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 811-07255
OPPENHEIMER INTERNATIONAL BOND FUND
(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: SEPTEMBER 30
Date of reporting period: OCTOBER 1, 2004 - MARCH 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN GEOGRAPHICAL HOLDINGS
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United States 9.5%
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United Kingdom 7.5
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Russia 6.8
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Brazil 6.8
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Turkey 5.3
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Japan 4.5
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Colombia 3.8
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Poland 3.0
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Sweden 3.0
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Norway 3.0
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2005, and are based on total investments.
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REGIONAL ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Europe 32.2%
Latin America 18.1
Emerging Europe 15.5
Middle East/Africa 12.2
Asia 11.2
United States/Canada 10.0
Supranational 0.8
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2005, and are based on total investments.
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10 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES
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Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE
FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY
BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION
ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US
AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 6/15/95. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 4.75%.
CLASS B shares of the Fund were first publicly offered on 6/15/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the "since inception" return for Class
B uses Class A performance for the period after conversion. Class B shares are
subject to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 6/15/95. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
11 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES
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CLASS Y shares of the Fund were first publicly offered on 9/27/04. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor. This Class has a limited operating history.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
12 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended March 31, 2005.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in
13 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND EXPENSES
the Statement of Additional Information). Therefore, the "hypothetical" lines of
the table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(10/1/04) (3/31/05) MARCH 31, 2005
- --------------------------------------------------------------------------------
Class A Actual $1,000.00 $1,084.20 $5.37
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,019.80 5.20
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,079.80 9.84
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,015.51 9.54
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,080.30 9.22
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,016.11 8.94
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,082.00 7.66
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,017.60 7.42
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,084.20 3.64
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,021.44 3.53
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended March 31, 2005 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------
Class A 1.03%
- ---------------------------
Class B 1.89
- ---------------------------
Class C 1.77
- ---------------------------
Class N 1.47
- ---------------------------
Class Y 0.70
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Transfer Agent that can be terminated at any time, without advance
notice. The "Financial Highlights" tables in the Fund's financial statements,
included in this report, also show the gross expense ratios, without such
waivers or reimbursements.
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14 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS March 31, 2005 / Unaudited
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--1.1%
- ----------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Nts., 3.75%, 7/15/09 1 [EUR] 16,635,000 $ 22,156,855
- ----------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Sr. Unsec. Nts., 2.125%, 10/9/07 [JPY] 640,000,000 6,263,919
-----------------
Total U.S. Government Obligations (Cost $26,289,046) 28,420,774
- ----------------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--55.7%
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ARGENTINA--1.6%
Argentina (Republic of) Bonds:
2.352%, 5/3/05 5 396,000 393,770
3.01%, 8/3/12 5 21,040,000 17,738,971
Series PRE8, 2%, 1/3/10 2,3,4 [ARP] 15,670,000 8,503,309
Series PR12, 2%, 1/3/16 2,3,4 [ARP] 18,075,972 8,538,243
- ----------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Unsec. Unsub. Bonds, 5.83%, 12/31/33 [ARP] 15,776,351 4,895,876
- ----------------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Bonos de Consolidacion de
Deudas, Series PBA1, 4/1/07 2,3,4 [ARP] 1,279,897 506,510
-----------------
40,576,679
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AUSTRALIA--1.9%
Queensland Treasury Corp. Unsec. Nts., Series 09G, 6%, 7/14/09 [AUD] 62,395,000 48,633,530
- ----------------------------------------------------------------------------------------------------------------------
AUSTRIA--1.4%
Austria (Republic of) Nts.:
3.80%, 10/20/13 6 [EUR] 6,845,000 9,045,537
5.50%, 10/20/07 6 [EUR] 2,440,000 3,384,231
Series 98-1, 5%, 1/15/08 [EUR] 9,795,000 13,483,536
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Austria (Republic of) Sr. Unsec. Unsub. Nts., Series 1, 5%, 7/15/12 [EUR] 6,525,000 9,329,186
-----------------
35,242,490
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BELGIUM--0.7%
Belgium (Kingdom of) Bonds:
5.50%, 3/28/28 [EUR] 5,400,000 8,409,784
Series 26, 6.25%, 3/28/07 [EUR] 6,850,000 9,513,618
-----------------
17,923,402
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BRAZIL--2.0%
Brazil (Federal Republic of) Bonds:
8.75%, 2/4/25 5,975,000 5,616,500
10.50%, 7/14/14 13,615,000 15,010,538
Series 15 yr., 3.125%, 4/15/09 5 15,883 15,566
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Brazil (Federal Republic of) Debt Capitalization Bonds, Series 20 yr.,
8%, 4/15/14 24,971,030 24,799,354
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Brazil (Federal Republic of) Unsec. Bonds, 4.75%, 4/10/07 4 [JPY] 500,000,000 4,709,503
- ----------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Unsec. Unsub. Bonds, 11%, 8/17/40 2,084,200 2,322,320
-----------------
52,473,781
15 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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BULGARIA--0.1%
Bulgaria (Republic of) Bonds:
8.25%, 1/15/15 $ 1,505,000 $ 1,828,575
8.25%, 1/15/15 6 1,505,000 1,828,575
-----------------
3,657,150
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CANADA--0.5%
Canada (Government of) Bonds, 5%, 6/1/14 [CAD] 13,740,000 11,936,306
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COLOMBIA--2.0%
Colombia (Republic of) Bonds, 12%, 10/22/15 [COP] 48,747,000,000 19,763,057
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Colombia (Republic of) Nts., 11.75%, 3/1/10 [COP] 48,999,780,000 20,652,604
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Colombia (Republic of) Unsec. Unsub. Bonds, 5.50%, 4/27/05 [JPY] 960,000,000 8,953,524
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Colombia (Republic of) Unsec. Unsub. Nts., 11.375%, 1/31/08 [EUR] 1,845,000 2,736,540
-----------------
52,105,725
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DOMINICAN REPUBLIC--0.2%
Dominican Republic Bonds, Series REGS, 9.04%, 1/23/13 2,690,000 2,454,625
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Dominican Republic Unsec. Unsub. Bonds, 9.50%, 9/27/06 6,7 1,500,000 1,395,000
-----------------
3,849,625
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ECUADOR--0.2%
Ecuador (Republic of) Unsec. Bonds, 8%, 8/15/30 5 6,690,000 6,071,175
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EL SALVADOR--0.0%
El Salvador (Republic of) Bonds, 7.625%, 9/21/34 6 1,185,000 1,220,550
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FINLAND--2.0%
Finland (Republic of) Bonds, 5.375%, 7/4/13 [EUR] 20,985,000 30,870,825
- ----------------------------------------------------------------------------------------------------------------------
Finland (Republic of) Sr. Unsec. Unsub. Bonds:
2.75%, 7/4/06 [EUR] 3,470,000 4,521,679
5%, 7/4/07 [EUR] 12,415,000 16,949,099
-----------------
52,341,603
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FRANCE--2.1%
France (Government of) Obligations Assimilables du Tresor Bonds:
4%, 10/25/13 [EUR] 13,960,000 18,711,536
5.50%, 10/25/07 [EUR] 12,375,000 17,161,343
5.50%, 10/25/10 [EUR] 3,080,000 4,464,110
5.75%, 10/25/32 [EUR] 5,300,000 8,709,655
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France (Government of) Treasury Nts., 5 yr., 5%, 7/12/05 [EUR] 5,050,000 6,598,327
-----------------
55,644,971
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GERMANY--1.0%
Germany (Republic of) Bonds:
2%, 6/17/05 [EUR] 7,865,000 10,192,293
5.375%, 1/4/10 [EUR] 7,205,000 10,292,457
Series 02, 5%, 7/4/12 [EUR] 4,200,000 6,000,856
-----------------
26,485,606
16 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
GREECE--1.2%
Greece (Republic of) Bonds, 3.70%, 7/20/15 [EUR] 17,360,000 $ 22,240,932
- ----------------------------------------------------------------------------------------------------------------------
Greece (Republic of) Sr. Unsub. Bonds, 4.65%, 4/19/07 [EUR] 6,980,000 9,416,752
-----------------
31,657,684
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GUATEMALA--0.0%
Guatemala (Republic of) Nts.:
10.25%, 11/8/11 525,000 612,281
10.25%, 11/8/11 6 160,000 186,600
-----------------
798,881
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HUNGARY--0.4%
Hungary (Government of) Bonds, Series 05/I, 8.50%, 10/12/05 [HUF] 1,918,660,000 10,097,889
- ----------------------------------------------------------------------------------------------------------------------
IRELAND--1.3%
Ireland (Republic of) Treasury Bonds, 3.25%, 4/18/09 [EUR] 25,900,000 34,020,378
- ----------------------------------------------------------------------------------------------------------------------
ISRAEL--1.2%
Israel (State of) Bonds, Series 2682, 7.50%, 3/31/14 [ILS] 127,190,000 30,755,317
- ----------------------------------------------------------------------------------------------------------------------
ITALY--2.0%
Italy (Republic of) Treasury Bonds:
Buoni del Tesoro Poliennali, 4.25%, 2/1/19 [EUR] 13,785,000 18,462,676
Buoni del Tesoro Poliennali, 4.50%, 3/1/07 [EUR] 14,745,000 19,830,241
Buoni del Tesoro Poliennali, 4.75%, 7/1/05 [EUR] 7,000,000 9,131,405
Buoni del Tesoro Poliennali, 5%, 10/15/07 [EUR] 2,770,000 3,802,228
-----------------
51,226,550
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IVORY COAST--0.0%
