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: 09/30/2007
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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 24.3%
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United Kingdom 7.6
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Germany 7.5
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Japan 7.0
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Brazil 5.7
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Italy 4.9
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France 4.6
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Australia 3.5
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Russia 3.3
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Canada 3.0
Portfolio holdings and allocations are subject to change. Percentages are as of
September 30, 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 32.6%
United States/Canada 27.3
Latin America 14.4
Asia 14.2
Emerging Europe 5.6
Middle East/Africa 5.5
Supranational 0.4
Portfolio holdings and allocations are subject to change. Percentages are as
of September 30, 2007, and are based on the total market value of investments.
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9 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED SEPTEMBER 30, 2007, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The Fund continued to fare quite
well. The Fund's Class A shares (without sales charge) significantly
outperformed its benchmark, the Citigroup Non-U.S. Dollar World Government Bond
Index, 15.18% versus 9.50%, respectively. The Fund's Class A shares (without
sales charge) ranked 3rd out of 71 funds in the Lipper International Income
Funds category over the reporting period, significantly outperforming the
average return of the category, which was 8.69%.
Robust total returns from emerging-market bonds combined to drive the
Fund's strong relative performance over the reporting period. We focused
primarily on markets where the rate of inflation and long-term bond yields have
been falling due to improved credit and economic fundamentals. Among Latin
American markets, Brazil and, to a lesser extent, Mexico have produced
attractive returns as these nations drew down debt, reduced their budget
deficits and became more significant participants in world trade. In Eastern
Europe, Turkey has prospered through reforms designed to help it qualify for
inclusion in the European Union. We also have found attractive opportunities in
bonds from Russia and other parts of the former Soviet Union.
Among developed markets, we have maintained relatively light exposure to
Japan, where bond yields have remained very low in a persistently weak economic
environment. We also have largely avoided bonds and currencies of industrialized
commodity producers, such as Canada, Australia and New Zealand, where we believe
high current account deficits may lead to heightened volatility. Otherwise, we
have attempted to diversify holdings across the developed nations of Europe,
where robust economic growth has led to higher bond yields. To manage risks in
this environment, we generally have focused on government securities, and we
have maintained a neutral duration.
Finally, the Fund benefited during the reporting period from unhedged
currency exposure as the U.S. dollar continued to deteriorate relative to most
foreign currencies.
We currently expect global economic growth to remain strong, particularly
in the emerging markets, and we have seen no evidence that the decline of the
U.S. dollar is complete. However, we are aware that some emerging markets have
already posted impressive rallies, and further gains may be more modest.
Accordingly, to reduce risks, we recently trimmed the Fund's positions in some
emerging markets.
Please remember that investing in foreign markets entails additional
risks, including the risks associated with currency fluctuations and political
uncertainties, as described in the prospectus.
10 | OPPENHEIMER INTERNATIONAL BOND FUND
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until September 30, 2007. In the case of Class A, Class B and Class C
shares, performance is measured over a ten fiscal year period. In the case of
Class N shares, performance is measured from inception of the Class on March 1,
2001. In the case of Class Y shares, performance is measured from inception of
the Class on September 27, 2004. The Fund's performance reflects the deduction
of the maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B, Class C and Class N shares, and reinvestments
of all dividends and capital gains distributions.
The Fund's performance is compared to the Citigroup Non-U.S. Dollar World
Government Bond Index, a subset of the Citigroup World Government Bond Index.
The Citigroup Non-U.S. Dollar World Government Bond Index is a market
capitalization weighted benchmark that tracks the performance of government bond
markets including Australia, Canada, Japan and various European countries. Thus,
the index does not reflect the performance of the fixed income markets in either
the United States or in any emerging market countries. In addition, it is
comprised of only government bonds and does not reflect the performance of
corporate bonds. Index performance reflects the reinvestment of dividends but
does not consider the effect of capital gains or transaction costs, and none of
the data in the graphs that follow shows the effect of taxes. The Fund's
performance reflects the effects of Fund business and operating expenses. While
index comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited to the
securities in the indices.
11 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class A)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Citigroup Non-U.S. Dollar
Oppenheimer International World Government Bond
Bond Fund (Class A) Index
09/30/1997 $ 9,525 $10,000
12/31/1997 $ 9,203 $ 9,861
03/31/1998 $ 9,332 $ 9,902
06/30/1998 $ 9,240 $10,067
09/30/1998 $ 8,335 $11,035
12/31/1998 $ 8,802 $11,616
03/31/1999 $ 8,784 $11,054
06/30/1999 $ 9,085 $10,557
09/30/1999 $ 9,217 $11,203
12/31/1999 $ 9,771 $11,027
03/31/2000 $10,174 $10,899
06/30/2000 $10,057 $10,812
09/30/2000 $10,040 $10,323
12/31/2000 $10,440 $10,736
03/31/2001 $10,170 $10,210
06/30/2001 $10,215 $10,009
09/30/2001 $10,180 $10,785
12/31/2001 $10,664 $10,356
03/31/2002 $10,893 $10,163
06/30/2002 $11,769 $11,583
09/30/2002 $11,888 $11,912
12/31/2002 $12,883 $12,634
03/31/2003 $13,268 $13,105
06/30/2003 $14,302 $13,656
09/30/2003 $15,058 $14,032
12/31/2003 $16,218 $14,974
03/31/2004 $17,048 $15,209
06/30/2004 $16,153 $14,694
09/30/2004 $16,799 $15,177
12/31/2004 $18,741 $16,791
03/31/2005 $18,213 $16,270
06/30/2005 $19,007 $15,833
09/30/2005 $19,408 $15,654
12/31/2005 $19,358 $15,245
03/31/2006 $19,840 $15,216
06/30/2006 $19,305 $15,830
09/30/2006 $20,034 $15,970
12/31/2006 $21,031 $16,304
03/31/2007 $21,590 $16,481
06/30/2007 $22,020 $16,178
09/30/2007 $23,075 $17,488
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
9/30/07
1-Year 9.71% 5-Year 13.08% 10-Year 8.72%
12 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class B)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Citigroup Non-U.S. Dollar
Oppenheimer International World Government Bond
Bond Fund (Class B) Index
09/30/1997 $10,000 $10,000
12/31/1997 $ 9,645 $ 9,861
03/31/1998 $ 9,762 $ 9,902
06/30/1998 $ 9,648 $10,067
09/30/1998 $ 8,684 $11,035
12/31/1998 $ 9,155 $11,616
03/31/1999 $ 9,119 $11,054
06/30/1999 $ 9,415 $10,557
09/30/1999 $ 9,534 $11,203
12/31/1999 $10,091 $11,027
03/31/2000 $10,490 $10,899
06/30/2000 $10,326 $10,812
09/30/2000 $10,291 $10,323
12/31/2000 $10,707 $10,736
03/31/2001 $10,410 $10,210
06/30/2001 $10,436 $10,009
09/30/2001 $10,379 $10,785
12/31/2001 $10,826 $10,356
03/31/2002 $11,065 $10,163
06/30/2002 $11,934 $11,583
09/30/2002 $12,030 $11,912
12/31/2002 $12,985 $12,634
03/31/2003 $13,377 $13,105
06/30/2003 $14,363 $13,656
09/30/2003 $15,130 $14,032
12/31/2003 $16,295 $14,974
03/31/2004 $17,129 $15,209
06/30/2004 $16,230 $14,694
09/30/2004 $16,879 $15,177
12/31/2004 $18,830 $16,791
03/31/2005 $18,300 $16,270
06/30/2005 $19,097 $15,833
09/30/2005 $19,500 $15,654
12/31/2005 $19,450 $15,245
03/31/2006 $19,935 $15,216
06/30/2006 $19,397 $15,830
09/30/2006 $20,129 $15,970
12/31/2006 $21,132 $16,304
03/31/2007 $21,692 $16,481
06/30/2007 $22,124 $16,178
09/30/2007 $23,185 $17,488
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
9/30/07
1-Year 9.26% 5-Year 12.98% 10-Year 8.77%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE
10-YEAR RETURN FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER
CONVERSION. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 17 FOR FURTHER
INFORMATION.
13 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class C)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Citigroup Non-U.S. Dollar
Oppenheimer International World Government Bond
Bond Fund (Class C) Index
09/30/1997 $10,000 $10,000
12/31/1997 $ 9,645 $ 9,861
03/31/1998 $ 9,762 $ 9,902
06/30/1998 $ 9,648 $10,067
09/30/1998 $ 8,684 $11,035
12/31/1998 $ 9,156 $11,616
03/31/1999 $ 9,120 $11,054
06/30/1999 $ 9,416 $10,557
09/30/1999 $ 9,535 $11,203
12/31/1999 $10,092 $11,027
03/31/2000 $10,491 $10,899
06/30/2000 $10,328 $10,812
09/30/2000 $10,293 $10,323
12/31/2000 $10,709 $10,736
03/31/2001 $10,411 $10,210
06/30/2001 $10,437 $10,009
09/30/2001 $10,381 $10,785
12/31/2001 $10,828 $10,356
03/31/2002 $11,067 $10,163
06/30/2002 $11,936 $11,583
09/30/2002 $12,031 $11,912
12/31/2002 $12,986 $12,634
03/31/2003 $13,349 $13,105
06/30/2003 $14,365 $13,656
09/30/2003 $15,097 $14,032
12/31/2003 $16,231 $14,974
03/31/2004 $17,062 $15,209
06/30/2004 $16,105 $14,694
09/30/2004 $16,720 $15,177
12/31/2004 $18,623 $16,791
03/31/2005 $18,061 $16,270
06/30/2005 $18,816 $15,833
09/30/2005 $19,177 $15,654
12/31/2005 $19,091 $15,245
03/31/2006 $19,531 $15,216
06/30/2006 $19,000 $15,830
09/30/2006 $19,649 $15,970
12/31/2006 $20,593 $16,304
03/31/2007 $21,102 $16,481
06/30/2007 $21,484 $16,178
09/30/2007 $22,476 $17,488
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
9/30/07
1-Year 13.39% 5-Year 13.31% 10-Year 8.44%
14 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class N)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Citigroup Non-U.S. Dollar
Oppenheimer International World Government Bond
Bond Fund (Class N) Index
03/01/2001 $10,000 $10,000
03/31/2001 $ 9,706 $ 9,598
06/30/2001 $ 9,747 $ 9,409
09/30/2001 $ 9,712 $10,139
12/31/2001 $10,144 $ 9,736
03/31/2002 $10,380 $ 9,554
06/30/2002 $11,208 $10,889
09/30/2002 $11,287 $11,198
12/31/2002 $12,225 $11,877
03/31/2003 $12,583 $12,320
06/30/2003 $13,552 $12,838
09/30/2003 $14,257 $13,192
12/31/2003 $15,315 $14,077
03/31/2004 $16,115 $14,298
06/30/2004 $15,227 $13,814
09/30/2004 $15,824 $14,268
12/31/2004 $17,669 $15,785
03/31/2005 $17,122 $15,296
06/30/2005 $17,852 $14,884
09/30/2005 $18,240 $14,716
12/31/2005 $18,141 $14,332
03/31/2006 $18,605 $14,304
06/30/2006 $18,083 $14,882
09/30/2006 $18,748 $15,013
12/31/2006 $19,630 $15,327
03/31/2007 $20,162 $15,494
06/30/2007 $20,508 $15,209
09/30/2007 $21,505 $16,440
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
9/30/07
1-Year 13.71% 5-Year 13.76% Since Inception (3/1/01) 12.34%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE
10-YEAR RETURN FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER
CONVERSION. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 17 FOR FURTHER
INFORMATION.
15 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class Y)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Citigroup Non-U.S. Dollar
Oppenheimer International World Government Bond
Bond Fund (Class Y) Index
09/27/2004 $10,000 $10,000
09/30/2004 $10,092 $10,000
12/31/2004 $11,270 $11,064
03/31/2005 $10,942 $10,721
06/30/2005 $11,449 $10,432
09/30/2005 $11,702 $10,315
12/31/2005 $11,684 $10,045
03/31/2006 $11,987 $10,026
06/30/2006 $11,675 $10,431
09/30/2006 $12,129 $10,523
12/31/2006 $12,746 $10,743
03/31/2007 $13,096 $10,859
06/30/2007 $13,370 $10,660
09/30/2007 $14,024 $11,523
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 9/30/07
1-Year 15.63% 5-Year N/A Since Inception (9/27/04) 11.90%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE
10-YEAR RETURN FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER
CONVERSION. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 17 FOR FURTHER
INFORMATION.
16 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES
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Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. 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.
17 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES
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CLASS Y shares of the Fund were first publicly offered on 9/27/04. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
18 | 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 September 30, 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
19 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND EXPENSES Continued
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the Statement of Additional Information). Therefore, the "hypothetical" lines of
the table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(4/1/07) (9/30/07) SEPTEMBER 30, 2007
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Class A Actual $1,000.00 $1,068.80 $4.78
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Class A Hypothetical 1,000.00 1,020.46 4.67
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Class B Actual 1,000.00 1,064.50 9.15
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Class B Hypothetical 1,000.00 1,016.24 8.93
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Class C Actual 1,000.00 1,065.10 8.58
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Class C Hypothetical 1,000.00 1,016.80 8.38
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Class N Actual 1,000.00 1,066.60 7.02
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Class N Hypothetical 1,000.00 1,018.30 6.85
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,070.90 2.75
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,022.41 2.69
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 183/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended September 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- -------------------------------
Class A 0.92%
- -------------------------------
Class B 1.76
- -------------------------------
Class C 1.65
- -------------------------------
Class N 1.35
- -------------------------------
Class Y 0.53
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements 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 and reduction
to custodian expenses, if applicable.
