Oppenheimer Strategic Income Fund

485BPOS 1 n1afiling.htm 485B FILING STRATEGIC INCOME FUND Oppenheimer Strategic Income Fund

Registration No. 33-28598
File No. 811-5724

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X]

Pre-Effective Amendment No. _____ [ ]

Post-Effective Amendment No. 24 [X]
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and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]

Amendment No. 25 [X]
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OPPENHEIMER STRATEGIC INCOME FUND
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(Exact Name of Registrant as Specified in Charter)

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6803 S. Tucson Way, Centennial, CO 80112-3924
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(Address of Principal Executive Offices) (Zip Code)

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303-768-3200
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(Registrant's Telephone Number, including Area Code)

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Robert G. Zack, Esq.
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OppenheimerFunds, Inc.
Two World Financial Center, 225 Liberty Street
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New York, New York 10080
(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box):

[ ] Immediately upon filing pursuant to paragraph (b)
[X] On November 21, 2003 pursuant to paragraph (b)
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[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On ____________ pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] On _______________ pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Oppenheimer
Strategic Income Fund

Prospectus dated November 21, 2003

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the Fund's securities nor has it determined that this
Prospectus is accurate or complete. It is a criminal offense to represent
otherwise.

Oppenheimer Strategic Income Fund is a mutual fund. It seeks high current
income by investing mainly in debt securities in three market sectors: debt
securities of foreign governments and companies, U.S. government securities,
and lower-rated high-yield securities of U.S. and foreign companies.

This Prospectus contains important information about the Fund's
objective, its investment policies, strategies and risks. It also contains
important information about how to buy and sell shares of the Fund and other
account features. Please read this Prospectus carefully before you invest and
keep it for future reference about your account.

(logo) OppenheimerFunds
The Right Way to Invest

Contents

About the Fund
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3 The Fund's Investment Objective and Principal Investment
Strategies

4 Main Risks of Investing in the Fund

7 The Fund's Past Performance

8 Fees and Expenses of the Fund

9 About the Fund's Investments

15 How the Fund is Managed

About Your Account
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15 How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Class N Shares
Class Y Shares

24 Special Investor Services
AccountLink
PhoneLink
OppenheimerFunds Internet Website
Retirement Plans

26 How to Sell Shares

By Wire
By Mail
By Telephone
By Checkwriting

29 How to Exchange Shares

30 Shareholder Account Rules and Policies

32 Dividends, Capital Gains and Taxes

33 Financial Highlights

A B O U T T H E F U N D

The Fund's Investment Objective and Principal Investment
Strategies

WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks high current income
by investing mainly in debt securities.

WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests mainly in debt
securities of issuers in three market sectors: foreign governments and
companies, U.S. government securities and lower-rated high-yield securities
of U.S. and foreign companies (commonly called "junk bonds"). Those debt
securities typically include:

o foreign government and U.S. government bonds and notes,
o collateralized mortgage obligations (CMOs),
o other mortgage-related securities and asset-backed securities,
o participation interests in loans,
o "structured" notes,
o lower-grade, high-yield domestic and foreign corporate debt
obligations, and
o "zero-coupon" or "stripped" securities.

Under normal market conditions, the Fund invests in each of those three
market sectors. However, the Fund is not required to invest in all three
sectors at all times, and the amount of its assets in each of the three
sectors will vary over time. The Fund can invest up to 100% of its assets in
any one sector at any time, if the Fund's investment Manager,
OppenheimerFunds, Inc., believes that the Fund can achieve its objective
without undue risk. The Fund can invest in issuers in any market
capitalization range - large-cap, mid-cap and small-cap, and can buy
securities having short-, medium-, or long-term maturities.

The Fund's foreign investments can include debt securities of issuers
in developed markets and emerging markets. The Fund also uses derivative
investments for hedging purposes or to seek higher investment returns. These
include options, futures, forward contracts, CMOs and "structured" notes. The
Fund's investments are more fully explained in "About the Fund's
Investments," below.

HOW DO THE PORTFOLIO MANAGERS DECIDE WHAT SECURITIES TO BUY OR SELL? In
selecting securities to buy or sell for the Fund, the Fund's portfolio
managers analyze the overall investment opportunities and risks among the
three sectors in which the Fund invests. Their overall strategy is to build a
broadly-diversified portfolio of debt securities to help moderate the special
risks of investing in high-yield debt securities and foreign securities. The
Fund may try to take advantage of any lack of correlation in the movement of
securities prices among the three sectors from time to time. When buying or
selling securities, the portfolio managers currently focus on the factors
below (some of which may vary in particular cases and may change over time),
looking for:

o Securities offering high current income,
o Overall portfolio diversification by seeking securities whose market
prices tend to move in different directions, and
o Relative values among the three major market sectors in which the Fund
invests.

The Fund's portfolio managers may sell securities from the portfolio
when the analytics underlying the factors discussed above no longer appear
favorable to the Fund. The Fund's diversification strategies, both with
respect to securities in different sectors, and securities issued by
different companies and governments, are intended to help reduce the
volatility of the Fund's share prices while seeking current income.

WHO IS THE FUND DESIGNED FOR? The Fund is designed primarily for investors
seeking high current income from a fund that normally diversifies its
portfolio by investing in a variety of domestic and foreign debt securities,
including government securities and lower-grade debt securities. Those
investors should be willing to assume the risks of short-term share price
fluctuations that are typical for a fund that invests in debt securities,
particularly high-yield and foreign securities. Since the Fund's income level
will fluctuate, it is not designed for investors needing an assured level of
current income. Also, the Fund does not seek capital appreciation. The Fund
is designed as a long-term investment and may be appropriate as a part of an
investor's retirement plan portfolio. However, the Fund is not a complete
investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments are subject
to changes in their value from a number of factors described below. There is
also the risk that poor security selection by the Manager will cause the Fund
to under perform other funds having a similar objective.

CREDIT RISK. Debt securities are subject to credit risk. Credit risk is the
risk that the issuer of a debt security might not make interest and principal
payments on the security as they become due. If the issuer fails to pay
interest, the Fund's income might be reduced, and if the issuer fails to
repay principal, the value of that security and of the Fund's shares might
fall. A downgrade in an issuer's credit rating or other adverse news about an
issuer can reduce the market value of that issuer's securities. While the
Fund's investments in U.S. government securities are subject to little credit
risk, the Fund's other investments in debt securities, particularly
high-yield, lower-grade debt securities, are subject to risks of default.

Special Risks of Lower-Grade Securities. Because the Fund can invest without
limit in securities below investment grade to seek high income, the
Fund's credit risks are greater than those of funds that buy only
investment-grade bonds. Lower-grade debt securities may be subject to
greater market fluctuations and greater risks of loss of income and
principal than investment-grade debt securities (particularly during
general economic downturns). Securities that are (or that have fallen)
below investment grade are exposed to a greater risk that the issuers
of those securities might not meet their debt obligations. The market
for these securities may be less liquid, making it difficult for the
Fund to value or sell them at an acceptable price. These risks can
reduce the Fund's share prices and the income it earns.

RISKS OF FOREIGN INVESTING. The Fund can invest without limit in foreign
government and corporate debt securities in both developed and emerging
markets. The Fund will normally invest significant amounts of its assets in
foreign securities. While foreign securities may offer special investment
opportunities, they also have special risks that can reduce the Fund's share
prices and income.

The change in value of a foreign currency against the U.S. dollar will
result in a change in the U.S. dollar value of securities denominated in that
foreign currency. Currency rate changes can also affect the distributions
the Fund makes from the income it receives from foreign securities if foreign
currency values change against the U.S. dollar. Foreign investing can result
in higher transaction and operating costs for the Fund. Foreign issuers are
not subject to the same accounting and disclosure requirements that U.S.
companies are subject to.

The value of foreign investments may be affected by exchange control
regulations, expropriation or nationalization of a company's assets, foreign
taxes, delays in settlement of transactions, changes in governmental economic
or monetary policy in the U.S. or abroad, or other political and economic
factors.

Special Risks of Emerging Markets. The Fund can buy securities in emerging
and developing markets. They present risks not found in more mature
markets. Those securities may be more difficult to sell at an
acceptable price and their prices may be more volatile than securities
of issuers in more developed markets. Settlements of trades may be
subject to greater delays so that the Fund might not receive the sale
proceeds of a security on a timely basis.

Emerging markets might have less developed trading markets and
exchanges, and less developed legal and accounting systems. Investments may
be subject to greater risks of government restrictions on withdrawing the
sales proceeds of securities from the country. Economies of developing
countries may be more dependent on relatively few industries that may be
highly vulnerable to local and global changes. Governments may be more
unstable and present greater risks of nationalization or restrictions on
foreign ownership of stocks of local companies. These investments may be
substantially more volatile than debt securities of issuers in the U.S. and
other developed countries and may be very speculative.

INTEREST RATE RISKS. The values of debt securities, including U.S. government
securities, are subject to change when prevailing interest rates change.
When interest rates fall, the values of already-issued debt securities
generally rise. When interest rates rise, the values of already-issued debt
securities generally fall, and they may sell at a discount from their face
amount. The magnitude of these fluctuations will often be greater for debt
securities having longer maturities than for shorter-term debt securities.
The Fund's share prices can go up or down when interest rates change because
of the effect of the changes on the value of the Fund's investments in debt
securities. Also, if interest rates fall, the Fund's investments in new
securities at lower yields will reduce the Fund's income.

PREPAYMENT RISK. Prepayment risk is the risk that the issuer of a security
can prepay the principal prior to the security's expected maturity. The
prices and yields of mortgage-related securities are determined, in part, by
assumptions about the cash flows from the rate of payments of the underlying
mortgages. Changes in interest rates may cause the rate of expected
prepayments of those mortgages to change. In general, prepayments increase
when general interest rates fall and decrease when general interest rates
rise. Securities subject to prepayment risk, including the mortgage-related
securities that the Fund buys, have greater potential for losses when
interest rates rise than other types of debt securities.

The impact of prepayments on the price of a security may be difficult
to predict and may increase the volatility of the price. Interest-only and
principal-only "stripped" securities can be particularly volatile when
interest rates change. If the Fund buys mortgage-related securities at a
premium, accelerated prepayments on those securities could cause the Fund to
lose a portion of its principal investment represented by the premium the
Fund paid.

If prepayments of mortgages underlying a CMO occur faster than expected
when interest rates fall, the market value and yield of the CMO could be
reduced. If interest rates rise rapidly, prepayments may occur at slower
rates than expected, which could have the effect of lengthening the expected
maturity of a short- or medium-term security. That could cause its value to
fluctuate more widely in response to changes in interest rates. In turn, this
could cause the value of the Fund's shares to fall more.

RISKS OF DERIVATIVE INVESTMENTS. In general terms, a derivative investment is
an investment contract whose value depends on (or is derived from) the value
of an underlying asset, interest rate or index. Options, futures, structured
notes and mortgage-related securities are some of the derivatives the Fund
typically uses.

If the issuer of the derivative does not pay the amount due, the Fund
can lose money on the investment. Also, the underlying security or investment
on which the derivative is based, and the derivative itself, might not
perform the way the Manager expected it to perform. If that happens, the
Fund's share prices could fall, and the Fund could get less income than
expected, or its hedge might be unsuccessful. Some derivatives may be
illiquid, making it difficult to value or sell them at an acceptable price.
Using derivatives can increase the volatility of the Fund's share prices.

SECTOR ALLOCATION RISKS. In allocating the Fund's investments among the three
principal sectors in which the Fund invests to seek to take advantage of the
lack of correlation of the performance of these sectors, the Manager's
expectations about the relative performance of those sectors may be
inaccurate, and the Fund's returns might be less than other funds using
similar strategies.

HOW RISKY IS THE FUND OVERALL? The risks described above collectively form
the overall risk profile of the Fund and can affect the value of the Fund's
investments, its investment performance and its prices per share. Particular
investments and investment strategies also have risks. These risks mean that
you can lose money by investing in the Fund. When you redeem your shares,
they may be worth more or less than what you paid for them. There is no
assurance that the Fund will achieve its investment objective.

In the short term, the values of debt securities can fluctuate
substantially because of interest rate changes. Prices of foreign debt
securities, particularly in emerging markets, and of high-yield securities
can be volatile, and the prices of the Fund's shares and its income can go up
and down substantially because of events affecting foreign markets or issuers
or events affecting the high-yield market. In the OppenheimerFunds spectrum,
the Fund is generally more aggressive and has more risks than funds that
focus on U. S. government securities and
investment-grade bonds, but its sector diversification strategy may help make
it less volatile than funds that focus solely on investments in high-yield
bonds or a single foreign sector, such as emerging markets.

The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in
the Fund, by showing changes in the Fund's performance (for its Class A
shares) from year to year for the last 10 calendar years and by showing how
the average annual total returns of the Fund's shares, both before and after
taxes, compare to those of broad-based market indices. The after-tax returns
for the other classes of shares will vary.

The after-tax returns are shown for Class A shares only and are calculated
using the historical highest individual federal marginal income tax rates in
effect during the periods shown, and do not reflect the impact of state or
local taxes. In certain cases, the figure representing "Return After Taxes
on Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a capital
loss occurs upon redemption and translates into an assumed tax deduction that
benefits the shareholder. The after-tax returns are calculated based on
certain assumptions mandated by regulation and your actual after-tax returns
may differ from those shown, depending on your individual tax situation. The
after-tax returns set forth below are not relevant to investors who hold
their fund shares through tax-deferred arrangements such as 401(k) plans or
IRAs or to institutional investors not subject to tax. The Fund's past
investment performance, both before and after taxes, is not necessarily an
indication of how the Fund will perform in the future.

Annual Total Returns (Class A) (as of 12/31 each year)

[See appendix to prospectus for data in bar chart showing annual total
returns]

Sales charges and taxes are not included in the calculations of return in
this bar chart, and if those charges and taxes were included, the returns may
be less than those shown.

For the period from 1/1/03 through 9/30/03, the cumulative return (not
annualized) before taxes for Class A shares was 14.23%.
During the period shown in the bar chart, the highest return (not annualized)
before taxes for a calendar quarter was 6.41% (1QTR'93) and the lowest return
(not annualized) before taxes for a calendar quarter was -3.41% (3QTR'98)

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-------------------------------- 1 Year 5 Years (or 10 Years (or
Average Annual Total Returns Life of Class, Life of Class,
for the periods ended December if Less) if Less)

31, 2002

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Class A Shares (inception

10/16/89) 1.77% 2.64% 6.23%
Return Before Taxes -1.44% -0.66% 2.63%
Return After Taxes on 1.00% 0.42% 3.14%
Distributions
Return After Taxes on
Distributions and Sale of Fund
Shares

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Lehman Brothers Aggregate Bond

Index (reflects no deduction 10.25% 7.55% 7.51%

for fees, expenses or taxes)
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Citigroup World Government Bond
Index (reflects no deduction 19.49% 5.82% 6.64%

for fees, expenses or taxes)
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Class B Shares (inception 0.86% 2.58% 6.28%

11/30/92)
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Class C Shares (inception 4.82% 2.87% 5.30%

5/26/95)
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Class N Shares (inception 5.31% 3.32% N/A

3/1/01)
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Class Y Shares (inception 6.80% 3.80% N/A

1/26/98)
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1 From 12/31/92.
The Fund's average annual total returns include applicable sales charges:
for Class A shares, the current maximum initial sales charge of 4.75%; for
Class B shares, the contingent deferred sales charges of 5% (1-year) and 2%
(5-year); and for Class C and Class N shares, the 1% contingent deferred
sales charge for the 1-year period. There is no sales charge for Class Y
shares. Because Class B shares convert to Class A shares 72 months after
purchase, Class B "life-of-class" performance does not include any
contingent deferred sales charge and uses Class A performance for the
period after conversion. The returns measure the performance of a
hypothetical account and assume that all dividends and capital gains
distributions have been reinvested in additional shares. The performance
of the Fund's Class A shares is compared to the Lehman Brothers Aggregate
Bond Index, an unmanaged index of U.S. corporate and government bonds, and
the Citigroup World Government Bond Index, an unmanaged index of debt
securities of major foreign government bond markets. The indices'
performance includes reinvestment of income but does not reflect
transaction costs, fees, expenses or taxes. The Fund's investments vary
from those in the indices.

Fees and Expenses of the Fund

The following tables are provided to help you understand the fees and
expenses you may pay if you buy and hold shares of the Fund. The Fund pays a
variety of expenses directly for management of its assets, administration,
distribution of its shares and other services. Those expenses are subtracted
from the Fund's assets to calculate the Fund's net asset values per share.
All shareholders therefore pay those expenses indirectly. Shareholders pay
other transaction expenses directly, such as sales charges. The numbers below
are based on the Fund's expenses during its fiscal year ended September 30,
2003.

Shareholder Fees (charges paid directly from your investment):

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Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
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Maximum Sales Charge 4.75% None None None None
(Load) on purchases
(as % of offering price)
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Maximum Deferred Sales None1 5%2 1%3 1%4 None
Charge (Load) (as % of
the lower of the
original offering price
or redemption proceeds)
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1. A contingent deferred sales charge may apply to redemptions of
investments of $1 million or more ($500,000 for certain retirement plan
accounts) of Class A shares. See "How Can You Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent
deferred sales charge declines to 1% in the sixth year and is eliminated
after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of retirement plan's first
purchase of Class N shares.

Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

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Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
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Management Fees 0.53% 0.53% 0.53% 0.53% 0.53%
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Distribution and/or Service 0.25% 1.00% 1.00% 0.50% N/A
(12b-1) Fees

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Other Expenses 0.17% 0.15% 0.16% 0.31% 0.88%

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Total Annual Operating Expenses 0.95% 1.68% 1.69% 1.34% 1.41%

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Expenses may vary in future years. "Other Expenses" include transfer agent
fees, custodial fees, and accounting and legal expenses that the Fund pays.
The "Other Expenses" in the table are based on, among other things, the fees
the Fund would have paid if the transfer agent had not waived a portion of
its fee under a voluntary undertaking to the Fund to limit these fees to
0.35% of average daily net assets per fiscal year for all classes. That
undertaking may be amended or withdrawn at any time. After the waiver, the
actual "Other Expenses" and "Total Annual Operating Expenses" as percentages
of average daily net assets were 0.38% and 0.91%, respectively, for Class Y
shares. Class A, Class B, Class C and Class N expenses were the same as
shown above.

Examples. The following examples are intended to help you compare the cost
of investing in the Fund with the cost of investing in other mutual funds.
The examples assume that you invest $10,000 in a class of shares of the Fund
for the time periods indicated and reinvest your dividends and distributions.

The first example assumes that you redeem all of your shares at the end
of those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that
the class's operating expenses remain the same. Your actual costs may be
higher or lower because expenses will vary over time. Based on these
assumptions your expenses would be as follows:

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If shares are redeemed: 1 Year 3 Years 5 Years 10 Years
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Class A Shares $567 $763 $976 $1,586

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Class B Shares $671 $830 $1,113 $1,6151

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Class C Shares $272 $533 $918 $1,998

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Class N Shares $236 $425 $734 $1,613

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Class Y Shares $144 $446 $771 $1,691

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If shares are not 1 Year 3 Years 5 Years 10 Years
redeemed:
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Class A Shares $567 $763 $976 $1,586

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Class B Shares $171 $530 $913 $1,6151

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Class C Shares $172 $533 $918 $1,998

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Class N Shares $136 $425 $734 $1,613

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Class Y Shares $144 $446 $771 $1,691

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In the first example, expenses include the initial sales charge for Class A
and the applicable Class B, Class C or Class N contingent deferred sales
charges. In the second example, the Class A expenses include the sales
charge, but Class B, Class C and Class N expenses do not include the
contingent deferred sales charges. There is no sales charge on Class Y
shares.
1 Class B expenses for years 7 through 10 are based on Class A expenses
because Class B shares automatically convert to Class A shares 72 months
after purchase.

About the Fund's Investments

THE FUND'S PRINCIPAL INVESTMENT POLICIES AND RISKS. The allocation of the
Fund's portfolio among different investments will vary over time based upon
the Manager's evaluation of economic and market trends. The Fund's portfolio
might not always include all of the different types of investments described
below. At times the Fund might increase the relative emphasis of its
investments in one or two sectors because of the Manager's belief that there
are greater opportunities for high current income from debt securities of
issuers in those sectors relative to other sectors. The Statement of
Additional Information contains more detailed information about the Fund's
investment policies and risks.

The Manager tries to reduce risks by carefully researching securities
before they are purchased, and in some cases by using hedging techniques. The
Fund attempts to reduce its exposure to market risks by diversifying its
investments, that is, by not holding a substantial amount of securities of
any one issuer and by not investing too great a percentage of the Fund's
assets in any one company. Also, the Fund does not concentrate 25% or more
of its total assets in investments in the securities of any one foreign
government or in securities of companies in any one industry. However,
changes in the overall market prices of securities and the income they pay
can occur at any time. The Fund's share prices and yields will change daily
based on changes in market prices of securities and market conditions and in
response to other economic events.

The Fund can invest in different types of debt securities, as described
above. The debt securities the Fund buys may be rated by
nationally-recognized rating organizations or they may be unrated securities
assigned an equivalent rating by the Manager. The Fund can buy
investment-grade securities, although it normally invests a substantial part
of its assets in debt securities below investment-grade, and can do so
without limit.

U.S. Government Securities. The Fund normally invests some of its assets in
securities issued or guaranteed by the U.S. Treasury or other
government agencies or federally-chartered corporate entities referred
to as "instrumentalities." These are referred to as "U.S. government
securities" in this Prospectus.

U.S. Treasury Obligations. These include Treasury bills (having maturities of
one year or less when issued), Treasury notes (having maturities of
more than one and up to ten years when issued), and Treasury bonds
(having maturities of more than ten years when issued). Treasury
securities are backed by the full faith and credit of the United States
as to timely payments of interest and repayments of principal. The Fund
can buy U. S. Treasury securities that have been "stripped" of their
coupons by a Federal Reserve Bank, and zero-coupon U.S. Treasury
securities described below.

o Obligations of U.S. Government Agencies or Instrumentalities. These
include direct obligations and mortgage-related securities that have
different levels of credit support from the U.S. government. Some are
supported by the full faith and credit of the U.S. government, such as
Government National Mortgage Association pass-through mortgage
certificates (called "Ginnie Maes"). Some are supported by the right of
the issuer to borrow from the U.S. Treasury under certain
circumstances, such as Federal National Mortgage Association bonds
("Fannie Maes"). Others are supported only by the credit of the entity
that issued them, such as Federal Home Loan Mortgage Corporation
obligations ("Freddie Macs"). Securities issued by Fannie Mae, Freddie
Mac and the Federal Home Loan Banks are neither guaranteed nor issued
by the U.S. government.

o Mortgage-Related U.S. Government Securities. Pools of residential or
commercial mortgages, in the form of CMOs and other "pass-through"
mortgage securities that are U.S. government securities, have
collateral to secure payment of interest and principal. They may be
issued in different series each having different interest rates and
maturities.
The collateral is either in the form of mortgage pass-through
certificates issued or guaranteed by a U.S. agency or instrumentality
or mortgage loans insured by a U.S. government agency or
instrumentality.

The Fund may enter into "forward roll" (also referred to as "mortgage
dollar rolls") transactions with respect to mortgage-related
securities. In this type of transaction, the Fund sells a
mortgage-related security to a buyer and simultaneously agrees to
repurchase a similar security at a later date at a set price.

During the period between the sale and the purchase, the Fund will not
be entitled to receive interest and principal payments on the
securities that have been sold. It is possible that the market value
of the securities the Fund sells may decline below the price at which
the Fund is obligated to repurchase securities, or that the
counterparty might default in its obligation.

High-Yield, Lower-Grade Debt Securities. The Fund can purchase a variety of
lower-grade, high-yield debt securities of U.S. and foreign issuers,
including bonds, debentures, notes, preferred stocks, loan
participation interests, structured notes, asset-backed securities,
among others, to seek high current income. These securities are
sometimes called "junk bonds."

Lower-grade debt securities are rated below "Baa" by Moody's Investors
Service, Inc. ("Moody's") or lower than "BBB" by Standard & Poor's
Rating Service ("S&P") or have comparable ratings by other
nationally-recognized rating organizations. The Fund can invest in
securities rated as low as "C" or "D" or which are in default at the
time the Fund buys them. While securities rated "Baa" by Moody's or
"BBB" by S&P are considered "investment grade," they have some
speculative characteristics.

The Manager does not rely solely on ratings issued by rating
organizations when selecting investments for the Fund, and it can buy
unrated securities. The Manager may assign a rating to an unrated
security that the Manager believes is equivalent to that of a rated
security that offers comparable yields and risks.

Private-Issuer Mortgage-Backed Securities. CMOs and other mortgage-related
securities issued by private issuers are not U.S. government
securities, and are subject to greater credit risks than
mortgage-related securities that are U.S. government securities. The
Fund can invest in mortgage-backed securities issued by private
issuers. Primarily these include multi-class debt or pass-through
certificates secured by mortgage loans. They may be issued by banks,
savings and loans, mortgage bankers and other non-governmental issuers.
Private issuer mortgage-backed securities are subject to the credit
risks of the issuers (as well as interest rate risks and prepayment
risks), although in some cases they may be supported by insurance or
guarantees.

Asset-Backed Securities. The Fund can buy asset-backed securities, which are
fractional interests in pools of loans collateralized by the loans or
other assets or receivables. They are issued by trusts and special
purpose corporations that pass the income from the underlying pool to
the buyer of the interest. These securities are subject to the risk of
default by the issuer as well as by the borrowers of the underlying
loans in the pool, as well as interest rate and prepayment risks.
Foreign Securities. The Fund can buy a variety of debt securities issued by
foreign governments and companies, as well as "supra-national"
entities, such as the World Bank. They can include bonds, debentures,
and notes, including derivative investments called "structured" notes,
described below. The Fund's foreign debt investments can be denominated
in U.S. dollars or in foreign currencies.

o Investments in Emerging and Developing Markets. The Fund can buy bonds
issued out of emerging market countries which are typically denominated
in U.S. dollars but may be denominated in any currency. They are
typically issued by emerging markets countries and are considered
speculative securities with higher risks of default.

CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The Fund's Board of
Trustees can change non-fundamental investment policies without shareholder
approval, although significant changes will be described in amendments to
this Prospectus. Fundamental policies cannot be changed without the approval
of a majority of the Fund's outstanding voting shares. The Fund's investment
objective is a fundamental policy. Other investment restrictions that are
fundamental policies are listed in the Statement of Additional Information.
An investment policy is not fundamental unless this Prospectus or the
Statement of Additional Information says that it is.

OTHER INVESTMENT STRATEGIES. To seek its objective, the Fund can use the
investment techniques and strategies described below. The Fund might not
always use all of them. These techniques have risks, although some are
designed to help reduce overall investment or market risks. The Fund can
invest in common and preferred stocks and other equity securities such as
warrants and rights of foreign and U.S. companies. However, the Fund does not
anticipate having a substantial percentage of its assets invested in those
types of securities as part of its normal portfolio strategies.

Zero-Coupon and "Stripped" Securities. The Fund can buy government and
corporate zero-coupon bonds that pay no interest. They are issued at a
substantial discount from their face value. The Fund can invest up to
50% of its total assets in zero-coupon securities issued by either the
U.S. government or U.S. companies. The Fund also can buy "stripped"
securities that are the separate income or principal components of a
debt security. Some CMOs or other mortgage-related securities may be
stripped, with each component having a different proportion of
principal or interest payments. One class might receive all the
interest and the other all the principal payments.

Zero-coupon and stripped securities are subject to greater fluctuations
in price from interest rate changes than interest-bearing securities.
The Fund may have to pay out the imputed income on zero-coupon
securities without receiving the actual cash currently. The values of
interest-only and principal-only mortgage-related securities are also
very sensitive to prepayments of underlying mortgages and changes in
interest rates. When prepayments tend to fall, the timing of the cash
flows to these securities increases, making them more sensitive to
changes in interest rates. The market for some of these securities may
be limited, making it difficult for the Fund to dispose of its holdings
quickly at an acceptable price.

Participation Interests in Loans. These securities represent an undivided
fractional interest in a loan obligation of a borrower. They are
typically purchased from banks or dealers that have made the loan or
are members of the loan syndicate. The loans may be to foreign or U.S.
companies. They are subject to the risk of default by the borrower as
well as credit risks of the servicing agent of the participation
interest, which can cause the Fund to lose money on its investment. The
Fund can also buy interests in trusts and other entities that hold loan
obligations. In that case the Fund will be subject to the trust's
credit risks. The Fund does not invest more than 5% of its net assets
in participation interests of any one borrower.

Equity Securities. Equity securities include common stocks, as well as
"equity equivalents" such as preferred stocks and securities
convertible into common stock. Preferred stock has a set dividend rate
and ranks after bonds and before common stocks in its claim for
dividends and on assets if the issuer is liquidated or becomes
bankrupt. The Manager considers some convertible securities to be
"equity equivalents" because of the conversion feature and in that case
their rating has less impact on the investment decision than in the
case of debt securities.

Illiquid and Restricted Securities. Investments may be illiquid because they
do not have an active trading market, making it difficult to value them
or dispose of them promptly at an acceptable price. A restricted
security is one that has a contractual restriction on its resale or
which cannot be sold publicly until it is registered under the
Securities Act of 1933. The Fund will not invest more than 10% of its
net assets in illiquid or restricted securities (the Fund's Board of
Trustees can increase that limit to 15%). Certain restricted
securities that are eligible for resale to qualified institutional
purchasers may not be subject to that limit. The Manager monitors
holdings of illiquid securities on an ongoing basis to determine
whether to sell any holdings to maintain adequate liquidity.

Derivative Investments. The Fund can invest in a number of different kinds of
"derivative investments." Options, futures contracts, structured
notes, mortgage-related securities and forward contracts are examples
of "derivative investments" the Fund uses. In addition to using
derivatives to hedge risks, the Fund can use other derivative
investments because they offer the potential for increased income.
Interest rate and stock market changes in the U.S. and abroad may
influence the performance of derivatives.

o "Structured" Notes. The Fund can buy "structured" notes, which are
specially-designed debt investments with principal payments or interest
payments that are linked to the value of an index (such as a currency
or securities index) or commodity.o The terms of the instrument may be
"structured" by the purchaser (the Fund) and the borrower issuing the
note.

The values of these notes will fall or rise in response to the changes
in the values of the underlying security or index. They are subject to
both credit and interest rate risks. Therefore the Fund could receive
more or less than it originally invested when a note matures, or it
might receive less interest than the stated coupon payment if the
underlying investment or index does not perform as anticipated. The
prices of these notes may be very volatile and they may have a limited
trading market, making it difficult for the Fund to value them or to
sell its investment quickly at an acceptable price.

Hedging. The Fund can buy and sell futures contracts, put and call options,
and forward contracts. These are all referred to as "hedging
instruments." The Fund is not required to use hedging instruments to
seek its objective. The Fund does not use hedging instruments for
speculative purposes and has limits on its use of them.

The Fund could buy and sell options, futures and forward contracts for
a number of purposes. It might do so to try to hedge against falling
prices of its portfolio securities or to establish a position in the
securities market as a temporary substitute for purchasing individual
securities. It might do so to try to manage its exposure to changing
interest rates. Forward contracts and currency options can be used to
try to manage foreign currency risks on the Fund's foreign investments.
The Fund could write covered call options to seek cash for liquidity
purposes or to distribute to shareholders.

Hedging has risks. Options trading involves the payment of premiums and
increases portfolio turnover. If a covered call written by the Fund is
exercised on an investment that has increased in value, the Fund will
be required to sell the investment at the call price and will not be
able to realize any profit if the investment has increased in value
above the call price. In writing a put, there is a risk that the Fund
may be required to buy the underlying security at a disadvantageous
price. If the Manager used a hedging instrument at the wrong time or
judged market conditions incorrectly, the strategy could reduce the
Fund's return. The Fund could also experience losses if it could not
close out a position because of an illiquid market.

"When-Issued" and "Delayed-Delivery" Transactions. The Fund can purchase
securities on a "when-issued" basis and may purchase or sell securities
on a "delayed-delivery" basis. These terms refer to securities that
have been created and for which a market exists, but which are not
available for immediate delivery. There might be a risk of loss to the
Fund if the value of the security declines prior to the settlement
date.

Portfolio Turnover. The Fund may use short-term trading to try to achieve its
objective. Increased portfolio turnover creates higher brokerage and
transaction costs for the Fund (and may reduce performance); however,
most of the Fund's portfolio transactions are principal trades that do
not entail brokerage fees. If the Fund realizes capital gains when it
sells its portfolio investments, it must generally pay those gains out
to shareholders, increasing their taxable distributions. The Financial
Highlights table at the end of this Prospectus shows the Fund's
portfolio turnover rates during recent fiscal years.

Temporary Defensive and Interim Investments. In times of adverse or unstable
market economic or political conditions, the Fund can invest up to 100%
of its assets in temporary investments that are inconsistent with the
Fund's principal investment strategies. Generally they would be U.S.
government securities, highly-rated commercial paper, bank deposits or
repurchase agreements. The Fund may also hold these types of securities
pending the investment of proceeds from the sale of Fund shares or
portfolio securities or to meet anticipated redemptions of Fund shares.
To the extent the Fund invests defensively in these securities, it may
not achieve its investment objective.

Loans of Portfolio Securities. The Fund has entered into a Securities
Lending Agreement with JP Morgan Chase. Under the agreement,
portfolio securities of the Fund may be loaned to brokers, dealers
and other financial institutions. The Securities Lending Agreement
provides that loans must be adequately collateralized and may be
made only in conformity with the Fund's Securities Lending
Guidelines, adopted by the Fund's Board of Trustees. The value of
the securities loaned may not exceed 25% of the value of the Fund's
net assets.

How the Fund Is Managed

THE MANAGER. The Manager chooses the Fund's investments and handles its
day-to-day business. The Manager carries out its duties, subject to the
policies established by the Fund's Board of Trustees, under an investment
advisory agreement that states the Manager's responsibilities. The agreement
sets the fees the Fund pays to the Manager and describes the expenses that
the Fund is responsible to pay to conduct its business.

The Manager has been an investment advisor since January 1960. The
Manager and its subsidiaries and controlled affiliates managed more than $135
billion in assets as of September 30, 2003, including other Oppenheimer funds
with more than 7 million shareholder accounts. The Manager is located at Two
World Financial Center, 225 Liberty Street, New York, New York 10080.

Portfolio Manager. The portfolio manager of the Fund is Arthur P.
Steinmetz. He is the person who has been principally responsible for
the day-to-day management of the Fund's investments since the Fund's
inception in October 1989. Mr. Steinmetz is a Vice President of the
Fund and a Senior Vice President of the Manager. He also serves as an
officer and portfolio manager of other Oppenheimer funds.

Advisory Fees. Under the investment advisory agreement, the Fund pays the
Manager an advisory fee at an annual rate that declines on additional
assets as the Fund grows: 0.75% of the first $200 million of average
annual net assets of the Fund, 0.72% of the next $200 million, 0.69% of
the next $200 million, 0.66% of the next $200 million, 0.60% of the
next $200 million, and 0.50% of average annual net assets in excess of
$1 billion. The Fund's management fee for its last fiscal year ended
September 30, 2003 was 0.53% of average annual net assets for each
class of shares.

ABOUT your account

How to Buy Shares

You can buy shares several ways, as described below. The Fund's Distributor,
OppenheimerFunds Distributor, Inc., may appoint servicing agents to accept
purchase (and redemption) orders. The Distributor, in its sole discretion,
may reject any purchase order for the Fund's shares.

Buying Shares Through Your Dealer. You can buy shares through any dealer,
broker or financial institution that has a sales agreement with the
Distributor. Your dealer will place your order with the Distributor on
your behalf.
Buying Shares Through the Distributor. Complete an OppenheimerFunds New
Account Application and return it with a check payable to
"OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver,
Colorado 80217. If you don't list a dealer on the application, the
Distributor will act as your agent in buying the shares. However, we
recommend that you discuss your investment with a financial advisor
before you make a purchase to be sure that the Fund is appropriate for
you.
o Paying by Federal Funds Wire. Shares purchased through the Distributor
may be paid for by Federal Funds wire. The minimum investment is
$2,500. Before sending a wire, call the Distributor's Wire Department
at 1.800.225.5677 to notify the Distributor of the wire and to receive
further instructions.
o Buying Shares Through OppenheimerFunds AccountLink. With AccountLink,
you pay for shares by electronic funds transfers from your bank
account. Shares are purchased for your account by a transfer of money
from your bank account through the Automated Clearing House (ACH)
system. You can provide those instructions automatically, under an
Asset Builder Plan, described below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below. Please refer to
"AccountLink," below for more details.
o Buying Shares Through Asset Builder Plans. You may purchase shares of
the Fund automatically each month from your account at a bank or other
financial institution under an Asset Builder Plan with AccountLink.
Details are in the Asset Builder Application and the Statement of
Additional Information.

WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $50. There are reduced minimums
available under the following special investment plans:
o If you establish one of the many types of retirement plan accounts that
OppenheimerFunds offers, more fully described below under "Special
Investor Services," you can start your account with as little as $500.
o By using an Asset Builder Plan or Automatic Exchange Plan (details are
in the Statement of Additional Information), or government allotment
plan, you can make subsequent investments (after making the initial
investment of $500) for as little as $50. For any type of account
established under one of these plans prior to November 1, 2002, the
minimum additional investment will remain $25.
o The minimum investment requirement does not apply to reinvesting
dividends from the Fund or other Oppenheimer funds (a list of them
appears in the Statement of Additional Information, or you can ask your
dealer or call the Transfer Agent), or reinvesting distributions from
unit investment trusts that have made arrangements with the Distributor.

AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price which
is the net asset value per share plus any initial sales charge that applies.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the
Distributor receives the purchase order at its offices in Colorado, or after
any agent appointed by the Distributor receives the order.

Net Asset Value. The Fund calculates the net asset value of each class of
shares as of the close of The New York Stock Exchange ("the Exchange"),
on each day the Exchange is open for trading (referred to in this
Prospectus as a "regular business day"). The Exchange normally closes
at 4:00 P.M., Eastern time, but may close earlier on some days. All
references to time in this Prospectus mean "Eastern time."

The net asset value per share is determined by dividing the value of
the Fund's net assets attributable to a class by the number of shares
of that class that are outstanding. To determine net asset value, the
Fund's Board of Trustees has established procedures to value the Fund's
securities, in general, based on market value. The Board has adopted
special procedures for valuing illiquid and restricted securities and
obligations for which market values cannot be readily obtained. Because
some foreign securities trade in markets and on exchanges that operate
on weekends and U.S. holidays, the values of some of the Fund's foreign
investments may change on days when investors cannot buy or redeem Fund
shares.

If, after the close of the principal market on which a security held by
the Fund is traded, and before the time the Fund's securities are
priced that day, an event occurs that the Manager deems likely to cause
a material change in the value of such security, the Fund's Board of
Trustees/Directors has authorized the Manager, subject to the Board's
review, to ascertain a fair value for such security. A security's
valuation may differ depending on the method used for determining value.

The Offering Price. To receive the offering price for a particular day, the
Distributor or its designated agent must receive your order by the time
the Exchange closes that day. If your order is received on a day when
the Exchange is closed or after it has closed, the order will receive
the next offering price that is determined after your order is received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must
receive the order by the close of the Exchange and transmit it to the
Distributor so that it is received before the Distributor's close of
business on a regular business day (normally 5:00 P.M.) to receive that
day's offering price, unless your dealer has made alternative
arrangements with the Distributor. Otherwise, the order will receive
the next offering price that is determined.

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WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors five
different classes of shares. The different classes of shares represent
investments in the same portfolio of securities, but the classes are subject
to different expenses and will likely have different share prices. When you
buy shares, be sure to specify the class of shares. If you do not choose a
class, your investment will be made in Class A shares.
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Class A Shares. If you buy Class A shares, you pay an initial sales charge
(on investments up to $1 million for regular accounts or lesser amounts
for certain retirement plans). The amount of that sales charge will
vary depending on the amount you invest. The sales charge rates are
listed in "How Can You Buy Class A Shares?" below.
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Class B Shares. If you buy Class B shares, you pay no sales charge at the
time of purchase, but you will pay an annual asset-based sales charge.
If you sell your shares within 6 years of buying them, you will
normally pay a contingent deferred sales charge. That contingent
deferred sales charge varies depending on how long you own your shares,
as described in "How Can You Buy Class B Shares?" below.
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Class C Shares. If you buy Class C shares, you pay no sales charge at the
time of purchase, but you will pay an annual asset-based sales charge.
If you sell your shares within 12 months of buying them, you will
normally pay a contingent deferred sales charge of 1.0%, as described
in "How Can You Buy Class C Shares?" below.
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Class N Shares. If you buy Class N shares (available only through certain
retirement plans), you pay no sales charge at the time of purchase, but
you will pay an annual asset-based sales charge. If you sell your
shares within 18 months of the retirement plan's first purchase of
Class N shares, you may pay a contingent deferred sales charge of 1.0%,
as described in "How Can You Buy Class N Shares?" below.

Class Y Shares. Class Y shares are offered only to certain institutional
investors that have a special agreement with the Distributor.

WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is
best suited to your needs depends on a number of factors that you should
discuss with your financial advisor. Some factors to consider are how much
you plan to invest and how long you plan to hold your investment. If your
goals and objectives change over time and you plan to purchase additional
shares, you should re-evaluate those factors to see if you should consider
another class of shares. The Fund's operating costs that apply to a class of
shares and the effect of the different types of sales charges on your
investment will vary your investment results over time.

The discussion below is not intended to be investment advice or a
recommendation, because each investor's financial considerations are
different. The discussion below assumes that you will purchase only one class
of shares and not a combination of shares of different classes. Of course,
these examples are based on approximations of the effects of current sales
charges and expenses projected over time, and do not detail all of the
considerations in selecting a class of shares. You should analyze your
options carefully with your financial advisor before making that choice.

How Long Do You Expect to Hold Your Investment? While future financial needs
cannot be predicted with certainty, knowing how long you expect to hold
your investment will assist you in selecting the appropriate class of
shares. Because of the effect of class-based expenses, your choice will
also depend on how much you plan to invest. For example, the reduced
sales charges available for larger purchases of Class A shares may,
over time, offset the effect of paying an initial sales charge on your
investment, compared to the effect over time of higher class-based
expenses on shares of Class B, Class C or Class N shares. For
retirement plans that qualify to purchase Class N shares, Class N
shares will generally be more advantageous than Class B and Class C
shares.

o Investing for the Shorter Term. While the Fund is meant to be a
long-term investment, if you have a relatively short-term investment
horizon (that is, you plan to hold your shares for not more than six
years), you should most likely invest in Class A or Class C shares
rather than Class B shares. That is because of the effect of the Class
B contingent deferred sales charge if you redeem within six years, as
well as the effect of the Class B asset-based sales charge on the
investment return for that class in the short-term. Class C shares
might be the appropriate choice (especially for investments of less
than $100,000), because there is no initial sales charge on Class C
shares, and the contingent deferred sales charge does not apply to
amounts you sell after holding them one year.

However, if you plan to invest more than $100,000 for the shorter term,
then as your investment horizon increases toward six years, Class C
shares might not be as advantageous as Class A shares. That is because
the annual asset-based sales charge on Class C shares will have a
greater impact on your account over the longer term than the reduced
front-end sales charge available for larger purchases of Class A
shares.

And for non-retirement plan investors who invest $1 million or more, in
most cases Class A shares will be the most advantageous choice, no
matter how long you intend to hold your shares. For that reason, the
Distributor normally will not accept purchase orders of $500,000 or
more of Class B shares or $1 million or more of Class C shares from a
single investor.

o Investing for the Longer Term. If you are investing less than $100,000
for the longer-term, for example for retirement, and do not expect to
need access to your money for seven years or more, Class B shares may
be appropriate.

Are There Differences in Account Features That Matter to You? Some account
features may not be available to Class B, Class C and Class N
shareholders. Other features may not be advisable (because of the
effect of the contingent deferred sales charge) for Class B, Class C
and Class N shareholders. Therefore, you should carefully review how
you plan to use your investment account before deciding which class of
shares to buy.

Additionally, the dividends payable to Class B, Class C and Class N
shareholders will be reduced by the additional expenses borne by those
classes that are not borne by Class A or Class Y shares, such as the
Class B, Class C and Class N asset-based sales charge described below
and in the Statement of Additional Information. Share certificates are
only available for Class A shares. If you are considering using your
shares as collateral for a loan, that may be a factor to consider.
Also, checkwriting is not available on accounts subject to a contingent
deferred sales charge.

How Do Share Classes Affect Payments to Your Broker? A financial advisor may
receive different compensation for selling one class of shares than for
selling another class. It is important to remember that Class B, Class
C and Class N contingent deferred sales charges and asset-based sales
charges have the same purpose as the front-end sales charge on sales of
Class A shares: to compensate the Distributor for concessions and
expenses it pays to dealers and financial institutions for selling
shares. The Distributor may pay additional compensation from its own
resources to securities dealers or financial institutions based upon
the value of shares of the Fund owned by the dealer or financial
institution for its own account or for its customers.

SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix C to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified
retirement plan arrangements or in other special types of transactions. To
receive a waiver or special sales charge rate, you must advise the
Distributor when purchasing shares or the Transfer Agent when redeeming
shares that a special condition applies.

HOW CAN YOU BUY CLASS A SHARES? Class A shares are sold at their offering
price, which is normally net asset value plus an initial sales charge.
However, in some cases, described below, purchases are not subject to an
initial sales charge, and the offering price will be the net asset value. In
other cases, reduced sales charges may be available, as described below or in
the Statement of Additional Information. Out of the amount you invest, the
Fund receives the net asset value to invest for your account.

The sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor or allocated
to your dealer as a concession. The Distributor reserves the right to reallow
the entire concession to dealers. The current sales charge rates and
concessions paid to dealers and brokers are as follows:

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Front-End Sales Front-End Sales Concession As
Charge As a
Charge As a Percentage of
Percentage of Net Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
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Less than $50,000 4.75% 4.98% 4.00%
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$50,000 or more but 4.50% 4.71% 3.75%
less than $100,000
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$100,000 or more but 3.50% 3.63% 2.75%
less than $250,000
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$250,000 or more but 2.50% 2.56% 2.00%
less than $500,000
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$500,000 or more but 2.00% 2.04% 1.60%
less than $1 million
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Can You Reduce Class A Sales Charges? You may be eligible to buy Class A
shares at reduced sales charge rates under the Fund's "Right of
Accumulation" or a Letter of Intent, as described in "Reduced Sales
Charges" in the Statement of Additional Information.

Class A Contingent Deferred Sales Charge. There is no initial sales charge on
purchases of Class A shares of any one or more of the Oppenheimer funds
aggregating $1 million or more, or on purchases of Class A shares of
any one or more of the Oppenheimer funds by certain retirement plans
that satisfied certain requirements prior to March 1, 2001
("grandfathered retirement accounts"). However, those Class A shares
may be subject to a Class A contingent deferred sales charge, as
described below. Qualified retirement plans (other than grandfathered
retirement accounts, single 401(k) plans, SEP IRAs and SIMPLE IRAs) are
not permitted to purchase Class A shares without an initial sales
charge but subject to a Class A contingent deferred sales charge. The
Distributor pays dealers of record concessions in an amount equal to
1.0% of purchases of $1 million or more other than by grandfathered
retirement accounts. For grandfathered retirement accounts, the
concession is 0.75% of the first $2.5 million of purchases plus 0.25%
of purchases in excess of $2.5 million. In either case, the concession
will not be paid on purchases of shares by exchange or that were
previously subject to a front-end sales charge and dealer concession.

If you redeem any of those shares within an 18-month "holding period"
measured from the beginning of the calendar month of their purchase, a
contingent deferred sales charge (called the "Class A contingent
deferred sales charge") may be deducted from the redemption proceeds.
That sales charge will be equal to 1.0% of the lesser of:
o the aggregate net asset value of the redeemed shares at the time of
redemption (excluding shares purchased by reinvestment of dividends or
capital gain distributions) or
o the original net asset value of the redeemed shares.

The Class A contingent deferred sales charge will not exceed the
aggregate amount of the concessions the Distributor paid to your dealer
on all purchases of Class A shares of all Oppenheimer funds you made
that were subject to the Class A contingent deferred sales charge.

Purchases by Certain Retirement Plans. There is no initial sales charge on
purchases of Class A shares of any one or more Oppenheimer funds by
retirement plans that have $10 million or more in plan assets and that
have entered into a special agreement with the Distributor and by
retirement plans which are part of a retirement plan product or
platform offered by certain banks, broker-dealers, financial advisors,
insurance companies or recordkeepers which have entered into a special
agreement with the Distributor. The Distributor currently pays dealers
of record concessions in an amount equal to 0.25% of the purchase price
of Class A shares by those retirement plans from its own resources at
the time of sale, subject to certain exceptions as described in the
Statement of Additional Information. There is no contingent deferred
sales charge upon the redemption of such shares.

HOW CAN YOU BUY CLASS B SHARES? Class B shares are sold at net asset value
per share without an initial sales charge. However, if Class B shares are
redeemed within six years from the beginning of the calendar month of their
purchase, a contingent deferred sales charge will be deducted from the
redemption proceeds. The Class B contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class B shares.

The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule for the Class B contingent deferred sales
charge holding period:

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Years Since Beginning of Month in Contingent Deferred Sales Charge on
Which Purchase Order was Accepted Redemptions in That Year (As % of

Amount Subject to Charge)
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0 - 1 5.0%
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1 - 2 4.0%
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2 - 3 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3 - 4 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4 - 5 2.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5 - 6 1.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
More than 6 None
-------------------------------------------------------------------------------
In the table, a "year" is a 12-month period. In applying the contingent
deferred sales charge, all purchases are considered to have been made on the
first regular business day of the month in which the purchase was made.

Automatic Conversion of Class B Shares. Class B shares automatically convert
to Class A shares 72 months after you purchase them. This conversion
feature relieves Class B shareholders of the asset-based sales charge
that applies to Class B shares under the Class B Distribution and
Service Plan, described below. The conversion is based on the relative
net asset value of the two classes, and no sales load or other charge
is imposed. When any Class B shares that you hold convert, any other
Class B shares that were acquired by reinvesting dividends and
distributions on the converted shares will also convert to Class A
shares. For further information on the conversion feature and its tax
implications, see "Class B Conversion" in the Statement of Additional
Information.

How Can you Buy Class C Shares? Class C shares are sold at net asset value
per share without an initial sales charge. However, if Class C shares are
redeemed within a holding period of 12 months from the beginning of the
calendar month of their purchase, a contingent deferred sales charge of 1.0%
will be deducted from the redemption proceeds. The Class C contingent
deferred sales charge is paid to compensate the Distributor for its expenses
of providing distribution-related services to the Fund in connection with the
sale of Class C shares.

HOW CAN YOU BUY CLASS N SHARES? Class N shares are offered for sale to
retirement plans (including IRAs and 403(b) plans) that purchase $500,000 or
more of Class N shares of one or more Oppenheimer funds or to group
retirement plans (which do not include IRAs and 403(b) plans) that have
assets of $500,000 or more or 100 or more eligible participants. See
"Availability of Class N shares" in the Statement of Additional Information
for other circumstances where Class N shares are available for purchase.

Class N shares are sold at net asset value without an initial sales
charge. A contingent deferred sales charge of 1.0% will be imposed upon the
redemption of Class N shares, if:

o The group retirement plan is terminated or Class N shares of all
Oppenheimer funds are terminated as an investment option of the plan
and Class N shares are redeemed within 18 months after the plan's first
purchase of Class N shares of any Oppenheimer fund, or
o With respect to an IRA or 403(b) plan, Class N shares are redeemed
within 18 months of the plan's first purchase of Class N shares of any
Oppenheimer fund.

Retirement plans that offer Class N shares may impose charges on plan
participant accounts. The procedures for buying, selling, exchanging and
transferring the Fund's other classes of shares (other than the time those
orders must be received by the Distributor or Transfer Agent in Colorado) and
the special account features applicable to purchasers of those other classes
of shares described elsewhere in this Prospectus do not apply to Class N
shares offered through a group retirement plan. Instructions for buying,
selling, exchanging or transferring Class N shares offered through a group
retirement plan must be submitted by the plan, not by plan participants for
whose benefit the shares are held.

Who Can Buy Class Y Shares? Class Y shares are sold at net asset value per
share without a sales charge directly to institutional investors that have
special agreements with the Distributor for this purpose. They may include
insurance companies, registered investment companies and employee benefit
plans. Individual investors cannot buy Class Y shares directly.

An institutional investor that buys Class Y shares for its customers'
accounts may impose charges on those accounts. The procedures for buying,
selling, exchanging and transferring the Fund's other classes of shares
(other than the time those orders must be received by the Distributor or
Transfer Agent at their Colorado office) and the special account features
available to investors buying those other classes of shares do not apply to
Class Y shares. Instructions for buying, selling, exchanging or transferring
Class Y shares must be submitted by the institutional investor, not by its
customers for whose benefit the shares are held.

DISTRIBUTION AND SERVICE (12b-1) PLANS

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 quarterly at an annual rate of up to
0.25% of the average annual net assets of Class A shares of the Fund.
The Distributor currently uses all of those fees to pay dealers,
brokers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that
hold Class A shares. With respect to Class A shares subject to a Class
A contingent deferred sales charge purchased by grandfathered
retirement accounts, the Distributor pays the 0.25% service fee to
dealers in advance for the first year after the shares are sold by the
dealer. The Distributor retains the first year's service fee paid by
the Fund. After the shares have been held by grandfathered retirement
accounts for a year, the Distributor pays the service fee to dealers on
a quarterly basis.

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 pay the Distributor for its services and costs in
distributing Class B, Class C and Class N 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 the Class B, Class C and Class N plans.

The asset-based sales charge and service fees increase Class B and
Class C expenses by 1.0% and increase Class N expenses by 0.50% of the
net assets per year of the respective class. Because these fees are
paid out of the Fund's assets on an on-going basis, over time these
fees will increase the cost of your investment and may cost you more
than other types of sales charges.

The Distributor uses the service fees to compensate dealers for
providing personal services for accounts that hold Class B, Class C or
Class N shares. The Distributor normally pays the 0.25% service fees to
dealers in advance for the first year after the shares are sold by the
dealer. After the shares have been held for a year, the Distributor
pays the service fees to dealers on a quarterly basis. The Distributor
retains the service fees for accounts for which it renders the required
personal services.

The Distributor currently pays a sales concession of 3.75% of the
purchase price of Class B shares to dealers from its own resources at
the time of sale. Including the advance of the service fee, the total
amount paid by the Distributor to the dealer at the time of sale of
Class B shares is therefore 4.00% of the purchase price. The
Distributor normally retains the Class B asset-based sales charge. See
the Statement of Additional Information for exceptions.

The Distributor currently pays a sales concession of 0.75% of the
purchase price of Class C shares to dealers from its own resources at
the time of sale. Including the advance of the service fee, the total
amount paid by the Distributor to the dealer at the time of sale of
Class C shares is therefore 1.0% of the purchase price. The Distributor
pays the asset-based sales charge as an ongoing concession to the
dealer on Class C shares that have been outstanding for a year or more.
The Distributor normally retains the asset-based sales charge on Class
C shares during the first year after the purchase of Class C shares.
See the Statement of Additional Information for exceptions.

The Distributor currently pays a sales concession of 0.75% of the
purchase price of Class N shares to dealers from its own resources at
the time of sale. Including the advance of the service fee, the total
amount paid by the Distributor to the dealer at the time of sale of
Class N shares is therefore 1.0% of the purchase price. The Distributor
normally retains the asset-based sales charge on Class N shares. See
the Statement of Additional Information for exceptions.

Under certain circumstances, the Distributor will pay the full Class B,
Class C or Class N asset-based sales charge and service fee to the
dealer beginning in the first year after purchase of such shares in
lieu of paying the dealer the sales concession and the advance of the
first year's service fee at the time of purchase.

Special Investor Services

ACCOUNTLINK. You can use our AccountLink feature to link your Fund account
with an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
o transmit funds electronically to purchase shares by telephone (through
a service representative or by PhoneLink) or automatically under Asset
Builder Plans, or
o have the Transfer Agent send redemption proceeds or transmit dividends
and distributions directly to your bank account. Please call the
Transfer Agent for more information.

You may purchase shares by telephone only after your account has been
established. To purchase shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1.800.225.5677. The purchase payment
will be debited from your bank account.

AccountLink privileges should be requested on your Application or your
dealer's settlement instructions if you buy your shares through a dealer.
After your account is established, you can request AccountLink privileges by
sending signature-guaranteed instructions and proper documentation to the
Transfer Agent. AccountLink privileges will apply to each shareholder listed
in the registration on your account as well as to your dealer representative
of record unless and until the Transfer Agent receives written instructions
terminating or changing those privileges. After you establish AccountLink for
your account, any change of bank account information must be made by
signature-guaranteed instructions to the Transfer Agent signed by all
shareholders who own the account.

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification
Number (PIN), by calling the PhoneLink number, 1.800.225.5677.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by
phone, by calling 1.800.225.5677. You must have established AccountLink
privileges to link your bank account with the Fund to pay for these
purchases.
Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
below, you can exchange shares automatically by phone from your Fund
account to another OppenheimerFunds account you have already
established by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling
the PhoneLink number and the Fund will send the proceeds directly to
your AccountLink bank account. Please refer to "How to Sell Shares,"
below for details.

CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send requests for certain
types of account transactions to the Transfer Agent by fax (telecopier).
Please call 1.800.225.5677 for information about which transactions may be
handled this way. Transaction requests submitted by fax are subject to the
same rules and restrictions as written and telephone requests described in
this Prospectus.

OPPENHEIMERFUNDS INTERNET WEBSITE. You can obtain information about the Fund,
as well as your account balance, on the OppenheimerFunds Internet website, at
www.oppenheimerfunds.com. Additionally, shareholders listed in the account
registration (and the dealer of record) may request certain account
transactions through a special section of that website. To perform account
transactions or obtain account information online, you must first obtain a
user I.D. and password on that website. If you do not want to have Internet
account transaction capability for your account, please call the Transfer
Agent at 1.800.225.5677. At times, the website may be inaccessible or its
transaction features may be unavailable.

AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
OppenheimerFunds account on a regular basis. Please call the Transfer Agent
or consult the Statement of Additional Information for details.

REINVESTMENT PRIVILEGE. If you redeem some or all of your Class A or Class B
shares of the Fund, you have up to six months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other Oppenheimer funds
without paying a sales charge. This privilege applies only to Class A shares
that you purchased subject to an initial sales charge and to Class A or Class
B shares on which you paid a contingent deferred sales charge when you
redeemed them. This privilege does not apply to Class C, Class N or Class Y
shares. You must be sure to ask the Distributor for this privilege when you
send your payment.

RETIREMENT PLANS. You may buy shares of the Fund for your retirement plan
account. If you participate in a plan sponsored by your employer, the plan
trustee or administrator must buy the shares for your plan account. The
Distributor also offers a number of different retirement plans that
individuals and employers can use:
Individual Retirement Accounts (IRAs). These include regular IRAs, Roth IRAs,
SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small business
owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax-deferred plans for employees of
eligible tax-exempt organizations, such as schools, hospitals and
charitable organizations.
401(k) Plans. These are special retirement plans for businesses.
Pension and Profit-Sharing Plans. These plans are designed for businesses and
self-employed individuals.
Please call the Distributor for OppenheimerFunds retirement plan
documents, which include applications and important plan information.

How to Sell Shares

You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your
order is received in proper form (which means that it must comply with the
procedures described below) and is accepted by the Transfer Agent. The Fund
lets you sell your shares by writing a letter, by wire, by using the Fund's
checkwriting privilege, or by telephone. You can also set up Automatic
Withdrawal Plans to redeem shares on a regular basis. If you have questions
about any of these procedures, and especially if you are redeeming shares in
a special situation, such as due to the death of the owner or from a
retirement plan account, please call the Transfer Agent first, at
1.800.225.5677, for assistance.

Certain Requests Require a Signature Guarantee. To protect you and the Fund
from fraud, the following redemption requests must be in writing and
must include a signature guarantee (although there may be other
situations that also require a signature guarantee):
o You wish to redeem more than $100,000 and receive a check
o The redemption check is not payable to all shareholders listed on the
account statement
o The redemption check is not sent to the address of record on your
account statement
o Shares are being transferred to a Fund account with a different owner
or name
o Shares are being redeemed by someone (such as an Executor) other than
the owners.

Where Can You Have Your Signature Guaranteed? The Transfer Agent will accept
a guarantee of your signature by a number of financial institutions,
including:
o a U.S. bank, trust company, credit union or savings association,
o a foreign bank that has a U.S. correspondent bank,
o a U.S. registered dealer or broker in securities, municipal securities
or government securities, or
o a U.S. national securities exchange, a registered securities
association or a clearing agency.
If you are signing on behalf of a corporation, partnership or other
business or as a fiduciary, you must also include your title in the
signature.

Retirement Plan Accounts. There are special procedures to sell shares in an
OppenheimerFunds retirement plan account. Call the Transfer Agent for a
distribution request form. Special income tax withholding requirements
apply to distributions from retirement plans. You must submit a
withholding form with your redemption request to avoid delay in getting
your money and if you do not want tax withheld. If your employer holds
your retirement plan account for you in the name of the plan, you must
ask the plan trustee or administrator to request the sale of the Fund
shares in your plan account.

Sending Redemption Proceeds by Wire. While the Fund normally sends your money
by check, you can arrange to have the proceeds of shares you sell sent
by Federal Funds wire to a bank account you designate. It must be a
commercial bank that is a member of the Federal Reserve wire system.
The minimum redemption you can have sent by wire is $2,500. There is a
$10 fee for each request. To find out how to set up this feature on
your account or to arrange a wire, call the Transfer Agent at
1.800.225.5677.

Checkwriting. To write checks against your Fund account, request that
privilege on your account application, or contact the Transfer Agent for
signature cards. They must be signed (with a signature guarantee) by all
owners of the account and returned to the Transfer Agent so that checks can
be sent to you to use. Shareholders with joint accounts can elect in writing
to have checks paid over the signature of one owner. If you previously signed
a signature card to establish checkwriting in another Oppenheimer fund,
simply call 1.800.225.5677 to request checkwriting for an account in this
Fund with the same registration as the other account.
o Checks can be written to the order of whomever you wish, but may not be
cashed at the bank the checks are payable through or the Fund's
custodian bank.
o Checkwriting privileges are not available for accounts holding shares
that are subject to a contingent deferred sales charge.
o Checks must be written for at least $500. Checks written below the
stated amount on the check will not be accepted. However, if you have
existing checks indicating a $100 minimum, you may still use them for
amounts of $100 or more.
o Checks cannot be paid if they are written for more than your account
value. Remember, your shares fluctuate in value and you should not
write a check close to the total account value.
o You may not write a check that would require the Fund to redeem shares
that were purchased by check or Asset Builder Plan payments within the
prior 10 days.
o Don't use your checks if you changed your Fund account number, until
you receive new checks.

HOW DO you SELL SHARES BY MAIL? Write a letter of instruction that includes:
o Your name
o The Fund's name
o Your Fund account number (from your account statement)
o The dollar amount or number of shares to be redeemed
o Any special payment instructions
o Any share certificates for the shares you are selling
o The signatures of all registered owners exactly as the account is
registered, and
o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares.

Use the following address for Send courier or express mail

requests by mail: requests to:
OppenheimerFunds Services OppenheimerFunds Services
P.O. Box 5270 10200 E. Girard Avenue, Building D
Denver, Colorado 80217 Denver, Colorado 80231

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price calculated on a particular regular business day, your call must be
received by the Transfer Agent by the close of the Exchange that day, which
is normally 4:00 P.M., but may be earlier on some days. You may not redeem
shares held in an OppenheimerFunds-sponsored qualified retirement plan
account or under a share certificate by telephone.

o To redeem shares through a service representative or automatically on
PhoneLink, call 1.800.225.5677.
Whichever method you use, you may have a check sent to the address on
the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by
telephone in any seven-day period. The check must be payable to all
owners of record of the shares and must be sent to the address on the
account statement. This service is not available within 30 days of
changing the address on an account.

Telephone Redemptions Through AccountLink or by Wire. There are no dollar
limits on telephone redemption proceeds sent to a bank account
designated when you establish AccountLink. Normally the ACH transfer to
your bank is initiated on the business day after the redemption. You do
not receive dividends on the proceeds of the shares you redeemed while
they are waiting to be transferred.

If you have requested Federal Funds wire privileges for your account,
the wire of the redemption proceeds will normally be transmitted on the
next bank business day after the shares are redeemed. There is a
possibility that the wire may be delayed up to seven days to enable the
Fund to sell securities to pay the redemption proceeds. No dividends
are accrued or paid on the proceeds of shares that have been redeemed
and are awaiting transmittal by wire.

CAN YOU SELL SHARES THROUGH your DEALER? The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on behalf of
their customers. Brokers or dealers may charge for that service. If your
shares are held in the name of your dealer, you must redeem them through your
dealer.

HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase
shares subject to a Class A, Class B, Class C or Class N contingent deferred
sales charge and redeem any of those shares during the applicable holding
period for the class of shares, the contingent deferred sales charge will be
deducted from the redemption proceeds (unless you are eligible for a waiver
of that sales charge based on the categories listed in Appendix C to the
Statement of Additional Information and you advise the Transfer Agent of your
eligibility for the waiver when you place your redemption request.)

A contingent deferred sales charge will be based on the lesser of the
net asset value of the redeemed shares at the time of redemption or the
original net asset value. A contingent deferred sales charge is not imposed
on:
o the amount of your account value represented by an increase in net
asset value over the initial purchase price,
o shares purchased by the reinvestment of dividends or capital gains
distributions, or
o shares redeemed in the special circumstances described in Appendix C to
the Statement of Additional Information.
To determine whether a contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order:
1. shares acquired by reinvestment of dividends and capital gains
distributions,
2. shares held for the holding period that applies to the class, and
3. shares held the longest during the holding period.
Contingent deferred sales charges are not charged when you exchange
shares of the Fund for shares of other Oppenheimer funds. However, if you
exchange them within the applicable contingent deferred sales charge holding
period, the holding period will carry over to the fund whose shares you
acquire. Similarly, if you acquire shares of this Fund by exchanging shares
of another Oppenheimer fund that are still subject to a contingent deferred
sales charge holding period, that holding period will carry over to this Fund.

How to Exchange Shares

Shares of the Fund may be exchanged for shares of certain Oppenheimer funds
at net asset value per share at the time of exchange, without sales charge.
Shares of the Fund can be purchased by exchange of shares of other
Oppenheimer funds on the same basis. To exchange shares, you must meet
several conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of both funds must offer the exchange privilege.
o You must hold the shares you buy when you establish your account for at
least seven days before you can exchange them. After the account is
open seven days, you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund whose
shares you purchase by exchange.
o Before exchanging into a fund, you must obtain and read its prospectus.
Shares of a particular class of the Fund may be exchanged only for
shares of the same class in the other Oppenheimer funds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another fund.
In some cases, sales charges may be imposed on exchange transactions. For
tax purposes, exchanges of shares involve a sale of the shares of the fund
you own and a purchase of the shares of the other fund, which may result in a
capital gain or loss. Please refer to "How to Exchange Shares" in the
Statement of Additional Information for more details.

You can find a list of Oppenheimer funds currently available for
exchanges in the Statement of Additional Information or obtain one by calling
a service representative at 1.800.225.5677. That list can change from time to
time.

HOW DO you SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing or
by telephone:

Written Exchange Requests. Submit an OppenheimerFunds Exchange Request form,
signed by all owners of the account. Send it to the Transfer Agent at
the address on the back cover. Exchanges of shares held under
certificates cannot be processed unless the Transfer Agent receives the
certificates with the request.
Telephone Exchange Requests. Telephone exchange requests may be made either
by calling a service representative or by using PhoneLink for automated
exchanges by calling 1.800.225.5677. Telephone exchanges may be made
only between accounts that are registered with the same name(s) and
address. Shares held under certificates may not be exchanged by
telephone.

ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o Shares are redeemed from one fund and purchased from the other fund in

the exchange transaction on the same regular business day on which the
Transfer Agent receives an exchange request that conforms to the
policies described above. It must be received by the close of the
Exchange that day, which is normally 4:00 P.M. but may be earlier on
some days.
o The interests of the Fund's long-term shareholders and its ability to
manage its investments may be adversely affected when its shares are
repeatedly bought and sold in response to short-term market
fluctuations--also known as "market timing." When large dollar amounts
are involved, the Fund may have difficulty implementing long-term
investment strategies, because it cannot predict how much cash it will
have to invest. Market timing also may force the Fund to sell portfolio
securities at disadvantageous times to raise the cash needed to buy a
market timer's Fund shares. These factors may hurt the Fund's
performance and its shareholders. When the Manager believes frequent
trading would have a disruptive effect on the Fund's ability to manage
its investments, the Manager and the Fund may reject purchase orders
and exchanges into the Fund by any person, group or account that the
Manager believes to be a market timer. All accounts under common
ownership or control within the Oppenheimer funds complex may be
counted together for purposes of determining market timing with respect
to any exchange involving this Fund.
o The Fund may amend, suspend or terminate the exchange privilege at any
time. The Fund may refuse any exchange order and is currently not
obligated to provide notice before rejecting an exchange order.

o If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual fee is assessed on any account valued at less than $500. The fee

is automatically deducted from accounts annually on or about the second
to last business day of September. See the Statement of Additional
Information, or existing shareholders may visit the OppenheimerFunds
website, to learn how you can avoid this fee and for circumstances when
this fee will not be assessed.

The offering of shares may be suspended during any period in which the
determination of net asset value is suspended, and the offering may be
suspended by the Board of Trustees at any time the Board believes it is
in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may
be modified, suspended or terminated by the Fund at any time. The Fund
will provide you notice whenever it is required to do so by applicable
law. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone
privileges apply to each owner of the account and the dealer
representative of record for the account unless the Transfer Agent
receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
transactions and has adopted other procedures to confirm that telephone
instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. The Transfer Agent and the
Fund will not be liable for losses or expenses arising out of telephone
instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
receives all required documents in proper form. From time to time, the
Transfer Agent in its discretion may waive certain of the requirements
for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating
in NETWORKING through the National Securities Clearing Corporation are
responsible for obtaining their clients' permission to perform those
transactions, and are responsible to their clients who are shareholders
of the Fund if the dealer performs any transaction erroneously or
improperly.
The redemption price for shares will vary from day to day because the value
of the securities in the Fund's portfolio fluctuates. The redemption
price, which is the net asset value per share, will normally differ for
each class of shares. The redemption value of your shares may be more
or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
check, or through AccountLink or by Federal Funds wire (as elected by
the shareholder) within seven days after the Transfer Agent receives
redemption instructions in proper form. However, under unusual
circumstances determined by the Securities and Exchange Commission,
payment may be delayed or suspended. For accounts registered in the
name of a broker-dealer, payment will normally be forwarded within
three business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as
described under "How to Sell Shares" for recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much
as 10 days from the date the shares were purchased. That delay may be
avoided if you purchase shares by Federal Funds wire or certified
check, or arrange with your bank to provide telephone or written
assurance to the Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the
account value has fallen below $500 for reasons other than the fact
that the market value of shares has dropped. In some cases, involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.

Shares may be "redeemed in kind" under unusual circumstances (such as a lack
of liquidity in the Fund's portfolio to meet redemptions). This means
that the redemption proceeds will be paid with liquid securities from
the Fund's portfolio. If the Fund redeems your shares in kind, you may
bear transaction costs and will bear market risks until such time as
such securities are converted into cash.
Federal regulations may require the Fund to obtain your name, your date of
birth (for a natural person), your residential street address or
principal place of business and your Social Security Number, Employer
Identification Number or other government issued identification when
you open an account. Additional information may be required in certain
circumstances or to open corporate accounts. The Fund or the Transfer
Agent may use this information to attempt to verify your identity. The
Fund may not be able to establish an account if the necessary
information is not received. The Fund may also place limits on account
transactions while it is in the process of attempting to verify your
identity. Additionally, if the Fund is unable to verify your identity
after your account is established, the Fund may be required to redeem
your shares and close your account.

"Backup withholding" of federal income tax may be applied against taxable
dividends, distributions and redemption proceeds (including exchanges)
if you fail to furnish the Fund your correct, certified Social Security
or Employer Identification Number when you sign your application, or if
you under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund will
mail only one copy of each prospectus, annual and semi-annual report
and annual notice of the Fund's privacy policy to shareholders having
the same last name and address on the Fund's records. The consolidation
of these mailings, called householding, benefits the Fund through
reduced mailing expense.

If you want to receive multiple copies of these materials, you may call
the Transfer Agent at 1.800.225.5677. You may also notify the Transfer
Agent in writing. Individual copies of prospectuses, reports and
privacy notices will be sent to you commencing within 30 days after the
Transfer Agent receives your request to stop householding.

Dividends, Capital Gains and Taxes

DIVIDENDS. The Fund intends to declare dividends separately for each class of
shares from net investment income on each regular business day and to pay
those dividends to shareholders monthly on a date selected by the Board of
Trustees. Daily dividends will not be declared or paid on newly-purchased
shares until Federal Funds are available to the Fund from the purchase
payment for the shares.

The Fund attempts to pay dividends on Class A shares at a constant
level. There is no assurance that it will be able to do so. The Board of
Trustees may change the targeted dividend rate at any time without prior
notice to shareholders. The amount of those dividends and the dividends paid
on the Fund's other classes of shares may vary over time, depending on market
conditions, the composition of the Fund's portfolio, and expenses borne by
the particular class of shares. Dividends and distributions paid on Class A
and Class Y shares will generally be higher than dividends for Class B, Class
C and Class N shares, which normally have higher expenses than Class A and
Class Y shares.