Ivory Coast (Government of) Past Due Interest Bonds, 3/29/18 2,3,4 [FRF] 16,007,500 514,050
- ----------------------------------------------------------------------------------------------------------------------
JAPAN--2.7%
Japan (Government of) Bonds, 5 yr., Series 14, 0.40%, 6/20/06 [JPY] 7,578,800,000 70,994,619
- ----------------------------------------------------------------------------------------------------------------------
MEXICO--1.7%
Mexican Williams Sr. Nts., 3.242%, 11/15/08 4,5 500,000 517,813
- ----------------------------------------------------------------------------------------------------------------------
United Mexican States Bonds:
Series MI10, 8%, 12/19/13 [MXN] 230,788,000 17,742,678
Series MI10, 9.50%, 12/18/14 5 [MXN] 243,434,400 20,297,281
Series M20, 8%, 12/7/23 [MXN] 43,415,000 3,013,243
- ----------------------------------------------------------------------------------------------------------------------
United Mexican States Unsec. Unsub. Nts., Series 6 BR, 6.75%, 6/6/06 [JPY] 205,000,000 2,052,485
-----------------
43,623,500
- ----------------------------------------------------------------------------------------------------------------------
NEW ZEALAND--0.4%
New Zealand (Government of) Bonds, 7%, 7/15/09 [NZD] 14,330,000 10,468,737
- ----------------------------------------------------------------------------------------------------------------------
NIGERIA--0.1%
Central Bank of Nigeria Gtd. Bonds, Series WW, 6.25%, 11/15/20 1,375,000 1,285,625
- ----------------------------------------------------------------------------------------------------------------------
Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 602,288 489,950
-----------------
1,775,575
17 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
NORWAY--3.0%
Norway (Kingdom of) Bonds:
5.50%, 5/15/09 [NOK] 58,130,000 $ 9,953,374
6%, 5/16/11 [NOK] 258,330,000 45,863,548
6.50%, 5/15/13 [NOK] 116,250,000 21,633,197
-----------------
77,450,119
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PANAMA--0.4%
Panama (Republic of) Bonds:
7.25%, 3/15/15 2,860,000 2,852,850
8.125%, 4/28/34 2,030,000 2,040,150
9.375%, 1/16/23 5,585,000 6,283,125
-----------------
11,176,125
- ----------------------------------------------------------------------------------------------------------------------
PERU--0.9%
Peru (Republic of) Bonds:
8.375%, 5/3/16 1,380,000 1,442,100
Series 2, 9%, 1/31/12 [PEN] 18,850,000 5,840,927
Series 8-1, 12.25%, 8/10/11 [PEN] 18,633,000 6,788,369
- ----------------------------------------------------------------------------------------------------------------------
Peru (Republic of) Sr. Nts., 4.53%, 2/28/16 8 5,742,145 3,389,760
- ----------------------------------------------------------------------------------------------------------------------
Peru (Republic of) Unsec. Unsub. Bonds, 8.75%, 11/21/33 6,720,000 7,022,400
-----------------
24,483,556
- ----------------------------------------------------------------------------------------------------------------------
PHILIPPINES--1.3%
Philippines (Republic of) Bonds:
9.50%, 2/2/30 16,830,000 16,493,400
10.625%, 3/16/25 3,740,000 4,020,500
Series 5-56, 12.375%, 10/28/09 [PHP] 149,350,000 2,820,423
Series 5-57, 11.50%, 1/27/10 [PHP] 507,800,000 9,413,574
-----------------
32,747,897
- ----------------------------------------------------------------------------------------------------------------------
POLAND--3.0%
Poland (Republic of) Bonds:
Series DS0509, 6%, 5/24/09 [PLZ] 183,260,000 59,234,322
Series DS1013, 5%, 10/24/13 [PLZ] 55,940,000 17,028,675
Series WS0922, 5.75%, 9/23/22 [PLZ] 10,000,000 3,278,748
-----------------
79,541,745
- ----------------------------------------------------------------------------------------------------------------------
PORTUGAL--2.5%
Portugal (Republic of) Obrig Do Tes Medio Prazo Nts.:
3.25%, 7/15/08 [EUR] 8,160,000 10,702,576
4.875%, 8/17/07 [EUR] 9,710,000 13,234,867
- ----------------------------------------------------------------------------------------------------------------------
Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Unsub. Nts.,
5.85%, 5/20/10 [EUR] 28,945,000 42,358,839
-----------------
66,296,282
18 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
RUSSIA--3.9%
Aries Vermoegensverwaltungs GmbH Unsub. Nts., Series B, 7.75%,
10/25/09 4 [EUR] 2,500,000 $ 3,656,967
- ----------------------------------------------------------------------------------------------------------------------
Aries Vermoegensverwaltungs GmbH Credit Unsub. Nts., Series C,
9.60%, 10/25/14 23,330,000 28,164,793
- ----------------------------------------------------------------------------------------------------------------------
Ministry Finance of Russia Debs., Series VI, 3%, 5/14/06 4 3,590,000 3,529,580
- ----------------------------------------------------------------------------------------------------------------------
Russian Federation Unsec. Unsub. Bonds, 5%, 3/31/30 5,6 8,580,000 8,858,850
- ----------------------------------------------------------------------------------------------------------------------
Russian Federation Unsub. Nts., 5%, 3/31/30 5 55,775,000 57,264,750
-----------------
101,474,940
- ----------------------------------------------------------------------------------------------------------------------
SOUTH AFRICA--2.0%
South Africa (Republic of) Bonds:
Series R157, 13.50%, 9/15/15 [ZAR] 76,130,000 16,146,604
Series R186, 10.50%, 12/21/26 [ZAR] 136,575,000 27,341,904
Series R203, 8.25%, 9/15/17 [ZAR] 30,810,000 4,770,396
Series R204, 8%, 12/21/18 [ZAR] 34,150,000 5,171,443
-----------------
53,430,347
- ----------------------------------------------------------------------------------------------------------------------
SPAIN--1.9%
Spain (Kingdom of) Bonds:
Bonos y Obligacion del Estado, 4.25%, 10/31/07 [EUR] 8,945,000 12,061,482
Bonos y Obligacion del Estado, 4.80%, 10/31/06 [EUR] 5,500,000 7,392,450
Bonos y Obligacion del Estado, 5.35%, 10/31/11 [EUR] 8,060,000 11,708,173
Bonos y Obligacion del Estado, 5.75%, 7/30/32 [EUR] 5,200,000 8,525,639
- ----------------------------------------------------------------------------------------------------------------------
Spain (Kingdom of) Treasury Bills, 2.02%, 6/17/05 8 [EUR] 8,520,000 10,995,409
-----------------
50,683,153
- ----------------------------------------------------------------------------------------------------------------------
SWEDEN--3.0%
Sweden (Kingdom of) Bonds:
Series 1043, 5%, 1/28/09 [SEK] 63,420,000 9,610,764
Series 1045, 5.25%, 3/15/11 [SEK] 440,410,000 68,593,068
-----------------
78,203,832
- ----------------------------------------------------------------------------------------------------------------------
THE NETHERLANDS--1.2%
Netherlands (Kingdom of the) Bonds:
3.75%, 7/15/09 [EUR] 8,000,000 10,707,388
4.25%, 7/15/13 [EUR] 9,660,000 13,192,638
5.50%, 1/15/28 [EUR] 5,300,000 8,292,522
-----------------
32,192,548
- ----------------------------------------------------------------------------------------------------------------------
TURKEY--0.6%
Turkey (Republic of) Nts., 7.25%, 3/15/15 6,680,000 6,563,100
- ----------------------------------------------------------------------------------------------------------------------
Turkey (Republic of) Sr. Unsec. Unsub. Nts., 11.875%, 1/15/30 7,010,000 9,340,825
-----------------
15,903,925
19 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM--4.7%
United Kingdom Treasury Nts., 4%, 3/7/09 [GBP] 66,725,000 $ 123,067,445
- ----------------------------------------------------------------------------------------------------------------------
VENEZUELA--0.6%
Venezuela (Republic of) Collateralized Par Bonds, Series W-B,
6.75%, 3/31/20 159,000 158,205
- ----------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Debs., Series DL, 3.625%, 12/18/07 5 11,458 11,458
- ----------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Nts.:
7%, 3/16/15 [EUR] 5,250,000 6,444,849
8.50%, 10/8/14 9,954,000 9,845,750
-----------------
16,460,262
-----------------
Total Foreign Government Obligations (Cost $1,400,312,967) 1,457,207,949
- ----------------------------------------------------------------------------------------------------------------------
LOAN PARTICIPATIONS--0.4%
- ----------------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Loan Participation Nts.:
0.878%, 3/4/10 4,5 [JPY] 177,162,984 1,627,395
4.003%, 3/4/10 4,5 677,500 669,031
4.003%, 9/4/06 4,5 492,857 487,928
- ----------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Indonesia (Republic of) Rupiah Loan Participation Nts., 3.813%, 1/25/06 5 3,155,000 3,163,834
OAO Gazprom Loan Participation Nts., 8.27%, 8/4/05 4,5 3,005,000 3,087,337
-----------------
Total Loan Participations (Cost $8,691,664) 9,035,525
- ----------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--7.7%
- ----------------------------------------------------------------------------------------------------------------------
Alrosa Finance SA:
8.875% Nts., 11/17/14 2,400,000 2,485,080
8.875% Nts., 11/17/14 6 3,600,000 3,739,500
- ----------------------------------------------------------------------------------------------------------------------
Argentine Beverages Financial Trust, 7.375% Bonds, 3/22/12 4 1,445,000 1,445,000
- ----------------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/1995 2,3,4 2,000 --
- ----------------------------------------------------------------------------------------------------------------------
CITGO Trustees Cayman Ltd., 8.50% Nts., 12/21/14 4 1,330,000 1,263,500
- ----------------------------------------------------------------------------------------------------------------------
Gazprom International SA, 7.201% Sr. Unsec. Bonds, 2/1/20 7,850,000 8,077,807
- ----------------------------------------------------------------------------------------------------------------------
General Electric Capital Corp., 1.40% Sr. Unsec. Unsub. Nts., 11/2/06 [JPY] 4,101,000,000 39,044,404
- ----------------------------------------------------------------------------------------------------------------------
HSBC Bank plc:
9.75% Sr. Unsec. Nts., 7/8/09 8 30,220,000 18,751,510
11.60% Sr. Unsec. Nts., 1/12/10 8 42,800,000 23,005,000
12.28% Sr. Unsec. Nts., 3/9/09 8 30,220,000 17,503,424
- ----------------------------------------------------------------------------------------------------------------------
Inter-American Development Bank:
1.90% Unsec. Bonds, 7/8/09 [JPY] 113,000,000 1,122,887
3.95% Nts., 1/25/12 4 [COP] 16,902,000,000 7,104,271
6.26% Nts., 12/8/09 4,5 [BRR] 11,200,000 4,205,243
- ----------------------------------------------------------------------------------------------------------------------
International Bank for Reconstruction and Development (The):
2% Nts., 2/18/08 [JPY] 121,000,000 1,192,284
15% Nts., 1/7/10 [TRY] 3,000,000 2,384,473
- ----------------------------------------------------------------------------------------------------------------------
Japan (Government of) Unsec. Unsub. Nts., 2.875%, 7/28/05 [JPY] 3,320,000,000 31,242,553
20 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------
KfW International Finance, Inc., 2.05% Unsec. Unsub. Nts., 9/21/09 [JPY] 104,000,000 $ 1,041,967
- ----------------------------------------------------------------------------------------------------------------------
Nak Naftogaz Ukraine, 8.125% Bonds, 9/30/09 3,900,000 3,985,020
