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
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OPPENHEIMER INTERNATIONAL BOND FUND
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(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
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(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: SEPTEMBER 30
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Date of reporting period: 03/31/2007
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ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN GEOGRAPHICAL HOLDINGS
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United States 13.6%
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Brazil 8.5
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Germany 7.4
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United Kingdom 6.9
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Japan 6.8
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Italy 5.3
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France 4.1
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Russia 3.7
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Australia 3.6
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Turkey 3.6
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
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REGIONAL ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Europe 30.2%
Latin America 22.6
United States/Canada 16.2
Asia 15.1
Emerging Europe 8.0
Middle East/Africa 7.6
Supranational 0.3
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2007, and are based on the total market value of investments.
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9 | 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 10-year 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.
10 | OPPENHEIMER INTERNATIONAL BOND FUND
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.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
11 | 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, 2007.
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 the
Statement of Additional Information). Therefore, the "hypo-
12 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND EXPENSES
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thetical" 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.
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(10/1/06) (3/31/07) MARCH 31, 2007
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Class A Actual $ 1,000.00 $ 1,077.60 $ 4.93
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Class A Hypothetical 1,000.00 1,020.19 4.80
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Class B Actual 1,000.00 1,073.30 9.40
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Class B Hypothetical 1,000.00 1,015.91 9.14
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Class C Actual 1,000.00 1,074.00 8.72
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Class C Hypothetical 1,000.00 1,016.55 8.48
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Class N Actual 1,000.00 1,075.50 7.27
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Class N Hypothetical 1,000.00 1,017.95 7.07
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Class Y Actual 1,000.00 1,079.80 2.86
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Class Y Hypothetical 1,000.00 1,022.19 2.78
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,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended March 31, 2007 are as follows:
CLASS EXPENSE RATIOS
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Class A 0.95%
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Class B 1.81
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Class C 1.68
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Class N 1.40
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Class Y 0.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager and 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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13 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS March 31, 2007 / Unaudited
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES--0.0%
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Taganka Car Loan Finance plc, Automobile Asset-Backed Certificates,
Series 2006-1A, Cl. C, 8.62%, 11/14/13 1,2 (Cost $1,350,000) $ 1,350,000 $ 1,350,000
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U.S. GOVERNMENT OBLIGATIONS--3.1%
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U.S. Treasury Nts., 5.125%, 5/15/16 3,4 (Cost $198,506,977) 197,180,000 203,934,992
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FOREIGN GOVERNMENT OBLIGATIONS--52.3%
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ARGENTINA--1.6%
Argentina (Republic of) Bonds:
2%, 9/30/14 [ARP] 21,270,000 7,610,524
5.475%, 8/3/12 2 20,544,000 19,478,794
Series V, 7%, 3/28/11 47,005,000 45,807,672
Series VII, 7%, 9/12/13 17,605,000 16,883,195
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Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas,
Series PBA1, 4/1/07 1,5 [ARP] 2,535 1,022
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Central Bank of Argentina Bonds, 2%, 2/4/18 [ARP] 22,931,998 11,036,961
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Neuquen (Province Del) Sr. Sec. Nts., 8.656%, 10/18/14 1 3,375,000 3,510,000
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104,328,168
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AUSTRALIA--3.5%
New South Wales Treasury Corp. Sr. Unsec. Nts.,
Series 17RG, 5.50%, 3/1/17 [AUD] 82,715,000 63,822,941
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New South Wales Treasury Corp. Gtd. Bonds, 8%, 3/1/08 [AUD] 208,360,000 170,908,675
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234,731,616
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BELGIUM--1.8%
Belgium (Kingdom of) Bonds, Series 44, 5%, 3/28/35 [EUR] 26,590,000 39,533,173
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Belgium (Kingdom of) Treasury Bills, 3.615%, 5/10/07 6 [EUR] 62,870,000 83,663,989
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123,197,162
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BRAZIL--2.0%
Brazil (Federal Republic of) Bonds:
6%, 1/17/17 16,320,000 16,481,813
8%, 1/15/18 14,015,000 15,864,980
8.75%, 2/4/25 3,475,000 4,474,063
8.875%, 10/14/19 23,654,000 29,934,137
10.25%, 1/10/28 [BRR] 64,020,000 30,972,157
10.50%, 7/14/14 18,700,000 24,076,250
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Brazil (Federal Republic of) Nts., 7.875%, 3/7/15 4,000,000 4,564,000
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Brazil (Federal Republic of) Unsec. Bonds, 4.75%, 4/10/07 1 [JPY] 500,000,000 4,258,953
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130,626,353
14 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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BULGARIA--0.1%
Bulgaria (Republic of) Bonds:
8.25%, 1/15/15 $ 1,500,000 $ 1,781,250
8.25%, 1/15/15 7 1,440,000 1,710,000
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3,491,250
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CANADA--2.6%
Canada (Government of) Bonds, 5.25%, 6/1/12 [CAD] 125,120,000 114,513,249
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Canada (Government of) Treasury Bills, 4.059%, 5/3/07 6,8,9 [CAD] 67,280,000 58,069,721
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172,582,970
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COLOMBIA--1.1%
Colombia (Republic of) Bonds:
7.375%, 9/18/37 3,390,000 3,698,490
10.75%, 1/15/13 10,000,000 12,450,000
12%, 10/22/15 [COP] 64,578,000,000 34,049,199
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Colombia (Republic of) Nts.:
8.25%, 12/22/14 6,655,000 7,590,028
11.75%, 3/1/10 [COP] 35,992,780,000 17,402,750
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75,190,467
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COSTA RICA--0.1%
Costa Rica (Republic of) Unsec. Bonds, 9.995%, 8/1/20 2,730,000 3,595,410
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DENMARK--0.5%
Denmark (Kingdom of) Bonds:
4%, 11/15/10 [DKK] 57,430,000 10,288,905
4%, 11/15/15 [DKK] 42,400,000 7,587,911
7%, 11/10/24 [DKK] 15,475,000 3,729,648
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Denmark (Kingdom of) Nts., 4%, 8/15/08 [DKK] 61,095,000 10,932,749
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32,539,213
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DOMINICAN REPUBLIC--0.0%
Dominican Republic Unsec. Unsub. Bonds, Series REGS, 9.04%, 1/23/18 2,705,118 3,137,937
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EL SALVADOR--0.1%
El Salvador (Republic of) Bonds:
7.625%, 9/21/34 7 1,185,000 1,371,638
7.65%, 6/15/35 7 4,630,000
5,301,350
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6,672,988
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FRANCE--4.0%
France (Government of) Bonds, 3.25%, 4/25/16 10 [EUR] 81,760,000 102,542,127
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France (Government of) Obligations Assimilables du Tresor Bonds,
4%, 4/25/55 [EUR] 72,835,000 92,595,382
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France (Government of) Treasury Bills, 3.574%, 5/10/07 6 [EUR] 50,855,000 67,668,081
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262,805,590
15 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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GERMANY--7.3%
Germany (Federal Republic of) Bonds:
Series 03, 3.75% 7/4/13 [EUR] 85,350,000 $ 112,281,329
Series 05, 4%, 1/4/37 [EUR] 103,810,000 133,002,272
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Germany (Federal Republic of) Treasury Bills,
Series 0107, 3.802%, 7/18/07 6 [EUR] 180,385,000 238,314,515
---------------
483,598,116
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GREECE--1.3%
Greece (Republic of) Bonds, 4.60%, 5/20/13 [EUR] 61,620,000 84,303,476
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GUATEMALA--0.0%
Guatemala (Republic of) Nts.:
10.25%, 11/8/11 1 160,000 187,600
10.25%, 11/8/11 1 525,000 615,563
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803,163
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INDONESIA--0.3%
Indonesia (Republic of) Nts.:
6.75%, 3/10/14 7 5,170,000 5,402,650
7.25%, 4/20/15 7 7,450,000 8,073,938
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Indonesia (Republic of) Unsec. Nts., 8.50%, 10/12/35 7 6,540,000 8,027,850
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21,504,438
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ISRAEL--0.7%
Israel (State of) Bonds, Series 2682, 7.50%, 3/31/14 [ILS] 161,700,000 44,010,556
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ITALY--3.9%
Italy (Republic of) Nts., Certificati di Credito del Tesoro, 4%, 7/1/09 2 [EUR] 192,825,000 258,897,938
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JAPAN--6.7%
Japan (Government of) Bonds:
2 yr., Series 252, 0.80%, 1/15/09 [JPY] 19,993,000,000 169,742,843
10 yr., Series 245, 0.90%, 12/20/12 [JPY] 9,397,000,000 77,327,486
10 yr., Series 268, 1.50%, 3/20/15 [JPY] 9,820,000,000 83,466,667
30 yr., Series 25, 2.30%, 12/20/36 [JPY] 13,547,000,000 114,153,938
---------------
444,690,934
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MALAYSIA--0.7%
Johor Corp. Malaysia (Government of) Bonds, Series P3, 1%, 7/31/12 1 [MYR] 107,980,000 35,134,490
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Malaysia (Government of) Bonds, Series 2/05, 4.72%, 9/30/15 [MYR] 39,730,000 12,264,303
---------------
47,398,793
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MEXICO--0.4%
Mexican Williams Sr. Nts., 6.128%, 11/15/08 1,2 500,000 515,313
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United Mexican States Bonds, Series M30, 10%, 11/20/36 [MXN] 223,830,000 26,107,718
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26,623,031
16 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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NIGERIA--0.6%
Nigeria (Federal Republic of) Bonds, Series 5Y, 13.50%,
9/11/11 [NGN] 437,980,000 $ 3,833,823
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Nigeria (Federal Republic of) Nts.:
Series 3Y2S, 12.50%, 2/24/09 [NGN] 356,000,000 2,945,938
Series 3Y7S, 17%, 12/16/08 [NGN] 570,000,000 5,007,268
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Nigeria (Federal Republic of) Promissory Nts., Series RC,
5.092%, 1/5/10 379,485 338,557
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Nigeria (Federal Republic of) Treasury Bonds:
Series 5Y13, 12.99%, 9/29/11 [NGN] 866,700,000 7,552,720
Series 7Y16, 11.99%, 12/22/13 1 [NGN] 1,422,500,000 11,840,270
Series 7YR, 12.74%, 10/27/13 1 [NGN] 1,050,600,000 9,052,649
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40,571,225
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PANAMA--0.3%
Panama (Republic of) Bonds:
6.70%, 1/26/36 11 2,720,000 2,836,960
7.25%, 3/15/15 15,905,000 17,304,640
9.375%, 4/1/29 1,650,000 2,206,875
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22,348,475
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PERU--2.2%
Peru (Republic of) Bonds:
7.84%, 8/12/20 [PEN] 150,435,000 54,131,311
8.20%, 8/12/26 1 [PEN] 34,690,000 13,231,251
9.91%, 5/5/15 [PEN] 128,732,000 50,898,287
Series 7, 8.60%, 8/12/17 [PEN] 56,965,000 21,356,818
Series 8-1, 12.25%, 8/10/11 [PEN] 18,633,000 7,327,233
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Peru (Republic of) Sr. Nts., 4.533%, 2/28/16 6 2,410,062 1,423,527
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148,368,427