Capital Gains. The Fund may realize capital gains on the sale of portfolio
securities. If it does, it may make distributions out of any net short-term
or long-term capital gains in December of each year. The Fund may make
supplemental distributions of dividends and capital gains following the end
of its fiscal year. There can be no assurance that the Fund will pay any
capital gains distributions in a particular year.

WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open your
account, specify on your application how you want to receive your dividends
and distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all
dividends and capital gains distributions in additional shares of the
Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
distributions (dividends, short-term capital gains or long-term capital
gains distributions) in the Fund while receiving the other types of
distributions by check or having them sent to your bank account through
AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
dividends and capital gains distributions or have them sent to your
bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
reinvest all distributions in the same class of shares of another
OppenheimerFunds account you have established.

TAXES. If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the Fund.
Distributions are subject to federal income tax and may be subject to state
or local taxes. Dividends paid from short-term capital gains and net
investment income are taxable as ordinary income. Long-term capital gains are
taxable as long-term capital gains when distributed to shareholders. It does
not matter how long you have held your shares. Whether you reinvest your
distributions in additional shares or take them in cash, the tax treatment is
the same.

Mutual fund distributions of interest income from U.S. government
securities are generally free from state and local income taxes. However,
particular states may limit that benefit, and some types of securities, such
as repurchase agreements and asset-backed securities, may not qualify for
that benefit.

Every year the Fund will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year. Any
long-term capital gains will be separately identified in the tax information
the Fund sends you after the end of the calendar year.

Avoid "Buying a Distribution." If you buy shares on or just before the Fund
declares a capital gains distribution, you will pay the full price for
the shares and then receive a portion of the price back as a taxable
capital gain.

Remember, There May be Taxes on Transactions. Because the Fund's share prices
fluctuate, you may have a capital gain or loss when you sell or
exchange your shares. A capital gain or loss is the difference between
the price you paid for the shares and the price you received when you
sold them. Any capital gain is subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by the
Fund may be considered a non-taxable return of capital to shareholders.
If that occurs, it will be identified in notices to shareholders.

This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax advisor
about the effect of an investment in the Fund on your particular tax
situation.

Financial Highlights

The Financial Highlights Table is presented to help you understand the Fund's
financial performance for the past five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Deloitte & Touche LLP,
the Fund's independent auditors, whose report, along with the Fund's
financial statements, is included in the Statement of Additional Information,
which is available on request.

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

Class A Year Ended September 30, 2003
2002 2001 2000 1999
--------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period $3.64
$3.72 $4.18 $4.33 $4.59
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .26
.32 .36 .43 .42
Net realized and unrealized gain (loss) .43
(.08) (.43) (.17) (.29)

-----------------------------------------------------------------
Total from investment operations .69
.24 (.07) .26 .13
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.25)
(.30) (.26) (.41) (.39)
Tax return of capital distribution --
(.02) (.13) -- --

-----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.25)
(.32) (.39) (.41) (.39)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.08
$3.64 $3.72 $4.18 $4.33

=================================================================

--------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 19.59%
6.63% (1.79)% 6.18% 2.91%

--------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $3,873,018
$3,202,825 $3,186,441 $3,431,763 $3,578,105
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $3,521,307
$3,263,490 $3,349,859 $3,517,517 $3,798,380
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 6.60%
7.91% 8.90% 9.98% 9.34%
Total expenses 0.95% 3 1.01%
3 0.93% 3 0.95% 3 0.94% 3
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 104%
117% 209% 136% 172%

1. Assumes an investment on the business day before the first day of the
fiscal
period, with all dividends and distributions reinvested in additional shares
on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

2. Annualized for periods of less than one full year.

3. Reduction to custodian expenses less than 0.01%.

See accompanying Notes to Financial Statements.

52 | OPPENHEIMER STRATEGIC INCOME FUND

Class B Year Ended September 30, 2003
2002 2001 2000 1999
------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period $3.66
$3.73 $4.19 $4.34 $4.61
------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .22
.28 .33 .39 .39
Net realized and unrealized gain (loss) .44
(.05) (.43) (.17) (.30)

----------------------------------------------------------------------
Total from investment operations .66
.23 (.10) .22 .09
------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.22)
(.28) (.24) (.37) (.36)
Tax return of capital distribution --
(.02) (.12) -- --

----------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.22)
(.30) (.36) (.37) (.36)
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.10
$3.66 $3.73 $4.19 $4.34

======================================================================

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 18.62%
6.11% (2.53)% 5.37% 1.92%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,686,295 $1,847,182
$2,186,638 $2,581,391 $3,380,689
------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,757,152 $2,056,449
$2,394,886 $2,907,627 $3,838,145
------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets :2
Net investment income 5.92%
7.22% 8.14% 9.01% 8.55%
Total expenses 1.68% 3 1.75%
3 1.68% 3 1.71% 3 1.69% 3
------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 104%
117% 209% 136% 172%

1. 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 business day of the fiscal period. Sales charges are not
reflected
in the total returns. Total returns are not annualized for periods of less
than
one full year. Returns do not reflect the deduction of taxes that a
shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.

See accompanying Notes to Financial Statements.

53 | OPPENHEIMER STRATEGIC INCOME FUND

FINANCIAL HIGHLIGHTS Continued
--------------------------------------------------------------------------------

Class C Year Ended September 30, 2003
2002 2001 2000 1999
------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period $3.64
$3.71 $4.17 $4.32 $4.59
------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .23
.29 .33 .39 .39
Net realized and unrealized gain (loss) .42
(.06) (.43) (.17) (.30)

-------------------------------------------------------------
Total from investment operations .65
.23 (.10) .22 .09
------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.22)
(.28) (.24) (.37) (.36)
Tax return of capital distribution --
(.02) (.12) -- --

-------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.22)
(.30) (.36) (.37) (.36)
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.07
$3.64 $3.71 $4.17 $4.32

=============================================================

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 18.45%
6.15% (2.54)% 5.39% 1.92%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $698,196
$568,487 $553,399 $548,332 $610,686
------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $623,598
$571,292 $554,279 $568,742 $650,197
------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 5.85%
7.15% 8.15% 9.21% 8.58%
Total expenses 1.69% 3
1.75% 3 1.68% 3 1.71% 3 1.69% 3
------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 104%
117% 209% 136% 172%

54 | OPPENHEIMER STRATEGIC INCOME FUND

Class N Year Ended September 30,
2003 2002 2001 1
-----------------------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period
$3.65 $3.72 $4.13
-----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income
.25 .30 .22
Net realized and unrealized gain (loss)
.42 (.05) (.41)

----------------------------------------------
Total from investment operations
.67 .25 (.19)
-----------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income
(.24) (.30) (.15)
Tax return of capital distribution
-- (.02) (.07)

----------------------------------------------
Total dividends and/or distributions
to shareholders
(.24) (.32) (.22)
-----------------------------------------------------------------------------------------------------------
Net asset value, end of period
$4.08 $3.65 $3.72

==============================================

-----------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2
18.82% 6.70% (4.61)%

-----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $30,110
$15,508 $3,215
-----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $22,627
$ 8,954 $1,348
-----------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income
6.08% 7.07% 9.74%
Total expenses 1.34%
4 1.22% 4 0.98% 4
-----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
104% 117% 209%

1. For the period from March 1, 2001 (inception of offering) to September 30,
2001.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year. Returns do not reflect the deduction
of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.

55 | OPPENHEIMER STRATEGIC INCOME FUND

FINANCIAL HIGHLIGHTS Continued
--------------------------------------------------------------------------------

Class Y Year Ended September 30, 2003
2002 2001 2000 1999
-----------------------------------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period $3.64
$3.71 $4.17 $4.32 $4.59
-----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .26
.32 .36 .46 .44
Net realized and unrealized gain (loss) .42
(.06) (.42) (.19) (.30)

-------------------------------------------------------------
Total from investment operations .68
.26 (.06) .27 .14
-----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.25)
(.31) (.26) (.42) (.41)
Tax return of capital distribution --
(.02) (.14) -- --

-------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.25)
(.33) (.40) (.42) (.41)
-----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.07
$3.64 $3.71 $4.17 $4.32

=============================================================

-----------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 19.33%
7.06% (1.58)% 6.55% 3.07%

-----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $240,296
$152,767 $103,858 $75,748 $48,566
-----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $194,308
$127,992 $ 94,400 $57,127 $32,310
-----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 6.57%
7.86% 9.09% 11.39% 10.16%
Total expenses 1.41%
1.74% 1.35% 0.83% 0.57%
Expenses after expense reimbursement or fee
waiver and reduction to custodian expenses 0.91%
0.90% 0.78% N/A 3 N/A 3
-----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 104%
117% 209% 136% 172%

INFORMATION AND SERVICES

For More Information on Oppenheimer Strategic Income Fund
The following additional information about the Fund is available without
charge upon request:

STATEMENT OF ADDITIONAL INFORMATION. This document includes additional
information about the Fund's investment policies, risks, and operations. It
is incorporated by reference into this Prospectus (which means it is legally
part of this Prospectus).

ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about the Fund's
investments and performance is available in the Fund's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year.

How to Get More Information
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, the notice explaining the Fund's privacy policy and
other information about the Fund or your account:

------------------------------------------------------------------------------
By Telephone: Call OppenheimerFunds Services toll-free:

1.800.CALL OPP (225.5677)

------------------------------------------------------------------------------
------------------------------------------------------------------------------
By Mail: Write to:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270
------------------------------------------------------------------------------
------------------------------------------------------------------------------
On the Internet: You can send us a request by e-mail or read or
down-load documents on the OppenheimerFunds
website: WWW.OPPENHEIMERFUNDS.COM
------------------------
------------------------------------------------------------------------------

Information about the Fund including the Statement of Additional Information
can 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 the SEC at 1.202.942.8090. Reports and other information
about the Fund are available on the EDGAR database on the SEC's Internet
website at WWW.SEC.GOV. Copies may be obtained after payment of a duplicating
-----------
fee by electronic request at the SEC's e-mail address: publicinfo@sec.gov or
by writing to the SEC's Public Reference Section, Washington, D.C. 20549-0102.
No one has been authorized to provide any information about the Fund or to
make any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any
state or other jurisdiction where it is unlawful to make such an offer.

The Fund's shares are distributed by: [logo] OppenheimerFunds
Distributor, Inc.
The Fund's SEC File No. 811-5724

PR0230.001.1103
Printed on recycled paper

Appendix to Prospectus of
Oppenheimer Strategic Income Fund

Graphic material included in the Prospectus of Oppenheimer Strategic
Income Fund under the heading "Annual Total Returns (Class A)(% as of 12/31
each year)":

A bar chart will be included in the Prospectus of Oppenheimer Strategic
Income Fund (the "Fund") depicting the annual total returns of a hypothetical
investment in Class A shares of the Fund for each of the past ten calendar
years, without deducting sales charges. Set forth below are the relevant data
points that will appear in the bar chart:

Calendar Annual
Year Ended Total Returns

12/31/93 19.51%
12/31/94 -4.45%
12/31/95 15.38%
12/31/96 12.59%
12/31/97 8.36%
12/31/98 1.67%
12/31/99 4.04%
12/31/00 2.21%
12/31/01 3.52%
12/31/02 6.85%

Oppenheimer Strategic Income Fund

6803 South Tucson Way, Centennial, Colorado 80112-3924

1.800.CALL OPP (225.5677)

Statement of Additional Information dated November 21, 2003

This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Fund and supplements
information in the Prospectus dated November 21, 2003, as supplemented from
time to time. It should be read together with the Prospectus. You can obtain
the Prospectus by writing to the Fund's Transfer Agent, OppenheimerFunds
Services, at P.O. Box 5270, Denver, Colorado 80217, or by calling the
Transfer Agent at the toll-free number shown above, or by downloading it from
the OppenheimerFunds Internet website at www.oppenheimerfunds.com.

Contents
Page
About the Fund

Additional Information About the Fund's Investment Policies and Risks.....2
The Fund's Investment Policies........................................2
Other Investment Techniques and Strategies...........................11
Investment Restrictions..............................................33

How the Fund is

Managed..................................................35Organization and
History..................................................................35
Trustees and Officers....................................................37
The Manager..........................................................47
Brokerage Policies of the Fund...........................................50
Distribution and Service Plans...........................................53
Performance of the Fund..................................................57

About Your Account

How To Buy Shares........................................................63
How To Sell Shares.......................................................74
How To Exchange Shares...................................................79
Dividends, Capital Gains and Taxes.......................................83
Additional Information About the Fund....................................88

Financial Information About the Fund

Independent Auditors' Report.............................................89
Financial Statements.....................................................90

Appendix A: Ratings Definitions.........................................A-1
Appendix B: Industry Classifications....................................B-1
Appendix C: Special Sales Charge Arrangements and Waivers...............C-1

A B O U T T H E F U N D

Additional Information About the Fund's Investment Policies and Risks

The investment objective, the principal investment policies and the main
risks of the Fund are described in the Prospectus. This Statement of
Additional Information contains supplemental information about those policies
and risks and the types of securities that the Fund's investment Manager,
OppenheimerFunds, Inc., can select for the Fund. Additional information is
also provided about the strategies that the Fund may use to try to achieve
its objective.

The Fund's Investment Policies. The composition of the Fund's portfolio and
the techniques and strategies that the Manager may use in selecting portfolio
securities will vary over time. The Fund is not required to use all of the
investment techniques and strategies described below in seeking its goal. It
may use some of the investment techniques and strategies at some times or not
at all.

In selecting securities for the Fund's portfolio, the Manager evaluates
the merits of particular securities primarily through the exercise of its own
investment analysis. That process may include, among other things, evaluation
of the issuer's historical operations, prospects for the industry of which
the issuer is part, the issuer's financial condition, its pending product
developments and business (and those of its competitors), the effect of
general market and economic conditions on the issuer's business, and
legislative proposals that might affect the issuer.

Additionally, in analyzing a particular issuer, the Manager may
consider the trading activity in the issuer's securities, present and
anticipated cash flow, estimated current value of its assets in relation to
their historical cost, the issuer's experience and managerial expertise,
responsiveness to changes in interest rates and business conditions, debt
maturity schedules, current and future borrowing requirements, and any change
in the financial condition of an issuer and the issuer's continuing ability
to meet its future obligations. The Manager also may consider anticipated
changes in business conditions, levels of interest rates of bonds as
contrasted with levels of cash dividends, industry and regional prospects,
the availability of new investment opportunities and the general economic,
legislative and monetary outlook for specific industries, the nation and the
world.

|X| Foreign Securities. The Fund expects to have substantial investments in
foreign securities. For the most part, these will be debt securities issued
or guaranteed by foreign companies or governments, including "supra-national"
entities. "Foreign securities" include equity and debt securities of
companies organized under the laws of countries other than the United States
and debt securities issued or guaranteed by governments other than the U.S.
government or by foreign supra-national entities. They also include
securities of companies (including those that are located in the U.S. or
organized under U.S. law) that derive a significant portion of their revenue
or profits from foreign businesses, investments or sales, or that have a
significant portion of their assets abroad. They may be traded on foreign
securities exchanges or in the foreign over-the-counter markets.

The percentage of the Fund's assets that will be allocated to foreign
securities will vary over time depending on a number of factors. Those
factors may include the relative yields of foreign and U.S. securities, the
economies of foreign countries, the condition of a country's financial
markets, the interest rate climate of particular foreign countries and the
relationship of particular foreign currencies to the U.S. dollar. The
Manager analyzes fundamental economic criteria (for example, relative
inflation levels and trends, growth rate forecasts, balance of payments
status, and economic policies) as well as technical and political data.

Securities of foreign issuers that are represented by American
Depository Receipts or that are listed on a U.S. securities exchange or
traded in the U.S. over-the-counter markets are not considered "foreign
securities" for the purpose of the Fund's investment allocations, because
they are not subject to many of the special considerations and risks,
discussed below, that apply to foreign securities traded and held abroad.

Because the Fund may purchase securities denominated in foreign
currencies, a change in the value of such foreign currency against the U.S.
dollar will result in a change in the amount of income the Fund has available
for distribution. Because a portion of the Fund's investment income may be
received in foreign currencies, the Fund will be required to compute its
income in U.S. dollars for distribution to shareholders, and therefore the
Fund will absorb the cost of currency fluctuations. After the Fund has
distributed income, subsequent foreign currency losses may result in the
Fund's having distributed more income in a particular fiscal period than was
available from investment income, which could result in a return of capital
to shareholders.

Investing in foreign securities offers potential benefits not available
from investing solely in securities of domestic issuers. They include the
opportunity to invest in foreign issuers that appear to offer high income
potential, or in foreign countries with economic policies or business cycles
different from those of the U.S., or to reduce fluctuations in portfolio
value by taking advantage of foreign securities markets that do not move in a
manner parallel to U.S. markets. The Fund will hold foreign currency only in
connection with the purchase or sale of foreign securities.

o Foreign Debt Obligations. The debt obligations of foreign governments
and entities may or may not be supported by the full faith and credit of the
foreign government. The Fund may buy securities issued by certain
supra-national entities, which include entities designated or supported by
governments to promote economic reconstruction or development, international
banking organizations and related government agencies. Examples are the
International Bank for Reconstruction and Development (commonly called the
"World Bank"), the Asian Development bank and the Inter-American Development
Bank.

The governmental members of these supra-national entities are
"stockholders" that typically make capital contributions and may be committed
to make additional capital contributions if the entity is unable to repay its
borrowings. A supra-national entity's lending activities may be limited to a
percentage of its total capital, reserves and net income. There can be no
assurance that the constituent foreign governments will continue to be able
or willing to honor their capitalization commitments for those entities.

The Fund can invest in U.S. dollar-denominated "Brady Bonds." These
foreign debt obligations may be fixed-rate par bonds or floating-rate
discount bonds. They are generally collateralized in full as to repayment of
principal at maturity by U.S. Treasury zero-coupon obligations that have the
same maturity as the Brady Bonds. Brady Bonds can be viewed as having three
or four valuation components: (i) the collateralized repayment of principal
at final maturity; (ii) the collateralized interest payments; (iii) the
uncollateralized interest payments; and (iv) any uncollateralized repayment
of principal at maturity. Those uncollateralized amounts constitute what is
called the "residual risk."

If there is a default on collateralized Brady Bonds resulting in
acceleration of the payment obligations of the issuer, the zero-coupon U.S.
Treasury securities held as collateral for the payment of principal will not
be distributed to investors, nor will those obligations be sold to distribute
the proceeds. The collateral will be held by the collateral agent to the
scheduled maturity of the defaulted Brady Bonds. The defaulted bonds will
continue to remain outstanding, and the face amount of the collateral will
equal the principal payments which would have then been due on the Brady
Bonds in the normal course. Because of the residual risk of Brady Bonds and
the history of defaults with respect to commercial bank loans by public and
private entities of countries issuing Brady Bonds, Brady Bonds are considered
speculative investments.

o Risks of Foreign Investing. Investments in foreign securities may
offer special opportunities for investing but also present special additional
risks and considerations not typically associated with investments in
domestic securities. Some of these additional risks are:
o reduction of income by foreign taxes;
o fluctuation in value of foreign investments due to changes in currency
rates or currency control regulations (for example,
currency blockage);
o transaction charges for currency exchange;
o lack of public information about foreign issuers;
o lack of uniform accounting, auditing and financial reporting standards
in foreign countries comparable to those applicable to
domestic issuers;
o less volume on foreign exchanges than on U.S. exchanges;
o greater volatility and less liquidity on foreign markets than in the
U.S.;
o less governmental regulation of foreign issuers, stock exchanges and
brokers than in the U.S.;
o foreign exchange contracts;
o greater difficulties in commencing lawsuits;
o higher brokerage commission rates than in the U.S.;
o increased risks of delays in settlement of portfolio transactions or
loss of certificates for portfolio securities;
o foreign withholding taxes on interest and dividends;
o possibilities in some countries of expropriation, nationalization,
confiscatory taxation, political, financial or social
instability or adverse diplomatic developments; and
o unfavorable differences between the U.S. economy and foreign economies.

In the past, U.S. government policies have discouraged certain
investments abroad by U.S. investors, through taxation or other restrictions,
and it is possible that such restrictions could be re-imposed.

o Special Risks of Emerging Markets. Emerging and developing markets
abroad may also offer special opportunities for investing but have greater
risks than more developed foreign markets, such as those in Europe, Canada,
Australia, New Zealand and Japan. There may be even less liquidity in their
securities markets, and settlements of purchases and sales of securities may
be subject to additional delays. They are subject to greater risks of
limitations on the repatriation of income and profits because of currency
restrictions imposed by local governments. Those countries may also be
subject to the risk of greater political and economic instability, which can
greatly affect the volatility of prices of securities in those countries. The
Manager will consider these factors when evaluating securities in these
markets, because the selection of those securities must be consistent with
the Fund's investment objective.

|X| Debt Securities. The Fund can invest in a variety of debt
securities to seek its objective. Foreign debt securities are subject to the
risks of foreign securities described above. In general, debt securities are
also subject to two additional types of risk: credit risk and interest rate
risk.

o Credit Risks. Credit risk relates to the ability of the issuer to meet
interest or principal payments or both as they become due. In general,
lower-grade, higher-yield bonds are subject to credit risk to a greater
extent that lower-yield, higher-quality bonds.

The Fund's debt investments can include high-yield,
non-investment-grade bonds (commonly referred to as "junk bonds").
Investment-grade bonds are bonds rated at least "Baa" by Moody's Investors
Service, Inc., at least "BBB" by Standard & Poor's Ratings Group or Duff &
Phelps, Inc., or that have comparable ratings by another
nationally-recognized rating organization.

In making investments in debt securities, the Manager may rely to some
extent on the ratings of ratings organizations or it may use its own research
to evaluate a security's credit-worthiness. If securities the Fund buys are
unrated, they are assigned a rating by the Manager of comparable quality to
bonds having similar yield and risk characteristics within a rating category
of a rating organization.

The Fund does not have investment policies establishing specific
maturity ranges for the Fund's investments, and they may be within any
maturity range (short, medium or long) depending on the Manager's evaluation
of investment opportunities available within the debt securities markets. The
Fund may shift its investment focus to securities of longer maturity as
interest rates decline and to securities of shorter maturity as interest
rates rise.

o Interest Rate Risk. Interest rate risk refers to the fluctuations in
value of fixed-income securities resulting from the inverse relationship
between price and yield. For example, an increase in general interest rates
will tend to reduce the market value of already-issued fixed-income
investments, and a decline in general interest rates will tend to increase
their value. In addition, debt securities with longer maturities, which tend
to have higher yields, are subject to potentially greater fluctuations in
value from changes in interest rates than obligations with shorter
maturities.

While the changes in value of the Fund's portfolio securities after
they are purchased will be reflected in the net asset value of the Fund's
shares, those changes normally do not affect the interest income paid by
those securities (unless the security's interest is paid at a variable rate
pegged to particular interest rate changes). However, those price
fluctuations will be reflected in the valuations of the securities, and
therefore the Fund's net asset values will be affected by those fluctuations.

o Special Risks of Lower-Grade Securities. The Fund can invest without
limit in lower-grade debt securities, if the Manager believes it is
consistent with the Fund's objective. Because lower-rated securities tend to
offer higher yields than investment grade securities, the Fund may invest in
lower-grade securities to try to achieve higher income.

"Lower-grade" debt securities are those rated below "investment grade"
which means they have a rating lower than "Baa" by Moody's or lower than
"BBB" by Standard & Poor's or Duff & Phelps, or similar ratings by other
rating organizations. If they are unrated, and are determined by the Manager
to be of comparable quality to debt securities rated below investment grade,
they are considered part of the Fund's portfolio of lower-grade securities.
The Fund can invest in securities rated as low as "C" or "D" or which may be
in default at the time the Fund buys them.

Some of the special credit risks of lower-grade securities are
discussed below. There is a greater risk that the issuer may default on its
obligation to pay interest or to repay principal than in the case of
investment grade securities. The issuer's low creditworthiness may increase
the potential for its insolvency. An overall decline in values in the
high-yield bond market is also more likely during a period of a general
economic downturn. An economic downturn or an increase in interest rates
could severely disrupt the market for high-yield bonds, adversely affecting
the values of outstanding bonds as well as the ability of issuers to pay
interest or repay principal. In the case of foreign high-yield bonds, these
risks are in addition to the special risk of foreign investing discussed in
the Prospectus and in this Statement of Additional Information.

To the extent they can be converted into stock, convertible securities
may be less subject to some of these risks than non-convertible high-yield
bonds, since stock may be more liquid and less affected by some of these risk
factors.

While securities rated "Baa" by Moody's or "BBB" by Standard & Poor's
or Duff & Phelps are investment grade and are not regarded as junk bonds,
those securities may be subject to special risks, and have some speculative
characteristics. Definitions of the debt security ratings categories of the
principal rating organizations are included in Appendix A to this Statement
of Additional Information.

|X| Mortgage-Related Securities. Mortgage-related securities are a form of
derivative investment collateralized by pools of commercial or residential
mortgages. Pools of mortgage loans are assembled as securities for sale to
investors by government agencies or instrumentalities or by private issuers.
These securities include collateralized mortgage obligations ("CMOs"),
mortgage pass-through securities, stripped mortgage pass-through securities,
interests in real estate mortgage investment conduits ("REMICs") and other
real estate-related securities.

Mortgage-related securities that are issued or guaranteed by agencies
or instrumentalities
of the U.S. government have relatively little credit risk (depending on the
nature of the issuer) but are subject to interest rate risks and prepayment
risks, as described in the Prospectus. Mortgage-related securities issued by
private issuers have greater credit risk.

As with other debt securities, the prices of mortgage-related
securities tend to move inversely to changes in interest rates. The Fund can
buy mortgage-related securities that have interest rates that move inversely
to changes in general interest rates, based on a multiple of a specific
index. Although the value of a mortgage-related security may decline when
interest rates rise, the converse is not always the case.

In periods of declining interest rates, mortgages are more likely to be
prepaid. Therefore, a mortgage-related security's maturity can be shortened
by unscheduled prepayments on the underlying mortgages, and it is not
possible to predict accurately the security's yield. The principal that is
returned earlier than expected may have to be reinvested in other investments
having a lower yield than the prepaid security. As a result, these securities
may be less effective as a means of "locking in" attractive long-term
interest rates, and they may have less potential for appreciation during
periods of declining interest rates, than conventional bonds with comparable
stated maturities.

Prepayment risks can lead to substantial fluctuations in the value of a
mortgage-related security. In turn, this can affect the value of the Fund's
shares. If a mortgage-related security has been purchased at a premium, all
or part of the premium the Fund paid may be lost if there is a decline in the
market value of the security, whether that results from interest rate changes
or prepayments on the underlying mortgages. In the case of stripped
mortgage-related securities, if they experience greater rates of prepayment
than were anticipated, the Fund may fail to recoup its initial investment on
the security.

During periods of rapidly rising interest rates, prepayments of
mortgage-related securities may occur at slower than expected rates. Slower
prepayments effectively may lengthen a mortgage-related security's expected
maturity. Generally, that would cause the value of the security to fluctuate
more widely in responses to changes in interest rates. If the prepayments on
the Fund's mortgage-related securities were to decrease broadly, the Fund's
effective duration, and therefore its sensitivity to interest rate changes,
would increase.

As with other debt securities, the values of mortgage-related
securities may be affected by changes in the market's perception of the
creditworthiness of the entity issuing the securities or guaranteeing them.
Their values may also be affected by changes in government regulations and
tax policies.

o Collateralized Mortgage Obligations. CMOs are multi-class bonds that
are backed by pools of mortgage loans or mortgage pass-through certificates.
They may be collateralized by:
(1) pass-through certificates issued or guaranteed by Ginnie Mae, Fannie
Mae, or Freddie Mac,
(2) unsecuritized mortgage loans insured by the Federal Housing
Administration or guaranteed by the Department of
Veterans' Affairs,
(3) unsecuritized conventional mortgages,
(4) other mortgage-related securities, or
(5) any combination of these.

Each class of CMO, referred to as a "tranche," is issued at a specific
coupon rate and has a stated maturity or final distribution date. Principal
prepayments on the underlying mortgages may cause the CMO to be retired much
earlier than the stated maturity or final distribution date. The principal
and interest on the underlying mortgages may be allocated among the several
classes of a series of a CMO in different ways. One or more tranches may have
coupon rates that reset periodically at a specified increase over an index.
These are floating rate CMOs, and typically have a cap on the coupon rate.
Inverse floating rate CMOs have a coupon rate that moves in the opposite
direction of an applicable index. The coupon rate on these CMOs will increase
as general interest rates decrease. These are usually much more volatile than
fixed rate CMOs or floating rate CMOs.

o Forward Rolls. The Fund can enter into "forward roll" transactions
with respect to mortgage-related securities (also referred to as "mortgage
dollar rolls"). In this type of transaction, the Fund sells a
mortgage-related security to a buyer and simultaneously agrees to repurchase
a similar security (the same type of security, and having the same coupon and
maturity) at a later date at a set price. The securities that are
repurchased will have the same interest rate as the securities that are sold,
but typically will be collateralized by different pools of mortgages (with
different prepayment histories) than the securities that have been sold.
Proceeds from the sale are invested in short-term instruments, such as
repurchase agreements. The income from those investments, plus the fees from
the forward roll transaction, are expected to generate income to the Fund in
excess of the yield on the securities that have been sold.

The Fund will only enter into "covered" rolls. To assure its future
payment of the purchase price, the Fund will identify on its books liquid
assets in an amount equal to the payment obligation under the roll.

These transactions have risks. During the period between the sale and
the repurchase, the Fund will not be entitled to receive interest and
principal payments on the securities that have been sold. It is possible
that the market value of the securities the Fund sells may decline below the
price at which the Fund is obligated to repurchase securities.

|X| U.S. Government Securities. These are securities issued or
guaranteed by the U.S. Treasury or other government agencies or
federally-charted corporate entities referred to as "instrumentalities." The
obligations of U.S. government agencies or instrumentalities in which the
Fund may invest may or may not be guaranteed or supported by the "full faith
and credit" of the United States. "Full faith and credit" means generally
that the taxing power of the U.S. government is pledged to the payment of
interest and repayment of principal on a security. If a security is not
backed by the full faith and credit of the United States, the owner of the
security must look principally to the agency issuing the obligation for
repayment. The owner might not be able to assert a claim against the United
States if the issuing agency or instrumentality does not meet its
commitment. The Fund will invest in securities of U.S. government agencies
and instrumentalities only if the Manager is satisfied that the credit risk
with respect to the agency or instrumentality is minimal.

o U.S. Treasury Obligations. These include Treasury bills (maturities of
one year or less when issued), Treasury notes (maturities of one to ten
years), and Treasury bonds (maturities of more than ten years). Treasury
securities are backed by the full faith and credit of the United States as to
timely payments of interest and repayments of principal. They also can
include U. S. Treasury securities that have been "stripped" by a Federal
Reserve Bank, zero-coupon U.S. Treasury securities described below, and
Treasury Inflation-Protection Securities ("TIPS").

o Treasury Inflation-Protection Securities. The Fund can buy these TIPS,
which are designed to provide an investment vehicle that is not vulnerable to
inflation. The interest rate paid by TIPS is fixed. The principal value rises
or falls semi-annually based on changes in the published Consumer Price
Index. If inflation occurs, the principal and interest payments on TIPS are
adjusted to protect investors from inflationary loss. If deflation occurs,
the principal and interest payments will be adjusted downward, although the
principal will not fall below its face amount at maturity.

o Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities. These include direct obligations and mortgage-related
securities that have different levels of credit support from the government.
Some are supported by the full faith and credit of the U.S. government, such
as Government National Mortgage Association ("GNMA") pass-through mortgage
certificates (called "Ginnie Maes"). Some are supported by the right of the
issuer to borrow from the U.S. Treasury under certain circumstances, such as
Federal National Mortgage Association bonds ("Fannie Maes"). Others are
supported only by the credit of the entity that issued them, such as Federal
Home Loan Mortgage Corporation obligations ("Freddie Macs").

|X| U.S. Government Mortgage-Related Securities. The Fund can invest in a
variety of mortgage-related securities that are issued by U.S. government
agencies or instrumentalities, some of which are described below.

o GNMA Certificates. The Government National Mortgage Association is a
wholly-owned corporate instrumentality of the United States within the U.S.
Department of Housing and Urban Development. GNMA's principal programs
involve its guarantees of privately-issued securities backed by pools of
mortgages. Ginnie Maes are debt securities representing an interest in one
mortgage or a pool of mortgages that are insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by the
Veterans Administration

The Ginnie Maes in which the Fund invests are of the "fully modified
pass-through" type. They provide that the registered holders of the Ginnie
Maes will receive timely monthly payments of the pro-rata share of the
scheduled principal payments on the underlying mortgages, whether or not
those amounts are collected by the issuers. Amounts paid include, on a pro
rata basis, any prepayment of principal of such mortgages and interest (net
of servicing and other charges) on the aggregate unpaid principal balance of
the Ginnie Maes, whether or not the interest on the underlying mortgages has
been collected by the issuers.

The Ginnie Maes purchased by the Fund are guaranteed as to timely
payment of principal and interest by GNMA. In giving that guaranty, GNMA
expects that payments received by the issuers of Ginnie Maes on account of
the mortgages backing the Ginnie Maes will be sufficient to make the required
payments of principal of and interest on those Ginnie Maes. However, if those
payments are insufficient, the guaranty agreements between the issuers of the
Ginnie Maes and GNMA require the issuers to make advances sufficient for the
payments. If the issuers fail to make those payments, GNMA will do so.

Under Federal law, the full faith and credit of the United States is
pledged to the payment of all amounts that may be required to be paid under
any guaranty issued by GNMA as to such mortgage pools. An opinion of an
Assistant Attorney General of the United States, dated December 9, 1969,
states that such guaranties "constitute general obligations of the United
States backed by its full faith and credit." GNMA is empowered to borrow
from the United States Treasury to the extent necessary to make any payments
of principal and interest required under those guaranties.

Ginnie Maes are backed by the aggregate indebtedness secured by the
underlying FHA-insured, FMHA-insured or VA-guaranteed mortgages. Except to
the extent of payments received by the issuers on account of such mortgages,
Ginnie Maes do not constitute a liability of those issuers, nor do they
evidence any recourse against those issuers. Recourse is solely against
GNMA. Holders of Ginnie Maes (such as the Fund) have no security interest in
or lien on the underlying mortgages.

Monthly payments of principal will be made, and additional prepayments
of principal may be made, to the Fund with respect to the mortgages
underlying the Ginnie Maes owned by the Fund. All of the mortgages in the
pools relating to the Ginnie Maes in the Fund are subject to prepayment
without any significant premium or penalty, at the option of the mortgagors.
While the mortgages on 1-to-4-family dwellings underlying certain Ginnie Maes
have a stated maturity of up to 30 years, it has been the experience of the
mortgage industry that the average life of comparable mortgages, as a result
of prepayments, refinancing and payments from foreclosures, is considerably
less.

o Federal Home Loan Mortgage Corporation ("FHLMC") Certificates. FHLMC, a
corporate instrumentality of the United States, issues FHLMC Certificates
representing interests in mortgage loans. FHLMC guarantees to each
registered holder of a FHLMC Certificate timely payment of the amounts
representing a holder's proportionate share in:
(i) interest payments less servicing and guarantee fees,
(ii) principal prepayments, and
(iii) the ultimate collection of amounts representing the holder's
proportionate interest in principal payments on the
mortgage loans in the pool represented by the FHLMC
Certificate, in each case whether or not such amounts are
actually received.

The obligations of FHLMC under its guarantees are obligations solely of
FHLMC and are not backed by the full faith and credit of the United States.

o Federal National Mortgage Association (Fannie Mae) Certificates.
Fannie Mae, a federally-chartered and privately-owned corporation, issues
Fannie Mae Certificates which are backed by a pool of mortgage loans. Fannie
Mae guarantees to each registered holder of a Fannie Mae Certificate that the
holder will receive amounts representing the holder's proportionate interest
in scheduled principal and interest payments, and any principal prepayments,
on the mortgage loans in the pool represented by such Certificate, less
servicing and guarantee fees, and the holder's proportionate interest in the
full principal amount of any foreclosed or other liquidated mortgage loan. In
each case the guarantee applies whether or not those amounts are actually
received. The obligations of Fannie Mae under its guarantees are obligations
solely of Fannie Mae and are not backed by the full faith and credit of the
United States or any of its agencies or instrumentalities other than Fannie
Mae.

|X| Zero-Coupon U.S. Government Securities. The Fund may buy zero-coupon
U.S. government securities. These will typically be U.S. Treasury Notes and
Bonds that have been stripped of their unmatured interest coupons, the
coupons themselves, or certificates representing interests in those stripped
debt obligations and coupons.