- ----------------------------------------------------------------------------------------------------------------------
Nordic Investment Bank, 12.50% Sr. Unsec. Nts., 2/15/09 [TRY] 5,000,000 3,659,889
- ----------------------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/10 2,3,4 550,000 --
- ----------------------------------------------------------------------------------------------------------------------
Pemex Project Funding Master Trust, 9.125% Unsec. Unsub. Nts., 10/13/10 4,570,000 5,289,775
- ----------------------------------------------------------------------------------------------------------------------
Pfizer, Inc., 0.80% Unsec. Nts., Series INTL, 3/18/08 9 [JPY] 1,980,000,000 18,679,176
- ----------------------------------------------------------------------------------------------------------------------
Tengizchevroil LLP, 6.124% Nts., 11/15/14 6 3,330,000 3,313,350
- ----------------------------------------------------------------------------------------------------------------------
Titan Petrochemicals Group Ltd., 8.50% Sr. Unsec. Nts., 3/18/12 6 2,381,000 2,238,140
-----------------
Total Corporate Bonds and Notes (Cost $206,645,298) 200,774,253
SHARES
- ----------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--1.9%
- ----------------------------------------------------------------------------------------------------------------------
3i Group plc 74,910 950,584
- ----------------------------------------------------------------------------------------------------------------------
All Nippon Airways Co. Ltd. 269,000 918,157
- ----------------------------------------------------------------------------------------------------------------------
Arriva plc 95,420 946,681
- ----------------------------------------------------------------------------------------------------------------------
Asahi Glass Co. Ltd. 91,092 959,936
- ----------------------------------------------------------------------------------------------------------------------
BAE Systems plc 203,220 996,572
- ----------------------------------------------------------------------------------------------------------------------
BASF AG 13,411 950,068
- ----------------------------------------------------------------------------------------------------------------------
Billiton plc 68,540 920,913
- ----------------------------------------------------------------------------------------------------------------------
BNP Paribas SA 13,780 976,209
- ----------------------------------------------------------------------------------------------------------------------
Brambles Industries plc 170,570 976,675
- ----------------------------------------------------------------------------------------------------------------------
Capcom Co. Ltd. 99,800 974,453
- ----------------------------------------------------------------------------------------------------------------------
CNP Assurances SA 13,982 990,519
- ----------------------------------------------------------------------------------------------------------------------
Continental AG 13,532 1,047,225
- ----------------------------------------------------------------------------------------------------------------------
DaimlerChrysler AG 21,503 963,611
- ----------------------------------------------------------------------------------------------------------------------
Dainippon Ink & Chemicals, Inc. 356,000 972,750
- ----------------------------------------------------------------------------------------------------------------------
Daiwa Securities Group, Inc. 146,170 958,220
- ----------------------------------------------------------------------------------------------------------------------
Dentsu, Inc. 376 1,027,399
- ----------------------------------------------------------------------------------------------------------------------
E.ON AG 11,144 954,874
- ----------------------------------------------------------------------------------------------------------------------
Gecina SA 9,320 1,064,377
- ----------------------------------------------------------------------------------------------------------------------
Heidelberger Zement AG 15,104 950,375
- ----------------------------------------------------------------------------------------------------------------------
Hilton Group plc 164,510 935,758
- ----------------------------------------------------------------------------------------------------------------------
Ishikawajima-Harima Heavy Industries Co. Ltd. 3 619,000 998,666
- ----------------------------------------------------------------------------------------------------------------------
Japan Real Estate Investment Corp. 119 971,044
- ----------------------------------------------------------------------------------------------------------------------
Karstadt Quelle AG 86,014 864,121
- ----------------------------------------------------------------------------------------------------------------------
Kelda Group plc 86,280 975,026
- ----------------------------------------------------------------------------------------------------------------------
Klepierre 10,671 959,301
- ----------------------------------------------------------------------------------------------------------------------
Lafarge SA 9,600 929,598
21 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
COMMON STOCKS Continued
- ----------------------------------------------------------------------------------------------------------------------
Lloyds TSB Group plc 106,231 $ 959,586
- ----------------------------------------------------------------------------------------------------------------------
Merck KGaA 3 13,021 936,956
- ----------------------------------------------------------------------------------------------------------------------
Mitchells & Butlers plc 150,360 978,873
- ----------------------------------------------------------------------------------------------------------------------
Nippon Building Fund, Inc. 119 1,016,544
- ----------------------------------------------------------------------------------------------------------------------
Novar plc 273,100 961,220
- ----------------------------------------------------------------------------------------------------------------------
NSK Ltd. 189,252 974,234
- ----------------------------------------------------------------------------------------------------------------------
Peninsular & Oriental Steam Navigation Co. 165,690 906,462
- ----------------------------------------------------------------------------------------------------------------------
Pilkington plc 433,540 970,850
- ----------------------------------------------------------------------------------------------------------------------
PSA Peugeot Citroen 15,260 969,686
- ----------------------------------------------------------------------------------------------------------------------
Rakuten, Inc. 1,107 965,257
- ----------------------------------------------------------------------------------------------------------------------
RWE AG 16,489 997,125
- ----------------------------------------------------------------------------------------------------------------------
Sega Sammy Holdings, Inc. 3 16,000 972,862
- ----------------------------------------------------------------------------------------------------------------------
Severn Trent plc 57,010 985,773
- ----------------------------------------------------------------------------------------------------------------------
Societe Generale, Cl. A 9,465 983,394
- ----------------------------------------------------------------------------------------------------------------------
Sony Corp. 26,400 1,051,273
- ----------------------------------------------------------------------------------------------------------------------
Suez SA 36,934 993,933
- ----------------------------------------------------------------------------------------------------------------------
Sumitomo Bakelite Co. Ltd. 152,000 948,317
- ----------------------------------------------------------------------------------------------------------------------
Tate & Lyle plc 99,760 1,001,993
- ----------------------------------------------------------------------------------------------------------------------
ThyssenKrupp AG 43,780 903,488
- ----------------------------------------------------------------------------------------------------------------------
TonenGeneral Sekiyu K.K. 95,852 982,387
- ----------------------------------------------------------------------------------------------------------------------
TUI AG 38,768 1,021,176
- ----------------------------------------------------------------------------------------------------------------------
Unibail 8,078 957,615
- ----------------------------------------------------------------------------------------------------------------------
United Utilities plc 83,840 999,736
- ----------------------------------------------------------------------------------------------------------------------
Vinci 6,805 980,926
-----------------
Total Common Stocks (Cost $45,694,007) 48,552,778
UNITS
- ----------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ----------------------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05 3,4 495 --
- ----------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07 3,4 50 --
- ----------------------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts., Exp. 6/30/05 3,4 640 --
- ----------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Oil Linked Payment Obligation Wts., Exp. 4/15/20 3,4 500 10,500
-----------------
Total Rights, Warrants and Certificates (Cost $481) 10,500
22 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--27.7%
- ----------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Holdings, Inc.:
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 19.85%, 1/2/09 [BRR] 28,074,132 $ 5,687,798
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 38,356,000 11,485,826
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 59,878,000 17,930,658
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 100,000,000 29,945,315
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 18.80%, 1/3/08 [BRR] 24,719,335 5,855,983
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 20.40%, 1/5/10 [BRR] 32,035,902 5,625,000
Colombia (Republic of) Credit Linked Nts., Series II, 15%, 4/27/12 [COP] 6,942,469,928 3,680,380
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 3/15/07 [COP] 22,700,000,000 10,613,022
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 3/15/07 [COP] 7,400,000,000 3,459,752
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 31,110,000,000 16,492,334
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 12,430,000,000 6,589,459
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 11,705,100,000 6,073,472
Dominican Republic Credit Linked Nts., 19.163%, 3/10/06 [DOP] 319,516,460 10,078,668
Dominican Republic Credit Linked Nts., 19.69%, 3/31/06 7,8 [DOP] 249,890,000 7,861,888
Dominican Republic Unsec. Credit Linked Nts., 23.60%, 3/3/06 [DOP] 493,299,200 15,636,005
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8%,
10/28/05 [EGP] 50,120,000 8,153,141
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.407%,
2/9/06 [EGP] 75,466,000 11,879,389
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.90%,
12/29/05 [EGP] 17,390,000 2,812,982
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.90%,