- --------------------------------------------------------------------------------
20 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS September 30, 2007
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--0.0%
- -------------------------------------------------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--3.8%
- -------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 4.125%, 8/31/12 3,4 (Cost $324,231,609) 325,350,000 324,028,428
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--53.8%
- -------------------------------------------------------------------------------------------------------------------------
ARGENTINA--0.6%
Argentina (Republic of) Bonds:
2%, 9/30/14 [ARP] 21,270,000 6,847,039
5.374%, 8/3/12 2 5,648,125 5,067,368
7%, 10/3/15 2,450,000 2,014,513
Series GDP, 7.24%, 12/15/35 5 14,920,000 1,947,060
Series V, 7%, 3/28/11 18,993,000 17,838,651
Series VII, 7%, 9/12/13 4,700,000 4,093,504
- -------------------------------------------------------------------------------------------------------------------------
Central Bank of Argentina Bonds, 2%, 2/4/18 [ARP] 22,320,478 9,315,850
- -------------------------------------------------------------------------------------------------------------------------
Neuquen (Province Del) Sr. Sec. Nts., 8.656%, 10/18/14 6 3,375,000 3,425,625
---------------
50,549,610
- -------------------------------------------------------------------------------------------------------------------------
AUSTRALIA--3.7%
New South Wales Treasury Corp. Sr. Unsec. Nts.:
6%, 10/1/09 [AUD] 250,640,000 219,434,492
Series 17RG, 5.50%, 3/1/17 [AUD] 99,125,000 81,410,128
- -------------------------------------------------------------------------------------------------------------------------
Queensland Treasury Corp. Unsec. Nts., Series 09G, 6%, 7/14/09 [AUD] 15,660,000 13,737,334
---------------
314,581,954
- -------------------------------------------------------------------------------------------------------------------------
AUSTRIA--0.6%
Austria (Republic of) Unsec. Unsub. Nts., Series E, 4%, 9/15/16 [EUR] 39,996,000 55,402,921
- -------------------------------------------------------------------------------------------------------------------------
BELGIUM--2.2%
Belgium (Kingdom of) Bonds, Series 44, 5%, 3/28/35 [EUR] 37,375,000 55,603,900
- -------------------------------------------------------------------------------------------------------------------------
Belgium (Kingdom of) Treasury Bills, 4.043%, 11/15/07 5 [EUR] 93,165,000 132,230,958
---------------
187,834,858
- -------------------------------------------------------------------------------------------------------------------------
BRAZIL--1.1%
Brazil (Federal Republic of) Bonds:
6%, 1/17/17 7 16,320,000 16,581,120
8%, 1/15/18 14,015,000 15,675,778
8.75%, 2/4/25 2,135,000 2,738,138
8.875%, 10/14/19 23,654,000 29,508,365
10.50%, 7/14/14 17,650,000 22,371,375
- -------------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Nts., 7.875%, 3/7/15 8 4,000,000 4,528,000
---------------
91,402,776
21 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
BULGARIA--0.0%
Bulgaria (Republic of) Bonds:
8.25%, 1/15/15 $ 1,500,000 $ 1,751,250
8.25%, 1/15/15 6 1,440,000 1,681,200
---------------
3,432,450
- -------------------------------------------------------------------------------------------------------------------------
CANADA--3.2%
Canada (Government of) Treasury Bills:
4.283%, 11/1/07 5 [CAD] 81,925,000 82,081,083
4.342%, 12/27/07 5 [CAD] 191,305,000 190,496,236
---------------
272,577,319
- -------------------------------------------------------------------------------------------------------------------------
COLOMBIA--0.6%
Bogota Distrio Capital Sr. Bonds, 9.75%, 7/26/28 6 [COP] 16,413,000,000 7,824,733
- -------------------------------------------------------------------------------------------------------------------------
Colombia (Republic of) Bonds:
7.375%, 9/18/37 3,390,000 3,737,475
10.75%, 1/15/13 12,180,000 14,920,500
12%, 10/22/15 [COP] 19,665,000,000 10,942,366
- -------------------------------------------------------------------------------------------------------------------------
Colombia (Republic of) Nts.:
8.25%, 12/22/14 6,655,000 7,520,150
11.75%, 3/1/10 [COP] 7,228,000,000 3,739,512
---------------
48,684,736
- -------------------------------------------------------------------------------------------------------------------------
COSTA RICA--0.0%
Costa Rica (Republic of) Unsec. Bonds, 9.995%, 8/1/20 2,730,000 3,552,413
- -------------------------------------------------------------------------------------------------------------------------
DENMARK--0.5%
Denmark (Kingdom of) Bonds:
4%, 11/15/10 [DKK] 78,390,000 14,875,042
4%, 11/15/15 [DKK] 57,085,000 10,641,839
7%, 11/10/24 [DKK] 20,740,000 5,069,238
- -------------------------------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Nts., 4%, 8/15/08 [DKK] 82,385,000 15,700,410
---------------
46,286,529
- -------------------------------------------------------------------------------------------------------------------------
DOMINICAN REPUBLIC--0.0%
Dominican Republic Unsec. Unsub. Bonds, Series REGS, 9.04%, 1/23/18 2,705,118 3,059,488
- -------------------------------------------------------------------------------------------------------------------------
EGYPT--0.1%
Egypt (The Arab Republic of) Unsec. Unsub. Bonds, 8.75%, 7/15/12 6 [EGP] 54,260,000 9,953,736
- -------------------------------------------------------------------------------------------------------------------------
EL SALVADOR--0.1%
El Salvador (Republic of) Bonds:
7.625%, 9/21/34 6 1,185,000 1,344,975
7.65%, 6/15/35 6 7,740,000 8,707,500
---------------
10,052,475
- -------------------------------------------------------------------------------------------------------------------------
FRANCE--4.9%
France (Government of) Obligations Assimilables du Tresor Bonds:
3.25%, 4/25/16 [EUR] 142,130,000 186,582,485
22 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
FRANCE Continued
France (Government of) Obligations Assimilables du Tresor Bonds:
Continued
4%, 10/25/38 [EUR] 122,300,000 $ 155,709,321
- -------------------------------------------------------------------------------------------------------------------------
France (Government of) Treasury Bills, 3.99%, 10/18/07 5 [EUR] 50,550,000 71,955,307
---------------
414,247,113
- -------------------------------------------------------------------------------------------------------------------------
GERMANY--8.0%
Germany (Federal Republic of) Bonds:
Series 03, 3.75%, 7/4/13 [EUR] 83,080,000 115,742,646
Series 05, 4%, 1/4/37 [EUR] 147,735,000 191,074,448
- -------------------------------------------------------------------------------------------------------------------------
Germany (Federal Republic of) Treasury Bills, Series 0707,
4.108%, 1/16/08 5 [EUR] 263,480,000 371,443,343
---------------
678,260,437
- -------------------------------------------------------------------------------------------------------------------------
GHANA--0.1%
Ghana (Republic of) Bonds, 8.50%, 10/4/17 1,9 6,100,000 6,222,000
- -------------------------------------------------------------------------------------------------------------------------
GREECE--1.5%
Greece (Republic of) Bonds, 4.60%, 5/20/13 [EUR] 86,700,000 124,897,748
- -------------------------------------------------------------------------------------------------------------------------
GUATEMALA--0.0%
Guatemala (Republic of) Nts.:
10.25%, 11/8/11 6 160,000 184,800
10.25%, 11/8/11 525,000 606,375
---------------
791,175
- -------------------------------------------------------------------------------------------------------------------------
INDONESIA--0.2%
Indonesia (Republic of) Nts.:
6.75%, 3/10/14 6 5,170,000 5,338,025
7.25%, 4/20/15 6 7,450,000 7,915,625
- -------------------------------------------------------------------------------------------------------------------------
Indonesia (Republic of) Unsec. Nts., 8.50%, 10/12/35 6 6,540,000 7,733,550
---------------
20,987,200
- -------------------------------------------------------------------------------------------------------------------------
ISRAEL--0.3%
Israel (State of) Bonds, Series 2682, 7.50%, 3/31/14 [ILS] 107,990,000 29,776,275
- -------------------------------------------------------------------------------------------------------------------------
ITALY--4.6%
Italy (Republic of) Nts., Certificati di Credito del Tesoro, 4.40%, 7/1/09 2 [EUR] 271,860,000 389,261,932
- -------------------------------------------------------------------------------------------------------------------------
JAPAN--7.4%
Japan (Government of) Bonds:
2 yr., Series 252, 0.80%, 1/15/09 9 [JPY] 27,807,000,000 242,130,182
10 yr., Series 245, 0.90%, 12/20/12 9 [JPY] 12,976,000,000 111,140,714
10 yr., Series 268, 1.50%, 3/20/15 9 [JPY] 13,780,000,000 120,776,694
30 yr., Series 25, 2.30%, 12/20/36 9 [JPY] 18,695,000,000 158,464,396
---------------
632,511,986
- -------------------------------------------------------------------------------------------------------------------------
MALAYSIA--0.6%
Johor Corp. Malaysia (Government of) Bonds, Series P3, 1%, 7/31/12 1 [MYR] 107,980,000 36,759,149
- -------------------------------------------------------------------------------------------------------------------------
Malaysia (Government of) Bonds, Series 2/05, 4.72%, 9/30/15 [MYR] 39,730,000 12,388,298
---------------
49,147,447
23 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
MEXICO--0.0%
Mexican Williams Sr. Nts., 6.63%, 11/15/08 1,2 $ 500,000 $ 504,500
- -------------------------------------------------------------------------------------------------------------------------
NIGERIA--0.6%
Nigeria (Federal Republic of) Bonds, Series 5Y, 13.50%, 9/11/11 [NGN] 437,980,000 3,568,208
- -------------------------------------------------------------------------------------------------------------------------
Nigeria (Federal Republic of) Nts.:
Series 3Y2S, 12.50%, 2/24/09 [NGN] 356,000,000 3,004,390
Series 3Y7S, 17%, 12/16/08 [NGN] 570,000,000 5,030,751
Series 7Y, 9.20%, 6/29/14 [NGN] 650,000,000 5,178,714
- -------------------------------------------------------------------------------------------------------------------------
Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 320,171 288,086
- -------------------------------------------------------------------------------------------------------------------------
Nigeria (Federal Republic of) Treasury Bonds:
Series 5Y13, 12.99%, 9/29/11 [NGN] 866,700,000 7,839,758
Series 7Y16, 11.99%, 12/22/13 [NGN] 1,422,500,000 12,725,240
Series 7YR, 12.74%, 10/27/13 [NGN] 1,050,600,000 9,650,080
---------------
47,285,227
- -------------------------------------------------------------------------------------------------------------------------
PANAMA--0.3%
Panama (Republic of) Bonds:
6.70%, 1/26/36 4,650,000 4,801,125
7.25%, 3/15/15 15,905,000 17,097,875
8.875%, 9/30/27 3,255,000 4,143,062
9.375%, 4/1/29 1,650,000 2,219,250
---------------
28,261,312
- -------------------------------------------------------------------------------------------------------------------------
PERU--1.3%
Peru (Republic of) Bonds:
7.84%, 8/12/20 [PEN] 86,585,000 31,613,420
9.91%, 5/5/15 [PEN] 128,732,000 50,982,379
Series 7, 8.60%, 8/12/17 [PEN] 56,965,000 21,556,206
Series 8-1, 12.25%, 8/10/11 [PEN] 18,633,000 7,306,105
- -------------------------------------------------------------------------------------------------------------------------
Peru (Republic of) Sr. Nts., 4.533%, 2/28/16 5 2,350,699 1,428,449
---------------
112,886,559
- -------------------------------------------------------------------------------------------------------------------------
PHILIPPINES--0.3%
Philippines (Republic of the) Bonds, 8%, 1/15/16 2,910,000 3,266,475
- -------------------------------------------------------------------------------------------------------------------------
Philippines (Republic of the) Unsec. Bonds:
7.75%, 1/14/31 3,914,000 4,354,325
9%, 2/15/13 12,145,000 13,906,025
---------------
21,526,825
- -------------------------------------------------------------------------------------------------------------------------
POLAND--0.4%
Poland (Republic of) Bonds:
Series DS1013, 5%, 10/24/13 [PLZ] 79,840,000 29,271,394
Series WS0922, 5.75%, 9/23/22 [PLZ] 10,000,000 3,780,532
---------------
33,051,926
24 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
SPAIN--2.2%
Spain (Government of) Bonds, 3.80%, 1/31/17 [EUR] 30,885,000 $ 41,995,391
- -------------------------------------------------------------------------------------------------------------------------
Spain (Government of) Treasury Bills, 3.758%, 10/19/07 5 [EUR] 99,975,000 142,304,959
---------------
184,300,350
- -------------------------------------------------------------------------------------------------------------------------
THE NETHERLANDS--0.9%
Netherlands (Kingdom of the) Bonds, 5%, 7/15/11 [EUR] 54,140,000 79,408,524
- -------------------------------------------------------------------------------------------------------------------------
TURKEY--1.8%
Turkey (Republic of) Bonds:
6.75%, 4/3/18 9 20,035,000 20,035,000
7%, 9/26/16 13,755,000 14,081,681
- -------------------------------------------------------------------------------------------------------------------------
Turkey (Republic of) Nts.:
7.25%, 3/15/15 8,615,000 9,024,213
16%, 3/7/12 [TRY] 106,080,000 88,616,613
17.864%, 8/13/08 5 [TRY] 28,615,000 20,595,403
---------------
152,352,910
- -------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM--4.9%
United Kingdom Treasury Bonds:
5%, 3/7/08 10 [GBP] 61,145,000 124,958,432
6%, 12/7/28 [GBP] 70,060,000 166,453,420
- -------------------------------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 4%, 3/7/09 [GBP] 63,050,000 127,200,369
---------------
418,612,221
- -------------------------------------------------------------------------------------------------------------------------
URUGUAY--0.8%
Uruguay (Oriental Republic of) Bonds:
4.25%, 4/5/27 [UYU] 248,600,000 11,753,324
7.625%, 3/21/36 17,825,000 19,117,313
- -------------------------------------------------------------------------------------------------------------------------
Uruguay (Oriental Republic of) Unsec. Bonds:
5%, 9/14/18 [UYU] 403,060,000 21,546,538
8%, 11/18/22 12,685,000 14,143,775
---------------
66,560,950
---------------
Total Foreign Government Obligations (Cost $4,343,827,546) 4,588,225,882
- -------------------------------------------------------------------------------------------------------------------------
LOAN PARTICIPATIONS--0.1%