Zero-coupon securities do not make periodic interest payments and are
sold at a deep discount from their face value at maturity. The buyer
recognizes a rate of return determined by the gradual appreciation of the
security, which is redeemed at face value on a specified maturity date. This
discount depends on the time remaining until maturity, as well as prevailing
interest rates, the liquidity of the security and the credit quality of the
issuer. The discount typically decreases as the maturity date approaches.

Because zero-coupon securities pay no interest and compound
semi-annually at the rate fixed at the time of their issuance, their value is
generally more volatile than the value of other debt securities that pay
interest. Their value may fall more dramatically than the value of
interest-bearing securities when interest rates rise. When prevailing
interest rates fall, zero-coupon securities tend to rise more rapidly in
value because they have a fixed rate of return.

The Fund's investment in zero-coupon securities may cause the Fund to
recognize income and make distributions to shareholders before it receives
any cash payments on the zero-coupon investment. To generate cash to satisfy
those distribution requirements, the Fund may have to sell portfolio
securities that it otherwise might have continued to hold or to use cash
flows from other sources such as the sale of Fund shares.

|X| Portfolio Turnover. "Portfolio turnover" describes the rate at
which the Fund traded its portfolio securities during its last fiscal year.
For example, if a fund sold all of its securities during the year, its
portfolio turnover rate would have been 100%. The Fund's portfolio turnover
rate will fluctuate from year to year, and the Fund may continue to have a
portfolio turnover rate of more than 100% annually.

Increased portfolio turnover creates higher brokerage and transaction
costs for the Fund, which may reduce its overall performance. Additionally,
the realization of capital gains from selling portfolio securities may result
in distributions of taxable long-term capital gains to shareholders, since
the Fund will normally distribute all of its capital gains realized each
year, to avoid excise taxes under the Internal Revenue Code.

Other Investment Techniques and Strategies. In seeking its objective, the
Fund may from time to time use the types of investment strategies and
investments described below. It is not required to use all of these
strategies at all times and at times may not use them.

Investment in Other Investment Companies. The Fund can also invest in the
securities of other investment companies, which can include open-end funds,
closed-end funds and unit investment trusts, subject to the limits set forth
in the Investment Company Act of 1940 (the "Investment Company Act") that
apply to those types of investments. For example, the Fund can invest in
Exchange-Traded Funds, which are typically open-end funds or unit investment
trusts, listed on a stock exchange. The Fund might do so as a way of gaining
exposure to the segments of the equity or fixed-income markets represented by
the Exchange-Traded Funds' portfolio, at times when the Fund may not be able
to buy those portfolio securities directly.
Investing in another investment company may involve the payment of
substantial premiums above the value of such investment company's portfolio
securities and is subject to limitations under the Investment Company Act.
The Fund does not intend to invest in other investment companies unless the
Manager believes that the potential benefits of the investment justify the
payment of any premiums or sales charges. As a shareholder of an investment
company, the Fund would be subject to its ratable share of that investment
company's expenses, including its advisory and administration expenses. The
Fund does not anticipate investing a substantial amount of its net assets in
shares of other investment companies.

|X| Other Zero-Coupon Securities. The Fund may buy zero-coupon and
delayed-interest securities, and "stripped" securities of corporations and of
foreign government issuers. These are similar in structure to zero-coupon
and "stripped" U.S. government securities, but in the case of foreign
government securities, they may or may not be backed by the "full faith and
credit" of the issuing foreign government. Zero-coupon securities issued by
foreign governments and by corporations will be subject to greater credit
risks than U.S. government zero-coupon securities.

|X| "Stripped" Mortgage-Related Securities. The Fund may invest in
stripped mortgage-related securities that are created by segregating the cash
flows from underlying mortgage loans or mortgage securities to create two or
more new securities. Each has a specified percentage of the underlying
security's principal or interest payments. These are a form of derivative
investment.

Mortgage securities may be partially stripped so that each class
receives some interest and some principal. However, they may be completely
stripped. In that case all of the interest is distributed to holders of one
type of security, known as an "interest-only" security, or "I/O," and all of
the principal is distributed to holders of another type of security, known as
a "principal-only" security or "P/O." Strips can be created for pass-through
certificates or CMOs.

The yields to maturity of I/Os and P/Os are very sensitive to principal
repayments (including prepayments) on the underlying mortgages. If the
underlying mortgages experience greater than anticipated prepayments of
principal, the Fund might not fully recoup its investment in an I/O based on
those assets. If underlying mortgages experience less than anticipated
prepayments of principal, the yield on the P/Os based on them could decline
substantially.

|X| Preferred Stocks. Unlike common stock, preferred stock typically
has a stated dividend rate payable from the corporation's earnings.
Preferred stock dividends may be cumulative or non-cumulative, participating,
or auction rate. "Cumulative" dividend provisions require all or a portion of
prior unpaid dividends to be paid.

If interest rates rise, the fixed dividend on preferred stocks may be
less attractive, causing the price of preferred stocks to decline. Preferred
stock may have mandatory sinking fund provisions, as well as call/redemption
provisions prior to maturity, which can be a negative feature when interest
rates decline. Preferred stock also generally has a preference over common
stock on the distribution of a corporation's assets in the event of
liquidation of the corporation. Preferred stock may be "participating" stock,
which means that it may be entitled to a dividend exceeding the stated
dividend in certain cases. The rights of preferred stock on distribution of
a corporation's assets in the event of a liquidation are generally
subordinate to the rights associated with a corporation's debt securities.

|X| Floating Rate and Variable Rate Obligations. Some securities the
Fund can purchase have variable or floating interest rates. Variable rates
are adjusted at stated periodic intervals. Variable rate obligations can
have a demand feature that allows the Fund to tender the obligation to the
issuer or a third party prior to its maturity. The tender may be at par value
plus accrued interest, according to the terms of the obligations.

The interest rate on a floating rate demand note is adjusted
automatically according to a stated prevailing market rate, such as a bank's
prime rate, the 91-day U.S. Treasury Bill rate, or some other standard. The
instrument's rate is adjusted automatically each time the base rate is
adjusted. The interest rate on a variable rate note is also based on a stated
prevailing market rate but is adjusted automatically at specified intervals
of not less than one year. Generally, the changes in the interest rate on
such securities reduce the fluctuation in their market value. As interest
rates decrease or increase, the potential for capital appreciation or
depreciation is less than that for fixed-rate obligations of the same
maturity. The Manager may determine that an unrated floating rate or variable
rate demand obligation meets the Fund's quality standards by reason of being
backed by a letter of credit or guarantee issued by a bank that meets those
quality standards.

Floating rate and variable rate demand notes that have a stated
maturity in excess of one year may have features that permit the holder to
recover the principal amount of the underlying security at specified
intervals not exceeding one year and upon no more than 30 days' notice. The
issuer of that type of note normally has a corresponding right in its
discretion, after a given period, to prepay the outstanding principal amount
of the note plus accrued interest. Generally, the issuer must provide a
specified number of days' notice to the holder.

|X| "When-Issued" and "Delayed-Delivery" Transactions. The Fund can
purchase securities on a "when-issued" basis, and may purchase or sell
securities on a "delayed-delivery" basis. "When-issued" or "delayed-delivery"
refers to securities whose terms and indenture are available and for which a
market exists, but which are not available for immediate delivery.

When such transactions are negotiated, the price (which is generally
expressed in yield terms) is fixed at the time the commitment is made.
Delivery and payment for the securities take place at a later date. The
securities are subject to change in value from market fluctuations during the
period until settlement. The value at delivery may be less than the purchase
price. For example, changes in interest rates in a direction other than that
expected by the Manager before settlement will affect the value of such
securities and may cause a loss to the Fund. During the period between
purchase and settlement, the Fund makes no payment to the issuer and no
interest accrues to the Fund from the investment until it receives the
security at settlement. There is a risk of loss to the Fund if the value of
the security changes prior to the settlement date, and there is the risk that
the other party may not perform.

The Fund may engage in when-issued transactions to secure what the
Manager considers to be an advantageous price and yield at the time the
obligation is entered into. When the Fund enters into a when-issued or
delayed-delivery transaction, it relies on the other party to complete the
transaction. Its failure to do so may cause the Fund to lose the opportunity
to obtain the security at a price and yield the Manager considers to be
advantageous.
When the Fund engages in when-issued and delayed-delivery transactions,
it does so for the purpose of acquiring or selling securities consistent with
its investment objective and policies for its portfolio or for delivery
pursuant to options contracts it has entered into, and not for the purposes
of investment leverage. Although the Fund will enter into when-issued or
delayed-delivery purchase transactions to acquire securities, the Fund may
dispose of a commitment prior to settlement. If the Fund chooses to dispose
of the right to acquire a when-issued security prior to its acquisition or to
dispose of its right to deliver or receive against a forward commitment, it
may incur a gain or loss.

At the time the Fund makes the commitment to purchase or sell a
security on a when-issued or delayed-delivery basis, it records the
transaction on its books and reflects the value of the security purchased in
determining the Fund's net asset value. In a sale transaction, it records
the proceeds to be received. The Fund will identify on its books liquid
assets at least equal in value to the value of the Fund's purchase
commitments until the Fund pays for the investment.

When-issued and delayed-delivery transactions can be used by the Fund
as a defensive technique to hedge against anticipated changes in interest
rates and prices. For instance, in periods of rising interest rates and
falling prices, the Fund might sell securities in its portfolio on a forward
commitment basis to attempt to limit its exposure to anticipated falling
prices. In periods of falling interest rates and rising prices, the Fund
might sell portfolio securities and purchase the same or similar securities
on a when-issued or delayed-delivery basis to obtain the benefit of currently
higher cash yields.

|X| Participation Interests. The Fund may invest in participation
interests, subject to the Fund's limitation on investments in illiquid
investments. A participation interest is an undivided interest in a loan
made by the issuing financial institution in the proportion that the buyers
participation interest bears to the total principal amount of the loan. No
more than 5% of the Fund's net assets can be invested in participation
interests of the same borrower. The issuing financial institution may have
no obligation to the Fund other than to pay the Fund the proportionate amount
of the principal and interest payments it receives.

Participation interests are primarily dependent upon the
creditworthiness of the borrowing corporation, which is obligated to make
payments of principal and interest on the loan. There is a risk that a
borrower may have difficulty making payments. If a borrower fails to pay
scheduled interest or principal payments, the Fund could experience a
reduction in its income. The value of that participation interest might also
decline, which could affect the net asset value of the Fund's shares. If the
issuing financial institution fails to perform its obligations under the
participation agreement, the Fund might incur costs and delays in realizing
payment and suffer a loss of principal and/or interest.

|X| Repurchase Agreements. The Fund can acquire securities subject to
repurchase agreements. It might do so for liquidity purposes to meet
anticipated redemptions of Fund shares, or pending the investment of the
proceeds from sales of Fund shares, or pending the settlement of portfolio
securities transactions, or for temporary defensive purposes, as described
below.

In a repurchase transaction, the Fund buys a security from, and
simultaneously resells it to, an approved vendor for delivery on an
agreed-upon future date. The resale price exceeds the purchase price by an
amount that reflects an agreed-upon interest rate effective for the period
during which the repurchase agreement is in effect. Approved vendors include
U.S. commercial banks, U.S. branches of foreign banks, or broker-dealers that
have been designated as primary dealers in government securities. They must
meet credit requirements set by the Manager from time to time.

The majority of these transactions run from day to day, and delivery
pursuant to the resale typically occurs within one to five days of the
purchase. Repurchase agreements having maturity beyond seven days are subject
to the Fund's limits on holding illiquid investments. The Fund will not enter
into a repurchase agreement that causes more than 10% of its net assets to be
subject to repurchase agreements having a maturity beyond seven days. There
is no limit on the amount of the Fund's net assets that may be subject to
repurchase agreements having maturities of seven days or less.

Repurchase agreements, considered "loans" under the Investment Company
Act, are collateralized by the underlying security. The Fund's repurchase
agreements require that at all times while the repurchase agreement is in
effect, the value of the collateral must equal or exceed the repurchase price
to fully collateralize the repayment obligation. However, if the vendor fails
to pay the resale price on the delivery date, the Fund may incur costs in
disposing of the collateral and may experience losses if there is any delay
in its ability to do so. The Manager will monitor the vendor's
creditworthiness to confirm that the vendor is financially sound and will
monitor the collateral's value on an on-going basis.

Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission (the "SEC"), the Fund, along with other affiliated entities
managed by the Manager, may transfer uninvested cash balances into one or
more joint repurchase accounts. These balances are invested in one or more
repurchase agreements, secured by U.S. government securities. Securities that
are pledged as collateral for repurchase agreements are held by a custodian
bank until the agreements mature. Each joint repurchase arrangement requires
that the market value of the collateral be sufficient to cover payments of
interest and principal; however, in the event of default by the other party
to the agreement, retention or sale of the collateral may be subject to legal
proceedings.

|X| Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Trustees, the Manager
determines the liquidity of certain of the Fund's investments. To enable the
Fund to sell its holdings of a restricted security not registered under the
Securities Act of 1933, the Fund may have to cause those securities to be
registered. The expenses of registering restricted securities may be
negotiated by the Fund with the issuer at the time the Fund buys the
securities. When the Fund must arrange registration because the Fund wishes
to sell the security, a considerable period may elapse between the time the
decision is made to sell the security and the time the security is registered
so that the Fund could sell it. The Fund would bear the risks of any downward
price fluctuation during that period.

The Fund may also acquire restricted securities through private
placements. Those securities have contractual restrictions on their public
resale. Those restrictions might limit the Fund's ability to dispose of the
securities and might lower the amount the Fund could realize upon the sale.

The Fund has limitations that apply to purchases of restricted
securities, as stated in the Prospectus. Those percentage restrictions do not
limit purchases of restricted securities that are eligible for sale to
qualified institutional purchasers under Rule 144A of the Securities Act of
1933, if those securities have been determined to be liquid by the Manager
under Board-approved guidelines. Those guidelines take into account the
trading activity for such securities and the availability of reliable pricing
information, among other factors. If there is a lack of trading interest in
a particular Rule 144A security, the Fund's holdings of that security may be
considered to be illiquid.

Illiquid securities include repurchase agreements maturing in more than
seven days and participation interests that do not have puts exercisable
within seven days.

|X| Investments in Equity Securities. The Fund can invest limited amounts
of its assets in securities other than debt securities, including certain
types of equity securities of both foreign and U.S. companies. However, it
does not anticipate investing significant amounts of its assets in these
securities as part of its normal investment strategy. Those equity securities
include preferred stocks (described above), rights and warrants, and
securities convertible into common stock. Certain equity securities may be
selected because they may provide dividend income.

o Risks of Investing in Stocks. Stocks fluctuate in price, and their
short-term volatility at times may be great. To the extent that the Fund
invests in equity securities, the value of the Fund's portfolio will be
affected by changes in the stock markets. Market risk can affect the Fund's
net asset value per share, which will fluctuate as the values of the Fund's
portfolio securities change. The prices of individual stocks do not all move
in the same direction uniformly or at the same time. Different stock markets
may behave differently from each other.

Other factors can affect a particular stock's price, such as poor
earnings reports by the issuer, loss of major customers, major litigation
against the issuer, or changes in government regulations affecting the issuer
or its industry. The Fund can invest in securities of large companies and
mid-size companies, but may also buy stocks of small companies, which may
have more volatile stock prices than large companies.

o Convertible Securities. While some convertible securities are a form
of debt security, in many cases their conversion feature (allowing conversion
into equity securities) causes them to be regarded by the Manager more as
"equity equivalents." As a result, the rating assigned to the security has
less impact on the Manager's investment decision with respect to convertible
securities than in the case of non-convertible debt fixed-income securities.
Convertible securities are subject to the credit risks and interest rate
risks described above.

The value of a convertible security is a function of its "investment
value" and its "conversion value." If the investment value exceeds the
conversion value, the security will behave more like a debt security and the
security's price will likely increase when interest rates fall and decrease
when interest rates rise. If the conversion value exceeds the investment
value, the security will behave more like an equity security. In that case,
it will likely sell at a premium over its conversion value and its price will
tend to fluctuate directly with the price of the underlying security.

To determine whether convertible securities should be regarded as
"equity equivalents," the Manager examines the following factors:
(1) whether, at the option of the investor, the convertible security can be
exchanged for a fixed number of shares of common stock of the
issuer,
(2) whether the issuer of the convertible securities has restated its
earnings per share of common stock on a fully diluted basis
(considering the effect of conversion of the convertible
securities), and
(3) the extent to which the convertible security may be a defensive "equity
substitute," providing the ability to participate in any
appreciation in the price of the issuer's common stock.

o Rights and Warrants. The Fund can invest up to 5% of its total assets
in warrants or rights. That limit does not apply to warrants and rights the
Fund has acquired as part of units of securities or that are attached to
other securities that the Fund buys. The Fund does not expect that it will
have significant investments in warrants and rights.

Warrants basically are options to purchase equity securities at
specific prices valid for a specific period of time. Their prices do not
necessarily move parallel to the prices of the underlying securities. Rights
are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and warrants
have no voting rights, receive no dividends and have no rights with respect
to the assets of the issuer.

Loans of Portfolio Securities. To raise cash for liquidity purposes or
income, the Fund can lend its portfolio securities to brokers, dealers and
other types of financial institutions approved by the Fund's Board of
Trustees.

The Fund may lend its portfolio securities pursuant to the Securities
Lending Agreement (the "Securities Lending Agreement") with JP Morgan Chase,
subject to the restrictions stated in the Prospectus. The Fund will lend
such portfolio securities to attempt to increase the Fund's income. Under
the Securities Lending Agreement and applicable regulatory requirements
(which are subject to change), the loan collateral must, on each business
day, be at least equal to the value of the loaned securities and must consist
of cash, bank letters of credit or securities of the U.S. Government (or its
agencies or instrumentalities), or other cash equivalents in which the Fund
is permitted to invest. To be acceptable as collateral, letters of credit
must obligate a bank to pay to JP Morgan Chase, as agent, amounts demanded by
the Fund if the demand meets the terms of the letter. Such terms of the
letter of credit and the issuing bank must be satisfactory to JP Morgan Chase
and the Fund. The Fund will receive, pursuant to the Securities Lending
Agreement, 80% of all annual net income (i.e., net of rebates to the
Borrower) from securities lending transactions. JP Morgan Chase has agreed,
in general, to guarantee the obligations of borrowers to return loaned
securities and to be responsible for expenses relating to securities
lending. The Fund will be responsible, however, for risks associated with
the investment of cash collateral, including the risk that the issuer of the
security in which the cash collateral has been invested in defaults. The
Securities Lending Agreement may be terminated by either JP Morgan Chase or
the Fund on 30 days' written notice. The terms of the Fund's loans must also
meet applicable tests under the Internal Revenue Code and permit the Fund to
reacquire loaned securities on five business days' notice or in time to vote
on any important matter.

There are some risks in connection with securities lending. The Fund
might experience a delay in receiving additional collateral to secure a
loan, or a delay in recovery of the loaned securities if the borrower
defaults. The Fund must receive collateral for a loan. Under current
applicable regulatory requirements (which are subject to change), on each
business day the loan collateral must be at least equal to the value of the
loaned securities. It must consist of cash, bank letters of credit,
securities of the U.S. government or its agencies or instrumentalities, or
other cash equivalents in which the Fund is permitted to invest. To be
acceptable as collateral, letters of credit must obligate a bank to pay
amounts demanded by the Fund if the demand meets the terms of the letter.
The terms of the letter of credit and the issuing bank both must be
satisfactory to the Fund.

When it lends securities, the Fund receives amounts equal to the
dividends or interest on loaned securities. It also receives one or more of
(a) negotiated loan fees, (b) interest on securities used as collateral, and
(c) interest on any short-term debt securities purchased with such loan
collateral. Either type of interest may be shared with the borrower. The
Fund may also pay reasonable finders', custodian and administrative fees in
connection with these loans. The terms of the Fund's loans must meet
applicable tests under the Internal Revenue Code and must permit the Fund to
reacquire loaned securities on five days' notice or in time to vote on any
important matter.

Interfund Borrowing and Lending Arrangements. Consistent with its
fundamental policies and pursuant to an exemptive order issued by the
Securities and Exchange Commission (the "SEC"), the Fund may engage in
borrowing and lending activities with other funds in the OppenheimerFunds
complex. Borrowing money from affiliated funds may afford the Fund the
flexibility to use the most cost-effective alternative to satisfy its
borrowing requirements. Lending money to an affiliated fund may allow the
Fund to obtain a higher rate of return than it could from interest rates on
alternative short-term investments. The interfund lending arrangement is
consistent with applicable regulatory requirements, including the provisions
of the SEC order.

o Interfund Borrowing. The Fund will not borrow from affiliated funds
unless the terms of the borrowing arrangement are at least as favorable as
the terms the Fund could otherwise negotiate with a third party. To assure
that the Fund will not be disadvantaged by borrowing from an affiliated fund,
certain safeguards have been implemented. Examples of these safeguards
include the following:
o the Fund will not borrow money from affiliated funds unless the
interest rate is more favorable than available bank loan rates;
o the Fund's borrowing from affiliated funds must be consistent with its
investment objective and investment policies;
o the loan rates will be the average of the overnight repurchase
agreement rate available through the OppenheimerFunds joint
repurchase agreement account and a pre-established formula based on
quotations from independent banks to approximate the lowest interest
rate at which bank loans would be available to the Fund;
o if the Fund has outstanding borrowings from all sources greater than
10% of its total assets, then the Fund must secure each additional
outstanding interfund loan by segregating liquid assets of the Fund
as collateral;
o the Fund cannot borrow from an affiliated fund in excess of 125% of its
total redemptions for the preceding seven days;
o each interfund loan may be repaid on any day by the Fund; and
o the Trustees will be provided with a report of all interfund loans and
the Trustees will monitor all such borrowings to ensure that the
Fund's participation is appropriate.
There is a risk that a borrowing fund could have a loan called on one
days' notice. In that circumstance, the Fund might have to borrow from a
bank at a higher interest cost if money to lend were not available from
another Oppenheimer fund.

o Interfund Lending. To assure that the Fund will not be disadvantaged by
making loans to affiliated funds, certain safeguards have been implemented.
Examples of these safeguards include the following:

o the Fund will not lend money to affiliated funds unless the interest
rate on such loan is determined to be reasonable under the
circumstances;
o the Fund may not make interfund loans in excess of 15% of its net
assets;
o an interfund loan to any one affiliated fund shall not exceed 5% of the
Fund's net assets;
o an interfund loan may not be outstanding for more than seven days;
o each interfund loan may be called on one business day's notice; and
o the Manager will provide the Trustees reports on all interfund loans
demonstrating that the Fund's participation is appropriate and
that the loan is consistent with its investment objectives and
policies.

When the Fund lends assets to another affiliated fund, the Fund is
subject to the risk that the borrowing fund might fail to repay the loan.

|X| Borrowing for Leverage. The Fund has the ability to borrow from
banks on an unsecured basis to invest the borrowed funds in portfolio
securities. This speculative technique is known as "leverage." The Fund
cannot borrow money in excess of 331/3% of the value of its total assets
(including the amount borrowed). The Fund may borrow only from banks and/or
affiliated investment companies. With respect to this policy, the Fund can
borrow only if it maintains a 300% ratio of assets to borrowings at all times
in the manner set forth in the Investment Company Act of 1940. If the value
of the Fund's assets fails to meet this 300% asset coverage requirement, the
Fund will reduce its bank debt within three days to meet the requirement. To
do so, the Fund might have to sell a portion of its investments at a
disadvantageous time.

The Fund will pay interest on these loans, and that interest expense
will raise the overall expenses of the Fund and reduce its returns. If it
does borrow, its expenses will be greater than comparable funds that do not
borrow for leverage. Additionally, the Fund's net asset value per share might
fluctuate more than that of funds that do not borrow. Currently, the Fund
does not contemplate using this technique in the next year but if it does so,
it will not likely be to a substantial degree.

|X| Asset-Backed Securities. Asset-backed securities are fractional
interests in pools of assets, typically accounts receivable or consumer
loans. They are issued by trusts or special-purpose corporations. They are
similar to mortgage-backed securities, described above, and are backed by a
pool of assets that consist of obligations of individual borrowers. The
income from the pool is passed through to the holders of participation
interest in the pools. The pools may offer a credit enhancement, such as a
bank letter of credit, to try to reduce the risks that the underlying debtors
will not pay their obligations when due. However, the enhancement, if any,
might not be for the full par value of the security. If the enhancement is
exhausted and any required payments of interest or repayments of principal
are not made, the Fund could suffer losses on its investment or delays in
receiving payment.

The value of an asset-backed security is affected by changes in the
market's perception of the asset backing the security, the creditworthiness
of the servicing agent for the loan pool, the originator of the loans, or the
financial institution providing any credit enhancement, and is also affected
if any credit enhancement has been exhausted. The risks of investing in
asset-backed securities are ultimately related to payment of consumer loans
by the individual borrowers. As a purchaser of an asset-backed security, the
Fund would generally have no recourse to the entity that originated the loans
in the event of default by a borrower. The underlying loans are subject to
prepayments, which may shorten the weighted average life of asset-backed
securities and may lower their return, in the same manner as in the case of
mortgage-backed securities and CMOs, described above. Unlike mortgage-backed
securities, asset-backed securities typically do not have the benefit of a
security interest in the underlying collateral.

|X| Derivatives. The Fund can invest in a variety of derivative
investments to seek income or for hedging purposes. Some derivative
investments the Fund can use are the hedging instruments described below in
this Statement of Additional Information.

Among the derivative investments the Fund can invest in are structured
notes called "index-linked" or "currency-linked" notes. Principal and/or
interest payments on index-linked notes depend on the performance of an
underlying index. Currency-indexed securities are typically short-term or
intermediate-term debt securities. Their value at maturity or the rates at
which they pay income are determined by the change in value of the U.S.
dollar against one or more foreign currencies or an index. In some cases,
these securities may pay an amount at maturity based on a multiple of the
amount of the relative currency movements. This type of index security
offers the potential for increased income or principal payments but at a
greater risk of loss than a typical debt security of the same maturity and
credit quality.

Other derivative investments the Fund can use include "debt
exchangeable for common stock" of an issuer or "equity-linked debt
securities" of an issuer. At maturity, the debt security is exchanged for
common stock of the issuer or it is payable in an amount based on the price
of the issuer's common stock at the time of maturity. Both alternatives
present a risk that the amount payable at maturity will be less than the
principal amount of the debt because the price of the issuer's common stock
might not be as high as the Manager expected.

|X| Credit Derivatives. The Fund may enter into credit default swaps, both
directly ("unfunded swaps") and indirectly in the form of a swap embedded
within a structured note ("funded swaps"), to protect against the risk that a
security will default. Unfunded and funded credit default swaps may be on a
single security, or on a basket of securities. The Fund pays a fee to enter
into the swap and receives a fixed payment during the life of the swap. The
Fund may take a short position in the credit default swap (also known as
"buying credit protection"), or may take a long position in the credit
default swap note (also known as "selling credit protection").

The Fund would take a short position in a credit default swap (the
"unfunded swap") against a long portfolio position to decrease exposure to
specific high yield issuers. If the short credit default swap is against
a corporate issue, the Fund must own that corporate issue. However, if the
short credit default swap is against sovereign debt, the Fund may own
either: (i) the reference obligation, (ii) any sovereign debt of that
foreign country, or (iii) sovereign debt of any country that the Manager
determines is closely correlated as an inexact bona fide hedge.

If the Fund takes a short position in the credit default swap, if
there is a credit event (including bankruptcy, failure to timely pay
interest or principal, or a restructuring), the Fund will deliver the
defaulted bonds and the swap counterparty will pay the par amount of the
bonds. An associated risk is adverse pricing when purchasing bonds to
satisfy the delivery obligation. If the swap is on a basket of
securities, the notional amount of the swap is reduced by the par amount
of the defaulted bond, and the fixed payments are then made on the reduced
notional amount.

Taking a long position in the credit default swap note (i.e.,
purchasing the "funded swap") would increase the Fund's exposure to
specific high yield corporate issuers. The goal would be to increase
liquidity in that market sector via the swap note and its associated
increase in the number of trading instruments, the number and type of
market participants, and market capitalization.

If the Fund takes a long position in the credit default swap note,
if there is a credit event the Fund will pay the par amount of the bonds
and the swap counterparty will deliver the bonds. If the swap is on a
basket of securities, the notional amount of the swap is reduced by the
par amount of the defaulted bond, and the fixed payments are then made on
the reduced notional amount.

The Fund will invest no more than 25% of its total assets in
"unfunded" credit default swaps.

The Fund will limit its investments in "funded" credit default swap
notes to no more than 10% of its total assets.

Other risks of credit default swaps include 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, and the
need to fund the delivery obligation (either cash or the defaulted bonds,
depending on whether the Fund is long or short the swap, respectively).

|X| Hedging. The Fund can use hedging instruments. It is not
obligated to use them in seeking its objective although it can write covered
calls to seek high current income if the Manager believes that it is
appropriate to do so. To attempt to protect against declines in the market
value of the Fund's portfolio, to permit the Fund to retain unrealized gains
in the value of portfolio securities that have appreciated, or to facilitate
selling securities for investment reasons, the Fund could:

o sell futures contracts,
o buy puts on such futures or on securities, or
o write covered calls on securities or futures. Covered calls may also
be used to increase the Fund's income.

The Fund can use hedging to establish a position in the securities
market as a temporary substitute for purchasing particular securities. In
that case, the Fund would normally seek to purchase the securities and then
terminate that hedging position. The Fund might also use this type of hedge
to attempt to protect against the possibility that its portfolio securities
would not be fully included in a rise in value of the market. To do so the
Fund could:
o buy futures, or
o buy calls on such futures or on securities.

The Fund is not obligated to use hedging instruments, even though it is
permitted to use them in the Manager's discretion, as described below. The
Fund's strategy of hedging with futures and options on futures will be
incidental to the Fund's activities in the underlying cash market. The
particular hedging instruments the Fund can use are described below. The
Fund may employ new hedging instruments and strategies when they are
developed, if those investment methods are consistent with the Fund's
investment objective and are permissible under applicable regulations
governing the Fund.

o Futures. The Fund can buy and sell futures contracts that relate to
(1) broadly-based securities indices (these are referred to as "financial
futures"), (2) commodities (these are referred to as "commodity index
futures"), (3) debt securities (these are referred to as "interest rate
futures"), (4) foreign currencies (these are referred to as "forward
contracts") and (5) an individual stock ("single stock futures").

A broadly-based stock index is used as the basis for trading stock
index futures. They may in some cases be based on stocks of issuers in a
particular industry or group of industries. A stock index assigns relative
values to the securities included in the index and its value fluctuates in
response to the changes in value of the underlying securities. A stock index
cannot be purchased or sold directly. Bond index futures are similar
contracts based on the future value of the basket of securities that comprise
the index. These contracts obligate the seller to deliver, and the purchaser
to take, cash to settle the futures transaction. There is no delivery made of
the underlying securities to settle the futures obligation. Either party may
also settle the transaction by entering into an offsetting contract.

An interest rate future obligates the seller to deliver (and the
purchaser to take) cash or a specified type of debt security to settle the
futures transaction. Either party could also enter into an offsetting
contract to close out the position. Similarly, a single stock future
obligates the seller to deliver (and the purchaser to take) cash or a
specified equity security to settle the futures transaction. Either party
could also enter into an offsetting contract to close out the position.
Single stock futures trade on a very limited number of exchanges, with
contracts typically not fungible among the exchanges.

The Fund can invest a portion of its assets in commodity futures
contracts. Commodity futures may be based upon commodities within five main
commodity groups:

(1) energy, which includes crude oil, natural gas, gasoline and heating
oil;
(2) livestock, which includes cattle and hogs;
(3) agriculture, which includes wheat, corn, soybeans, cotton, coffee,
sugar and cocoa;
(4) industrial metals, which includes aluminum, copper, lead, nickel, tin
and zinc; and
(5) precious metals, which includes gold, platinum and silver. The Fund
may purchase and sell commodity futures contracts, options on
futures contracts and options and futures on commodity indices
with respect to these five main commodity groups and the
individual commodities within each group, as well as other types
of commodities.

No money is paid or received by the Fund on the purchase or sale of a
future. Upon entering into a futures transaction, the Fund will be required
to deposit an initial margin payment with the futures commission merchant
(the "futures broker"). Initial margin payments will be deposited with the
Fund's Custodian bank in an account registered in the futures broker's name.
However, the futures broker can gain access to that account only under
specified conditions. As the future is marked to market (that is, its value
on the Fund's books is changed) to reflect changes in its market value,
subsequent margin payments, called variation margin, will be paid to or by
the futures broker daily.

At any time prior to expiration of the future, the Fund may elect to
close out its position by taking an opposite position, at which time a final
determination of variation margin is made and any additional cash must be
paid by or released to the Fund. Any loss or gain on the future is then
realized by the Fund for tax purposes. All futures transactions, except
forward contracts, are effected through a clearinghouse associated with the
exchange on which the contracts are traded.
o Put and Call Options. The Fund may buy and sell certain kinds of put
options ("puts") and call options ("calls"). The Fund can buy and sell
exchange-traded and over-the-counter put and call options, including index
options, securities options, currency options, commodities options, and
options on the other types of futures described above.

o Writing Covered Call Options. The Fund may write (that is, sell)
covered calls. If the Fund sells a call option, it must be covered. That
means the Fund must own the security subject to the call while the call is
outstanding, or, for certain types of calls, the call may be covered by
liquid assets identified on the Fund's books to enable the Fund to satisfy
its obligations if the call is exercised. There is no limit on the amount of
the Fund's total assets that may be subject to covered calls the Fund writes.

When the Fund writes a call on a security, it receives cash (a
premium). The Fund agrees to sell the underlying security to a purchaser of a
corresponding call on the same security during the call period at a fixed
exercise price regardless of market price changes during the call period. The
call period is usually not more than nine months. The exercise price may
differ from the market price of the underlying security. The Fund has the
risk of loss that the price of the underlying security may decline during the
call period. That risk may be offset to some extent by the premium the Fund
receives. If the value of the investment does not rise above the call price,
it is likely that the call will lapse without being exercised. In that case
the Fund would keep the cash premium and the investment.

When the Fund writes a call on an index, it receives cash (a premium).
If the buyer of the call exercises it, the Fund will pay an amount of cash
equal to the difference between the closing price of the call and the
exercise price, multiplied by the specified multiple that determines the
total value of the call for each point of difference. If the value of the
underlying investment does not rise above the call price, it is likely that
the call will lapse without being exercised. In that case the Fund would
keep the cash premium.

The Fund's custodian, or a securities depository acting for the
custodian, will act as the Fund's escrow agent, through the facilities of the
Options Clearing Corporation ("OCC"), as to the investments on which the Fund
has written calls traded on exchanges or as to other acceptable escrow
securities. In that way, no margin will be required for such transactions.
OCC will release the securities on the expiration of the option or when the
Fund enters into a closing transaction.

When the Fund writes an over-the-counter ("OTC") option, it will enter
into an arrangement with a primary U.S. government securities dealer which
will establish a formula price at which the Fund will have the absolute right
to repurchase that OTC option. The formula price will generally be based on
a multiple of the premium received for the option, plus the amount by which
the option is exercisable below the market price of the underlying security
(that is, the option is "in the money"). When the Fund writes an OTC option,
it will treat as illiquid (for purposes of its restriction on holding
illiquid securities) the mark-to-market value of any OTC option it holds,
unless the option is subject to a buy-back agreement by the executing broker.

To terminate its obligation on a call it has written, the Fund may
purchase a corresponding call in a "closing purchase transaction." The Fund
will then realize a profit or loss, depending upon whether the net of the
amount of the option transaction costs and the premium received on the call
the Fund wrote is more or less than the price of the call the Fund purchases
to close out the transaction. The Fund may realize a profit if the call
expires unexercised, because the Fund will retain the underlying security and
the premium it received when it wrote the call. Any such profits are
considered short-term capital gains for federal income tax purposes, as are
the premiums on lapsed calls. When distributed by the Fund they are taxable
as ordinary income. If the Fund cannot effect a closing purchase transaction
due to the lack of a market, it will have to hold the callable securities
until the call expires or is exercised.

The Fund may also write calls on a futures contract without owning the
futures contract or securities deliverable under the contract. To do so, at
the time the call is written, the Fund must cover the call by identifying an
equivalent dollar amount of liquid assets on its books. The Fund will
identify additional liquid assets if the value of the identified assets drops
below 100% of the current value of the future. Because of this identified
requirement, in no circumstances would the Fund's receipt of an exercise
notice as to that future require the Fund to deliver a futures contract. It
would simply put the Fund in a short futures position, which is permitted by
the Fund's hedging policies.

o Writing Put Options. The Fund may sell put options on securities,
broadly-based securities indices, foreign currencies and futures. A put
option on securities gives the purchaser the right to sell, and the writer
the obligation to buy, the underlying investment at the exercise price during
the option period. The Fund will not write puts if, as a result, more than
50% of the Fund's net assets would be required to be segregated to cover such
put options.