1/12/06 [EGP] 57,210,000 9,224,619
Indonesia (Republic of) Recapitalization Unsec. Credit Linked Nts.,
13.15%, 3/17/10 9,523,810 9,167,334
OAO Gazprom Russian Local Market Unsec. Credit Linked Nts.,
15.208%, 11/8/05 4,406,270 5,349,101
Peruvian Sol Credit Linked Nts., Series II, 2.33%, 4/13/05 [PEN] 34,734,000 10,718,681
Ukraine (Republic of) Unsec. Credit Linked Nts., 8%, 5/25/05 [UAH] 14,747,028 2,870,742
Ukraine (Republic of) Unsec. Credit Linked Nts., 8%, 5/27/05 [UAH] 18,167,000 3,536,494
Ukraine Hryvnia Unsec. Credit Linked Nts., 7.50%, 5/6/05 4 [UAH] 41,174,000 7,793,825
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (Cayman), Turkey (Republic of)
Credit Linked Nts., Series EMG 7, 15%, 2/10/10 [TRY] 37,857,000 27,990,388
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston International:
Lukoil Credit Linked Nts., Series Fbi 105, 7.25%, 11/17/09 [RUR] 321,528,000 11,690,228
Moscow (City of) Credit Linked Nts., Series Fbi 101, 10%, 12/31/10 [RUR] 277,800,000 11,172,856
Moscow (City of) Credit Linked Nts., Series Fbi 98, 11%, 4/23/09 [RUR] 280,840,000 10,988,419
OAO Gazprom Credit Linked Nts., 8.11%, 1/21/07 [RUR] 289,282,000 10,659,588
South African Rand Interest Bearing Linked Nts., Series FBi 43,
2.425%, 5/23/22 2,100,000 2,077,530
Ukraine (Republic of) Credit Linked Nts., Series EMG 13, 11.94%,
12/30/09 [UAH] 30,400,000 7,236,177
23 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston, Inc.:
(Nassau Branch), Turkey (Republic of) Credit Linked Nts., 20%, 10/18/07 $ 4,238,000 $ 4,775,845
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series EM 868, 27.50%, 8/25/05 4,070,000 3,829,056
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series EM 872, 25.85%, 10/20/05 5 19,769,000 21,368,207
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series EM 880, 20%, 10/18/07 12,320,000 15,369,323
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series EMG4, 18.70%, 7/6/06 [TRY] 24,930,576 14,986,179
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series NA S 316, 18.641%, 2/23/06 7,266,000 6,269,105
(Nassau Branch), Ukraine (Republic of) Credit Linked Nts.,
Series EMG 11, 11.94%, 12/30/09 [UAH] 9,163,000 2,181,089
- ----------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Botswana (Republic of) Credit Linked Nts., 10.75%, 6/1/05 4 [BWP] 22,000,000 4,780,603
Botswana (Republic of) Credit Linked Nts., 10.75%, 6/1/05 4 [BWP] 12,970,000 2,818,383
Brazil Real Credit Linked Nts., 9.638%, 3/3/10 [BRR] 61,128,560 10,989,404
European Investment Bank, Russian Federation Credit Linked Nts.,
5.65%, 1/19/10 8,475,000 6,275,314
Indonesia (Republic of) Credit Linked Nts., 9.50%, 6/22/15 10,300,162 9,537,950
Indonesia (Republic of) Credit Linked Nts., 14.25%, 6/22/13 4 11,285,000 13,553,285
Indonesia (Republic of) Credit Linked Nts., Series II, 14.25%, 6/22/13 4 11,282,000 13,549,682
Indonesia (Republic of) Credit Linked Nts., Series III, 14.25%, 6/22/13 7 12,412,800 14,907,773
Nigeria (Federal Republic of) Credit Linked Nts., 11%, 6/16/05 [NGN] 1,301,000,000 9,547,519
Nigeria (Federal Republic of) Credit Linked Nts., 11%, 6/2/05 [NGN] 1,572,571,000 11,533,371
Nigeria (Federal Republic of) Credit Linked Nts., 11.64%, 6/2/05 [NGN] 783,751,000 5,748,097
Nigeria (Federal Republic of) Credit Linked Nts., 13%, 8/17/05 [NGN] 858,100,000 6,103,551
Nigeria (Federal Republic of) Credit Linked Nts., 13.25%, 4/14/05 [NGN] 649,321,000 4,862,335
OAO Gazprom I Credit Nts., 6.20%, 10/20/07 1,435,000 1,551,870
OAO Gazprom II Credit Nts., 5.95%, 4/20/07 1,435,000 1,534,973
Philippines (Republic of) Credit Linked Nts., 12%, 1/20/09 4 [PHP] 319,400,000 6,046,452
Philippines (Republic of) Credit Linked Nts., 12.375%, 11/1/09 4 [PHP] 596,990,000 11,635,858
Philippines (Republic of) Credit Linked Nts., 12.375%, 3/1/15 4 [PHP] 109,790,000 2,007,875
Romania (The State of) 3 yr. Linked Nts., 12.25%, 10/15/07 [ROL] 227,400,000,000 9,109,587
Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/24/07 [ROL] 56,400,000,000 2,303,722
Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/24/07 [ROL] 33,200,000,000 1,356,092
Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/24/07 [ROL] 100,000,000,000 4,084,614
Romania (The State of) Credit Linked Nts., 6%, 5/12/05 [ROL] 219,100,000,000 7,702,361
Romania (The State of) Credit Linked Nts., 11.49%, 12/7/06 [ROL] 91,186,500,000 3,422,029
Russian Federation Credit Linked Nts., 8.40%, 12/2/09 [RUR] 233,573,000 8,606,463
Ukraine (Republic of) Credit Linked Nts., 6.57%, 8/5/11 7,740,000 8,366,708
Ukraine (Republic of) Credit Linked Nts., 9.60%, 7/1/09 [UAH] 13,256,000 2,992,254
Ukraine (Republic of) Credit Linked Nts., 10.208%, 7/1/09 4 [UAH] 46,272,000 10,444,900
Ukraine (Republic of) Credit Linked Nts., 11.70%, 5/31/06 [UAH] 20,689,000 4,169,404
Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 3,228,000 744,415
Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 11,438,000 2,637,740
Videocon International Ltd. Credit Linked Nts, 4.86%, 12/29/09 4 7,300,000 7,248,170
24 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------
ING Bank NV:
Ukraine (Republic of) Credit Linked Nts., 11.89%, 12/30/09 [UAH] 15,891,000 $ 3,761,734
Ukraine (Republic of) Credit Linked Nts.-A, 11.89%, 12/30/09 [UAH] 1,274,000 301,583
Ukraine (Republic of) Credit Linked Nts.-B, 11.89%, 12/30/09 [UAH] 16,380,000 3,877,491
- ----------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank:
Brazil (Federal Republic of) Credit Linked Nts., 15.89%, 1/2/15 8 [BRR] 138,200,796 11,297,786
Brazil (Federal Republic of) Credit Linked Nts., 15.93%, 4/1/10 7,8 [BRR] 129,150,391 22,482,810
Brazil (Federal Republic of) Credit Linked Nts., 16.13%, 1/2/15 8 [BRR] 51,226,300 4,187,702
- ----------------------------------------------------------------------------------------------------------------------
Lehman Brothers International:
Romania (The State of) Treasury Bills Total Return Linked Nts.,
7.90%, 2/8/10 [ROL] 107,264,000,000 3,822,422
Romania (The State of) Treasury Bills Total Return Linked Nts.,
8.59%, 4/21/05 [ROL] 21,207,000,000 744,367
Romania (The State of) Treasury Bills Total Return Linked Nts.,
8.88%, 4/28/05 [ROL] 14,100,000,000 494,146
Romania (The State of) Treasury Bills Total Return Linked Nts.,
13.99%, 4/4/05 [ROL] 58,970,000,000 2,368,328
Romania (The State of) Treasury Bills Total Return Linked Nts.,
14.20%, 4/18/05 [ROL] 23,950,000,000 960,656
Romania (The State of) Treasury Bills Total Return Linked Nts.,
14.80%, 5/23/05 [ROL] 17,923,000,000 716,876
Romania (The State of) Treasury Bills Total Return Linked Nts.,
15%, 5/9/05 [ROL] 23,590,000,000 948,097
Turkey (Republic of) Treasury Bills Total Return Linked Nts.,
20%, 10/17/07 13,040,000 16,099,184
Turkey (Republic of) Treasury Bills Total Return Linked Nts.,
22.419%, 5/26/05 11,674,353 12,470,544
- ----------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.:
Romania (The State of) Treasury Bills Total Return Linked Nts.,
6.50%, 3/8/10 [ROL] 309,041,000,000 10,941,899
Romania (The State of) Treasury Bills Total Return Linked Nts.,
6.75%, 3/10/08 [ROL] 366,500,000,000 12,962,388
Romania (The State of) Treasury Bills Total Return Linked Nts.,
7.90%, 2/11/08 [ROL] 248,955,000,000 8,859,099
- ----------------------------------------------------------------------------------------------------------------------
UBS AG:
Israel (State of) Credit Linked Nts., 7.50%, 4/5/14 [ILS] 56,205,300 14,042,614
OAO Gazprom III Credit Nts., 5.928%, 7/5/06 3,590,000 3,721,684
-----------------
Total Structured Notes (Cost $715,008,545) 724,350,022
DATE STRIKE CONTRACTS
- ----------------------------------------------------------------------------------------------------------------------
OPTIONS PURCHASED--0.0%
- ----------------------------------------------------------------------------------------------------------------------
Euro Call 3 6/14/05 $ 1.37 25,000,000 61,575
- ----------------------------------------------------------------------------------------------------------------------
Mexican Nuevo Peso Put 3,4 4/7/05 11.19 137,100,000 48,533
-----------------
Total Options Purchased (Cost $357,798) 110,108
25 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--5.1%
- -----------------------------------------------------------------------------------------------------------------------
Undivided interest of 15.88% in joint repurchase agreement (Principal Amount/
Value $838,272,000, with a maturity value of $838,336,035) with UBS Warburg LLC,
2.75%, dated 3/31/05, to be repurchased at $133,098,166 on 4/1/05,
collateralized by Federal National Mortgage Assn., 4.50%--5%,
5/1/19--3/1/34, with a value of $857,182,684 (Cost $133,088,000) $ 133,088,000 $ 133,088,000
- -----------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (excluding Investments Purchased with
Cash Collateral from Securities Loaned) (Cost $2,536,087,806) 2,601,549,909
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--0.6%
- -----------------------------------------------------------------------------------------------------------------------
ASSET BACKED FLOATING NOTE--0.1%
Whitehawk CDO Funding Corp., 3.08%, 6/15/05 10 2,000,000 2,000,000
- -----------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.5%
Undivided interest of 2.96% in joint repurchase agreement (Principal Amount/
Value $500,000,000, with a maturity value of $500,040,972) with Merrill Lynch
Securities/MLPFS, 2.95%, dated 3/31/05, to be repurchased at $14,824,355 on
4/1/05, collateralized by AA Asset-Backed Securities, 0.0%-7.76%,
6/15/09-1/25/45, with a value of $525,002,014 10 14,823,140 14,823,140
------------------
Total Investments Purchased with Cash Collateral from Securities Loaned
(Cost $16,823,140) 16,823,140
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $2,552,910,946) 100.2% 2,618,373,049
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.2) (4,184,221)
-------------------------------------
NET ASSETS 100.0% $ 2,614,188,828
=====================================
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
BRR Brazilian Real
BWP Botswana Pula
CAD Canadian Dollar
COP Colombian Peso
DOP Dominican Republic Peso
EGP Egyptian Pounds
EUR Euro
FRF French Franc
GBP British Pound Sterling
HUF Hungarian Forint
ILS Israeli Shekel
JPY Japanese Yen
MXN Mexican Nuevo Peso
NGN Nigeria Naira
NOK Norwegian Krone
NZD New Zealand Dollar
PEN Peruvian New Sol
PHP Philippines Peso
PLZ Polish Zloty
ROL Romanian Leu
RUR Russian Ruble
SEK Swedish Krona
TRY New Turkish Lira
UAH Ukraine Hryvnia
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 $2,055,000. See Note 6 of Notes to Financial Statements.
2. Issue is in default. See Note 1 of Notes to Financial Statements.
3. Non-income producing security.
26 | OPPENHEIMER INTERNATIONAL BOND FUND
4. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of March 31, 2005 was $130,303,746, which represents
4.98% of the Fund's net assets, none of which is considered restricted. In
addition, the Fund held restricted currency with a value of $6,059,403, which
represents 0.23% of the Fund's net assets. See Note 12 of Notes to Financial
Statements.
5. Represents the current interest rate for a variable or increasing rate
security.
6. 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 $35,210,333 or 1.35% of the Fund's net
assets as of March 31, 2005.
7. When-issued security or forward commitment to be delivered and settled after
March 31, 2005. See Note 1 of Notes to Financial Statements.
