UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-5473
Oppenheimer Multi-Sector Income Trust
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: October 31
Date of reporting period: November 1, 2003 - October 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
International Sector 38.8%
Corporate Sector 28.4
Asset-Backed Sector 18.8
Money Market Sector 7.2
U.S. Government Sector 6.8
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on total investments (excluding investments
purchased with cash collateral from securities loan).
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8 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS October 31, 2004
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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U.S. GOVERNMENT SECTOR--7.3%
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U.S. GOVERNMENT OBLIGATIONS--7.3%
Federal Home Loan Mortgage Corp.
Nts., 3.75%, 7/15/09 [EUR] 470,000 $ 614,210
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Federal National Mortgage Assn. Unsec. Nts.:
1.80%, 5/27/05 550,000 548,672
4.25%, 7/15/07 1 4,175,000 4,312,625
6%, 5/15/08 2,000,000 2,182,644
7.25%, 5/15/30 385,000 492,288
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Resolution Funding Corp. Federal Book Entry
Principal Strips, 5.85%, 1/15/21 2 715,000 313,405
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Tennessee Valley Authority Bonds:
Series A, 6.79%, 5/23/12 5,577,000 6,482,543
Series C, 4.75%, 8/1/13 650,000 667,560
Series C, 6%, 3/15/13 625,000 698,778
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U.S. Treasury Bonds, 5.375%, 2/15/31 143,000 155,362
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U.S. Treasury Nts.:
2.50%, 9/30/06 3,175,000 3,173,390
2.75%, 7/31/06 387,000 388,920
2.75%, 8/15/07 3 574,000 573,866
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Total U.S. Government Sector (Cost $20,557,130) 20,604,263
SHARES
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CORPORATE SECTOR--30.6%
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COMMON STOCKS--0.4%
AboveNet, Inc. 4 86 2,107
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Broadwing Corp. 4 344 1,957
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Capital Gaming International, Inc. 4,5 18 --
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Cebridge Connections Holding LLC 4,7 793 --
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Covad Communications Group, Inc. 4 6,198 9,297
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Crunch Equity Holdings, Cl. A 4,5 120 156,133
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Dobson Communications Corp., Cl. A 4 34,718 46,175
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Equinix, Inc. 4 3,873 145,973
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Globix Corp. 4 6,880 17,922
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ICO Global Communication Holdings Ltd. 4 24,061 2,406
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Leap Wireless International, Inc. 4 1,501 30,245
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Manitowoc Co., Inc. (The) 173 6,107
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MCI, Inc. 815 14,059
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NTL, Inc. 4 3,879 257,992
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Orbital Sciences Corp. 4 651 6,738
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Pioneer Cos., Inc. 4 5,655 89,688
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Polymer Group, Inc., Cl. A 4 8,013 98,480
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Prandium, Inc. 4 14,499 435
9 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
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VALUE
SHARES SEE NOTE 1
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COMMON STOCKS Continued
Star Gas Partners LP 220 $ 1,538
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Sterling Chemicals, Inc. 4,5 264 6,494
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TVMAX Holdings, Inc. 4,5 2,500 14,688
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UnitedGlobalCom, Inc., Cl. A 4 53,053 396,836
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WRC Media Corp. 4,5 676 14
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XO Communications, Inc. 4 1,091 3,273
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1,308,557
PRINCIPAL
AMOUNT
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CORPORATE BONDS AND NOTES--29.4%
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CONSUMER DISCRETIONARY--8.6%
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AUTO COMPONENTS--1.3%
ArvinMeritor, Inc., 8.75% Sr. Unsec. Unsub
Nts., 3/1/12 $ 300,000 336,000
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Collins & Aikman Floorcoverings, Inc., 9.75%
Sr. Sub. Nts., Series B, 2/15/10 200,000 214,750
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Dana Corp., 9% Unsec. Nts., 8/15/11 600,000 717,000
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Dura Operating Corp.:
8.625% Sr. Nts., Series B, 4/15/12 400,000 414,500
9% Sr. Unsec. Sub. Nts., Series D, 5/1/09 600,000 577,500
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Eagle-Picher, Inc., 9.75% Sr. Nts., 9/1/13 200,000 204,000
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Lear Corp., 8.11% Sr. Unsec. Nts.,
Series B, 5/15/09 700,000 804,581
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Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12 200,000 230,000
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Tenneco Automotive, Inc., 10.25% Sr. Sec. Nts.,
Series B, 7/15/13 100,000 117,000
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United Components, Inc., 9.375%
Sr. Sub. Nts., 6/15/13 100,000 109,000
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3,724,331
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HOTELS, RESTAURANTS & LEISURE--2.0%
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 5 400,000 358,000
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Aztar Corp., 9% Sr. Unsec. Sub. Nts., 8/15/11 250,000 281,250
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Boyd Gaming Corp., 8.75% Sr. Sub. Nts., 4/15/12 200,000 227,000
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Capital Gaming International, Inc., 11.50%
Promissory Nts., 8/1/1995 4,5,6 5,500 --
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Choctaw Resort Development Enterprise (The),
7.25% Sr. Nts., 11/15/19 7,11 100,000 102,625
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Domino's, Inc., 8.25% Sr. Unsec.
Sub. Nts., 7/1/11 145,000 159,500
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Hilton Hotels Corp.:
7.625% Nts., 5/15/08 200,000 224,306
7.625% Nts., 12/1/12 200,000 235,620
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Isle of Capri Casinos, Inc., 9%
Sr. Sub. Nts., 3/15/12 200,000 225,000
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John Q. Hammons Hotels, Inc., 8.875%
Sr. Nts., Series B, 5/15/12 200,000 231,000
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La Quinta Properties, Inc., 7%
Sr. Nts., 8/15/12 7 75,000 80,906
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Mandalay Resort Group, 10.25%
Sr. Unsec. Sub. Nts., Series B, 8/1/07 500,000 572,500
10 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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HOTELS, RESTAURANTS & LEISURE Continued
MGM Mirage, Inc.:
5.875% Sr. Nts., 2/27/14 $ 200,000 $ 198,250
9.75% Sr. Unsec. Sub. Nts., 6/1/07 150,000 169,500
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Mohegan Tribal Gaming Authority, 6.375%
Sr. Sub. Nts., 7/15/09 150,000 157,875
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Penn National Gaming, Inc., 8.875%
Sr. Sub. Nts., 3/15/10 300,000 332,250
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Pinnacle Entertainment, Inc., 8.25%
Sr. Unsec. Sub. Nts., 3/15/12 250,000 259,375
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Six Flags, Inc.:
8.875% Sr. Unsec. Nts., 2/1/10 250,000 240,625
9.625% Sr. Nts., 6/1/14 9,000 8,640
9.75% Sr. Nts., 4/15/13 50,000 48,438
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Starwood Hotels & Resorts Worldwide, Inc.,
7.875% Sr. Nts., 5/1/12 400,000 471,000
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Sun International Hotels Ltd., 8.875%
Sr. Unsec. Sub. Nts., 8/15/11 500,000 553,750
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Universal City Development Partners Ltd.,
11.75% Sr. Nts., 4/1/10 200,000 234,000
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Venetian Casino Resort LLC/Las Vegas
Sands, Inc., 11% Sec. Nts., 6/15/10 200,000 230,750
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5,602,160
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HOUSEHOLD DURABLES--1.3%
Beazer Homes USA, Inc., 8.375% Sr. Nts., 4/15/12 500,000 553,750
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Blount, Inc., 8.875% Sr. Sub. Nts., 8/1/12 125,000 136,719
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D.R. Horton, Inc., 9.75%
Sr. Sub. Nts., 9/15/10 1 500,000 605,000
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K. Hovnanian Enterprises, Inc., 8.875%
Sr. Sub. Nts., 4/1/12 300,000 336,000
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KB Home:
8.625% Sr. Sub. Nts., 12/15/08 500,000 568,750
9.50% Sr. Unsec. Sub. Nts., 2/15/11 500,000 557,500
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Meritage Corp., 9.75% Sr. Unsec. Nts., 6/1/11 150,000 168,000
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Sealy Mattress Co., 8.25% Sr. Sub. Nts., 6/15/14 175,000 185,938
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Standard Pacific Corp., 9.25%
Sr. Sub. Nts., 4/15/12 100,000 116,500
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WCI Communities, Inc., 9.125%
Sr. Sub. Nts., 5/1/12 200,000 223,000
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William Lyon Homes, Inc., 10.75%
Sr. Nts., 4/1/13 5 200,000 228,500
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3,679,657
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LEISURE EQUIPMENT & PRODUCTS--0.0%
Remington Arms Co., Inc., 10.50%
Sr. Unsec. Nts., 2/1/11 50,000 44,500
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MEDIA--3.4%
Adelphia Communications Corp.:
8.125% Sr. Nts., Series B, 7/15/03 4,6 250,000 212,500
9.875% Sr. Nts., Series B, 3/1/07 4,6 300,000 258,000
10.25% Sr. Unsec. Nts., 11/1/06 4,6 100,000 86,000
10.25% Sr. Unsec. Sub. Nts., 6/15/11 4,6 200,000 179,500
10.875% Sr. Unsec. Nts., 10/1/10 4,6 100,000 87,750
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Allbritton Communications Co., 7.75%
Sr. Unsec. Sub. Nts., 12/15/12 150,000 157,125
11 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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MEDIA Continued
AMC Entertainment, Inc.:
8% Sr. Sub. Nts., 3/1/14 7 $ 100,000 $ 96,500
9.50% Sr. Unsec. Sub. Nts., 2/1/11 360,000 373,500
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Block Communications, Inc., 9.25%
Sr. Sub. Nts., 4/15/09 200,000 215,000
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Charter Communications Holdings
LLC/Charter Communications
Holdings Capital Corp., 8.375%
Sr. Nts., Second Lien, 4/30/14 7 1,000,000 1,013,750
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Cinemark USA, Inc., 9% Sr. Unsec.
Sub. Nts., 2/1/13 100,000 113,500
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Cinemark, Inc., 0%/9.75% Sr. Unsec.
Disc. Nts., 3/15/14 8 200,000 142,500
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CSC Holdings, Inc., 7.625% Sr. Unsec.
Unsub. Nts., Series B, 4/1/11 225,000 245,813
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Dex Media East LLC/Dex Media East
Finance Co., 9.875% Sr. Unsec.
Nts., 11/15/09 100,000 115,500
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Dex Media, Inc., 8% Unsec. Nts., 11/15/13 150,000 161,250
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DirecTV Holdings LLC/DirecTV
Financing Co., Inc., 8.375% Sr. Unsec.
Nts., 3/15/13 400,000 458,000
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EchoStar DBS Corp., 6.625% Sr. Nts., 10/1/14 7 500,000 513,750
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Entravision Communications Corp., 8.125%
Sr. Sub. Nts., 3/15/09 100,000 107,750
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Granite Broadcasting Corp., 9.75%
Sr. Sec. Nts., 12/1/10 9,000 8,348
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LCE Acquisition Corp., 9%
Sr. Sub. Nts., 8/1/14 7 175,000 184,188
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Lin Television Corp., 6.50%
Sr. Sub. Nts., 5/15/13 150,000 155,250
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LodgeNet Entertainment Corp., 9.50%
Sr. Sub. Debs., 6/15/13 100,000 109,750
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Mediacom LLC/Mediacom Capital Corp., 9.50%
Sr. Unsec. Nts., 1/15/13 459,000 452,115
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News America Holdings, Inc., 8.875%
Sr. Debs., 4/26/23 380,000 500,980
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PanAmSat Corp., 9% Sr. Nts., 8/15/14 7 250,000 266,250
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PRIMEDIA, Inc.:
8% Sr. Nts., 5/15/13 7 500,000 503,750
8.875% Sr. Unsec. Nts., 5/15/11 9,000 9,428
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R.H. Donnelley Financial Corp. I, 10.875%
Sr. Sub. Nts., 12/15/12 7 200,000 245,500
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Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts.,
Series B, 7/1/11 200,000 222,000
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Rainbow National Services LLC, 8.75%
Sr. Nts., 9/1/12 7 200,000 215,000
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Sinclair Broadcast Group, Inc.:
8% Sr. Unsec. Sub. Nts., 3/15/12 1,200,000 1,266,000
8.75% Sr. Sub. Nts., 12/15/11 300,000 328,500
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Spanish Broadcasting System, Inc., 9.625%
Sr. Unsec. Sub. Nts., 11/1/09 300,000 316,125
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Vertis, Inc., 9.75% Sr. Sec. Nts., 4/1/09 100,000 109,500
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WRC Media, Inc./Weekly Reader
Corp./CompassLearning, Inc.,
12.75% Sr. Sub. Nts., 11/15/09 300,000 283,875
-------------
9,714,247
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MULTILINE RETAIL--0.1%
Saks, Inc., 9.875% Nts., 10/1/11 200,000 236,000
12 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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SPECIALTY RETAIL--0.2%
Asbury Automotive Group, Inc., 9%
Sr. Sub. Nts., 6/15/12 $ 200,000 $ 212,000
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Building Materials Corp. of America, 7.75%
Sr. Nts., 8/1/14 7 100,000 99,750
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Eye Care Centers of America, Inc., 9.125%
Sr. Unsec. Sub. Nts., 5/1/08 5 100,000 100,500
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Hollywood Entertainment Corp., 9.625%
Sr. Sub. Nts., 3/15/11 150,000 169,875
-------------
582,125
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TEXTILES, APPAREL & LUXURY GOODS--0.3%
Levi Strauss & Co.:
11.625% Sr. Unsec. Nts., 1/15/08 200,000 205,000
12.25% Sr. Nts., 12/15/12 250,000 259,375
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Oxford Industries, Inc., 8.875%
Sr. Nts., 6/1/11 5 150,000 162,750
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Russell Corp., 9.25% Sr. Nts., 5/1/10 100,000 108,000
-------------
735,125
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CONSUMER STAPLES--1.0%
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BEVERAGES--0.0%
Constellation Brands, Inc., 8.125%
Sr. Sub. Nts., 1/15/12 100,000 110,000
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FOOD & STAPLES RETAILING--0.2%
Great Atlantic & Pacific Tea Co., Inc.
(The), 9.125% Sr. Nts., 12/15/11 209,000 180,785
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Ingles Markets, Inc., 8.875%
Sr. Unsec. Sub. Nts., 12/1/11 9,000 9,765
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Rite Aid Corp.:
8.125% Sr. Sec. Nts., 5/1/10 250,000 268,125
9.50% Sr. Sec. Nts., 2/15/11 100,000 111,250
-------------
569,925
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FOOD PRODUCTS--0.7%
B&G Foods Holdings Corp., 8% Sr. Nts., 10/1/11 50,000 53,000
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Chiquita Brands International, Inc., 7.50%
Sr. Nts., 11/1/14 7 50,000 51,500
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Del Monte Corp., 8.625% Sr. Sub. Nts., 12/15/12 200,000 226,500
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Doane Pet Care Co., 10.75% Sr. Nts., 3/1/10 375,000 406,875
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Dole Food Co., Inc., 8.875%
Sr. Unsec. Nts., 3/15/11 50,000 55,625
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Hines Nurseries, Inc., 10.25% Sr. Unsec.