- -------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston International, Export-Import Bank of Ukraine
Loan Participation Nts., 8.40%, 2/9/16 5,890,000 5,713,300
- -------------------------------------------------------------------------------------------------------------------------
Dali Capital plc/Bank of Moscow Loan Participation Nts., Series 28,
Tranche 1, 7.25%, 11/25/09 [RUR] 72,600,000 2,906,155
- -------------------------------------------------------------------------------------------------------------------------
Dali Capital SA (ROSBANK) Loan Participation Nts., Series 23, Tranche
1, 8%, 9/30/09 [RUR] 71,200,000 2,857,074
---------------
Total Loan Participations (Cost $11,140,331) 11,476,529
25 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--13.1%
- -------------------------------------------------------------------------------------------------------------------------
AES Dominicana Energia Finance SA, 11% Sr. Nts., 12/13/15 6 $ 7,923,000 $ 8,140,883
- -------------------------------------------------------------------------------------------------------------------------
AES Panama SA, 6.35% Sr. Nts., 12/21/16 6 2,225,000 2,184,267
- -------------------------------------------------------------------------------------------------------------------------
African Development Bank, 9.25% Bonds, 1/18/08 [NGN] 1,289,400,000 10,982,557
- -------------------------------------------------------------------------------------------------------------------------
Alrosa Finance SA:
8.875% Nts., 11/17/14 7,010,000 7,724,319
8.875% Nts., 11/17/14 6 7,625,000 8,401,988
- -------------------------------------------------------------------------------------------------------------------------
AmBev International Finance Co. Ltd., 9.50% Bonds, 7/24/17 6 [BRR] 27,130,000 13,727,810
- -------------------------------------------------------------------------------------------------------------------------
America Movil SAB de CV, 8.46% Bonds, 12/18/36 6 [MXN] 140,800,000 12,655,702
- -------------------------------------------------------------------------------------------------------------------------
Autopistas del Nordeste Cayman Ltd., 9.39% Nts., 1/15/26 6 9,146,394 9,283,590
- -------------------------------------------------------------------------------------------------------------------------
BA Covered Bond Issuer, 4.25% Sec. Nts., 4/5/17 [EUR] 34,020,000 46,331,021
- -------------------------------------------------------------------------------------------------------------------------
Banco Bilbao Vizcaya Argentaria SA, 4.25% Sec. Bonds, 7/15/14 [EUR] 32,820,000 45,456,325
- -------------------------------------------------------------------------------------------------------------------------
Banco BMG SA, 9.15% Nts., 1/15/16 6 9,710,000 10,316,875
- -------------------------------------------------------------------------------------------------------------------------
Banco de Credito del Peru, 6.95% Sub. Nts., 11/7/21 2,6 2,750,000 2,695,000
- -------------------------------------------------------------------------------------------------------------------------
Banco Hipotecario SA, 9.75% Sr. Unsec. Nts., 4/27/16 6 4,325,000 4,292,563
- -------------------------------------------------------------------------------------------------------------------------
Banco Invex SA, 24.891% Mtg. Backed Certificates,
Series 062U, 3/13/34 2,11 [MXN] 32,056,600 11,726,008
- -------------------------------------------------------------------------------------------------------------------------
C10 Capital SPV Ltd., 6.722% Unsec. Perpetual Debs. 6,12 6,700,000 6,446,432
- -------------------------------------------------------------------------------------------------------------------------
Cloverie plc, 9.838% Sec. Nts., Series 2005-93, 12/20/10 1,2 3,600,000 3,907,800
- -------------------------------------------------------------------------------------------------------------------------
Coriolanus Ltd., 10.62% Sec. Nts., 8/10/10 1 16,300,000 15,631,700
- -------------------------------------------------------------------------------------------------------------------------
Eirles Two Ltd., 6.793% Sec. Nts., Series 335, 4/30/12 1,2 10,800,000 10,766,520
- -------------------------------------------------------------------------------------------------------------------------
Eletropaulo Metropolitana SA, 19.125% Nts., 6/28/10 6 [BRR] 13,295,000 8,377,373
- -------------------------------------------------------------------------------------------------------------------------
Gaz Capital (Gazprom), 7.288% Sr. Unsec. Bonds, 8/16/37 6 27,890,000 29,667,988
- -------------------------------------------------------------------------------------------------------------------------
HBOS Treasury Services plc:
4.375% Sr. Sec. Nts., 7/13/16 [EUR] 129,560,000 178,834,331
4.50% Sr. Sec. Nts., 7/13/21 [EUR] 67,050,000 91,090,058
- -------------------------------------------------------------------------------------------------------------------------
HSBC Bank plc:
11.601% Sr. Unsec. Nts., 1/12/10 1,5 42,800,000 33,812,000
12.278% Sr. Unsec. Nts., 3/9/09 1,5 30,220,000 26,342,774
9.751% Sr. Unsec. Nts., 7/8/09 1,5 30,220,000 27,953,500
- -------------------------------------------------------------------------------------------------------------------------
ICICI Bank Ltd.:
6.375% Bonds, 4/30/22 2,6 12,125,000 11,356,275
6.625% Nts., 10/3/12 1,9 11,560,000 11,600,460
- -------------------------------------------------------------------------------------------------------------------------
IIRSA Norte Finance Ltd., 8.75% Sr. Nts., 5/30/24 6 9,305,127 11,026,576
- -------------------------------------------------------------------------------------------------------------------------
Inter-American Development Bank:
6.26% Nts., 12/8/09 2 [BRR] 11,200,000 6,140,753
9.891% Nts., 1/25/12 2 [COP] 10,865,571,549 6,342,639
- -------------------------------------------------------------------------------------------------------------------------
International Bank for Reconstruction & Development (The),
15% Nts., 1/7/10 1 [TRY] 3,000,000 2,451,052
- -------------------------------------------------------------------------------------------------------------------------
ISA Capital do Brasil SA:
7.875% Sr. Nts., 1/30/12 6 2,225,000 2,263,938
8.80% Sr. Nts., 1/30/17 6 2,780,000 2,919,000
26 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
JP Morgan Hipotecaria su Casita:
6.47% Sec. Nts., 8/26/35 1 [MXN] 41,757,200 $ 3,777,546
20.077% Mtg.-Backed Certificates, Series 06U, 9/25/35 2 [MXN] 25,013,500 7,907,883
- -------------------------------------------------------------------------------------------------------------------------
JPMorgan, Red Square Capital Ltd., 9% CDO Nts., 11/20/08 1 [RUR] 365,000,000 14,653,858
- -------------------------------------------------------------------------------------------------------------------------
Kuznetski Capital SA/Bank of Moscow, 7.375% Nts., 11/26/10 6 2,780,000 2,800,850
- -------------------------------------------------------------------------------------------------------------------------
Majapahit Holding BV:
7.25% Nts., 10/17/11 6 2,860,000 2,895,750
7.75% Nts., 10/17/16 6 2,640,000 2,686,200
- -------------------------------------------------------------------------------------------------------------------------
MHP SA, 10.25% Sr. Sec. Sub. Bonds, 11/30/11 6 2,745,000 2,717,550
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley:
6.25% Sr. Nts., 3/23/17 1 [PEN] 26,120,000 7,985,463
10.09% Sr. Unsec. Nts., 5/3/17 1 [BRR] 49,950,000 26,705,401
- -------------------------------------------------------------------------------------------------------------------------
National Gas Co., 6.05% Nts., 1/15/36 6 4,945,000 4,709,104
- -------------------------------------------------------------------------------------------------------------------------
National Power Corp.:
5.875% Unsec. Unsub. Bonds, 12/19/16 [PHP] 665,100,000 14,378,709
6.875% Nts., 11/2/16 6 2,739,000 2,718,458
9.625% Unsec. Bonds, 5/15/28 5,095,000 6,126,738
- -------------------------------------------------------------------------------------------------------------------------
Nordic Investment Bank, 12.50% Sr. Unsec. Nts., 2/15/09 1 [TRY] 5,000,000 3,939,519
- -------------------------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/10 1,13,14 550,000 --
- -------------------------------------------------------------------------------------------------------------------------
Petroleum Export Ltd. Cayman SPV, 5.265% Sr. Nts., Cl. A3, 6/15/11 6 10,678,777 10,623,194
- -------------------------------------------------------------------------------------------------------------------------
Piazza Vittoria Finance SrL, 5.77% Asset-Backed Nts., 7/20/10 2 [EUR] 27,415,135 38,959,522
- -------------------------------------------------------------------------------------------------------------------------
RSHB Capital SA/OJSC Russian Agricultural Bank, 7.175% Nts., 5/16/13 6 3,820,000 3,900,602
- -------------------------------------------------------------------------------------------------------------------------
Salisbury International Investments Ltd., 9.51% Sec. Nts.,
Series 2006-003, Tranche E, 7/20/11 1,2 2,400,000 2,503,200
- -------------------------------------------------------------------------------------------------------------------------
Telefonica del Peru SA, 8% Sr. Unsec. Bonds, 4/11/16 6 [PEN] 26,033,700 9,037,564
- -------------------------------------------------------------------------------------------------------------------------
Tengizchevroil LLP, 6.124% Nts., 11/15/14 6 5,840,000 5,781,016
- -------------------------------------------------------------------------------------------------------------------------
TGI International Ltd., 9.50% Nts., 10/3/17 1,9 10,640,000 10,746,400
- -------------------------------------------------------------------------------------------------------------------------
Tiers-BSP, 0%/8.60% Collateralized Trust, Cl. A, 6/15/97 15 6,065,000 2,739,136
- -------------------------------------------------------------------------------------------------------------------------
Transshipment Megahub Bhd:
5.15% Nts., 11/2/12 1 [MYR] 21,000,000 6,085,224
6.70% Bonds, Series F, 11/2/12 1 [MYR] 14,000,000 4,319,354
6.85% Nts., 11/2/12 1 [MYR] 16,000,000 4,967,395
6.95% Nts., 11/2/12 1 [MYR] 11,000,000 3,429,288
- -------------------------------------------------------------------------------------------------------------------------
Vitro SAB de CV:
8.625% Sr. Unsec. Unsub. Nts., 2/1/12 2,775,000 2,747,250
9.125% Sr. Unsec. Unsub. Nts., 2/1/17 4,715,000 4,656,063
- -------------------------------------------------------------------------------------------------------------------------
VTB Capital SA, 6.25% Sr. Nts., 6/30/35 6 2,950,000 2,895,130
- -------------------------------------------------------------------------------------------------------------------------
WM Covered Bond Program:
3.875% Sec. Nts., Series 1, 9/27/11 [EUR] 81,560,000 112,480,089
4% Sec. Mtg. Nts., Series 2, 9/27/16 [EUR] 79,755,000 105,870,501
---------------
Total Corporate Bonds and Notes (Cost $1,077,234,417) 1,116,594,034
27 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
UNITS SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- -------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Oil Linked Payment Obligation Wts.,
Exp. 4/15/20 1,13 (Cost $0) 500 $ 18,750
PRINCIPAL
AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
STRUCTURED SECURITIES--18.6%
- -------------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Holdings, Inc.:
Argentina (Republic of) Credit Linked Nts., 11.44%, 5/22/08 1,11 [ARP] 11,655,000 10,594,523
Argentina (Republic of) Credit Linked Nts., 4%, 5/18/09 1 [ARP] 7,884,000 7,164,990
Argentina (Republic of) Unsec. Credit Linked Nts., 9.28%, 4/16/10 1,11 [ARP] 10,108,564 5,242,171
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 38,356,000 20,873,716
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 59,878,000 32,586,201
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 100,000,000 54,420,992
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 14.809%,
1/5/10 5 [BRR] 32,035,902 13,704,672
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 15.427%,
1/2/09 5 [BRR] 28,074,132 13,401,301
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 15.728%,
1/3/08 5 [BRR] 24,719,335 13,143,782
Colombia (Republic of) Credit Linked Bonds, 11%, 7/27/20 [COP] 12,570,000,000 6,590,939
Colombia (Republic of) Credit Linked Nts., Series II, 15%, 4/27/12 [COP] 6,942,469,928 3,954,591
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 31,110,000,000 17,720,975
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 12,430,000,000 7,080,415
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 11,705,100,000 6,667,496
Dominican Republic Credit Linked Nts., 10.086%, 3/20/08 1,5 [DOP] 118,000,000 3,224,569
Dominican Republic Credit Linked Nts., 22%, 10/3/11 [DOP] 158,100,000 5,992,075
Dominican Republic Credit Linked Nts., 8.452%, 3/24/08 5 [DOP] 177,660,000 5,104,587
Dominican Republic Credit Linked Nts., 9.522%, 5/12/08 5 [DOP] 106,540,000 3,016,971
Dominican Republic Credit Linked Nts., 9.826%, 3/20/08 5 [DOP] 109,540,000 3,146,596
Dominican Republic Credit Linked Nts., 9.931%, 12/24/07 5 [DOP] 107,470,000 3,087,134
Dominican Republic Unsec. Credit Linked Nts., 15%, 3/12/12 [DOP] 289,700,000 8,980,908
Dominican Republic Unsec. Credit Linked Nts., 9.342%, 8/11/08 5,9 [DOP] 244,600,000 6,761,725
Dominican Republic Unsec. Credit Linked Nts., 9.696%, 3/10/08 5 [DOP] 196,300,000 5,657,819
Dominican Republic Unsec. Credit Linked Nts., Series 007, 9.302%,
5/12/08 5 [DOP] 211,900,000 6,000,526
Egypt (The Arab Republic of) Credit Linked Nts., 7.364%, 1/10/08 1,5 [EGP] 54,440,000 9,553,087
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.376%,
2/28/08 1,5 [EGP] 54,300,000 9,440,085
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.50%,
2/16/08 [EGP] 34,150,000 6,172,364
Ghana (Republic of) Credit Linked Nts., 13.50%, 4/2/10 [GHS] 15,350,000 16,782,235
Nigeria (Federal Republic of) Credit Linked Nts., 14.50%, 3/1/11 6 [NGN] 2,672,000,000 24,883,320
Nigeria (Federal Republic of) Credit Linked Nts., Series II, 14.50%,
4/4/11 6 [NGN] 2,032,000,000 18,994,818
Renins Nonlife Ltd. Credit Linked Nts., 12.50%, 5/30/12 1 4,925,000 4,925,000
Russian Federation Credit Linked Nts., 7.65%, 12/4/08 1,2 [RUR] 41,690,000 1,647,756
Ukraine Hryvnia Unsec. Credit Linked Nts., 11.94%, 1/4/10 [UAH] 13,799,000 2,954,782
Zambia (Republic of) Credit Linked Nts., 8.833%, 2/21/08 5 [ZMK] 38,315,000,000 9,364,442