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PHILIPPINES--0.4%
Philippines (Republic of the) Bonds, 8%, 1/15/16 2,910,000 3,291,938
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Philippines (Republic of the) Sr. Unsec. Bonds, 6.375%,
1/15/32 4,265,000 4,163,706
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Philippines (Republic of the) Unsec. Bonds:
7.75%, 1/14/31 4,844,000 5,485,830
9%, 2/15/13 12,145,000 14,042,656
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26,984,130
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POLAND--1.2%
Poland (Republic of) Bonds:
Series 0K0807, 4.191%, 8/12/07 6 [PLZ] 43,990,000 14,972,587
Series DS1013, 5%, 10/24/13 [PLZ] 79,840,000 27,431,399
Series WS0922, 5.75%, 9/23/22 [PLZ] 10,000,000 3,609,960
Series 0511, 4.25%, 5/24/11 [PLZ] 97,965,000 32,953,663
---------------
78,967,609
17 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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SPAIN--2.0%
Spain (Government of) Bonds, 3.80%, 1/31/17 [EUR] 30,885,000 $ 40,280,296
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Spain (Government of) Treasury Bills, 3.715%, 10/19/07 6 [EUR] 70,675,000 92,416,397
---------------
132,696,693
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TURKEY--1.6%
Turkey (Republic of) Bonds:
7%, 9/26/16 22,085,000 22,581,913
Series CPI, 10%, 2/15/12 [TRY] 6,800,000 4,898,965
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Turkey (Republic of) Nts.:
7.25%, 3/15/15 8,615,000 8,981,138
9.50%, 1/15/14 1,610,000 1,878,548
11%, 1/14/13 3,850,000 4,728,262
16%, 3/7/12 [TRY] 70,985,000 48,150,472
19.868%, 7/16/08 6 [TRY] 8,755,000 4,971,720
20.493%, 8/13/08 6 [TRY] 15,945,000 8,930,517
---------------
105,121,535
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UKRAINE--0.1%
Ukraine (Government of) Bonds, 7.65%, 6/11/13 7,655,000 8,343,950
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UNITED KINGDOM--4.3%
United Kingdom Treasury Bonds:
5%, 3/7/08 [GBP] 43,745,000 85,696,022
6%, 12/7/28 [GBP] 50,025,000 116,844,114
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United Kingdom Treasury Nts., 4%, 3/7/09 [GBP] 44,640,000 85,550,996
---------------
288,091,132
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URUGUAY--0.9%
Uruguay (Oriental Republic of) Bonds:
4.25%, 4/5/27 [UYU] 248,600,000 10,437,699
7.625%, 3/21/36 12,640,000 13,998,800
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Uruguay (Oriental Republic of) Unsec. Bonds:
5%, 9/14/18 [UYU] 403,060,000 18,889,817
8%, 11/18/22 12,685,000 14,460,900
---------------
57,787,216
---------------
Total Foreign Government Obligations (Cost $3,339,705,038) 3,474,009,961
18 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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LOAN PARTICIPATIONS--0.2%
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Credit Suisse First Boston International, Export-Import Bank
of Ukraine Loan Participation Nts., 8.40%, 2/9/16 $ 5,890,000 $ 6,125,600
- ----------------------------------------------------------------------------------------------------------------------------------
Dali Capital plc/Bank of Moscow Loan Participation Nts.,
Series 28, Tranche 1, 7.25%, 11/25/09 [RUR] 72,600,000 2,824,772
- ----------------------------------------------------------------------------------------------------------------------------------
Dali Capital SA (ROSBANK) Loan Participation Nts.,
Series 23, Tranche 1, 8%, 9/30/09 [RUR] 71,200,000 2,756,599
---------------
Total Loan Participations (Cost $11,138,643) 11,706,971
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CORPORATE BONDS AND NOTES--12.7%
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AES Dominicana Energia Finance SA, 11% Sr. Nts., 12/13/15 1 7,923,000 8,200,305
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AES Panama SA, 6.35% Sr. Nts., 12/21/16 7 2,225,000 2,223,138
- ----------------------------------------------------------------------------------------------------------------------------------
African Development Bank, 9.25% Bonds, 1/18/08 [NGN] 1,289,400,000 10,300,084
- ----------------------------------------------------------------------------------------------------------------------------------
Alrosa Finance SA:
8.875% Nts., 11/17/14 4,240,000 4,886,600
8.875% Nts., 11/17/14 7 7,625,000 8,787,813
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America Movil SAB de CV, 8.46% Bonds, 12/18/36 1 [MXN] 140,800,000 12,913,815
- ----------------------------------------------------------------------------------------------------------------------------------
Astana-finance:
7.625% Unsec. Bonds, 2/16/09 2,375,000 2,384,749
9% Sr. Unsec. Unsub. Bonds, 11/16/11 1,895,000 1,934,615
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Autopistas del Nordeste Cayman Ltd., 9.39% Nts., 1/15/26 1 8,731,632 9,211,872
- ----------------------------------------------------------------------------------------------------------------------------------
Banco Bilbao Vizcaya Argentaria SA, 4.25% Sec. Bonds, 7/15/14 [EUR] 16,330,000 21,808,891
- ----------------------------------------------------------------------------------------------------------------------------------
Banco BMG SA, 9.15% Nts., 1/15/16 7 9,710,000 10,438,250
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Banco de Credito del Peru, 6.95% Sub. Nts., 11/7/21 1,2 2,750,000 2,743,125
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Banco Hipotecario SA, 9.75% Sr. Unsec. Nts., 4/27/16 1 4,325,000 4,584,500
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C10 Capital SPV Ltd., 6.722% Unsec. Perpetual Debs. 7,12 6,700,000 6,619,774
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Cloverie plc, 9.60% Sec. Nts., Series 2005-93, 12/20/10 1,2 3,600,000 3,628,800
- ----------------------------------------------------------------------------------------------------------------------------------
Depfa ACS Bank, 3.50% Sec. Nts., 3/16/11 [EUR] 22,315,000 29,114,071
- ----------------------------------------------------------------------------------------------------------------------------------
Eletropaulo Metropolitana SA, 19.125% Nts., 6/28/10 1 [BRR] 13,295,000 7,549,944
- ----------------------------------------------------------------------------------------------------------------------------------
Gaz Capital SA, 8.625% Sr. Unsec. Nts., 4/28/34 7 4,440,000 5,716,500
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Halyk Savings Bank Kazakhstan Europe BV, 7.75% Nts., 5/13/13 7 4,400,000 4,636,500
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HBOS Treasury Services plc:
4.375% Sr. Sec. Nts., 7/13/16 [EUR] 63,120,000 84,743,906
4.50% Sr. Sec. Nts., 7/13/21 [EUR] 59,070,000 79,341,160
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HSBC Bank plc:
11.601% Sr. Unsec. Nts., 1/12/10 1,6 42,800,000 26,129,400
12.278% Sr. Unsec. Nts., 3/9/09 1,6 30,220,000 20,703,722
9.751% Sr. Unsec. Nts., 7/8/09 1,6 30,220,000 21,833,950
- ----------------------------------------------------------------------------------------------------------------------------------
ICICI Bank Ltd., 6.375% Bonds, 4/30/22 2,7 5,545,000 5,506,107
- ----------------------------------------------------------------------------------------------------------------------------------
IIRSA Norte Finance Ltd., 8.75% Sr. Nts., 5/30/24 7 8,915,092 10,519,809
19 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------------------
Inter-American Development Bank:
6.26% Nts., 12/8/09 2 [BRR] 11,200,000 $ 5,472,795
7.889% Nts., 1/25/12 2 [COP] 12,072,857,239 5,818,134
- ----------------------------------------------------------------------------------------------------------------------------------
International Bank for Reconstruction & Development (The),
15% Nts., 1/7/10 1 [TRY] 3,000,000 2,028,017
- ----------------------------------------------------------------------------------------------------------------------------------
ISA Capital do Brasil SA:
7.875% Sr. Nts., 1/30/12 7 2,225,000 2,284,519
8.80% Sr. Nts., 1/30/17 7 2,780,000 2,960,005
- ----------------------------------------------------------------------------------------------------------------------------------
JP Morgan Hipotecaria su Casita, 6.56% Sec. Nts., 8/26/35 7,11 [MXN] 41,757,200 3,782,955
- ----------------------------------------------------------------------------------------------------------------------------------
JPMorgan, Red Square Capital Ltd., 9% CDO Nts., 11/20/08 11 [RUR] 365,000,000 13,906,688
- ----------------------------------------------------------------------------------------------------------------------------------
Kuznetski Capital SA/Bank of Moscow, 7.375% Nts., 11/26/10 7 2,780,000 2,905,100
- ----------------------------------------------------------------------------------------------------------------------------------
Majapahit Holding BV:
7.25% Nts., 10/17/11 7 2,860,000 2,945,800
7.75% Nts., 10/17/16 7 2,640,000 2,778,600
- ----------------------------------------------------------------------------------------------------------------------------------
MHP SA, 10.25% Sr. Sec. Sub. Bonds, 11/30/11 7 2,745,000 2,841,075
- ----------------------------------------------------------------------------------------------------------------------------------
National Gas Co., 6.05% Nts., 1/15/36 7 4,945,000 4,805,210
- ----------------------------------------------------------------------------------------------------------------------------------
National Power Corp.:
5.875% Unsec. Unsub. Bonds, 12/19/16 [PHP] 665,100,000 13,784,456
6.875% Nts., 11/2/16 7 2,739,000 2,804,051
9.625% Unsec. Bonds, 5/15/28 5,095,000 6,451,544
- ----------------------------------------------------------------------------------------------------------------------------------
Nordic Investment Bank, 12.50% Sr. Unsec. Nts., 2/15/09 1 [TRY] 5,000,000 3,279,454
- ----------------------------------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50% Sec. Nts.,
3/29/10 1,5,13 550,000 --
- ----------------------------------------------------------------------------------------------------------------------------------
Petroleum Export Ltd. Cayman SPV, 5.265% Sr. Nts., Cl. A3,
6/15/11 7 11,504,278 11,264,713
- ----------------------------------------------------------------------------------------------------------------------------------
Piazza Vittoria Finance SrL, 4.454% Asset-Backed Nts., 7/20/10 2 [EUR] 47,470,370 63,292,558
- ----------------------------------------------------------------------------------------------------------------------------------
RSHB Capital SA/OJSC Russian Agricultural Bank, 7.175% Nts., 5/16/13 7 3,820,000 4,044,425
- ----------------------------------------------------------------------------------------------------------------------------------
Salisbury International Investments Ltd., 9.51% Sec. Nts.,
Series 2006-003, Tranche E, 7/20/11 1,2 2,400,000 2,400,000
- ----------------------------------------------------------------------------------------------------------------------------------
Telefonica del Peru SA, 8% Sr. Unsec. Bonds, 4/11/16 1 [PEN] 26,033,700 9,129,587
- ----------------------------------------------------------------------------------------------------------------------------------
Tengizchevroil LLP, 6.124% Nts., 11/15/14 7 5,840,000 5,840,000
- ----------------------------------------------------------------------------------------------------------------------------------
Tiers-BSP, 0%/8.60% Collateralized Trust, Cl. A, 6/15/97 14 6,065,000 2,553,717
- ----------------------------------------------------------------------------------------------------------------------------------
Vitro SA de CV:
8.625% Sr. Unsec. Unsub. Nts., 2/1/12 7 2,775,000 2,816,625
9.125% Sr. Unsec. Nts., 2/1/17 7 4,715,000 4,809,300
- ----------------------------------------------------------------------------------------------------------------------------------
VTB Capital SA, 6.25% Sr. Nts., 6/30/35 7 2,950,000 3,056,938
- ----------------------------------------------------------------------------------------------------------------------------------
WM Covered Bond Program:
3.875% Sec. Nts., Series1, 9/27/11 [EUR] 71,760,000 94,406,497
4% Sec. Mtg. Nts., Series 2, 9/27/16 [EUR] 121,045,000 157,284,604
---------------
Total Corporate Bonds and Notes (Cost $840,094,809) 846,208,767
20 | OPPENHEIMER INTERNATIONAL BOND FUND
VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--0.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Okumura Corp. 3 459,000 $ 2,500,151
- ----------------------------------------------------------------------------------------------------------------------------------
Societe des Autoroutes Paris-Rhin-Rhone 21,812 1,987,174
---------------
Total Common Stocks (Cost $4,305,601) 4,487,325
UNITS
- ----------------------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ----------------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Oil Linked Payment Obligation Wts.,
Exp. 4/15/20 1,13 (Cost $0) 500 18,250
PRINCIPAL
AMOUNT
- ----------------------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--25.6%
- ----------------------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Holdings, Inc.:
Argentina (Republic of) Credit Linked Nts., 11.083%, 5/22/08 1,15 [ARP] 11,655,000 10,426,030
Argentina (Republic of) Credit Linked Nts., 4%, 5/18/09 1 [ARP] 7,884,000 7,050,885
Argentina (Republic of) Unsec. Credit Linked Nts., 15.40%, 4/16/10 15 [ARP] 6,931,968 3,649,923