Sub. Nts., 10/1/11 5 100,000 107,500
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Pinnacle Foods Holding Corp., 8.25%
Sr. Sub. Nts., 12/1/13 7 200,000 190,000
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Smithfield Foods, Inc.:
7.625% Sr. Unsec. Sub. Nts., 2/15/08 400,000 429,000
8% Sr. Nts., Series B, 10/15/09 300,000 334,500
-------------
1,854,500
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HOUSEHOLD PRODUCTS--0.1%
Playtex Products, Inc., 8% Sr. Sec. Nts., 3/1/11 300,000 329,250
13 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ENERGY--2.3%
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ENERGY EQUIPMENT & SERVICES--0.4%
Hornbeck-Leevac Marine Services, Inc., 10.625%
Sr. Nts., 8/1/08 $ 750,000 $ 830,625
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Petroleum Helicopters, Inc., 9.375%
Sr. Nts., 5/1/09 100,000 108,625
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Universal Compression, Inc., 7.25%
Sr. Unsec. Sub. Nts., 5/15/10 200,000 215,000
-------------
1,154,250
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OIL & GAS--1.9%
Chesapeake Energy Corp., 6.875%
Sr. Unsec. Nts., 1/15/16 336,000 361,200
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CITGO Petroleum Corp., 6% Sr. Nts., 10/15/11 7 50,000 51,125
- --------------------------------------------------------------------------------
El Paso Corp., 7.875% Sr. Unsec. Nts., 6/15/12 709,000 742,678
- --------------------------------------------------------------------------------
El Paso Production Holding Co., 7.75%
Sr. Unsec. Nts., 6/1/13 475,000 497,563
- --------------------------------------------------------------------------------
Enterprise Products Operating LP, 5.60%
Sr. Nts., 10/15/14 7 150,000 153,143
- --------------------------------------------------------------------------------
Forest Oil Corp., 7.75% Sr. Nts., 5/1/14 200,000 220,000
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Frontier Oil Corp.:
6.625% Sr. Nts., 10/1/11 7 75,000 78,000
11.75% Sr. Nts., 11/15/09 600,000 638,250
- --------------------------------------------------------------------------------
MarkWest Energy Partners LP/MarkWest
Energy Finance Corp.,
6.875% Sr. Nts., 11/1/14 7 50,000 51,250
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Newfield Exploration Co., 6.625%
Sr. Unsec. Sub. Nts., 9/1/14 7 200,000 215,500
- --------------------------------------------------------------------------------
Pemex Project Funding Master Trust, 8.50%
Unsub. Nts., 2/15/08 265,000 300,643
- --------------------------------------------------------------------------------
Pioneer Natural Resources Co., 5.875%
Sr. Unsec. Nts., 7/15/16 200,000 212,878
- --------------------------------------------------------------------------------
Premcor Refining Group, Inc., 9.50%
Sr. Nts., 2/1/13 500,000 592,500
- --------------------------------------------------------------------------------
Tesoro Petroleum Corp.:
8% Sr. Sec. Nts., 4/15/08 100,000 109,250
9.625% Sr. Sub. Nts., 4/1/12 9,000 10,553
- --------------------------------------------------------------------------------
Williams Cos., Inc. (The):
7.125% Nts., 9/1/11 100,000 112,500
7.625% Nts., 7/15/19 800,000 904,000
- --------------------------------------------------------------------------------
XTO Energy, Inc., 7.50% Sr. Nts., 4/15/12 100,000 118,492
-------------
5,369,525
- --------------------------------------------------------------------------------
FINANCIALS--1.2%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.3%
American Color Graphics, Inc., 10%
Sr. Sec. Nts., 6/15/10 100,000 77,000
- --------------------------------------------------------------------------------
Berry Plastics Corp., 10.75%
Sr. Sub. Nts., 7/15/12 200,000 231,000
- --------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc., 12%
Sr. Unsec. Sub. Nts., Series B, 9/30/08 800,000 541,000
-------------
849,000
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--0.1%
Western Financial Bank, 9.625%
Unsec. Sub. Debs., 5/15/12 5 300,000 343,500
14 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.2%
Pemex Project Funding Master Trust, 7.375%
Unsec. Unsub. Nts., 12/15/14 $ 410,000 $ 455,305
- --------------------------------------------------------------------------------
INSURANCE--0.1%
Arbor I Ltd., 17.38% Nts., 6/15/06 7,9 250,000 258,613
- --------------------------------------------------------------------------------
Leap Wireless International, Inc.:
4/1/27, Escrow Shares 5,10 400,000 16,000
4/1/27, Escrow Shares 5,10 200,000 6,500
-------------
281,113
- --------------------------------------------------------------------------------
REAL ESTATE--0.5%
Felcor Lodging LP, 9% Sr. Nts., 6/1/11 294,000 332,220
- --------------------------------------------------------------------------------
Host Marriott LP, 9.50% Sr. Nts., 1/15/07 400,000 446,000
- --------------------------------------------------------------------------------
MeriStar Hospitality Corp., 9.125%
Sr. Unsec. Nts., 1/15/11 709,000 758,630
-------------
1,536,850
- --------------------------------------------------------------------------------
HEALTH CARE--2.1%
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.2%
Fisher Scientific International, Inc., 8.125%
Sr. Sub. Nts., 5/1/12 174,000 194,880
- --------------------------------------------------------------------------------
HMP Equity Holdings Corp., 12.86%
Sr. Disc. Nts., 5/15/08 2,5 500,000 325,000
- --------------------------------------------------------------------------------
Inverness Medical Innovations, Inc., 8.75%
Sr. Sub. Nts., 2/15/12 7 150,000 155,250
-------------
675,130
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.9%
Alderwoods Group, Inc., 7.75%
Sr. Nts., 9/15/12 7 150,000 162,750
- --------------------------------------------------------------------------------
AmeriPath, Inc., 10.50%
Sr. Unsec. Sub. Nts., 4/1/13 100,000 98,500
- --------------------------------------------------------------------------------
Extendicare Health Services, Inc., 9.50%
Sr. Unsec. Sub. Nts., 7/1/10 100,000 113,000
- --------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust II, 7.875%
Nts., 2/1/08 900,000 972,000
- --------------------------------------------------------------------------------
HCA, Inc., 6.30% Sr. Unsec. Nts., 10/1/12 450,000 456,209
- --------------------------------------------------------------------------------
HealthSouth Corp.:
7.625% Nts., 6/1/12 800,000 780,000
10.75% Sr. Unsec. Sub. Nts., 10/1/08 9,000 9,428
- --------------------------------------------------------------------------------
Medquest, Inc., 11.875%
Sr. Unsec. Sub. Nts., Series B, 8/15/12 200,000 233,000
- --------------------------------------------------------------------------------
NDCHealth Corp., 10.50%
Sr. Unsec. Sub. Nts., 12/1/12 600,000 639,000
- --------------------------------------------------------------------------------
PacifiCare Health Systems, Inc., 10.75%
Sr. Unsec. Unsub. Nts., 6/1/09 259,000 299,793
- --------------------------------------------------------------------------------
Quintiles Transnational Corp., 10%
Sr. Sub. Nts., 10/1/13 150,000 164,250
- --------------------------------------------------------------------------------
Rotech Healthcare, Inc., 9.50%
Sr. Unsec. Sub. Nts., 4/1/12 400,000 438,000
- --------------------------------------------------------------------------------
Tenet Healthcare Corp.:
6.375% Sr. Nts., 12/1/11 387,000 355,073
7.375% Nts., 2/1/13 9,000 8,550
9.875% Sr. Nts., 7/1/14 7 50,000 52,625
- --------------------------------------------------------------------------------
Triad Hospitals, Inc.:
7% Sr. Nts., 5/15/12 200,000 215,000
7% Sr. Sub. Nts., 11/15/13 100,000 103,000
15 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
US Oncology, Inc.:
9% Sr. Nts., 8/15/12 7 $ 100,000 $ 108,500
10.75% Sr. Sub. Nts., 8/15/14 7 100,000 109,500
-------------
5,318,178
- --------------------------------------------------------------------------------
INDUSTRIALS--3.4%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.5%
Alliant Techsystems, Inc., 8.50%
Sr. Unsec. Sub. Nts., 5/15/11 200,000 221,500
- --------------------------------------------------------------------------------
BE Aerospace, Inc.:
8.50% Sr. Unsec. Nts., 10/1/10 100,000 110,000
8.875% Sr. Unsec. Sub. Nts., 5/1/11 209,000 220,913
- --------------------------------------------------------------------------------
K&F Industries, Inc., 9.625%
Sr. Unsec. Sub. Nts., 12/15/10 125,000 145,625
- --------------------------------------------------------------------------------
Rexnord Corp., 10.125%
Sr. Unsec. Sub. Nts., 12/15/12 5 150,000 170,250
- --------------------------------------------------------------------------------
TD Funding Corp., 8.375% Sr. Sub. Nts., 7/15/11 200,000 216,000
- --------------------------------------------------------------------------------
TRW Automotive, Inc.:
9.375% Sr. Nts., 2/15/13 134,000 154,770
11% Sr. Sub. Nts., 2/15/13 97,000 115,915
- --------------------------------------------------------------------------------
Vought Aircraft Industries, Inc., 8%
Sr. Nts., 7/15/11 100,000 98,000
-------------
1,452,973
- --------------------------------------------------------------------------------
AIRLINES--0.4%
America West Airlines, Inc., 10.75%
Sr. Nts., 9/1/05 1,000,000 985,000
- --------------------------------------------------------------------------------
ATA Holdings Corp., 13%
Sr. Unsec. Nts., 2/1/09 6,9 1,260,000 252,000
-------------
1,237,000
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.1%
Associated Materials, Inc., 9.75%
Sr. Sub. Nts., 4/15/12 100,000 114,500
- --------------------------------------------------------------------------------
Jacuzzi Brands, Inc., 9.625%
Sr. Sec. Nts., 7/1/10 156,000 176,280
-------------
290,780
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.3%
Allied Waste North America, Inc.:
7.375% Sr. Sec. Nts., Series B, 4/15/14 300,000 279,000
7.875% Sr. Nts., 4/15/13 400,000 409,000
8.50% Sr. Sub. Nts., 12/1/08 500,000 527,500
- --------------------------------------------------------------------------------
Boise Cascade LLC/Boise Cascade Finance Corp.,
7.125% Sr. Sub. Nts., 10/15/14 7 150,000 157,321
- --------------------------------------------------------------------------------
Comforce Operating, Inc., 12% Sr. Nts.,
Series B, 12/1/07 5 200,000 195,000
- --------------------------------------------------------------------------------
Corrections Corp. of America, 9.875%
Sr. Nts., 5/1/09 100,000 113,000
- --------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375%
Sr. Sub. Nts., 8/1/07 600,000 607,500
- --------------------------------------------------------------------------------
IMCO Recycling Escrow, Inc., 9%
Sr. Nts., 11/15/14 7,11 50,000 51,250
- --------------------------------------------------------------------------------
Kindercare Learning Centers, Inc., 9.50%
Sr. Sub. Nts., 2/15/09 192,000 195,360
- --------------------------------------------------------------------------------
Mail-Well I Corp., 9.625% Sr. Nts., 3/15/12 300,000 334,500
16 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES Continued
Protection One, Inc., /Protection
One Alarm Monitoring, Inc.,
7.375% Sr. Unsec. Nts., 8/15/05 $ 400,000 $ 402,000
- --------------------------------------------------------------------------------
Synagro Technologies, Inc., 9.50%
Sr. Sub. Nts., 4/1/09 100,000 107,250
- --------------------------------------------------------------------------------
United Rentals, Inc., 7% Sr. Sub. Nts., 2/15/14 400,000 371,000
-------------
3,749,681
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.0%
URS Corp., 11.50% Sr. Unsec. Nts., 9/15/09 64,000 73,920
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.0%
Great Lakes Dredge & Dock Co., 7.75%
Sr. Unsec. Sub. Nts., 12/15/13 30,000 27,000
- --------------------------------------------------------------------------------
MACHINERY--0.7%
AGCO Corp., 9.50% Sr. Unsec. Nts., 5/1/08 5 500,000 540,000
- --------------------------------------------------------------------------------
Dresser-Rand Group, Inc., 7.375%
Sr. Sub. Nts., 11/1/14 5 50,000 52,625
- --------------------------------------------------------------------------------
Milacron Escrow Corp., 11.50%
Sr. Sec. Nts., 5/15/11 7 300,000 313,500
- --------------------------------------------------------------------------------
NMHG Holding Co., 10% Sr. Nts., 5/15/09 100,000 111,125
- --------------------------------------------------------------------------------
SPX Corp., 7.50% Sr. Nts., 1/1/13 400,000 430,000
- --------------------------------------------------------------------------------
Terex Corp., 9.25% Sr. Unsec. Sub. Nts., 7/15/11 200,000 225,000
- --------------------------------------------------------------------------------
Trinity Industries, Inc., 6.50%
Sr. Nts., 3/15/14 5 150,000 150,000
-------------
1,822,250
- --------------------------------------------------------------------------------
MARINE--0.2%
Navigator Gas Transport plc, 10.50%
First Priority Ship Mtg. Nts., 6/30/07 4,5,6 750,000 543,750
- --------------------------------------------------------------------------------
ROAD & RAIL--0.1%
Kansas City Southern Railway Co. (The), 7.50%
Sr. Nts., 6/15/09 200,000 209,000
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.1%
Worldspan LP/Worldspan Financial Corp., 9.625%
Sr. Nts., 6/15/11 150,000 143,250
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--1.1%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.2%
Orion Network Systems, Inc., 12.50%
Sr. Unsub. Disc. Nts., 1/15/07 4,5,6 1,150,000 563,500
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.2%
Seagate Technology Hdd Holdings, 8%
Sr. Nts., 5/15/09 400,000 434,500
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.1%
Ingram Micro, Inc., 9.875%
Sr. Unsec. Sub. Nts., 8/15/08 300,000 330,750
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Globix Corp., 11% Sr. Nts., 5/1/08 5,12 42,888 38,385
- --------------------------------------------------------------------------------
NorthPoint Communications Group, Inc., 12.875%
Nts., 2/15/10 4,5,6 160,138 --
- --------------------------------------------------------------------------------
PSINet, Inc.:
10.50% Sr. Unsec. Nts., 12/1/06 4,5,6 [EUR] 500,000 25,184
11% Sr. Nts., 8/1/09 4,5,6 540,935 18,257
-------------
81,826
17 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
IT SERVICES--0.2%
Iron Mountain, Inc., 7.75%
Sr. Sub. Nts., 1/15/15 $ 500,000 $ 542,500
- --------------------------------------------------------------------------------
Titan Corp. (The), 8% Sr. Sub. Nts., 5/15/11 50,000 53,000
-------------
595,500
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.4%
AMI Semiconductor, Inc., 10.75%
Sr. Unsec. Sub. Nts., 2/1/13 5 194,000 228,435
- --------------------------------------------------------------------------------
Amkor Technology, Inc., 9.25%
Sr. Unsec. Sub. Nts., 2/15/08 300,000 289,500
- --------------------------------------------------------------------------------
ChipPAC International Co. Ltd., 12.75%
Sr. Unsec. Sub. Nts., Series B, 8/1/09 5 200,000 215,000
- --------------------------------------------------------------------------------
Freescale Semiconductor, Inc., 7.125%
Sr. Nts., 7/15/14 7 200,000 213,000
-------------
945,935
- --------------------------------------------------------------------------------
MATERIALS--4.4%
- --------------------------------------------------------------------------------
CHEMICALS--1.3%
Crompton Corp., 9.875% Sr. Nts., 8/1/12 7 125,000 138,438
- --------------------------------------------------------------------------------
Equistar Chemicals LP/Equistar Funding Corp.:
8.75% Sr. Unsec. Nts., 2/15/09 200,000 221,000
10.125% Sr. Unsec. Nts., 9/1/08 9,000 10,384
10.625% Sr. Unsec. Nts., 5/1/11 200,000 232,000
- --------------------------------------------------------------------------------
Huntsman Co. LLC:
11.50% Sr. Nts., 7/15/12 7 375,000 423,750
11.625% Sr. Unsec. Nts., 10/15/10 9,000 10,654
- --------------------------------------------------------------------------------
Huntsman Corp./ICI Chemical Co. plc, 13.08%
Sr. Unsec. Disc. Nts., 12/31/09 2,5 300,000 164,250
- --------------------------------------------------------------------------------
Huntsman International LLC, 9.875%
Sr. Nts., 3/1/09 600,000 669,000
- --------------------------------------------------------------------------------
IMC Global, Inc., 10.875%
Sr. Unsec. Nts., 8/1/13 9,000 11,408
- --------------------------------------------------------------------------------
Innophos, Inc., 8.875% Sr. Sub. Nts., 8/15/14 7 150,000 162,375
- --------------------------------------------------------------------------------
ISP Holdings, Inc., 10.625%
Sr. Sec. Nts., 12/15/09 200,000 222,000
- --------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.50% Sec. Nts., 12/15/08 9,000 9,855
9.80% Debs., 2/1/20 50,000 55,750
9.875% Sec. Nts., Series B, 5/1/07 320,000 340,000
10.50% Sr. Sec. Nts., 6/1/13 50,000 59,250
- --------------------------------------------------------------------------------
Millennium America, Inc., 9.25%
Sr. Unsec. Sub. Nts., 6/15/08 50,000 56,000
- --------------------------------------------------------------------------------
Pioneer Cos., Inc., 5.475%
Sr. Sec. Nts., 12/31/06 5,9 27,687 27,964
- --------------------------------------------------------------------------------
PolyOne Corp.:
8.875% Sr. Unsec. Nts., 5/1/12 400,000 429,000
10.625% Sr. Unsec. Nts., 5/15/10 9,000 10,035
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc.:
10% Sr. Sec. Nts., 12/19/07 5,12 204,568 201,499
11.25% Sr. Sub. Nts., 8/15/06 4,5,6 200,000 --
- --------------------------------------------------------------------------------
Westlake Chemical Corp., 8.75%
Sr. Nts., 7/15/11 5 129,000 146,093
-------------
3,600,705
18 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.1%
Texas Industries, Inc., 10.25%
Sr. Unsec. Nts., 6/15/11 5 $ 200,000 $ 231,000
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--1.4%
Graham Packaging Co., Inc.:
8.50% Sr. Nts., 10/15/12 7 50,000 52,750
9.875% Sub. Nts., 10/15/14 7 100,000 106,500
- --------------------------------------------------------------------------------
Graphic Packaging International Corp.:
8.50% Sr. Nts., 8/15/11 250,000 283,125
9.50% Sr. Sub. Nts., 8/15/13 200,000 231,500
- --------------------------------------------------------------------------------
Jefferson Smurfit Corp., 8.25%
Sr. Unsec. Nts., 10/1/12 450,000 501,750
- --------------------------------------------------------------------------------
Owens-Brockway Glass Container, Inc.:
8.25% Sr. Unsec. Nts., 5/15/13 9,000 9,945
8.75% Sr. Sec. Nts., 11/15/12 500,000 566,250
8.875% Sr. Sec. Nts., 2/15/09 900,000 992,250
- --------------------------------------------------------------------------------
Pliant Corp., 0%/11.125%
Sr. Sec. Disc. Nts., 6/15/09 8 200,000 179,000
- --------------------------------------------------------------------------------
Solo Cup Co., 8.50% Sr. Sub. Nts., 2/15/14 100,000 98,750
- --------------------------------------------------------------------------------
Stone Container Corp.:
9.25% Sr. Unsec. Nts., 2/1/08 250,000 282,500
9.75% Sr. Unsec. Nts., 2/1/11 400,000 448,000
- --------------------------------------------------------------------------------
TriMas Corp., 9.875%
Sr. Unsec. Sub. Nts., 6/15/12 250,000 257,500
-------------
4,009,820
- --------------------------------------------------------------------------------
METALS & MINING--1.3%
AK Steel Corp., 7.75% Sr. Unsec. Nts., 6/15/12 9,000 9,158
- --------------------------------------------------------------------------------
Arch Western Finance LLC, 6.75%
Sr. Nts., 7/1/13 9 200,000 213,500
- --------------------------------------------------------------------------------
California Steel Industries, Inc., 6.125%
Sr. Nts., 3/15/14 200,000 197,500
- --------------------------------------------------------------------------------
Century Aluminum Co., 7.50% Sr. Nts., 8/15/14 7 250,000 266,250
- --------------------------------------------------------------------------------
Foundation PA Coal Co., 7.25% Sr. Nts., 8/1/14 7 100,000 107,375
- --------------------------------------------------------------------------------
IMCO Recycling, Inc., 10.375%
Sr. Sec. Nts., 10/15/10 5 200,000 224,000
- --------------------------------------------------------------------------------
International Steel Group, Inc., 6.50%
Sr. Nts., 4/15/14 50,000 53,750
- --------------------------------------------------------------------------------
Jorgensen (Earle M.) Co., 9.75%
Sr. Sec. Nts., 6/1/12 5 400,000 446,000
- --------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 10.875%
Sr. Nts., Series B, 10/15/06 4,6 500,000 470,000
- --------------------------------------------------------------------------------
Koppers Industry, Inc., 9.875%
Sr. Sec. Nts., 10/15/13 5 250,000 283,750
- --------------------------------------------------------------------------------
Metallurg, Inc., 11% Sr. Nts., 12/1/07 200,000 153,000
- --------------------------------------------------------------------------------
Oregon Steel Mills, Inc., 10% Sr. Nts., 7/15/09 200,000 223,000
- --------------------------------------------------------------------------------
Peabody Energy Corp., 6.875%
Sr. Unsec. Nts., Series B, 3/15/13 200,000 220,500
- --------------------------------------------------------------------------------
Steel Dynamics, Inc., 9.50% Sr. Nts., 3/15/09 200,000 222,250
- --------------------------------------------------------------------------------
UCAR Finance, Inc., 10.25% Sr. Nts., 2/15/12 100,000 114,500
- --------------------------------------------------------------------------------
United States Steel Corp, 10.75%
Sr. Nts., 8/1/08 260,000 309,400
- --------------------------------------------------------------------------------
United States Steel Corp., 9.75%
Sr. Nts., 5/15/10 168,000 193,200
-------------
3,707,133
19 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.3%
Buckeye Technologies, Inc., 8.50%
Sr. Nts., 10/1/13 $ 50,000 $ 55,500
- --------------------------------------------------------------------------------
Georgia-Pacific Corp., 8.125%
Sr. Unsec. Nts., 5/15/11 500,000 586,250
- --------------------------------------------------------------------------------
Tekni-Plex, Inc.:
8.75% Sr. Sec. Nts., 11/15/13 7 109,000 104,504
12.75% Sr. Unsec. Sub. Nts., Series B, 6/15/10 200,000 151,000
-------------
897,254
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.4%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.1%
COLO.com, Inc., 13.875% Sr. Nts., 3/15/10 4,5,6 249,878 25
- --------------------------------------------------------------------------------
Crown Castle International Corp., 7.50%
Sr. Nts., 12/1/13 200,000 215,000
- --------------------------------------------------------------------------------
Dex Media West LLC/Dex Media West Finance Co.:
8.50% Sr. Nts., 8/15/10 150,000 171,750
9.875% Sr. Sub. Nts., 8/15/13 293,000 347,938
- --------------------------------------------------------------------------------
MCI, Inc., 5.908% Sr. Unsec. Nts., 5/1/07 233,000 233,000
- --------------------------------------------------------------------------------
Qwest Capital Funding, Inc., 7.90%
Unsec. Nts., 8/15/10 134,000 130,315
- --------------------------------------------------------------------------------
Qwest Corp., 9.125% Nts., 3/15/12 7 700,000 792,750
- --------------------------------------------------------------------------------
Qwest Services Corp., 14% Nts., 12/15/10 7,9 925,000 1,103,063
- --------------------------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts., 12/1/07 4,5,6 200,000 --
-------------
2,993,841
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.3%
Alamosa Delaware, Inc.:
11% Sr. Unsec. Nts., 7/31/10 9,000 10,575
12.50% Sr. Unsec. Nts., 2/1/11 200,000 227,000
- --------------------------------------------------------------------------------
American Tower Corp., 7.50% Sr. Nts., 5/1/12 100,000 105,000
- --------------------------------------------------------------------------------
American Tower Escrow Corp., 12.25%
Sr. Sub. Disc. Nts., 8/1/08 2 400,000 303,000
- --------------------------------------------------------------------------------
CellNet Data Systems, Inc.,
Sr. Unsec. Disc. Nts., 10/1/07 4,5,6 554,000 --
- --------------------------------------------------------------------------------
Centennial Cellular Operating Co.