8. Zero coupon bond reflects effective yield on the date of purchase.
9. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
10. 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 13 of Notes to Financial
Statements.
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- --------------------------------------------------------------------------------
United States $ 249,745,514 9.5%
United Kingdom 196,794,081 7.5
Russia 178,597,853 6.8
Brazil 177,962,063 6.8
Turkey 139,061,756 5.3
Japan 116,928,671 4.5
Colombia 99,014,144 3.8
Poland 79,541,745 3.0
Sweden 78,203,832 3.0
Norway 77,450,119 3.0
Romania 70,796,683 2.7
Portugal 66,296,282 2.5
France 65,450,529 2.5
Ukraine 64,899,576 2.5
Indonesia 63,879,858 2.4
South Africa 55,507,877 2.1
Philippines 52,438,082 2.0
Finland 52,341,603 2.0
Italy 51,226,550 2.0
Spain 50,683,153 1.9
Australia 48,633,530 1.9
Israel 44,797,931 1.7
Mexico 43,623,500 1.7
Argentina 42,021,679 1.6
Nigeria 39,570,448 1.5
Dominican Republic 37,426,186 1.4
Germany 36,074,625 1.4
Austria 35,242,490 1.4
Peru 35,202,237 1.4
Ireland 34,020,378 1.3
The Netherlands 32,192,548 1.2
Egypt 32,070,131 1.2
27 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
GEOGRAPHIC HOLDINGS VALUE PERCENT
- --------------------------------------------------------------------------------
Greece $ 31,657,684 1.2%
Supranational 19,669,047 0.8
Belgium 17,923,402 0.7
Venezuela 16,470,762 0.6
Luxembourg 15,130,657 0.6
Canada 11,936,306 0.5
Panama 11,176,125 0.4
New Zealand 10,468,737 0.4
Hungary 10,097,889 0.4
Botswana 7,598,986 0.3
Ecuador 6,071,175 0.2
Bulgaria 3,657,150 0.1
Algeria 2,784,354 0.1
Bermuda 2,238,140 0.1
Cayman Islands 1,263,500 0.1
El Salvador 1,220,550 0.0
Guatemala 798,881 0.0
Ivory Coast 514,050 0.0
-------------------------------------
TOTAL $ 2,618,373,049 100.0%
=====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
March 31, 2005
- -----------------------------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Investments, at value (including securities loaned of $16,965,005)
(cost $2,552,910,946)--see accompanying statement of investments $ 2,618,373,049
- -----------------------------------------------------------------------------------------------------------------------
Cash 14,992,145
- -----------------------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $16,816,684) 16,747,753
- -----------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 16,907,843
- -----------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 3,943,590
- -----------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 32,819,575
Interest, dividends and principal paydowns 25,263,911
Investments sold 2,201,665
Other 24,006
------------------
Total assets 2,731,273,537
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------
Swaptions written, at value (premiums received $722,517) 626,242
- -----------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 16,823,140
- -----------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 14,185,627
- -----------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $48,133,305 purchased on a when-issued basis
or forward commitment) 73,913,319
Shares of beneficial interest redeemed 6,993,043
Dividends 1,734,872
Distribution and service plan fees 1,431,220
Closed foreign currency contracts 637,545
Transfer and shareholder servicing agent fees 308,952
Shareholder communications 102,965
Futures margins 68,849
Trustees' compensation 23,393
Other 235,542
------------------
Total liabilities 117,084,709
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,614,188,828
==================
- -----------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 454,573
- -----------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,501,710,552
- -----------------------------------------------------------------------------------------------------------------------
Accumulated net investment loss (17,335,201)
- -----------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 56,780,968
- -----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 72,577,936
------------------
NET ASSETS $ 2,614,188,828
==================
29 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ----------------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $1,942,606,989
and 337,522,421 shares of beneficial interest outstanding) $ 5.76
Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $ 6.05
- ----------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $203,282,878 and 35,436,187 shares
of beneficial interest outstanding) $ 5.74
- ----------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $414,364,755 and 72,229,097 shares
of beneficial interest outstanding) $ 5.74
- ----------------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $30,134,774 and 5,248,466 shares
of beneficial interest outstanding) $ 5.74
- ----------------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of
$23,799,432 and 4,136,540 shares of beneficial interest outstanding) $ 5.75
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended March 31, 2005
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------
Interest $ 46,065,365
- -----------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $79,025) 427,338
- -----------------------------------------------------------------------------------------------------------------------
Portfolio lending fees 27,637
------------------
Total investment income 46,520,340
- -----------------------------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------------------------
Management fees 6,153,672
- -----------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,903,483
Class B 943,947
Class C 1,589,465
Class N 58,969
- -----------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,156,884
Class B 226,991
Class C 235,765
Class N 39,582
Class Y 5,168
- -----------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Class A 95,753
Class B 24,986
Class C 18,269
Class N 2,378
Class Y 2,694
- -----------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 241,373
- -----------------------------------------------------------------------------------------------------------------------
Trustees' compensation 20,724
- -----------------------------------------------------------------------------------------------------------------------
Other 138,374
------------------
Total expenses 12,858,477
Less reduction to custodian expenses (40,450)
Less waivers and reimbursements of expenses (1,043)
------------------
Net expenses 12,816,984
- -----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 33,703,356
31 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF OPERATIONS Unaudited / Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments $ 27,321,979
Closing of futures contracts (3,015,727)
Closing and expiration of option contracts written 1,131,468
Closing and expiration of swaption contracts written (636,981)
Foreign currency transactions 48,661,345
Swap contracts (12,751,539)
------------------
Net realized gain 60,710,545
- -----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 9,009,419
Translation of assets and liabilities denominated in foreign currencies 20,778,173
Futures contracts 308,643
Option contracts written (1,069,786)
Swaption contracts written 350,765
Swap contracts 6,395,306
------------------
Net change in unrealized appreciation 35,772,520
- -----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 130,186,421
==================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2005 SEPTEMBER 30,
(UNAUDITED) 2004
- -----------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 33,703,356 $ 22,611,481
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain 60,710,545 77,848,408
- -----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 35,772,520 (2,233,848)
-------------------------------------
Net increase in net assets resulting from operations 130,186,421 98,226,041
- -----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (72,014,061) (35,086,382)
Class B (8,314,236) (6,602,563)
Class C (13,442,152) (6,093,022)
Class N (1,048,541) (397,275)
Class Y (1,038,944) (2,820)
- -----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (15,264,925) --
Class B (1,931,157) --
Class C (3,155,866) --
Class N (225,580) --
Class Y (218,918) --
- -----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 755,796,017 713,652,173
Class B 32,772,534 25,122,862
Class C 179,978,831 136,111,001
Class N 11,279,243 13,528,377
Class Y 9,359,760 14,179,799
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Total increase 1,002,718,426 952,638,191
- -----------------------------------------------------------------------------------------------------------------------
Beginning of period 1,611,470,402 658,832,211
-------------------------------------
End of period (including accumulated net investment income (loss)
of $(17,335,201) and $44,819,377, respectively) $ 2,614,188,828 $ 1,611,470,402
=====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2005 SEPT. 30,
CLASS A (UNAUDITED) 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.63 $ 5.33 $ 4.38 $ 3.95 $ 4.19 $ 4.23
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .10 1 .13 .20 .24 .30 .45
Net realized and unrealized gain (loss) .38 .47 .95 .41 (.24) (.08)
--------------------------------------------------------------------------------
Total from investment operations .48 .60 1.15 .65 .06 .37
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.29) (.30) (.20) (.19) -- (.21)
Distributions from net realized gain (.06) -- -- -- -- --
Tax return of capital distribution -- -- -- (.03) (.30) (.20)
--------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.35) (.30) (.20) (.22) (.30) (.41)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.76 $ 5.63 $ 5.33 $ 4.38 $ 3.95 $ 4.19
================================================================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 8.42% 11.56% 26.67% 16.78% 1.40% 8.93%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,942,607 $1,177,628 $429,283 $181,456 $118,733 $100,928
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,553,608 $ 811,608 $285,391 $134,912 $117,000 $110,968
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.40% 2.19% 3.94% 5.16% 7.10% 10.23%
Total expenses 1.03% 1.13% 1.22% 1.37% 1.38% 1.31%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4 N/A 4,5 N/A 4 N/A 4 N/A 4 1.29%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 48% 133% 341% 372% 377% 288%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34 | OPPENHEIMER INTERNATIONAL BOND FUND
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2005 SEPT. 30,
CLASS B (UNAUDITED) 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17 $ 4.22
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 1 .08 .16 .21 .26 .42
Net realized and unrealized gain (loss) .38 .47 .94 .40 (.22) (.09)
-----------------------------------------------------------------------------
Total from investment operations .45 .55 1.10 .61 .04 .33
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.26) (.25) (.16) (.15) -- (.20)
Distributions from net realized gain (.06) -- -- -- -- --
Tax return of capital distribution -- -- -- (.03) (.27) (.18)
-----------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.32) (.25) (.16) (.18) (.27) (.38)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.74 $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17
=============================================================================
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 7.98% 10.66% 25.48% 15.90% 0.85% 7.94%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 203,283 $167,621 $134,661 $100,049 $ 84,427 $ 98,272
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 189,977 $153,117 $119,232 $ 85,244 $ 93,455 $115,116
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.54% 1.40% 3.20% 4.41% 6.40% 9.63%
Total expenses 1.89% 1.98% 2.03% 2.14% 2.14% 2.05%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4 N/A 4,5 N/A 4 N/A 4 N/A 4 2.03%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 48% 133% 341% 372% 377% 288%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2005 SEPT. 30,
CLASS C (UNAUDITED) 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17 $ 4.22
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .08 1 .09 .16 .21 .26 .41
Net realized and unrealized gain (loss) .38 .46 .94 .40 (.22) (.08)
-----------------------------------------------------------------------------
Total from investment operations .46 .55 1.10 .61 .04 .33
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.27) (.25) (.16) (.15) -- (.19)
Distributions from net realized gain (.06) -- -- -- -- --
Tax return of capital distribution -- -- -- (.03) (.27) (.19)
-----------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.33) (.25) (.16) (.18) (.27) (.38)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.74 $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17
=============================================================================
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 8.03% 10.75% 25.48% 15.90% 0.85% 7.95%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 414,365 $233,311 $ 90,248 $ 38,865 $ 25,221 $ 27,663
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 320,416 $170,796 $ 63,198 $ 28,635 $ 27,125 $ 30,710
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.64% 1.46% 3.15% 4.37% 6.39% 9.55%
Total expenses 1.77% 1.88% 2.02% 2.14% 2.14% 2.05%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4 N/A 4,5 N/A 4 N/A 4 N/A 4 2.03%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 48% 133% 341% 372% 377% 288%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36 | OPPENHEIMER INTERNATIONAL BOND FUND
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2005 SEPT. 30,
CLASS N (UNAUDITED) 2004 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.61 $ 5.32 $ 4.37 $ 3.95 $ 4.23
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 2 .12 .18 .21 .16
Net realized and unrealized gain (loss) .40 .45 .95 .42 (.28)
-----------------------------------------------------------------
Total from investment operations .47 .57 1.13 .63 (.12)
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.28) (.28) (.18) (.18) --
Distributions from net realized gain (.06) -- -- -- --
Tax return of capital distribution -- -- -- (.03) (.16)
-----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.34) (.28) (.18) (.21) (.16)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.74 $ 5.61 $ 5.32 $ 4.37 $ 3.95
=================================================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 8.20% 11.00% 26.31% 16.23% (2.88)%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 30,135 $ 18,641 $ 4,640 $ 1,280 $ 109
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 23,768 $ 10,769 $ 2,653 $ 297 $ 34
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.46% 1.83% 3.56% 4.87% 6.56%
Total expenses 1.47% 5,6 1.49% 5,6 1.57% 5 1.57% 5 1.39% 5
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 48% 133% 341% 372% 377%
1. For the period from March 1, 2001 (inception of offering) to September 30,
2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS PERIOD
ENDED ENDED
MARCH 31, 2005 SEPT. 30,
CLASS Y (UNAUDITED) 2004 1
- -------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.63 $ 5.58
- -------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 2 -- 3
Net realized and unrealized gain .35 .05
-------------------------
Total from investment operations .48 .05
- -------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.30) --
Distributions from net realized gain (.06) --
Tax return of capital distribution -- --
--------------------------
Total dividends and/or distributions
to shareholders (.36) --
- -------------------------------------------------------------------------------
Net asset value, end of period $ 5.75 $ 5.63
=========================
- -------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 8.42% 0.92%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 23,799 $ 14,268
- -------------------------------------------------------------------------------
Average net assets (in thousands) $ 20,979 $ 7,086
- -------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 4.34% 4.84%
Total expenses 0.70% 6 1.17% 6
- -------------------------------------------------------------------------------