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 38,356,000 18,344,902
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 59,878,000 28,638,442
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 100,000,000 47,827,986
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 14.809%, 1/5/10 6 [BRR] 32,035,902 11,467,805
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 15.427%, 1/2/09 6 [BRR] 28,074,132 11,221,886
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 15.728%, 1/3/08 6 [BRR] 4,719,335 11,022,978
Colombia (Republic of) Credit Linked Bonds, 11%, 7/24/20 [COP] 12,570,000,000 6,184,418
Colombia (Republic of) Credit Linked Nts., Series II, 15%, 4/27/12 [COP] 6,942,469,928 3,770,269
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 31,110,000,000 16,895,005
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 12,430,000,000 6,750,399
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 11,705,100,000 6,356,725
Dominican Republic Credit Linked Nts., 10.105%, 7/2/07
(linked to Dominican Republic Treasury Bills) 6 [DOP] 97,400,000 2,944,671
Dominican Republic Credit Linked Nts., 11.01%, 9/4/07
(linked to Dominican Republic Treasury Bills) 6 [DOP] 169,790,000 5,046,621
Dominican Republic Credit Linked Nts., 14.608%, 5/14/07
(linked to Dominican Republic Treasury Bills) 6 [DOP] 189,200,000 5,810,165
Dominican Republic Credit Linked Nts., 22%, 10/3/11 [DOP] 158,100,000 6,188,919
Dominican Republic Credit Linked Nts., Series II, 15.603%, 4/23/07
(linked to Dominican Republic Treasury Bills) 6 [DOP] 118,210,000 3,636,081
Dominican Republic Unsec. Credit Linked Nts., 11.648%, 9/24/07
(linked to Dominican Republic Treasury Bills) 6 [DOP] 57,500,000 1,700,596
Dominican Republic Unsec. Credit Linked Nts., 15%, 3/12/12
(linked to Dominican Republic Treasury Bills) [DOP] 289,700,000 9,054,312
Dominican Republic Unsec. Credit Linked Nts., 15.638%, 4/30/07
(linked to Dominican Republic Treasury Bills) 6 [DOP] 108,450,000 3,335,868
Dominican Republic Unsec. Credit Linked Nts., 9.696%, 3/10/08
(linked to Dominican Republic Treasury Bills) 6 [DOP] 196,300,000 5,496,946
Dominican Republic Unsec. Credit Linked Nts., Series II, 15.736%, 4/30/07
(linked to Dominican Republic Treasury Bills) 6 [DOP] 237,770,000 7,301,707
21 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Holdings, Inc.: Continued
Egypt (The Arab Republic of) Credit Linked Nts., 8.226%, 6/28/07
(linked to Egyptian Treasury Bills) 1,6 [EGP] 36,460,000 $ 6,271,472
Egypt (The Arab Republic of) Credit Linked Nts., 8.70%, 7/12/07
(linked to Egyptian Treasury Bills) 1,6 [EGP] 51,690,000 8,863,048
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.376%, 2/28/08
(linked to Egyptian Treasury Bills) 1,6 [EGP] 54,300,000 8,840,903
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.50%, 2/16/08 [EGP] 34,150,000 6,020,352
Nigeria (Federal Republic of) Credit Linked Nts., 12.474%, 7/22/07 6 [NGN] 1,606,440,000 12,233,803
Nigeria (Federal Republic of) Credit Linked Nts., 14.50%, 3/1/11 [NGN] 2,672,000,000 23,858,172
Nigeria (Federal Republic of) Credit Linked Nts.,
Series II, 14.50%, 4/4/11 [NGN] 2,032,000,000 18,193,507
Russian Federation Credit Linked Nts., 7.65%, 12/4/08 1,2 [RUR] 41,690,000 1,624,511
Ukraine Hryvnia Unsec. Credit Linked Nts., 11.94%, 1/4/10 [UAH] 13,799,000 2,968,736
Zambia (Republic of) Credit Linked Nts., 8.833%, 2/21/08
(linked to Zambian Treasury Bills) 6 [ZMK] 38,315,000,000 8,179,573
- ----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston International:
Boryspil Airport Total Return Linked Nts., 10%, 4/19/10 2,11 [UAH] 49,215,000 10,112,884
EES Total Return Linked Nts., 7.10%, 12/12/08 2 [RUR] 72,800,000 2,811,541
Gazprom Total Return Linked Nts., 6.79%, 10/29/09 [RUR] 144,790,000 5,742,419
Gazprom Total Return Linked Nts., Series 002, 6.95%, 8/6/09 [RUR] 141,750,000 5,548,150
Indonesia (Republic of) Total Return Linked Nts., 12%, 9/16/11 [IDR] 116,800,000,000 14,198,912
Lukoil Credit Linked Nts., Series Fbi 105, 7.25%, 11/17/09 1,2 [RUR] 321,528,000 12,500,959
Moitk Total Return Linked Nts., 8.966%, 3/26/11 2 [RUR] 352,714,000 13,581,116
Moscow (City of) Credit Linked Nts., Series Fbi 101, 10%, 12/31/10 1 [RUR] 277,800,000 12,011,603
Moscow (City of) Credit Linked Nts., Series Fbi 98, 11%, 4/23/09 [RUR] 280,840,000 11,995,948
Orenburgskaya IZHK Total Return Linked Nts., 9.24%, 2/21/12 2 [RUR] 64,940,000 2,499,240
South African Rand Interest Bearing Linked Nts.,
Series Fbi 43, 5.245%, 5/23/22 2 2,100,000 2,059,890
Turkey (Republic of) Credit Linked Nts.,
Series EMG 59, 21.41%, 7/16/08 6 [TRY] 28,495,000 16,179,960
Ukraine (Republic of) Credit Linked Nts.,
Series EMG 13, 11.94%, 12/30/09 [UAH] 30,400,000 6,681,303
Vietnam Shipping Industry Group Total Return Linked Nts.,
10.50%, 1/19/17 1 [VND] 85,958,000,000 5,655,897
- ----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston, Inc. (Nassau Branch):
Turkey (Republic of) Credit Linked Nts., Series 2, 20.853%, 7/16/08 6 [TRY] 39,420,000 22,383,367
Ukraine (Republic of) Credit Linked Nts.,
Series EMG 11, 11.94%, 12/30/09 [UAH] 9,163,000 2,013,841
Ukraine (Republic of) Credit Linked Nts.,
Series NPC 12, 11.94%, 12/30/09 [UAH] 65,490,000 14,393,372
- ----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Argentina (Republic of) Credit Linked Nts., 11.077%, 12/21/11 [ARP] 35,580,000 31,460,815
Arrendadora Capita Corp. SA de CV/Capita Corp.
(The) de Mexico SA de CV Credit Linked Nts., 9.09%, 1/5/11 1 [MXN] 118,305,720 10,691,002
Arrendadora Capita Corp. SA de CV/Capita Corp.
(The) de Mexico SA de CV Credit Linked Nts., 9.65%, 1/5/11 1 [MXN] 78,011,604 7,076,223
Borhis Total Return Linked Nts., 6.45%, 3/15/34 [MXN] 25,990,000 8,707,089
22 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG: Continued
Brazil Real Credit Linked Nts., 13.882%, 3/3/10 6 [BRR] 61,128,560 $ 27,091,437
Brazil Real Credit Linked Nts., 6%, 8/18/10 [BRR] 15,895,000 12,044,944
Colombia (Republic of) Credit Linked Nts., 13.50%, 9/15/14 1 [COP] 13,259,000,000 7,132,405
Colombia (Republic of) Total Return Linked Bonds,
Series 002, 11%, 7/28/20 [COP] 24,620,000,000 12,166,873
Compania Total Return Linked Nts., 4.454%, 7/22/10 [EUR] 19,753,600 26,352,383
Egypt (The Arab Republic of) Credit Linked Nts., 9.381%, 2/5/08
(linked to Egyptian Treasury Bills) 1,6 [EGP] 36,510,000 5,955,048
Egypt (The Arab Republic of) Total Return Linked Nts., 10.029%, 9/12/07
(linked to Egyptian Treasury Bills) 1,6 [EGP] 71,360,000 11,993,240
European Investment Bank, Russian Federation Credit Linked Nts.,
5.502%, 1/19/10 6 8,475,000 7,434,270
Grupo TMM SA Credit Linked Nts., 6%, 9/7/12 1 5,165,807 5,191,797
Halyk Bank of Kazakhstan Total Return Linked Nts.,
Series I, 7.25%, 3/20/09 [KZT] 2,003,690,000 16,141,515
Indonesia (Republic of) Credit Linked Nts., 9.50%, 6/22/15 10,300,162 10,516,465
Indonesia (Republic of) Credit Linked Nts., Series III, 14.25%, 6/15/13 12,412,800 15,705,916
Nigeria (Federal Republic of) Credit Linked Nts., 12.50%, 2/24/09 [NGN] 525,300,000 4,326,797
Nigeria (Federal Republic of) Credit Linked Nts., 15%, 1/27/09 [NGN] 704,900,000 6,098,666
OAO Gazprom I Credit Nts., 9.22%, 10/20/07 1,435,000 1,524,404
OAO Gazprom II Credit Nts., 8.97%, 4/20/07 1,435,000 1,496,508
Peru (Republic of) Credit Linked Nts., 6.665%, 2/20/11 2 3,255,000 3,326,809
Romania (Republic of) 3 yr. Linked Nts., 12.25%, 10/15/07 [RON] 22,740,000 9,795,999
Romania (Republic of) 3 yr. Linked Nts., 12.89%, 9/24/07 [RON] 3,320,000 1,443,956
Romania (Republic of) 3 yr. Linked Nts., 12.89%, 9/24/07 [RON] 10,000,000 4,349,264
Romania (Republic of) 3 yr. Linked Nts., 12.89%, 9/24/07 [RON] 5,640,000 2,452,985
Russian Federation Credit Linked Nts., 0%, 12/2/09 6 [RUR] 233,573,000 9,618,563
Russian Federation Credit Linked Nts., 6.942%, 2/22/08 6 [RUR] 161,200,000 5,829,626
Russian Federation Credit Linked Nts., 7.176%, 2/21/08 6 [RUR] 78,000,000 2,820,186
Russian Federation Total Return Linked Nts., Series II, 9%, 4/22/11 [RUR] 288,935,000 12,400,879
Russian Railways Total Return Linked Bonds, 6.67%, 1/26/09 2 [RUR] 146,720,000 5,652,220
Ukraine (Republic of) 5 yr. Credit Linked Nts., 4.05%, 8/25/10 2,505,000 2,566,347
Ukraine (Republic of) 5.5 yr. Credit Linked Nts., 4.05%, 2/25/11 2,505,000 2,564,419
Ukraine (Republic of) 6 yr. Credit Linked Nts., 4.05%, 8/25/11 2,505,000 2,563,968
Ukraine (Republic of) 6.5 yr. Credit Linked Nts., 4.05%, 2/27/12 2,505,000 2,562,840
Ukraine (Republic of) 7 yr. Credit Linked Nts., 4.05%, 8/28/12 2,505,000 2,556,428
Ukraine (Republic of) Credit Linked Nts., 10.208%, 7/1/09 1 [UAH] 27,763,200 6,125,932
Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 3,228,000 725,494
Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 11,438,000 2,570,695
Ukraine (Republic of) Credit Linked Nts., 5.592%, 5/18/07 [UAH] 27,990,000 5,663,079
Ukraine (Republic of) Credit Linked Nts., 9.60%, 7/1/09 1 [UAH] 7,953,600 1,754,957
Ukraine (Republic of) Credit Linked Nts., Series A, 5.592%, 5/16/07 [UAH] 27,980,000 5,661,056
United Mexican States BORHIS Total Return Linked Nts.,
6.10%, 9/27/35 [MXN] 23,552,567 8,550,330
United Mexican States Credit Linked Nts., 9.52%, 1/5/11 1 [MXN] 78,063,736 7,072,112
Videocon International Ltd. Credit Linked Nts., 6.26%, 12/29/09 1 7,300,000 7,341,391
- ----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG Singapore, Vietnam Shipping Industry Group Total
Return Linked Nts., 9%, 4/20/17 11 [VND] 216,800,000,000 13,533,084
23 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------------------
Dresdner Bank AG, Lukoil Credit Linked Nts.,
Series 3, 7.041%, 12/8/11 2 [RUR] 213,030,000 $ 8,206,737
- ----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs & Co., Turkey (Republic of) Credit Linked Nts.,
14.802%, 3/29/17 6 [TRY] 129,050,000 20,942,813
- ----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital Markets LP, Colombia (Republic of)
Credit Linked Nts., 10.476%, 2/8/37 6 [COP] 376,977,600,000 7,513,366
- ----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs International, Russian Federation
Total Return Linked Nts., 8%, 5/13/09 2 [RUR] 573,900,000 22,578,768
- ----------------------------------------------------------------------------------------------------------------------------------
ING Bank NV, Ukraine (Republic of) Credit Linked Nts.,
Series 725, 11.89%, 12/30/09 1 [UAH] 64,285,000 14,412,420
- ----------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank:
Argentina (Republic of) Credit Linked Nts., 11.032%, 12/19/11 1 [ARP] 36,445,000 31,790,507
Brazil (Federal Republic of) Credit Linked Nts., 12.08%, 1/2/15 6 [BRR] 51,226,300 10,500,496
Brazil (Federal Republic of) Credit Linked Nts., 12.683%, 6/1/13 6 [BRR] 75,340,000 18,283,727
Brazil (Federal Republic of) Credit Linked Nts., 13.847%, 4/1/10 6 [BRR] 129,150,391 45,559,629
Brazil (Federal Republic of) Credit Linked Nts., 14.35%, 2/20/12 [BRR] 34,060,000 16,744,830
Brazil (Federal Republic of) Credit Linked Nts., 15.326%, 1/2/15 6 [BRR] 138,200,796 28,328,748
Brazil (Federal Republic of) Credit Linked Nts., 2.731%, 11/30/12 6 [ARP] 35,605,000 11,005,234
Brazil (Federal Republic of) Credit Linked Nts., 6%, 5/16/45 1 [BRR] 45,170,000 31,766,548
Brazil (Federal Republic of) Credit Linked Nts.,
Series II, 13.553%, 1/2/15 6 [BRR] 114,770,000 23,525,845
Colombia (Republic of) Credit Linked Bonds, 10.19%, 1/5/16 6 [COP] 153,800,000,000 28,684,103
Colombia (Republic of) Credit Linked Bonds, 10.218%, 10/31/16 1,6 [COP] 90,697,000,000 15,490,528
Colombia (Republic of) Credit Linked Bonds, 11.198%, 8/3/20 6 [COP] 132,560,000,000 17,633,342
Colombia (Republic of) Credit Linked Bonds,
Series A, 10.218%, 10/31/16 1,6 [COP] 90,312,000,000 15,424,772
Peru (Republic of) Credit Linked Nts., 8.115%, 9/2/15 6 [PEN] 40,860,000 7,286,112
Russian Federation Railways Credit Linked Nts., 6.59%, 6/15/07 [RUR] 297,950,000 12,638,353
Swaziland (Kingdom of) Credit Linked Nts., 7.25%, 6/20/10 3,850,000 3,849,615
- ----------------------------------------------------------------------------------------------------------------------------------
JSC Astana Finance Nts., 9.16%, 3/14/12 1 14,000,000 13,895,681
- ----------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers International, Romania (Republic of)
Total Return Linked Nts., 7.90%, 2/9/10
(linked to Romanian Treasury Bills) [RON] 10,726,400 4,390,014
- ----------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.:
Argentina (Republic of) Credit Linked Nts., 9.655%, 12/20/15 20,000,000 22,808,000
CMS 10 yr. Curve Credit Linked Nts., 6%, 2/5/17 130,660,000 135,612,014
Romania (Republic of) Total Return Linked Nts., 6.50%, 3/9/10
(linked to Romanian Treasury Bills) [RON] 30,904,100 12,127,290
Romania (Republic of) Total Return Linked Nts., 6.75%, 3/11/08
(linked to Romanian Treasury Bills) [RON] 36,650,000 14,645,143
Romania (Republic of) Total Return Linked Nts., 7.25%, 4/19/10
(linked to Romanian Treasury Bills) [RON] 3,105,000 1,318,714
Romania (Republic of) Total Return Linked Nts., 7.75%, 4/21/08
(linked to Romanian Treasury Bills) [RON] 3,101,000 1,338,302
Romania (Republic of) Total Return Linked Nts., 7.75%, 4/21/08
(linked to Romanian Treasury Bills) [RON] 7,453,000 3,216,498
24 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.: Continued
Romania (Republic of) Total Return Linked Nts., 7.90%, 2/12/08
(linked to Romanian Treasury Bills) [RON] 24,895,500 $ 10,106,132
- ----------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch:
Colombia (Republic of) Credit Linked Nts., 10%, 11/17/16 1 [COP] 13,289,000,000 6,214,183
Renaissance Capital International Services Ltd.