If the Fund writes a put, the put must be covered by liquid assets
identified on the Fund's books. The premium the Fund receives from writing a
put represents a profit, as long as the price of the underlying investment
remains equal to or above the exercise price of the put. However, the Fund
also assumes the obligation during the option period to buy the underlying
investment from the buyer of the put at the exercise price, even if the value
of the investment falls below the exercise price.

If a put the Fund has written expires unexercised, the Fund realizes a
gain in the amount of the premium less the transaction costs incurred. If
the put is exercised, the Fund must fulfill its obligation to purchase the
underlying investment at the exercise price. That price will usually exceed
the market value of the investment at that time. In that case, the Fund may
incur a loss if it sells the underlying investment. That loss will be equal
to the sum of the sale price of the underlying investment and the premium
received minus the sum of the exercise price and any transaction costs the
Fund incurred.

When writing a put option on a security, to secure its obligation to
pay for the underlying security the Fund will deposit in escrow liquid assets
with a value equal to or greater than the exercise price of the underlying
securities. The Fund therefore forgoes the opportunity of investing the
segregated assets or writing calls against those assets.

As long as the Fund's obligation as the put writer continues, it may be
assigned an exercise notice by the broker-dealer through which the put was
sold. That notice will require the Fund to take delivery of the underlying
security and pay the exercise price. The Fund has no control over when it
may be required to purchase the underlying security, since it may be assigned
an exercise notice at any time prior to the termination of its obligation as
the writer of the put. That obligation terminates upon expiration of the
put. It may also terminate if, before it receives an exercise notice, the
Fund effects a closing purchase transaction by purchasing a put of the same
series as it sold. Once the Fund has been assigned an exercise notice, it
cannot effect a closing purchase transaction.

The Fund may decide to effect a closing purchase transaction to realize
a profit on an outstanding put option it has written or to prevent the
underlying security from being put. Effecting a closing purchase transaction
will also permit the Fund to write another put option on the security, or to
sell the security and use the proceeds from the sale for other investments.
The Fund will realize a profit or loss from a closing purchase transaction
depending on whether the cost of the transaction is less or more than the
premium received from writing the put option. Any profits from writing puts
are considered short-term capital gains for Federal tax purposes, and when
distributed by the Fund, are taxable as ordinary income.

o Purchasing Calls and Puts. The Fund can purchase calls on securities,
broadly-based securities indices, foreign currencies and futures. It may do
so to protect against the possibility that the Fund's portfolio will not
participate in an anticipated rise in the securities market. When the Fund
buys a call (other than in a closing purchase transaction), it pays a
premium. The Fund then has the right to buy the underlying investment from a
seller of a corresponding call on the same investment during the call period
at a fixed exercise price.

The Fund benefits only if it sells the call at a profit or if, during
the call period, the market price of the underlying investment is above the
sum of the call price plus the transaction costs and the premium paid for the
call and the Fund exercises the call. If the Fund does not exercise the call
or sell it (whether or not at a profit), the call will become worthless at
its expiration date. In that case the Fund will have paid the premium but
lost the right to purchase the underlying investment.

The Fund can buy puts on securities, broadly-based securities indices,
foreign currencies and futures, whether or not it owns the underlying
investment. When the Fund purchases a put, it pays a premium and, except as
to puts on indices, has the right to sell the underlying investment to a
seller of a put on a corresponding investment during the put period at a
fixed exercise price.

Buying a put on an investment the Fund does not own (such as an index
or future) permits the Fund either to resell the put or to buy the underlying
investment and sell it at the exercise price. The resale price will vary
inversely to the price of the underlying investment. If the market price of
the underlying investment is above the exercise price and, as a result, the
put is not exercised, the put will become worthless on its expiration date.

Buying a put on securities or futures the Fund owns enables the Fund to
attempt to protect itself during the put period against a decline in the
value of the underlying investment below the exercise price by selling the
underlying investment at the exercise price to a seller of a corresponding
put. If the market price of the underlying investment is equal to or above
the exercise price and, as a result, the put is not exercised or resold, the
put will become worthless at its expiration date. In that case the Fund will
have paid the premium but lost the right to sell the underlying investment.
However, the Fund may sell the put prior to its expiration. That sale may or
may not be at a profit.

When the Fund purchases a call or put on an index or future, it pays a
premium, but settlement is in cash rather than by delivery of the underlying
investment to the Fund. Gain or loss depends on changes in the index in
question (and thus on price movements in the securities market generally)
rather than on price movements in individual securities or futures contracts.

The Fund may also purchase calls and puts on spread options. Spread
options pay the difference between two interest rates, two exchange rates or
two referenced assets. Spread options are used to hedge the decline in the
value of an interest rate, currency or asset compared
to a reference or base interest rate, currency or asset. The risks
associated with spread options are similar to those of interest rate options,
foreign exchange options and debt or equity options.

The Fund may buy a call or put only if, after the purchase, the value
of all call and put options held by the Fund will not exceed 5% of the Fund's
total assets.

o Buying and Selling Options on Foreign Currencies. The Fund can buy and
sell calls and puts on foreign currencies. They include puts and calls that
trade on a securities or commodities exchange or in the over-the-counter
markets or are quoted by major recognized dealers in such options. The Fund
could use these calls and puts to try to protect against declines in the
dollar value of foreign securities and increases in the dollar cost of
foreign securities the Fund wants to acquire.

If the Manager anticipates a rise in the dollar value of a foreign
currency in which securities to be acquired are denominated, the increased
cost of those securities may be partially offset by purchasing calls or
writing puts on that foreign currency. If the Manager anticipates a decline
in the dollar value of a foreign currency, the decline in the dollar value of
portfolio securities denominated in that currency might be partially offset
by writing calls or purchasing puts on that foreign currency. However, the
currency rates could fluctuate in a direction adverse to the Fund's position.
The Fund will then have incurred option premium payments and transaction
costs without a corresponding benefit.

A call the Fund writes on a foreign currency is "covered" if the Fund
owns the underlying foreign currency covered by the call or has an absolute
and immediate right to acquire that foreign currency without additional cash
consideration (or it can do so for additional cash consideration from liquid
assets identified on the Fund's books upon conversion or exchange of other
foreign currency held in its portfolio.

The Fund could write a call on a foreign currency to provide a hedge
against a decline in the U.S. dollar value of a security which the Fund owns
or has the right to acquire and which is denominated in the currency
underlying the option. That decline might be one that occurs due to an
expected adverse change in the exchange rate. In those circumstances, the
Fund covers the option by identifying liquid assets on its books having a
value equal to the aggregate amount of the Fund's commitment under such
option position.

o Risks of Hedging with Options and Futures. The use of hedging
instruments requires special skills and knowledge of investment techniques
that are different than what is required for normal portfolio management. If
the Manager uses a hedging instrument at the wrong time or judges market
conditions incorrectly, hedging strategies may reduce the Fund's return. The
Fund could also experience losses if the prices of its futures and options
positions were not correlated with its other investments.

The Fund's option activities could affect its portfolio turnover rate
and brokerage commissions. The exercise of calls written by the Fund might
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate. The exercise by the Fund of puts on securities will cause the
sale of underlying investments, increasing portfolio turnover. Although the
decision whether to exercise a put it holds is within the Fund's control,
holding a put might cause the Fund to sell the related investments for
reasons that would not exist in the absence of the put.

The Fund could pay a brokerage commission each time it buys a call or
put, sells a call or put, or buys or sells an underlying investment in
connection with the exercise of a call or put. Those commissions could be
higher on a relative basis than the commissions for direct purchases or sales
of the underlying investments. Premiums paid for options are small in
relation to the market value of the underlying investments. Consequently, put
and call options offer large amounts of leverage. The leverage offered by
trading in options could result in the Fund's net asset value being more
sensitive to changes in the value of the underlying investment.

If a covered call written by the Fund is exercised on an investment
that has increased in value, the Fund will be required to sell the investment
at the call price. It will not be able to realize any profit if the
investment has increased in value above the call price.

An option position may be closed out only on a market that provides
secondary trading for options of the same series, and there is no assurance
that a liquid secondary market will exist for any particular option. The
Fund might experience losses if it could not close out a position because of
an illiquid market for the future or option.

There is a risk in using short hedging by selling futures or purchasing
puts on broadly-based indices or futures to attempt to protect against
declines in the value of the Fund's portfolio securities. The risk is that
the prices of the futures or the applicable index will correlate imperfectly
with the behavior of the cash prices of the Fund's securities. For example,
it is possible that while the Fund has used hedging instruments in a short
hedge, the market might advance and the value of the securities held in the
Fund's portfolio might decline. If that occurred, the Fund would lose money
on the hedging instruments and also experience a decline in the value of its
portfolio securities. However, while this could occur for a very brief period
or to a very small degree, over time the value of a diversified portfolio of
securities will tend to move in the same direction as the indices upon which
the hedging instruments are based.

The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the price
of the portfolio securities being hedged and movements in the price of the
hedging instruments, the Fund might use hedging instruments in a greater
dollar amount than the dollar amount of portfolio securities being hedged. It
might do so if the historical volatility of the prices of the portfolio
securities being hedged is more than the historical volatility of the
applicable index.

The ordinary spreads between prices in the cash and futures markets are
subject to distortions, due to differences in the nature of those markets.
First, all participants in the futures market are subject to margin deposit
and maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through offsetting
transactions which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or
taking delivery. To the extent participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus producing distortion.
Third, from the point of view of speculators, the deposit requirements in the
futures market are less onerous than margin requirements in the securities
markets. Therefore, increased participation by speculators in the futures
market may cause temporary price distortions.

The Fund can use hedging instruments to establish a position in the
securities markets as a temporary substitute for the purchase of individual
securities (long hedging) by buying futures and/or calls on such futures,
broadly-based indices or on securities. It is possible that when the Fund
does so the market might decline. If the Fund then concludes not to invest
in securities because of concerns that the market might decline further or
for other reasons, the Fund will realize a loss on the hedging instruments
that is not offset by a reduction in the price of the securities purchased.

o Forward Contracts. Forward contracts are foreign currency exchange
contracts. They are used to buy or sell foreign currency for future delivery
at a fixed price. The Fund uses them to "lock in" the U.S. dollar price of a
security denominated in a foreign currency that the Fund has bought or sold,
or to protect against possible losses from changes in the relative values of
the U.S. dollar and a foreign currency. The Fund limits its exposure in
foreign currency exchange contracts in a particular foreign currency to the
amount of its assets denominated in that currency or a closely-correlated
currency. The Fund may also use "cross-hedging" where the Fund hedges
against changes in currencies other than the currency in which a security it
holds is denominated.

Under a forward contract, one party agrees to purchase, and another
party agrees to sell, a specific currency at a future date. That date may be
any fixed number of days from the date of the contract agreed upon by the
parties. The transaction price is set at the time the contract is entered
into. These contracts are traded in the inter-bank market conducted directly
among currency traders (usually large commercial banks) and their customers.

The Fund may use forward contracts to protect against uncertainty in
the level of future exchange rates. The use of forward contracts does not
eliminate the risk of fluctuations in the prices of the underlying securities
the Fund owns or intends to acquire, but it does fix a rate of exchange in
advance. Although forward contracts may reduce the risk of loss from a
decline in the value of the hedged currency, at the same time they limit any
potential gain if the value of the hedged currency increases.

When the Fund enters into a contract for the purchase or sale of a
security denominated in a foreign currency, or when it anticipates receiving
dividend payments in a foreign currency, the Fund might desire to "lock-in"
the U.S. dollar price of the security or the U.S. dollar equivalent of the
dividend payments. To do so, the Fund could enter into a forward contract
for the purchase or sale of the amount of foreign currency involved in the
underlying transaction, in a fixed amount of U.S. dollars per unit of the
foreign currency. This is called a "transaction hedge." The transaction
hedge will protect the Fund against a loss from an adverse change in the
currency exchange rates during the period between the date on which the
security is purchased or sold or on which the payment is declared, and the
date on which the payments are made or received.

The Fund could also use forward contracts to lock in the U.S. dollar
value of portfolio positions. This is called a "position hedge." When the
Fund believes that foreign currency might suffer a substantial decline
against the U.S. dollar, it could enter into a forward contract to sell an
amount of that foreign currency approximating the value of some or all of the
Fund's portfolio securities denominated in that foreign currency. When the
Fund believes that the U.S. dollar might suffer a substantial decline against
a foreign currency, it could enter into a forward contract to buy that
foreign currency for a fixed dollar amount. Alternatively, the Fund could
enter into a forward contract to sell a different foreign currency for a
fixed U.S. dollar amount if the Fund believes that the U.S. dollar value of
the foreign currency to be sold pursuant to its forward contract will fall
whenever there is a decline in the U.S. dollar value of the currency in which
portfolio securities of the Fund are denominated. That is referred to as a
"cross hedge."

The Fund will cover its short positions in these cases by identifying
liquid assets on its books having a value equal to the aggregate amount of
the Fund's commitment under forward contracts. The Fund will not enter into
forward contracts or maintain a net exposure to such contracts if the
consummation of the contracts would obligate the Fund to deliver an amount of
foreign currency in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency or another currency that is the
subject of the hedge.

However, to avoid excess transactions and transaction costs, the Fund
may maintain a net exposure to forward contracts in excess of the value of
the Fund's portfolio securities or other assets denominated in foreign
currencies if the excess amount is "covered" by liquid securities denominated
in any currency. The cover must be at least equal at all times to the amount
of that excess. As one alternative, the Fund may purchase a call option
permitting the Fund to purchase the amount of foreign currency being hedged
by a forward sale contract at a price no higher than the forward contract
price. As another alternative, the Fund may purchase a put option permitting
the Fund to sell the amount of foreign currency subject to a forward purchase
contract at a price as high or higher than the forward contract price.

The precise matching of the amounts under forward contracts and the
value of the securities involved generally will not be possible because the
future value of securities denominated in foreign currencies will change as a
consequence of market movements between the date the forward contract is
entered into and the date it is sold. In some cases the Manager might decide
to sell the security and deliver foreign currency to settle the original
purchase obligation. If the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver, the Fund might
have to purchase additional foreign currency on the "spot" (that is, cash)
market to settle the security trade. If the market value of the security
instead exceeds the amount of foreign currency the Fund is obligated to
deliver to settle the trade, the Fund might have to sell on the spot market
some of the foreign currency received upon the sale of the security. There
will be additional transaction costs on the spot market in those cases.

The projection of short-term currency market movements is extremely
difficult, and the successful execution of a short-term hedging strategy is
highly uncertain. Forward contracts involve the risk that anticipated
currency movements will not be accurately predicted, causing the Fund to
sustain losses on these contracts and to pay additional transactions costs.
The use of forward contracts in this manner might reduce the Fund's
performance if there are unanticipated changes in currency prices to a
greater degree than if the Fund had not entered into such contracts.

At or before the maturity of a forward contract requiring the Fund to
sell a currency, the Fund might sell a portfolio security and use the sale
proceeds to make delivery of the currency. In the alternative the Fund might
retain the security and offset its contractual obligation to deliver the
currency by purchasing a second contract. Under that contract the Fund will
obtain, on the same maturity date, the same amount of the currency that it is
obligated to deliver. Similarly, the Fund might close out a forward contract
requiring it to purchase a specified currency by entering into a second
contract entitling it to sell the same amount of the same currency on the
maturity date of the first contract. The Fund would realize a gain or loss
as a result of entering into such an offsetting forward contract under either
circumstance. The gain or loss will depend on the extent to which the
exchange rate or rates between the currencies involved moved between the
execution dates of the first contract and offsetting contract.

The costs to the Fund of engaging in forward contracts varies with
factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because forward contracts are
usually entered into on a principal basis, no brokerage fees or commissions
are involved. Because these contracts are not traded on an exchange, the
Fund must evaluate the credit and performance risk of the counterparty under
each forward contract.

Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund may convert foreign currency from time to
time, and will incur costs in doing so. Foreign exchange dealers do not
charge a fee for conversion, but they do seek to realize a profit based on
the difference between the prices at which they buy and sell various
currencies. Thus, a dealer might offer to sell a foreign currency to the
Fund at one rate, while offering a lesser rate of exchange if the Fund
desires to resell that currency to the dealer.

o Interest Rate Swap Transactions. The Fund can enter into interest rate
swap agreements. In an interest rate swap, the Fund and another party
exchange their right to receive or their obligation to pay interest on a
security. For example, they might swap the right to receive floating rate
payments for fixed rate payments. The Fund can enter into swaps only on
securities that it owns or as a hedge against a basket of securities held by
the Fund that the Manager deems to be closely correlated with the swap
transaction. The Fund will not enter into swaps with respect to more than 25%
of its total assets. Also, the Fund will identify on its books liquid assets
(such as cash or U.S. government securities) to cover any amounts it could
owe under swaps that exceed the amounts it is entitled to receive, and it
will adjust that amount daily, as needed.

Swap agreements entail both interest rate risk and credit risk. There
is a risk that, 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.

The Fund can enter into swap transactions with certain counterparties
pursuant to master netting agreements. A master netting agreement provides
that all swaps done between the Fund and that counterparty shall be regarded
as parts of an integral agreement. If amounts are payable on a particular
date in the same currency in respect of one or more swap transactions, the
amount payable on that date in that currency shall be the net amount. In
addition, the master netting agreement may provide that if one party defaults
generally or on one swap, the counterparty can terminate all of the swaps
with that party. Under these agreements, if a default results in a loss to
one party, the measure of that party's damages is calculated by reference to
the average cost of a replacement swap for each swap. It is measured by the
mark-to-market value at the time of the termination of each swap. The gains
and losses on all swaps are then netted, and the result is the counterparty's
gain or loss on termination. The termination of all swaps and the netting of
gains and losses on termination is generally referred to as "aggregation."

o Swaption Transactions. The Fund may enter into a swaption transaction,
which is a contract that grants the holder, in return for payment of the
purchase price (the "premium") of the option, the right, but not the
obligation, to enter into an interest rate swap at a preset rate within a
specified period of time, with the writer of the contract. The writer of the
contract receives the premium and bears the risk of unfavorable changes in
the preset rate on the underlying interest rate swap. Unrealized
gains/losses on swaptions are reflected in investment assets and investment
liabilities in the Fund's statement of financial condition.

o Regulatory Aspects of Hedging Instruments. When using futures and
options on futures, the Fund is required to operate within certain guidelines
and restrictions with respect to the use of futures as established by the
Commodities Futures Trading Commission (the "CFTC"). In particular, the Fund
is exempted from registration with the CFTC as a "commodity pool operator" if
the Fund complies with the requirements of Rule 4.5 adopted by the CFTC. The
Rule does not limit the percentage of the Fund's assets that may be used for
futures margin and related options premiums for a bona fide hedging
position. However, under the Rule, the Fund must limit its aggregate initial
futures margin and related options premiums to not more than 5% of the Fund's
net assets for hedging strategies that are not considered bona fide hedging
strategies under the Rule. Under the Rule, the Fund must also use short
futures and options on futures solely for bona fide hedging purposes within
the meaning and intent of the applicable provisions of the Commodity Exchange
Act.

Transactions in options by the Fund are subject to limitations
established by the option exchanges. The exchanges limit the maximum number
of options that may be written or held by a single investor or group of
investors acting in concert. Those limits apply regardless of whether the
options were written or purchased on the same or different exchanges or are
held in one or more accounts or through one or more different exchanges or
through one or more brokers. Thus, the number of options that the Fund may
write or hold may be affected by options written or held by other entities,
including other investment companies having the same adviser as the Fund (or
an adviser that is an affiliate of the Fund's adviser). The exchanges also
impose position limits on futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.

Under the Investment Company Act, when the Fund purchases a future, it
must maintain cash or readily marketable short-term debt instruments in an
amount equal to the market value of the securities underlying the future,
less the margin deposit applicable to it.

o Tax Aspects of Certain Hedging Instruments. Certain foreign currency
exchange contracts in which the Fund may invest are treated as "Section 1256
contracts" under the Internal Revenue Code. In general, gains or losses
relating to Section 1256 contracts are characterized as 60% long-term and 40%
short-term capital gains or losses under the Code. However, foreign currency
gains or losses arising from Section 1256 contracts that are forward
contracts generally are treated as ordinary income or loss. In addition,
Section 1256 contracts held by the Fund at the end of each taxable year are
"marked-to-market," and unrealized gains or losses are treated as though they
were realized. These contracts also may be marked-to-market for purposes of
determining the excise tax applicable to investment company distributions and
for other purposes under rules prescribed pursuant to the Internal Revenue
Code. An election can be made by the Fund to exempt those transactions from
this marked-to-market treatment.

Certain forward contracts the Fund enters into may result in
"straddles" for Federal income tax purposes. The straddle rules may affect
the character and timing of gains (or losses) recognized by the Fund on
straddle positions. Generally, a loss sustained on the disposition of a
position making up a straddle is allowed only to the extent that the loss
exceeds any unrecognized gain in the offsetting positions making up the
straddle. Disallowed loss is generally allowed at the point where there is
no unrecognized gain in the offsetting positions making up the straddle, or
the offsetting position is disposed of.

Under the Internal Revenue Code, the following gains or losses are
treated as ordinary income or loss:

(1) gains or losses attributable to fluctuations in exchange rates that
occur between the
time the Fund accrues interest or other receivables or accrues
expenses or other liabilities denominated in a foreign currency
and the time the Fund actually collects such receivables or pays
such liabilities, and
(2) gains or losses attributable to fluctuations in the value of a
foreign currency
between the date of acquisition of a debt security denominated in
a foreign currency or foreign currency forward contracts and the
date of disposition.

Currency gains and losses are offset against market gains and losses on
each trade before determining a net "Section 988" gain or loss under the
Internal Revenue Code for that trade, which may increase or decrease the
amount of the Fund's investment income available for distribution to its
shareholders.

|X| Temporary Defensive Investments. When market conditions are unstable,
or the Manager believes it is otherwise appropriate to reduce holdings in
stocks, the Fund can invest in a variety of debt securities for defensive
purposes. The Fund can also purchase these securities for liquidity purposes
to meet cash needs due to the redemption of Fund shares, or to hold while
waiting to reinvest cash received from the sale of other portfolio
securities. The Fund's temporary defensive investments can include the
following short-term (maturing in one year or less) dollar-denominated debt
obligations:

o obligations issued or guaranteed by the U. S. government or its
instrumentalities or agencies,
o commercial paper (short-term, unsecured promissory notes) of domestic
or foreign companies,
o debt obligations of domestic or foreign corporate issuers,
o certificates of deposit and bankers' acceptances of domestic and
foreign banks having total assets in excess of $1 billion, and
o repurchase agreements.

Short-term debt securities would normally be selected for defensive or
cash management purposes because they can normally be disposed of quickly,
are not generally subject to significant fluctuations in principal value and
their value will be less subject to interest rate risk than longer-term debt
securities.

Investment Restrictions

|X| What Are "Fundamental Policies?" Fundamental policies are those
policies that the Fund has adopted to govern its investments that can be
changed only by the vote of a "majority" of the Fund's outstanding voting
securities. Under the Investment Company Act, a "majority" vote is defined
as the vote of the holders of the lesser of:

o 67% or more of the shares present or represented by proxy at a
shareholder meeting, if the holders of more than 50% of the
outstanding shares are present or represented by proxy, or
o more than 50% of the outstanding shares.

The Fund's investment objective is a fundamental policy. Other policies
described in the Prospectus or this Statement of Additional Information are
"fundamental" only if they are identified as such. The Fund's Board of
Trustees can change non-fundamental policies without shareholder approval.
However, significant changes to investment policies will be described in
supplements or updates to the Prospectus or this Statement of Additional
Information, as appropriate. The Fund's most significant investment policies
are described in the Prospectus.

|X| Does the Fund Have Additional Fundamental Policies? The following
investment restrictions are fundamental policies of the Fund.

o The Fund cannot buy securities issued or guaranteed by any one issuer
if more than 5% of its total assets would be invested in securities of that
issuer or it would then own more than 10% of that issuer's voting
securities. This limit applies to 75% of the Fund's total assets. The limit
does not apply to securities issued by the U.S. government or any of its
agencies or instrumentalities, or securities of other investment companies.

o The Fund cannot invest 25% or more of its total assets in any one
industry. That limit does not apply to securities issued or guaranteed by
the U.S. government or its agencies and instrumentalities. Each foreign
government is treated as an "industry" and utilities are divided according to
the services they provide.

o The Fund cannot borrow money in excess of 331/3% of the value of its
total assets (including the amount borrowed). The Fund may borrow only from
banks and/or affiliated investment companies. With respect to this
fundamental policy, the Fund can borrow only if it maintains a 300% ratio of
assets to borrowings at all times in the manner set forth in the Investment
Company Act of 1940.

o The Fund cannot make loans except (a) through lending of securities,
(b) through the purchase of debt instruments or similar evidences of
indebtedness, (c) through an inter-fund lending program with other affiliated
funds, provided that no such loan may be made if, as a result, the aggregate
of such loans would exceed 33 1/3% of the value of its total assets (taken at
market value at the time of such loans), and (d) through repurchase
agreements.

o The Fund cannot invest in real estate, physical commodities or
commodity contracts. However, the Fund may: (1) invest in debt securities
secured by real estate or interests in real estate, or issued by companies,
including real estate investment trusts, that invest in real estate or
interests in real estate; (2) invest in hedging instruments permitted by any
of its other investment policies; and (3) buy and sell options, futures,
securities or other instruments backed by, or the investment return from
which is linked to changes in the price of, physical commodities or
currencies.

o The Fund cannot underwrite securities of other companies. A permitted
exception is in case it is deemed to be an underwriter under the Securities
Act of 1933 when reselling any securities held in its own portfolio.

o The Fund cannot issue "senior securities," but this does not prohibit
certain investment activities for which assets of the Fund are designated as
segregated, or margin, collateral or escrow arrangements are established, to
cover the related obligations. Examples of those activities include
borrowing money, reverse repurchase agreements, delayed-delivery and
when-issued arrangements for portfolio securities transactions, and contracts
to buy or sell derivatives, hedging instruments, options or futures.

Unless the Prospectus or this Statement of Additional Information
states that a percentage restriction applies on an ongoing basis, it applies
only at the time the Fund makes an investment (except in the case of
borrowing and investments in illiquid securities). The Fund need not sell
securities to meet the percentage limits if the value of the investment
increases in proportion to the size of the Fund.

|X| Does the Fund Have Additional Restrictions That Are Not "Fundamental"
Policies?

The Fund has additional operating policies, which are stated below,
that are not "fundamental," and which can be changed by the Board of Trustees
without shareholder approval.

o The Fund cannot invest in securities of other investment companies,
except if it acquires them as part of a merger, consolidation or acquisition
of assets.

For purposes of the Fund's policy not to concentrate its investments,
the Fund has adopted the industry classifications set forth in Appendix B to
this Statement of Additional Information. This is not a fundamental policy.

How the Fund is Managed

Organization and History. The Fund is an open-end, diversified management
investment company with an unlimited number of authorized shares of
beneficial interest. The Fund was organized as a Massachusetts business trust
in 1989.

The Fund is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The
Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.

Classes of Shares. The Trustees are authorized, without shareholder
approval, to create new series and classes of shares. The Trustees may
reclassify unissued shares of the Fund into additional series or classes of
shares. The Trustees also may divide or combine the shares of a class into a
greater or lesser number of shares without changing the proportionate
beneficial interest of a shareholder in the Fund. Shares do not have
cumulative voting rights or preemptive or subscription rights. Shares may be
voted in person or by proxy at shareholder meetings.

The Fund currently has five classes of shares: Class A, Class B, Class
C, Class N and Class Y. All classes invest in the same investment
portfolio. Only retirement plans may purchase Class N shares. Only certain
institutional investors may elect to purchase Class Y shares. Each class of
shares:
o has its own dividends and distributions,
o pays certain expenses which may be different for the different classes,
o may have a different net asset value,
o may have separate voting rights on matters in which interests of one
class are different from interests of another class, and
o votes as a class on matters that affect that class alone.

Shares are freely transferable, and each share of each class has one
vote at shareholder meetings, with fractional shares voting proportionally on
matters submitted to the vote of shareholders. Each share of the Fund
represents an interest in the Fund proportionately equal to the interest of
each other share of the same class.

Meetings of Shareholders. As a Massachusetts business trust, the Fund is not
required to hold, and does not plan to hold, regular annual meetings of
shareholders, but may do so from time to time on important matters when
required to do so by the Investment Company Act or other applicable law.
Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Fund, to remove a Trustee or to
take other action described in the Fund's Declaration of Trust.

The Trustees will call a meeting of shareholders to vote on the removal
of a Trustee upon the written request of the record holders of 10% of its
outstanding shares. If the Trustees receive a request from at least 10
shareholders stating that they wish to communicate with other shareholders to
request a meeting to remove a Trustee, the Trustees will then either make the
Fund's shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants' expense. The
shareholders making the request must have been shareholders for at least six
months and must hold shares of the Fund valued at $25,000 or more or
constituting at least 1% of the Fund's outstanding shares. The Trustees may
also take other action as permitted by the Investment Company Act.

Shareholder and Trustee Liability. The Fund's Declaration of Trust
contains an express disclaimer of shareholder or Trustee liability for the
Fund's obligations. It also provides for indemnification and reimbursement of
expenses out of the Fund's property for any shareholder held personally
liable for its obligations. The Declaration of Trust also states that upon
request, the Fund shall assume the defense of any claim made against a
shareholder for any act or obligation of the Fund and shall satisfy any
judgment on that claim. Massachusetts law permits a shareholder of a
business trust (such as the Fund) to be held personally liable as a "partner"
under certain circumstances. However, the risk that a Fund shareholder will
incur financial loss from being held liable as a "partner" of the Fund is
limited to the relatively remote circumstances in which the Fund would be
unable to meet its obligations.

The Fund's contractual arrangements state that any person doing
business with the Fund (and each shareholder of the Fund) agrees under its
Declaration of Trust to look solely to the assets of the Fund for
satisfaction of any claim or demand that may arise out of any dealings with
the Fund. Additionally, the Trustees shall have no personal liability to any
such person, to the extent permitted by law.

Board of Trustees and Oversight Committees. The Fund is governed by a Board
of Trustees, which is responsible for protecting the interests of
shareholders under Massachusetts law. The Trustees meet periodically
throughout the year to oversee the Fund's activities, review its performance,
and review the actions of the Manager.

The Board of Trustees has an Audit Committee and a Review Committee.
The Audit Committee is comprised solely of Independent Trustees. The members
of the Audit Committee are Edward L. Cameron (Chairman), William L.
Armstrong, George C. Bowen and Robert J. Malone. The Audit Committee held 6
meetings during the fiscal year ended September 30, 2003. The Audit Committee
furnishes the Board with recommendations regarding the selection of the
Fund's independent auditors. Other main functions of the Audit Committee
include, but are not limited to: (i) reviewing the scope and results of
financial statement audits and the audit fees charged; (ii) reviewing reports
from the Fund's independent auditors regarding the Fund's internal accounting
procedures and controls; (iii) review reports from the Manager's Internal
Audit Department; (iv) maintaining a separate line of communication between
the Fund's independent auditors and its Independent Trustees; and (v)
exercise all other functions outlined in the Audit Committee Charter,
including but not limited to reviewing the independence of the Fund's
independent auditors and the pre-approval of the performance by the Fund's
independent auditors of any non-audit service, including tax service, for the
Fund and the Manager and certain affiliates of the Manager.

The Audit Committee's functions include selecting and nominating, to
the full Board, nominees for election as Trustees, and selecting and
nominating Independent Trustees for election. The Audit Committee may, but
need not, consider the advice and recommendation of the Manager and its
affiliates in selecting nominees. The full Board elects new trustees except
for those instances when a shareholder vote is required.

To date, the Committee has been able to identify from its own resources
an ample number of qualified candidates. Nonetheless, shareholders may
submit names of individuals, accompanied by complete and properly supported
resumes, for the Audit Committee's consideration by mailing such information
to the Committee in care of the Fund. The Committee may consider such
persons at such time as it meets to consider possible nominees. The
Committee, however, reserves sole discretion to determine the candidates to
present to the Board and/or shareholders when it meets for the purpose of
considering potential nominees.

The members of the Review Committee are Jon S. Fossel (Chairman),
Robert G. Avis, Richard Grabish, Sam Freedman, Beverly Hamilton and F.
William Marshall, Jr. The Review Committee held 6 meetings during the fiscal
year ended September 30, 2003. Among other functions, the Review Committee
reviews reports and makes recommendations to the Board concerning the fees
paid to the Fund's transfer agent and the services provided to the Fund by
the transfer agent. The Review Committee also reviews the Fund's investment
performance and policies and procedures adopted by the Fund to comply with
Investment Company Act and other applicable law.

Trustees and Officers of the Fund. Except for Messrs. Murphy and Grabish,
each of the Trustees are "Independent Trustees," as under the Investment
Company Act. Mr. Murphy is an "Interested Trustee," because he is affiliated
with the Manager by virtue of his positions as an officer and director of the
Manager, and as a shareholder of its parent company. Mr. Murphy was elected
as a Trustee of the Fund with the understanding that in the event he ceases
to be the chief executive officer of the Manager, he will resign as a trustee
of the Fund and the other Board II Funds (defined below) for which he is a
trustee or director. Mr. Grabish is an "Interested Trustee" because he is
affiliated with Centennial Asset Management Corporation (a wholly-owned
investment advisory subsidiary of the Manager), by virtue of his positions
with A.G. Edwards & Sons, Inc. and its affiliates (as described in his
biography below), which is a partial owner of the Manager's parent company.

The Fund's Trustees and officers and their positions held with the Fund
and length of service in such position(s) and their principal occupations and
business affiliations during the past five years are listed in the chart
below. The information for the Trustees also includes the dollar range of
shares of the Fund as well as the aggregate dollar range of shares
beneficially owned in any of the Oppenheimer funds overseen by the Trustees.
All of the Trustees are also trustees or directors of the following
Oppenheimer funds (except for Ms. Hamilton and Messrs. Grabish and Malone,
who are not Trustees of Oppenheimer Senior Floating Rate Fund) (referred to
as "Board II Funds"):

Oppenheimer Cash Reserves Oppenheimer Real Asset Fund
Oppenheimer Senior Floating Rate

Oppenheimer Champion Income Fund Fund

Oppenheimer Capital Income Fund Oppenheimer Strategic Income Fund
Oppenheimer Equity Fund, Inc. Oppenheimer Variable Account Funds
Oppenheimer High Yield Fund Panorama Series Fund, Inc.
Oppenheimer International Bond Fund
Oppenheimer Integrity Funds Centennial America Fund, L. P.

Centennial California Tax Exempt

Oppenheimer Limited-Term Government Fund Trust
Oppenheimer Main Street Funds, Inc. Centennial Government Trust
Oppenheimer Main Street Opportunity Fund Centennial Money Market Trust

Centennial New York Tax Exempt

Oppenheimer Main Street Small Cap Fund Trust
Oppenheimer Municipal Fund Centennial Tax Exempt Trust
Oppenheimer Principal Protected Trust II

Present or former officers, directors, trustees and employees (and
their immediate family members) of the Fund, the Manager and its affiliates,
and retirement plans established by them for their employees are permitted to
purchase Class A shares of the Fund and the other Oppenheimer funds at net
asset value without sales charge. The sales charges on Class A shares is
waived for that group because of the economies of sales efforts realized by
the Distributor.

Messrs. Murphy, Molleur, Vottiero, Wixted, Zack, Steinmetz, and Mses.
Bechtolt, Feld and Ives who are officers of the Fund, respectively hold the
same offices with one or more of the other Board II Funds as with the Fund.
As of October 22, 2003, the Trustees and officers of the Fund, as a group,
owned of record or beneficially less than 1% of each class of shares of the
Fund. The foregoing statement does not reflect ownership of shares held of
record by an employee benefit plan for employees of the Manager, other than
the shares beneficially owned under that plan by the officers of the Fund
listed above. In addition, each Independent Trustee, and his family members,
do not own securities of either the Manager or Distributor of the Board II
Funds or any person directly or indirectly controlling, controlled by or
under common control with the Manager or Distributor.

Affiliated Transactions and Material Business Relationships. In 2001,
Mr. Swain surrendered for cancellation 60,000 options of Oppenheimer
Acquisition Company ("OAC") (the Manager's parent holding company) to
MassMutual for a cash payment of $2,700,600.

Mr. Swain has reported that he sold a residential property to Mr.
Freedman on October 23, 2001 for $1.2 million. An independent appraisal of
the property supported the sale price.

The address of each Trustee in the chart below is 6803 S. Tucson Way,
Centennial, CO 80112-3924. Each Trustee serves for an indefinite term, until
his or her resignation, retirement, death or removal.