LLC/Centennial Communications Corp.,
10.125% Sr. Nts., 6/15/13 300,000 327,000
- --------------------------------------------------------------------------------
Crown Castle International Corp., 10.75%
Sr. Nts., 8/1/11 200,000 222,500
- --------------------------------------------------------------------------------
Dobson Cellular Systems, 8.375%
Sec. Nts., 11/1/11 7,11 50,000 51,813
- --------------------------------------------------------------------------------
Dobson Communications Corp., 8.875%
Sr. Nts., 10/1/13 209,000 141,598
- --------------------------------------------------------------------------------
Nextel Communications, Inc., 7.375%
Sr. Nts., 8/1/15 1,040,000 1,159,600
- --------------------------------------------------------------------------------
Rural Cellular Corp.:
9.625% Sr. Sub. Nts., Series B, 5/15/08 150,000 141,750
9.75% Sr. Sub. Nts., 1/15/10 9,000 7,785
9.875% Sr. Nts., 2/1/10 150,000 151,875
- --------------------------------------------------------------------------------
SBA Telecommunications, Inc./SBA
Communications Corp.,
0%/9.75% Sr. Disc. Nts., 12/15/11 8 459,000 389,003
- --------------------------------------------------------------------------------
Triton PCS, Inc., 8.50% Sr. Unsec. Nts., 6/1/13 300,000 276,750
20 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES Continued
Western Wireless Corp., 9.25%
Sr. Unsec. Nts., 7/15/13 $ 259,000 $ 277,130
-------------
3,792,379
- --------------------------------------------------------------------------------
UTILITIES--2.9%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--2.1%
Allegheny Energy Supply Co. LLC, 8.25%
Bonds, 4/15/12 7 9,000 10,193
- --------------------------------------------------------------------------------
Caithness Coso Funding Corp., 9.05%
Sr. Sec. Nts., Series B, 12/15/09 397,819 443,568
- --------------------------------------------------------------------------------
Calpine Corp., 8.75% Sr. Nts., 7/15/07 125,000 90,000
- --------------------------------------------------------------------------------
CenterPoint Energy, Inc., 7.25%
Sr. Nts., Series B, 9/1/10 100,000 112,048
- --------------------------------------------------------------------------------
CMS Energy Corp.:
7.50% Sr. Nts., 1/15/09 9,000 9,698
7.75% Sr. Nts., 8/1/10 100,000 110,000
9.875% Sr. Unsec. Nts., 10/15/07 900,000 1,014,750
- --------------------------------------------------------------------------------
ESI Tractebel Acquisition Corp., 7.99%
Sec. Bonds, Series B, 12/30/11 5 448,000 482,202
- --------------------------------------------------------------------------------
Midwest Generation LLC, 8.75%
Sr. Sec. Nts., 5/1/34 800,000 910,000
- --------------------------------------------------------------------------------
Mirant Americas Generation LLC, 8.30%
Sr. Unsec. Nts., 5/1/11 4,6 600,000 583,500
- --------------------------------------------------------------------------------
MSW Energy Holdings LLC/MSW
Energy Finance Co., Inc.,
8.50% Sr. Sec. Nts., 9/1/10 5 100,000 110,000
- --------------------------------------------------------------------------------
NRG Energy, Inc., 8% Sr. Sec. Nts., 12/15/13 7 550,000 608,438
- --------------------------------------------------------------------------------
PG&E Corp., 6.875% Sr. Sec. Nts., 7/15/08 200,000 217,500
- --------------------------------------------------------------------------------
Reliant Resources, Inc.:
9.25% Sr. Sec. Nts., 7/15/10 359,000 400,285
9.50% Sr. Sec. Nts., 7/15/13 200,000 226,000
- --------------------------------------------------------------------------------
Teco Energy, Inc., 7.20% Unsec.
Unsub. Nts., 5/1/11 300,000 328,500
- --------------------------------------------------------------------------------
Westar Energy, Inc., 9.75%
Sr. Unsec. Nts., 5/1/07 185,000 211,611
-------------
5,868,293
- --------------------------------------------------------------------------------
GAS UTILITIES--0.1%
AmeriGas Partners LP/AmeriGas
Eagle Finance Corp.,
8.875% Sr. Unsec. Nts., Series B, 5/20/11 200,000 220,000
- --------------------------------------------------------------------------------
SEMCO Energy, Inc., 7.125% Sr. Nts., 5/15/08 100,000 106,000
-------------
326,000
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.7%
Consumers Energy Co., 7.375% Nts., 9/15/23 200,000 207,171
- --------------------------------------------------------------------------------
Dynegy Holdings, Inc.:
6.875% Sr. Unsec. Unsub. Nts., 4/1/11 400,000 389,000
8.75% Sr. Nts., 2/15/12 9,000 9,540
10.125% Sr. Sec. Nts., 7/15/13 7 900,000 1,053,000
- --------------------------------------------------------------------------------
Mirant Mid-Atlantic LLC, 8.625%
Sec. Pass-Through Certificates,
Series A, 6/30/12 131,808 138,481
21 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER Continued
NorthWestern Corp., 5.875%
Sr. Sec. Nts., 11/1/14 7,11 $ 30,000 $ 31,088
-------------
1,828,280
-------------
82,920,991
SHARES
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.7%
Dobson Communications Corp., 6% Cv.,
Series F (converts into
Dobson Communications Corp., Cl. A
common stock), Non-Vtg. 7 600 30,268
- --------------------------------------------------------------------------------
e.spire Communications, Inc., 12.75%
Jr. Redeemable, Non-Vtg. 4,5,12 249 25
- --------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., 11.75% Cum
Exchangeable, Series B, Non-Vtg. 4,5 4,000 361,000
- --------------------------------------------------------------------------------
Nebco Evans Holdings, Inc., 11.25%
Sr. Redeemable Exchangeable, Non-Vtg. 4,5,12 3,031 --
- --------------------------------------------------------------------------------
Paxson Communications Corp.:
14.25% Cum. Jr. Exchangeable, Non-Vtg. 12 41 312,625
14.25% Cum. 4,12 1 5,681
- --------------------------------------------------------------------------------
Pennsylvania Real Estate Investment Trust, 11% 4,000 242,000
- --------------------------------------------------------------------------------
PTV, Inc., 10% Cum., Series A, Non-Vtg. 4 24
- --------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Cum.,
Series B, Non-Vtg. 4,5,12 115 92,288
- --------------------------------------------------------------------------------
Sovereign Real Estate Investment Trust,
12% Non-Cum., Series A 7 5,750 863,938
-------------
1,907,849
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
STRUCTURED NOTES--0.1%
Swiss Re Capital Markets Corp./Fujiyama Ltd.
Catastrophe Linked Nts.,
5.711%, 5/16/05 7,9 $ 250,000 252,680
-------------
Total Corporate Sector (Cost $84,237,040) 86,390,077
UNITS
- --------------------------------------------------------------------------------
CONVERTIBLE SECTOR--0.0%
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
AboveNet, Inc. Wts.:
Exp. 9/8/08 4 78 644
Exp. 9/8/10 4 92 735
- --------------------------------------------------------------------------------
American Tower Corp. Wts., Exp. 8/1/08 4,7 400 84,200
- --------------------------------------------------------------------------------
COLO.com, Inc. Wts., Exp. 3/15/10 4,5 300 3
- --------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/15/07 4,5 600 --
- --------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc. Wts.,
Exp. 9/30/08 4,5 800 --
- --------------------------------------------------------------------------------
e.spire Communications, Inc. Wts.,
Exp. 11/1/05 4,5 700 7
- --------------------------------------------------------------------------------
Horizon PCS, Inc. Wts., Exp. 10/1/10 4,5 1,000 --
- --------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05 4,5 4,125 41
- --------------------------------------------------------------------------------
ICO Global Communication Holdings Ltd. Wts.:
Exp. 5/16/06 4,5 6,035 30
Exp. 5/16/06 4,5 9 --
22 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
VALUE
UNITS SEE NOTE 1
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES Continued
Insilco Corp. Wts., Exp. 8/15/07 4,5 720 $ --
- --------------------------------------------------------------------------------
Leap Wireless International, Inc. Wts.,
Exp. 4/15/10 4,5 400 4
- --------------------------------------------------------------------------------
Long Distance International, Inc. Wts.,
Exp. 4/13/08 4,5 400 --
- --------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts.,
Exp. 1/15/07 4,5 975 10
- --------------------------------------------------------------------------------
Millenium Seacarriers, Inc. Wts.,
Exp. 7/15/05 4,5 700 7
- --------------------------------------------------------------------------------
Ntelos, Inc. Wts., Exp. 8/15/10 4,5 500 5
- --------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts., Exp. 9/19/10 4 6,738 1,550
- --------------------------------------------------------------------------------
Protection One, Inc. Wts., Exp. 6/30/05 4,5 6,400 --
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. Wts., Exp. 12/19/08 4,5 431 335
- --------------------------------------------------------------------------------
Verado Holdings, Inc., Cl. B Wts.,
Exp. 4/15/08 4 500 304
- --------------------------------------------------------------------------------
XO Communications, Inc., Cl. A Wts.,
Exp. 1/16/10 4 2,188 1,652
- --------------------------------------------------------------------------------
XO Communications, Inc., Cl. B Wts.,
Exp. 1/16/10 4 1,641 771
- --------------------------------------------------------------------------------
XO Communications, Inc., Cl. C Wts.,
Exp. 1/16/10 4 1,641 509
-------------
Total Convertible Sector (Cost $45,818) 90,807
SHARES
- --------------------------------------------------------------------------------
INTERNATIONAL SECTOR--41.9%
- --------------------------------------------------------------------------------
COMMON STOCKS--0.3%
COLT Telecom Group plc, ADR 4 7,020 22,969
- --------------------------------------------------------------------------------
Microcell Telecommunications, Inc., Cl. A 4 7 199
- --------------------------------------------------------------------------------
Telewest Global, Inc. 4 44,358 545,603
- --------------------------------------------------------------------------------
Viatel Holding Ltd. (Bermuda) 4,5 877 745
- --------------------------------------------------------------------------------
Western Forest Products, Inc. 4 31,882 208,080
-------------
777,596
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--3.8%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--0.4%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--0.2%
Intrawest Corp., 7.50%
Sr. Unsec. Nts., 10/15/13 $ 333,000 357,975
- --------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd., 8.75%
Sr. Unsub. Nts., 2/2/11 200,000 239,000
-------------
596,975
- --------------------------------------------------------------------------------
MEDIA--0.1%
Corus Entertainment, Inc., 8.75%
Sr. Sub. Nts., 3/1/12 200,000 224,000
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.1%
Jean Coutu Group (PJC), Inc. (The):
7.625% Sr. Nts., 8/1/12 7 100,000 106,250
8.50% Sr. Sub. Nts., 8/1/14 7 250,000 256,250
-------------
362,500
23 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CONSUMER STAPLES--0.4%
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.4%
Burns Philp Capital Property Ltd., 9.75%
Sr. Unsec. Sub. Nts., 7/15/12 5 $ 100,000 $ 110,500
- --------------------------------------------------------------------------------
Tembec Industries, Inc., 8.50%
Sr. Unsec. Nts., 2/1/11 9,000 9,248
- --------------------------------------------------------------------------------
United Biscuits Finance plc, 10.75%
Sr. Sub. Nts., 4/15/11 5 [GBP] 500,000 957,876
-------------
1,077,624
- --------------------------------------------------------------------------------
ENERGY--1.2%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.4%
Ocean Rig Norway AS, 10.25%
Sr. Sec. Nts., 6/1/08 1,200,000 1,242,000
- --------------------------------------------------------------------------------
OIL & GAS--0.8%
Gazprom International SA, 7.201%
Sr. Unsec. Bonds, 2/1/20 1,520,000 1,592,968
- --------------------------------------------------------------------------------
Pemex Project Funding Master Trust, 6.625%
Nts., 4/4/10 [EUR] 460,000 644,186
-------------
2,237,154
- --------------------------------------------------------------------------------
FINANCIALS--0.5%
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS--0.5%
Network Rail MTN Finance plc, 4.875% Sec.