Total Return Linked Nts., 10.50%, 10/4/08 11 [RUR] 414,000,000 15,932,943
- ----------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley & Co. International Ltd./Red Arrow International Leasing plc:
Total Return Linked Nts., Series A, 8.375%, 6/30/12 1 [RUR] 246,944,887 9,836,397
Total Return Linked Nts., Series B, 11%, 6/30/12 1 [RUR] 214,199,179 8,537,004
- ----------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc.:
Bank Center Credit Total Return Linked Nts., 7.52%, 6/6/08 [KZT] 3,273,000,000 26,637,258
Brazil (Federal Republic of) Linked Nts., 12.551%, 1/5/22 6 [BRR] 173,500,000 15,789,569
Brazil (Federal Republic of) Sr. Linked Nts., 14.40%, 8/4/16 [BRR] 56,967,568 34,535,016
Philippines (Republic of the) Credit Linked Nts., 10.22%, 9/20/15 1 30,000,000 36,217,327
Philippines (Republic of the) Credit Linked Nts., 8.619%, 9/20/15 1 980,000 1,138,142
Philippines (Republic of the) Credit Linked Nts., 8.22%, 6/20/16 1,2 2,640,000 2,830,462
United Mexican States Credit Linked Nts., 5.64%, 11/20/15 11,760,000 12,444,461
Venezuela (Republic of) 10 yr. Credit Linked Nts., 7.85%, 11/20/15 4,415,000 4,917,827
WTI Trading Ltd. Total Return Linked Nts., Series A, 0%, 2/6/09 1,6 10,900,000 11,227,000
WTI Trading Ltd. Total Return Linked Nts., Series B, 0%, 2/6/09 1,6 14,550,000 14,986,500
- ----------------------------------------------------------------------------------------------------------------------------------
UBS AG:
Congo (Republic of) Credit Linked Nts., 9%, 3/22/12 [XAF] 2,050,000,000 3,934,753
Ghana (Republic of) Credit Linked Nts., 14.47%, 12/28/11 1 [GHC] 73,692,320,000 8,247,674
Israel (State of) Credit Linked Nts., 7.50%, 4/5/14 [ILS] 56,205,300 16,196,291
---------------
Total Structured Notes (Cost $1,518,992,864) 1,697,405,522
STRIKE
DATE PRICE CONTRACTS
- ----------------------------------------------------------------------------------------------------------------------------------
OPTIONS PURCHASED--0.0%
- ----------------------------------------------------------------------------------------------------------------------------------
Japanese Yen (JPY) Put 13
(Cost $2,221,645) 7/25/07 $95 261,370,000 1,274,179
SHARES
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--4.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E, 5.23% 16,17
(Cost $272,575,619) 272,575,619 272,575,619
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (excluding Investments Purchased
with Cash Collateral from Securities Loaned) (Cost $6,188,891,196) 6,512,971,586
25 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES
LOANED--0.4% 18
- ----------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED FLOATING NOTES--0.1%
Citigroup Mortgage Loan Trust, Inc.,
Series 2006-HE1, Cl. A1, 5.38%, 4/25/07 $ 1,362,125 $ 1,362,125
- ----------------------------------------------------------------------------------------------------------------------------------
Countrywide Asset-Backed Certificates,
Series 2005-17, Cl. 4AV1, 5.43%, 4/25/07 470,583 470,583
- ----------------------------------------------------------------------------------------------------------------------------------
Whitehawk CDO Funding Corp., 5.4%, 6/15/07 2,000,000 2,000,000
---------------
3,832,708
- ----------------------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.2%
Undivided interest of 0.31% in joint repurchase agreement
(Principal Amount/Value $3,500,000,000, with a maturity
value of $3,501,591,771) with Bank of America NA,
5.4575%, dated 3/30/07, to be repurchased at
$10,917,162 on 4/2/07, collateralized by
U.S. Agency Mortgages, 5%-5.50%,
9/1/33-6/1/35, with a value of
$3,570,000,000 10,912,199 10,912,199
- ----------------------------------------------------------------------------------------------------------------------------------
Undivided interest of 1% in joint repurchase agreement
(Principal Amount/Value $500,000,000, with a maturity
value of $500,228,229) with Credit Suisse First Boston
LLC, 5.4775%, dated 3/30/07, to be repurchased
at $5,002,282 on 4/2/07, collateralized by
Private Label CMOs, 0.00%-6.50%,
5/15/16-11/14/42, with a value
of $525,000,050 5,000,000 5,000,000
---------------
15,912,199
- ----------------------------------------------------------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE--0.1%
American Express Credit Corp., 5.33%, 4/16/07 2,000,000 2,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.33%, 4/30/07 2,000,000 2,000,000
---------------
4,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
YANKEE CERTIFICATE OF DEPOSIT FLOATING NOTE--0.0%
Natexis Banques Populaires NY, 5.37%, 4/2/07 2,000,000 2,000,000
---------------
Total Investments Purchased with Cash Collateral from
Securities Loaned (Cost $25,744,907) 25,744,907
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $6,214,636,103) 98.5% 6,538,716,493
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.5 99,326,016
---------------------------------
NET ASSETS 100.0% $6,638,042,509
=================================
26 | OPPENHEIMER INTERNATIONAL BOND FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars (USD), except for those denoted in
the following currencies:
ARP Argentine Peso
AUD Australian Dollar
BRR Brazilian Real
CAD Canadian Dollar
COP Colombian Peso
DKK Danish Krone
DOP Dominican Republic Peso
EGP Egyptian Pounds
EUR Euro
GBP British Pound Sterling
GHC Ghanaian Cedi
IDR Indonesia Rupiah
ILS Israeli Shekel
JPY Japanese Yen
KZT Kazakhstan Tenge
MXN Mexican Nuevo Peso
MYR Malaysian Ringgit
NGN Nigeria Naira
PEN Peruvian New Sol
PHP Philippines Peso
PLZ Polish Zloty
RON New Romanian Leu
RUR Russian Ruble
TRY New Turkish Lira
UAH Ukraine Hryvnia
UYU Uruguay Peso
VND Vietnam Dong
XAF CFA Franc BEAC
ZMK Zambian Kwacha
1. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of March 31, 2007 was $579,646,412, which represents
8.73% of the Fund's net assets. In addition, the Fund has restricted currency of
$4,452,553, which represents 0.07% of the Fund's net assets. See Note 12 of
accompanying Notes.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Partial or fully-loaned security. See Note 13 of accompanying Notes.
4. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $41,308,344. See Note 6 of accompanying Notes.
5. Issue is in default. See Note 1 of accompanying Notes.
6. Zero coupon bond reflects effective yield on the date of purchase.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $144,274,633 or 2.17% of the Fund's net
assets as of March 31, 2007.
8. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of accompanying Notes.
9. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1
- -----------------------------------------------------------------------------------------
Japanese Yen (JPY) 578,000,000 4/4/07 $117.00 $29,394 $35,431
Japanese Yen (JPY) 523,000,000 4/5/07 117.35 25,270 32,845
Japanese Yen (JPY) 537,000,000 4/9/07 118.00 27,532 27,532
--------------------
$82,196 $95,808
====================
10. A sufficient amount of liquid assets has been designated to cover
outstanding written put options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO PUT DATES PRICE RECEIVED SEE NOTE 1
- -----------------------------------------------------------------------------------------
Japanese Yen (JPY) 578,000,000 4/4/07 $117.00 $27,912 $14,045
Japanese Yen (JPY) 523,000,000 4/5/07 117.35 26,384 19,822
Japanese Yen (JPY) 537,000,000 4/9/07 118.00 27,533 27,532
--------------------
$81,829 $61,399
====================
27 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
11. When-issued security or forward commitment to be delivered and settled after
March 31, 2007. See Note 1 of accompanying Notes.
12. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest. Rate reported represents
the current interest rate for this variable rate security.
13. Non-income producing security.
14. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
15. Denotes an inflation-indexed security: coupon and principal are indexed to
the consumer price index.
16. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended March 31, 2007 by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES SHARES
SEPTEMBER 30, GROSS GROSS MARCH 31,
2006 ADDITIONS REDUCTIONS 2007
- -------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund,
Cl. E, 5.23% -- 2,414,551,422 2,141,975,803 272,575,619
VALUE DIVIDEND
SEE NOTE 1 INCOME
- -------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund,
Cl. E, 5.23% $ 272,575,619 $10,153,693
17. Rate shown is the 7-day yield as of March 31, 2007.
18. The security/securities have 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
accompanying Notes.