28 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston International:
Boryspil Airport Total Return Linked Nts., 10%, 4/19/10 2 [UAH] 49,215,000 $ 10,156,863
EES Total Return Linked Nts., 7.10%, 12/12/08 2 [RUR] 72,800,000 2,922,742
Gazprom Total Return Linked Nts., 6.79%, 10/29/09 [RUR] 144,790,000 5,970,404
Gazprom Total Return Linked Nts., Series 002, 6.95%, 8/6/09 [RUR] 141,750,000 5,742,351
Indonesia (Republic of) Total Return Linked Nts., 12%, 9/16/11 1 [IDR] 116,800,000,000 14,167,859
Lukoil Credit Linked Nts., Series Fbi 105, 7.25%, 11/19/09 1,2 [RUR] 321,528,000 12,999,105
Moitk Total Return Linked Nts., 8.966%, 3/26/11 1,2 [RUR] 352,714,000 12,770,085
Moscow (City of) Credit Linked Nts., Series Fbi 101, 10%, 12/31/10 1 [RUR] 277,800,000 12,276,113
Moscow (City of) Credit Linked Nts., Series Fbi 98, 11%, 4/23/09 6 [RUR] 280,840,000 12,200,203
Orenburgskaya IZHK Total Return Linked Nts., 9.24%, 2/21/12 1,2 [RUR] 64,940,000 2,481,787
Ukraine (Republic of) Credit Linked Nts., Series EMG 13, 11.94%,
12/30/09 [UAH] 30,400,000 6,868,439
Vietnam Shipping Industry Group Total Return Linked Nts.,
10.50%, 1/19/17 1 [VND] 85,958,000,000 5,450,526
- -------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston, Inc. (Nassau Branch):
Russian Oreniz Credit Linked Nts., Series 009, 9.24%, 2/21/12 1,2 [RUR] 75,000,000 2,866,246
Russian Specialized Construction and Installation Administration
Credit Linked Nts., 8.59%, 5/20/10 1,2 [RUR] 64,600,000 2,598,730
Ukraine (Republic of) Credit Linked Nts., Series EMG 11, 11.94%,
12/30/09 [UAH] 9,163,000 2,070,247
Ukraine (Republic of) Credit Linked Nts., Series NPC 12, 11.94%,
12/30/09 6 [UAH] 65,490,000 14,796,517
- -------------------------------------------------------------------------------------------------------------------------
Credit Suisse Group, Russian Moscoblgaz Finance Total Return Linked
Nts., 9.25%, 6/24/12 1 [RUR] 64,500,000 2,568,760
- -------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Argentina (Republic of) Credit Linked Nts., 11.50%, 12/21/11 1 [ARP] 35,580,000 28,920,400
Arrendadora Capita Corp. SA de CV/Capita Corp. (The) de Mexico
SA de CV Credit Linked Nts., 9.09%, 1/5/11 1 [MXN] 105,478,332 9,692,041
Arrendadora Capita Corp. SA de CV/Capita Corp. (The) de Mexico
SA de CV Credit Linked Nts., 9.65%, 1/5/11 1 [MXN] 69,607,189 6,395,965
Brazil Real Credit Linked Nts., 13.882%, 3/3/10 5 [BRR] 61,128,560 26,029,240
Brazil Real Credit Linked Nts., 6%, 8/18/10 [BRR] 15,895,000 14,206,471
Colombia (Republic of) Credit Linked Nts., 13.50%, 9/15/14 1 [COP] 13,259,000,000 7,553,406
Colombia (Republic of) Total Return Linked Bonds, Series 002, 11%,
7/28/20 [COP] 24,620,000,000 12,901,756
Compania Total Return Linked Nts., 4.454%, 7/22/10 [EUR] 11,407,613 16,370,719
Egypt (The Arab Republic of) Credit Linked Nts., 9.381%, 2/5/08 1,5 [EGP] 36,510,000 6,328,400
Egypt (The Arab Republic of) Total Return Linked Nts., 7.725%,
9/16/08 5 [EGP] 74,375,000 12,439,893
European Investment Bank, Russian Federation Credit Linked Nts.,
5.502%, 1/19/10 1,5 8,475,000 7,252,905
Grupo TMM SA Credit Linked Nts., 6%, 9/7/12 1 4,966,695 4,991,529
Halyk Bank of Kazakhstan Total Return Linked Nts., Series I, 7.25%,
3/20/09 [KZT] 2,003,690,000 15,984,791
Indonesia (Republic of) Credit Linked Nts., 9.50%, 6/22/15 10,300,162 10,822,792
Indonesia (Republic of) Credit Linked Nts., Series III, 14.25%, 6/15/13 12,412,800 15,781,013
Nigeria (Federal Republic of) Credit Linked Nts., 12.50%, 2/24/09 [NGN] 525,300,000 4,374,004
Nigeria (Federal Republic of) Credit Linked Nts., 15%, 1/27/09 [NGN] 704,900,000 6,108,758
29 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
STRUCTURED SECURITIES Continued
- -------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG: Continued
OAO Gazprom I Credit Nts., 9.35%, 10/20/07 $ 1,435,000 $ 1,498,305
Peru (Republic of) Credit Linked Nts., 6.659%, 2/20/11 2 3,255,000 3,319,591
Romania (Republic of) 3 yr. Linked Nts., 12.25%, 10/15/07 [RON] 22,740,000 10,797,766
Russian Federation Credit Linked Nts., 0%, 12/2/09 5 [RUR] 233,573,000 9,850,013
Russian Federation Credit Linked Nts., 6.942%, 2/22/08 5 [RUR] 161,200,000 6,288,203
Russian Federation Credit Linked Nts., 7.176%, 2/21/08 5 [RUR] 78,000,000 3,041,988
Russian Federation Total Return Linked Nts., Series II, 9%, 4/22/11 [RUR] 288,935,000 12,669,376
Russian Railways Total Return Linked Bonds, 6.67%, 1/26/09 2 [RUR] 146,720,000 5,872,152
Singapore, Vietnam Shipping Industry Group Total Return Linked Nts.,
9%, 4/20/17 1 [VND] 216,800,000,000 12,853,547
Ukraine (Republic of) 5 yr. Credit Linked Nts., 4.05%, 8/25/10 2,505,000 2,552,119
Ukraine (Republic of) 5.5 yr. Credit Linked Nts., 4.05%, 2/25/11 2,505,000 2,546,708
Ukraine (Republic of) 6 yr. Credit Linked Nts., 4.05%, 8/25/11 2,505,000 2,543,477
Ukraine (Republic of) 6.5 yr. Credit Linked Nts., 4.05%, 2/27/12 2,505,000 2,538,216
Ukraine (Republic of) 7 yr. Credit Linked Nts., 4.05%, 8/28/12 2,505,000 2,533,532
Ukraine (Republic of) Credit Linked Nts., 10.208%, 7/1/09 1 [UAH] 18,508,800 3,853,176
Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 3,228,000 716,084
Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 11,438,000 2,537,351
Ukraine (Republic of) Credit Linked Nts., 9.60%, 7/1/09 1 [UAH] 5,302,400 1,103,858
United Mexican States Credit Linked Nts., 9.52%, 1/5/11 1 [MXN] 69,604,885 6,395,753
Videocon International Ltd. Credit Linked Nts., 6.26%, 12/29/09 1 7,300,000 7,290,583
- -------------------------------------------------------------------------------------------------------------------------
Dresdner Bank AG, Lukoil Credit Linked Nts., Series 3, 7.04%,
12/8/11 2,6 [RUR] 213,030,000 9,023,971
- -------------------------------------------------------------------------------------------------------------------------
Goldman Sachs & Co., Turkey (Republic of) Credit Linked Nts., 14.802%,
3/29/17 5,6 [TRY] 129,050,000 25,756,541
- -------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital Markets LP, Colombia (Republic of) Credit
Linked Nts., 10.476%, 2/8/37 5,6 [COP] 376,977,600,000 7,764,863
- -------------------------------------------------------------------------------------------------------------------------
Goldman Sachs International, Russian Federation Total Return Linked
Nts., 8%, 5/13/09 2 [RUR] 573,900,000 23,076,940
- -------------------------------------------------------------------------------------------------------------------------
ING Bank NV, Ukraine (Republic of) Credit Linked Nts., Series 725,
11.89%, 12/30/09 1 [UAH] 64,285,000 14,597,327
- -------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank:
Argentina (Republic of) Credit Linked Nts., 11.45%, 12/19/11 1 [ARP] 36,445,000 30,141,907
Brazil (Federal Republic of) Credit Linked Nts., 13.847%, 4/1/10 5,6 [BRR] 129,150,391 54,781,467
Brazil (Federal Republic of) Credit Linked Nts., 14.35%, 2/20/12 1 [BRR] 34,060,000 18,315,844
Brazil (Federal Republic of) Credit Linked Nts., 15.326%, 1/2/15 5 [BRR] 115,066,796 28,365,692
Brazil (Federal Republic of) Credit Linked Nts., 2.731%, 11/30/12 5,6 [ARP] 35,605,000 9,822,888
Brazil (Federal Republic of) Credit Linked Nts., 6%, 5/16/45 1 [BRR] 11,130,000 9,976,075
Colombia (Republic of) Credit Linked Bonds, 10.19%, 1/5/16 5,6 [COP] 153,800,000,000 29,377,357
Colombia (Republic of) Credit Linked Bonds, 10.218%, 10/31/16 1,5 [COP] 90,697,000,000 17,324,045
Colombia (Republic of) Credit Linked Bonds, 11.198%, 8/3/20 1,5 [COP] 132,560,000,000 18,916,564
Colombia (Republic of) Credit Linked Bonds, Series A, 10.218%,
10/31/16 1,5 [COP] 90,312,000,000 17,250,507
Peru (Republic of) Credit Linked Nts., 8.115%, 9/2/15 5,6 [PEN] 40,860,000 7,504,357
Swaziland (Kingdom of) Credit Linked Nts., 7.25%, 6/20/10 6 3,850,000 3,811,500
- -------------------------------------------------------------------------------------------------------------------------
JSC Astana Finance, 9.16% Nts., 3/14/12 1 14,000,000 12,770,456
30 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
STRUCTURED SECURITIES Continued
- -------------------------------------------------------------------------------------------------------------------------
Lehman Brothers International, Romania (Republic of) Total Return
Linked Nts., 7.90%, 2/9/10 [RON] 10,726,400 $ 4,861,362
- -------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.:
Argentina (Republic of) Credit Linked Nts., 9.655%, 12/20/15 6 20,000,000 20,594,000
CMS 10 yr. Curve Credit Linked Nts., 6%, 2/5/17 130,660,000 125,930,239
Romania (Republic of) Total Return Linked Nts., 6.50%, 3/9/10 [RON] 30,904,100 13,428,671
Romania (Republic of) Total Return Linked Nts., 6.75%, 3/11/08 [RON] 36,650,000 16,151,182
Romania (Republic of) Total Return Linked Nts., 7.25%, 4/19/10 [RON] 3,105,000 1,364,868
Romania (Republic of) Total Return Linked Nts., 7.75%, 4/21/08 [RON] 3,101,000 1,369,785
Romania (Republic of) Total Return Linked Nts., 7.75%, 4/21/08 [RON] 7,453,000 3,292,166
Romania (Republic of) Total Return Linked Nts., 7.90%, 2/12/08 [RON] 24,895,500 11,151,391
- -------------------------------------------------------------------------------------------------------------------------
Merrill Lynch:
Colombia (Republic of) Credit Linked Nts., 10%, 11/17/16 1 [COP] 13,289,000,000 6,130,860
Renaissance Capital International Services Ltd. Total Return Linked
Nts., 10.50%, 10/7/08 1 [RUR] 414,000,000 16,362,945
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley, Russian Federation Total Return Linked Securities,
Series 007, Cl. VR, 5%, 8/22/34 [RUR] 543,300,000 18,067,695
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley & Co. International Ltd./Red Arrow International
Leasing plc:
Total Return Linked Nts., Series A, 8.375%, 6/30/12 1 [RUR] 221,069,172 9,093,270
Total Return Linked Nts., Series B, 11%, 6/30/12 1 [RUR] 166,758,107 6,926,368
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc.:
Bank Center Credit Total Return Linked Nts., 7.52%, 6/6/08 [KZT] 3,273,000,000 26,529,431
Brazil (Federal Republic of) Linked Nts., 12.551%, 1/5/22 5,6 [BRR] 173,500,000 19,593,290
Brazil (Federal Republic of) Sr. Linked Nts., 14.40%, 8/4/16 1 [BRR] 56,967,568 41,956,474
Brazil (Federal Republic of) Total Return Nts., 8/2/10 [BRR] 31,053,730 14,151,601
Philippines (Republic of the) Credit Linked Nts., 10.21%, 9/20/15 1 30,000,000 35,591,700
Philippines (Republic of the) Credit Linked Nts., 8.619%, 9/20/15 1 980,000 1,119,944
Philippines (Republic of the) Credit Linked Nts., 8.21%, 6/20/16 1,2 2,640,000 2,797,793
United Mexican States Credit Linked Nts., 5.64%, 11/20/15 6 11,760,000 12,440,316
WTI Trading Ltd. Total Return Linked Nts., Series A, 13.50%, 2/6/09 1 10,900,000 10,464,000
WTI Trading Ltd. Total Return Linked Nts., Series B, 13.50%, 2/6/09 1 14,550,000 13,968,000
- -------------------------------------------------------------------------------------------------------------------------
UBS AG, Ghana (Republic of) Credit Linked Nts., 14.47%, 12/28/11 1 [GHS] 7,369,232 7,924,741
---------------
Total Structured Securities (Cost $1,379,108,713) 1,584,540,814
EXPIRATION STRIKE
DATES PRICE CONTRACTS
- -------------------------------------------------------------------------------------------------------------------------
OPTIONS PURCHASED--0.1%
- -------------------------------------------------------------------------------------------------------------------------
Brazilian Real (BRR) Call 13 12/21/07 $ 1.81 96,820,000 782,644
- -------------------------------------------------------------------------------------------------------------------------
Credit Suisse International
Basket of Currencies Call 13 11/19/07 90.86 134,510,000 13,451
- -------------------------------------------------------------------------------------------------------------------------
Credit Suisse International
Basket of Currencies Call 13 12/12/07 1.02 268,230,000 781,944
- -------------------------------------------------------------------------------------------------------------------------
Euro (EUR) Call 13 12/21/07 1.41 196,090,000 5,647,647
---------------
Total Options Purchased (Cost $7,942,538) 7,225,686
31 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--13.7%
- -------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E, 5.37% 16,17
(Cost $1,166,273,150) 1,166,273,150 $1,166,273,150
- -------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (excluding Investments
Purchased with Cash Collateral from Securities Loaned)
(Cost $8,311,108,304) 8,799,733,273
PRINCIPAL
AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--3.4% 18
- -------------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--3.3%
Undivided interest of 28.03% in joint repurchase agreement (Principal
Amount/Value $1,000,000,000, with a maturity value of $1,000,425,000)
with Bank of America NA, 5.10%, dated 9/28/07, to be repurchased
at $280,413,484 on 10/1/07, collateralized by U.S. Agency Mortgages,
5%-5.50%, 5/1/33-6/1/35, with a value of $1,020,000,000 $ 280,294,359 280,294,359
- -------------------------------------------------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE--0.1%
American Express Credit Corp., 5.76%, 10/15/07 1,250,000 1,250,000
- -------------------------------------------------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.14%, 10/30/07 1,250,000 1,250,000
---------------
2,500,000
- -------------------------------------------------------------------------------------------------------------------------
YANKEE CERTIFICATE OF DEPOSIT FLOATING NOTE--0.0%
Natexis Banques Populaires NY, 4.87%, 10/1/07 2,000,000 2,000,000
---------------
Total Investments Purchased with Cash Collateral from
Securities Loaned (Cost $284,794,359) 284,794,359
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $8,595,902,663) 106.6% 9,084,527,632
- -------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (6.6) (559,564,871)
----------------------------------
NET ASSETS 100.0% $8,524,962,761
==================================
32 | 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
GHS Ghana 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
ZMK Zambian Kwacha
1. Illiquid security. The aggregate value of illiquid securities as of September
30, 2007 was $780,664,628, which represents 9.16% of the Fund's net assets. See
Note 13 of accompanying Notes.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Partial or fully-loaned security. See Note 14 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 $35,593,466. See Note 6 of accompanying Notes.
5. Zero coupon bond reflects effective yield on the date of purchase.
6. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $519,976,855 or 6.10% of the Fund's net
assets as of September 30, 2007.