Nts., 3/6/09 [GBP] 740,000 1,352,944
- --------------------------------------------------------------------------------
INDUSTRIALS--0.3%
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.0%
Videotron Ltee, 6.875% Sr. Unsec. Nts., 1/15/14 100,000 105,500
- --------------------------------------------------------------------------------
MARINE--0.2%
CP Ships Ltd., 10.375% Sr. Nts., 7/15/12 300,000 347,250
- --------------------------------------------------------------------------------
Pacific & Atlantic Holdings, Inc., 3.75%
Sec. Nts., 12/31/07 7,12 183,960 79,949
-------------
427,199
- --------------------------------------------------------------------------------
ROAD & RAIL--0.1%
Stena AB:
7.50% Sr. Unsec. Nts., 11/1/13 232,000 243,020
9.625% Sr. Nts., 12/1/12 150,000 169,688
-------------
412,708
- --------------------------------------------------------------------------------
MATERIALS--0.7%
- --------------------------------------------------------------------------------
CHEMICALS--0.1%
PCI Chemicals Canada, 10%
Sr. Sec. Nts., 12/31/08 87,434 90,494
- --------------------------------------------------------------------------------
Rhodia SA, 10.25% Sr. Unsec. Nts., 6/1/10 275,000 299,750
-------------
390,244
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.3%
Crown Euro Holdings SA:
9.50% Sr. Sec. Nts., 3/1/11 300,000 343,500
10.875% Sr. Sec. Nts., 3/1/13 100,000 119,250
- --------------------------------------------------------------------------------
MDP Acquisitions plc, 9.625% Sr. Nts., 10/1/12 200,000 229,000
-------------
691,750
24 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
METALS & MINING--0.1%
Ispat Inland ULC, 9.75% Sr. Sec. Nts., 4/1/14 $ 250,000 $ 305,000
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.2%
Abitibi-Consolidated, Inc., 8.55% Nts., 8/1/10 225,000 247,500
- --------------------------------------------------------------------------------
Western Forest Products, Inc., 15%
Sec. Nts., 7/28/09 5,12 156,000 176,280
-------------
423,780
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--0.2%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.2%
Telus Corp., 7.50% Nts., 6/1/07 596,000 655,257
- --------------------------------------------------------------------------------
UTILITIES--0.1%
- --------------------------------------------------------------------------------
GAS UTILITIES--0.1%
Intergas Finance BV, 6.875% Bonds, 11/4/11 7,11 270,000 270,338
-------------
10,774,973
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--31.6%
- --------------------------------------------------------------------------------
ARGENTINA--0.9%
Argentina (Republic of) Bonds:
1.389%, 5/3/05 9 24,000 23,657
1.98%, 8/3/12 9 2,220,000 1,671,174
Series PRE8, 2%, 1/3/10 4,5,6 [ARP] 810,000 394,260
Series PR12, 2%, 1/3/16 4,5,6 [ARP] 551,273 218,363
- --------------------------------------------------------------------------------
Argentina (Republic of) Disc. Bonds,
2.345%, 3/31/23 5,6 185,000 98,050
- --------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Bonos
de Consolidacion de Deudas,
Series PBA1, 3.257%, 4/1/07 5,6 [ARP] 50,689 20,293
-------------
2,425,797
- --------------------------------------------------------------------------------
AUSTRALIA--1.1%
Queensland Treasury Corp. Unsec. Nts.,
Series 09G, 6%, 7/14/09 [AUD] 3,940,000 3,025,231
- --------------------------------------------------------------------------------
AUSTRIA--1.1%
Austria (Republic of) Bonds, 6.25%,
7/15/27 [EUR] 1,465,000 2,332,601
- --------------------------------------------------------------------------------
Austria (Republic of) Nts.,
Series 98-1, 5%, 1/15/08 [EUR] 470,000 641,464
-------------
2,974,065
- --------------------------------------------------------------------------------
BELGIUM--2.1%
Belgium (Kingdom of) Bonds:
5%, 9/28/11 [EUR] 360,000 500,576
Series 19, 6.50%, 3/31/05 [EUR] 730,000 950,157
Series 26, 6.25%, 3/28/07 [EUR] 1,465,000 2,032,195
Series 28, 5.75%, 3/28/08 [EUR] 550,000 768,850
Series 32, 3.75%, 3/28/09 [EUR] 750,000 984,536
Series 35, 5.75%, 9/28/10 [EUR] 450,000 647,422
-------------
5,883,736
25 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
BRAZIL--2.3%
Brazil (Federal Republic of) Bonds:
8.875%, 10/14/19 $ 480,000 $ 475,200
Series 15 yr., 3.125%, 4/15/09 9 5,883 5,765
- --------------------------------------------------------------------------------
Brazil (Federal Republic of) Debt
Capitalization Bonds, Series 20 yr.,
8%, 4/15/14 3,097,284 3,079,862
- --------------------------------------------------------------------------------
Brazil (Federal Republic of) Nts., 12%, 4/15/10 460,000 549,700
- --------------------------------------------------------------------------------
Brazil (Federal Republic of) Unsec.
Unsub. Bonds:
10%, 8/7/11 305,000 335,500
11%, 2/4/10 [EUR] 150,000 218,503
11%, 8/17/40 1,070,000 1,208,298
Cl. B, 8.875%, 4/15/24 536,000 518,580
-------------
6,391,408
- --------------------------------------------------------------------------------
BULGARIA--0.3%
Bulgaria (Republic of) Bonds:
8.25%, 1/15/15 305,000 382,775
8.25%, 1/15/15 7 305,000 382,775
-------------
765,550
- --------------------------------------------------------------------------------
COLOMBIA--0.1%
Colombia (Republic of) Unsec. Unsub. Bonds,
8.375%, 2/15/27 315,000 288,225
- --------------------------------------------------------------------------------
DENMARK--0.3%
Denmark (Kingdom of) Nts., 4%, 8/15/08 [DKK] 5,400,000 962,302
- --------------------------------------------------------------------------------
ECUADOR--0.2%
Ecuador (Republic of) Unsec. Bonds, 8%,
8/15/30 9 570,000 480,225
- --------------------------------------------------------------------------------
EL SALVADOR--0.1%
El Salvador (Republic of) Bonds, 7.625%,
9/21/34 7 210,000 216,300
- --------------------------------------------------------------------------------
FINLAND--0.1%
Finland (Republic of) Sr. Unsec. Unsub. Bonds,
2.75%, 7/4/06 [EUR] 115,000 148,021
- --------------------------------------------------------------------------------
FRANCE--1.4%
France (Government of) Obligations
Assimilables du Tresor Bonds:
5.50%, 10/25/07 [EUR] 465,000 641,343
5.50%, 10/25/10 [EUR] 245,000 349,101
5.75%, 10/25/32 [EUR] 1,070,000 1,624,240
- --------------------------------------------------------------------------------
France (Government of) Treasury Nts.:
3 yr., 3.50%, 1/12/05 [EUR] 945,000 1,212,089
5 yr., 4.75%, 7/12/07 [EUR] 50,000 67,439
-------------
3,894,212
26 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
GERMANY--5.5%
Germany (Republic of) Bonds:
2%, 6/17/05 [EUR] 950,000 $ 1,213,988
5.375%, 1/4/10 [EUR] 765,000 1,077,669
Series 01, 5%, 7/4/11 [EUR] 1,600,000 2,226,830
Series 140, 4.50%, 8/17/07 [EUR] 730,000 979,152
Series 143, 3.50%, 10/10/08 [EUR] 7,765,000 10,128,663
-------------
15,626,302
- --------------------------------------------------------------------------------
GREAT BRITAIN--1.7%
United Kingdom Treasury Nts., 4%, 3/7/09 [GBP] 2,725,000 4,879,905
- --------------------------------------------------------------------------------
GREECE--1.1%
Greece (Republic of) Bonds:
3.50%, 4/18/08 [EUR] 930,000 1,211,848
5.35%, 5/18/11 [EUR] 1,095,000 1,541,097
- --------------------------------------------------------------------------------
Greece (Republic of) Sr. Unsub. Bonds,
4.65%, 4/19/07 [EUR] 265,000 355,093
-------------
3,108,038
- --------------------------------------------------------------------------------
GUATEMALA--0.1%
Guatemala (Republic of) Nts.:
10.25%, 11/8/11 7 170,000 199,325
10.25%, 11/8/11 55,000 64,488
-------------
263,813
- --------------------------------------------------------------------------------
HUNGARY--0.1%
Hungary (Government of) Bonds,
Series 05/I, 8.50%, 10/12/05 [HUF] 68,320,000 350,605
- --------------------------------------------------------------------------------
IRELAND--0.2%
Ireland (Republic of) Treasury Bonds,
3.25%, 4/18/09 [EUR] 420,000 539,896
- --------------------------------------------------------------------------------
ISRAEL--0.2%
United States (Government of) Gtd.
Israel Aid Bonds, 5.50%, 12/4/23 560,000 587,097
- --------------------------------------------------------------------------------
ITALY--2.3%
Italy (Republic of) Treasury Bonds:
Buoni del Tesoro Poliennali, 4%, 3/1/05 [EUR] 290,000 373,242
Buoni del Tesoro Poliennali, 4.50%, 3/1/07 [EUR] 460,000 613,970
Buoni del Tesoro Poliennali, 5%, 10/15/07 [EUR] 2,475,000 3,376,559
Buoni del Tesoro Poliennali, 5%, 2/1/12 [EUR] 740,000 1,027,353
Buoni del Tesoro Poliennali,
5.25%, 12/15/05 [EUR] 860,000 1,138,351
-------------
6,529,475
- --------------------------------------------------------------------------------
IVORY COAST--0.0%
Ivory Coast (Government of) Past Due
Interest Bonds, 3/29/18 4,5,6 [FRF] 3,857,000 136,330
- --------------------------------------------------------------------------------
JAPAN--1.9%
Japan (Government of) Bonds, 5 yr.,
Series 14, 0.40%, 6/20/06 [JPY] 572,000,000 5,418,854
27 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
KOREA (SOUTH)--0.3%
Korea (Republic of) Nts.:
4.25%, 6/1/13 $ 305,000 $ 297,695
8.875%, 4/15/08 460,000 542,915
-------------
840,610
- --------------------------------------------------------------------------------
MEXICO--0.7%
United Mexican States Bonds:
7.50%, 4/8/33 470,000 502,195
8.30%, 8/15/31 230,000 266,455
11.375%, 9/15/16 45,000 67,050
Series M20, 8%, 12/7/23 [MXN] 8,845,000 603,413
- --------------------------------------------------------------------------------
United Mexican States Unsec. Unsub. Nts.,
Series 6 BR, 6.75%, 6/6/06 [JPY] 40,000,000 414,645
-------------
1,853,758
- --------------------------------------------------------------------------------
NEW ZEALAND--0.1%
New Zealand (Government of) Bonds,
7%, 7/15/09 13 [NZD] 450,000 320,433
- --------------------------------------------------------------------------------
NIGERIA--0.1%
Central Bank of Nigeria Gtd. Bonds, Series WW,
6.25%, 11/15/20 140,000 133,000
- --------------------------------------------------------------------------------
Nigeria (Federal Republic of) Promissory Nts.,
Series RC, 5.092%, 1/5/10 135,613 123,945
-------------
256,945
- --------------------------------------------------------------------------------
PANAMA--0.4%
Panama (Republic of) Bonds:
8.125%, 4/28/34 285,000 286,425
9.375%, 1/16/23 785,000 853,688
-------------
1,140,113
- --------------------------------------------------------------------------------
PERU--0.4%
Peru (Republic of) Past Due Interest Bonds,
Series 20 yr., 5%, 3/7/17 9 1,232,000 1,133,440
- --------------------------------------------------------------------------------
PHILIPPINES--0.1%
Philippines (Republic of) Bonds, 8.375%, 2/15/11 263,000 262,374
- --------------------------------------------------------------------------------
POLAND--1.0%
Poland (Republic of) Bonds:
Series 0K0805, 5.24%, 8/12/05 2 [PLZ] 8,030,000 2,252,716
Series DS0509, 6%, 5/24/09 [PLZ] 1,800,000 510,230
Series WS0922, 5.75%, 9/23/22 [PLZ] 360,000 96,751
-------------
2,859,697
- --------------------------------------------------------------------------------
PORTUGAL--0.5%
Portugal (Republic of) Obrig Do Tes
Medio Prazo Nts., 4.875%, 8/17/07 [EUR] 265,000 358,520
- --------------------------------------------------------------------------------
Portugal (Republic of) Obrig Do Tes Medio
Prazo Unsec. Unsub. Nts.,
5.85%, 5/20/10 [EUR] 805,000 1,159,505
-------------
1,518,025
28 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
RUSSIA--1.2%
Aries Vermoegensverwaltungs GmbH Unsub. Nts.,
Series B, 7.75%,
10/25/09 5 [EUR] 270,000 $ 375,173
- --------------------------------------------------------------------------------
Ministry Finance of Russia Debs.,
Series VI, 3%, 5/14/06 770,000 757,010
- --------------------------------------------------------------------------------
Russian Federation Unsub. Nts., 5%, 3/31/30 9 2,160,750 2,163,108
-------------
3,295,291
- --------------------------------------------------------------------------------
SOUTH AFRICA--0.2%
South Africa (Republic of) Bonds:
Series R157, 13.50%, 9/15/15 [ZAR] 1,780,000 380,538
Series R203, 8.25%, 9/15/17 [ZAR] 1,070,000 163,965
-------------
544,503
- --------------------------------------------------------------------------------
SPAIN--1.8%
Spain (Kingdom of) Bonds:
Bonos y Obligacion del Estado,
5.35%, 10/31/11 [EUR] 1,470,000 2,087,270
- --------------------------------------------------------------------------------
Bonos y Obligacion del Estado,
5.75%, 7/30/32 [EUR] 840,000 1,272,052
- --------------------------------------------------------------------------------
Spain (Kingdom of) Treasury Bills,
2.05%, 12/17/04 2 [EUR] 1,450,000 1,850,156
-------------
5,209,478
- --------------------------------------------------------------------------------
SWEDEN--0.2%
Sweden (Kingdom of) Bonds, Series 1043,
5%, 1/28/09 [SEK] 4,420,000 664,155
- --------------------------------------------------------------------------------
THE NETHERLANDS--0.5%
Netherlands (Kingdom of the) Bonds:
5%, 7/15/11 [EUR] 250,000 347,750
5.50%, 1/15/28 [EUR] 735,000 1,070,901
-------------
1,418,651
- --------------------------------------------------------------------------------
TURKEY--0.1%
Turkey (Republic of) Nts., 7.25%, 3/15/15 335,000 336,675
- --------------------------------------------------------------------------------
VENEZUELA--0.9%
Venezuela (Republic of) Nts.:
8.50%, 10/8/14 460,000 466,716
10.75%, 9/13/13 1,540,000 1,781,588
- --------------------------------------------------------------------------------
Venezuela (Republic of) Sr. Unsec. Unsub
Bonds, 11%, 3/5/08 [EUR] 150,000 220,782
-------------
2,469,086
-------------
89,018,621
- --------------------------------------------------------------------------------
LOAN PARTICIPATIONS--1.4%
Algeria (Republic of) Loan Participation Nts.,
2.183%, 3/4/10 5,9 263,083 259,137
- --------------------------------------------------------------------------------
Deutsche Bank AG:
Indonesia (Republic of) Rupiah Loan
Participation Nts., 2.636%, 3/21/05 9 835,000 834,666
Indonesia (Republic of) Rupiah Loan
Participation Nts., 2.636%, 1/25/06 9 965,000 950,043
OAO Gazprom Loan Participation Nts.,
6.50%, 8/4/05 5 960,000 982,368
29 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
LOAN PARTICIPATIONS Continued
Morgan Stanley Bank AG, OAO Gazprom Unsec.