28 | OPPENHEIMER INTERNATIONAL BOND FUND
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- --------------------------------------------------------------------------------
United States $ 890,832,812 13.6%
Brazil 557,559,093 8.5
Germany 483,598,116 7.4
United Kingdom 452,176,198 6.9
Japan 447,191,085 6.8
Italy 348,542,879 5.3
France 264,792,764 4.1
Russia 243,057,780 3.7
Australia 234,731,616 3.6
Turkey 233,294,747 3.6
Colombia 225,406,855 3.4
Argentina 216,098,828 3.3
Peru 181,373,869 2.8
Canada 172,582,970 2.6
Spain 154,505,584 2.4
Ukraine 129,421,896 2.0
Belgium 123,197,162 1.9
Mexico 117,298,514 1.8
Nigeria 115,582,254 1.8
Philippines 92,763,829 1.4
Greece 84,303,476 1.3
Poland 78,967,609 1.2
Kazakhstan 71,470,318 1.1
Dominican Republic 71,066,000 1.1
Indonesia 67,650,131 1.0
Romania 65,184,297 1.0
Israel 60,206,847 0.9
Egypt 59,208,776 0.9
Uruguay 57,787,216 0.9
Malaysia 47,398,793 0.7
Denmark 32,539,213 0.5
Ireland 29,114,071 0.4
Panama 24,571,613 0.4
Supranational 22,627,200 0.3
Vietnam 19,188,981 0.3
India 12,847,498 0.2
Ghana 8,247,674 0.1
Zambia 8,179,573 0.1
El Salvador 6,672,988 0.1
Venezuela 4,936,077 0.1
Trinidad & Tobago 4,805,210 0.1
Congo 3,934,753 0.1
Swaziland 3,849,615 0.1
Costa Rica 3,595,410 0.1
Bulgaria 3,491,250 0.1
South Africa 2,059,890 0.0
Guatemala 803,163 0.0
-------------------------
Total $6,538,716,493 100.0%
=========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
March 31, 2007
- --------------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $5,942,060,484) $ 6,266,140,874
Affiliated companies (cost $272,575,619) 272,575,619
-----------------
6,538,716,493
- --------------------------------------------------------------------------------------------------------------
Cash 17,172,744
- --------------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $4,022,774) 4,036,966
- --------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 64,347,399
- --------------------------------------------------------------------------------------------------------------
Swaps, at value (premiums received $473,599) 55,008,130
- --------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $17,029,829 sold on a when-issued basis or forward commitment) 108,193,570
Interest, dividends and principal paydowns 75,541,792
Shares of beneficial interest sold 41,315,574
Other 38,194
-----------------
Total assets 6,904,370,862
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $164,025)--see accompanying
statement of investments 157,207
- --------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 25,744,907
- --------------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 24,105,638
- --------------------------------------------------------------------------------------------------------------
Swaps, at value 7,565,355
- --------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $61,056,062 purchased on a when-issued basis or
forward commitment) 177,014,915
Shares of beneficial interest redeemed 14,821,505
Closed foreign currency contracts 6,179,634
Dividends 4,819,993
Distribution and service plan fees 3,680,789
Transfer and shareholder servicing agent fees 786,358
Futures margins 758,356
Shareholder communications 459,402
Trustees' compensation 21,808
Other 212,486
-----------------
Total liabilities 266,328,353
- --------------------------------------------------------------------------------------------------------------
NET ASSETS $ 6,638,042,509
=================
30 | OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 1,084,901
- --------------------------------------------------------------------------------------------------------------
Additional paid-in capital 6,225,349,535
- --------------------------------------------------------------------------------------------------------------
Accumulated net investment income 36,856,957
- --------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (30,075,477)
- --------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 404,826,593
-----------------
NET ASSETS $ 6,638,042,509
=================
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$4,930,672,432 and 805,299,320 shares of beneficial interest outstanding) $6.12
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $6.43
- --------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $240,143,281
and 39,353,326 shares of beneficial interest outstanding) $6.10
- --------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $1,062,359,726
and 174,076,418 shares of beneficial interest outstanding) $6.10
- --------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $111,194,713
and 18,206,463 shares of beneficial interest outstanding) $6.11
- --------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $293,672,357 and 47,965,490 shares of
beneficial interest outstanding) $6.12
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended March 31, 2007
- -------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $1,430,144) $ 132,324,093
- -------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $4,390) 82,305
Affiliated companies 10,153,693
- -------------------------------------------------------------------------------------
Portfolio lending fees 306,278
---------------
Total investment income 142,866,369
- -------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------
Management fees 15,713,337
- -------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 5,525,018
Class B 1,170,542
Class C 4,806,195
Class N 229,857
- -------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 3,405,427
Class B 286,491
Class C 631,905
Class N 259,657
Class Y 7,029
- -------------------------------------------------------------------------------------
Shareholder communications:
Class A 164,835
Class B 21,386
Class C 30,729
Class N 2,278
Class Y 254
- -------------------------------------------------------------------------------------
Custodian fees and expenses 454,524
- -------------------------------------------------------------------------------------
Trustees' compensation 47,696
- -------------------------------------------------------------------------------------
Administration service fees 750
- -------------------------------------------------------------------------------------
Other 256,743
---------------
Total expenses 33,014,653
Less reduction to custodian expenses (66,369)
Less waivers and reimbursements of expenses (290,818)
---------------
Net expenses 32,657,466
- -------------------------------------------------------------------------------------
NET INVESTMENT INCOME 110,208,903
32 | OPPENHEIMER INTERNATIONAL BOND FUND
- -------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------
Net realized gain on:
Investments (including premiums on options exercised) $ 42,689,639
Closing and expiration of option contracts written 1,707,952
Closing and expiration of futures contracts 91,921
Foreign currency transactions 11,834,407
Swap contracts 24,277,394
---------------
Net realized gain 80,601,313
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 36,710,485
Translation of assets and liabilities denominated in foreign 211,696,285
currencies
Futures contracts (22,826,669)
Option contracts written (264,137)
Swap contracts 25,824,511
---------------
Net change in unrealized appreciation 251,140,475
- -------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 441,950,691
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2007 SEPTEMBER 30,
(UNAUDITED) 2006
- --------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------
Net investment income $ 110,208,903 $ 161,377,436
- --------------------------------------------------------------------------------------------
Net realized gain (loss) 80,601,313 (25,734,684)
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation 251,140,475 (8,589,064)
----------------------------------
Net increase in net assets resulting from operations 441,950,691 127,053,688
- --------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (85,331,430) (200,784,108)
Class B (3,498,736) (12,370,619)
Class C (14,949,097) (36,714,329)
Class N (1,576,589) (3,110,737)
Class Y (4,824,640) (5,420,742)
----------------------------------
(110,180,492) (258,400,535)
- --------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (9,318,274) (11,599,099)
Class B (500,536) (891,798)
Class C (2,033,412) (2,435,648)
Class N (194,577) (203,177)
Class Y (465,053) (253,487)
----------------------------------
(12,511,852) (15,383,209)
- --------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 617,373,950 1,502,920,202
Class B (7,308,042) 18,514,548
Class C 136,046,518 338,152,983
Class N 42,719,222 18,829,709
Class Y 104,740,174 141,286,624
----------------------------------
893,571,822 2,019,704,066
- --------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------
Total increase 1,212,830,169 1,872,974,010
- --------------------------------------------------------------------------------------------
Beginning of period 5,425,212,340 3,552,238,330
----------------------------------
End of period (including accumulated net investment
income of $36,856,957 and $36,828,546, respectively) $ 6,638,042,509 $ 5,425,212,340
==================================
34 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2007 SEPT. 30,
CLASS A (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 5.80 $ 6.01 $ 5.63 $ 5.33 $ 4.38 $ 3.95
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .11 1 .22 1 .23 1 .13 .20 .24
Net realized and unrealized gain
(loss) .33 (.04) .62 .47 .95 .41
-------------------------------------------------------------------------------------------
Total from investment operations .44 .18 .85 .60 1.15 .65
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income (.11) (.37) (.41) (.30) (.20) (.19)
Distributions from net realized
gain (.01) (.02) (.06) -- -- --
Tax return of capital distribution -- -- -- -- -- (.03)
-------------------------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.12) (.39) (.47) (.30) (.20) (.22)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.12 $ 5.80 $ 6.01 $ 5.63 $ 5.33 $ 4.38
===========================================================================================
TOTAL RETURN, AT NET ASSET VALUE 2 7.76% 3.23% 15.53% 11.56% 26.67% 16.78%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 4,930,673 $ 4,075,172 $ 2,683,900 $ 1,177,628 $ 429,283 $ 181,456
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $ 4,459,527 $ 3,430,374 $ 1,925,344 $ 811,608 $ 285,391 $ 134,912
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.84% 3.72% 3.85% 2.19% 3.94% 5.16%
Total expenses 0.96% 4 0.98% 1.03% 1.13% 1.22% 1.37%
Expenses after payments and
waivers and reduction to
custodian expenses 0.95% 0.97% 1.02% 1.13% 1.22% 1.37%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 144% 90% 133% 341% 372%
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. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended March 31, 2007 0.97%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2007 SEPT. 30,
CLASS B (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 5.78 $ 5.99 $ 5.61 $ 5.31 $ 4.37 $ 3.94
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .09 1 .17 1 .17 1 .08 .16 .21
Net realized and unrealized gain
(loss) .33 (.04) .63 .47 .94 .40
-------------------------------------------------------------------------------------------
Total from investment operations .42 .13 .80 .55 1.10 .61
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income (.09) (.32) (.36) (.25) (.16) (.15)
Distributions from net realized
gain (.01) (.02) (.06) -- -- --
Tax return of capital distribution -- -- -- -- -- (.03)
-------------------------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.10) (.34) (.42) (.25) (.16) (.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.10 $ 5.78 $ 5.99 $ 5.61 $ 5.31 $ 4.37
===========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 7.33% 2.35% 14.58% 10.66% 25.48% 15.90%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 240,143 $ 234,848 $ 224,381 $ 167,621 $ 134,661 $ 100,049
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 235,032 $ 229,871 $ 201,541 $ 153,117 $ 119,232 $ 85,244
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.99% 2.88% 2.95% 1.40% 3.20% 4.41%
Total expenses 1.82% 4 1.83% 1.89% 1.98% 2.03% 2.14%
Expenses after payments and
waivers and reduction to custodian
expenses 1.81% 1.83% 1.89% 1.98% 2.03% 2.14%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 144% 90% 133% 341% 372%
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. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended March 31, 2007 1.83%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36 | OPPENHEIMER INTERNATIONAL BOND FUND
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2007 SEPT. 30,
CLASS C (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 5.78 $ 5.99 $ 5.61 $ 5.31 $ 4.37 $ 3.94
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .09 1 .17 1 .18 1 .09 .16 .21
Net realized and unrealized gain
(loss) .33 (.03) .63 .46 .94 .40
-------------------------------------------------------------------------------------------
Total from investment operations .42 .14 .81 .55 1.10 .61
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income (.09) (.33) (.37) (.25) (.16) (.15)
Distributions from net realized
gain (.01) (.02) (.06) -- -- --
Tax return of capital distribution -- -- -- -- -- (.03)
-------------------------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.10) (.35) (.43) (.25) (.16) (.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.10 $ 5.78 $ 5.99 $ 5.61 $ 5.31 $ 4.37
===========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 7.40% 2.46% 14.70% 10.75% 25.48% 15.90%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 1,062,360 $ 875,032 $ 560,138 $ 233,311 $ 90,248 $ 38,865
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 965,390 $ 717,977 $ 401,401 $ 170,796 $ 63,198 $ 28,635
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.11% 2.98% 3.10% 1.46% 3.15% 4.37%
Total expenses 1.69% 4 1.71% 1.77% 1.88% 2.02% 2.14%
Expenses after payments and
waivers and reduction to custodian
expenses 1.68% 1.71% 1.77% 1.88% 2.02% 2.14%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 144% 90% 133% 341% 372%
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. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended March 31, 2007 1.70%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2007 SEPT. 30,
CLASS N (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 5.79 $ 6.00 $ 5.61 $ 5.32 $ 4.37 $ 3.95
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .10 1 .19 1 .20 1 .12 .18 .21
Net realized and unrealized gain
(loss) .33 (.04) .64 .45 .95 .42
-------------------------------------------------------------------------------------------
Total from investment operations .43 .15 .84 .57 1.13 .63
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income (.10) (.34) (.39) (.28) (.18) (.18)
Distributions from net realized
gain (.01) (.02) (.06) -- -- --
Tax return of capital distribution -- -- -- -- -- (.03)
-------------------------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.11) (.36) (.45) (.28) (.18) (.21)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.11 $ 5.79 $ 6.00 $ 5.61 $ 5.32 $ 4.37
===========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 7.55% 2.78% 15.27% 11.00% 26.31% 16.23%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 111,195 $ 63,432 $ 46,533 $ 18,641 $ 4,640 $ 1,280
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 92,546 $ 55,216 $ 30,696 $ 10,769 $ 2,653 $ 297
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.42% 3.29% 3.45% 1.83% 3.56% 4.87%
Total expenses 1.62% 4 1.58% 1.47% 1.49% 1.57% 1.57%
Expenses after payments and
waivers and reduction to custodian
expenses 1.40% 1.42% 1.46% 1.49% 1.57% 1.57%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 144% 90% 133% 341% 372%
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. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended March 31, 2007 1.63%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38 | OPPENHEIMER INTERNATIONAL BOND FUND
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2007 SEPT. 30,
CLASS Y (UNAUDITED) 2006 2005 2004 1
- -----------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 5.80 $ 6.01 $ 5.63 $ 5.58
- -----------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .13 2 .24 2 .25 2 -- 3
Net realized and unrealized gain
(loss) .33 (.04) .63 .05
-------------------------------------------------------------
Total from investment operations .46 .20 .88 .05
- -----------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income (.13) (.39) (.44) --
Distributions from net realized
gain (.01) (.02) (.06) --
Tax return of capital distribution -- -- -- --
-------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.14) (.41) (.50) --
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.12 $ 5.80 $ 6.01 $ 5.63
=============================================================
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 7.98% 3.64% 15.96% 0.92%
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 293,672 $ 176,728 $ 37,286 $ 14,268
- -----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 227,677 $ 97,992 $ 25,559 $ 7,086
- -----------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 4.25% 4.11% 4.23% 4.84%
Total expenses 0.56% 6 0.56% 0.67% 1.17%
Expenses after payments and
waivers and reduction to custodian
expenses 0.55% 0.56% 0.66% 1.17%
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 144% 90% 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. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended March 31, 2007 0.57%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | 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 primary 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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic 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(R) 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. Securities traded on
foreign exchanges are valued based on the last sale price on the principal
exchange on which the security is traded, as identified by the portfolio pricing
service, prior to the time when the Fund's assets are valued. In the absence of
a sale, the security is valued at the official closing price on the principal
exchange. 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. Futures
contracts traded
40 | OPPENHEIMER INTERNATIONAL BOND FUND
on a commodities or futures exchange will be valued at the final settlement
price or official closing price on the principal exchange as reported by such
principal exchange at its trading session ending at, or most recently prior to,
the time when the Fund's assets are valued. Options are valued daily based upon
the last sale price on the principal exchange on which the option is traded.