-------------------------------------------------------------------------------------
Independent Trustees
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range Of
Shares
Beneficially
Owned in
Years; Range of Any of the
Position(s) Held Other Trusteeships/Directorships Held by Shares Oppenheimer
with Fund, Trustee; BeneficiallFunds
Length of Service, Number of Portfolios in Fund Complex Owned in Overseen
Age Currently Overseen by Trustee the Fund by Trustee
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
As of December 31,

2002

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

James C. Swain, Formerly, Chief Executive Officer (until None Over
Chairman and August 27, 2002) of the Board II Funds,
Trustee since 1989 Vice Chairman (until January 2, 2002) of
Age: 70 the Manager and President and a director

(until 1997) of Centennial Asset
Management Corporation (a wholly-owned
investment advisory subsidiary of the

Manager). Oversees 38 portfolios in the $100,000
OppenheimerFunds complex.

Armstrong, mortgage banking companies: Cherry Creek
Trustee since 1999 Mortgage Company (since 1991),
Age: 66 Centennial State Mortgage Company (since
1994), The El Paso Mortgage Company
(since 1993), Transland Financial
Services, Inc. (since 1997); Chairman of
the following private companies: Great
Frontier Insurance (insurance agency)
(since 1995), Ambassador Media
Corporation and Broadway Ventures (since
1984); a director of the following
public companies: Helmerich & Payne,
Inc. (oil and gas drilling/production
company) (since 1992) and UNUMProvident
(insurance company) (since 1991). Mr. None $50,001-
Armstrong is also a Director/Trustee of $100,000
Campus Crusade for Christ and the
Bradley Foundation. Formerly a director
of the following: Storage Technology
Corporation (a publicly-held computer
equipment company) (1991-February 2003),
and International Family Entertainment
(television channel) (1992-1997),
Frontier Real Estate, Inc. (residential
real estate brokerage) (1994-1999), and
Frontier Title (title insurance agency)
(1995-June 1999); a U.S. Senator
(January 1979-January 1991). Oversees 38
portfolios in the OppenheimerFunds
complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Robert G. Avis, Formerly, Director and President of A.G.
Trustee since 1993 Edwards Capital, Inc. (General Partner
Age: 72 of private equity funds) (until February

2001); Chairman, President and Chief
Executive Officer of A.G. Edwards
Capital, Inc. (until March 2000); Vice
Chairman and Director of A.G. Edwards,
Inc. and Vice Chairman of A.G. Edwards &

Sons, Inc. (its brokerage company None Over
subsidiary) (until March 1999); Chairman $100,000
of A.G. Edwards Trust Company and A.G.E.
Asset Management (investment advisor)
(until March 1999); and a Director
(until March 2000) of A.G. Edwards &
Sons and A.G. Edwards Trust Company.
Oversees 38 portfolios in the
OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

George C. Bowen, Formerly (until April 1999): Senior Vice
Trustee since 1997 President (from September 1987) and
Age: 67 Treasurer (from March 1985) of the

Manager; Vice President (from June 1983)
and Treasurer (since March 1985) of
OppenheimerFunds Distributor, Inc. (a
subsidiary of the Manager); Senior Vice
President (since February 1992),
Treasurer (since July 1991) Assistant
Secretary and a director (since December
1991) of Centennial Asset Management
Corporation; Vice President (since
October 1989) and Treasurer (since April
1986) of HarbourView Asset Management
Corporation (an investment advisory
subsidiary of the Manager); President,
Treasurer and a director (June
1989-January 1990) of Centennial Capital
Corporation (an investment advisory
subsidiary of the Manager); Vice
President and Treasurer (since August
1978) and Secretary (since April 1981)
of Shareholder Services, Inc. (a

transfer agent subsidiary of the ,00Over
Manager); Vice President, Treasurer and $10,001-$50 $100,000
Secretary (since November 1989) of
Shareholder Financial Services, Inc. (a
transfer agent subsidiary of the
Manager); Assistant Treasurer (since
March 1998) of Oppenheimer Acquisition
Corp. (the Manager's parent
corporation); Treasurer (since November
1989) of Oppenheimer Partnership
Holdings, Inc. (a holding company
subsidiary of the Manager); Vice
President and Treasurer (since July
1996) of Oppenheimer Real Asset
Management, Inc. (an investment advisory
subsidiary of the Manager); Chief
Executive Officer and director (since
March 1996) of MultiSource Services,
Inc. (a broker-dealer subsidiary of the
Manager); Treasurer (since October 1997)
of OppenheimerFunds International Ltd.
and OppenheimerFunds plc (offshore fund
management subsidiaries of the Manager).
Oversees 38 portfolios in the
OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Edward L. Cameron, A member of The Life Guard of Mount
Trustee since 1999 Vernon, George Washington's home (since
Age: 65 June 2000). Formerly (March 2001 - May

2002) Director of Genetic ID, Inc. and
its subsidiaries (a privately held
biotech company); a partner with

PricewaterhouseCoopers LLP (from None $50,001-
1974-1999) (an accounting firm) and $100,000
Chairman (from 1994-1998), Price
Waterhouse LLP Global Investment
Management Industry Services Group.
Oversees 38 portfolios in the
OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Jon S. Fossel, Chairman and Director (since 1998) of
Trustee since 1990 Rocky Mountain Elk Foundation (a
Age: 61 not-for-profit foundation); and a

director (since October 1999) of P.R.
Pharmaceuticals (a privately held
company) and UNUMProvident (an insurance
company) (since June 1, 2002). Formerly
Chairman and a director (until October

1996) and President and Chief Executive None $50,001-
Officer (until October 1995) of the $100,000
Manager; President, Chief Executive
Officer and a director of Oppenheimer
Acquisition Corp., Shareholders Services
Inc. and Shareholder Financial Services,
Inc. (until October 1995). Oversees 38
portfolios in the OppenheimerFunds
complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Sam Freedman, Director of Colorado Uplift (a
Trustee since 1996 non-profit charity) (since September
Age: 63 1984). Formerly (until October 1994) Mr.
Freedman held several positions in $10,001-$50,00Over
subsidiary or affiliated companies of $100,000
the Manager. Oversees 38 portfolios in
the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Beverly L. Trustee (since 1996) of MassMutual 000
Hamilton, Institutional Funds and of MML Series
Trustee since 2002 Investment Fund (open-end investment
Age: 57 companies); Director of MML Services

(since April 1987) and America Funds
Emerging Markets Growth Fund (since
October 1991) (both are investment
companies), The California Endowment (a
philanthropy organization) (since April
2002), and Community Hospital of
Monterey Peninsula, (since February
2002); a trustee (since February 2000)

of Monterey International Studies (an None $10,001-$50,
educational organization), and an
advisor to Unilever (Holland)'s pension
fund and to Credit Suisse First Boston's
Sprout venture capital unit. Mrs.
Hamilton also is a member of the
investment committees of the Rockefeller
Foundation, the University of Michigan
and Hartford Hospital. Formerly,
President (February 1991-April 2000)
ARCO Investment Management Company.
Oversees 39 portfolios in the
OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Robert J. Malone, Chairman and CEO (since 2003) of Steele
Trustee since 2002 Street State Bank (a commercial banking
Age: 59 entity); Director (since 2001) of Jones

Knowledge, Inc. (a privately held
company), U.S. Exploration, Inc., (since
1997), Colorado UpLIFT (a non-profit
organization) (since 1986) and a trustee

of the Gallagher Family Foundation Over
(non-profit organization) (since 2000). None $100,000
Formerly, Chairman of U.S. Bank (a
subsidiary of U.S. Bancorp and formerly
Colorado National Bank,) (July
1996-April 1, 1999) and a director of
Commercial Assets, Inc. (a REIT)
(1993-2000). Oversees 39 portfolios in
the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

F. William Trustee (since 1996) of MassMutual None $50,001-
Marshall, Jr., Institutional Funds and of MML Series
Trustee since 2000 Investment Fund (open-end investment
Age: 61 companies); Trustee (since 1987),
Chairman of the Board (since 2003) and
Chairman of the investment committee
(since 1994) for the Worcester Polytech
Institute; President and Treasurer
(since January 1999) of the SIS Fund (a
private not for profit charitable fund);
Trustee (since 1995) of the Springfield
Library and Museum Association; Trustee
(since 1996) of the Community Music
School of Springfield. Formerly, member
of the investment committee of the
Community Foundation of Western
Massachusetts (1998 - 2003); Chairman
(January 1999-July 1999) of SIS & Family
Bank, F.S.B. (formerly SIS Bank);
President, Chief Executive Officer and
Director (May 1993-December 1998) of SIS
Bankcorp, Inc. and SIS Bank (formerly $100,000
Springfield Institution for Savings) and
Executive Vice President (January
1999-July 1999) of Peoples Heritage
Financial Group, Inc. Oversees 40
portfolios in the OppenheimerFunds
complex.

-------------------------------------------------------------------------------------

The address of Mr. Grabish in the chart below is 6803 S. Tucson Way,
Centennial, CO 80112-3924. Mr. Grabish serves for an indefinite term, until
his resignation, retirement, death or removal.

-------------------------------------------------------------------------------------

Interested Trustee

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Name, Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range Of
Shares
Years; Range of Beneficially
Position(s) Held Other Trusteeships/Directorships Held by Shares Owned in
with Fund, Trustee; BeneficiallAny of the
Length of Service, Number of Portfolios in Fund Complex Owned in Oppenheimer
Age Currently Overseen by Trustee the Fund Funds

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

As of December 31,
2002

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Richard F. Senior Vice President, Assistant Director None Over
Grabish, of Sales and Marketing (since March
Trustee since 2003 1997), and Manager of Private Client
Age: 55 Services (since June 1985) for A.G.
Edwards & Sons, Inc. (broker/dealer and
investment firm). Chairman and Chief
Executive Officer (since March 2001) of
A.G. Edwards Trust Company; Director
(since March 1988) of A.G. Edwards &
Sons, Inc. Formerly (until March 1987)
President and Vice Chairman of A.G. $100,000
Edwards Trust Company. Oversees 37
portfolios in the OppenheimerFunds
complex.

-------------------------------------------------------------------------------------

The address of Mr. Murphy in the chart below is Two World Financial
Center, 225 Liberty Street, New York, New York 10080. Mr. Murphy serves for
an indefinite term, until his resignation, death or removal.

-------------------------------------------------------------------------------------
Interested Trustee and Officer
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range Of
Shares
Years; Range of Beneficially
Position(s) Held Other Trusteeships/Directorships Held by Shares Owned in
with Fund, Trustee; BeneficiallAny of the
Length of Service, Number of Portfolios in Fund Complex Owned in Oppenheimer
Age Currently Overseen by Trustee the Fund Funds
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
As of December 31,

2002

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

John V. Murphy, Chairman, Chief Executive Officer and $10,001-$50,00Over
President and director (since June 2001) and President
Trustee since 2001 (since September 2000) of the Manager;
Age: 54 President and a director or trustee of

other Oppenheimer funds; President and a
director (since July 2001) of Oppenheimer
Acquisition Corp. and of Oppenheimer
Partnership Holdings, Inc.; a director
(since November 2001) of OppenheimerFunds
Distributor, Inc.; Chairman and a
director (since July 2001) of Shareholder
Services, Inc. and of Shareholder
Financial Services, Inc.; President and a
director (since July 2001) of
OppenheimerFunds Legacy Program (a
charitable trust program established by
the Manager); a director of the following
investment advisory subsidiaries of
OppenheimerFunds, Inc.: OFI Institutional
Asset Management, Inc. and Centennial
Asset Management Corporation (since
November 2001), HarbourView Asset
Management Corporation and OFI Private
Investments, Inc. (since July 2001);
President (since November 1, 2001) and a
director (since July 2001) of Oppenheimer
Real Asset Management, Inc.; a director
(since November 2001) of Trinity
Investment Management Corp. and Tremont
Advisers, Inc. (investment advisory
affiliates of the Manager); Executive
Vice President (since February 1997) of
Massachusetts Mutual Life Insurance
Company (the Manager's parent company); a
director (since June 1995) of DLB
Acquisition Corporation (a holding
company that owns shares of David L.
Babson & Company, Inc.); formerly, Chief
Operating Officer (September 2000-June
2001) of the Manager; President and

trustee (November 1999-November 2001) of $100,000
MML Series Investment Fund and MassMutual
Institutional Funds (open-end investment
companies); a director (September
1999-August 2000) of C.M. Life Insurance
Company; President, Chief Executive
Officer and director (September
1999-August 2000) of MML Bay State Life
Insurance Company; a director (June
1989-June 1998) of Emerald Isle Bancorp
and Hibernia Savings Bank (a wholly-owned
subsidiary of Emerald Isle Bancorp).
Oversees 66 portfolios in the
OppenheimerFunds complex.

-------------------------------------------------------------------------------------

The address of the Officers in the chart below is as follows: for
Messrs. Steinmetz, Molleur and Zack and Ms. Feld, Two World Financial Center,
225 Liberty Street, New York, New York 10080, for Messrs. Vottiero and Wixted
and Mses. Bechtolt and Ives, 6803 S. Tucson Way, Centennial, CO 80112-3924.
Each Officer serves for an annual term or until his or her earlier
resignation, death or removal.

-------------------------------------------------------------------------------------
Officers of the Fund
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Principal Occupation(s) During Past 5 Years
Position(s) Held with

Fund,
Length of Service, Age

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Arthur P. Steinmetz, Senior Vice President of the Manager (since March 1993) and
Vice President and of HarbourView Asset Management Corporation (since March
Portfolio Manager 2000); an officer of 6 portfolios in the OppenheimerFunds
since 1989 complex.
Age: 44
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of
Treasurer since 1999 the Manager; Treasurer (since March 1999) of HarbourView
Age: 44 Asset Management Corporation, Shareholder Services, Inc.,
Oppenheimer Real Asset Management Corporation, Shareholder
Financial Services, Inc., Oppenheimer Partnership Holdings,
Inc., OFI Private Investments, Inc. (since March 2000),
OppenheimerFunds International Ltd. and OppenheimerFunds
plc (offshore fund management subsidiaries of the Manager)
(since May 2000) and OFI Institutional Asset Management,
Inc. (since November 2000); Treasurer and Chief Financial
Officer (since May 2000) of Oppenheimer Trust Company (a
trust company subsidiary of the Manager); Assistant
Treasurer (since March 1999) of Oppenheimer Acquisition
Corp. and OppenheimerFunds Legacy Program (since April
2000); formerly Principal and Chief Operating Officer
(March 1995-March 1999), Bankers Trust Company-Mutual Fund
Services Division. An officer of 82 portfolios in the
OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Philip Vottiero, Assistant Vice President of the Manager (since September
Assistant Treasurer 1998); formerly Manager/Fund Accounting (September
since 2002 1994-September 1998) of the Manager. An officer of 84
Age: 40 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Connie Bechtolt, Vice President/Fund Accounting of the Manager (since March
Assistant Treasurer 2002); formerly Vice President/Corporate Accounting of the
since 2002 Manager (July 1999-March 2002) prior to which he was Chief
Age: 40 Financial Officer at Sovlink Corporation (April 1996-June
1999). An officer of 82 portfolios in the OppenheimerFunds
complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Robert G. Zack, Senior Vice President (since May 1985) and General Counsel
Vice President & (since February 2002) of the Manager; General Counsel and a
Secretary since 2001 director (since November 2001) of OppenheimerFunds
Age: 55 Distributor, Inc.; Senior Vice President and General
Counsel (since November 2001) of HarbourView Asset
Management Corporation; Vice President and a director
(since November 2000) of Oppenheimer Partnership Holdings,
Inc.; Senior Vice President, General Counsel and a director
(since November 2001) of Shareholder Services, Inc.,
Shareholder Financial Services, Inc., OFI Private
Investments, Inc., Oppenheimer Trust Company and OFI
Institutional Asset Management, Inc.; General Counsel
(since November 2001) of Centennial Asset Management
Corporation; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Assistant
Secretary and a director (since November 2001) of
OppenheimerFunds International Ltd.; Vice President (since
November 2001) of OppenheimerFunds Legacy Program;
Secretary (since November 2001) of Oppenheimer Acquisition
Corp.; formerly Acting General Counsel (November
2001-February 2002) and Associate General Counsel (May
1981-October 2001) of the Manager; Assistant Secretary of
Shareholder Services, Inc. (May 1985-November 2001),
Shareholder Financial Services, Inc. (November
1989-November 2001); OppenheimerFunds International Ltd.
And OppenheimerFunds plc (October 1997-November 2001). An
officer of 82 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Denis R. Molleur, Vice President and Senior Counsel (since July 1999) of the
Assistant Secretary Manager; Vice President (since June 1990) of
since 2001 OppenheimerFunds Distributor, Inc.; Director, Vice
Age: 45 President and Assistant Secretary (since June 1999) of
Centennial Asset Management Corporation; Vice President
(since 1997) of Oppenheimer Real Asset Management, Inc.;
formerly Vice President and Associate Counsel of the
Manager (June 1990-July 1999). An officer of 73 portfolios
in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Katherine P. Feld, Vice President (since June 1998) and Senior Counsel (since
Assistant Secretary October 2003) of the Manager; Vice President (since 1999)
since 2001 of OppenheimerFunds Distributor, Inc.; Vice President and
Age: 45 Assistant Secretary (since 1999) of Shareholder Services,
Inc.; Assistant Secretary (since December 2001) of
OppenheimerFunds Legacy Program and Shareholder Financial
Services, Inc.; formerly an Assistant Counsel (August
1994-October 2003) and Assistant Vice President of the
Manager (August 1997-June 1998). An officer of 82
portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Kathleen T. Ives, Vice President and Senior Counsel of the Manager (since
Assistant Secretary July 1999); formerly a Vice President and Associate Counsel
since 2001 of the Manager (September 1995-July 1999). An officer of 82
Age: 38 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------

Remuneration of
Trustees. The officers
of the Fund and Mr.
Murphy (who is an
officer and Trustee of
the Fund) are
affiliated with the
Manager and receive no
salary or fee from the
Fund. The remaining
Trustees of the Fund
received the
compensation shown
below from the Fund
with respect to the
Fund's fiscal year
ended September 30,
2003. The compensation
from all 41 of the
Board II Funds
(including the Fund)
represents
compensation received
for serving as a
director or trustee
and member of a
committee (if
applicable) of the
boards of those funds
during the calendar
year ended December
31, 2002.

-------------------------------------------------------------------------------------

Trustee Name and Other Aggregate Compensation from Fund1 Total Compensation From Fund and Fund Complex Paid to Trustees
Fund Position(s) (as

applicable)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------

James C. Swain $30,999 $177,996

Chairman of the Board of
Trustees
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

William L. Armstrong $17,678 $92,076

Audit Committee Member
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Robert G. Avis $17,678 $92,199

Review Committee Member
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

George C. Bowen $16,678 $91,124

Audit Committee Member
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Edward L. Cameron $20,117 $99,743

Audit Committee Chairman
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Jon S. Fossel $20,117 $94,590

Review Committee Chairman
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Sam Freedman $17,678 $92,199

Review Committee Member
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Richard F. Grabish $0 $9,0132

Review Committee Member
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Beverly Hamilton $17,4383 $113,6594,5
Review Committee Member

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Robert J. Malone $17,438 6 $58,3264
Audit Committee Member

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

F. William Marshall, Jr. $17,678 $138,1247
Review Committee Member

-------------------------------------------------------------------------------

Effective July 1, 2002, C. Howard Kast and Robert M. Kirchner retired as
Trustees from the Board II Funds. For the calendar year ended December 31,
2002, Mr. Kast received $41,451 and Mr. Kirchner received $38,001 total
compensation from all of the Oppenheimer funds for which they served as
Trustee.
1. Aggregate Compensation from Fund includes fees and deferred
compensation, if any, for a Trustee.
2. Effective October 27, 2003, Mr. Grabish was elected as Trustee on all
Board II Funds (with the exception of Oppenheimer Senior Floating Rate
Fund). Prior to that date, "Total Compensation From Fund and Fund Complex"
paid to Mr. Grabish for service as a Trustee, as well as service on the
Review Committee was paid only by Centennial Government Trust, Centennial
California Tax Exempt Trust, Centennial Money Market Trust, Centennial New
York Tax Exempt Trust, Centennial Tax Exempt Trust and Centennial America
Fund, L.P. (total of six funds for which he previously served as Trustee
on the Board II Funds). Mr. Grabish was appointed to the Review Committee
beginning February 24, 2003. Had he served on the Review Committee for the
2002 calendar year, his "Total Compensation From Trust and Fund Complex"
would have been higher.
3. Includes $17,438 deferred under Deferred Compensation Plan described
below.
4. Mrs. Hamilton and Mr. Malone were elected as Trustees of the Board II
Funds effective June 1, 2002. Total compensation for Mrs. Hamilton and Mr.
Malone was paid by all the Board II Funds, with the exception of
Oppenheimer Senior Floating Rate Fund for which they currently do not
serve as Trustees (total of 40 Oppenheimer funds at December 31, 2002).
5. Includes $55,333 compensation (of which 100% was deferred under a
deferred compensation plan) paid to Mrs. Hamilton for serving as a trustee
by two open-end investment companies (MassMutual Institutional Funds and
MML Series Investment Fund) the investment adviser for which is the
indirect parent company of the Fund's Manager. The Manager also serves as
the Sub-Advisor to the MassMutual International Equity Fund, a series of
MassMutual Institutional Funds.
6. Includes $17,438 deferred under Deferred Compensation Plan described
below.
7. Includes $47,000 compensation paid to Mr. Marshall for serving as a
trustee by two open-end investment companies (MassMutual Institutional
Funds and MML Series Investment Fund) the investment adviser for which is
the indirect parent company of the Fund's Manager. The Manager also serves
as the Sub-Advisor to the MassMutual International Equity Fund, a series
of MassMutual Institutional Funds.

* For purposes of this section only, "Fund Complex" includes the Oppenheimer
funds, MassMutual Institutional Funds and MML Series Investment Fund in
accordance with the instructions for Form N-1A. The Manager does not
consider MassMutual Institutional Funds and MML Series Investment Fund to be
part of the OppenheimerFunds "Fund Complex" as that term may be otherwise
interpreted.

|X| Deferred Compensation Plan for Trustees. The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested Trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund. Under the plan, the compensation
deferred by a Trustee is periodically adjusted as though an equivalent amount
had been invested in shares of one or more Oppenheimer funds selected by the
Trustee. The amount paid to the Trustee under the plan will be determined
based upon the performance of the selected funds.

Deferral of Trustee's fees under the plan will not materially affect
the Fund's assets, liabilities and net income per share. The plan will not
obligate the fund to retain the services of any Trustee or to pay any
particular level of compensation to any Trustee. Pursuant to an Order issued
by the Securities and Exchange Commission, the Fund may invest in the funds
selected by the Trustee under the plan without shareholder approval for the
limited purpose of determining the value of the Trustee's deferred fee
account.

|X| Major Shareholders. As of October 22, 2003 the only persons who owned
of record or were known by the Fund to own beneficially 5% or more of any
class of the Fund's outstanding securities were:

Citigroup Global
Mkts Inc,
109801250, Attn
Cindy Tempesta,
7th Floor, 333
West 34th Street,
New York, NY
10001-2483, which
owned
26,748,776.311
Class B shares
(6.65% of the
Class B shares
then outstanding).

Citigroup Global
Mkts Inc,
109801250, Attn
Cindy Tempesta,
7th Floor, 333
West 34th Street,
New York, NY
10001-2483, which
owned
11,575,150.496
Class C shares
(6.73% of the
Class C shares
then outstanding).

MLPF&S for the
sole benefit of
its customers,
Attn: Fund
Admn/#97G06, 4800
Deer Lake Dr E,
Fl 3,
Jacksonville, FL
32246-6484, which
owned
8,795,994.848
Class C shares
(5.12% of the
Class C shares
then outstanding).

RPSS Tr, Ganot
Corporation, 401K
PSP, Attn: S.
Klurman & H
Lichtman, 4000
Hollywood Blvd,
Ste 530N,
Hollywood, FL
33021-6789, which
owned 606,474.343
Class N shares
(8.10% of the
Class N shares
then outstanding).

Mass Mutual Life
Insurance Co,
Separate
Investment Acct,
Attn: N225, 1295
State St,
Springfield, MA
01111-0001, which
owned
20,664,218.302
Class Y shares
(35.78% of the
Class Y shares
then outstanding).

Opp Capital
Preservation
Fund, Attn: Brian
Wixted, 6803 S.
Tucson Way,
Englewood, CO
80112-3924, which
owned
14,566,073.121
Class Y shares
(25.22% of the
Class Y shares
then outstanding).

Mass Mutual
Life Insurance
Co, Separate
Investment Acct,
Attn: N225, 1295
State St,
Springfield, MA
01111-0001, which
owned
8,995,247.599
Class Y shares
(15.57% of the
Class Y shares
then outstanding).

Mass Mutual
Life Insurance
Co, Separate
Investment Acct,
Attn: N225, 1295
State St,
Springfield, MA
01111-0001, which
owned
6,931,967.785
Class Y shares
(12.00% of the
Class Y shares
then outstanding).

Mass Mutual
Life Insurance
Co, Separate
Investment Acct,
Attn: N225, 1295
State St,
Springfield, MA
01111-0001, which
owned
4,444,690.730
Class Y shares
(7.69% of the
Class Y shares
then outstanding).

The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp.,
a holding company controlled by Massachusetts Mutual Life Insurance Company, a
global, diversified insurance and financial services organization.

|X| Code of Ethics. The Fund, the Manager and the Distributor have a Code
of Ethics. It is designed to detect and prevent improper personal trading
by certain employees, including portfolio managers, that would compete with
or take advantage of the Fund's portfolio transactions. Covered persons include
persons with knowledge of the investments and investment intentions of
the Fund and other funds advised by the Manager. The Code of Ethics does
permit personnel subject to the Code to invest in securities, including
securities that may be purchased or held by the Fund, subject to a number
of restrictions and controls. Compliance with the Code of Ethics is
carefully monitored and enforced by the Manager.

The Code of Ethics is an exhibit to the Fund's registration statement
filed with the SEC and can be reviewed and copied at the SEC's Public Reference
Room in Washington, D.C. You can obtain information about the hours of operation of
the Public Reference Room by calling the SEC at 1.202.942.8090. The Code
of Ethics can also be viewed as part of the Fund's registration statement on
the SEC's EDGAR database at the SEC's Internet website at WWW.SEC.GOV. Copies may
be obtained, after paying a duplicating fee, by electronic request at the
following E-mail address: PUBLICINFO@SEC.GOV., or by writing to the SEC's
Public Reference Section, Washington, D.C. 20549-0102.

|X| Portfolio Proxy Voting. 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. The Fund's primary consideration in voting
portfolio proxies is the financial interests of the Fund and its shareholders.
The Fund has retained an unaffiliated third-party as its agent to vote
portfolio proxies in accordance with the Fund's Portfolio Proxy Voting
Guidelines and to maintain records of such portfolio proxy voting. The Proxy
Voting Guidelines include provisions to address conflicts of interest
that may arise between the Fund and OFI where an OFI directly-controlled
affiliate manages or administers the assets of a pension plan of a
company soliciting the proxy. The Fund's Portfolio Proxy Voting Guidelines on
routine and non-routine proxy proposals are summarized below.

o The Fund votes with the recommendation of the issuer's management on
routine matters, including election of directors nominated by
management and ratification of auditors, unless circumstances indicate
otherwise.
o In general, the Fund opposes anti-takeover proposals and supports
elimination of anti-takeover proposals, absent unusual circumstances.
o The Fund supports shareholder proposals to reduce a super-majority
vote requirement, and opposes management proposals to add a super-majority
vote requirement.
o The Fund opposes proposals to classify the board of directors.
o The Fund support proposals to eliminate cumulative voting.
o The Fund opposes re-pricing of stock options.
o The Fund generally considers executive compensation questions such as stock
option plans and bonus plans to be ordinary business activity. The
Fund analyzes stock option plans, paying particular attention to
their dilutive effect. While the Fund generally supports management
proposals, the Fund opposes plans it considers to be excessive.

The Fund will be required to file new Form N-PX, with its complete
proxy voting record for the 12 months ended June 30th, no later than
August 31st of each year. The first such filing is due no later than August
31, 2004, for the twelve months ended June 30, 2004. Once filed, the
Fund's Form N-PX filing will be available (i)without charge, upon
request, by calling the Fund toll-free at 1.800.225.5677 and (ii)on the SEC's
website at WWW.SEC.GOV.
-----------

|X| The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Fund under an investment advisory agreement
between the Manager and the Fund. The Manager selects securities for
the Fund's portfolio and handles its day-to-day business. The portfolio
manager of the Fund is employed by the Manager and is the person who is
principally responsible for the day-to-day management of the Fund's
portfolio. Other members of the Manager's Fixed Income Portfolio Team
provide the portfolio managers with counsel and support in managing the
Fund's portfolio.

The agreement requires the Manager, at its expense, to provide
the Fund with adequate office space, facilities and equipment. It also
requires the Manager to provide and supervise the activities of all
administrative and clerical personnel Management Fees Paid to
OppenheimerFunds, Inc. required to provide effective administration
for the Fund. Those responsibilities include the compilation and
maintenance of records with respect to its operations, the preparation and filing of
specified reports, and composition of proxy materials and registration statements
for continuous public sale of shares of the Fund.

The Fund pays expenses not expressly assumed by the Manager under the advisory
agreement. The advisory agreement lists examples of expenses paid by the
Fund. The major categories relate to interest, taxes, brokerage commissions,
fees to certain Trustees legal and audit expenses custodian and transfer
agent expenses, share issuance costs, certain printing and registration
costs and non-recurring expenses, including, litigation costs. The management
fees paid by the Fund to the Manager are calculated at the rates described in
the Prospectus, which are applied to the assets of the Fund as a whole. The
fees are allocated to each class of shares based upon the relative proportion
of the Fund's net assets represented by that class. The management fees paid by
the Fund to the Manager during its last three fiscal years were:

Fiscal Year ended 9/30:y

-------------------------------------------------------------------------------
----------------------------------------------------------------------------

2001 $33,795,878

----------------------------------------------------------------------------
----------------------------------------------------------------------------

2002 $31,984,221

----------------------------------------------------------------------------
----------------------------------------------------------------------------

2003 $32,424,727

----------------------------------------------------------------------------

The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the investment
advisory agreement, the Manager is not liable for any loss the Fund sustains
by reason of good faith errors or omissions on its part with respect to any
of its duties under the agreement.
The agreement permits the Manager to act as investment adviser for any
other person, firm or corporation and to use the name "Oppenheimer" in
connection with other investment companies for which it may act as investment
adviser or general distributor. If the Manager shall no longer act as
investment adviser to the Fund, the Manager may withdraw the right of the
Fund to use the name "Oppenheimer" as part of its name.

|X| Annual Approval of Investment Advisory Agreement. Each
year, the Board of Trustees, including a majority of the Independent
Trustees, is required to approve the renewal of the investment advisory
agreement. The Investment Company Act requires that the Board request and
evaluate and the Manager provide such information as may be reasonably
necessary to evaluate the terms of the investment advisory agreement. The
Board employs an independent consultant to prepare a report that provides
such information as the Board requests for this purpose.

The Board also receives information about the 12b-1 distribution fees
the Fund pays. These distribution fees are reviewed and approved at a
different time of the year.

The Board reviewed the foregoing information in arriving at its
decision to renew the investment advisory agreement. Among other factors, the
Board considered:
o The nature, cost, and quality of the services provided to the Fund and
its shareholders;
o The profitability of the Fund to the Manager;
o The investment performance of the Fund in comparison to regular market
indices
o Economies of scale that may be available to the Fund from the Manager;
o Fees paid by other mutual funds for similar services;
o The value and quality of any other benefits or services received by the
Fund from its relationship with the Manager, and
o The direct and indirect benefits the Manager received from its
relationship with the Fund. These included services provided by the
Distributor and the Transfer Agent, and brokerage and soft dollar
arrangements permissible under Section 28(e) of the Securities
Exchange Act.

The Board considered that the Manager must be able to pay and retain
high quality personnel at competitive rates to provide services to the Fund.
The Board also considered that maintaining the financial viability of the
Manager is important so that the Manager will be able to continue to provide
quality services to the Fund and its shareholders in adverse times. The Board
also considered the investment performance of other mutual funds advised by
the Manager. The Board is aware that there are alternatives to the use of the
Manager.

These matters were also considered by the Independent Trustees meeting
separately from the full Board with experienced Counsel to Independent
Trustees and experienced Counsel to the Independent Trustees who assisted the
Board in its deliberations. The Independent Trustees Counsel is independent
of the Manager within the meaning and intent of the SEC Rules regarding the
independence of counsel.

After careful deliberation, the Board, including the Independent
Trustees, concluded that it was in the best interest of shareholders to
continue the investment advisory agreement for another year. In arriving at a
decision, the Board did not single out any one factor or group of factors as
being more important than other factors, but considered all factors together.
The Board judged the terms and conditions of the investment advisory
agreement, including the investment advisory fee, in light of all of the
surrounding circumstances.

Brokerage Policies of the Fund

Brokerage Provisions of the Investment Advisory Agreement. One of the duties
of the Manager under the investment advisory agreement is to arrange the
portfolio transactions for the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers to effect the Fund's
portfolio transactions. The Manager is authorized by the advisory agreement
to employ broker-dealers, including "affiliated" brokers, as that term is
defined in the Investment Company Act. The Manager may employ broker-dealers
that the Manager thinks, in its best judgment based on all relevant factors,
will implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" of the Fund's portfolio transactions. "Best execution" means
prompt and reliable execution at the most favorable price obtainable. The
Manager need not seek competitive commission bidding. However, it is expected
to be aware of the current rates of eligible brokers and to minimize the
commissions paid to the extent consistent with the interests and policies of
the Fund as established by its Board of Trustees.

Under the investment advisory agreement, the Manager may select brokers
(other than affiliates) that provide brokerage and/or research services for
the Fund and/or the other accounts over which the Manager or its affiliates
have investment discretion. The commissions paid to such brokers may be
higher than another qualified broker would charge, if the Manager makes a
good faith determination that the commission is fair and reasonable in
relation to the services provided. Subject to those considerations, as a
factor in selecting brokers for the Fund's portfolio transactions, the
Manager may also consider sales of shares of the Fund and other investment
companies for which the Manager or an affiliate serves as investment advisor.

Brokerage Practices Followed by the Manager. Most securities purchases made
by the Fund are in principal transactions at net prices. The Fund usually
deals directly with the selling or purchasing principal or market maker
without incurring charges for the services of a broker on its behalf unless
the Manager determines that a better price or execution may be obtained by
using the services of a broker. Therefore, the Fund does not incur
substantial brokerage costs. Portfolio securities purchased from underwriters
include a commission or concession paid by the issuer to the underwriter in
the price of the security. Portfolio securities purchased from dealers
include a spread between the bid and asked price. The Fund seeks to obtain
prompt execution of these orders at the most favorable net price.

The Manager allocates brokerage for the Fund subject to the provisions
of the investment advisory agreement and the procedures and rules described
above. Generally, the Manager's portfolio traders allocate brokerage based
upon recommendations from the Manager's portfolio managers. In certain
instances, portfolio managers may directly place trades and allocate
brokerage. In either case, the Manager's executive officers supervise the
allocation of brokerage.

Transactions in securities other than those for which an exchange is
the primary market are generally done with principals or market makers. In
transactions on foreign exchanges, the Fund may be required to pay fixed
brokerage commissions and therefore would not have the benefit of negotiated
commissions available in U.S. markets. Brokerage commissions are paid
primarily for transactions in listed securities or for certain fixed-income
agency transactions in the secondary market. Otherwise, brokerage commissions
are paid only if it appears likely that a better price or execution can be
obtained by doing so. In an option transaction, the Fund ordinarily uses the
same broker for the purchase or sale of the option and any transaction in the
securities to which the option relates.

Other funds advised by the Manager have investment policies similar to
those of the Fund. Those other funds may purchase or sell the same securities
as the Fund at the same time as the Fund, which could affect the supply and
price of the securities. If two or more funds advised by the Manager purchase
the same security on the same day from the same dealer, the transactions
under those combined orders are averaged as to price and allocated in
accordance with the purchase or sale orders actually placed for each account.

In an option transaction, the Fund ordinarily uses the same broker for
the purchase or sale of the option and any transaction in the securities to
which the option relates. When possible, the Manager tries to combine
concurrent orders to purchase or sell the same security by more than one of
the accounts managed by the Manager or its affiliates. The transactions under
those combined orders are averaged as to price and allocated in accordance
with the purchase or sale orders actually placed for each account.

The investment advisory agreement permits the Manager to allocate
brokerage for research services. The research services provided by a
particular broker may be useful only to one or more of the advisory accounts
of the Manager and its affiliates. The investment research received for the
commissions of those other accounts may be useful both to the Fund and one or
more of the Manager's other accounts. Investment research may be supplied to
the Manager by a third party at the instance of a broker through which trades
are placed.