7. 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
- ----------------------------------------------------------------------------------------------
British Pound Sterling (GBP) 1,220,000 10/5/07 $2.03 $10,792 $ 5,711
British Pound Sterling (GBP) 1,225,000 10/1/07 2.02 9,176 --
British Pound Sterling (GBP) 1,220,000 10/2/07 2.01 9,089 --
Euro (EUR) 6,175,000 10/4/07 1.42 33,844 17,722
Euro (EUR) 5,480,000 10/5/07 1.42 34,016 17,990
--------------------
$96,917 $ 41,423
====================
8. 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
- ----------------------------------------------------------------------------------------------
British Pound Sterling (GBP) 1,225,000 10/1/07 $2.02 $ 9,176 $ 26,040
British Pound Sterling (GBP) 1,220,000 10/2/07 2.01 8,966 39,303
British Pound Sterling (GBP) 1,220,000 10/5/07 2.03 10,792 22,149
Euro (EUR) 6,175,000 10/4/07 1.42 33,844 68,311
Euro (EUR) 5,480,000 10/5/07 1.42 34,016 62,976
--------------------
$96,794 $ 218,779
====================
33 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
9. When-issued security or forward commitment to be delivered and settled after
September 30, 2007. See Note 1 of accompanying Notes.
10. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of accompanying Notes.
11. Denotes an inflation-indexed security: coupon and principal are indexed to
the consumer price index.
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. Issue is in default. See Note 1 of accompanying Notes.
15. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
16. Rate shown is the 7-day yield as of September 30, 2007.
17. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended September 30, 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 GROSS GROSS SHARES
SEPTEMBER 30, 2006 ADDITIONS REDUCTIONS SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E -- 4,694,209,317 3,527,936,167 1,166,273,150
VALUE DIVIDEND
SEE NOTE 1 INCOME
- --------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $1,166,273,150 $28,944,943
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 14 of
accompanying Notes.
34 | 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 $ 2,207,624,337 24.3%
United Kingdom 688,536,610 7.6
Germany 678,260,437 7.5
Japan 632,511,986 7.0
Brazil 514,337,478 5.7
Italy 444,592,173 4.9
France 414,247,113 4.6
Australia 314,581,954 3.5
Russia 303,783,077 3.3
Canada 272,577,319 3.0
Turkey 266,217,725 2.9
Spain 229,756,675 2.5
Colombia 218,664,910 2.4
Belgium 187,834,858 2.1
Argentina 157,500,164 1.7
Peru 146,469,647 1.6
Greece 124,897,748 1.4
Nigeria 112,628,684 1.2
Ukraine 105,231,546 1.2
Mexico 90,336,988 1.0
Philippines 86,999,303 1.0
The Netherlands 79,408,524 0.9
Dominican Republic 71,456,871 0.8
Malaysia 67,948,708 0.8
Indonesia 67,340,814 0.7
Uruguay 66,560,950 0.7
Egypt 64,510,759 0.7
Romania 62,417,191 0.7
Kazakhstan 61,065,694 0.7
Austria 55,402,921 0.6
Denmark 46,286,529 0.5
Supranational 36,051,483 0.4
Poland 33,051,926 0.4
Ghana 30,928,976 0.3
Panama 30,445,579 0.3
India 30,247,318 0.3
Israel 29,776,275 0.3
Vietnam 18,304,073 0.2
El Salvador 10,052,475 0.1
Zambia 9,364,442 0.1
Trinidad & Tobago 4,709,104 0.1
Swaziland 3,811,500 0.0
Costa Rica 3,552,413 0.0
Bulgaria 3,432,450 0.0
Guatemala 791,175 0.0
Venezuela 18,750 0.0
--------------------------
Total $ 9,084,527,632 100.0%
==========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES September 30, 2007
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $7,429,629,513) $ 7,918,254,482
Affiliated companies (cost $1,166,273,150) 1,166,273,150
----------------
9,084,527,632
- -------------------------------------------------------------------------------------------------------------
Cash 19,841,072
- -------------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $7,082,550) 7,010,593
- -------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 147,564,512
- -------------------------------------------------------------------------------------------------------------
Swaps, at value 47,914,116
- -------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 80,244,781
Closed foreign currency contracts 67,744,363
Shares of beneficial interest sold 66,353,189
Futures margins 6,523,452
Investments sold 6,017,846
Other 10,447,447
----------------
Total assets 9,544,189,003
- -------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $193,711)--
see accompanying statement of investments 260,202
- -------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 284,794,359
- -------------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 60,842,254
- -------------------------------------------------------------------------------------------------------------
Swaps, at value (premiums received $898,534) 15,651,845
- -------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $131,900,488 purchased on a when-issued basis
or forward commitment) 559,876,012
Closed foreign currency contracts 70,687,291
Shares of beneficial interest redeemed 15,226,162
Dividends 5,630,722
Distribution and service plan fees 4,641,972
Transfer and shareholder servicing agent fees 965,224
Shareholder communications 308,659
Trustees' compensation 21,808
Other 319,732
----------------
Total liabilities 1,019,226,242
- -------------------------------------------------------------------------------------------------------------
NET ASSETS $ 8,524,962,761
================
36 | OPPENHEIMER INTERNATIONAL BOND FUND
- -------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 1,329,909
- -------------------------------------------------------------------------------------------------------------
Additional paid-in capital 7,758,232,273
- -------------------------------------------------------------------------------------------------------------
Accumulated net investment income 135,476,136
- -------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 38,936,547
- -------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 590,987,896
----------------
NET ASSETS $ 8,524,962,761
================
- -------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $6,300,320,276
and 982,201,804 shares of beneficial interest outstanding) $ 6.41
Maximum offering price per share (net asset value plus sales charge of 4.75% of offering
price) $ 6.73
- -------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $259,284,802 and 40,558,005 shares
of beneficial interest outstanding) $ 6.39
- -------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $1,357,937,338 and 212,390,529 shares
of beneficial interest outstanding) $ 6.39
- -------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $153,180,593 and 23,940,927 shares
of beneficial interest outstanding) $ 6.40
- -------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $454,239,752 and 70,817,237 shares of beneficial interest
outstanding) $ 6.41
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF OPERATIONS For the Year Ended September 30, 2007
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $734,906) $ 299,906,333
- ------------------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $4,431) 112,481
Affiliated companies 28,944,943
- ------------------------------------------------------------------------------------------------------
Portfolio lending fees 451,752
- ------------------------------------------------------------------------------------------------------
Other income 17,233
--------------
Total investment income 329,432,742
- ------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------
Management fees 35,050,002
- ------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 12,357,040
Class B 2,400,150
Class C 10,769,939
Class N 560,094
- ------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 7,360,145
Class B 572,839
Class C 1,362,666
Class N 635,286
Class Y 23,826
- ------------------------------------------------------------------------------------------------------
Shareholder communications:
Class A 230,862
Class B 29,468
Class C 45,060
Class N 3,931
Class Y 762
- ------------------------------------------------------------------------------------------------------
Custodian fees and expenses 873,692
- ------------------------------------------------------------------------------------------------------
Trustees' compensation 102,081
- ------------------------------------------------------------------------------------------------------
Administration service fees 1,500
- ------------------------------------------------------------------------------------------------------
Other 449,732
--------------
Total expenses 72,829,075
Less reduction to custodian expenses (146,378)
Less waivers and reimbursements of expenses (806,297)
--------------
Net expenses 71,876,400
- ------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 257,556,342
38 | OPPENHEIMER INTERNATIONAL BOND FUND
- ------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments from unaffiliated companies (including premiums on options exercised) $ 93,902,216
Closing and expiration of option contracts written 4,463,947
Closing and expiration of futures contracts (10,811,706)
Foreign currency transactions 135,644,807
Swap contracts 28,953,246
--------------
Net realized gain 252,152,510
- ------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (27,999,778)
Translation of assets and liabilities denominated in foreign currencies 484,105,183
Futures contracts (29,535,123)
Option contracts written (337,446)
Swap contracts 11,068,942
--------------
Net change in unrealized appreciation 437,301,778
- ------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 947,010,630
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2007 2006
- --------------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income $ 257,556,342 $ 161,377,436
- --------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 252,152,510 (25,734,684)
- --------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 437,301,778 (8,589,064)
----------------------------------
Net increase in net assets resulting from operations 947,010,630 127,053,688
- --------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (198,019,724) (200,784,108)
Class B (7,485,081) (12,370,619)
Class C (34,902,172) (36,714,329)
Class N (3,994,007) (3,110,737)
Class Y (13,121,592) (5,420,742)
----------------------------------
(257,522,576) (258,400,535)
- --------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (9,318,202) (11,599,099)
Class B (500,541) (891,798)
Class C (2,033,412) (2,435,648)
Class N (194,577) (203,177)
Class Y (465,053) (253,487)
----------------------------------
(12,511,785) (15,383,209)
- --------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 1,722,287,255 1,502,920,202
Class B 283,956 18,514,548
Class C 374,437,685 338,152,983
Class N 78,446,426 18,829,709
Class Y 247,318,830 141,286,624
----------------------------------
2,422,774,152 2,019,704,066
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Total increase 3,099,750,421 1,872,974,010
- --------------------------------------------------------------------------------------------------------------------
Beginning of period 5,425,212,340 3,552,238,330
----------------------------------
End of period (including accumulated net investment income of
$135,476,136 and $36,828,546, respectively) $ 8,524,962,761 $ 5,425,212,340
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED SEPTEMBER 30, 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.80 $ 6.01 $ 5.63 $ 5.33 $ 4.38
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .24 1 .22 1 .23 1 .13 .20
Net realized and unrealized gain (loss) .62 (.04) .62 .47 .95
-----------------------------------------------------------------------
Total from investment operations .86 .18 .85 .60 1.15
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.24) (.37) (.41) (.30) (.20)
Distributions from net realized gain (.01) (.02) (.06) -- --
-----------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.25) (.39) (.47) (.30) (.20)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.41 $ 5.80 $ 6.01 $ 5.63 $ 5.33
=======================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 15.18% 3.23% 15.53% 11.56% 26.67%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 6,300,320 $ 4,075,172 $ 2,683,900 $ 1,177,628 $ 429,283
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 4,988,412 $ 3,430,374 $ 1,925,344 $ 811,608 $ 285,391
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.97% 3.72% 3.85% 2.19% 3.94%
Total expenses 0.94% 4 0.98% 1.03% 1.13% 1.22%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 0.93% 0.97% 1.02% 1.13% 1.22%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 144% 90% 133% 341%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended September 30, 2007 0.95%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS B YEAR ENDED SEPTEMBER 30, 2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.78 $ 5.99 $ 5.61 $ 5.31 $ 4.37
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .19 1 .17 1 .17 1 .08 .16
Net realized and unrealized gain (loss) .62 (.04) .63 .47 .94
--------------------------------------------------------------
Total from investment operations .81 .13 .80 .55 1.10
- ---------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.19) (.32) (.36) (.25) (.16)
Distributions from net realized gain (.01) (.02) (.06) -- --
--------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.20) (.34) (.42) (.25) (.16)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.39 $ 5.78 $ 5.99 $ 5.61 $ 5.31
==============================================================
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.26% 2.35% 14.58% 10.66% 25.48%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 259,285 $ 234,848 $ 224,381 $ 167,621 $ 134,661
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 240,238 $ 229,871 $ 201,541 $ 153,117 $ 119,232
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.12% 2.88% 2.95% 1.40% 3.20%
Total expenses 1.79% 4 1.83% 1.89% 1.98% 2.03%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 1.78% 1.83% 1.89% 1.98% 2.03%
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 144% 90% 133% 341%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended September 30, 2007 1.80%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
42 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS C YEAR ENDED SEPTEMBER 30, 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.78 $ 5.99 $ 5.61 $ 5.31 $ 4.37
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 1 .17 1 .18 1 .09 .16
Net realized and unrealized gain (loss) .62 (.03) .63 .46 .94
----------------------------------------------------------------
Total from investment operations .82 .14 .81 .55 1.10
- -----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.20) (.33) (.37) (.25) (.16)
Distributions from net realized gain (.01) (.02) (.06) -- --
----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.21) (.35) (.43) (.25) (.16)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.39 $ 5.78 $ 5.99 $ 5.61 $ 5.31
================================================================
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.39% 2.46% 14.70% 10.75% 25.48%
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,357,937 $ 875,032 $ 560,138 $ 233,311 $ 90,248
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,078,601 $ 717,977 $ 401,401 $ 170,796 $ 63,198
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.24% 2.98% 3.10% 1.46% 3.15%
Total expenses 1.67% 4 1.71% 1.77% 1.88% 2.02%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 1.66% 1.71% 1.77% 1.88% 2.02%
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 144% 90% 133% 341%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended September 30, 2007 1.68%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
43 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS N YEAR ENDED SEPTEMBER 30, 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.79 $ 6.00 $ 5.61 $ 5.32 $ 4.37
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .22 1 .19 1 .20 1 .12 .18
Net realized and unrealized gain (loss) .61 (.04) .64 .45 .95
----------------------------------------------------------
Total from investment operations .83 .15 .84 .57 1.13
- -----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.21) (.34) (.39) (.28) (.18)
Distributions from net realized gain (.01) (.02) (.06) -- --
----------------------------------------------------------
Total dividends and/or distributions
to shareholders (.22) (.36) (.45) (.28) (.18)
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.40 $ 5.79 $ 6.00 $ 5.61 $ 5.32
==========================================================
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.71% 2.78% 15.27% 11.00% 26.31%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 153,181 $ 63,432 $ 46,533 $ 18,641 $ 4,640
- -----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 112,319 $ 55,216 $ 30,696 $ 10,769 $ 2,653
- -----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.56% 3.29% 3.45% 1.83% 3.56%
Total expenses 1.61% 4 1.58% 1.47% 1.49% 1.57%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 1.37% 1.42% 1.46% 1.49% 1.57%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 144% 90% 133% 341%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended September 30, 2007 1.62%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
44 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS Y YEAR ENDED SEPTEMBER 30, 2007 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 (loss) .27 2 .24 2 .25 2 -- 3
Net realized and unrealized gain (loss) .62 (.04) .63 .05
------------------------------------------------
Total from investment operations .89 .20 .88 .05
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.27) (.39) (.44) --
Distributions from net realized gain (.01) (.02) (.06) --
------------------------------------------------
Total dividends and/or distributions
to shareholders (.28) (.41) (.50) --
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.41 $ 5.80 $ 6.01 $ 5.63
================================================
- -------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 15.63% 3.64% 15.96% 0.92%
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 454,240 $ 176,728 $ 37,286 $ 14,268
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 299,298 $ 97,992 $ 25,559 $ 7,086
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 4.38% 4.11% 4.23% 4.84%
Total expenses 0.55% 6 0.56% 0.67% 1.17%
Expenses after payments, waivers and/or
reimbursements and reduction to
custodian expenses 0.54% 0.56% 0.66% 1.17%
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 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 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 less than one full year.
6. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended September 30, 2007 0.56%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
45 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 on a commodities or futures exchange will be valued at the
final settlement price or
46 | OPPENHEIMER INTERNATIONAL BOND FUND
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 SECURITIES. The Fund invests in structured securities 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 securities are often
leveraged, increasing the volatility of each securities' 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 security is sold, matures or expires.
- --------------------------------------------------------------------------------
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 September 30, 2007, the Fund had purchased
$131,900,488 of securities issued on a when-issued basis or forward commitment.