Loan Participation Nts.,
9.625%, 3/1/13 $ 890,000 $ 1,017,938
-------------
4,044,152
SHARES
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
Pacific & Atlantic Holdings, Inc., 7.50%
Cum. Cv., Series A 4,5,12 9,083 18,166
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
Telus Corp. Wts., Exp. 9/15/05 4 539 6,788
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
STRUCTURED NOTES--4.8%
Citigroup Global Markets Holdings, Inc.:
Brazilian Real Unsec. Credit Linked Nts.,
0.93%, 1/14/05 $ 758,379 809,168
Colombia (Republic of) Unsec. Credit
Linked Nts., 15%, 3/15/07 [COP] 1,476,565,000 677,657
Colombia (Republic of) Unsec. Credit
Linked Nts., 15%, 4/27/12 [COP] 742,500,000 333,054
Colombia (Republic of) Unsec. Credit
Linked Nts., 15%, 4/27/12 [COP] 430,000,000 192,880
Peruvian Sol Unsec. Linked Nts., 1.466%,
1/14/05 [PEN] 1,605,000 504,989
- --------------------------------------------------------------------------------
Credit Suisse First Boston International:
Moscow (City of) Credit Linked Nts., Series
Fbi 101, 10%, 12/31/10 [RUR] 9,100,000 359,490
Moscow (City of) Credit Linked Nts., Series
Fbi 98, 11%, 4/23/09 [RUR] 9,495,000 371,791
OAO Gazprom Credit Linked Nts., 8.11%,
1/21/07 [RUR] 9,855,000 356,933
- --------------------------------------------------------------------------------
Credit Suisse First Boston, Inc.:
(USA), U.S. Dollar/South African Rand
Linked Nts., Series FBi 43,
1.468%, 5/23/22 540,000 521,910
(Nassau Branch), Turkey (Republic of)
Credit Linked Nts., Series EM 868,
19.92%, 8/25/05 790,000 667,408
(Nassau Branch), Turkey (Republic of)
Credit Linked Nts., Series EM 872,
23.57%, 10/20/05 9 140,000 143,879
(Nassau Branch), Turkey (Republic of)
Credit Linked Nts., Series EM 880,
20%, 10/18/07 415,000 415,208
- --------------------------------------------------------------------------------
Deutsche Bank AG:
Moscow (City of) Linked Nts., 10%, 5/27/05 [RUR] 5,140,000 186,830
Moscow (City of) Linked Nts., 15%, 9/2/05 [RUR] 15,165,000 581,508
OAO Gazprom I Credit Nts., 6.20%, 10/20/07 310,000 322,270
OAO Gazprom II Credit Nts., 5.95%, 4/20/07 310,000 320,628
Korea (Republic of) Credit Bonds, 2.49%, 6/20/09 1,525,000 1,542,995
Ukraine (Republic of) Credit
Linked Nts., 6.541%, 8/5/11 1,540,000 1,593,053
- --------------------------------------------------------------------------------
Lehman Brothers International:
Turkey (Republic of) Treasury Bills Total
Return Linked Nts., 28.25%, 5/26/05 495,199 441,272
Turkey (Republic of) Treasury Bills Total
Return Linked Nts., 24.20%, 8/25/05 480,000 355,248
Turkey (Republic of) Treasury Bills Total
Return Linked Nts., 20%, 10/17/07 440,000 437,800
- --------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc.,
Venezuela (Republic of) Credit Bonds,
5%, 9/20/09 610,000 646,056
30 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
Pioneer 2002 Ltd. Sec. Catastrophe Linked Nts.:
Series 2003-II, Cl. A, 7.88%, 6/15/06 7,9 $ 250,000 $ 256,263
Series 2003-II, Cl. B, 6.88%, 6/15/06 7,9 250,000 254,338
Series 2003-II, Cl. C, 7.63%, 6/15/06 7,9 250,000 254,375
- --------------------------------------------------------------------------------
UBS AG, OAO Gazprom III Credit Nts.,
4.705%, 7/5/06 770,000 807,054
-------------
13,354,057
-------------
Total International Sector (Cost $110,660,602) 117,994,353
- --------------------------------------------------------------------------------
ASSET-BACKED SECTOR--20.3%
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--3.7%
- --------------------------------------------------------------------------------
AUTO LOAN--2.7%
Bank One Auto Securitization Trust, Automobile
Receivable Certificates,
Series 2003-1, Cl. A2, 1.29%, 8/21/06 176,289 175,941
- --------------------------------------------------------------------------------
BMW Vehicle Owner Trust, Automobile Loan
Certificates, Series 2004-A,
Cl. A2, 1.88%, 10/25/06 310,000 309,365
- --------------------------------------------------------------------------------
Capital Auto Receivables Asset Trust,
Automobile Mtg.-Backed Nts.,
Series 2002-3, Cl. A2A, 3.05%, 9/15/05 57,552 57,644
- --------------------------------------------------------------------------------
Chase Manhattan Auto Owner Trust,
Automobile Loan Pass-Through Certificates:
Series 2002-A, Cl. A4, 4.24%, 9/15/08 67,148 67,844
Series 2003-A, Cl. A2, 1.26%, 1/16/06 24,535 24,541
Series 2003-B, Cl. A2, 1.28%, 3/15/06 80,793 80,758
- --------------------------------------------------------------------------------
DaimlerChrysler Auto Trust, Automobile
Loan Pass-Through Certificates:
Series 2002-A, Cl. A3, 3.85%, 4/6/06 116,040 116,276
Series 2003-A, Cl. A2, 1.52%, 12/8/05 227,151 227,165
Series 2003-B, Cl. A2, 1.61%, 7/10/06 452,473 452,030
Series 2004-B, Cl. A2, 2.48%, 2/8/07 5 100,000 100,074
- --------------------------------------------------------------------------------
Ford Credit Auto Owner Trust, Automobile
Loan Pass-Through Certificates:
Series 2003-A, Cl. A2A, 1.62%, 8/15/05 7,053 7,057
Series 2004-A, Cl. A2, 2.13%, 10/15/06 440,000 439,404
- --------------------------------------------------------------------------------
Harley-Davidson Motorcycle Trust,
Motorcycle Receivable Nts.:
Series 2002-2, Cl. A1, 1.91%, 4/15/07 5 11,659 11,659
Series 2003-3, Cl. A1, 1.50%, 1/15/08 270,783 270,091
- --------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust,
Automobile Receivable Obligations:
Series 2003-3, Cl. A2, 1.52%, 4/21/06 362,246 361,864
Series 2003-4, Cl. A2, 1.58%, 7/17/06 392,362 391,792
- --------------------------------------------------------------------------------
Household Automotive Trust,
Automobile Loan Certificates, Series 2003-2,
Cl. A2, 1.56%, 12/18/06 157,793 157,580
- --------------------------------------------------------------------------------
M&I Auto Loan Trust,
Automobile Loan Certificates:
Series 2002-1, Cl. A3, 2.49%, 10/22/07 172,172 172,425
Series 2003-1, Cl. A2, 1.60%, 7/20/06 308,155 307,887
- --------------------------------------------------------------------------------
National City Auto Receivables Trust,
Automobile Receivable Obligations,
Series 2004-A, Cl. A2, 1.50%, 2/15/07 220,000 219,439
31 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
AUTO LOAN Continued
Nissan Auto Lease Trust, Automobile
Lease Obligations:
Series 2003-A, Cl. A2, 1.69%, 12/15/05 $ 133,806 $ 133,869
Series 2004-A, Cl. A2, 2.55%, 1/15/07 170,000 169,883
- --------------------------------------------------------------------------------
Nissan Auto Receivables Owner Trust,
Automobile Receivable Nts.:
Series 2002-A, Cl. A4, 4.28%, 10/16/06 58,018 58,472
Series 2004-A, Cl. A2, 1.40%, 7/17/06 250,000 249,239
- --------------------------------------------------------------------------------
Toyota Auto Receivables Owner Trust, Automobile
Mtg.-Backed Obligations:
Series 2002-B, Cl. A3, 3.76%, 6/15/06 41,951 42,097
Series 2003-B, Cl. A2, 1.43%, 2/15/06 185,447 185,387
- --------------------------------------------------------------------------------
USAA Auto Owner Trust, Automobile Loan
Asset-Backed Nts.:
Series 2002-1, Cl. A3, 2.41%, 10/16/06 81,116 81,218
Series 2003-1, Cl. A2, 1.22%, 4/17/06 46,448 46,460
Series 2004-1, Cl. A2, 1.43%, 9/15/06 600,000 598,482
Series 2004-2, Cl. A2, 2.41%, 2/15/07 230,000 230,018
- --------------------------------------------------------------------------------
Volkswagen Auto Lease Trust, Automobile
Lease Asset-Backed Securities,
Series 2004-A, Cl. A2, 2.47%, 1/22/07 230,000 229,775
- --------------------------------------------------------------------------------
Volkswagen Auto Loan Enhanced Trust,
Automobile Loan
Receivable Certificates:
Series 2003-1, Cl. A2, 1.11%, 12/20/05 225,638 225,554
Series 2003-2, Cl. A2, 1.55%, 6/20/06 218,774 218,485
- --------------------------------------------------------------------------------
Wachovia Auto Owner Trust,
Automobile Receivable Nts., Series 2004-B,
Cl. A2, 2.40%, 5/21/07 170,000 169,898
- --------------------------------------------------------------------------------
Whole Auto Loan Trust,
Automobile Loan Receivable Certificates:
Series 2002-1, Cl. A3, 2.60%, 8/15/06 336,643 337,270
Series 2003-1, Cl. A2A, 1.40%, 4/15/06 325,044 324,669
Series 2004-1, Cl. A2A, 2.59%, 5/15/07 11 220,000 220,000
-------------
7,471,612
- --------------------------------------------------------------------------------
CREDIT CARD--0.4%
Citibank Credit Card Issuance Trust,
Credit Card Receivable Nts.,
Series 2002-A3, Cl. A3, 4.40%, 5/15/07 220,000 222,510
- --------------------------------------------------------------------------------
Consumer Credit Reference Index
Securities Program, Credit Card
Asset-Backed Certificates, Series 2002-B,
Cl. FX, 10.421%, 3/22/07 5 1,000,000 1,042,383
-------------
1,264,893
- --------------------------------------------------------------------------------
EQUIPMENT--0.1%
CIT Equipment Collateral,
Equipment Receivable-Backed Nts.,
Series 2004-DFS, Cl. A2, 2.66%, 11/20/06 5 190,000 189,970
- --------------------------------------------------------------------------------
HOME EQUITY LOAN--0.5%
Centex Home Equity Co.
LLC, Home Equity Loan Asset-Backed
Certificates:
Series 2003-C, Cl. AF1, 2.14%, 7/25/18 101,268 101,141
Series 2004-A, Cl. AF1, 2.03%, 6/25/19 100,026 99,836
Series 2004-D, Cl. AF1, 2.98%, 4/25/20 5 127,796 127,818
32 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOME EQUITY LOAN Continued
Chase Funding Mortgage Loan Asset-Backed
Certificates, Home Equity
Mtg. Obligations:
Series 2002-4, Cl. 1A3, 3.44%, 4/25/23 $ 58,050 $ 58,152
Series 2003-3, Cl. 1A1, 2.013%, 8/25/17 9 15,441 15,450
Series 2003-4, Cl. 1A1, 2.053%, 9/25/17 9 127,562 127,639
Series 2003-4, Cl. 1A2, 2.138%, 7/25/18 100,000 99,716
- --------------------------------------------------------------------------------
CIT Group Home Equity Loan Trust,
Home Equity Loan Asset-Backed
Certificates, Series 2003-1, Cl. A2, 2.35%, 4/20/27 142,580 142,395
- --------------------------------------------------------------------------------
CitiFinancial Mortgage Securities, Inc.,
Home Equity Collateralized
Mtg. Obligations:
Series 2003-2, Cl. AF1, 2.033%, 5/25/33 9 47,386 47,413
Series 2003-3, Cl. AF1, 2.053%, 8/25/33 9 107,334 107,399
- --------------------------------------------------------------------------------
Option One Mortgage Loan Trust,
Home Equity Mtg. Obligations,
Series 2004-3, Cl. A2, 1.99%, 11/25/34 5,9 130,000 130,081
- --------------------------------------------------------------------------------
Wells Fargo Home Equity Trust,
Collateralized Mtg. Obligations,
Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 364,710 364,318
-------------
1,421,358
-------------
10,347,833
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY--13.5%
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--13.4%
Federal Home Loan Mortgage Corp.:
5%, 9/1/33 211,624 211,657
5%, 12/1/34 11 3,053,000 3,036,782
5.50%, 1/1/34 151,783 154,829
5.50%, 12/1/34 11 490,000 497,963
7%, 3/1/31-11/1/34 11 1,805,438 1,917,088
7%, 9/1/33-11/1/33 580,959 618,336
12%, 5/1/10-6/1/15 130,182 146,570
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Collateralized Mtg. Obligations,
Structured Pass-Through Securities,
Series T-42, Cl. A2, 5.50%, 2/25/42 5 14 14
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd
Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates:
Series 1669, Cl. G, 6.50%, 2/15/23 71,662 72,412
Series 2055, Cl. ZM, 6.50%, 5/15/28 161,566 168,551
Series 2080, Cl. Z, 6.50%, 8/15/28 108,715 112,479
Series 2387, Cl. PD, 6%, 4/15/30 225,779 234,297
Series 2430, Cl. ND, 6.50%, 1/15/31 1,436,639 1,450,135
Series 2466, Cl. PD, 6.50%, 4/15/30 89,209 89,919
Series 2498, Cl. PC, 5.50%, 10/15/14 32,683 33,056
Series 2500, Cl. FD, 2.37%, 3/15/32 9 88,335 88,574
Series 2526, Cl. FE, 2.27%, 6/15/29 9 123,930 124,727
Series 2551, Cl. FD, 2.27%, 1/15/33 9 99,721 100,307
Series 2551, Cl. TA, 4.50%, 2/15/18 90,569 90,608
33 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped
Mtg.-Backed Security:
Series 177, Cl. B, (4.102)%, 7/1/26 14 $ 272,016 $ 48,276
Series 192, Cl. IO, 1.541%, 2/1/28 14 47,711 8,287
Series 200, Cl. IO, 0.982%, 1/1/29 14 58,084 10,226
Series 205, Cl. IO, (2.02)%, 9/1/29 14 334,410 57,167
Series 208, Cl. IO, (32.832)%, 6/1/30 14 300,579 48,400
Series 2074, Cl. S, 11.491%, 7/17/28 14 60,028 7,834
Series 2079, Cl. S, 9.942%, 7/17/28 14 94,621 12,384
Series 2526, Cl. SE, 20.275%, 6/15/29 14 161,306 13,703
Series 2819, Cl. S, 19.306%, 6/15/34 14 1,524,912 131,304
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Principal-Only Stripped Mtg.-Backed
Security, Series 2819, Cl. PO, 11.057%,
6/15/34 15 217,845 191,954
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.:
4.50%, 11/1/19 11 1,219,000 1,222,428
5%, 1/1/17-7/1/17 1,132,800 1,158,300
5%, 11/1/19 11 619,000 631,767
5.50%, 3/1/33-9/1/34 1,679,103 1,713,296
5.50%, 11/1/19-11/1/34 11 7,558,000 7,766,979
6.50%, 1/1/29 1 1,471,958 1,552,590
6.50%, 10/1/30 64,172 67,687
7%, 9/1/29-8/1/34 2,524,226 2,684,006
7%, 11/1/34 11 8,267,000 8,778,521
7.50%, 6/1/10-9/1/29 349,620 374,740
8.50%, 7/1/32 25,446 27,690
11%, 7/1/16 62,789 70,803
13%, 6/1/15 160,752 185,441
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates:
Trust 1996-35, Cl. Z, 7%, 7/25/26 416,877 438,033
Trust 1998-63, Cl. PG, 6%, 3/25/27 63,735 64,169
Trust 2001-50, Cl. NE, 6%, 8/25/30 123,068 124,305
Trust 2001-70, Cl. LR, 6%, 9/25/30 117,141 119,707
Trust 2001-72, Cl. NH, 6%, 4/25/30 96,125 99,187
Trust 2001-74, Cl. PD, 6%, 5/25/30 38,272 38,882
Trust 2002-50, Cl. PD, 6%, 9/25/27 109,713 110,063
Trust 2002-77, Cl. WF, 2.289%, 12/18/32 9 163,382 164,133
Trust 2002-94, Cl. MA, 4.50%, 8/25/09 194,842 195,608
Trust 2003-81, Cl. PA, 5%, 2/25/12 79,186 79,716
- --------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd
Real Estate Mtg. Investment Conduit
Pass-Through Certificates,
Interest-Only Stripped Mtg.-Backed Security:
Trust 2002-28, Cl. SA, 20.25%, 4/25/32 14 89,347 8,281
Trust 2002-38, Cl. SO, 27.335%, 4/25/32 14 265,701 19,606
Trust 2002-39, Cl. SD, 14.29%, 3/18/32 14 140,997 13,056
Trust 2002-48, Cl. S, 18%, 7/25/32 14 141,505 13,599
Trust 2002-53, Cl. SK, 14.135%, 4/25/32 14 87,993 8,449
Trust 2002-56, Cl. SN, 20.834%, 7/25/32 14 194,921 18,990
Trust 2002-77, Cl. IS, 21.643%, 12/18/32 14 452,675 42,581
Trust 319, Cl. 2, (1.708)%, 2/1/32 14 105,954 19,401
34 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.,
Interest-Only Stripped
Mtg.-Backed Security:
Trust 221, Cl. 2, (1.348)%, 5/1/23 14 $ 100,119 $ 18,007
Trust 240, Cl. 2, 0.49%, 9/1/23 14 146,156 27,369
Trust 301, Cl. 2, (5.502)%, 4/1/29 14 209,308 36,700
Trust 321, Cl. 2, (2.718)%, 3/1/32 11,14 468,320 86,975
Trust 324, Cl. 2, (7.997)%, 6/1/32 14 670,807 122,149
Trust 333, Cl. 2, 1.99%, 3/1/33 14 149,359 31,657
Trust 2001-63, Cl. SD, 23.888%, 12/18/31 14 128,642 13,330
Trust 2001-68, Cl. SC, 17.876%, 11/25/31 14 95,723 10,020
Trust 2001-81, Cl. S, 22.192%, 1/25/32 14 119,110 12,644
Trust 2002-9, Cl. MS, 17.604%, 3/25/32 14 161,845 16,675
Trust 2002-77, Cl. SH, 24.146%, 12/18/32 14 140,896 14,434
-------------
37,879,813
- --------------------------------------------------------------------------------
GNMA/GUARANTEED--0.1%
Government National Mortgage Assn.:
4.75%, 7/20/27 21,351 21,606
7%, 1/15/28-3/15/28 70,596 75,473
11%, 10/20/19 49,117 55,652
12%, 11/20/13-9/20/15 69,685 79,945
- --------------------------------------------------------------------------------
Government National Mortgage Assn.,
Interest-Only Stripped
Mtg.-Backed Security:
Series 1998-6, Cl. SA, 10.899%, 3/16/28 14 116,319 14,095
Series 1998-19, Cl. SB, 10.699%, 7/16/28 14 193,733 25,187
-------------
271,958
-------------
38,151,771
- --------------------------------------------------------------------------------
PRIVATE--3.1%
- --------------------------------------------------------------------------------
COMMERCIAL--3.1%
Asset Securitization Corp., Commercial Mtg.
Pass-Through Certificates,
Series 1995-MD4, Cl. A5, 7.384%, 8/13/29 1,500,000 1,653,412
- --------------------------------------------------------------------------------
Bank of America Mortgage Securities, Inc.,
Collateralized Mtg. Obligations
Pass-Through Certificates:
Series 2004-E, Cl. 2A9, 3.712%, 6/25/34 225,080 225,468
Series 2004-G, Cl. 2A1, 2.469%, 8/25/34 223,661 223,167
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 407,143 423,966
Series 2004-8, Cl. 5A1, 6.50%, 9/25/34 315,982 327,535
- --------------------------------------------------------------------------------
Capital Lease Funding Securitization LP,
Interest-Only Corporate-Backed
Pass-Through Certificates, Series 1997-CTL1,
10.868%, 6/22/24 14 8,825,004 339,484
- --------------------------------------------------------------------------------
Countrywide Alternative Loan Trust,
Collateralized Mtg. Obligations,
Series 2004-J9, Cl. 1A1, 2.113%, 10/25/34 9 288,199 288,087
- --------------------------------------------------------------------------------
First Union National Bank/Lehman
Brothers/Bank of America Commercial
Mtg. Trust, Pass-Through Certificates,
Series 1998-C2, Cl. A2, 6.56%, 11/18/35 140,000 152,400
- --------------------------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc.,
Mtg. Pass-Through Certificates:
Series 1997-C1, Cl. A3, 6.869%, 7/15/29 118,848 127,972
Series 1998-C1, Cl. F, 7.709%, 5/15/30 9 2,000,000 2,002,636
35 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
GSR Mortgage Loan Trust, Collateralized Mtg.