Investment research services include information and analysis on
particular companies and industries as well as market or economic trends and
portfolio strategy, market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If a research
service also assists the Manager in a non-research capacity (such as
bookkeeping or other administrative functions), then only the percentage or
component that provides assistance to the Manager in the investment
decision-making process may be paid in commission dollars.

The Board of Trustees permits the Manager to use stated commissions on
secondary fixed-income agency trades to obtain research if the broker
represents to the Manager that: (i) the trade is not from or for the broker's
own inventory, (ii) the trade was executed by the broker on an agency basis
at the stated commission, and (iii) the trade is not a riskless principal
transaction. The Board of Trustees permits the Manager to use commissions on
fixed-price offerings to obtain research, in the same manner as is permitted
for agency transactions.

The research services provided by brokers broadens the scope and
supplements the research activities of the Manager. That research provides
additional views and comparisons for consideration, and helps the Manager to
obtain market information for the valuation of securities that are either
held in the Fund's portfolio or are being considered for purchase. The
Manager provides information to the Board about the commissions paid to
brokers furnishing such services, together with the Manager's representation
that the amount of such commissions was reasonably related to the value or
benefit of such services.

Other funds by the Manager may purchase or sell the sane securities as
the Fund at the same time as the Fund, which could affect the supply and
price of the securities. If two or more funds advised by the Manager or the
Sub-Advisor purchase the same security on the same day from the same dealer,
the Manager or the Sub-Advisor may average the price of the transactions and
allocate the average among the funds.

-------------------------------------------------------------------------------

Fiscal Year Ended 9/30: Total Brokerage Commissions Paid by the Fund1

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2001 $719,920

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2002 $1,046,022

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2003 $1,061,7562

-------------------------------------------------------------------------------

1. Amounts do not include spreads or concessions on principal transactions
on a net trade basis.
2. During the fiscal year ended 9/30/03, the amount of transactions
directed to brokers for research services was $34,136,984 and the amount
of the commissions paid to broker-dealers for those services was $41,919.

Distribution and Service Plans

The Distributor. Under its General Distributor's Agreement with the Fund, the
Distributor acts as the Fund's principal underwriter in the continuous public
offering of the Fund's classes of shares. The Distributor bears the expenses
normally attributable to sales, including advertising and the cost of
printing and mailing prospectuses, other than those furnished to existing
shareholders. The Distributor is not obligated to sell a specific number of
shares. Expenses normally attributable to sales are borne by the Distributor.

The sales charges and concessions paid to, or retained by, the
Distributor from the sale of shares during the Fund's three most recent
fiscal years, and the contingent deferred sales charges retained by the
Distributor on the redemption of shares for the most recent fiscal year are
shown in the tables below.

---------------------------------------------------------------------------------

Class A Fiscal Year Ended 9/30: Aggregate Front-End Sales Charges on Class A Shares
Front-End
Sales
Charges
Retained by
Distributor

---------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2001 $7,153,223 $1,940,739

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2002 $4,841,002 $1,420,119

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2003 $5,134,030 $1,418,393

-------------------------------------------------------------------------------

1. Includes amounts retained by a broker-dealer that is an affiliate or a
parent of the distributor.

-------------------------------------------------------------------------------

Concessions on Concessions on Concessions on Concessions
Fiscal Year Class A Shares Class B Shares Class C Shares on Class N
Ended 9/30: Advanced by Advanced by Advanced by Shares
Distributor1 Distributor1 Distributor1 Advanced by
Distributor1

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2001 $729,152 $13,529,708 $1,449,887 $38,409

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2002 $330,235 $8,201,918 $1,150,891 $116,766

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2003 $594,870 $6,186,560 $1,150,531 $122,428

-------------------------------------------------------------------------------

1. The Distributor advances concession payments to dealers for certain
sales of Class A shares and for sales of Class B, Class C and Class N
shares from its own resources at the time of sale.

-------------------------------------------------------------------------------

Fiscal Year Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Deferred Sales Deferred Sales Deferred Sales Deferred
Charges Charges Charges Sales Charges
Retained by Retained by Retained by Retained by
Ended 9/30 Distributor Distributor Distributor Distributor

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

2003 $115,085 $6,274,772 $97,016 $41,724

-------------------------------------------------------------------------------

Distribution and Service Plans. The Fund has adopted a Service Plan for Class
A shares and Distribution and Service Plans for Class B, Class C and Class N
shares under Rule 12b-1 of the Investment Company Act. Under those plans the
Fund pays the Distributor for all or a portion of its costs incurred in
connection with the distribution and/or servicing of the shares of the
particular class. Each plan has been approved by a vote of the Board of
Trustees, including a majority of the Independent Trustees1, cast in person
at a meeting called for the purpose of voting on that plan.

Under the plans, the Manager and the Distributor may make payments to
affiliates and in their sole discretion, from time to time, may use their own
resources (at no direct cost to the Fund) to make payments to brokers,
dealers or other financial institutions for distribution and administrative
services they perform. The Manager may use its profits from the advisory fee
it receives from the Fund. In their sole discretion, the Distributor and the
Manager may increase or decrease the amount of payments they make from their
own resources to plan recipients.

Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if the Fund's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose
of voting on continuing the plan. A plan may be terminated at any time by the
vote of a majority of the Independent Trustees or by the vote of the holders
of a "majority" (as defined in the Investment Company Act) of the outstanding
shares of that class.

The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount
of payments to be made under a plan must be approved by shareholders of the
class affected by the amendment. Because Class B shares of the Fund
automatically convert into Class A shares 72 months after purchase, the Fund
must obtain the approval of both Class A and Class B shareholders for a
proposed material amendment to the plan that would materially increase
payments under the plan. That approval must be by a "majority" (as defined in
the Investment Company Act) of the shares of each class, voting separately by
class.

While the plans are in effect, the Treasurer of the Fund shall provide
separate written reports on the plans to the Board of Trustees at least
quarterly for its review. The Reports shall detail the amount of all payments
made under a plan and the purpose for which the payments were made. Those
reports are subject to the review and approval of the Independent Trustees.

Each plan states that while it is in effect, the selection and
nomination of those Trustees of the Fund who are not "interested persons" of
the Fund is committed to the discretion of the Independent Trustees. This
does not prevent the involvement of others in the selection and nomination
process as long as the final decision as to selection or nomination is
approved by a majority of the Independent Trustees.

Under the plans for a class, no payment will be made to any recipient
in any quarter in which the aggregate net asset value of all Fund shares of
that class held by the recipient for itself and its customers does not exceed
a minimum amount, if any, that may be set from time to time by a majority of
the Independent Trustees. The Board of Trustees has set no minimum amount of
assets to qualify for payments under the plans.

|X| Class A Service Plan Fees. Under the Class A service plan, the
Distributor currently uses the fees it receives from the Fund to pay brokers,
dealers and other financial institutions (they are referred to as
"recipients") for personal services and account maintenance services they
provide for their customers who hold Class A shares. The services include,
among others, answering customer inquiries about the Fund, assisting in
establishing and maintaining accounts in the Fund, making the Fund's
investment plans available and providing other services at the request of the
Fund or the Distributor. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of
Class A shares. The Board has set the rate at that level. While the plan
permits the Board to authorize payments to the Distributor to reimburse
itself for services under the plan, the Board has not yet done so, except in
the case of the special arrangement described below, regarding grandfathered
retirement accounts. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net
assets consisting of Class A shares held in the accounts of the recipients or
their customers.

With respect to purchases of Class A shares subject to a contingent
deferred sales charge by certain retirement plans that purchased such shares
prior to March 1, 2001 ("grandfathered retirement accounts"), the Distributor
currently intends to pay the service fee to recipients in advance for the
first year after the shares are purchased. During the first year the shares
are sold, the Distributor retains the service fee to reimburse itself for the
costs of distributing the shares. After the first year shares are
outstanding, the Distributor makes service fee payments to recipients
quarterly on those shares. The advance payment is based on the net asset
value of shares sold. Shares purchased by exchange do not qualify for the
advance service fee payment. If Class A shares purchased by grandfathered
retirement accounts are redeemed during the first year after their purchase,
the recipient of the service fees on those shares will be obligated to repay
the Distributor a pro rata portion of the advance payment of the service fee
made on those shares.

------------------------------------------------------------------------------
For the fiscal year ended September 30, 2003 payments under the Class A
plan totaled $8,660,139, of which $25,427 was retained by the Distributor
under the arrangement described above, regarding grandfathered retirement
accounts, and included $554,215 paid to an affiliate of the Distributor's
parent company. Any unreimbursed expenses the Distributor incurs with respect
to Class A shares in any fiscal year cannot be recovered in subsequent years.
The Distributor may not use payments received under the Class A plan to pay
any of its interest expenses, carrying charges, or other financial costs, or
allocation of overhead.
------------------------------------------------------------------------------

|X| Class B, Class C and Class N Distribution and Service Plan Fees.
Under each plan, distribution and service fees are computed on the average of
the net asset value of shares in the respective class, determined as of the
close of each regular business day during the period. Each plan provides for
the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund
under the plan during the period for which the fee is paid. The types of
services that recipients provide are similar to the services provided under
the Class A service plan, described above.

Each plan permits the Distributor to retain both the asset-based sales
charges and the service fees or to pay recipients the service fee on a
quarterly basis, without payment in advance. However, the Distributor
currently intends to pay the service fee to recipients in advance for the
first year after Class B, Class C and Class N shares are purchased. After the
first year Class B, Class C or Class N shares are outstanding, after their
purchase, the Distributor makes service fee payments quarterly on those
shares. The advance payment is based on the net asset value of shares sold.
Shares purchased by exchange do not qualify for the advance service fee
payment. If Class B, Class C or Class N shares are redeemed during the first
year after their purchase, the recipient of the service fees on those shares
will be obligated to repay the Distributor a pro rata portion of the advance
payment of the service fee made on those shares. In cases where the
Distributor is the broker of record for Class B, Class C and Class N shares,
i.e. shareholders without the services of a broker directly invest in the
Fund, the Distributor will retain the asset-based sales charge and service
fee for Class B, Class C and Class N shares.

The asset-based sales charge and service fees increase Class B and
Class C expenses by 1.00% and the asset-based sales charge and service fees
increases Class N expenses by 0.50% of the net assets per year of the
respective class.

The Distributor retains the asset-based sales charge on Class B and
Class N shares. The Distributor retains the asset-based sales charge on Class
C shares during the first year the shares are outstanding. It pays the
asset-based sales charge as an ongoing concession to the recipient on Class C
shares outstanding for a year or more. If a dealer has a special agreement
with the Distributor, the Distributor will pay the Class B, Class C or Class
N service fee and the asset-based sales charge to the dealer quarterly in
lieu of paying the sales concessions and service fee in advance at the time
of purchase.

---------------------------------------------------------------------------------

The asset-based sales charges on Class B, Class C and Class N shares
allow investors to buy shares without a front-end sales charge while allowing
the Distributor to compensate dealers that sell those shares. The Fund pays
the asset-based sales charges to the Distributor for its services rendered in
distributing Class B, Class C and Class N shares. The payments are made to
the Distributor in recognition that the Distributor:
o pays sales concessions to authorized brokers and dealers at the time of
sale and pays service fees as described above,
o may finance payment of sales concessions and/or the advance of the
service fee payment to recipients under the plans, or may provide
such financing from its own resources or from the resources of an
affiliate,
o employs personnel to support distribution of Class B, Class C and Class
N shares, and
o bears the costs of sales literature, advertising and prospectuses
(other than those furnished to current shareholders) and state "blue
sky" registration fees and certain other distribution expenses,
o may not be able to adequately compensate dealers that sell Class B,
Class C and Class N shares without receiving payment under the plans
and therefore may not be able to offer such Classes for sale absent
the plans,
o receives payments under the plans consistent with the service fees and
asset-based sales charges paid by other non-proprietary funds that
charge 12b-1 fees,
o may use the payments under the plan to include the Fund in various
third-party distribution programs that may increase sales of Fund
shares,
o may experience increased difficulty selling the Fund's shares if
payments under the plan are discontinued because most competitor
funds have plans that pay dealers for rendering distribution
services as much or more than the amounts currently being paid by
the Fund, and
o may not be able to continue providing, at the same or at a lesser cost,
the same quality distribution sales efforts and services, or to
obtain such services from brokers and dealers, if the plan payments
were to be discontinued.

The Distributor's actual expenses in selling Class B, Class C and Class
N shares may be more than the payments it receives from the contingent
deferred sales charges collected on redeemed shares and from the Fund under
the plans. If either the Class B, Class C or Class N plan is terminated by
the Fund, the Board of Trustees may allow the Fund to continue payments of
the asset-based sales charge to the Distributor for distributing shares
before the plan was terminated.

Distribution Fees Paid to the Distributor for the Fiscal Year Ended 9/30/03

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class: Total Amount Distributor's Distributor's
Unreimbursed
Aggregate Expenses as %
Payments Retained by Unreimbursed of Net Assets
Under Plan Distributor Expenses Under Plan of Class

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class B Plan $17,575,847 $12,679,6581 $101,273,876 6.01%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class C Plan $6,232,376 $1,064,2352 $18,958,511 2.72%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class N Plan $112,928 $91,1623 $545,064 1.81%

---------------------------------------------------------------------------------

1. Includes $143,267 paid to an affiliate of the Distributor's parent
company.
2. Includes $164,087 paid to an affiliate of the Distributor's parent
company.
3. Includes $7,595 paid to an affiliate of the Distributor's parent
company.

-----------

All payments under the Class B, Class C and Class N plans
are subject to the limitations imposed by the Conduct Rules of the
National Association of Securities Dealers, Inc.on payments of asset-based
sales charges and service fees.
-----------

Performance of the Fund

Explanation of Performance Terminology.
The Fund uses a variety of terms to illustrate its investment performance.
Those terms include "cumulative total return," "average annual total return,"
"average annual total return at net asset value" and "total return at net asset
value." An explanation of how total returns are calculated is set forth
below. The charts below show the Fund's performance as of the Fund's most recent
fiscal year end. You can obtain current performance information by calling the Fund's
Transfer Agent at 1.800.225.5677 or by visiting the OppenheimerFunds Internet
website at www.oppenheimerfunds.com.

The Fund's illustrations of its performance data in advertisements
must comply with rules of the SEC. Those rules describe the types of
performance data that may be used and how it is to be calculated.
In general, any advertisement by the Fund of its performance data must include
the average annual total returns for the advertised class of shares of
the Fund. Those returns must be shown for the 1-, 5- and 10-year periods
(or the life of the class, if less) ending as of the most recently ended
calendar quarter prior to the publication of the advertisement (or its
submission for publication).

Use of standardized performance calculations enables an investor to compare
the Fund's performance to the performance of other funds for the same periods.
However, a number of factors should be considered before using the Fund's
performance information as a basis for comparison with other investments:

o
Yields and total returns measure the performance of a hypothetical
account in the Fund over various periods and do not show the
performance of each shareholder's account. Your account's performance
will vary from the model performance data if your dividends
are received in
cash,
or
you
buy
or
sell
shares
during
the
period,
or
you
bought
your
shares
at
a
different
time
and
price
than
the
shares
used
in
the
model.
o The Fund's performance returns do not reflect the effect
of taxes on dividends and capital gains distributions.
o An investment in the Fund is not insured by the FDIC or any other
government agency.
o The
principal
value
of
the
Fund's
shares,
its
yields
and
total
returns
are
not
guaranteed
and
normally
will
fluctuate
on
a
daily
basis.
o When
an
investor's
shares
are
redeemed,
they
may
be
worth
more
or
less
than
their
original
cost.
o
Yields and total returns for any given past period represent
historical performance information and are not, and should
not be considered, a prediction of future yields or returns.

The performance of each class of shares is shown separately, because
the performance of each class of shares will usually be different. That is
because of the different kinds of expenses each class bears. The yields and
total returns of each class of shares of the Fund are affected by market
conditions, the quality of the Fund's investments, the maturity of debt investments,
the types of investments the Fund holds, and its operating expenses that are
allocated to the particular class.

|X|
Yields.
The Fund uses a variety of different yields to illustrate its current
returns. Each class of shares calculates its yield separately because of
the different expenses that affect each class.

o
Standardized Yield. The "standardize yield" (sometimes referred to just as
"yield") is shown for a class of shares for a stated 30-day period. It
is not based on actual distribution paid by the Fund to shareholders in the
30-day period, but is a hypothetical yield based upon the net investment
income from the Fund's portfolio investments for that period. It may
therefore differ from the "dividend yield" for the same class of shares,
described below.

Standardized yield is calculated using the following formula set forth
in rules adopted by the SEC, designed to assure uniformity in the way
that all funds calculate their yields:

-----------
Standardized
Yield

------

------------------------------------------------------------------------------

The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense assumptions).
c = the average daily number of shares of that class outstanding
during the 30-day period that were entitled to receive dividends.
d = the maximum offering price per share of that class on the last day
of the period, adjusted for undistributed net investment income.

The standardized yield for a particular 30-day period may differ from
the yield for other periods. The SEC formula assumes that the standardized
yield for a 30-day period occurs at a constant rate for a six-month period
and is annualized at the end of the six-month period. Additionally, because
each class of shares is subject to different expenses, it is likely that the
standardized yields of the Fund's classes of shares will differ for any
30-day period.

o Dividend Yield. The Fund may quote a "dividend yield" for each class of
its shares. Dividend yield is based on the dividends paid on a class of
shares during the actual dividend period. To calculate dividend yield, the
dividends of a class declared during a stated period are added together, and
the sum is multiplied by 12 (to annualize the yield) and divided by the
maximum offering price on the last day of the dividend period. The formula is
shown below:

Dividend Yield = dividends paid x 12/maximum offering price (payment date)

The maximum offering price for Class A shares includes the current
maximum initial sales charge. The maximum offering price for Class B, Class C
and Class N shares is the net asset value per share, without considering the
effect of contingent deferred sales charges. There is no sales charge on
Class Y shares. The Class A dividend yield may also be quoted without
deducting the maximum initial sales charge.

-------------------------------------------------------------------------------

The Fund's Yields for the 30-Day Periods Ended 9/30/03

-------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class of Standardized Yield Dividend Yield
Shares

---------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Without After Without After
Sales Charge Sales Charge Sales Charge Sales Charge

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Class A 5.16% 4.91% 5.91% 5.63%

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Class B 4.43% N/A 5.15% N/A

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Class C 4.43% N/A 5.18% N/A

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Class N 4.70% N/A 5.44% N/A

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Class Y 5.15% N/A 5.90% N/A

-------------------------------------------------------------------------------

|X| Total Return Information. There are different types of "total
returns" to measure the Fund's performance. Total return is the change in
value of a hypothetical investment in the Fund over a given period, assuming
that all dividends and capital gains distributions are reinvested in
additional shares and that the investment is redeemed at the end of the
period. Because of differences in expenses for each class of shares, the
total returns for each class are separately measured. The cumulative total
return measures the change in value over the entire period (for example, ten
years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show actual
year-by-year performance. The Fund uses standardized calculations for its
total returns as prescribed by the SEC. The methodology is discussed below.

In calculating total returns for Class A shares, the current maximum
sales charge of 4.75% (as a percentage of the offering price) is deducted
from the initial investment ("P" in the formula below) (unless the return is
shown without sales charge, as described below). For Class B shares, payment
of the applicable contingent deferred sales charge is applied, depending on
the period for which the return is shown: 5.0% in the first year, 4.0% in the
second year, 3.0% in the third and fourth years, 2.0% in the fifth year, 1.0%
in the sixth year and none thereafter. For Class C shares, the 1.0%
contingent deferred sales charge is deducted for returns for the one-year
period. For Class N shares, the 1.0% contingent deferred sales charge is
deducted for returns for the one-year period, and total returns for the
periods prior to 03/01/01 (the inception date for Class N shares) is based on
the Fund's Class A returns, adjusted to reflect the higher Class N 12b-1
fees. There is no sales charge on Class Y shares.

o Average Annual Total Return. The "average annual total return" of each
class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P" in the formula
below) held for a number of years ("n" in the formula) to achieve an Ending
Redeemable Value ("ERV" in the formula) of that investment, according to the
following formula:

ERV l/n - 1 Average Annual Total
Return
P

o Average Annual Total Return (After Taxes on Distributions). The
"average annual total return (after taxes on distributions)" of Class A
shares is an average annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of federal taxes
(calculated using the highest individual marginal federal income tax rates in
effect on any reinvestment date) on any distributions made by the Fund during
the specified period. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below)
held for a number of years ("n" in the formula) to achieve an ending value
("ATVD" in the formula) of that investment, after taking into account the
effect of taxes on Fund distributions, but not on the redemption of Fund
shares, according to the following formula:

- 1 = Average Annual Total Return (After Taxes on
ATVD l/n Distributions)
---
P

Average Annual Total Return (After Taxes on Distributions and
Redemptions). The "average annual total return (after taxes on distributions
and redemptions)" of Class A shares is an average annual compounded rate of
return for each year in a specified number of years, adjusted to show the
effect of federal taxes (calculated using the highest individual marginal
federal income tax rates in effect on any reinvestment date) on any
distributions made by the Fund during the specified period and the effect of
capital gains taxes or capital loss tax benefits (each calculated using the
highest federal individual capital gains tax rate in effect on the redemption
date) resulting from the redemption of the shares at the end of the period.
It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVDR" in the
formula) of that investment, after taking into account the effect of taxes on
fund distributions and on the redemption of Fund shares, according to the
following formula:

ATVDR - 1 = Average Annual Total Return (After Taxes on Distributions
---
l/n and Redemptions)
P

o Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as
average annual total return, but it does not average the rate of return on an
annual basis. Cumulative total return is determined as follows:

ERV - P = Total Return

-----------

o Total Returns at Net Asset Value. From time to time the Fund may also
quote a cumulative or an average annual total return "at net asset value"
(without deducting sales charges) for Class A, Class B, Class C or Class N
shares. There is no sales charge on Class Y shares. Each is based on the
difference in net asset value per share at the beginning and the end of the
period for a hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions.

---------------------------------------------------------------------------------

The Fund's Total Returns for the Periods Ended 9/30/03

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class of Cumulative Total Average Annual Total Returns
Shares Returns

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

1-Year 10-Year
5-Year
(or (or
life-of-class, life-of-class,
if less) if less)

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

After Without After Without After Without After Without
Sales Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge Charge

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class A 82.97%1 92.09%1 13.91% 19.59% 5.44% 6.47% 6.23% 6.75%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class B 83.58%2 83.58%2 13.62% 18.62% 5.38% 5.67% 6.26% 6.26%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class C 68.22%3 68.22%3 17.45% 18.45% 5.65% 5.65% 6.43%3 6.43%3

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class N 20.92%4 20.92%4 17.82% 18.82% 7.64%4 7.64%4 N/A N/A

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class Y 37.20%5 37.20%5 19.33% 19.33% 6.67% 6.67% 5.73%5 5.73%5

---------------------------------------------------------------------------------

1. Inception of Class A: 10/16/89.
2. Inception of Class B: 11/30/92.
3. Inception of Class C: 5/26/95.
4. Inception of Class N: 3/01/01.
5. Inception of Class Y: 1/26/98.

-------------------------------------------------------------------------------

Average Annual Total Returns for Class A Shares1 (After Sales Charge)
For the Periods Ended 9/30/03

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

1-Year 5-Year 10 Years

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

After Taxes on 11.29% 2.25% 2.75%
Distributions

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

After Taxes on 8.84% 2.57% 3.04%
Distributions and
Redemption of Fund Shares

-------------------------------------------------------------------------------

1. Inception of Class A shares: 10/16/89.

Other Performance Comparisons. The Fund compares its performance annually to
that of an appropriate broadly-based market index in its Annual Report to
shareholders. You can obtain that information by contacting the Transfer
Agent at the addresses or telephone numbers shown on the cover of this
Statement of Additional Information. The Fund may also compare its
performance to that of other investments, including other mutual funds, or
use rankings of its performance by independent ranking entities. Examples of
these performance comparisons are set forth below.

|X| Lipper Rankings. From time to time the Fund may publish the
ranking of the performance of its classes of shares by Lipper, Inc.
("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring
service. Lipper monitors the performance of regulated investment companies,
including the Fund, and ranks their performance for various periods in
categories based on investment styles. The Lipper performance rankings are
based on total returns that include the reinvestment of capital gain
distributions and income dividends but do not take sales charges or taxes
into consideration. Lipper also publishes "peer-group" indices of the
performance of all mutual funds in a category that it monitors and averages
of the performance of the funds in particular categories.

|X| Morningstar Ratings. From time to time the Fund may publish the star
rating of the performance of its classes of shares by Morningstar, Inc., an
independent mutual fund monitoring service. Morningstar rates mutual funds in
their specialized market sector. The Fund is rated among multi-sector bond
category.

Morningstar proprietary star ratings reflect historical risk-adjusted
total investment return. For each fund with at least a three-year history,
Morningstar calculates a Morningstar Rating(TM)based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in a fund's monthly
performance (including the effects of sales charges, loads, and redemption
fees), placing more emphasis on downward variations and rewarding consistent
performance. The top 10% of funds in each category receive 5 stars, the next
22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2
stars, and the bottom 10% receive 1 star. (Each share class is counted as a
fraction of one fund within this scale and rated separately, which may cause
slight variations in the distribution percentages.) The Overall Morningstar
Rating for a fund is derived from a weighted average of the performance
figures associated with its three-, five-and ten-year (if applicable)
Morningstar Rating metrics.

|X| Performance Rankings and Comparisons by Other Entities and
Publications. From time to time the Fund may include in its advertisements
and sales literature performance information about the Fund cited in
newspapers and other periodicals such as The New York Times, The Wall Street
Journal, Barron's, or similar publications. That information may include
performance quotations from other sources, including Lipper and Morningstar.
The performance of the Fund's classes of shares may be compared in
publications to the performance
of various market indices or other investments, and averages, performance
rankings or other benchmarks prepared by recognized mutual fund statistical
services.

Investors may also wish to compare the returns on the Fund's share
classes to the return on fixed-income investments available from banks and
thrift institutions. Those include certificates of deposit, ordinary
interest-paying checking and savings accounts, and other forms of fixed or
variable time deposits, and various other instruments such as Treasury bills.
However, the Fund's returns and share price are not guaranteed or insured by
the FDIC or any other agency and will fluctuate daily, while bank depository
obligations may be insured by the FDIC and may provide fixed rates of return.
Repayment of principal and payment of interest on Treasury securities is
backed by the full faith and credit of the U.S. government.

From time to time, the Fund may publish rankings or ratings of the
Manager or Transfer Agent, and of the investor services provided by them to
shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves. Those ratings or rankings of shareholder and
investor services by third parties may include comparisons of their services
to those provided by other mutual fund families selected by the rating or
ranking services. They may be based upon the opinions of the rating or
ranking service itself, using its research or judgment, or based upon surveys
of investors, brokers, shareholders or others.

From time to time the Fund may include in its advertisements and sales
literature the total return performance of a hypothetical investment account
that includes shares of the Fund and other Oppenheimer funds. The combined
account may be part of an illustration of an asset allocation model or
similar presentation. The account performance may combine total return
performance of the Fund and the total return performance of other Oppenheimer
funds included in the account. Additionally, from time to time, the Fund's
advertisements and sales literature may include, for illustrative or
comparative purposes, statistical data or other information about general or
specific market and economic conditions. That may include, for example,
o information about the performance of certain securities or commodities

markets or segments of those markets,
o information about the performance of the economies of particular
countries or regions,
o the earnings of companies included in segments of particular
industries, sectors, securities markets, countries or regions,
o the availability of different types of securities or offerings of
securities,
o information relating to the gross national or gross domestic product of
the United States or other countries or regions,
o comparisons of various market sectors or indices to demonstrate
performance, risk, or other characteristics of the Fund.

ABOUT your account

How to Buy Shares

Additional information is presented below about the methods that can be used
to buy shares of the Fund. Appendix C contains more information about the
special sales charge arrangements offered by the Fund, and the circumstances
in which sales charges may be reduced or waived for certain classes of
investors.

AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $50 and shareholders must invest at least $500 before an
---
Asset Builder Plan (described below) can be established on a new account.
Accounts established prior to November 1, 2002 will remain at $25 for
additional purchases. Shares will be purchased on the regular business day
the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares. Dividends will begin to accrue on shares
purchased with the proceeds of ACH transfers on the business day the Fund
receives Federal Funds for the purchase through the ACH system before the
close of The New York Stock Exchange ("the Exchange"). The Exchange normally
closes at 4:00 P.M., but may close earlier on certain days. If Federal Funds
are received on a business day after the close of the Exchange, the shares
will be purchased and dividends will begin to accrue on the next regular
business day. The proceeds of ACH transfers are normally received by the Fund
three days after the transfers are initiated. If the proceeds of the ACH
transfer are not received on a timely basis, the Distributor reserves the
right to cancel the purchase order. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from delays in ACH
transmissions.

Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge
rate may be obtained for Class A shares under Right of Accumulation and
Letters of Intent because of the economies of sales efforts and reduction in
expenses realized by the Distributor, dealers and brokers making such sales.
No sales charge is imposed in certain other circumstances described in
Appendix C to this Statement of Additional Information because the
Distributor or dealer or broker incurs little or no selling expenses.

|X| Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and your spouse
can add together:
o Class A and Class B shares you purchase for your individual accounts
(including IRAs and 403(b) plans), or for your joint accounts, or
for trust or custodial accounts on behalf of your children who
are minors, and

o Current purchases of Class A and Class B shares of the Fund and other
Oppenheimer funds to reduce the sales charge rate that applies to
current purchases of Class A shares, and

o Class A and Class B shares of Oppenheimer funds you previously
purchased subject to an initial or contingent deferred sales
charge to reduce the sales charge rate for current purchases of
Class A shares, provided that you still hold your investment in
one of the Oppenheimer funds.

A fiduciary can count all shares purchased for a trust, estate or other
fiduciary account (including one or more employee benefit plans of the same
employer) that has multiple accounts. The Distributor will add the value, at
current offering price, of the shares you previously purchased and currently
own to the value of current purchases to determine the sales charge rate that
applies. The reduced sales charge will apply only to current purchases. You
must request it when you buy shares.

The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for which
the Distributor acts as the distributor and currently include the following:

Oppenheimer AMT-Free New York Municipals Oppenheimer Main Street Fund
Oppenheimer Bond Fund Oppenheimer Main Street Opportunity Fund
Oppenheimer California Municipal Fund Oppenheimer Main Street Small Cap Fund
Oppenheimer Capital Appreciation Fund Oppenheimer MidCap Fund
Oppenheimer Capital Preservation Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Capital Income Fund Oppenheimer Municipal Bond Fund
Oppenheimer Champion Income Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Convertible Securities Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Principal Protected Main
Oppenheimer Developing Markets Fund Street Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer Quest Balanced Value Fund
Oppenheimer Quest Capital Value Fund,
Oppenheimer Discovery Fund Inc.
Oppenheimer Quest International Value
Oppenheimer Emerging Growth Fund Fund, Inc.
Oppenheimer Emerging Technologies Fund Oppenheimer Quest Opportunity Value Fund
Oppenheimer Enterprise Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Equity Fund, Inc. Oppenheimer Real Asset Fund
Oppenheimer Global Fund Oppenheimer Real Estate Fund
Oppenheimer Rochester National
Oppenheimer Global Opportunities Fund Municipals
Oppenheimer Gold & Special Minerals Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Growth Fund Oppenheimer Small Cap Value Fund
Oppenheimer High Yield Fund Oppenheimer Strategic Income Fund
Oppenheimer International Bond Fund Oppenheimer Total Return Bond Fund
Oppenheimer International Growth Fund Oppenheimer U.S. Government Trust
Oppenheimer International Small Company
Fund Oppenheimer Value Fund
Oppenheimer Limited-Term Government Fund Limited-Term New York Municipal Fund
Oppenheimer Limited Term Municipal Fund Rochester Fund Municipals
And the following money market funds:

Oppenheimer Cash Reserves Centennial Government Trust
Oppenheimer Money Market Fund, Inc. Centennial Money Market Trust
Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust

There is an initial sales charge
on the purchase of Class A shares of
each of the Oppenheimer funds described
above except the money market funds and
Oppenheimer Senior Floating Rate Fund.
Under certain circumstances described in
this Statement of Additional
Information, redemption proceeds of
certain money market fund shares may be
subject to a contingent deferred sales
charge.

Letters of Intent. Under a Letter of
Intent ("Letter"), if you purchase Class
A shares or Class A and Class B shares
of the Fund and other Oppenheimer funds
during a 13-month period, you can reduce
the sales charge rate that applies to
your purchases of Class A shares. The
total amount of your intended purchases
of both Class A and Class B shares will
determine the reduced sales charge rate
for the Class A shares purchased during
that period. You can include purchases
made up to 90 days before the date of
the Letter. Letters do not consider
Class C or Class N shares you purchase
or may have purchased.

A Letter is an investor's
statement in writing to the Distributor
of the intention to purchase Class A
shares or Class A and Class B shares of
the Fund (and other Oppenheimer funds)
during a 13-month period (the "Letter
period"). At the investor's request,
this may include purchases made up to 90
days prior to the date of the Letter.
The Letter states the investor's
intention to make the aggregate amount
of purchases of shares which, when added
to the investor's holdings of shares of
those funds, will equal or exceed the
amount specified in the Letter.
Purchases made by reinvestment of
dividends or distributions of capital
gains and purchases made at net asset
value without sales charge do not count
toward satisfying the amount of the
Letter.

A Letter enables an investor to
count the Class A and Class B shares
purchased under the Letter to obtain the
reduced sales charge rate on purchases
of Class A shares of the Fund (and other
Oppenheimer funds) that applies under
the Right of Accumulation to current
purchases of Class A shares. Each
purchase of Class A shares under the
Letter will be made at the offering
price (including the sales charge) that
applies to a single lump-sum purchase of
shares in the amount intended to be
purchased under the Letter.

In submitting a Letter, the
investor makes no commitment to purchase
shares. However, if the investor's
purchases of shares within the Letter
period, when added to the value (at
offering price) of the investor's
holdings of shares on the last day of
that period, do not equal or exceed the
intended purchase amount, the investor
agrees to pay the additional amount of
sales charge applicable to such
purchases. That amount is described in
"Terms of Escrow," below (those terms
may be amended by the Distributor from
time to time). The investor agrees that
shares equal in value to 5% of the
intended purchase amount will be held in
escrow by the Transfer Agent subject to
the Terms of Escrow. Also, the investor
agrees to be bound by the terms of the
Prospectus, this Statement of Additional
Information and the application used for
a Letter. If those terms are amended, as
they may be from time to time by the
Fund, the investor agrees to be bound by
the amended terms and that those
amendments will apply automatically to
existing Letters.

If the total eligible purchases
made during the Letter period do not
equal or exceed the intended purchase
amount, the concessions previously paid
to the dealer of record for the account
and the amount of sales charge retained
by the Distributor will be adjusted to
the rates applicable to actual total
purchases. If total eligible purchases
during the Letter period exceed the
intended purchase amount and exceed the
amount needed to qualify for the next
sales charge rate reduction set forth in
the Prospectus, the sales charges paid
will be adjusted to the lower rate. That
adjustment will be made only if and when
the dealer returns to the Distributor
the excess of the amount of concessions
allowed or paid to the dealer over the
amount of concessions that apply to the
actual amount of purchases. The excess
concessions returned to the Distributor
will be used to purchase additional
shares for the investor's account at the
net asset value per share in effect on
the date of such purchase, promptly
after the Distributor's receipt thereof.

The Transfer Agent will not hold
shares in escrow for purchases of shares
of the Fund and other Oppenheimer funds
by OppenheimerFunds prototype 401(k)
plans under a Letter. If the intended
purchase amount under a Letter entered
into by an OppenheimerFunds prototype
401(k) plan is not purchased by the plan
by the end of the Letter period, there
will be no adjustment of concessions
paid to the broker-dealer or financial
institution of record for accounts held
in the name of that plan.

In determining the total amount of
purchases made under a Letter, shares
redeemed by the investor prior to the
termination of the Letter period will be
deducted. It is the responsibility of
the dealer of record and/or the investor
to advise the Distributor about the
Letter when placing any purchase orders
for the investor during the Letter
period. All of such purchases must be
made through the Distributor.

|X| Terms of Escrow That Apply
to Letters of Intent.

1. Out of the initial purchase (or
subsequent purchases if necessary) made
pursuant to a Letter, shares of the Fund
equal in value up to 5% of the intended
purchase amount specified in the Letter
shall be held in escrow by the Transfer
Agent. For example, if the intended
purchase amount is $50,000, the escrow
shall be shares valued in the amount of
$2,500 (computed at the offering price
adjusted for a $50,000 purchase). Any
dividends and capital gains
distributions on the escrowed shares
will be credited to the investor's
account.

2. If the total minimum investment
specified under the Letter is completed
within the 13-month Letter period, the
escrowed shares will be promptly
released to the investor.