Securities (including restricted securities) for which market quotations are not
readily available are valued at their fair value. Foreign and domestic
securities whose values have been materially affected by what the Manager
identifies as a significant event occurring before the Fund's assets are valued
but after the close of their respective exchanges will be fair valued. Fair
value is determined in good faith using consistently applied procedures under
the supervision of the Board of Trustees. Investments in open-end registered
investment companies (including affiliated funds) are valued at that fund's net
asset value. 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 Statement of Operations. The Fund records a realized gain or loss
when a structured note is sold or matures.
- --------------------------------------------------------------------------------
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 take place generally at least 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, 2007, the Fund had purchased $61,056,062
of securities issued on a when-issued basis or forward commitment and sold
$17,029,829 of securities issued on a when-issued basis or forward commitment.
41 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, 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, 2007, securities with an aggregate
market value of $1,022, representing less than 0.01% 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 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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
42 | OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
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.
As of March 31, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $14,678,278 expiring by 2015.
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, 2007, it is estimated that the Fund will utilize $81,074,912 of
capital loss carryforward to offset realized capital gains. During the fiscal
year ended September 30, 2006, the Fund did not utilize any capital loss
carryforward to offset capital gains realized in that fiscal year.
As of September 30, 2006, the Fund had available for federal income tax
purposes post-October foreign currency losses of $91,897,279 and straddle losses
of $3,855,911.
43 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral 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, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent
44 | OPPENHEIMER INTERNATIONAL BOND FUND
on future claims that may be made against the Fund. The risk of material loss
from such claims is considered remote.
- --------------------------------------------------------------------------------
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, 2007 YEAR ENDED SEPTEMBER 30, 2006
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
CLASS A
Sold 184,906,688 $ 1,106,221,035 401,071,813 $ 2,346,328,470
Dividends and/or
distributions reinvested 11,986,511 72,158,028 28,014,878 162,673,081
Redeemed (93,947,497) (561,005,113) (173,146,915) (1,006,081,349)
-------------------------------------------------------------------
Net increase 102,945,702 $ 617,373,950 255,939,776 $ 1,502,920,202
===================================================================
- -----------------------------------------------------------------------------------------------------------------
CLASS B
Sold 4,406,470 $ 26,294,981 13,953,510 $ 81,256,556
Dividends and/or
distributions reinvested 543,196 3,258,540 1,823,352 10,550,724
Redeemed (6,208,796) (36,861,563) (12,609,581) (73,292,732)
-------------------------------------------------------------------
Net increase (decrease) (1,259,130) $ (7,308,042) 3,167,281 $ 18,514,548
===================================================================
- -----------------------------------------------------------------------------------------------------------------
CLASS C
Sold 36,350,513 $ 216,719,310 76,001,789 $ 443,443,673
Dividends and/or
distributions reinvested 1,784,392 10,707,130 4,461,718 25,813,712
Redeemed (15,362,500) (91,379,922) (22,632,214) (131,104,402)
-------------------------------------------------------------------
Net increase 22,772,405 $ 136,046,518 57,831,293 $ 338,152,983
===================================================================
- -----------------------------------------------------------------------------------------------------------------
CLASS N
Sold 8,986,585 $ 53,039,155 7,063,532 $ 41,194,742
Dividends and/or
distributions reinvested 274,119 1,646,382 531,451 3,078,829
Redeemed (2,014,063) (11,966,315) (4,393,527) (25,443,862)
-------------------------------------------------------------------
Net increase 7,246,641 $ 42,719,222 3,201,456 $ 18,829,709
===================================================================
- -----------------------------------------------------------------------------------------------------------------
CLASS Y
Sold 18,159,512 $ 108,655,681 24,796,488 $ 144,435,008
Dividends and/or
distributions reinvested 833,419 5,019,282 973,953 5,648,766
Redeemed (1,488,237) (8,934,789) (1,513,656) (8,797,150)
-------------------------------------------------------------------
Net increase 17,504,694 $ 104,740,174 24,256,785 $ 141,286,624
===================================================================
45 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in affiliated companies, for the six
months ended March 31, 2007, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
Investment securities $2,744,222,162 $1,411,047,717
U.S. government and
government agency obligations 95,765,734 188,488,493
- --------------------------------------------------------------------------------
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 average net assets as shown in the following table:
FEE SCHEDULE
--------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Next $200 million 0.60
Next $4 billion 0.50
Over $5 billion 0.48
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. 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 or the Transfer Agent), 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, 2007, the Fund paid $4,462,397 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 accounts that hold Class A shares. Reimbursement is made
periodically 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 periodically 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
46 | OPPENHEIMER INTERNATIONAL BOND FUND
Class A shares in any fiscal year cannot be recovered in subsequent periods.
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% on Class B and
Class C shares and 0.25% 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 determines its
uncompensated expenses under the plan at calendar quarter ends. The
Distributor's aggregate uncompensated expenses under the plan at March 31, 2007
for Class B, Class C and Class N shares were $7,668,510, $13,915,452 and
$1,126,137, 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 following table 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, 2007 $ 700,965 $ 97,372 $ 261,293 $ 99,601 $ 5,092
- --------------------------------------------------------------------------------
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, 2007,
OFS waived $98,259 for Class N shares. This undertaking may be amended or
withdrawn at any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended March 31, 2007, the Manager waived $192,559
for IMMF management fees.
- --------------------------------------------------------------------------------
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
47 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued
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, 2007, the Fund had outstanding foreign currency contracts as
follows:
VALUATION
CONTRACT AS OF
EXPIRATION AMOUNT MARCH 31, UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) 2007 APPRECIATION DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Australian Dollar [AUD] 4/23/07 2,002AUD $ 1,618,746 $ 15,144 $ --
Brazilian Real [BRR] 5/3/07-1/13/10 657,329BRR 300,330,525 43,860,875 --
British Pound Sterling [GPB] 4/10/07-4/23/07 61,455GPB 120,931,398 1,465,096 --
Canadian Dollar [CAD] 4/23/07 7,370CAD 6,388,086 29,156 --
Chilean Peso [CLP] 5/16/07-6/28/07 23,557,000CLP 43,659,850 18,960 86,822
Euro [EUR] 4/2/07-9/24/07 557,054EUR 744,447,176 6,011,455 --
Hungarian Forint [HUF] 4/26/07 12,134,000HUF 65,284,087 -- 683,076
Indian Rupee [INR] 4/26/07 2,869,000INR 65,660,468 217,949 --
Japanese Yen [JPY] 4/2/07-5/14/07 105,824,000JPY 901,681,646 5,704,271 1,350,805
Malaysian Ringgit [MYR] 5/16/07 97,730MYR 28,332,508 261,281 --
Mexican Nuevo Peso [MXN] 4/2/07-5/25/07 1,723,842MXN 155,733,160 -- 591,830
New Turkish Lira [TRY] 4/24/07 91,400TRY 65,089,833 433,080 --
New Zealand Dollar [NZD] 9/24/07 25,060NZD 17,673,789 235,037 --
Norwegian Krone [NOK] 9/24/07-1/29/08 239,020NOK 39,464,474 1,043,415 --
Polish Zloty [PLZ] 4/30/07-5/7/07 221,970PLZ 76,783,323 2,334,558 --
Russian Ruble [RUR] 4/4/07-6/6/07 2,480,220RUR 95,464,662 559,438 --
Singapore Dollar [SGD] 2/5/08 99,680SGD 66,920,341 665,269 2,426
South African Rand [ZAR] 4/26/07-8/1/07 867,840ZAR 118,724,185 272,279 628,444
South Korean Won [KRW] 4/12/07-7/2/07 51,918,000KRW 55,248,245 -- 77,896
Swedish Krone [SEK] 4/10/07 77,740SEK 39,796,994 86,011 83,759
Swiss Franc [CHF] 4/5/07-4/23/07 89,452CHF 73,662,161 336,314 2,319
Ukraine Hryvnia [UAH] 4/5/07 50,954UAH 10,113,245 -- 6,668
Uruguay Peso [UYU] 4/3/07 248,600UYU 10,296,128 53,029 --
Vietnam Dong [VND] 4/13/07 218,426,000VND 13,634,582 -- 34,129
-----------------------------
63,602,617 3,548,174
-----------------------------
48 | OPPENHEIMER INTERNATIONAL BOND FUND
VALUATION
CONTRACT AS OF
EXPIRATION AMOUNT MARCH 31, UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) 2007 APPRECIATION DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------------------
CONTRACTS TO SELL
Australian Dollar [AUD] 4/10/07-4/11/07 207,940AUD $ 168,192,805 $ -- $ 5,762,492
British Pound Sterling [GPB] 8/6/07 19,550GPB 38,435,909 -- 60,038
Canadian Dollar [CAD] 8/21/07 60,215CAD 52,369,569 -- 487,242
Chinese Renminbi [CNY] 4/26/07 507,100CNY 65,865,863 106,947 --
Czech Koruna [CZK] 4/26/07-1/25/08 1,559,750CZK 74,713,291 80,009 276,309
Euro [EUR] 4/2/07-1/29/08 343,785EUR 459,828,296 4,938 9,875,280
Hong Kong Dollar [HKD] 1/25/08 136,990HKD 17,674,442 44,733 1,294
Indian Rupee [INR] 4/5/07 21,837INR 501,905 -- 2,194
Japanese Yen [JPY] 4/2/07-2/5/08 21,589,000JPY 186,678,587 49,494 1,881,269
New Turkish Lira [TRY] 5/7/07-6/29/07 43,255TRY 30,365,897 -- 453,065
New Zealand Dollar [NZD] 1/16/08 77,760NZD 54,343,337 -- 1,565,296
Russian Ruble [RUR] 4/3/07-4/4/07 450,583RUR 17,341,055 -- 10,935
Swedish Krone [SEK] 4/26/07-9/24/07 529,430SEK 76,005,475 261,062 --
Swiss Franc [CHF] 1/25/08 103,455CHF 85,638,719 197,599 182,050
-----------------------------
744,782 20,557,464
-----------------------------
Total unrealized appreciation and depreciation $ 64,347,399 $ 24,105,638
=============================
- --------------------------------------------------------------------------------
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
49 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
losses are reported in the Statement of Operations at the closing and expiration
of futures contracts. The net change in unrealized appreciation and depreciation
is reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of March 31, 2007, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS MARCH 31, 2007 (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
30 Day Interbank Cash Rate 4/20/07 32 $ 6,268,425 $ 325,628
Canada (Government of) Bonds, 10 yr. 6/20/07 249 24,447,077 (49,934)
DAX Index 6/15/07 30 6,982,126 314,855
Euro-Bundesobligation, 10 yr. 6/7/07 3,221 494,472,702 (5,160,463)
Euro-Schatz 6/7/07 4,684 646,389,372 (1,752,495)
Japan (Government of) Bonds, 10 yr. 6/11/07 477 543,020,621 217,260
Nikkei 225 Index 6/7/07 53 7,785,387 (41,217)
Standard & Poor's/MIB Index, 10 yr. 6/15/07 25 6,850,713 299,200
Standard & Poor's/Toronto Stock
Exchange 60 Index 6/14/07 61 7,991,026 93,659
U.S. Treasury Nts., 10 yr. 6/20/07 2,733 295,505,625 5,354
U.S. Treasury Nts., 30 yr. 6/20/07 44 4,895,000 (15,079)
---------------
(5,763,232)
---------------
CONTRACTS TO SELL
Australia (Commonwealth of) Bonds,
10 yr. 6/15/07 686 56,023,278 66,467
CAC-40 10 Index 4/20/07 290 21,872,320 (380,316)
DAX Index 6/15/07 148 34,445,157 (1,428,927)
Euro-Bundesobligation, 5 yr. 6/7/07 196 28,324,290 200,426
FTSE 100 Index 6/15/07 488 60,749,119 (1,675,017)
Nikkei 225 Index 6/7/07 273 40,102,088 (1,017,145)
Standard & Poor's 500 E-Mini 6/15/07 92 6,583,520 (60,544)
Standard & Poor's/Toronto Stock
Exchange 60 Index 6/14/07 52 6,812,023 (203,381)
U.S. Treasury Nts., 10 yr. 6/20/07 3,809 411,848,125 594,249
United Kingdom Long Gilt 6/27/07 50 10,607,671 113,790
---------------
(2,990,398)
---------------
$ (8,753,630)
===============
50 | OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
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 or put options are noted
in the Statement of Investments where applicable. Contracts subject to call or
put, 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.