Obligations, Series 04-12,
Cl. 3A1, 4.593%, 12/25/34 $ 490,000 $ 490,000
- --------------------------------------------------------------------------------
Mastr Asset Securitization Trust,
Pass-Through Collateralized Mtg.
Obligations, Series 2004-9, Cl
A3, 4.70%, 8/25/34 1,116,261 1,121,443
- --------------------------------------------------------------------------------
Nomura Asset Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1998-D6, Cl.
A1B, 6.59%, 3/15/30 160,000 175,328
- --------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC,
Commercial Mtg. Pass-Through
Certificates, Series PRU-HTG 2000-C1,
Cl. A2, 7.306%, 10/6/15 380,000 443,718
- --------------------------------------------------------------------------------
Washington Mutual Mortgage Securities Corp.,
Collateralized Mtg. Pass-Through Certificates,
Series 2003-AR12, Cl. A2, 2.446%, 2/25/34 9 188,633 188,791
- --------------------------------------------------------------------------------
Wells Fargo Mortgage Backed Securities Trust,
Collateralized Mtg. Obligations, Series 2004-N,
Cl. A10, 3.803%, 8/25/34 5 417,465 418,639
-------------
8,602,046
- --------------------------------------------------------------------------------
OTHER--0.0%
CIT Equipment Collateral, Equipment
Receivable-Backed Nts., Series 2003-EF1, Cl.
A2, 1.49%, 12/20/05 67,223 67,217
- --------------------------------------------------------------------------------
RESIDENTIAL--0.0%
Salomon Brothers Mortgage Securities VII,
Inc., Commercial Mtg. Pass-Through Certificates,
Series 1996-B, Cl. 1, 5.247%, 4/25/26 5,9 26,426 24,394
-------------
8,693,657
-------------
Total Asset-Backed Sector (Cost $56,482,946) 57,193,261
- --------------------------------------------------------------------------------
MONEY MARKET SECTOR--7.7%
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--7.7%
Undivided interest of 9.01% in joint repurchase
agreement (Principal Amount/
Value $241,756,000, with a maturity value
of $241,791,659) with Zions Bank/
Capital Markets Group, 1.77%, dated 10/29/04,
to be repurchased at $21,784,213
on 11/1/04, collateralized by U.S.
Treasury Nts., 1.875%--6.75%,
5/15/05--10/15/06, with a value of
$246,670,809 (Cost $21,781,000) 21,781,000 21,781,000
- --------------------------------------------------------------------------------
Total Investments, at Value (excluding
investments purchased with
cash collateral from securities loaned)
(Cost $293,764,536) 304,053,761
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES LOANED--1.0%
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--1.0%
CDC Financial Products, Inc. 16 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Greenwich Capital 16 836,445 836,445
-------------
Total Investments Purchased with Cash
Collateral from Securities Loaned (Cost $2,836,445) 2,836,445
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $296,600,981) 108.8% 306,890,206
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (8.8) (24,895,046)
-----------------------------
NET ASSETS 100.0% $281,995,160
=============================
36 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP Argentine Peso
AUD Australian Dollar
COP Colombian Peso
DKK Danish Krone
EUR Euro
FRF French Franc
GBP British Pound Sterling
HUF Hungarian Forint
JPY Japanese Yen
MXN Mexican Nuevo Peso
NZD New Zealand Dollar
PEN Peruvian New Sol
PLZ Polish Zloty
RUR Russian Ruble
SEK Swedish Krona
ZAR South African Rand
1. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts with an aggregate
market value of $7,117,163. See Note 6 of Notes to Financial Statements.
2. Zero coupon bond reflects effective yield on the date of purchase.
3. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
4. Non-income producing security.
5. Illiquid or restricted security. See Note 11 of Notes to Financial
Statements.
6. Issue is in default. See Note 1 of Notes to Financial Statements.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $14,214,332 or 5.04% of the Fund's net
assets as of October 31, 2004.
8. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
9. Represents the current interest rate for a variable or increasing rate
security.
10. Received as the result of issuer reorganization.
11. When-issued security or forward commitment to be delivered and settled after
October 31, 2004. See Note 1 of Notes to Financial Statements.
12. Interest or dividend is paid-in-kind.
13. A sufficient amount of liquid assets has been designated to cover
outstanding written call options, as follows:
PRINCIPAL EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO CALL DATE PRICE RECEIVED SEE NOTE 1
- ----------------------------------------------------------------------------------------------------
New Zealand (Government of)
Bonds, 7%, 7/15/09 450NZD 12/9/04 6.205NZD $1,335 $2,793
14. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $1,250,270 or 0.44% of the Fund's net assets
as of October 31, 2004.
15. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
These securities amount to $191,954 or 0.07% of the Fund's net assets as of
October 31, 2004.
16. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 12 of Notes to Financial
Statements.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES October 31, 2004
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------
Investments, at value (including securities loaned of $11,528,781)
(cost $296,600,981)--see accompanying statement of investments $ 306,890,206
- ---------------------------------------------------------------------------------------------------------
Cash 1,653,961
- ---------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $94,660) 94,640
- ---------------------------------------------------------------------------------------------------------
Collateral for securities loaned 8,912,511
- ---------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 620,462
- ---------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $6,937,115 sold on a when-issued basis or forward commitment) 9,630,772
Interest, dividends and principal paydowns 3,761,128
Futures margins 129,212
Other 23,089
-------------
Total assets 331,715,981
- ---------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $1,335)
- --see accompanying statement of investments 2,793
- ---------------------------------------------------------------------------------------------------------
Swaptions written, at value (premiums received $49,210) 81,455
- ---------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 11,748,956
- ---------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 1,173,743
- ---------------------------------------------------------------------------------------------------------
Unrealized depreciation on swap contracts 108,994
- ---------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $31,427,151 purchased on a when-issued basis
or forward commitment) 35,907,699
Closed foreign currency contracts 502,428
Trustees' compensation 59,142
Shareholder communications 43,639
Management and administrative fees 37,126
Other 54,846
-------------
Total liabilities 49,720,821
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 281,995,160
=============
38 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
- ----------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 292,299
- ----------------------------------------------------------------------------------------------------------
Additional paid-in capital 299,460,018
- ----------------------------------------------------------------------------------------------------------
Accumulated net investment income 8,927,863
- ----------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (36,472,410)
- ----------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 9,787,390
- ----------------------------------------------------------------------------------------------------------
NET ASSETS--applicable to 29,229,920 shares of beneficial interest outstanding $ 281,995,160
==============
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $ 9.65
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENT OF OPERATIONS For the Year Ended October 31, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 14,846,745
- --------------------------------------------------------------------------------
Fee income 686,330
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $4,973) 103,932
- --------------------------------------------------------------------------------
Portfolio lending fees 12,194
-------------
Total investment income 15,649,201
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 1,788,296
- --------------------------------------------------------------------------------
Shareholder communications 76,583
- --------------------------------------------------------------------------------
Legal, auditing and other professional fees 59,886
- --------------------------------------------------------------------------------
Custodian fees and expenses 35,107
- --------------------------------------------------------------------------------
Trustees' compensation 12,540
- --------------------------------------------------------------------------------
Other 56,575
-------------
Total expenses 2,028,987
Less reduction to custodian expenses (4,319)
-------------
Net expenses 2,024,668
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 13,624,533
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments (including premiums on options exercised) (353,176)
Closing of futures contracts (33,099)
Closing and expiration of option contracts written 229,159
Closing and expiration of swaption contracts (37,023)
Foreign currency transactions 5,595,937
Swap contracts 1,404,948
-------------
Net realized gain 6,806,746
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 6,704,507
Translation of assets and liabilities denominated in
foreign currencies (164,844)
Futures contracts 409,817
Option contracts (114,531)
Swaption contracts (46,897)
Swap contracts (209,432)
-------------
Net change in unrealized appreciation 6,578,620
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 27,009,899
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2004 2003
- -----------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------
Net investment income $ 13,624,533 $ 18,320,998
- -----------------------------------------------------------------------------------------------
Net realized gain (loss) 6,806,746 (998,513)
- -----------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 6,578,620 30,285,612
-------------------------------
Net increase in net assets resulting from operations 27,009,899 47,608,097
- -----------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------
Dividends from net investment income (17,362,572) (14,030,362)
- -----------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------
Total increase 9,647,327 33,577,735
- -----------------------------------------------------------------------------------------------
Beginning of period 272,347,833 238,770,098
-------------------------------
End of period (including accumulated net investment income of
$8,927,863 and $6,727,359, respectively) $ 281,995,160 $ 272,347,833
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.32 $ 8.17 $ 8.37 $ 8.85 $ 9.45
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .47 .63 .65 .78 .86
Net realized and unrealized gain (loss) .45 1.00 (.18) (.44) (.62)
------------------------------------------------------------------------------
Total from investment operations .92 1.63 .47 .34 .24
- -------------------------------------------------------------------------------------------------------------------------------
Dividend and/or distributions to shareholders:
Dividends from net investment income (.59) (.48) (.67) (.79) (.68)
Tax return of capital distribution -- -- -- (.03) (.16)
------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.59) (.48) (.67) (.82) (.84)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.65 $ 9.32 $ 8.17 $ 8.37 $ 8.85
==============================================================================
Market value, end of period $ 8.50 $ 8.34 $ 7.36 $ 8.08 $ 7.88
==============================================================================
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT MARKET VALUE 1 8.53% 20.44% (1.35)% 12.79% 6.93%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 281,995 $ 272,348 $ 238,770 $ 244,166 $ 257,629
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 274,432 $ 256,904 $ 243,498 $ 251,362 $ 269,849
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 4.96% 7.13% 7.82% 8.99% 9.27%
Expenses 0.74% 3 0.69% 3 0.82% 3 0.75% 3 0.84% 3
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79% 4 93% 70% 133% 104%
1. Assumes a purchase at the current market price on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and a sale at the current market
price on the last business day of the period. Total return does not reflect
sales charges or brokerage commissions. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
4. The portfolio turnover rate excludes purchase and sales transactions of To Be
Announced (TBA) mortgage-related securities of $369,582,610 and $378,110,185,
respectively.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
42 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Multi-Sector Income Trust (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a closed-end management
investment company. The Fund's investment objective is to seek high current
income consistent with preservation of capital. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing bid and asked prices, and if not, at the closing bid price.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of 60 days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities may be valued primarily
using dealer-supplied valuations or a portfolio pricing service authorized by
the Board of Trustees. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value.
Foreign and domestic securities whose values have been materially affected by
what the Manager identifies as a significant event occurring before the Fund's
assets are valued but after the close of their respective exchanges will be fair
valued. Fair value is determined in good faith using consistently applied
procedures under the supervision of the Board of Trustees. Short-term "money
market type" debt securities with remaining maturities of sixty days or less are
valued at amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in structured notes whose market values,
interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured notes are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying financial statements. The Fund records a realized gain or loss when
a structured note is sold or matures. As of October 31, 2004, the market value
of these securities comprised 4.9% of the Fund's net assets and resulted in
unrealized gains of $421,707.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward
43 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
commitment can take place up to ten days or more after the trade date. Normally
the settlement date occurs within six months after the trade date; however, the
Fund may, from time to time, purchase securities whose settlement date extends
six months or more beyond trade date. During this period, such securities do
not earn interest, are subject to market fluctuation and may increase or
decrease in value prior to their delivery. The Fund maintains internally
designated assets with a market value equal to or greater than the amount of
its purchase commitments. The purchase of securities on a when-issued basis or
forward commitment may increase the volatility of the Fund's net asset value to
the extent the Fund executes such transactions while remaining substantially
fully invested. The Fund may also sell securities that it purchased on a
when-issued basis or forward commitment prior to settlement of the original
purchase. As of October 31, 2004, the Fund had purchased $31,427,151 of
securities on a when-issued basis or forward commitment and sold $6,937,115 of
securities issued on a when-issued basis or forward commitment.
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of each
forward roll as realized gain (loss) on investments or as fee income in the case
of such transactions that have an associated fee in lieu of a difference in the
forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, market fluctuations and loss of
income and principal, and may be more sensitive to economic conditions than
lower-yielding, higher-rated fixed-income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. As of October 31, 2004, securities with an
aggregate market value of $4,147,262, representing 1.47% of the Fund's net
assets, were in default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars as of the close of The New York Stock Exchange (the
Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for
business. Amounts related to the purchase and sale of foreign securities and
investment income are translated at the rates
44 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
of exchange prevailing on the respective dates of such transactions. Foreign
exchange rates may be valued primarily using dealer supplied valuations or a
portfolio pricing service authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
45 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3,4 TAX PURPOSES
---------------------------------------------------------------------------
$9,540,865 $-- $35,446,278 $7,888,873
1. As of October 31, 2004, the Fund had $35,438,648 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of October 31, 2004,
details of the capital loss carryforwards were as follows:
EXPIRING
----------------------------
2006 $ 190,030
2007 11,561,894
2008 5,440,197
2009 4,239,210
2010 9,434,931
2011 4,572,386
------------
Total $ 35,438,648
============
2. The Fund had $7,630 of straddle losses which were deferred.
3. During the fiscal year ended October 31, 2004, the Fund utilized $1,319,511
of capital loss carryforward to offset capital gains realized in that fiscal
year.
4. During the fiscal year ended October 31, 2003, the Fund did not utilize any
capital loss carryforward.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for October 31, 2004. Net assets of the
Fund were unaffected by the reclassifications.
INCREASE TO INCREASE TO
ACCUMULATED ACCUMULATED NET
NET INVESTMENT REALIZED LOSS
INCOME ON INVESTMENTS
------------------------------------
$ 5,938,543 $ 5,938,543
The tax character of distributions paid during the years ended October 31, 2004
and October 31, 2003 was as follows:
YEAR ENDED YEAR ENDED
OCTOBER 31, 2004 OCTOBER 31, 2003
---------------------------------------------------------------
Distributions paid from:
Ordinary income $ 17,362,572 $ 14,030,362
46 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of October 31, 2004 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities $ 297,215,893
Federal tax cost of other investments (5,111,044)
-----------------
Total federal tax cost $ 292,104,849
=================
Gross unrealized appreciation $ 17,734,504
Gross unrealized depreciation (9,845,631)
-----------------
Net unrealized appreciation $ 7,888,873
=================
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended October
31, 2004, the Fund's projected benefit obligations were increased by $5,389 and
payments of $6,260 were made to retired trustees, resulting in an accumulated
liability of $50,674 as of October 31, 2004.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
investment income per share. Amounts will be deferred until distributed in
accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
daily and paid monthly. Capital gain distributions, if any, are declared and
paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
47 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. The Fund pays interest to its custodian on
such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The
Reduction to Custodian Expenses line item, if applicable, represents earnings on
cash balances maintained by the Fund during the period. Such interest expense
and other custodian fees may be paid with these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of $.01 par value shares of
beneficial interest. There were no transactions in shares of beneficial interest
for the year ended October 31, 2004 and the year ended October 31, 2003.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the year ended
October 31, 2004, were $119,043,539 and $138,915,376, respectively. There were
purchases of $58,775,473 and sales of $47,115,935 of U.S. government and
government agency obligations for the year ended October 31, 2004. In addition,
there were purchases of $369,582,610 and sales of $378,110,185 of To Be
Announced (TBA) mortgage-related securities for the year ended October 31, 2004.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.65% on the Fund's average annual net assets.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. Shareholder Financial Services, Inc. (SFSI), a wholly-owned
subsidiary of the Manager, is the transfer agent and registrar for the Fund.
Fees paid to SFSI are based on the number of accounts, plus out-of-pocket costs
and expenses.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts
48 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
to settle specific purchases or sales of securities denominated in a foreign
currency and for protection from adverse exchange rate fluctuation. Risks to the
Fund include the potential inability of the counterparty to meet the terms of
the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of October 31, 2004, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT VALUATION
EXPIRATION AMOUNT AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) OCT. 31, 2004 APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Argentine Peso (ARP) 2/2/05 1,430ARP $ 473,567 $ 6,948 $ --
Australian Dollar (AUD) 11/18/04 1,230AUD 919,204 22,792 --
Brazilian Real (BRR) 12/14/04-10/21/05 14,345BRR 4,782,185 145,786 844
British Pound
Sterling (GBP) 11/18/04 500GBP 917,567 21,187 --
Chilean Peso (CLP) 11/22/04-12/2/04 213,670CLP 348,772 1,900 --
Czech Koruna (CZK) 4/22/05 11,055CZK 448,133 6,983 --
Euro (EUR) 12/9/04 3,400EUR 4,348,883 131,421 --
Japanese Yen (JPY) 12/22/04-3/31/05 1,634,640JPY 15,569,887 261,929 --
New Zealand
Dollar (NZD) 11/18/04 1,320NZD 901,673 4,496 --
Polish Zloty (PLZ) 12/27/04 828PLZ 242,654 10,832 --
Russian Ruble (RUR) 10/27/05 9,910RUR 338,852 -- 648
Turkish Lira (TRL) 1/27/05 535,360,000TRL 347,449 2,111 --
Ukraine Hryvnia (UAH) 11/1/04 1,465UAH 275,428 -- 1,510
---------------------------
616,385 3,002
---------------------------
CONTRACTS TO SELL
British Pound
Sterling (GBP) 11/9/04-12/14/04 2,720GBP 4,992,810 -- 106,571
Euro (EUR) 11/16/04-4/22/05 17,085EUR 21,854,214 -- 993,304
Japanese Yen (JPY) 11/18/04 99,000JPY 936,348 -- 32,214
Mexican Nuevo
Peso (MXN) 11/26/04 6,360MXN 548,666 3,825 --
Russian Ruble (RUR) 11/29/04 9,910RUR 345,044 252 --
Swiss Franc (CHF) 11/18/04 1,120CHF 938,684 -- 38,652
---------------------------
4,077 1,170,741
---------------------------
Total unrealized appreciation and
depreciation $ 620,462 $ 1,173,743
===========================
49 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations as the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
50 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
As of October 31, 2004, the Fund had outstanding futures contracts as follows:
VALUATION AS OF UNREALIZED
EXPIRATION NUMBER OF OCTOBER 31, APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS 2004 (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
DAX Index 12/17/04 5 $ 635,842 $ (16)
Euro-Bundesobligation, 10 yr. 12/8/04 11 1,645,485 39,724
FTSE 100 Index 12/17/04 1 85,239 967
Japan (Government of) Bonds, 10 yr. 12/9/04 1 1,305,334 20,220
NASDAQ 100 Index 12/16/04 11 1,639,000 115,514
United Kingdom Long Gilt 12/29/04 2 398,219 1,619
U.S. Long Bonds 12/20/04 145 16,507,344 247,784
U.S. Treasury Nts., 10 yr. 12/20/04 192 21,804,000 223,507
---------------
649,319
---------------
CONTRACTS TO SELL
Japan (Government of) Bonds, 10 yr. 12/9/04 3 3,916,001 (60,661)
U.S. Treasury Nts., 2 yr. 12/30/04 166 35,153,094 (42,876)
U.S. Treasury Nts., 5 yr. 12/20/04 106 11,805,750 (109,631)
---------------
(213,168)
---------------
$ 436,151
===============
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Contracts subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security [or commodity]
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market price of the security [or commodity]
decreases and the option is exercised. The risk in buying
51 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY Continued
an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.