Portfolio turnover rate 48% 133%
1. For the period from September 27, 2004 (inception of offering) to September
30, 2004.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
5. Annualized for periods of less than one full year.
6. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer International Bond Fund (the Fund) is a registered investment
company organized as a Massachusetts Business Trust. The Fund is registered as a
non-diversified, open-end management investment company under the Investment
Company Act of 1940, as amended. The Fund's investment objective is to seek
total return. As a secondary objective, the Fund seeks income when consistent
with total return. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. 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 sixty 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
39 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 March 31, 2005, the market value of
these securities comprised 27.7% of the Fund's net assets and resulted in
unrealized cumulative gains of $9,341,477.
- --------------------------------------------------------------------------------
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 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 March 31, 2005, the Fund had purchased $48,133,305
of securities issued on a when-issued basis or forward commitment.
- --------------------------------------------------------------------------------
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 March 31, 2005, securities with an aggregate
market value of $18,062,112, representing 0.69% of the Fund's net assets, were
in default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated
40 | OPPENHEIMER INTERNATIONAL BOND FUND
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.
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.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to 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.
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.
41 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
As of March 31, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of zero. This estimated capital
loss carryforward represents carryforward as of the end of the last fiscal year,
increased for losses deferred under tax accounting rules to the current fiscal
year and is increased or decreased by capital losses or gains realized in the
first six months of the current fiscal year. As of March 31, 2005, it is
estimated that the Fund will utilize $629,834 of capital loss carryforward to
offset realized capital gains. During the year ended September 30, 2004, the
Fund utilized $3,556,158 of capital loss carryforward to offset capital gains
realized in that fiscal year.
As of September 30, 2004, the Fund had available for federal income tax
purposes post-October losses of $629,834.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. 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.
- --------------------------------------------------------------------------------
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. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. 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
42 | OPPENHEIMER INTERNATIONAL BOND FUND
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 Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED MARCH 31, 2005 YEAR ENDED SEPTEMBER 30, 2004
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
CLASS A
Sold 148,098,512 $ 871,430,426 172,839,291 $ 957,396,128
Dividends and/or
distributions reinvested 11,462,167 68,220,618 5,072,488 27,463,043
Redeemed (31,355,443) (183,855,027) (49,156,351) (271,206,998)
---------------------------------------------------------------
Net increase 128,205,236 $ 755,796,017 128,755,428 $ 713,652,173
===============================================================
- ------------------------------------------------------------------------------------------
CLASS B
Sold 8,659,709 $ 50,825,562 14,676,405 $ 80,808,899
Dividends and/or
distributions reinvested 1,364,519 8,102,952 944,780 5,057,584
Redeemed (4,473,820) (26,155,980) (11,077,428) (60,743,621)
---------------------------------------------------------------
Net increase 5,550,408 $ 32,772,534 4,543,757 $ 25,122,862
===============================================================
- ------------------------------------------------------------------------------------------
CLASS C
Sold 32,787,277 $ 192,525,205 30,576,433 $ 168,801,488
Dividends and/or
distributions reinvested 1,968,676 11,685,894 830,062 4,457,967
Redeemed (4,136,232) (24,232,268) (6,789,922) (37,148,454)
---------------------------------------------------------------
Net increase 30,619,721 $ 179,978,831 24,616,573 $ 136,111,001
===============================================================
- ------------------------------------------------------------------------------------------
CLASS N
Sold 2,382,013 $ 13,918,489 2,975,732 $ 16,429,938
Dividends and/or
distributions reinvested 198,521 1,179,589 66,020 357,127
Redeemed (652,922) (3,818,835) (593,448) (3,258,688)
---------------------------------------------------------------
Net increase 1,927,612 $ 11,279,243 2,448,304 $ 13,528,377
===============================================================
43 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED MARCH 31, 2005 YEAR ENDED SEPTEMBER 30, 2004
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
CLASS Y
Sold 1,817,734 $ 10,606,127 2,536,075 $ 14,176,984
Dividends and/or
distributions reinvested 211,357 1,257,798 500 2,815
Redeemed (429,126) (2,504,165) -- --
---------------------------------------------------------------
Net increase 1,599,965 $ 9,359,760 2,536,575 $ 14,179,799
===============================================================
- --------------------------------------------------------------------------------
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 six months
ended March 31, 2005, were $1,220,800,261 and $593,368,318, respectively. There
were purchases of $369,380,791 and sales of $267,097,461 of U.S. government and
government agency obligations for the six months ended March 31, 2005. In
addition, there were purchases of $1,872,727 and sales of $1,594,161 of To Be
Announced (TBA) mortgage-related securities for the six months ended March 31,
2005.
- --------------------------------------------------------------------------------
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 0.75% of the first $200 million of average annual net assets of
the Fund, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66%
of the next $200 million, 0.60% of the next $200 million and 0.50% of average
annual net assets in excess of $1 billion.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended March 31, 2005, the Fund paid
$1,599,266 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum for assets of $10 million or more. The Class Y shares are subject to the
minimum fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to
44 | OPPENHEIMER INTERNATIONAL BOND FUND
accounts that hold Class A shares. Reimbursement is made quarterly at an annual
rate of up to 0.25% of the average annual net assets of Class A shares of the
Fund. The Distributor currently uses all of those fees to pay dealers, brokers,
banks and other financial institutions quarterly for providing personal services
and maintenance of accounts of their customers that hold Class A shares. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years. Fees incurred by the
Fund under the Plan are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per year on
Class B and Class C shares and 0.25% per year on Class N shares. The Distributor
also receives a service fee of 0.25% per year under each plan. If either the
Class B, Class C or Class N plan is terminated by the Fund or by the
shareholders of a class, the Board of Trustees and its independent trustees must
determine whether the Distributor shall be entitled to payment from the Fund of
all or a portion of the service fee and/or asset-based sales charge in respect
to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at March 31, 2005
for Class B, Class C and Class N shares were $8,509,853, $6,349,583 and
$184,294, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------------------------------
March 31, 2005 $862,489 $37,927 $153,188 $61,029 $17,902
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended March 31, 2005,
OFS waived $1,043 for Class N shares. This undertaking may be amended or
withdrawn at any time.
45 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 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 March 31, 2005, the Fund had outstanding foreign currency contracts as
follows:
VALUATION
CONTRACT AS OF
EXPIRATION AMOUNT MARCH 31, UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) 2005 APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Argentine Peso [ARP] 2/2/06 17,910ARP $ 5,876,466 $ -- $ 73,700
Australian Dollar [AUD] 4/26/05 31,820AUD 24,522,918 -- 63,600
Brazilian Real [BRR] 4/1/05-1/5/10 456,651BRR 180,599,364 6,741,385 408,429
British Pound Sterling [GBP] 4/26/05 13,030GBP 24,589,605 31,638 --
Chilean Peso [CLP] 4/28/05-4/29/05 42,053,980CLP 71,752,785 88,450 --
Czech Koruna [CZK] 4/22/05 327,676CZK 14,146,434 1,070,500 --
Dominican Republic [DOP] 4/15/05 208,733DOP 7,861,888 512,130 --
Hungary Forints [HUF] 4/11/05 2,735,075HUF 14,307,579 -- 73,171
Indian Rupee [INR] 11/9/05-12/20/05 491,940INR 11,137,813 226,398 17,650
Japanese Yen [JPY] 5/16/05-7/5/05 45,847,640JPY 429,861,284 205,984 5,479,748
New Zealand Dollar [NZD] 4/26/05 34,410NZD 24,413,467 -- 67,183
Polish Zloty [PLZ] 4/25/05 86,150PLZ 27,208,183 -- 529,349
Russian Ruble [RUR] 10/27/05 302,480RUR 10,806,471 444,018 --
Slovakia Koruan [SKK] 6/21/05 356,910SKK 11,970,461 -- 559,292
South African Rand [ZAR] 4/11/05 71,251ZAR 11,389,826 -- 114,703
South Korean Won [KRW] 6/28/05-6/29/05 27,173,000KRW 26,704,714 69,082 30,719
Swiss Franc [CHF] 4/25/05 23,050CHF 19,294,362 -- 143,664
Thailand Baht [THB] 8/31/05 585,500THB 14,981,899 -- 273,444
Turkish Lira [TRY] 12/18/07-1/13/10 65,315,135TRY 68,549,524 3,234,389 --
------------------------------
12,623,974 7,834,652
------------------------------
46 | OPPENHEIMER INTERNATIONAL BOND FUND
VALUATION
CONTRACT AS OF
EXPIRATION AMOUNT MARCH 31, UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) 2005 APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------------------
CONTRACTS TO SELL
Australian Dollar [AUD] 6/3/05 65,600AUD $ 50,404,033 $ 782,007 $ --
British Pound Sterling [GBP] 5/9/05-6/8/05 57,745GBP 108,878,018 252,375 2,148,160
Euro [EUR] 4/11/05-7/5/05 305,055EUR 396,043,068 2,518,888 2,058,518
Japanese Yen [JPY] 4/21/05-6/29/05 4,911,000JPY 45,985,675 724,699 --
New Turkish Lira [TRY] 6/21/05-2/28/06 168,712TRY 118,059,723 -- 2,111,414
Norwegian Krone [NOK] 4/21/05 155,300NOK 24,519,461 -- 32,883
Swiss Franc [CHF] 4/21/05 29,120CHF 24,369,644 5,900 --
------------------------------
4,283,869 6,350,975
------------------------------
Total unrealized appreciation and depreciation $ 16,907,843 $ 14,185,627
------------------------------
- --------------------------------------------------------------------------------
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.