Written option activity for the six months ended March 31, 2007 was as follows:
CALL OPTIONS PUT OPTIONS
----------------------------- -------------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ---------------------------------------------------------------------------------------------
Options outstanding as of
September 30, 2006 -- $ -- 32,820,000 $ 556,532
Options written 9,613,620,000 578,178 9,712,160,000 1,306,895
Options closed or expired (6,358,620,000) (416,470) (2,800,980,000) (1,509,435)
Options exercised (1,617,000,000) (79,512) (5,306,000,000) (272,163)
---------------------------------------------------------------
Options outstanding as of
March 31, 2007 1,638,000,000 $ 82,196 1,638,000,000 $ 81,829
===============================================================
51 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS
A total return swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. One cash flow stream will typically be
based on a reference interest rate or index and the other on the total return of
a reference asset such as a security, a basket of securities, or an index. The
total return includes appreciation or depreciation on the reference asset, plus
any interest or dividend payments. Payments under the swap are based on an
agreed upon principal amount but since this principal amount is not exchanged,
it represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Total return swaps are marked to market daily using
primarily quotations from counterparties and brokers. The value of the contracts
is separately disclosed on the Statement of Assets and Liabilities. The
unrealized appreciation (depreciation) related to the change in the valuation of
the notional amount of the swap is combined with the amount due to (owed by) the
Fund at termination or settlement. The net change in this amount during the
period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur in the
reference asset).
As of March 31, 2007, the Fund had entered into the following total return swap
agreements:
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ---------------------------------------------------------------------------------------
Deutsche Bank AG:
Six-Month
$ 11,050,000 BBA LIBOR 5.25% 6/23/15 $ 1,943,126
Six-Month
16,760,000 BBA LIBOR 5.46 5/13/15 3,523,159
- ---------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
Six-Month
11,580,000 BBA LIBOR 5.10 1/14/15 2,411,666
Six-Month
11,580,000 BBA LIBOR 5.08 1/20/15 2,472,612
52 | OPPENHEIMER INTERNATIONAL BOND FUND
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ---------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
One-Month
BBA LIBOR USD
and if negative
the absolute value If positive the
of the Total Return Total Return of
of the MSCI Daily the MSCI Daily
Total Return Net Total Return Net
Belgium USD Belgium USD
5,395,703 Market Index. Market Index. 10/8/07 $ 315,851
If positive If negative, the
the Total Return absolute value of
of the INDF/NSE the Total Return
NIFTY Index INDF/NSE NIFTY
288,440,900INR 3/07 Future. Index 3/07 Future. 4/5/07 502,413
If negative, the
absolute value If positive,
of the Total the Total
Return of the Return of the
BMU/BOVESPA BMU/BOVESPA
12,836,983BRR 4/07 Index. 4/07 Index. 4/19/07 75,253
If positive, If negative, the
the Total Return absolute value of
of the INDF/NSE the Total Return
NIFTY Index INDF/NSE NIFTY
264,827,130INR 4/07 Future. Index 4/07 Future. 5/3/07 (60,929)
If positive, the
absolute value of
the Total Return If negative, the
of the Swiss Total Return of the
Market Index Swiss Market Index
7,095,787CH 6/07 Future. 6/07 Future. 6/20/07 (94,219)
If positive, the
absolute value of
the Total Return If negative, the
of the Swiss Total Return of the
Market Index Swiss Market Index
810,269CH 6/07 Future. 6/07 Future. 6/20/07 75
53 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS Continued
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ---------------------------------------------------------------------------------------------------------------
Morgan Stanley
International:
One-Month
BBA LIBOR GBP If positive, the
and if negative Total Return of a
the absolute value custom basket of
of the Total Return securities plus the
of a custom basket dividends from the
19,368,400GBP of securities. basket of securities. 10/9/07 $ 2,325,135
One-Month
BBA LIBOR EUR If positive, the
and if negative Total Return of a
the absolute value custom basket of
of the Total Return securities plus the
of a custom basket dividends from the
37,021,700EUR of securities. basket of securities. 12/2/07 2,295,090
One-Month If positive, the
BBA LIBOR JPY Total Return of a
and if negative the custom basket of
absolute value of securities plus the
the Total Return dividends from
of a custom basket the basket
4,201,443,500JPY of securities. of securities. 10/9/07 1,081,665
------------
$ 16,790,897
============
Notional amount is reported in U.S. Dollars (USD), except for those denoted in
the following currencies:
BRR Brazilian
Real
CHF Swiss Franc
EUR Euro
GBP British Pound Sterling
INR Indian Rupee
JPY Japanese Yen
Abbreviations are as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
BMU/BOVESPA Bovespa Index that trades on the Sao Paulo Stock Exchange
INDF/NSE NIFTY Indian National Stock Exchange Nifty
MSCI Morgan Stanley Capital International
54 | OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
9.INTEREST RATE SWAP CONTRACTS
An interest rate swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. Interest rate swaps involve the exchange
of rights to receive or commitments to pay interest. One cash flow stream will
typically be a floating rate payment based upon a specified index while the
other is typically a fixed rate. Payments under the swap are based on an agreed
upon principal amount but since this principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Interest rate swaps are marked to market daily using
primarily quotations from counterparties and brokers. The value of the contracts
is separately disclosed on the Statement of Assets and Liabilities. The
unrealized appreciation (depreciation) related to the change in the valuation of
the notional amount of the swap is combined with the amount due to (owed by) the
Fund at termination or settlement. The net change in this amount during the
period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations.
Swap agreements entail both interest rate risk and credit risk. There is a
risk, based on movements of interest rates in the future, the payments made by
the Fund under a swap agreement will be greater than the payments it received.
Credit risk arises from the possibility that the counterparty will default. If
the counterparty defaults, the Fund's loss will consist of the net amount of
contractual interest payments that the Fund has not yet received. The Manager
will monitor the creditworthiness of counterparties to the Fund's interest rate
swap transactions on an ongoing basis.
As of March 31, 2007, the Fund had entered into the following interest rate swap
agreements:
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- --------------------------------------------------------------------------------------------------
Barclays Bank plc:
49,540,000EUR 4.2200% EURIBOR 1/29/10 $ --
48,900,000EUR EURIBOR 4.1120% 6/15/09 (160,507)
BBA
33,420,000GBP 5.5525 LIBOR GBP 6/13/09 237,081
114,700,000MXN MXN TIIE 9.2700 7/17/26 1,292,337
406,840,000NOK NIBOR 5.3850 1/29/10 45,409
- --------------------------------------------------------------------------------------------------
Citigroup Global
Markets Holdings, Inc.:
Six-Month
16,830,000PLZ WIBO 5.5200 3/24/10 91,577
Six-Month
26,928,000PLZ WIBO 5.5500 3/25/10 154,252
489,400,000TWD 2.3200 TWD-telerate 6/27/11 (201,066)
55 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- --------------------------------------------------------------------------------------------------------------
Credit Suisse First
Boston, Inc. Six-Month
(Nassau Branch) 46,785,000PLZ WIBO 4.4800% 7/1/10 $ 132,843
- --------------------------------------------------------------------------------------------------------------
Credit Suisse First
Boston International:
112,580,000MXN 28-Day
MXN TIIE 10.0000 7/9/15 1,351,051
133,400,000MXN MXN TIIE 8.3000 12/17/26 316,322
- --------------------------------------------------------------------------------------------------------------
Six-Month
Deutsche Bank AG 2,387,000,000HUF 8.4400% BUBOR 7/4/11 (5,935)
- --------------------------------------------------------------------------------------------------------------
INR
MIBOR-OIS
Deutsche Bank AG, 5 yr. 490,200,000INR 7.175 Compound 6/27/11 365,179
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
16,060,000BRR BZDI 12.8400 1/2/14 278,934
26,730,000BRR BZDI 12.8700 1/2/14 475,470
34,800,000BRR BZDI 12.7300 1/2/14 551,048
45,260,000BRR BZDI 12.2900 1/2/15 452,037
53,240,000BRR BZDI 12.6700 1/4/10 509,583
53,240,000BRR BZDI 12.7100 1/4/10 530,342
53,700,000BRR BZDI 12.9200 1/2/14 992,302
75,174,396BRR BZDI 17.1800 1/2/08 2,464,450
99,100,000BRR BZDI 12.2600 1/2/15 946,119
159,910,000BRR BZDI 12.6100 1/4/10 1,440,060
CNY-
107,900,000CNY 4.0000 CFXSREPOFIX01 2/16/17 263,888
55,700,000MXN MXN TIIE 10.0000 6/24/15 661,296
60,800,000MXN MXN TIIE 9.3300 9/16/26 704,201
93,375,000MXN MXN TIIE 10.4300 5/29/15 1,326,836
93,375,000MXN MXN TIIE 10.3000 6/1/15 1,256,938
94,500,000MXN MXN TIIE 10.2900 6/4/15 1,266,240
120,050,000MXN MXN TIIE 10.2200 1/30/15 1,533,099
56 | OPPENHEIMER INTERNATIONAL BOND FUND
UNREALIZED
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION APPRECIATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
27,880,000BRR BZDI 14.0500% 1/2/12 $ 846,373
38,800,000MXN MXN TIIE 8.7000 2/5/16 180,294
48,030,000MXN MXN TIIE 9.4100 8/31/20 516,121
61,200,000MXN MXN TIIE 10.8500 3/5/15 996,273
91,750,000MXN MXN TIIE 9.2900 7/17/26 1,028,026
96,930,000MXN MXN TIIE 9.5000 8/28/25 1,262,332
100,000,000MXN MXN TIIE 10.7500 5/8/15 1,587,551
109,710,000MXN MXN TIIE 10.7000 5/8/15 1,711,223
140,720,000MXN MXN TIIE 9.1500 8/27/26 1,405,803
144,000,000MXN MXN TIIE 9.5100 8/26/25 1,869,061
289,270,000MXN MXN TIIE 9.8400 12/31/09 1,434,988
- ----------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank:
55,370,000BRR BZDI 13.9100 1/2/12 1,523,556
BUBOR
958,000,000HUF HUF 7.3200 2/28/12 20,968
114,500,000MXN MXN TIIE 9.7600 8/17/15 1,228,706
Three-Month
264,090,000ZAR 8.2900% JIBA 6/23/08 373,577
- ----------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing., Inc.:
The greater
of 0% and 8*
(-0.0031375-
(10 yr. CMS
Index + 2 yr.
CMS Index))
131,690,000 quarterly. $ 3,950,700 2/5/17 (3,437,750)
28-Day
111,440,000MXN MXN TIIE 9.9900 7/9/15 1,308,207
Six-Month
55,540,000PLZ WIBO 4.5300 7/5/10 123,855
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc. 269,500,000SEK STIBOR SEK 4.1825 11/12/12 (265,575)
- ----------------------------------------------------------------------------------------------------------------
Santander Central Hispano:
27,880,000BRR BZDI 14.0000 1/3/12 805,980
199,500,000MXN MXN TIIE 8.1200 1/26/17 272,055
---------------
$ 34,063,010
===============
57 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
Notional amount is reported in U.S. Dollars (USD), except for those denoted in
the following currencies:
BRR Brazilian Real
CNY Chinese Renminbi
EUR Euro
GBP British Pound Sterling
HUF Hungarian Forint
INR Indian Rupee
MXN Mexican Nuveo Peso
NOK Norwegian Krone
PLZ Polish Zloty
SEK Swedish Krone
TWD New Taiwan Dollar
ZAR South African Rand
Index abbreviations are as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
BUBOR Budapest Interbank Offered Rate
BZDI Brazil Interbank Deposit Rate
CFXSREPOFIX01 Chinese Renminbi 7 Days Repurchase Fixing Rates
EURIBOR Euro Interbank Offered Rate
JIBA South Africa Johannesburg Interbank Agreed Rate
MXN TIIE Mexican Peso-Interbank Equilibrium Interest Rate
MIBOR-OIS Mid Market Interest Rate for French Franc/Austrian
Schilling and India Swap Composites-Overnight Indexed Swap
NIBOR Norwegian Interbank Offered Rate
STIBOR Stockholm Interbank Offered Rate
WIBO Poland Warsaw Interbank Offer Bid Rate
- --------------------------------------------------------------------------------
10. CREDIT DEFAULT SWAP CONTRACTS
A credit default swap is a bilateral contract that enables an investor to buy or
sell protection against a defined-issuer credit event. The Fund may enter into
credit default swaps to hedge an existing position or to obtain exposure to a
security or market by purchasing or selling credit protection. The Fund may
enter into credit default swaps on a single security, or a basket of securities.