Written option activity for the year ended October 31, 2004 was as follows:
CALL OPTIONS PUT OPTIONS
--------------------------- ----------------------------
PRINCIPAL/ PRINCIPAL/
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- --------------------------------------------------------------------------------------------
Options outstanding as of
October 31, 2003 5,310,000 $ 69,674 391,000,000 $ 72,987
Options written 915,000,450 66,980 295,000,000 41,194
Options closed or expired (918,540,000) (114,978) (686,000,000) (114,181)
Options exercised (1,770,000) (20,341) -- --
-----------------------------------------------------------
Options outstanding as of
October 31, 2004 450 $ 1,335 -- $ --
===========================================================
- --------------------------------------------------------------------------------
8. INTEREST RATE SWAP CONTRACTS
The Fund may enter into an interest rate swap transaction to maintain a total
return or yield spread on a particular investment, or portion of its portfolio,
or for other non-speculative purposes. Interest rate swaps involve the exchange
of commitments to pay or receive interest, e.g., an exchange of floating rate
payments for fixed rate payments. The coupon payments are based on an agreed
upon principal amount and a specified index. Because the principal amount is not
exchanged, it represents neither an asset nor a liability to either
counterparty, and is referred to as notional. The Fund records an increase or
decrease to unrealized gain (loss), in the amount due to or owed by the Fund at
termination or settlement.
Interest rate swaps are subject to credit risk (if the counterparty fails
to meet its obligations) and interest rate risk. The Fund could be obligated to
pay more under its swap agreements than it receives under them, as a result of
interest rate changes.
As of October 31, 2004, the Fund had entered into the following interest rate
swap agreements:
FIXED RATE FLOATING RATE
PAID BY RECEIVED BY UNREALIZED
SWAP NOTIONAL THE FUND AT THE FUND AT FLOATING TERMINATION APPRECIATION
COUNTERPARTY AMOUNT OCT. 31, 2004 OCT. 31, 2004 RATE INDEX DATES (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------------
Deutsche Bank 90-day
AG, 5 yr. 20,340,000TWD 1.04% 1.024% CPTW Rate 8/19/09 $ (95)
Three-Month
Deutsche Bank LIBOR
AG, 10 yr. 4,000,000 1.68 5.32 BBA Rate 5/12/14 356,652
Deutsche Bank Three-Month
AG, 5 yr. 1,820,000 3.1025 1.81 LIBOR flat 3/4/08 10,758
52 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
FIXED RATE FLOATING RATE
PAID BY RECEIVED BY UNREALIZED
SWAP NOTIONAL THE FUND AT THE FUND AT FLOATING TERMINATION APPRECIATION
COUNTERPARTY AMOUNT OCT. 31, 2004 OCT. 31, 2004 RATE INDEX DATES (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------------
Deutsche Bank
AG, 5 yr. 28,440,000INR 4.88 4.50 IRS 1/15/09 $ 33,877
JPMorgan Six-Month
Chase Bank 360,000EUR 3.135 2.08 LIBOR flat 7/14/08 (3,072)
JPMorgan Six-Month
Chase Bank 100,600,000HUF 9.13 7.00 LIBOR flat 7/14/08 (41,992)
Three-Month
JPMorgan LIBOR
Chase Bank 8,500,000 2.09 4.41 BBA Rate 10/22/14 (92,304)
Three-Month
JPMorgan LIBOR
Chase Bank 15,000,000 3.663 3.66 BBA Rate 10/22/09 (49,140)
Three-Month
JPMorgan LIBOR
Chase Bank 27,000,000 2.21 4.0725 BBA Rate 5/6/09 909,839
JPMorgan Three-Month
Chase Bank 8,500,000 1.95 4.38 LIBOR 9/27/09 (61,034)
JPMorgan Three-Month
Chase Bank 9,000,000 4.24 1.65 LIBOR 7/23/09 (316,087)
Three-Month
JPMorgan LIBOR
Chase Bank 710,000 1.68 4.94 BBA Rate 4/30/14 41,910
JPMorgan Three-Month
Chase Bank 4,300,000 3.052 1.86 LIBOR flat 3/10/08 33,311
Morgan Stanley
Capital Services, Three-Month
Inc. 8,500,000 3.82 1.71 LIBOR flat 11/10/08 (201,171)
Morgan Stanley
Capital Services, Three-Month
Inc. 11,000,000 2.32 1.71 LIBOR flat 11/10/05 (19,783)
--------------
$ 601,669
==============
Notional amount is reported in U.S. Dollars, except for those denoted in the
following currencies. Index abbreviations and currencies are as follows:
EUR Euro
HUF Hungary Forints
INR Indian Rupee
TWD New Taiwan Dollar
CPTW Bloomberg Taiwan Secondary Commercial Papers
IRS India Swap Composites
LIBOR London-Interbank Offered Rate
LIBOR BBA London-Interbank Offered Rate British Bankers Association
53 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. CREDIT SWAP CONTRACTS
The Fund may enter into a credit swap transaction to maintain a total return on
a particular investment or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as a notional principal amount. The Fund records an increase or
decrease to unrealized gain (loss), in the amount due to or owed by the Fund at
termination or settlement. Credit swaps are subject to credit risks (if the
counterparty fails to meet its obligations). The Fund pays an annual interest
fee on the notional amount in exchange for the counterparty paying in a
potential credit event.
During the year ended October 31, 2004, the Fund entered into transactions to
hedge credit risk. Information regarding the credit swaps is as follows:
VALUATION AS OF UNREALIZED
EXPIRATION NOTIONAL OCTOBER 31, APPRECIATION
CONTRACT DESCRIPTION DATES AMOUNT 2004 (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Ltd.,
Venezuela (Republic of) Credit Nts. 11/20/09 $1,220,000 $ 3,803 $ 3,803
- ------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Export-Import Bank of Korea Credit Bonds 6/20/09 300,000 (3,540) (3,540)
Korea Deposit Insurance Corp. Credit Bonds 6/20/09 300,000 (3,660) (3,660)
Korea Development Bank Credit Bonds 6/20/09 300,000 (3,390) (3,390)
Korea Electric Power Corp. Credit Bonds 6/20/09 300,000 (3,810) (3,810)
Philippines (Republic of) 10 yr. Credit Bonds 7/25/13 630,000 27,216 27,216
Samsung Electronic Co. Ltd. Credit Bonds 6/20/09 300,000 (3,420) (3,420)
Ukraine (Republic of) Credit Bonds 10/29/09 615,000 -- --
United Mexican States Credit Bonds 9/20/13 630,000 (31,457) (31,457)
Venezuela (Republic of) Credit Bonds 10/20/09 1,220,000 (27,957) (27,957)
Venezuela (Republic of) Credit Bonds 10/20/09 460,000 (7,473) (7,473)
- ------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank:
Export-Import Bank of Korea Credit Bonds 6/20/09 150,000 (3,151) (3,151)
Jordan (Kingdom of) Credit Nts. 6/6/06 175,000 (1,602) (1,602)
Korea Deposit Insurance Corp. Credit Bonds 6/20/09 150,000 (3,222) (3,222)
Korea Development Bank Credit Bonds 6/20/09 150,000 (3,118) (3,118)
Korea Electric Power Co. Credit Bonds 6/20/09 150,000 (3,356) (3,356)
Russian Federation Credit Bonds 10/9/13 330,000 (2,678) (2,678)
Samsung Electronics Co. Ltd. Credit Bonds 6/20/09 150,000 (3,090) (3,090)
- ------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.:
Brazil (Federal Republic of) Credit Bonds 8/20/09 1,240,000 (113,344) (113,344)
Brazil (Federal Republic of) Credit Bonds 10/20/09 150,000 (632) (632)
Brazil (Federal Republic of) Credit Bonds 3/5/08 150,000 (4,372) (4,372)
54 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
VALUATION AS OF UNREALIZED
EXPIRATION NOTIONAL OCTOBER 31, APPRECIATION
CONTRACT DESCRIPTION DATES AMOUNT 2004 (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc.:
Brazil (Federal Republic of) Credit Bonds 8/20/09 $ 505,000 $ (46,129) $ (46,129)
Brazil (Federal Republic of) Credit Bonds 8/20/09 505,000 (47,215) (47,215)
Hungary (Republic of) Credit Bonds 12/2/13 900,000 (21,726) (21,726)
Philippines (Republic of) Credit Bonds 6/20/09 175,000 (1,680) (1,680)
Philippines (Republic of) Credit Bonds 6/20/09 85,000 (986) (986)
Philippines (Republic of) Credit Bonds 9/20/09 365,000 (1,102) (1,102)
Philippines (Republic of) Credit Bonds 6/20/09 175,000 (2,729) (2,729)
Venezuela (Republic of) Credit Bonds 8/20/06 920,000 39,041 39,041
Venezuela (Republic of) Credit Bonds 8/20/09 460,000 (39,674) (39,674)
Venezuela (Republic of) Credit Bonds 2/20/14 540,000 (124,586) (124,586)
- ------------------------------------------------------------------------------------------------------------
UBS AG:
Brazil (Federal Republic of) Credit Bonds 10/20/09 420,000 (2,708) (2,708)
Venezuela (Republic of) Credit Bonds 6/20/14 1,230,000 (267,566) (267,566)
Venezuela (Republic of) Credit Bonds 8/20/06 610,000 (25,923) (25,923)
Venezuela (Republic of) Credit Bonds 8/20/09 305,000 24,573 24,573
---------------
$ (710,663)
===============
- --------------------------------------------------------------------------------
10. SWAPTION TRANSACTIONS
The Fund may enter into a swaption transaction, whereby a contract that grants
the holder, in return for payment of the purchase price (the "premium") of the
option, the right, but not the obligation, to enter into an interest rate swap
at a preset rate within a specified period of time, with the writer of the
contract. The writer receives premiums and bears the risk of unfavorable changes
in the preset rate on the underlying interest rate swap. Swaption contracts
written by the Fund do not give rise to counterparty credit risk as they
obligate the Fund, not its counterparty, to perform. Swaptions written are
reported as a liability in the Statement of Assets and Liabilities.
Written swaption activity for the year ended October 31, 2004 was as follows:
NOTIONAL AMOUNT OF
AMOUNT PREMIUMS
----------------------------------------------------------------
Swaptions outstanding as of
October 31, 2003 2,220,000 $ 19,758
Swaptions written 10,505,000 89,878
Swaptions closed or expired (5,670,000) (60,426)
------------------------
Swaptions outstanding as of
October 31, 2004 7,055,000 $ 49,210
========================
55 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10. SWAPTION TRANSACTIONS Continued
As of October 31, 2004, the Fund had entered into the following swaption
contracts.:
NOTIONAL EXPIRATION EXERCISE PREMIUM VALUE
SWAPTIONS AMOUNT DATES PRICE RECEIVED SEE NOTE 1
- ----------------------------------------------------------------------------------------------
Deutsche Bank AG 3,940,000AUD 11/4/04 5.997% $ 18,387 $ 40,294
Lehman Brothers International 3,115,000GBP 12/30/04 5.150 30,823 41,161
----------------------
$ 49,210 $ 81,455
======================
Notional amount is denoted in the following currencies:.
AUD Australian Dollar
GBP British Pound Sterling
- --------------------------------------------------------------------------------
11. ILLIQUID OR RESTRICTED SECURITIES
As of October 31, 2004, investments in securities included issues that are
illiquid or restricted. Restricted securities are purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund will not invest more than 10% of
its net assets (determined at the time of purchase and reviewed periodically) in
illiquid or restricted securities. Certain restricted securities, eligible for
resale to qualified institutional investors, are not subject to that limitation.
The aggregate value of illiquid or restricted securities subject to this
limitation as of October 31, 2004 was $13,170,847, which represents 4.67% of the
Fund's net assets, of which $41,771 is considered restricted. Information
concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATE COST OCTOBER 31, 2004 DEPRECIATION
- --------------------------------------------------------------------------------
CURRENCY
Argentine Peso (ARP) 10/8/04 $ 42,052 $ 41,771 $ 281
- --------------------------------------------------------------------------------
12. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the collateral.
Cash collateral is invested in cash equivalents. The Fund retains a portion of
the interest earned from the collateral. The Fund also continues to receive
interest or dividends paid on the securities loaned. As of
56 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
October 31, 2004, the Fund had on loan securities valued at $11,528,781. Cash of
$11,748,956 was received as collateral for the loans, of which $2,836,445 has
been invested in approved instruments.
- --------------------------------------------------------------------------------
13. LITIGATION
Six complaints have been filed as putative derivative and class actions against
the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as well
as 51 of the Oppenheimer funds (collectively, the "Funds") excluding this Fund,
and nine Directors/ Trustees of certain of the Funds (collectively, the
"Directors/Trustees"). The complaints allege that the Manager charged excessive
fees for distribution and other costs, improperly used assets of the Funds in
the form of directed brokerage commissions and 12b-1 fees to pay brokers to
promote sales of the Funds, and failed to properly disclose the use of Fund
assets to make those payments in violation of the Investment Company Act of 1940
and the Investment Advisers Act of 1940. The complaints further allege that by
permitting and/or participating in those actions, the Directors/Trustees
breached their fiduciary duties to Fund shareholders under the Investment
Company Act of 1940 and at common law. By order dated October 27, 2004, these
six actions, and future related actions, were consolidated by the U.S. District
Court for the Southern District of New York into a single consolidated
proceeding in contemplation of the filing of a superseding consolidated and
amended complaint.
OppenheimerFunds believes that it is premature to render any opinion as to
the likelihood of an outcome unfavorable to them, the Funds or the
Directors/Trustees 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, the Funds and the Directors/Trustees believe that the
allegations contained in the complaints are without merit and intend to defend
these lawsuits vigorously.
57 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER MULTI-SECTOR INCOME TRUST:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Multi-Sector Income Trust, including the statement of investments,
as of October 31, 2004, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 2004, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Multi-Sector Income Trust as of October 31, 2004, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
KPMG LLP
Denver, Colorado
December 16, 2004
58 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2005, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2004. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends, if any, paid by the Fund during the fiscal year ended October
31, 2004 which are not designated as capital gain distributions should be
multiplied by 0.25% to arrive at the amount eligible for the corporate
dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal
year ended October 31, 2004 which are not designated as capital gain
distributions are eligible for lower individual income tax rates to the extent
that the Fund has received qualified dividend income as stipulated by recent tax
legislation. $75,794 of the Fund's fiscal year taxable income may be eligible
for the lower individual income tax rates. In early 2005, shareholders of record
will receive information regarding the percentage of distributions that are
eligible for lower individual income tax rates.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
59 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file new Form N-PX, with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. The Fund's Form N-PX
filing is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.525.7048, and (ii) on the SEC's website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may 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 1-800-SEC-0330.
60 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD
FUND, LENGTH OF SERVICE, AGE BY TRUSTEE; NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY,
TRUSTEES CENTENNIAL, CO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS
OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
CLAYTON K. YEUTTER, Of Counsel (since June 1993) Hogan & Hartson (a law firm); a director (since
Chairman of the Board 2002) of Danielson Holding Corp. Formerly a director of Weyerhaeuser Corp.
of Trustees (since 2003); (1999-April 2004), Caterpillar, Inc. (1993-December 2002), ConAgra Foods
Trustee (since 1993) (1993-2001), Texas Instruments (1993-2001) and FMC Corporation (1993-2001).
Age: 73 Oversees 25 portfolios in the OppenheimerFunds complex.
ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 35 portfolios in the
Trustee (since 1993) OppenheimerFunds complex.
Age: 71
PHILLIP A. GRIFFITHS, A director (since 1991) of the Institute for Advanced Study, Princeton, N.J., a
Trustee (since 1999) director (since 2001) of GSI Lumonics, a trustee (since 1983) of Woodward
Age: 65 Academy, a Senior Advisor (since 2001) of The Andrew W. Mellon Foundation. A
member of: the National Academy of Sciences (since 1979), American Academy of
Arts and Sciences (since 1995), American Philosophical Society (since 1996) and
Council on Foreign Relations (since 2002). Formerly a director of Bankers Trust
New York Corporation (1994-1999). Oversees 25 portfolios in the OppenheimerFunds
complex.