47 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS 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 September 30, 2007, securities that were in
default had a market value of zero.
- --------------------------------------------------------------------------------
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, if applicable.
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.
48 | 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.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2 TAX PURPOSES
-------------------------------------------------------------------
$ 275,179,513 $ 38,517,325 $ -- $ 453,724,680
1. During the fiscal year ended September 30, 2007, the Fund did not utilize any
capital loss carryforward.
2. During the fiscal year ended September 30, 2006, the Fund did not utilize any
capital loss carryforward.
49 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for September 30, 2007. Net assets of
the Fund were unaffected by the reclassifications.
REDUCTION TO
INCREASE TO ACCUMULATED NET
INCREASE TO ACCUMULATED NET REALIZED GAIN
PAID-IN CAPITAL INVESTMENT INCOME ON INVESTMENTS 3
-------------------------------------------------------------------
$ 3,925,416 $ 98,613,824 $ 102,539,240
3. $3,925,416, all of which was long-term capital gain, was distributed in
connection with Fund share redemptions.
The tax character of distributions paid during the years ended September 30,
2007 and September 30, 2006 was as follows:
YEAR ENDED YEAR ENDED
SEPT. 30, 2007 SEPT. 30, 2006
-------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 257,522,576 $ 258,400,535
Long-term capital gain 12,511,785 15,383,209
-------------------------------------
Total $ 270,034,361 $ 273,783,744
=====================================
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of September 30, 2007 are noted below. The
primary difference between book and tax appreciation or depreciation of
securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.
Federal tax cost of securities $ 8,595,805,659
Federal tax cost of other investments 5,551,398,765
----------------
Total federal tax cost $ 14,147,204,424
================
Gross unrealized appreciation $ 518,726,350
Gross unrealized depreciation (65,001,670)
----------------
Net unrealized appreciation $ 453,724,680
================
50 | OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
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.
51 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 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:
YEAR ENDED SEPTEMBER 30, 2007 YEAR ENDED SEPTEMBER 30, 2006
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------
CLASS A
Sold 433,932,882 $ 2,659,913,820 401,071,813 $ 2,346,328,470
Dividends and/or
distributions reinvested 25,787,295 158,485,899 28,014,878 162,673,081
Redeemed (179,871,991) (1,096,112,464) (173,146,915) (1,006,081,349)
-----------------------------------------------------------------
Net increase 279,848,186 $ 1,722,287,255 255,939,776 $ 1,502,920,202
=================================================================
- --------------------------------------------------------------------------------------------------
CLASS B
Sold 10,415,726 $ 63,664,138 13,953,510 $ 81,256,556
Dividends and/or
distributions reinvested 1,057,950 6,467,460 1,823,352 10,550,724
Redeemed (11,528,127) (69,847,642) (12,609,581) (73,292,732)
-----------------------------------------------------------------
Net increase (decrease) (54,451) $ 283,956 3,167,281 $ 18,514,548
=================================================================
- --------------------------------------------------------------------------------------------------
CLASS C
Sold 88,253,662 $ 539,409,592 76,001,789 $ 443,443,673
Dividends and/or
distributions reinvested 3,770,947 23,093,523 4,461,718 25,813,712
Redeemed (30,938,093) (188,065,430) (22,632,214) (131,104,402)
-----------------------------------------------------------------
Net increase 61,086,516 $ 374,437,685 57,831,293 $ 338,152,983
=================================================================
52 | OPPENHEIMER INTERNATIONAL BOND FUND
YEAR ENDED SEPTEMBER 30, 2007 YEAR ENDED SEPTEMBER 30, 2006
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------
CLASS N
Sold 16,571,249 $ 100,240,959 7,063,532 $ 41,194,742
Dividends and/or
distributions reinvested 633,640 3,890,963 531,451 3,078,829
Redeemed (4,223,784) (25,685,496) (4,393,527) (25,443,862)
-----------------------------------------------------------------
Net increase 12,981,105 $ 78,446,426 3,201,456 $ 18,829,709
=================================================================
- --------------------------------------------------------------------------------------------------
CLASS Y
Sold 42,411,954 $ 259,884,092 24,796,488 $ 144,435,008
Dividends and/or
distributions reinvested 2,027,388 12,488,704 973,953 5,648,766
Redeemed (4,082,901) (25,053,966) (1,513,656) (8,797,150)
-----------------------------------------------------------------
Net increase 40,356,441 $ 247,318,830 24,256,785 $ 141,286,624
=================================================================
- --------------------------------------------------------------------------------
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 IMMF, for the year ended
September 30, 2007, were as follows:
PURCHASES SALES
- ---------------------------------------------------------------------
Investment securities $4,659,154,952 $2,894,866,573
U.S. government and government
agency obligations 428,017,089 394,503,082
- --------------------------------------------------------------------------------
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), 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 year ended September 30, 2007, the Fund paid
$9,486,056 to OFS for services to the Fund.
53 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 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 September 30,
2007 for Class B, Class C and Class N shares were $7,707,885, $17,377,931 and
$1,468,738, 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
54 | OPPENHEIMER INTERNATIONAL BOND FUND
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
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- --------------------------------------------------------------------------------------------------
September 30, 2007 $ 1,542,702 $ 182,991 $ 499,260 $ 193,765 $ 10,502
- --------------------------------------------------------------------------------
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 year ended September 30, 2007,
OFS waived $259,987 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 year ended September 30, 2007, the Manager waived $546,310 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 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.
55 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued
As of September 30, 2007, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT VALUATION
EXPIRATION AMOUNT AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) SEPT. 30, 2007 APPRECIATION DEPRECIATION
- -------------------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Argentine Peso (ARP) 10/24/07 241,100ARP $ 76,242,289 $ -- $ 504,488
Australian Dollar (AUD) 10/11/07-12/21/07 42,117AUD 37,247,033 2,561,596 --
Brazilian Real (BRR) 11/5/07-1/5/2010 365,464BRR 191,655,698 36,575,194 --
British Pound Sterling (GBP) 10/1/07-10/11/07 73,898GBP 151,176,075 2,605,621 --
Canadian Dollar (CAD) 10/1/07-12/21/07 76,657CAD 77,104,365 2,040,592 --
Chilean Peso (CLP) 10/22/07 14,308,000CLP 28,004,834 184,496 --
Danish Krone (DKK) 10/2/07 27,737DKK 5,305,539 44,780 --
Dominican Republic Peso (DOP) 10/9/07 226,564DOP 6,783,359 -- 61,481
Euro (EUR) 10/1/07-12/27/07 902,720EUR 1,287,775,139 34,466,137 --
Indian Rupee (INR) 10/4/07-10/15/07 3,273,721INR 82,135,884 1,243,127 4,581
Japanese Yen (JPY) 10/2/07-10/11/07 163,065,724JPY 1,421,061,577 35,701,004 279,387
Malaysian Ringgit (MYR) 11/15/07-12/17/07 255,310MYR 75,138,179 1,480,342 --
Mexican Nuveo Peso (MXN) 11/26/07 693,700MXN 63,183,561 831,867 --
New Turkish Lira (TRY) 10/24/07-11/2/07 125,180TRY 102,809,770 3,258,794 --
New Zealand Dollar (NZD) 12/21/07 47,595NZD 35,780,649 179,023 3,450
Norwegian Krone (NOK) 1/29/08 631,240NOK 116,925,927 7,820,254 --
Polish Zloty (PLZ) 10/10/07-11/7/07 329,040PLZ 124,546,819 5,537,340 --
Singapore Dollar (SGD) 2/5/08 137,460SGD 93,375,120 1,728,591 --
South African Rand (ZAR) 10/15/07 572,600ZAR 82,933,916 3,410,557 --
South Korean Won (KRW) 10/12/07-2/1/08 51,992,000KRW 56,948,721 240,020 --
Swedish Krone (SEK) 10/10/07 834,930SEK 129,608,568 3,890,965 --
Swiss Franc (CHF) 10/5/07-11/8/07 140,572CHF 120,992,466 2,454,539 --
----------------------------------
146,254,839 853,387
----------------------------------
CONTRACTS TO SELL
Australian Dollar (AUD) 10/9/07-10/10/07 159,540AUD 141,505,375 -- 6,048,586
British Pound Sterling (GBP) 10/1/07-2/6/08 71,510GBP 146,138,560 -- 1,158,940
Canadian Dollar (CAD) 10/9/07-1/16/08 246,231CAD 247,748,360 -- 11,903,279
Colombian Peso (CPO) 10/16/07 52,832,000CPO 26,059,965 -- 1,997,265
Czech Koruna (CZK) 10/15/07-1/25/08 1,782,210CZK 92,377,403 -- 2,989,470
Euro (EUR) 10/1/07-2/6/08 490,745EUR 700,231,255 -- 23,703,632
Hong Kong Dollar (HKD) 1/25/08 143,380HKD 18,457,802 82,686 3,134
Indian Rupee (INR) 11/16/07 1,071,000INR 26,852,540 -- 794,146
Japanese Yen (JPY) 10/2/07-2/6/08 32,665,000JPY 286,889,635 1,226,987 3,027,375
New Taiwan Dollar (TWD) 10/15/07 2,584,000TWD 79,337,131 -- 1,112,325
New Turkish Lira (TRY) 10/1/07-11/7/07 33,031TRY 27,050,080 -- 2,752,368
New Zealand Dollar(NZD) 10/9/07-10/10/07 70,265NZD 53,198,349 -- 287,130
Singapore Dollar (SGD) 10/15/07 119,375SGD 80,450,964 -- 1,605,623
Swiss Franc (CHF) 10/9/07-1/25/08 176,311CHF 151,909,877 -- 2,605,594
----------------------------------
1,309,673 59,988,867
----------------------------------
Total unrealized appreciation and depreciation $ 147,564,512 $ 60,842,254
==================================
56 | OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations 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 September 30, 2007, the Fund had outstanding
futures contracts as follows:
VALUATION AS OF UNREALIZED
EXPIRATION NUMBER OF SEPTEMBER 30, APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS 2007 (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Canada (Government of)
Bonds, 10 yr. 12/18/07 580 $ 65,560,147 $ 174,834
DAX Index 12/21/07 122 34,595,139 620,775
Euro-Bundesobligation, 10 yr. 12/6/07 2,943 472,867,487 (3,951,488)
Euro-Schatz 12/6/07 12,288 1,811,073,422 (1,728,976)
FTSE 100 Index 12/21/07 61 8,136,703 213,465
Japan (Government of ) Bonds, 10 yr. 12/11/07 742 871,679,624 (2,821,890)
OMXS30 Index 10/26/07 1,399 26,480,505 717,112
Standard & Poor's/MIB Index, 10 yr. 12/21/07 28 7,993,868 (41,436)
57 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
VALUATION AS OF UNREALIZED
EXPIRATION NUMBER OF SEPTEMBER 30, APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS 2007 (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 12/19/07 1,112 $ 123,814,250 $ 671,369
U.S. Treasury Nts., 5 yr. 12/31/07 4,537 485,600,781 686,922
United Kingdom Long Gilt 12/27/07 304 66,514,772 (692,305)
---------------
(6,151,618)
---------------
CONTRACTS TO SELL
Australia (Commonwealth of) Bonds, 10 yr. 12/17/07 686 60,130,793 1,135,470
CAC 40 Index 10/19/07 382 31,195,568 (1,012,390)
DAX Index 12/21/07 113 32,043,039 (574,996)
Euro-Bundesobligation, 10 yr. 12/6/07 1,794 288,251,536 191,359
FTSE 100 Index 12/21/07 445 59,357,917 (1,558,000)
Mexican Bolsa Index 12/21/07 277 7,799,125 (6,360)
Nikkei 225 Index 12/13/07 590 86,446,698 (5,073,061)
Standard & Poor's 500 E-Mini Index 12/21/07 432 33,222,960 (1,056,953)
U.S. Treasury Nts., 10 yr. 12/19/07 1,698 185,559,563 (1,355,535)
---------------
(9,310,466)
---------------
$ (15,462,084)
===============
- --------------------------------------------------------------------------------
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.
58 | OPPENHEIMER INTERNATIONAL BOND FUND
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 year ended September 30, 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 36,006,510,000 3,292,734 36,105,050,000 4,029,617
Options closed or expired (19,410,610,000) (1,433,649) (18,380,700,000) (3,248,250)
Options exercised (16,580,580,000) (1,762,291) (17,741,850,000) (1,240,982)
------------------------------------------------------------------------
Options outstanding as of
September 30, 2007 15,320,000 $ 96,794 15,320,000 $ 96,917
========================================================================
- --------------------------------------------------------------------------------
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 counter-party, 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).