In a credit default swap contract, the purchaser of the contract will pay
a periodic interest fee, similar to an insurance premium, on the notional amount
of the swap contract to the counterparty (the seller of the contract). If there
is a credit event (for example, bankruptcy or a failure to timely pay interest
or principal), the purchaser will exercise the contract and will receive a
payment from the seller of the contract equal to the notional value of the
credit default swap contract less the value of the underlying security.
The periodic interest fees are accrued daily as a component of unrealized
appreciation (depreciation) and are recorded as realized loss (gain) upon
payment. In the event that the credit default swap is exercised due to a credit
event, the difference between the value of the underlying security and the
notional amount is recorded as realized gain (loss) and is included on the
Statement of Operations.
58 | OPPENHEIMER INTERNATIONAL BOND FUND
Credit default swaps are marked to market daily using primarily quotations
from counterparties and brokers. The value of the contracts is separately
disclosed on the Statement of Assets and Liabilities. The unrealized
appreciation (depreciation) related to the change in the valuation of the
notional amount of the swap is combined with the accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations.
Risks of credit default swaps include, but are not limited to, the cost of
paying for credit protection if there are no credit events, pricing transparency
when assessing the cost of a credit default swap, counterparty risk, adverse
pricing when purchasing bonds to satisfy its delivery obligation, and the need
to fund the delivery obligation (either cash or defaulted securities depending
on whether the Fund is the purchaser or seller of the credit default swap
contract, respectively).
Information regarding such credit default swaps as of March 31, 2007 is as
follows:
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Citigroup Global
Markets Holdings,
Inc. Hungary (Republic of) Buy $ 7,535 0.40% 12/20/15 $ -- $ (38,109)
- -----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
First Boston, Inc. NJSC Naftogaz Sell 8,215 3.25 4/20/11 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Deutsche
Bank AG:
Peru (Republic of) Sell 1,200 1.32 4/20/17 -- 5,540
Philippines
(Republic of the) Buy 14,000 3.69 9/20/15 -- (1,738,412)
- -----------------------------------------------------------------------------------------------------------------------------------
JPMorgan
Chase Bank:
Russian Federation Buy 550 2.40 10/9/13 -- (61,734)
Ukraine (Republic of) Sell 1,056 1.92 8/20/11 -- 27,059
- -----------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc.:
Colombia (Republic of) Buy 1,980 3.70 8/20/15 -- (307,522)
Dominican Republic Buy 7,970 3.25 6/20/11 -- (627,681)
Istanbul Bond Co
SA for Finansbank Sell 17,390 1.30 3/24/13 -- (288,438)
Turkey (Republic of) Sell 5,150 2.75 11/20/16 -- 111,437
Venezuela (Republic of) Buy 4,415 3.48 11/20/15 (473,599) (398,297)
---------------------------
$ (473,599) $ (3,316,157)
===========================
59 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11. CURRENCY SWAPS
A currency swap is an arrangement under which counterparties agree to exchange
different currencies equivalent to the notional value at contract inception and
reverse the exchange of the same notional values of those currencies at contract
termination. The contract may also include periodic exchanges of cash flows
based on a specified index or interest rate. Currency swaps are marked to market
daily using primarily quotations from counterparties and brokers. The value of
the contracts is separately disclosed on the Statement of Assets and
Liabilities. The unrealized appreciation (depreciation) related to the change in
the valuation of the notional amount of the swap is combined with the amount due
to (owed by) the Fund at termination or settlement. The net change in this
amount during the period is included on the Statement of Operations. The Fund
also records any periodic payments received from (paid to) the counterparty,
including at termination, under such contracts as realized gain (loss) on the
Statement of Operations.
Currency swap agreements entail exchange rate risk, interest rate risk and
credit risk. Due to the exchange of currency at contract termination, changes in
currency exchange rates may result in the Fund paying an amount greater than the
amount received. There is a risk, based on movements of interest rates or
indexes that the periodic payments made by the Fund will be greater than the
payments received. Credit risk arises from the possibility that the counterparty
will default on its payments to the Fund. The Manager monitors the
creditworthiness of counterparties on an ongoing basis.
As of March 31, 2007, the Fund entered into the following currency swap
arrangements:
NOTIONAL
SWAP AMOUNT PAID BY RECEIVED BY TERMINATION
COUNTERPARTY (000S) THE FUND THE FUND DATES VALUE
- -----------------------------------------------------------------------------------------
Merrill Lynch:
Three-Month
3,840TRY/USD BBA LIBOR 17.10% 2/6/12 $ 21,565
- -----------------------------------------------------------------------------------------
Credit Suisse:
Three-Month
7,370TRY/USD BBA LIBOR 17.25 2/7/12 87,651
Three-Month
11,105TRY/USD BBA LIBOR 17.30 2/9/12 73,287
Three-Month
18,590TRY/USD BBA LIBOR 16.75 2/26/12 (277,478)
----------
$ (94,975)
==========
Notional amount is reported in U.S. Dollars (USD), except for those denoted in
the following currency:
TRY Turkish Lira
Abbreviation is as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
60 | OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
12. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY
As of March 31, 2007, 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.
Securities that are illiquid or restricted are marked with the applicable
footnote on the Statement of Investments. Information concerning restricted
currency is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
CURRENCY DATES COST MARCH 31, 2007 APPRECIATION
- --------------------------------------------------------------------------------
Argentine Peso [ARP] 1/31/07-3/30/07 $4,441,805 $4,452,553 $10,748
- --------------------------------------------------------------------------------
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
securities, letters of credit or cash, against the loaned securities and
maintains collateral in an amount not less than 100% of the market value of the
loaned securities during the period of the loan. The market value of the loaned
securities is determined at the close of business each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion of the
interest earned from the collateral. 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. The Fund continues to receive the economic
benefit of interest or dividends paid on the securities loaned in the form of a
substitute payment received from the borrower. As of March 31, 2007, the Fund
had on loan securities valued at $166,196,385, which are included in the
Statement of Assets and Liabilities as "Investments, at value" and, when
applicable, as "Receivable for Investments sold." Collateral of $169,759,190 was
received for the loans, of which $25,744,907 was received in cash and
subsequently invested in approved investments. In addition, collateral of
$144,014,284 was also received in the form of securities.
61 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
14. RECENT ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax position that, in Management's judgment, will not be fully realized.
FIN 48 is effective for fiscal years beginning after December 15, 2006. As of
March 31, 2007, the Manager has evaluated the implications of FIN 48 and does
not currently anticipate a material impact to the Fund's financial statements.
The Manager will continue to monitor the Fund's tax positions prospectively for
potential future impacts.
In September 2006, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a
single authoritative definition of fair value, sets out a framework for
measuring fair value and expands disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. As of March 31, 2007, the Manager does not believe the
adoption of SFAS No. 157 will materially impact the financial statement amounts;
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements on changes in net
assets for the period.
62 | 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.
63 | 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 Fund's
investment advisory agreement (the "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 Agreement. The Board employs an independent consultant to prepare a
report that provides information, including comparative information, that the
Board requests for that purpose. In addition, the Board receives information
throughout the year regarding Fund services, fees, expenses and performance.
The Manager and the independent consultant provided information to the
Board on the following factors: (i) the nature, quality and extent of the
Manager's services, (ii) the investment performance of the Fund and the Manager,
(iii) the fees and expenses of the Fund, including comparative expense
information, (iv) the profitability of the Manager and its affiliates, including
an analysis of the cost of providing services, (v) whether economies of scale
are realized as the Fund grows and whether fee levels reflect these economies of
scale for Fund investors and (vi) other benefits to the Manager from its
relationship with the Fund. Outlined below is a summary of the principal
information considered by the Board as well as the Board's conclusions.
The Board was aware that there are alternatives to retaining the Manager.
NATURE, QUALITY AND EXTENT OF SERVICES. The Board considered information
about the nature and extent of the services provided to the Fund and information
regarding the Manager's key personnel who provide such services. The Manager's
duties include providing the Fund with 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; securities trading services;
oversight of third party service providers; monitoring compliance with
applicable Fund policies and procedures and adherence to the Fund's investment
restrictions. The Manager is responsible for providing certain administrative
services to the Fund as well. Those services include providing and supervising
all administrative and clerical personnel who are necessary in order to provide
effective corporate administration for the Fund; compiling and maintaining
records with respect to the Fund's operations; preparing and filing reports
required by the Securities and Exchange Commission; preparing periodic reports
regarding the operations of the Fund for its shareholders; preparing proxy
materials for shareholder meetings; and preparing the registration statements
required by Federal and state securities laws for the sale of the Fund's shares.
The Manager also provides the Fund with office space, facilities and equipment.
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
took account of the fact
64 | OPPENHEIMER INTERNATIONAL BOND FUND
that the Manager has had over forty years of experience as an investment adviser
and that its assets under management rank it among the top mutual fund managers
in the United States. The Board evaluated the Manager's administrative,
accounting, legal and compliance services, and information the Board has
received regarding the experience and professional qualifications of the
Manager's key personnel and the size and functions of its staff providing
investment management services to the Fund. 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 and quantitative fixed
income investment team and analysts. Mr. Steinmetz has been a portfolio manager
of the Fund since April 2004. The Board members also considered the totality of
their experiences with the Manager as directors or trustees of the Fund and
other funds advised by the Manager. In light of the foregoing, the Board
concluded that the Fund benefits from the services provided under the Agreement
as a result of the Manager's experience, reputation, personnel, operations, and
resources.
INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the
Manager provided information on the investment performance of the Fund and the
Manager at each Board meeting, including comparative performance information.
The Board also 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 retail front-end load and no-load
international income funds (including both funds advised by the Manager and
funds advised by other investment advisers). The Board noted that the Fund's
one-year, three-year, five-year and ten-year performance were better than its
peer group median.
COSTS OF SERVICES AND PROFITS REALIZED BY THE MANAGER. The Board
considered information regarding the Manager's costs in serving as the Fund's
investment adviser, including the costs associated with the personnel and
systems necessary to manage the Fund, and information regarding the Manager's
profitability from its relationship with the Fund. The Board reviewed the fees
paid to the Manager and the other expenses borne by the Fund. The Board also
evaluated the comparability of the fees charged and the services provided to the
Fund to the fees and services for other clients or accounts advised by the
Manager. The independent consultant provided comparative data in regard to the
fees and expenses of the Fund, other international income funds, global income
funds and other funds with comparable asset levels and distribution features.
The Board noted that the Fund's contractual and actual management fees are lower
than its peer group median.
65 | OPPENHEIMER INTERNATIONAL BOND FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
ECONOMIES OF SCALE. The Board reviewed whether the Manager may realize
economies of scale in managing and supporting the Fund and whether any economies
of scale would benefit the Fund's shareholders. The Board noted that the Fund
currently has management fee breakpoints, which are intended to share with
shareholders any economies of scale that may exist as the Fund grows.
OTHER BENEFITS TO THE MANAGER. In addition to considering the profits
realized by the Manager, the Board considered information that was 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. The Board also 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 quality services to
the Fund and its shareholders.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and to the independent Trustees. Fund counsel and the independent
Trustees' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
decided to continue the 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
considered the Agreement, including the management fee, in light of all of the
surrounding circumstances.
66 | 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. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES 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 FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations by
business and personal contacts of current Board members and by executive
search firms which the Committee may engage from time to time and may also
consider shareholder recommendations. The Committee may consider the advice
and recommendation of the Funds' investment manager and its affiliates in
making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met by
a trustee nominee. In evaluating trustee nominees, the Committee considers,
among other things, an individual's background, skills, and experience;
whether the individual is an "interested person" as defined in the
Investment Company Act of 1940; and
whether the individual would be deemed an "audit committee financial expert"
within the meaning of applicable SEC rules. The Committee also considers
whether the individual's background, skills, and experience will complement
the background, skills, and experience of other nominees and will contribute
to the Board. There are no differences in the manner in which the Committee
evaluates nominees for trustees based on whether the nominee is recommended
by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates to
present to the Board and, in such cases where required, to shareholders.
Recommendations for trustee nominees should, at a minimum, be accompanied by
the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person" as
defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in a
proxy statement concerning the person if he or she was nominated; and
o the name and address of the person submitting the recommendation and, if
that person is a shareholder, the period for which that person held Fund
shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under the
Investment Company Act of 1940. In addition, certain other relationships
with Massachusetts Mutual Life Insurance Company or its subsidiaries, with
registered broker-dealers, or with the Funds' outside legal counsel may
cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must be
disclosed under SEC and stock exchange rules and to determine whether the
individual is subject to any statutory disqualification from serving as a
trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the 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 03/31/2007, the registrant's principal executive officer and
principal financial officer found the registrant's disclosure controls and
procedures to provide reasonable assurances that information required to be
disclosed by the 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.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Not applicable to semiannual reports.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
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: 05/14/2007
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: 05/14/2007
By: /s/ Brian W. Wixted
-------------------
Brian W. Wixted
Principal Financial Officer
Date: 05/14/2007