MARY F. MILLER, Formerly a Senior Vice President and General Auditor, American Express Company
Trustee (since 2004) (July 1998-February 2003). Member of Trustees of the American Symphony Orchestra
Age: 62 (October 1998 to present). Oversees 25 portfolios in the OppenheimerFunds
complex.
JOEL W. MOTLEY, Director (since January 2002) Columbia Equity Financial Corp. (privately-held
Trustee (since 2002) financial adviser); Managing Director (since January 2002) Carmona Motley, Inc.
Age: 52 (privately-held financial adviser). Formerly a Managing Director of Carmona
Motley Hoffman Inc. (privately-held financial adviser) (January 1998-December
2001). Oversees 25 portfolios in the OppenheimerFunds complex.
KENNETH A. RANDALL, A director (since February 1972) of Dominion Resources, Inc. (electric utility
Trustee (since 1988) holding company); formerly a director of Prime Retail, Inc. (real estate investment
Age: 77 trust) and Dominion Energy, Inc. (electric power and oil & gas producer),
President and Chief Executive Officer of The Conference Board, Inc. (international
economic and business research) and a director of Lumbermens Mutual
Casualty Company, American Motorists Insurance Company and American
Manufacturers Mutual Insurance Company. Oversees 25 portfolios in the
OppenheimerFunds complex.
EDWARD V. REGAN, President, Baruch College, CUNY; a director of RBAsset (real estate manager); a
Trustee (since 1993) director of OffitBank; formerly Trustee, Financial Accounting Foundation (FASB
Age: 74 and GASB), Senior Fellow of Jerome Levy Economics Institute, Bard College,
Chairman of Municipal Assistance Corporation for the City of New York, New York
State Comptroller and Trustee of New York State and Local Retirement Fund.
Oversees 25 investment companies in the OppenheimerFunds complex.
61 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
RUSSELL S. REYNOLDS, JR., Chairman (since 1993) of The Directorship Search Group, Inc. (corporate
Trustee (since 1989) governance consulting and executive recruiting); a Life Trustee of International
Age: 72 House (non-profit educational organization); a former trustee of The Historical
Society of the Town of Greenwich. Oversees 25 portfolios in the OppenheimerFunds
complex.
- -----------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225
AND OFFICER LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN
INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President
President and Trustee (since September 2000) of the Manager; President and a director or trustee of
(since 2001) other Oppenheimer funds; President and a director (since July 2001) of
Age: 55 Oppenheimer Acquisition Corp. (the Manager's parent holding company) and of
Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the
Manager); a director (since November 2001) of OppenheimerFunds Distributor, Inc.
(a subsidiary of the Manager); Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer
agent subsidiaries of the Manager); President and a director (since July 2001)
of OppenheimerFunds Legacy Program (a charitable trust program established by
the Manager); a director of the following investment advisory subsidiaries of
the Manager: OFI Institutional Asset Management, Inc., Centennial Asset
Management Corporation, Trinity Investment Management Corporation and Tremont
Capital Management, Inc. (since November 2001), HarbourView Asset Management
Corporation and OFI Private Investments, Inc. (since July 2001); President
(since November 1, 2001) and a director (since July 2001) of Oppenheimer Real
Asset Management, Inc.; Executive Vice President (since February 1997) of
Massachusetts Mutual Life Insurance Company (the Manager's parent company); a
director (since June 1995) of DLB Acquisition Corporation (a holding company
that owns the shares of Babson Capital Management LLC); a member of the
Investment Company Institute's Board of Governors (elected to serve from October
3, 2003 through September 30, 2006). Formerly, Chief Operating Officer
(September 2000-June 2001) of the Manager; President and trustee (November
1999-November 2001) of MML Series Investment Fund and MassMutual Institutional
Funds (open-end investment companies); a director (September 1999-August 2000)
of C.M. Life Insurance Company; President, Chief Executive Officer and director
(September 1999-August 2000) of MML Bay State Life Insurance Company; a director
(June 1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank (a
wholly-owned subsidiary of Emerald Isle Bancorp). Oversees 63 portfolios as
Trustee/Director and 21 additional port- folios as Officer in the
OppenheimerFunds complex.
- ----------------------------------------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS.
STEINMETZ, WONG, AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH
FLOOR, NEW YORK, NY 10281-1008, AND FOR MR. WIXTED AND MR. VANDEHEY, 6803 S.
TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM
OR UNTIL HIS EARLIER RESIGNATION, DEATH OR REMOVAL.
ARTHUR P. STEINMETZ, Senior Vice President of the Manager (since March 1993) and of HarbourView
Vice President (since 1999) Asset Management Corporation (since March 2000); an officer of 4 portfolios
Age: 46 in the OppenheimerFunds complex.
62 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
CALEB WONG, Vice President of the Manager since June 1999; worked in fixed-income
Vice President (since 1999) quantitative research and risk management for the Manager (since July 1996); an
Age: 39 officer of 1 portfolio in the OppenheimerFunds complex. Formerly Assistant Vice
President of the Manager (January 1997 - June 1999); before joining the Manager
in July 1996 Mr. Wong was enrolled in the Ph.D. program for Economics at the
University of Chicago.
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer
Treasurer (since 1999) of HarbourView Asset Management Corporation, Shareholder Financial Services,
Age: 45 Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation,
and Oppenheimer Partnership Holdings, Inc. (since March 1999), of OFI Private
Investments, Inc. (since March 2000), of OppenheimerFunds International Ltd.
and OppenheimerFunds plc (since May 2000), of OFI Institutional Asset
Management, Inc. (since November 2000), and of OppenheimerFunds Legacy Program
(a Colorado non-profit corporation) (since June 2003); Treasurer and Chief
Financial Officer (since May 2000) of OFI Trust Company (a trust company
subsidiary of the Manager); Assistant Treasurer (since March 1999) of
Oppenheimer Acquisition Corp. Formerly Assistant Treasurer of Centennial Asset
Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy
Program (April 2000-June 2003); Principal and Chief Operating Officer (March
1995-March 1999) at Bankers Trust Company-Mutual Fund Services Division. An
officer of 84 portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since
Secretary (since 2001) February 2002) of the Manager; General Counsel and a director (since November
Age: 56 2001) of the Distributor; General Counsel (since November 2001) of Centennial
Asset Management Corporation; Senior Vice President and General Counsel (since
November 2001) of HarbourView Asset Management Corporation; Secretary and
General Counsel (since November 2001) of Oppenheimer Acquisition Corp.;
Assistant Secretary and a director (since October 1997) of OppenheimerFunds
International Ltd. and OppenheimerFunds plc; Vice President and a director
(since November 2001) of Oppenheimer Partnership Holdings, Inc.; a director
(since November 2001) of Oppenheimer Real Asset Management, Inc.; Senior Vice
President, General Counsel and a director (since November 2001) of Shareholder
Financial Services, Inc., Shareholder Services, Inc., OFI Private Investments,
Inc. and OFI Trust Company; Vice President (since November 2001) of
OppenheimerFunds Legacy Program; Senior Vice President and General Counsel
(since November 2001) of OFI Institutional Asset Management, Inc.; a director
(since June 2003) of OppenheimerFunds (Asia) Limited. Formerly Senior Vice
President (May 1985-December 2003), Acting General Counsel (November
2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the
Manager; Assistant Secretary of Shareholder Services, Inc. (May 1985 November
2001), Shareholder Financial Services, Inc. (November 1989-November 2001); and
OppenheimerFunds International Ltd. (October 1997-November 2001). An officer of
84 portfolios in the OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the
Vice President and Manager; Vice President (since June 1983) of OppenheimerFunds Distributor, Inc.,
Chief Compliance Officer Centennial Asset Management Corporation and Shareholder Services, Inc. Formerly
(since 2004) (until February 2004) Vice President and Director of Internal Audit of
Age: 54 OppenheimerFunds, Inc. An officer of 84 portfolios in the OppenheimerFunds
complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY
CALLING 1.800.525.7048.
63 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
GENERAL INFORMATION CONCERNING THE FUND Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Oppenheimer Multi-Sector Income Trust (the Fund) is a closed-end diversified
management investment company with a primary investment objective of seeking
high current income consistent with preservation of capital. The Fund's
secondary investment objective is capital appreciation. In seeking its
objectives under normal market conditions, the Fund may invest any percentage of
its assets in at least three of the following seven fixed income sectors: U.S.
Government, Corporate, International, Asset-Backed, Municipal, Convertible and
Money Market. Current income, preservation of capital and, secondarily, possible
capital appreciation may be considerations in the allocation of assets among
such sectors. The Fund can invest in a number of different kinds of "derivative
investments" and can also engage in certain special investment techniques,
including repurchase transactions, when-issued and delayed delivery transactions
and hedging. Although, the Fund is not required to invest in any of these types
of securities at all times. The investment advisor to the Fund is
OppenheimerFunds, Inc. (the Manager).
The Portfolio Managers of the Fund are Arthur Steinmetz and Caleb Wong.
Mr. Steinmetz is a Vice President of the Fund and a Senior Vice President of the
Advisor and Mr.Wong is Vice President of the Advisor and the Fund. Messrs.
Steinmetz and Wong have been the persons principally responsible for the
day-to-day management of the Fund's portfolio since February 1, 1999. Prior to
February 1999, Mr. Steinmetz served as a portfolio manager and officer of other
Oppenheimer funds. Mr.Wong worked on fixed-income quantitative research and risk
management for the Advisor since July 1996, prior to which he was enrolled in
the Ph.D. program for Economics as the University of Chicago. Other members of
the Advisor's fixed-income portfolio department, particularly portfolio
analysts, traders and other portfolio managers provide the Fund's Portfolio
Managers with support in managing the Fund's portfolio.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN--Pursuant to the Fund's Dividend
Reinvestment and Cash Purchase Plan (the Plan), as to shares of the Fund
(Shares) not registered in nominee name, all dividends and capital gains
distributions (Distributions) declared by the Fund will be automatically
reinvested in additional full and fractional Shares unless a shareholder elects
to receive cash. If Shares are registered in nominee name, the shareholder
should consult the nominee if the shareholder desires to participate in the
Plan. Shareholders that participate in the Plan (Participants) may, at their
option, make additional cash investments in Shares, semi-annually in amounts of
at least $100, through payment to Shareholder Financial Services, Inc., the
agent for the Plan (the Agent), accompanied by a service fee of $0.75.
Depending upon the circumstances hereinafter described, Plan Shares will
be acquired by the Agent for the Participant's account through receipt of newly
issued Shares or the purchase of outstanding Shares on the open market. If the
market price of Shares on the relevant date (normally the payment date) equals
or exceeds their net asset value, the Agent will ask the Fund for payment of the
Distribution in additional Shares at the greater of the Fund's net asset value
determined as of the date of purchase or 95% of the then-current market price.
If the market price is lower than net asset value, the
64 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
Distribution will be paid in cash, which the Agent will use to buy Shares on The
New York Stock Exchange (the NYSE), or otherwise on the open market to the
extent available. If the market price exceeds the net asset value before the
Agent has completed its purchases, the average purchase price per Share paid by
the Agent may exceed the net asset value, resulting in fewer Shares being
acquired than if the Distribution had been paid in Shares issued by the Fund.
Participants may elect to withdraw from the Plan at any time and thereby
receive cash in lieu of Shares by sending appropriate written instructions to
the Agent. Elections received by the Agent will be effective only if received
more than ten days prior to the record date for any Distribution; otherwise,
such termination will be effective shortly after the investment of such
Distribution with respect to any subsequent Distribution. Upon withdrawal from
or termination of the Plan, all Shares acquired under the Plan will remain in
the Participant's account unless otherwise requested. For full Shares, the
Participant may either: (1) receive without charge a share certificate for such
Shares; or (2) request the Agent (after receipt by the Agent of signature
guaranteed instructions by all registered owners) to sell the Shares acquired
under the Plan and remit the proceeds less any brokerage commissions and a $2.50
service fee.
Fractional Shares may either remain in the Participant's account or be
redeemed at the current market price with the proceeds remitted to the
Participant. Shareholders who have previously withdrawn from the Plan may rejoin
at any time by sending written instructions signed by all registered owners to
the Agent.
There is no direct charge for participation in the Plan; all fees of the
Agent are paid by the Fund. There are no brokerage charges for Shares issued
directly by the Fund. However, each Participant will pay a pro rata share of
brokerage commissions incurred with respect to open market purchases of Shares
to be issued under the Plan. Participants will receive tax information annually
for their personal records and to assist in federal income tax return
preparation. The automatic reinvestment of Distributions does not relieve
Participants of any income tax that may be payable on Distributions.
The Plan may be terminated or amended at any time upon 30 days' prior
written notice to Participants which, with respect to a Plan termination, must
precede the record date of any Distribution by the Fund. Additional information
concerning the Plan may be obtained by shareholders holding Shares registered
directly in their names by writing the Agent, Shareholder Financial Services,
Inc., P.O. Box 173673, Denver, CO 80217-3673 or by calling 1-800-647-7374.
Shareholders holding Shares in nominee name should contact their brokerage firm
or other nominee for more information.
SHAREHOLDER INFORMATION--The Shares are traded on the NYSE. Daily market prices
for the Fund's shares are published in the New York Stock Exchange Composite
Transaction section of newspapers under the designation "OppenMlti." The Fund's
NYSE trading symbol is OMS.Weekly net asset value (NAV) and market price
information about the Fund is generally published each Monday in The Wall Street
Journal and each Sunday in The New York Times and each Saturday in Barron's, and
other newspapers in a table called "Closed-End Bond Funds."
65 | OPPENHEIMER MULTI-SECTOR INCOME TRUST
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the registrant has determined that Edward V.
Regan, the Chairman of the Board's Audit Committee, possesses the technical
attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as
an "audit committee financial expert," and has designated Mr. Regan as the Audit
Committee's financial expert. Mr. Regan is an "independent" Trustee pursuant to
paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $33,000 in fiscal 2004 and $30,000 in
fiscal 2003.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual
financial statements billed $5,000 in fiscal 2004 and no such fees
in fiscal 2003 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant.
Such fees include, among others: internal control reviews.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $6,000 in fiscal 2004 and $5,000 in
fiscal 2003 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant.
Such fees include, among others: tax compliance, tax planning and
tax advice. Tax compliance generally involves preparation of
original and amended tax returns, claims for a refund and tax
payment-planning services. Tax planning and tax advice includes
assistance with tax audits and appeals, tax advice related to
mergers and acquisitions and requests for rulings or technical
advice from taxing authorities.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees in fiscal 2004 and $58 in
fiscal 2003.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees during the last two fiscal
years to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant.
Such fees include consultations regarding the registrant's
retirement plan with respect to its trustees.
(e) (1) During its regularly scheduled periodic meetings, the
registrant's audit committee will pre-approve all audit,
audit-related, tax and other services to be provided by the
principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next
regularly scheduled meeting.
Pre-approval of non-audit services is waived provided that: 1) the
aggregate amount of all such services provided constitutes no more
than five percent of the total amount of fees paid by the registrant
to it principal accountant during the fiscal year in which services
are provided 2) such services were not recognized by the registrant
at the time of engagement as non-audit services and 3) such services
are promptly brought to the attention of the audit committee of the
registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $11,000 in fiscal 2004 and $5,058 in
fiscal 2003 to the registrant and the registrant's investment
adviser or any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the
registrant related to non-audit fees. Those billings did not include
any prohibited non-audit services as defined by the Securities
Exchange Act of 1934.
(h) The registrant's audit committee of the board of trustees has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
account's independence. No such services were rendered.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under
which the Fund votes proxies relating to securities ("portfolio proxies") held
by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and
Procedures is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, (ii) on the Fund's website at
www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In
addition, the Fund will be required to file new Form N-PX, with its complete
proxy voting record for the 12 months ended June 30th, no later than August 31st
of each year. The first such filing is due no later than August 31, 2004, for
the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX filing
will be available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov.
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a meeting of the Board of Trustees of the registrant held on February
18, 2004, the Board adopted (1) a policy that, should the Board determine that a
vacancy exists or is likely to exist on the Board, the Governance Committee of
the Board, which is comprised entirely of independent trustees, shall consider
any candidates for Board membership recommended by the registrant's security
holders and (2) a policy that security holders wishing to submit a nominee for
election to the Board may do so by mailing their submission to the offices of
OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street - 11th
Floor, New York, NY 10281-1008, to the attention of the Chair of the Governance
Committee. Prior to February 18, 2004, the Board did not have a formalized
policy with respect to consideration of security holder nominees or a procedure
by which security holders may make their submissions. In addition to security
holder nominees, the Governance Committee may also consider nominees recommended
by independent Board members or recommended by any other Board members and is
authorized under its Charter, upon Board approval, to retain an executive search
firm to assist in screening potential candidates. Upon Board approval, the
Governance Committee may also obtain legal, financial, or other external counsel
that may be necessary or desirable in the screening process.
ITEM 10. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(c)) as of October 31, 2004,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances that information required to be
disclosed by registrant in the reports that it files under the
Securities Exchange Act of 1934 (a) is accumulated and communicated
to registrant's management, including its principal
executive officer and principal financial officer, to allow timely
decisions regarding required disclosure, and (b) is recorded,
processed, summarized and reported, within the time periods
specified in the rules and forms adopted by the U.S. Securities and
Exchange Commission.
(b) There have been no significant changes in registrant's internal
controls over financial reporting that occurred during the
registrant's last fiscal half-year that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 11. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)