59 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS Continued
As of September 30, 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
- -------------------------------------------------------------------------------------------------------------------------------
Citibank NA,
New York:
Twelve-Month JPY BBA LIBOR plus 40
basis points and if negative, the If positive, the Total
absolute value of the Total Return Return of a custom
5,456,801,421 JPY of a custom basket of securities basket of securities 4/8/08 $ 544,812
Twelve-Month GBP BBA LIBOR plus 35
basis points and if negative, the If positive, the Total
absolute value of the Total Return Return of a custom
23,174,662 GBP of a custom basket of securities basket of securities 5/7/08 (155,084)
- -------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Six-Month USD
16,760,000 BBA LIBOR 5.460% 5/13/15 3,400,494
Six-Month USD
11,050,000 LIBOR 5.250 6/23/15 1,867,671
- -------------------------------------------------------------------------------------------------------------------------------
One-Month BBA EURIBOR plus 10
basis points and if negative, the If positive, the Total
Deutsche Bank absolute value of the Total Return Return of a custom
AG, London 12,062,370 EUR of a custom equity basket equity basket 10/7/08 (257,370)
- -------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
Six-Month BBA
11,580,000 LIBOR 5.100 1/14/15 2,443,455
Six-Month BBA
11,580,000 LIBOR 5.080 1/20/15 2,506,624
60 | OPPENHEIMER INTERNATIONAL BOND FUND
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
One-Month USD BBA LIBOR and if
negative, the absolute value of If positive, the Total
the Total Return of the MSCI Daily Return of the MSCI Daily
Total Return Net Belgium USD Total Return Net Belgium
$ 5,395,703 Market Index USD Market Index 10/9/07 $ 93,325
One-Month USD BBA LIBOR and if
negative, the absolute value of If positive, the Total
the Total Return of the MSCI Daily Return of the MSCI Daily
Total Return Net Belgium USD Total Return Net Belgium
1,853,825 Market Index USD Market Index 10/9/07 26,713
If positive, the absolute
If negative, the Total Return of value of the Total Return
10,866,261 BRR the BOVESPA 10/07 Index of the BOVESPA 10/07 Index 10/18/07 704,436
If positive, the absolute
If negative, the Total Return of value of the Total Return
1,591,260 BRR the BOVESPA 10/07 Index of the BOVESPA 10/07 Index 10/18/07 220,811
If positive, the absolute
If negative, the Total Return of value of the Total Return
1,624,577 BRR the BOVESPA 10/07 Index of the BOVESPA 10/07 Index 10/18/07 214,120
If negative, the absolute
If positive, the Total Return of value of the Total Return
the INDF/NSE NIFTY Index 10/07 INDF/NSE NIFTY Index 10/07
(353,896,000)INR Future Future 10/25/07 (138,949)
If negative, the absolute
If positive, the Price Return of value of the Price Return
(9,175,706)CHF the SMI 12/07 Future of the SMI 12/07 Future 2/28/07 (151,717)
61 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS Continued
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch
Capital Services,
Inc.:
The Constant Maturity Option
$ 134,690,000 5.330% Price divided by 10,000 8/13/17 $(3,068,544)
The Constant Maturity Option
248,000,000 4.660 Price divided by 10,000 6/11/17 4,700,096
- ------------------------------------------------------------------------------------------------------------------------------------
One-Month EUR BBA LIBOR and if If positive, the Total Return
negative, the absolute value of the of a custom basket of
Morgan Stanley Total Return of a custom basket of securities plus the dividends
International 22,759,800 EUR securities from the basket of securities 12/20/07 630,015
------------
$13,580,908
============
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 British Bankers Association
BOVESPA Bovespa Index that trades on the Sao Paulo Stock Exchange
EURIBOR Euro Interbank Offered Rate
INDF/NSE NIFTY Index Indian National Stock Exchange Nifty Index
LIBOR London-Interbank Offered Rate
MSCI Morgan Stanley Capital International
SMI Swiss Market Index
- --------------------------------------------------------------------------------
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
62 | OPPENHEIMER INTERNATIONAL BOND FUND
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 September 30, 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
- ---------------------------------------------------------------------------------------------------------
Banco Santander
Central Hispano
SA:
Six-MonthTasa
Nominal Annual
5,126,000,000CLP (TNA-Chile) 6.6000% 8/21/17 $ 178,207
88,500,000MXN MXN TIIE 8.1200 1/26/17 (101,362)
27,880,000BRR BZDI 14.0000 1/3/12 1,037,482
- ---------------------------------------------------------------------------------------------------------
Barclays Bank
plc:
114,700,000MXN MXN TIIE 9.2700 7/17/26 872,043
Six-Month 5.3850 1/29/10 (360,285)
406,840,000NOK NIBOR Six-Month
49,540,000EUR 4.2200% EURIBOR 1/29/10 304,739
- ---------------------------------------------------------------------------------------------------------
Citibank NA,
London:
Six-Month
16,830,000PLZ WIBOR 5.5200 3/24/10 65,409
Six-Month
26,928,000PLZ WIBOR 5.5500 3/25/10 108,351
- ---------------------------------------------------------------------------------------------------------
Citibank NA,
New York:
489,400,000TWD 2.3200 TWD-Telerate 6/27/11 111,299
Six-Month Tasa
Nominal Annual
4,101,000,000CLP (TNA-Chile) 6.5300 8/25/17 202
- ---------------------------------------------------------------------------------------------------------
Credit Suisse
First Boston, Six-Month
Inc. 46,785,000PLZ WIBOR 4.4800 7/1/10 (469,602)
63 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ---------------------------------------------------------------------------------------------------------
Credit Suisse
International:
133,400,000MXN MXN TIIE 8.3000% 12/17/26 $ (176,332)
Six-Month Tasa
Nominal Annual
4,101,000,000CLP (TNA-Chile) 6.5800 8/21/17 132,396
- ---------------------------------------------------------------------------------------------------------
Deutsche Bank
AG:
490,200,000INR 7.1750% INR MIBOR-OIS
Compound 6/27/11 (2,134)
2,387,000,000HUF 8.4400 Six-Month BUBOR 7/4/11 (725,282)
- ---------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets
LP:
Six-Month
416,230,000NOK NIBOR 5.4700 5/2/10 (42,100)
EUR EURIBOR-
51,720,000EUR 4.4155 Telerate 5/2/10 949
- ---------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
38,800,000MXN MXN TIIE 8.7000 2/5/16 84,333
289,270,000MXN MXN TIIE 9.8400 12/31/09 1,045,136
- ---------------------------------------------------------------------------------------------------------
Goldman Sachs CNY-
International 107,900,000CNY 4.0000 CFXSREPOFIX01 2/16/17 855,242
- ---------------------------------------------------------------------------------------------------------
J Aron & Co.:
46,300,000BRR BZDI 10.6700 1/2/12 (434,965)
140,720,000MXN MXN TIIE 9.1500 8/27/26 881,921
60,800,000MXN MXN TIIE 9.3300 9/16/26 482,555
53,700,000BRR BZDI 12.9200 1/2/14 1,386,072
26,730,000BRR BZDI 12.8700 1/2/14 667,580
53,240,000BRR BZDI 12.7100 1/4/10 726,675
110,230,000BRR BZDI 12.6100 1/4/10 1,378,046
143,500,000MXN MXN TIIE 9.5100 8/26/25 1,343,861
96,930,000MXN MXN TIIE 9.5000 8/28/25 898,329
99,100,000BRR BZDI 12.2600 1/2/15 1,509,892
45,260,000BRR BZDI 12.2900 1/2/15 713,757
91,750,000MXN MXN TIIE 9.2900 7/17/26 694,803
27,880,000BRR BZDI 14.0500 1/2/12 1,105,202
- ---------------------------------------------------------------------------------------------------------
JPMorgan
Chase Bank NA:
264,090,000ZAR 8.2900 Three-Month JIBA 6/21/08 546,072
34,270,000BRR BZDI 13.9100 1/2/12 2,448,547
- ---------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing,
Inc.:
Six-Month
55,540,000PLZ WIBOR 4.5300 7/5/10 (120,019)
64 | OPPENHEIMER INTERNATIONAL BOND FUND
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ----------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing,
Inc.: Continued
Fund pays the
greater of 0 and 8*
(-0.0031375-(10 yr.
CMS Index + 2 yr.
CMS Index))
131,690,000PLZ quarterly $3,950,700 2/5/17 $ (3,328,117)
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley
& Co. Three-Month
International 7,609,000,000KZT 8.2500% KZT 6/29/12 (2,066,067)
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Six-Month
Inc. 122,500,000EUR 4.7130 EURIBOR 8/22/17 (449,043)
- ----------------------------------------------------------------------------------------------------------
UBS AG 63,571,606BRR BZDI 10.6700% 1/2/12 (1,636,214)
- ----------------------------------------------------------------------------------------------------------
Three-Month
Westpac 268,710,000NZD 7.7750 NZD-BBR-FRA 9/17/09 477,333
-------------
$ 10,144,911
=============
Notional amount is reported in U.S. Dollars (USD), except for those denoted in
the following currencies:
BRR Brazilian Real
CLP Chilean Peso
CNY Chinese Renminbi (Yuan)
EUR Euro
KZT Kazakhstan Tenge
HUF Hungarian Forint
INR Indian Rupee
MXN Mexian Nuevo Peso
NOK Norwegian Krone
NZD New Zealand Dollar
PLZ Polish Zloty
TWD New Taiwan Dollar
ZAR South African Rand
Index abbreviations are as follows:
BUBOR Budapest Interbank Offered Rate
BZDI Brazil Interbank Deposit Rate
CMS Constant Maturity Swap
CNY-CFXSREPOFIX01 Chinese Renminbi 7 Days Repurchase Fixing Rates
EURIBOR Euro Interbank Offered Rate
INR Indian Rupee
JIBA South Africa Johannesburg Interbank Agreed Rate
LIBOR London-Interbank Offered Rate
MIBOR-OIS Mid Market Interest Rate for French Franc/Austrian
Schilling and India Swap Composites--Overnight Indexed Swap
MXN TIIE Mexican Peso-Interbank Equilibrium Interest Rate
NIBOR Norwegian Interbank Offered Rate
NZD-BBR-FRA New Zealand Dollar-Bank Bill Rate-Forward Rate Agreement
WIBOR Poland Warsaw Interbank Offer Bid Rate
65 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11. 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 gain (loss) 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.
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 September 30, 2007 is as
follows:
PAY/
BUY/SELL NOTIONAL RECEIVE
REFERENCE CREDIT AMOUNT FIXED TERMINATION PREMIUM
COUNTERPARTY ENTITY PROTECTION (000S) RATE DATES RECEIVED VALUE
- ------------------------------------------------------------------------------------------------------------------
Barclays Bank
plc:
CDX.EM.8 5-Year Index Buy $ 49,370 1.75% 12/20/12 $454,204 $ (511,071)
Republic of Turkey Sell 6,025 1.62 4/20/12 -- 55,279
- ------------------------------------------------------------------------------------------------------------------
Citibank NA,
New York:
Republic of Hungary Buy 7,535 0.40 12/20/15 -- 6,082
Republic of Indonesia Sell 2,990 2.10 9/20/12 -- 100,442
66 | OPPENHEIMER INTERNATIONAL BOND FUND
PAY/
BUY/SELL NOTIONAL RECEIVE
REFERENCE CREDIT AMOUNT FIXED TERMINATION PREMIUM
COUNTERPARTY ENTITY PROTECTION (000S) RATE DATES RECEIVED VALUE
- ------------------------------------------------------------------------------------------------------------------
Citibank NA,
New York:
Continued Republic of Turkey Sell $ 4,520 2.47% 4/20/17 $ -- $ 76,574
Republic of Ukraine Sell 2,500 2.32 8/20/12 -- 69,858
- ------------------------------------------------------------------------------------------------------------------
Credit Suisse
International NJSC Naftogaz Sell 5,000 3.25 4/20/11 -- (484,143)
- ------------------------------------------------------------------------------------------------------------------
Deutsche
Bank AG Republic of Peru Sell 1,200 1.32 4/20/17 -- 17,222
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch
International:
Republic of Indonesia Sell 5,000 1.67 9/20/12 -- 76,985
Republic of Turkey Sell 3,070 2.47 4/20/17 -- 47,003
- ------------------------------------------------------------------------------------------------------------------
Morgan
Stanley Capital
Services, Inc.:
CDX.EM.8 Index Buy 49,370 1.75 12/20/12 444,330 (557,929)
Istanbul Bond Co. SA
for Finansbank Sell 17,390 1.30 3/24/13 -- (155,693)
Republic of Indonesia Sell 6,000 2.23 9/20/12 -- 234,161
Republic of Peru Sell 4,960 1.04 6/20/17 -- (35,893)
Republic of Turkey Sell 5,150 2.75 11/20/16 -- 164,091
Republic of Turkey Sell 6,150 1.60 4/20/12 -- 45,278
- ------------------------------------------------------------------------------------------------------------------
Republic of the
UBS AG Philippines Sell 5,945 1.45 6/20/17 -- (223,930)
------------------------
$898,534 $ (1,075,684)
========================
- --------------------------------------------------------------------------------
12. 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. If the
67 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
12. CURRENCY SWAPS Continued
counter-party defaults, the Fund's maximum loss will consist of the notional
contract value to be received at contract termination as well as any outstanding
interest payments due to the Fund. The Manager monitors the creditworthiness of
counterparties on an ongoing basis.
As of September 30, 2007, the Fund entered into the following currency swap
arrangements:
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ----------------------------------------------------------------------------------------
Credit Suisse
International:
Three-Month
USD BBA
18,590,000 TRY LIBOR 16.75% 2/26/12 $ 4,063,701
Three-Month
USD BBA
7,370,000 TRY LIBOR 17.25 2/7/12 1,844,240
Three-Month
USD BBA
11,105,000 TRY LIBOR 17.30 2/9/12 2,772,679
- ----------------------------------------------------------------------------------------
Three-Month
Merrill Lynch BBA
International 3,840,000 TRY LIBOR 17.10 2/6/12 931,516
------------
$ 9,612,136
============
Notional amount is reported in U.S. Dollars (USD), except for those denoted in
the following currency:
TRY New Turkish Lira
Index abbreviation is as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
- --------------------------------------------------------------------------------
13. ILLIQUID SECURITIES
As of September 30, 2007, investments in securities included issues that are
illiquid. A security may 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 securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
- --------------------------------------------------------------------------------
14. 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
68 | OPPENHEIMER INTERNATIONAL BOND FUND
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 September 30,
2007, the Fund had on loan securities valued at $280,011,205, which are included
in the Statement of Assets and Liabilities as "Investments, at value" and, when
applicable, as "Receivable for Investments sold." Collateral of $284,794,359 was
received for the loans, all of which was received in cash and subsequently
invested in approved investments.
- --------------------------------------------------------------------------------
15. RECENT ACCOUNTING PRONOUNCEMENT
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
September 30, 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, ("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 September 30, 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.
69 | OPPENHEIMER INTERNATIONAL BOND FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER INTERNATIONAL BOND
FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer International Bond Fund (the "Fund"), including the statement of
investments, as of September 30, 2007, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of September 30, 2007, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Fund as of September 30, 2007, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
November 14, 2007
70 | OPPENHEIMER INTERNATIONAL BOND FUND
FEDERAL INCOME TAX INFORMATION Unaudited
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In early 2008, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2007. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Capital gain distributions of $0.0126 per share were paid to Class A,
Class B, Class C, Class N and Class Y shareholders, respectively, on December
28, 2006. Whether received in stock or in cash, the capital gain distribution
should be treated by shareholders as a gain from the sale of the capital assets
held for more than one year (long-term capital gains).
None of the dividends paid by the Fund during the fiscal year ended
September 30, 2007 are eligible for the corporate dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal
year ended September 30, 2007 which are not designated as capital gain
distributions are eligible for lower individual income tax rates to the extent
that the Fund has received qualified dividend income as stipulated by recent tax
legislation. $136,863 of the Fund's fiscal year taxable income may be eligible
for the lower individual income tax rates. In early 2008, shareholders of record
will receive information regarding the percentage of distributions that are
eligible for lower individual income tax rates.
Recent tax legislation allows a regulated investment company to designate
distributions not designated as capital gain distributions, as either interest
related dividends or short-term capital gain dividends, both of which are exempt
from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal
year ended September 30, 2007, $54,031,502 or 20.98% of the ordinary
distributions paid by the Fund qualifies as an interest related dividend.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
71 | OPPENHEIMER INTERNATIONAL BOND FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
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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.
72 | OPPENHEIMER INTERNATIONAL BOND FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
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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.
73 | OPPENHEIMER INTERNATIONAL BOND FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
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 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
considered 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 and 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.
74 | OPPENHEIMER INTERNATIONAL BOND FUND
ECONOMIES OF SCALE. The Board reviewed whether the Manager may realize
economies of scale in managing and supporting the Fund. The Board noted that the
Fund currently has management fee breakpoints, which are intended to share with
shareholders 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
quality services to the Fund and that maintaining the financial viability of the
Manager is important in order for the Manager to continue to provide significant
services to the Fund and its shareholders.
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 considered all of the above information, and considered the
terms and conditions of the Agreement, including the management fee, in light of
all of the surrounding circumstances.
