645 (325) ---------- ---------- $121,947 (440) ========== ---------- CONTRACTS TO SELL British Pound Sterling 7/5/95 3 $ 4,056 $ 139 Norwegian Krone 7/7/95 187 30,344 35 Spanish Peseta 8/3/95 10,000 82,285 360 ---------- -------- $116,685 534 ========== -------- Net Unrealized Appreciation $ 94 ======== 12 Oppenheimer International Bond Fund OPPENHEIMER INTERNATIONAL BOND FUND OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer Robert G. Avis, Trustee William A. Baker, Trustee Charles Conrad, Jr., Trustee Jon S. Fossel, Trustee and President Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee Andrew J. Donohue, Vice President Ashwin Vasan, Vice President George C. Bowen, Vice President, Secretary, and Treasurer Robert J. Bishop, Assistant Treasurer Scott Farrar, Assistant Treasurer Robert G. Zack, Assistant Secretary INVESTMENT ADVISOR Oppenheimer Management Corporation DISTRIBUTOR Oppenheimer Funds Distributor, Inc. TRANSFER AND Oppenheimer Shareholder Services SHAREHOLDER SERVICING AGENT CUSTODIAN OF The Bank of New York PORTFOLIO SECURITIES INDEPENDENT AUDITORS Deloitte & Touche LLP LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C. The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors. This is a copy of a report to shareholders of Oppenheimer International Bond Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer International Bond Fund. For material information concerning the Fund, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested. 13 Oppenheimer International Bond Fund -----END PRIVACY-ENHANCED MESSAGE-----