47 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
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.
As of March 31, 2005, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS MARCH 31, 2005 (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------
CONTRACTS TO SELL
CAC-40 10 Index 6/17/05 123 $ 6,375,374 $ 12,158
DAX Index 6/17/05 64 9,048,131 100,282
FTSE 100 Index 6/17/05 140 12,996,769 223,888
Japan (Government of) Bonds, 10 yr. 6/8/05 23 2,990,021 (40,754)
Japan (Government of) Bonds, 10 yr. 6/9/05 25 32,502,565 (421,990)
Nikkei 225 Index 6/9/05 92 9,986,757 230,622
-------------
$ 104,206
=============
- --------------------------------------------------------------------------------
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 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 decreases and the option is
exercised. The risk in buying 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.
48 | OPPENHEIMER INTERNATIONAL BOND FUND
Written option activity for the six months ended March 31, 2005 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
September 30, 2004 14,995,007,110 $ 1,096,886 -- $ --
Options written 14,160 25,556 28,100,000 64,863
Options closed or expired (14,995,021,270) (1,122,442) (28,100,000) (64,863)
------------------------------------------------------------------
Options outstanding as of
March 31, 2005 -- $ -- -- $ --
==================================================================
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return 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 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. Total return swaps are subject to risks (if the counterparty fails
to meet its obligations).
As of March 31, 2005, the Fund had entered into the following total return swap
agreements:
PAID BY RECEIVED BY UNREALIZED
SWAP NOTIONAL THE FUND AT THE FUND AT TERMINATION APPRECIATION
COUNTERPARTY AMOUNT MARCH 31, 2005 MARCH 31, 2005 DATES (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------
Goldman Sachs Six-Month
Group, Inc. $11,580,000 LIBOR BBA 5.10% 1/14/15 $ 249,990
Goldman Sachs Six-Month
Group, Inc. 11,580,000 LIBOR BBA 5.08 1/20/15 242,222
-------------
$ 492,212
=============
Index abbreviation is as follows:
LIBOR BBA London-Interbank Offered Rate British Bankers Association
- --------------------------------------------------------------------------------
9. 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.
49 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
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 March 31, 2005, the Fund had entered into the following interest rate swap
agreements:
RATE
RATE PAID BY RECEIVED BY
THE FUND AT THE FUND AT UNREALIZED
SWAP NOTIONAL MARCH 31, MARCH 31, FLOATING TERMINATION APPRECIATION
COUNTERPARTY PRINCIPAL 2005 2005 RATE INDEX DATES (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------------------------------
Citigroup
Global Markets
Holdings, Inc.:
90-Day
333,000,000TWD 2.0200% 1.2020% CPTW 3/4/09 $ (25,370)
Six-Month
16,830,000PLZ 5.9000 5.5200 WIBO 3/24/10 9,339
Six-Month
26,928,000PLZ 5.9000 5.5500 WIBO 3/24/10 25,995
Three-Month
18,776,000,000KRW 3.6300 4.3400 KWCDC 2/17/10 183,643
90-Day
333,000,000TWD 2.0200 1.1880 CPTW 3/23/09 (16,360)
- ---------------------------------------------------------------------------------------------------------------------------------
Deutsche
Bank AG:
11,687,000,000KRW 3.5500 4.3100 KWCDC 3/4/10 87,146
9,350,000,000KRW 3.5500 4.2700 KWCDC 3/4/10 52,876
BBA LIBOR
65,000,000 4.8160 2.9588 Three-Month 3/8/15 896,751
EURIBOR
47,420,000EUR 2.1340 3.8300 Three-Month 3/18/15 413,769
9,350,000,000KRW 3.5500 4.2700 KWCDC 3/4/10 53,237
4,675,000,000KRW 3.5500 4.2800 KWCDC 3/4/10 28,702
19,570,000CAD 3.4750 2.5900 CDOR 1/28/07 103,881
11,686,000,000KRW 3.5500 4.1728 KWCDC 3/4/10 51,556
Six-Month
500,000,000INR 4.8700 5.0819 MIFOR 3/22/09 568,848
- ---------------------------------------------------------------------------------------------------------------------------------
Deutsche
Bank AG, 5 yr.:
454,000,000INR 4.8300 4.9709 IRS 1/14/09 469,037
90-Day
187,000,000TWD 2.5900 1.1900 CPTW 8/19/09 (3,403)
50 | OPPENHEIMER INTERNATIONAL BOND FUND
RATE
RATE PAID BY RECEIVED BY
THE FUND AT THE FUND AT UNREALIZED
SWAP NOTIONAL MARCH 31, MARCH 31, FLOATING TERMINATION APPRECIATION
COUNTERPARTY PRINCIPAL 2005 2005 RATE INDEX DATES (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
8,832,997BRR 18.6900 16.2800 BZDI 1/4/10 $ (109,192)
5,902,625BRR 18.7000 16.1500 BZDI 1/4/10 (98,921)
7,641,458BRR 18.7000 16.2500 BZDI 1/4/10 (85,579)
120,050,000MXN 9.7200 10.2200 MXN TIIE 1/30/15 (581,885)
- ---------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
61,200,000MXN 9.7900 10.8500 MXN TIIE 3/5/15 (85,143)
144,630,000MXN 9.7200 9.7400 MXN TIIE 1/5/10 (421,467)
110,809,000BRR 18.6300 18.0000 BZDI 1/2/07 (305,309)
17,037,427BRR 18.2500 17.1700 BZDI 1/2/08 (122,351)
20,823,527BRR 18.2500 17.1700 BZDI 1/2/08 (149,540)
21,965,083BRR 18.2500 17.7200 BZDI 1/2/07 (103,670)
289,270,000MXN 9.8200 9.8400 MXN TIIE 12/31/09 (741,181)
- ---------------------------------------------------------------------------------------------------------------------------------
JPMorgan
Chase Bank:
Three-Month
13,500,000 3.3420 2.5600 LIBOR flat 3/31/08 353,904
Six-Month
1,080,000,000HUF 8.8800 7.0000 LIBOR flat 7/14/08 116,564
Six-Month
65,000,000.00EUR 2.2110 3.4260 LIBOR 10/8/09 1,326,876
Six-Month
125,000,000.00EUR 2.2110 4.1060 LIBOR 10/8/14 5,997,124
28-Day
161,780,000.00MXN 9.7150 10.8800 MXN TIIE 11/16/14 (226,756)
Three-Month
49,550,000.00 4.7400 2.4100 LIBOR flat 12/2/14 309,914
Six-Month
66,000,000ZAR 7.4500 9.7800 LIBOR flat 2/20/11 619,556
Three-Month
66,000,000ZAR 7.4500 9.6800 LIBOR flat 2/18/11 571,205
- ---------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services,
Inc.
24,054,685BRR 18.6800 16.8800 BZDI 1/2/08 (219,153)
Three-Month
150,000,000ZAR 7.5000 7.8100 JIBA 2/4/10 (545,133)
-------------
$ 8,399,510
=============
51 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
Notional amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
BRR Brazilian Real
CAD Canadian Dollar
EUR Euro
HUF Hungary Forints
INR Indian Rupee
KRW South Korean Won
MXN Mexican Nuevo Peso
PLZ Polish Zloty
TWD New Taiwan Dollar
ZAR South African Rand
Index abbreviations are as follows:
BZDI Brazil Cetip Interbank Deposit Rate
CDOR Canada Bankers Acceptances Rate
CPTW Bloomberg Taiwan Secondary Commercial Papers
EURIBOR Euro Interbank Offered Rate
IRS India Swap Composites
JIBA South Africa Johannesburg Interbank Agreed Rate
KWCDC South Korean Won-3 Months
LIBOR London-Interbank Offered Rate
LIBOR BBA London-Interbank Offered Rate British Bankers Association
MXN TIIE Mexican Peso-Interbank Equilibrium Interest Rate
MIFOR Mumbai Interbank Forward Offer Rate
WIBO Poland Warsaw Interbank Offer Bid Rate
- --------------------------------------------------------------------------------
10. 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.
52 | OPPENHEIMER INTERNATIONAL BOND FUND
During the six months ended March 31, 2005, the Fund entered into transactions
to hedge credit risk. Information regarding the credit swaps is as follows:
UNREALIZED
EXPIRATION NOTIONAL APPRECIATION
CONTRACT DESCRIPTION DATES AMOUNT (DEPRECIATION)
- ---------------------------------------------------------------------------------------------
Deutsche Bank AG:
Panama (Republic of) Credit Nts. 5/13/08 $ 1,835,000 $ (120,218)
Peru (Republic of) Linked Nts. 2/20/15 1,900,000 31,506
United Mexican States Credit Bonds 9/20/13 2,790,000 (113,208)
- ---------------------------------------------------------------------------------------------
JP Morgan Chase Bank:
Chile (Republic of) Credit Bonds 12/20/13 8,500,000 (442,377)
Inter-American Development Bank
Credit Bonds 12/20/13 15,910,000 (14,551)
Jordan (Kingdom of) Credit Nts. 6/6/06 390,000 (3,407)
Russian Federation Credit Bonds 10/9/13 550,000 (25,413)
- ---------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.:
Brazil (Federal Republic of) Credit Bonds 8/20/09 5,120,000 (458,516)
Russian Federation Credit Bonds 10/28/14 50,000,000 (2,304,790)
Turkey (Republic of) Credit Bonds 11/11/09 1,660,000 (36,223)
Turkey (Republic of) Credit Bonds 11/11/06 3,645,000 45,072
- ---------------------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc.:
Brazil (Federal Republic of) Credit Bonds 8/20/05 11,540,000 (1,019,366)
Turkey (Republic of) Credit Bonds 2/20/15 7,010,000 210,208
- ---------------------------------------------------------------------------------------------
UBS AG:
Brazil (Federal Republic of) Credit Bonds 4/20/10 15,600,000 (410,300)
Brazil (Federal Republic of) Credit Bonds 10/20/09 4,780,000 (147,477)
Russian Federation Credit Bonds 11/4/14 4,290,000 (139,072)
--------------
$ (4,948,132)
==============
- --------------------------------------------------------------------------------
11. 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.