75 | OPPENHEIMER INTERNATIONAL BOND FUND
TRUSTEES AND OFFICERS Unaudited
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NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS
FUND, LENGTH OF SERVICE, AGE HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL,
TRUSTEES COLORADO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER
RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
WILLIAM L. ARMSTRONG, President, Colorado Christian University (since 2006); Chairman, Cherry Creek
Chairman of the Board of Mortgage Company (since 1991), Chairman, Centennial State Mortgage
Trustees (since 2003), Trustee Company (since 1994), Chairman, The El Paso Mortgage Company (since 1993);
(since 1999) Chairman, Ambassador Media Corporation (since 1984); Chairman, Broadway
Age: 70 Ventures (since 1984); Director of Helmerich & Payne, Inc. (oil and gas
drilling/production company) (since 1992), Campus Crusade for Christ (non-
profit) (since 1991); Former Director, The Lynde and Harry Bradley Foundation,
Inc. (non-profit organization) (2002-2006); former Chairman of: Transland
Financial Services, Inc. (private mortgage banking company) (1997-2003), Great
Frontier Insurance (1995-2000), Frontier Real Estate, Inc. (residential real estate
brokerage) (1994-2000) and Frontier Title (title insurance agency) (1995-2000);
former Director of the following: UNUMProvident (insurance company) (1991-
2004), Storage Technology Corporation (computer equipment company)
(1991-2003) and International Family Entertainment (television channel) (1992-
1997); U.S. Senator (January 1979-January 1991). Oversees 38 portfolios in the
OppenheimerFunds complex.
GEORGE C. BOWEN, Assistant Secretary and Director of the Manager (December 1991-April 1999);
Trustee (since 1998) President, Treasurer and Director of Centennial Capital Corporation (June 1989-April
Age: 71 1999); Chief Executive Officer and Director of MultiSource Services, Inc. (March
1996-April 1999); Mr. Bowen held several positions with OppenheimerFunds, Inc.
and with subsidiary or affiliated companies of OppenheimerFunds, Inc. (September
1987-April 1999). Oversees 38 portfolios in the OppenheimerFunds complex.
EDWARD L. CAMERON, Member of The Life Guard of Mount Vernon (George Washington historical
Trustee (since 1999) site) (June 2000-May 2006); Partner of PricewaterhouseCoopers LLP (account-
Age: 69 ing firm) (July 1974-June 1999); Chairman of Price Waterhouse LLP Global
Investment Management Industry Services Group (accounting firm) (July 1994-
June 1998). Oversees 38 portfolios in the OppenheimerFunds complex.
JON S. FOSSEL, Director of UNUMProvident (insurance company) (since June 2002); Director of
Trustee (since 1995) Northwestern Energy Corp. (public utility corporation) (since November 2004);
Age: 65 Director of P.R. Pharmaceuticals (October 1999-October 2003); Director of Rocky
Mountain Elk Foundation (non-profit organization) (February 1998-February 2003
and since February 2005); Chairman and Director (until October 1996) and President
and Chief Executive Officer (until October 1995) of the Manager; President, Chief
Executive Officer and Director of the following: Oppenheimer Acquisition Corp.
("OAC") (parent holding company of the Manager), Shareholders Services, Inc. and
Shareholder Financial Services, Inc. (until October 1995). Oversees 38 portfolios
in the OppenheimerFunds complex.
SAM FREEDMAN, Director of Colorado UpLIFT (charitable organization) (since September 1984).
Trustee (since 1996) Mr. Freedman held several positions with the Manager and with subsidiary or
Age: 67 affiliated companies of the Manager (until October 1994). Oversees 38 portfo-
lios in the OppenheimerFunds complex.
76 | OPPENHEIMER INTERNATIONAL BOND FUND
BEVERLY L. HAMILTON, Trustee of Monterey Institute for International Studies (educational organization)
Trustee (since 2002) (since February 2000); Board Member of Middlebury College (educational orga-
Age: 61 nization) (since December 2005); Director of The California Endowment
(philanthropic organization) (since April 2002); Director (February 2002-2005)
and Chairman of Trustees (since 2006) of the Community Hospital of Monterey
Peninsula; Director (October 1991-2005) and Vice Chairman (since 2006) of
American Funds' Emerging Markets Growth Fund, Inc. (mutual fund); President
of ARCO Investment Management Company (February 1991-April 2000);
Member of the investment committees of The Rockefeller Foundation (since
2001) and The University of Michigan (since 2000); Advisor at Credit Suisse First
Boston's Sprout venture capital unit (venture capital fund) (1994-January 2005);
Trustee of MassMutual Institutional Funds (investment company) (1996-June
2004); Trustee of MML Series Investment Fund (investment company) (April
1989-June 2004); Member of the investment committee of Hartford Hospital
(2000-2003); and Advisor to Unilever (Holland) pension fund (2000-2003).
Oversees 38 portfolios in the OppenheimerFunds complex.
ROBERT J. MALONE, Director of Jones Knowledge, Inc. (since 2006); Director of Jones International
Trustee (since 2002) University (educational organization) (since August 2005); Chairman, Chief
Age: 63 Executive Officer and Director of Steele Street State Bank (commercial banking)
(since August 2003); Director of Colorado UpLift (charitable organization) (since
1986); Trustee of the Gallagher Family Foundation (non-profit organization)
(since 2000); Former Chairman of U.S. Bank-Colorado (subsidiary of U.S. Bancorp
and formerly Colorado National Bank) (July 1996-April 1999); Director of
Commercial Assets, Inc. (real estate investment trust) (1993-2000); Director of
Jones Knowledge, Inc. (2001-July 2004); and Director of U.S. Exploration, Inc. (oil
and gas exploration) (1997-February 2004). Oversees 38 portfolios in the
OppenheimerFunds complex.
F. WILLIAM MARSHALL, JR., Trustee of MassMutual Select Funds (formerly MassMutual Institutional Funds)
Trustee (since 2000) (investment company) (since 1996) and MML Series Investment Fund (invest-
Age: 65 ment company) (since 1996); Trustee of Worcester Polytech Institute (since
1985); Chairman (since 1994) of the Investment Committee of the Worcester
Polytech Institute (private university); President and Treasurer of the SIS Funds
(private charitable fund) (since January 1999); Chairman of SIS & Family Bank,
F.S.B. (formerly SIS Bank) (commercial bank) (January 1999-July 1999); and
Executive Vice President of Peoples Heritage Financial Group, Inc. (com-
mercial bank) (January 1999-July 1999). Oversees 40 portfolios in the
OppenheimerFunds complex.
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INTERESTED TRUSTEE AND THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH
OFFICER FLOOR, NEW YORK, NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEF-
INITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER
FOR AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR.
MURPHY IS AN INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC.
AND ITS AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director of the Manager (since June
Trustee, President and 2001); President of the Manager (September 2000-March 2007); President and
Principal Executive Officer director or trustee of other Oppenheimer funds; President and Director of
(since 2001) Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent holding com-
Age: 58 pany) and of Oppenheimer Partnership Holdings, Inc. (holding company
subsidiary of the Manager) (since July 2001); Director of OppenheimerFunds
Distributor, Inc. (subsidiary of the Manager) (November 2001-December 2006);
Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial
Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001);
77 | OPPENHEIMER INTERNATIONAL BOND FUND
TRUSTEES AND OFFICERS Unaudited / Continued
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JOHN V. MURPHY, President and Director of OppenheimerFunds Legacy Program (charitable trust
Continued program established by the Manager) (since July 2001); Director of the follow-
ing investment advisory subsidiaries of the Manager: OFI Institutional Asset
Management, Inc., Centennial Asset Management Corporation, Trinity Investment
Management Corporation and Tremont Capital Management, Inc. (since November
2001), HarbourView Asset Management Corporation and OFI Private Investments,
Inc. (since July 2001); President (since November 2001) and Director (since July
2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of
Massachusetts Mutual Life Insurance Company (OAC's parent company) (since
February 1997); Director of DLB Acquisition Corporation (holding company parent
of Babson Capital Management LLC) (since June 1995); Chairman (since October
2007) and Member of the Investment Company Institute's Board of Governors
(since October 2003); Chief Operating Officer of the Manager (September 2000-
June 2001). Oversees 102 portfolios in the OppenheimerFunds complex.
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OTHER OFFICERS OF THE THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS.
FUND STEINMETZ, ZACK, GILLESPIE AND MS. BLOOMBERG, TWO WORLD FINANCIAL CENTER, 225
LIBERTY STREET, NEW YORK, NEW YORK 10281-1008, FOR MESSRS. VANDEHEY, WIXTED,
PETERSEN, SZILAGYI AND MS. IVES, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-
3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
ARTHUR P. STEINMETZ, Senior Vice President of the Manager (since March 1993) and of HarbourView
Vice President and Portfolio Asset Management Corporation (since March 2000). An officer of 4 portfolios in
Manager (since 1993) the OppenheimerFunds complex.
Age: 48
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since
Vice President and Chief March 2004); Chief Compliance Officer of the Manager, OppenheimerFunds
Compliance Officer Distributor, Inc., Centennial Asset Management and Shareholder Services, Inc.
(since 2004) (since March 2004); Vice President of OppenheimerFunds Distributor, Inc.,
Age: 57 Centennial Asset Management Corporation and Shareholder Services, Inc. (since
June 1983). Former Vice President and Director of Internal Audit of the Manager
(1997-February 2004). An officer of 102 portfolios in the OppenheimerFunds
complex.
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of
Treasurer and Principal the following: HarbourView Asset Management Corporation, Shareholder Financial
Financial & Accounting Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management, Inc.
Officer (since 1999) and Oppenheimer Partnership Holdings, Inc. (since March 1999), OFI Private
Age: 48 Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. (since
May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset
Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program
(charitable trust program established by the Manager) (since June 2003); Treasurer
and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the
Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March
1999), Centennial Asset Management Corporation (March 1999-October 2003) and
OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief
Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March
1995-March 1999). An officer of 102 portfolios in the OppenheimerFunds complex.
78 | OPPENHEIMER INTERNATIONAL BOND FUND
BRIAN PETERSEN, Vice President of the Manager (since February 2007); Assistant Vice President of
Assistant Treasurer the Manager (August 2002-February 2007); Manager/Financial Product
(since 2004) Accounting of the Manager (November 1998-July 2002). An officer of 102 port-
Age: 37 folios in the OppenheimerFunds complex.
BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since July 2004); Director of Financial
Assistant Treasurer Reporting and Compliance of First Data Corporation (April 2003-July 2004);
(since 2005) Manager of Compliance of Berger Financial Group LLC (May 2001-March 2003);
Age: 37 Director of Mutual Fund Operations at American Data Services, Inc. (September
2000-May 2001). An officer of 102 portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March
Vice President and Secretary 2002) of the Manager; General Counsel and Director of the Distributor (since
(since 2001) December 2001); General Counsel of Centennial Asset Management
Age: 59 Corporation (since December 2001); Senior Vice President and General Counsel
of HarbourView Asset Management Corporation (since December 2001);
Secretary and General Counsel of OAC (since November 2001); Assistant
Secretary (since September 1997) and Director (since November 2001) of
OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice
President and Director of Oppenheimer Partnership Holdings, Inc. (since
December 2002); Director of Oppenheimer Real Asset Management, Inc. (since
November 2001); Senior Vice President, General Counsel and Director of
Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since
December 2001); Senior Vice President, General Counsel and Director of OFI
Private Investments, Inc. and OFI Trust Company (since November 2001); Vice
President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice
President and General Counsel of OFI Institutional Asset Management, Inc.
(since November 2001); Director of OppenheimerFunds (Asia) Limited (since
December 2003); Senior Vice President (May 1985-December 2003), Acting
General Counsel (November 2001-February 2002) and Associate General
Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the
following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder
Financial Services, Inc. (November 1989-November 2001), and
OppenheimerFunds International Ltd. (September 1997-November 2001). An
officer of 102 portfolios in the OppenheimerFunds complex.
LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May 2004); First
Assistant Secretary Vice President (April 2001-April 2004), Associate General Counsel (December
(since 2004) 2000-April 2004), Corporate Vice President (May 1999-April 2001) and Assistant
Age: 39 General Counsel (May 1999-December 2000) of UBS Financial Services Inc. (for-
merly, PaineWebber Incorporated). An officer of 102 portfolios in the
OppenheimerFunds complex.
PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager (since
Assistant Secretary September 2004); First Vice President (2000-September 2004), Director (2000-
(since 2004) September 2004) and Vice President (1998-2000) of Merrill Lynch Investment
Age: 43 Management. An officer of 102 portfolios in the OppenheimerFunds complex.
79 | OPPENHEIMER INTERNATIONAL BOND FUND
TRUSTEES AND OFFICERS Unaudited / Continued
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KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and Assistant Secretary
Assistant Secretary (since October 2003) of the Manager; Vice President (since 1999) and Assist-
(since 2001) ant Secretary (since October 2003) of the Distributor; Assistant Secretary of
Age: 42 Centennial Asset Management Corporation (since October 2003); Vice
President and Assistant Secretary of Shareholder Services, Inc. (since 1999);
Assistant Secretary of OppenheimerFunds Legacy Program and Shareholder
Financial Services, Inc. (since December 2001); Assistant Counsel of the
Manager (August 1994-October 2003). An officer of 102 portfolios in the
OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE, UPON
REQUEST, BY CALLING 1.800.525.7048.
80 | OPPENHEIMER INTERNATIONAL BOND FUND
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the registrant has determined that Edward L. Cameron,
the Chairman of the Board's Audit Committee, and George C. Bowen, a member of
the Board's Audit Committee, are audit committee financial experts and that
Messrs. Cameron and Bowen are "independent" for purposes of this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $61,875 in fiscal 2007 and $36,000 in fiscal 2006.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed not such fees for 2007 and $40,000 for 2006 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services include: Review of management's assessment of the financial
statements disclosure impacts of an IRS private letter ruling.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years to the registrant's investment adviser or any entity controlling,
controlled by, or under common control with the adviser that provides ongoing
services to the registrant.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees in fiscal 2007 and $9,757 in fiscal 2006.
The principal accountant for the audit of the registrant's annual financial
statements billed $32,732 in fiscal 2007 and no such fees in fiscal 2006 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such fees would include compliance review and professional services for 22c-2
program.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and other
services to be provided by the principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its Chairman
for any subsequent new engagements that arise between regularly scheduled
meeting dates provided that any fees such pre-approved are presented to
the audit committee at its next regularly scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid by
the registrant to it principal accountant during the fiscal year in which
services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee of
the registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $32,732 in fiscal 2007 and $49,757 in fiscal
2006 to the registrant and the registrant's investment adviser or any
entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant related to
non-audit fees. Those billings did not include any prohibited non-audit
services as defined by the Securities Exchange Act of 1934.
(h) No such services were rendered.
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 09/30/2007, 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) Exhibit attached hereto.
(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: 11/14/2007
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: 11/14/2007
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 11/14/2007