53 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11. SWAPTION TRANSACTIONS Continued
Written swaption activity for the six months ended March 31, 2005 was as
follows:
CALL SWAPTIONS PUT SWAPTIONS
---------------------------------- ---------------------------------
NOTIONAL AMOUNT OF NOTIONAL AMOUNT OF
AMOUNT PREMIUMS AMOUNT PREMIUMS
- ---------------------------------------------------------------------------------------------------------
Swaptions outstanding as of
September 30, 2004 $ 50,550,000 $ 500,195 $ 62,395,000 $ 291,178
Swaptions written 179,915,000 1,244,458 62,395,000 215,509
Swaptions closed or expired (109,310,000) (1,022,136) (124,790,000) (506,687)
-------------------------------------------------------------------------
Swaptions outstanding as of
March 31, 2005 $ 121,155,000 $ 722,517 $ -- $ --
=========================================================================
As of March 31, 2005, the Fund had entered into the following swaption
contracts:
NOTIONAL EXPIRATION EXERCISE PREMIUM VALUE
SWAPTIONS AMOUNT DATES PRICE RECEIVED SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------
British Pound Sterling 58,760,000GBP 6/29/05 5.12GBP $ 523,070 $ 621,834
Deutsche Bank AG 62,395,000AUD 5/3/05 5.755AUD 199,447 4,408
--------------------------
$ 722,517 $ 626,242
==========================
Notional amount is denoted in the following currencies:
AUD Australian Dollar
GBP British Pound Sterling
- --------------------------------------------------------------------------------
12. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY
As of March 31, 2005, 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.
Information concerning restricted securities and currency is as follows:
UNREALIZED
ACQUISITION VALUATION AS OF APPRECIATION
SECURITY DATES COST MARCH 31, 2005 (DEPRECIATION)
- -------------------------------------------------------------------------------------------
CURRENCY
Argentine Peso 9/13/04 $ 797,584 $ 809,476 $ 11,892
Russian Ruble 3/11/05 5,330,847 5,249,927 (80,920)
- --------------------------------------------------------------------------------
13. 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,
54 | OPPENHEIMER INTERNATIONAL BOND FUND
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 March 31, 2005, the Fund had on loan securities valued
at $16,965,005. Collateral of $16,823,140 was received for the loans, all of
which was received in cash and subsequently invested in approved instruments.
- --------------------------------------------------------------------------------
14. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor (collectively, the
"Oppenheimer defendants"), as well as 51 of the Oppenheimer funds (as "Nominal
Defendants") including the Fund, 30 present and former Directors or Trustees and
8 present and former officers of the funds. This complaint, initially filed in
the U.S. District Court for the Southern District of New York on January 10,
2005 and amended on March 4, 2005, consolidates into a single action and amends
six individual previously-filed putative derivative and class action complaints.
Like those prior complaints, the complaint alleges 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 assets of the funds to make those payments in violation of the Investment
Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those
prior complaints, the complaint further alleges that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers breached
their fiduciary duties to shareholders of the funds under the Investment Company
Act of 1940 and at common law. The complaint seeks unspecified compensatory and
punitive damages, rescission of the funds' investment advisory agreements, an
accounting of all fees paid, and an award of attorneys' fees and litigation
expenses.
The Oppenheimer defendants believe that the allegations contained in the
Complaints are without merit and that they, the funds named as Nominal
Defendants, and the Directors/Trustees of those funds have meritorious defenses
against the claims asserted. The Oppenheimer defendants intend to defend these
lawsuits vigorously and to contest any claimed liability. The Oppenheimer
defendants believe that it is premature to render any opinion as to the
likelihood of an outcome unfavorable to them and that no estimate can yet be
made with any degree of certainty as to the amount or range of any potential
loss.
55 | OPPENHEIMER INTERNATIONAL BOND FUND
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing 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
http://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.
56 | OPPENHEIMER INTERNATIONAL BOND FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the advisory
agreement. The Investment Company Act of 1940, as amended, requires that the
Board request and evaluate, and that the Manager provide, such information as
may be reasonably necessary to evaluate the terms of the advisory agreement. The
Board employs an independent consultant to prepare a report that provides
information, including comparative information, that the Board requests for this
purpose. In addition, the Board receives information throughout the year
regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's
advisory agreement for the current year, the Board evaluated the nature and
extent of the services provided by the Manager and its affiliates. The Manager
provides the Fund with office space, facilities and equipment; administrative,
accounting, clerical, legal and compliance personnel; securities trading
services; oversight of third party service providers and the services of the
portfolio manager and the Manager's investment team, who provide research,
analysis and other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser. The Board evaluated the Manager's administrative,
accounting, legal and compliance services and information the Board received
regarding the experience and professional qualifications of the Manager's
personnel and the size and functions of its staff. The Board members also
considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board noted that the relatively low
redemption rate for funds advised by the Manager provided an indication of
shareholder satisfaction with the overall level of services provided by the
Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the
quality of the portfolio management services provided, the Board considered the
experience of Arthur P. Steinmetz and the Manager's international fixed income
investment team and analysts. Mr. Steinmetz has had over 22 years of experience
managing fixed-income investments. Mr. Steinmetz has been the person primarily
responsible for the day-to-day management of the Fund's portfolio since April
2004. Mr. Steinmetz has been a Senior Vice President of the Manager since March
1993 and of HarbourView Asset Management
57 | OPPENHEIMER INTERNATIONAL BOND FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
Corporation since March 2000 and is an officer of other portfolios and accounts
in the OppenheimerFunds complex.
The Board reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other international fixed-income funds
(including both funds advised by the Manager and funds advised by other
investment advisers). The Board also receives and reviews comparative
performance information regarding the Fund and other funds at each Board
meeting. The Board noted that the Fund's one-, three- and five-year performance
was better than its peer group average.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information,
including comparative information, regarding the fees paid to the Manager and
its affiliates and the other expenses borne by the Fund. The independent
consultant provided comparative data in regard to the fees and expenses of the
Fund, other international fixed-income funds and other funds with comparable
asset levels and distribution features. The Board noted that the Fund's actual
total expenses and its contractual management fees are lower than its peer group
average while its actual management fees are higher than its peer group average.
In addition, the Board evaluated the comparability of the fees charged and
services provided to the Fund to the fees charged and services provided to other
types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed
information regarding the cost of services provided by the Manager and its
affiliates and the Manager's profitability. The Board considered that the
Manager must be able to pay and retain experienced professional personnel at
competitive rates to provide services to the Fund and that maintaining the
financial viability of the Manager is important in order for the Manager to
continue to provide significant services to the Fund and its shareholders. In
addition the Board considered information provided regarding the direct and
indirect benefits the Manager receives as a result of its relationship with the
Fund, including compensation paid to the Manager's affiliates.
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board noted that the Fund has recently experienced
significant asset growth and, based on current asset levels, the Fund has passed
its last management fee breakpoint.
CONCLUSIONS. The above factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by both experienced
counsel to the Fund and experienced counsel to the independent Trustees. Fund
counsel and the
58 | OPPENHEIMER INTERNATIONAL BOND FUND
independent Trustees' counsel are both independent of the Manager within the
meaning and intent of the Securities and Exchange Commission Rules. The Board
was aware that there are alternatives to retaining the Manager.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates and the fee structure adopted by the
Board and the Manager are reasonable in relation to the services provided.
Accordingly, the Board elected to continue the investment advisory agreement for
another year. In arriving at this decision, the Board did not single out any
factor or factors as being more important than others, but considered all of the
factors together. The Board judged the terms and conditions of the advisory
agreement, including the management fee, in light of all of the surrounding
circumstances.
59 | OPPENHEIMER INTERNATIONAL BOND FUND
ITEM 2. CODE OF ETHICS
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to semiannual reports.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable.
ITEM 7. DISCLOSURE OF PROXY POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT
INVESTMENT COMPANIES
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES
Not applicable.
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The registrant's Board of Trustees has established a Governance Committee,
one function of which is to create and oversee the process by which shareholders
can submit nominees for positions on the Board. The Governance Committee has not
yet adopted a charter, but anticipates that it will do so in the coming months.
The Committee has temporarily adopted the process previously adopted by the
Audit Committee regarding shareholder submission of nominees for board
positions. Shareholders may submit names of individuals, accompanied by complete
and properly supported resumes, for the Governance Committee's consideration by
mailing such information to the Committee in care of the Fund. The Committee may
consider such persons at such time as it meets to consider possible nominees.
The Committee, however, reserves sole discretion to determine the candidates for
trustees and independent trustees to recommend to the Board and/or shareholders
and may identify candidates other than those submitted by Shareholders. The
Committee may, but need not, consider the advice and recommendation of the
Manager and its affiliates in selecting nominees. The full Board elects new
trustees except for those instances when a shareholder vote is required.
Shareholders who desire to communicate with the Board should address
correspondence to the Board of Trustees of the registrant, or to an individual
Trustee c/o the Secretary of the Fund at 6803 South Tucson Way, Centennial,
Colorado 80112 and may submit their correspondence electronically at
WWW.OPPENHEIMERFUNDS.COM under the caption "contact us." If your correspondence
is intended for a particular Trustee, please indicate the name of the Trustee
for whom it is intended. The sender should indicate in the address whether it is
intended for the entire board, the Independent Trustees as group, or to an
individual Trustee. The Governance Committee will consider if a different
process should be recommended to the Board.
ITEM 11. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-3(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-3(c)) as of March 31, 2005, 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 changes in registrant's internal controls over
financial reporting that occurred during the registrant's last
fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over
financial reporting.
ITEM 12. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer International Bond Fund
By: /s/ John V. Murphy
----------------------------
John V. Murphy
Principal Executive Officer
Date: May 13, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John V. Murphy
----------------------------
John V. Murphy
Principal Executive Officer
Date: May 13, 2005
By: /s/ Brian W. Wixted
----------------------------
Brian W. Wixted
Chief Financial Officer
Date: May 13, 2005