3. If, at the end of the 13-month
Letter period the total purchases
pursuant to the Letter are less than the
intended purchase amount specified in
the Letter, the investor must remit to
the Distributor an amount equal to the
difference between the dollar amount of
sales charges actually paid and the
amount of sales charges which would have
been paid if the total amount purchased
had been made at a single time. That
sales charge adjustment will apply to
any shares redeemed prior to the
completion of the Letter. If the
difference in sales charges is not paid
within twenty days after a request from
the Distributor or the dealer, the
Distributor will, within sixty days of
the expiration of the Letter, redeem the
number of escrowed shares necessary to
realize such difference in sales
charges. Full and fractional shares
remaining after such redemption will be
released from escrow. If a request is
received to redeem escrowed shares prior
to the payment of such additional sales
charge, the sales charge will be
withheld from the redemption proceeds.

4. By signing the Letter, the
investor irrevocably constitutes and
appoints the Transfer Agent as
attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase
under the Letter (or the holding of
which may be counted toward completion
of a Letter) include:
(a) Class A shares sold with a
front-end sales charge or
subject to a Class A
contingent deferred sales
charge,
(b) Class B shares of other
Oppenheimer funds acquired
subject to a contingent
deferred sales charge, and
(c) Class A or Class B shares acquired
by exchange of either (1)
Class A shares of one of the
other Oppenheimer funds that
were acquired subject to a
Class A initial or
contingent deferred sales
charge or (2) Class B shares
of one of the other
Oppenheimer funds that were
acquired subject to a
contingent deferred sales
charge.

6. Shares held in escrow hereunder
will automatically be exchanged for
shares of another fund to which an
exchange is requested, as described in
the section of the Prospectus entitled
"How to Exchange Shares" and the escrow
will be transferred to that other fund.

Asset Builder Plans. As explained in the
Prospectus, you must initially establish
your account with $500. Subsequently,
you can establish an Asset Builder Plan
to automatically purchase additional
shares directly from a bank account for
as little as $50. For those accounts
established prior to November 1, 2002
and which have previously established
Asset Builder Plans, additional
purchases will remain at $25. Shares
purchased by Asset Builder Plan payments
from bank accounts are subject to the
redemption restrictions for recent
purchases described in the Prospectus.
Asset Builder Plans are available only
if your bank is an ACH member. Asset
Builder Plans may not be used to buy
shares for OppenheimerFunds
employer-sponsored qualified retirement
accounts. Asset Builder Plans also
enable shareholders of Oppenheimer Cash
Reserves to use their fund account to
make monthly automatic purchases of
shares of up to four other Oppenheimer
funds.

If you make payments from your
bank account to purchase shares of the
Fund, your bank account will be debited
automatically. Normally the debit will
be made two business days prior to the
investment dates you selected on your
application. Neither the Distributor,
the Transfer Agent nor the Fund shall be
responsible for any delays in purchasing
shares that result from delays in ACH
transmissions.

Before you establish Asset Builder
payments, you should obtain a prospectus
of the selected fund(s) from your
financial advisor (or the Distributor)
and request an application from the
Distributor. Complete the application
and return it. You may change the amount
of your Asset Builder payment or you can
terminate these automatic investments at
any time by writing to the Transfer
Agent. The Transfer Agent requires a
reasonable period (approximately 10
days) after receipt of your instructions
to implement them. The Fund reserves the
right to amend, suspend or discontinue
offering Asset Builder plans at any time
without prior notice.

Retirement Plans. Certain types of
retirement plans are entitled to
purchase shares of the Fund without
sales charge or at reduced sales charge
rates, as described in Appendix C to
this Statement of Additional
Information. Certain special sales
charge arrangements described in that
Appendix apply to retirement plans whose
records are maintained on a daily
valuation basis by Merrill Lynch Pierce
Fenner & Smith, Inc. ("Merrill Lynch")
or an independent record keeper that has
a contract or special arrangement with
Merrill Lynch. If on the date the plan
sponsor signed the Merrill Lynch record
keeping service agreement the plan has
less than $3 million in assets (other
than assets invested in money market
funds) invested in applicable
investments, then the retirement plan
may purchase only Class B shares of the
Oppenheimer funds. Any retirement plans
in that category that currently invest
in Class B shares of the Fund will have
their Class B shares converted to Class
A shares of the Fund when the plan's
applicable investments reach $5 million.

OppenheimerFunds has entered into
arrangements with certain record keepers
whereby the Transfer Agent compensates
the record keeper for its record keeping
and account servicing functions that it
performs on behalf of the participant
level accounts of a retirement plan.
While such compensation may act to
reduce the record keeping fees charged
by the retirement plan's record keeper,
that compensation arrangement may be
terminated at any time, potentially
affecting the record keeping fees
charged by the retirement plan's record
keeper.

Cancellation of Purchase Orders.
Cancellation of purchase orders for the
Fund's shares (for example, when a
purchase check is returned to the Fund
unpaid) causes a loss to be incurred
when the net asset values of the Fund's
shares on the cancellation date is less
than on the purchase date. That loss is
equal to the amount of the decline in
the net asset value per share multiplied
by the number of shares in the purchase
order. The investor is responsible for
that loss. If the investor fails to
compensate the Fund for the loss, the
Distributor will do so. The Fund may
reimburse the Distributor for that
amount by redeeming shares from any
account registered in that investor's
name, or the Fund or the Distributor may
seek other redress.

Classes of Shares. Each class of shares
of the Fund represents an interest in
the same portfolio of investments of the
Fund. However, each class has different
shareholder privileges and features. The
net income attributable to Class B,
Class C or Class N shares and the
dividends payable on Class B, Class C or
Class N shares will be reduced by
incremental expenses borne solely by
that class. Those expenses include the
asset-based sales charges to which Class
B, Class C and Class N shares are
subject.

The availability of different
classes of shares permits an investor to
choose the method of purchasing shares
that is more appropriate for the
investor. That may depend on the amount
of the purchase, the length of time the
investor expects to hold shares, and
other relevant circumstances. Class A
shares normally are sold subject to an
initial sales charge. While Class B,
Class C and Class N shares have no
initial sales charge, the purpose of the
deferred sales charge and asset-based
sales charge on Class B, Class C and
Class N shares is the same as that of
the initial sales charge on Class A
shares - to compensate the Distributor
and brokers, dealers and financial
institutions that sell shares of the
Fund. A salesperson who is entitled to
receive compensation from his or her
firm for selling Fund shares may receive
different levels of compensation for
selling one class of shares rather than
another.

The Distributor will not accept
any order in the amount of $500,000 or
more for Class B shares or $1 million or
more for Class C shares on behalf of a
single investor (not including dealer
"street name" or omnibus accounts). That
is because generally it will be more
advantageous for that investor to
purchase Class A shares of the Fund.

Class A Shares Subject to a
Contingent Deferred Sales Charge. For
purchases of Class A shares at net asset
value whether or not subject to a
contingent deferred sales charge as
described in the Prospectus, no sales
concessions will be paid to the
broker-dealer of record, as described in
the Prospectus, on sales of Class A
shares purchased with the redemption
proceeds of shares of another mutual
fund offered as an investment option in
a retirement plan in which Oppenheimer
funds are also offered as investment
options under a special arrangement with
the Distributor, if the purchase occurs
more than 30 days after the Oppenheimer
funds are added as an investment option
under that plan. Additionally, that
concession will not be paid on purchases
of Class A shares by a retirement plan
made with the redemption proceeds of
Class N shares of one or more
Oppenheimer funds held by the plan for
more than 18 months.

|X| Class B Conversion. Under
current interpretations of applicable
federal income tax law by the Internal
Revenue Service, the conversion of Class
B shares to Class A shares 72 months
after purchase is not treated as a
taxable event for the shareholder. If
those laws or the IRS interpretation of
those laws should change, the automatic
conversion feature may be suspended. In
that event, no further conversions of
Class B shares would occur while that
suspension remained in effect. Although
Class B shares could then be exchanged
for Class A shares on the basis of
relative net asset value of the two
classes, without the imposition of a
sales charge or fee, such exchange could
constitute a taxable event for the
shareholder, and absent such exchange,
Class B shares might continue to be
subject to the asset-based sales charge
for longer than six years.

|X| Availability of Class N
Shares. In addition to the description
of the types of retirement plans which
may purchase Class N shares contained in
the prospectus, Class N shares also are
offered to the following:
o to all rollover IRAs (including
SEP IRAs and SIMPLE IRAs),
o to all rollover contributions made
to Individual 401(k) plans,
Profit-Sharing Plans and
Money Purchase Pension Plans,
o to all direct rollovers from
OppenheimerFunds-sponsored
Pinnacle and Ascender
retirement plans,
o to all trustee-to-trustee IRA
transfers,
o to all 90-24 type 403(b) transfers,
o to Group Retirement Plans (as
defined in Appendix C to
this Statement of Additional
Information) which have
entered into a special
agreement with the
Distributor for that purpose,
o to Retirement Plans qualified
under Sections 401(a) or
401(k) of the Internal
Revenue Code, the
recordkeeper or the plan
sponsor for which has
entered into a special
agreement with the
Distributor,
o to Retirement Plans of a plan
sponsor where the aggregate
assets of all such plans
invested in the Oppenheimer
funds is $500,000 or more,
o to OppenheimerFunds-sponsored
Ascender 401(k) plans that
pay for the purchase with
the redemption proceeds of
Class A shares of one or
more Oppenheimer funds, and
o to certain customers of
broker-dealers and financial
advisors that are identified
in a special agreement
between the broker-dealer or
financial advisor and the
Distributor for that purpose.

The sales concession and the
advance of the service fee, as described
in the Prospectus, will not be paid to
dealers of record on sales of Class N
shares on:
o purchases of Class N shares in
amounts of $500,000 or more
by a retirement plan that
pays for the purchase with
the redemption proceeds of
Class A shares of one or
more Oppenheimer funds
(other than rollovers from
an
OppenheimerFunds-sponsored
Pinnacle or Ascender 401(k)
plan to any IRA invested in
the Oppenheimer funds),
o purchases of Class N shares in
amounts of $500,000 or more
by a retirement plan that
pays for the purchase with
the redemption proceeds of
Class C shares of one or
more Oppenheimer funds held
by the plan for more than
one year (other than
rollovers from an
OppenheimerFunds-sponsored
Pinnacle or Ascender 401(k)
plan to any IRA invested in
the Oppenheimer funds), and
o on purchases of Class N shares by
an
OppenheimerFunds-sponsored
Pinnacle or Ascender 401(k)
plan made with the
redemption proceeds of Class
A shares of one or more
Oppenheimer funds.

No sales concessions will be paid
to the broker-dealer of record, as
described in the Prospectus, on sales of
Class N shares purchased with the
redemption proceeds of shares of another
mutual fund offered as an investment
option in a retirement plan in which
Oppenheimer funds are also offered as
investment options under a special
arrangement with the Distributor, if the
purchase occurs more than 30 days after
the Oppenheimer funds are added as an
investment option under that plan.

|X| Allocation of Expenses. The
Fund pays expenses related to its daily
operations, such as custodian fees,
Trustees' fees, transfer agency fees,
legal fees and auditing costs. Those
expenses are paid out of the Fund's
assets and are not paid directly by
shareholders. However, those expenses
reduce the net asset values of shares,
and therefore are indirectly borne by
shareholders through their investment.

The methodology for calculating
the net asset value, dividends and
distributions of the Fund's share
classes recognizes two types of
expenses. General expenses that do not
pertain specifically to any one class
are allocated pro rata to the shares of
all classes. The allocation is based on
the percentage of the Fund's total
assets that is represented by the assets
of each class, and then equally to each
outstanding share within a given class.
Such general expenses include management
fees, legal, bookkeeping and audit fees,
printing and mailing costs of
shareholder reports, Prospectuses,
Statements of Additional Information and
other materials for current
shareholders, fees to unaffiliated
Trustees, custodian expenses, share
issuance costs, organization and
start-up costs, interest, taxes and
brokerage commissions, and non-recurring
expenses, such as litigation costs.

Other expenses that are directly
attributable to a particular class are
allocated equally to each outstanding
share within that class. Examples of
such expenses include distribution and
service plan (12b-1) fees, transfer and
shareholder servicing agent fees and
expenses, and shareholder meeting
expenses (to the extent that such
expenses pertain only to a specific
class).

Account Fees. As stated in the
Prospectus, a $12 annual fee is assessed
on any account valued at less than $500.
This fee will not be assessed on the
following accounts:
o Accounts that have balances below
$500 due to the automatic
conversion of shares from Class
B to Class A shares;
o Accounts with an active Asset
Builder Plan, payroll deduction
plan or a military allotment
plan;
o OppenheimerFunds-sponsored group
retirement accounts that are
making continuing purchases;
o Certain accounts held by
broker-dealers through the
National Securities Clearing
Corporation; and
o Accounts that fall below the $500
threshold due solely to market
fluctuations within the
12-month period preceding the
date the fee is deducted.

The fee is automatically deducted
from qualifying accounts annually on or
about the second to last business day of
September. This annual fee is waived for
any shareholders who elect to access
their account documents through
electronic document delivery rather than
in paper copy and who elect to utilize
the Internet or PhoneLink as their
primary source for their general
servicing needs. To sign up to access
account documents electronically via
eDocs Direct, please visit the Service
Center on our website at
WWW.OPPENHEIMERFUNDS.COM or call
------------------------
1.888.470.0862 for instructions.

Determination of Net Asset Values Per
Share. The net asset values per share of
each class of shares of the Fund are
determined as of the close of business
of the Exchange on each day that the
Exchange is open. The calculation is
done by dividing the value of the Fund's
net assets attributable to a class by
the number of shares of that class that
are outstanding. The Exchange normally
closes at 4:00 P.M., Eastern time, but
may close earlier on some other days
(for example, in case of weather
emergencies or on days falling before a
U.S. holiday). All references to time in
this Statement of Additional Information
mean "Eastern time." The Exchange's most
recent annual announcement (which is
subject to change) states that it will
close on New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and
Christmas Day. It may also close on
other days.

Dealers other than Exchange
members may conduct trading in certain
securities on days on which the Exchange
is closed (including weekends and
holidays) or after 4:00 P.M. on a
regular business day. Because the Fund's
net asset values will not be calculated
on those days, the Fund's net asset
values per share may be significantly
affected on such days when shareholders
may not purchase or redeem shares.
Additionally, trading on European and
Asian stock exchanges and
over-the-counter markets normally is
completed before the close of the
Exchange.

Changes in the values of
securities traded on foreign exchanges
or markets as a result of events that
occur after the prices of those
securities are determined, but before
the close of The Exchange, will not be
reflected in the Fund's calculation of
its net asset values that day unless the
Manager determines that the event is
likely to effect a material change in
the value of the security. The Manager,
or an internal valuation committee
established by the Manager, as
applicable, may establish a valuation,
under procedures established by the
Board and subject to the approval,
ratification and confirmation by the
Board at its next ensuing meeting.

|X| Securities Valuation. The
Fund's Board of Trustees has established
procedures for the valuation of the
Fund's securities. In general those
procedures are as follows:
o Equity securities traded on a U.S.
securities exchange or on Nasdaq(R)are
valued as follows:
(1) if last sale information is
regularly reported, they
are valued at the last
reported sale price on
the principal exchange on
which they are traded or
on Nasdaq, as applicable,
on that day, or
(2) if last sale information is not
available on a valuation
date, they are valued at
the last reported sale
price preceding the
valuation date if it is
within the spread of the
closing "bid" and "asked"
prices on the valuation
date or, if not, at the
closing "bid" price on
the valuation date.
o Equity securities traded on a
foreign securities exchange generally
are valued in one of the following ways:
(1) at the last sale price available
to the pricing service
approved by the Board of
Trustees/Directors, or
(2) at the last sale price obtained by
the Manager from the
report of the principal
exchange on which the
security is traded at its
last trading session on
or immediately before the
valuation date, or
(3) at the mean between the "bid" and
"asked" prices obtained
from the principal
exchange on which the
security is traded or, on
the basis of reasonable
inquiry, from two market
makers in the security.
o Long-term debt securities having a
remaining maturity in excess of 60 days
are valued based on the mean between the
"bid" and "asked" prices determined by a
portfolio pricing service approved by
the Fund's Board of Trustees or obtained
by the Manager from two active market
makers in the security on the basis of
reasonable inquiry.
o The following securities are
valued at the mean between the "bid" and
"asked" prices determined by a pricing
service approved by the Fund's Board of
Trustees or obtained by the Manager from
two active market makers in the security
on the basis of reasonable inquiry:
(1) debt instruments that have a
maturity of more than 397
days when issued,
(2) debt instruments that had a
maturity of 397 days or
less when issued and have
a remaining maturity of
more than 60 days, and
(3) non-money market debt instruments
that had a maturity of
397 days or less when
issued and which have a
remaining maturity of 60
days or less.
o The following securities are
valued at cost, adjusted for
amortization of premiums and accretion
of discounts:
(1) money market debt securities held
by a non-money market
fund that had a maturity
of less than 397 days
when issued that have a
remaining maturity of 60
days or less, and
(2) debt instruments held by a money
market fund that have a
remaining maturity of 397
days or less.
o Securities (including restricted
securities) not having readily-available
market quotations are valued at fair
value determined under the Board's
procedures. If the Manager is unable to
locate two market makers willing to give
quotes, a security may be priced at the
mean between the "bid" and "asked"
prices provided by a single active
market maker (which in certain cases may
be the "bid" price if no "asked" price
is available).

In the case of U.S. government
securities, mortgage-backed securities,
corporate bonds and foreign government
securities, when last sale information
is not generally available, the Manager
may use pricing services approved by the
Board of Trustees/Directors. The pricing
service may use "matrix" comparisons to
the prices for comparable instruments on
the basis of quality, yield and
maturity. Other special factors may be
involved (such as the tax-exempt status
of the interest paid by municipal
securities). The Manager will monitor
the accuracy of the pricing services.
That monitoring may include comparing
prices used for portfolio valuation to
actual sales prices of selected
securities.
The closing prices in the London
foreign exchange market on a particular
business day that are provided to the
Manager by a bank, dealer or pricing
service that the Manager has determined
to be reliable are used to value foreign
currency, including forward contracts,
and to convert to U.S. dollars
securities that are denominated in
foreign currency.

Puts, calls, and futures are
valued at the last sale price on the
principal exchange on which they are
traded or on Nasdaq, as applicable, as
determined by a pricing service approved
by the Board of Trustees or by the
Manager. If there were no sales that
day, they shall be valued at the last
sale price on the preceding trading day
if it is within the spread of the
closing "bid" and "asked" prices on the
principal exchange or on Nasdaq on the
valuation date. If not, the value shall
be the closing bid price on the
principal exchange or on Nasdaq on the
valuation date. If the put, call or
future is not traded on an exchange or
on Nasdaq, it shall be valued by the
mean between "bid" and "asked" prices
obtained by the Manager from two active
market makers. In certain cases that may
be at the "bid" price if no "asked"
price is available.

When the Fund writes an option, an
amount equal to the premium received is
included in the Fund's Statement of
Assets and Liabilities as an asset. An
equivalent credit is included in the
liability section. The credit is
adjusted ("marked-to-market") to reflect
the current market value of the option.
In determining the Fund's gain on
investments, if a call or put written by
the Fund is exercised, the proceeds are
increased by the premium received. If a
call or put written by the Fund expires,
the Fund has a gain in the amount of the
premium. If the Fund enters into a
closing purchase transaction, it will
have a gain or loss, depending on
whether the premium received was more or
less than the cost of the closing
transaction. If the Fund exercises a put
it holds, the amount the Fund receives
on its sale of the underlying investment
is reduced by the amount of premium paid
by the Fund.

How to Sell Shares

The information below supplements the
terms and conditions for redeeming
shares set forth in the Prospectus.

Checkwriting. When a check is presented
to United Missouri Bank (the "Bank") for
clearance, the Bank will ask the Fund to
redeem a sufficient number of full and
fractional shares in the shareholder's
account to cover the amount of the
check. This enables the shareholder to
continue receiving dividends on those
shares until the check is presented to
the Fund. Checks may not be presented
for payment at the offices of the Bank
or the Fund's custodian bank. This
limitation does not affect the use of
checks for the payment of bills or to
obtain cash at other banks. The Fund
reserves the right to amend, suspend or
discontinue offering checkwriting
privileges at any time. The Fund will
provide you notice whenever it is
required to do so by applicable law.

In choosing to take advantage of
the Checkwriting privilege, by signing
the account application or by completing
a Checkwriting card, each individual who
signs:
(1) for individual accounts,
represents that they are the
registered owner(s) of the
shares of the Fund in that
account;
(2) for accounts for corporations,
partnerships, trusts and other
entities, represents that they
are an officer, general
partner, trustee or other
fiduciary or agent, as
applicable, duly authorized to
act on behalf of the registered
owner(s);
(3) authorizes the Fund, its Transfer
Agent and any bank through
which the Fund's drafts
(checks) are payable to pay all
checks drawn on the Fund
account of such person(s) and
to redeem a sufficient amount
of shares from that account to
cover payment of each check;
(4) specifically acknowledges that if
they choose to permit checks to
be honored if there is a single
signature on checks drawn
against joint accounts, or
accounts for corporations,
partnerships, trusts or other
entities, the signature of any
one signatory on a check will
be sufficient to authorize
payment of that check and
redemption from the account,
even if that account is
registered in the names of more
than one person or more than
one authorized signature
appears on the Checkwriting
card or the application, as
applicable;
(5) understands that the Checkwriting
privilege may be terminated or
amended at any time by the Fund
and/or the Fund's bank; and
(6) acknowledges and agrees that
neither the Fund nor its bank
shall incur any liability for
that amendment or termination
of checkwriting privileges or
for redeeming shares to pay
checks reasonably believed by
them to be genuine, or for
returning or not paying checks
that have not been accepted for
any reason.

Sending Redemption Proceeds by Federal
Funds Wire. The Federal Funds wire of
redemption proceeds may be delayed if
the Fund's custodian bank is not open
for business on a day when the Fund
would normally authorize the wire to be
made, which is usually the Fund's next
regular business day following the
redemption. In those circumstances, the
wire will not be transmitted until the
next bank business day on which the Fund
is open for business. No dividends will
be paid on the proceeds of redeemed
shares awaiting transfer by Federal
Funds wire.

Reinvestment Privilege. Within six
months of a redemption, a shareholder
may reinvest all or part of the
redemption proceeds of:
o Class A shares purchased subject
to an initial sales charge or
Class A shares on which a
contingent deferred sales
charge was paid, or
o Class B shares that were subject
to the Class B contingent
deferred sales charge when
redeemed.

The reinvestment may be made
without sales charge only in Class A
shares of the Fund or any of the other
Oppenheimer funds into which shares of
the Fund are exchangeable as described
in "How to Exchange Shares" below.
Reinvestment will be at the net asset
value next computed after the Transfer
Agent receives the reinvestment order.
The shareholder must ask the Transfer
Agent for that privilege at the time of
reinvestment. This privilege does not
apply to Class C, Class N or Class Y
shares. The Fund may amend, suspend or
cease offering this reinvestment
privilege at any time as to shares
redeemed after the date of such
amendment, suspension or cessation.

Any capital gain that was realized
when the shares were redeemed is
taxable, and reinvestment will not alter
any capital gains tax payable on that
gain. If there has been a capital loss
on the redemption, some or all of the
loss may not be tax deductible,
depending on the timing and amount of
the reinvestment. Under the Internal
Revenue Code, if the redemption proceeds
of Fund shares on which a sales charge
was paid are reinvested in shares of the
Fund or another of the Oppenheimer funds
within 90 days of payment of the sales
charge, the shareholder's basis in the
shares of the Fund that were redeemed
may not include the amount of the sales
charge paid. That would reduce the loss
or increase the gain recognized from the
redemption. However, in that case the
sales charge would be added to the basis
of the shares acquired by the
reinvestment of the redemption proceeds.

Payments "In Kind". The Prospectus
states that payment for shares tendered
for redemption is ordinarily made in
cash. However, under certain
circumstances, the Board of Trustees of
the Fund may determine that it would be
detrimental to the best interests of the
remaining shareholders of the Fund to
make payment of a redemption order
wholly or partly in cash. In that case,
the Fund may pay the redemption proceeds
in whole or in part by a distribution
"in kind" of liquid securities from the
portfolio of the Fund, in lieu of cash.

The Fund has elected to be
governed by Rule 18f-1 under the
Investment Company Act. Under that rule,
the Fund is obligated to redeem shares
solely in cash up to the lesser of
$250,000 or 1% of the net assets of the
Fund during any 90-day period for any
one shareholder. If shares are redeemed
in kind, the redeeming shareholder might
incur brokerage or other costs in
selling the securities for cash. The
Fund will value securities used to pay
redemptions in kind using the same
method the Fund uses to value its
portfolio securities described above
under "Determination of Net Asset Values
Per Share." That valuation will be made
as of the time the redemption price is
determined.

Involuntary Redemptions. The Fund's
Board of Trustees has the right to cause
the involuntary redemption of the shares
held in any account if the aggregate net
asset value of those shares is less than
$500 or such lesser amount as the Board
may fix. The Board will not cause the
involuntary redemption of shares in an
account if the aggregate net asset value
of such shares has fallen below the
stated minimum solely as a result of
market fluctuations. If the Board
exercises this right, it may also fix
the requirements for any notice to be
given to the shareholders in question
(not less than 30 days). The Board may
alternatively set requirements for the
shareholder to increase the investment,
or set other terms and conditions so
that the shares would not be
involuntarily redeemed.

Transfers of Shares. A transfer of
shares to a different registration is
not an event that triggers the payment
of sales charges. Therefore, shares are
not subject to the payment of a
contingent deferred sales charge of any
class at the time of transfer to the
name of another person or entity. It
does not matter whether the transfer
occurs by absolute assignment, gift or
bequest, as long as it does not involve,
directly or indirectly, a public sale of
the shares. When shares subject to a
contingent deferred sales charge are
transferred, the transferred shares will
remain subject to the contingent
deferred sales charge. It will be
calculated as if the transferee
shareholder had acquired the transferred
shares in the same manner and at the
same time as the transferring
shareholder.

If less than all shares held in an
account are transferred, and some but
not all shares in the account would be
subject to a contingent deferred sales
charge if redeemed at the time of
transfer, the priorities described in
the Prospectus under "How to Buy Shares"
for the imposition of the Class B, Class
C and Class N contingent deferred sales
charge will be followed in determining
the order in which shares are
transferred.

Distributions From Retirement Plans.
Requests for distributions from
OppenheimerFunds-sponsored IRAs,
SEP-IRAs, SIMPLE IRAs, 403(b)(7)
custodial plans, 401(k) plans or pension
or profit-sharing plans should be
addressed to "Trustee, OppenheimerFunds
Retirement Plans," c/o the Transfer
Agent at its address listed in "How To
Sell Shares" in the Prospectus or on the
back cover of this Statement of
Additional Information. The request
must:
(1) state the reason for the
distribution;
(2) state the owner's awareness of tax
penalties if the distribution
is premature; and
(3) conform to the requirements of the
plan and the Fund's other
redemption requirements.

Participants (other than
self-employed plan sponsors) in
OppenheimerFunds-sponsored pension or
profit-sharing plans with shares of the
Fund held in the name of the plan or its
fiduciary may not directly request
redemption of their accounts. The plan
administrator or fiduciary must sign the
request.

Distributions from pension and
profit sharing plans are subject to
special requirements under the Internal
Revenue Code and certain documents
(available from the Transfer Agent) must
be completed and submitted to the
Transfer Agent before the distribution
may be made. Distributions from
retirement plans are subject to
withholding requirements under the
Internal Revenue Code, and IRS Form W-4P
(available from the Transfer Agent) must
be submitted to the Transfer Agent with
the distribution request, or the
distribution may be delayed. Unless the
shareholder has provided the Transfer
Agent with a certified tax
identification number, the Internal
Revenue Code requires that tax be
withheld from any distribution even if
the shareholder elects not to have tax
withheld. The Fund, the Manager, the
Distributor, and the Transfer Agent
assume no responsibility to determine
whether a distribution satisfies the
conditions of applicable tax laws and
will not be responsible for any tax
penalties assessed in connection with a
distribution.

Special Arrangements for Repurchase of
Shares from Dealers and Brokers. The
Distributor is the Fund's agent to
repurchase its shares from authorized
dealers or brokers on behalf of their
customers. Shareholders should contact
their broker or dealer to arrange this
type of redemption. The repurchase price
per share will be the net asset value
next computed after the Distributor
receives an order placed by the dealer
or broker. However, if the Distributor
receives a repurchase order from a
dealer or broker after the close of The
Exchange on a regular business day, it
will be processed at that day's net
asset value if the order was received by
the dealer or broker from its customers
prior to the time the Exchange closes.
Normally, the Exchange closes at 4:00
P.M., but may do so earlier on some
days. Additionally, the order must have
been transmitted to and received by the
Distributor prior to its close of
business that day (normally 5:00 P.M.).

Ordinarily, for accounts redeemed
by a broker-dealer under this procedure,
payment will be made within three
business days after the shares have been
redeemed upon the Distributor's receipt
of the required redemption documents in
proper form. The signature(s) of the
registered owners on the redemption
documents must be guaranteed as
described in the Prospectus.

Automatic Withdrawal and Exchange Plans.
Investors owning shares of the Fund
valued at $5,000 or more can authorize
the Transfer Agent to redeem shares
(having a value of at least $50)
automatically on a monthly, quarterly,
semi-annual or annual basis under an
Automatic Withdrawal Plan. Shares will
be redeemed three business days prior to
the date requested by the shareholder
for receipt of the payment. Automatic
withdrawals of up to $1,500 per month
may be requested by telephone if
payments are to be made by check payable
to all shareholders of record. Payments
must also be sent to the address of
record for the account and the address
must not have been changed within the
prior 30 days. Required minimum
distributions from
OppenheimerFunds-sponsored retirement
plans may not be arranged on this basis.

Payments are normally made by
check, but shareholders having
AccountLink privileges (see "How To Buy
Shares") may arrange to have Automatic
Withdrawal Plan payments transferred to
the bank account designated on the
account application or by
signature-guaranteed instructions sent
to the Transfer Agent. Shares are
normally redeemed pursuant to an
Automatic Withdrawal Plan three business
days before the payment transmittal date
you select in the account application.
If a contingent deferred sales charge
applies to the redemption, the amount of
the check or payment will be reduced
accordingly.

The Fund cannot guarantee receipt
of a payment on the date requested. The
Fund reserves the right to amend,
suspend or discontinue offering these
plans at any time without prior notice.
Because of the sales charge assessed on
Class A share purchases, shareholders
should not make regular additional Class
A share purchases while participating in
an Automatic Withdrawal Plan. Class B,
Class C and Class N shareholders should
not establish automatic withdrawal
plans, because of the potential
imposition of the contingent deferred
sales charge on such withdrawals (except
where the Class B, Class C or Class N
contingent deferred sales charge is
waived as described in Appendix C to
this Statement of Additional
Information).

By requesting an Automatic
Withdrawal or Exchange Plan, the
shareholder agrees to the terms and
conditions that apply to such plans, as
stated below. These provisions may be
amended from time to time by the Fund
and/or the Distributor. When adopted,
any amendments will automatically apply
to existing Plans.

|X| Automatic Exchange Plans.
Shareholders can authorize the Transfer
Agent to exchange a pre-determined
amount of shares of the Fund for shares
(of the same class) of other Oppenheimer
funds automatically on a monthly,
quarterly, semi-annual or annual basis
under an Automatic Exchange Plan. The
minimum amount that may be exchanged to
each other fund account is $50.
Instructions should be provided on the
OppenheimerFunds Application or
signature-guaranteed instructions.
Exchanges made under these plans are
subject to the restrictions that apply
to exchanges as set forth in "How to
Exchange Shares" in the Prospectus and
below in this Statement of Additional
Information.

Automatic Withdrawal Plans. Fund
shares will be redeemed as necessary to
meet withdrawal payments. Shares
acquired without a sales charge will be
redeemed first. Shares acquired with
reinvested dividends and capital gains
distributions will be redeemed next,
followed by shares acquired with a sales
charge, to the extent necessary to make
withdrawal payments. Depending upon the
amount withdrawn, the investor's
principal may be depleted. Payments made
under these plans should not be
considered as a yield or income on your
investment.

The Transfer Agent will administer
the investor's Automatic Withdrawal Plan
as agent for the shareholder(s) (the
"Planholder") who executed the plan
authorization and application submitted
to the Transfer Agent. Neither the Fund
nor the Transfer Agent shall incur any
liability to the Planholder for any
action taken or not taken by the
Transfer Agent in good faith to
administer the plan. Share certificates
will not be issued for shares of the
Fund purchased for and held under the
plan, but the Transfer Agent will credit
all such shares to the account of the
Planholder on the records of the Fund.
Any share certificates held by a
Planholder may be surrendered unendorsed
to the Transfer Agent with the plan
application so that the shares
represented by the certificate may be
held under the lan.

For accounts subject to Automatic
Withdrawal Plans, distributions of
capital gains must be reinvested in
shares of the Fund, which will be done
at net asset value without a sales
charge. Dividends on shares held in the
account may be paid in cash or
reinvested.

Shares will be redeemed to make
withdrawal payments at the net asset
value per share determined on the
redemption date. Checks or AccountLink
payments representing the proceeds of
Plan withdrawals will normally be
transmitted three business days prior to
the date selected for receipt of the
payment, according to the choice
specified in writing by the Planholder.
Receipt of payment on the date selected
cannot be guaranteed.

The amount and the interval of
disbursement payments and the address to
which checks are to be mailed or
AccountLink payments are to be sent may
be changed at any time by the Planholder
by writing to the Transfer Agent. The
Planholder should allow at least two
weeks' time after mailing such
notification for the requested change to
be put in effect. The Planholder may, at
any time, instruct the Transfer Agent by
written notice to redeem all, or any
part of, the shares held under the plan.
That notice must be in proper form in
accordance with the requirements of the
then-current Prospectus of the Fund. In
that case, the Transfer Agent will
redeem the number of shares requested at
the net asset value per share in effect
and will mail a check for the proceeds
to the Planholder.

The Planholder may terminate a
plan at any time by writing to the
Transfer Agent. The Fund may also give
directions to the Transfer Agent to
terminate a plan. The Transfer Agent
will also terminate a plan upon its
receipt of evidence satisfactory to it
that the Planholder has died or is
legally incapacitated. Upon termination
of a plan by the Transfer Agent or the
Fund, shares that have not been redeemed
will be held in uncertificated form in
the name of the Planholder. The account
will continue as a
dividend-reinvestment, uncertificated
account unless and until proper
instructions are received from the
Planholder, his or her executor or
guardian, or another authorized person.

To use Class A shares held under
the plan as collateral for a debt, the
Planholder may request issuance of a
portion of the shares in certificated
form. Upon written request from the
Planholder, the Transfer Agent will
determine the number of shares for which
a certificate may be issued without
causing the withdrawal checks to stop.
However, should such uncertificated
shares become exhausted, plan
withdrawals will terminate.

If the Transfer Agent ceases to
act as transfer agent for the Fund, the
Planholder will be deemed to have
appointed any successor transfer agent
to act as agent in administering the
plan.

How to Exchange Shares

As stated in the Prospectus, shares of a
particular class of Oppenheimer funds
having more than one class of shares may
be exchanged only for shares of the same
class of other Oppenheimer funds. Shares
of Oppenheimer funds that have a single
class without a class designation are
deemed "Class A" shares for this
purpose. You can obtain a current list
showing which funds offer which classes
of shares by calling the Distributor.

o All of the Oppenheimer funds
currently offer Class A, B, C, N
and Y shares with the following
exceptions:

The following funds only offer
Class A shares:
Centennial America Fund, L.P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Centennial Tax Exempt Trust
Trust
Centennial Government Trust Oppenheimer Money Market Fund, Inc.
Centennial Money Market Trust

The following funds do not offer Class N shares:

Oppenheimer AMT-Free New York Oppenheimer Pennsylvania Municipal
Municipals Fund
Oppenheimer California Municipal Fund Oppenheimer Rochester National

Municipals

Oppenheimer Limited Term Municipal Oppenheimer Senior Floating Rate Fund
Fund
Oppenheimer Municipal Bond Fund Limited Term New York Municipal Fund
Oppenheimer New Jersey Municipal Fund Rochester Fund Municipals

The following funds do not offer Class Y shares:

Oppenheimer AMT-Free New York Oppenheimer Multiple Strategies Fund
Municipals
Oppenheimer California Municipal Fund Oppenheimer Municipal Bond Fund
Oppenheimer Capital Income Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Cash Reserves Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Champion Income Fund Oppenheimer Principal Protected Main
Street Fund
Oppenheimer Convertible Securities Oppenheimer Principal Protected Main
Fund Street Fund II
Oppenheimer Disciplined Allocation Oppenheimer Quest Capital Value Fund,

Fund Inc.

Oppenheimer Developing Markets Fund Oppenheimer Quest International Value
Fund, Inc.
Oppenheimer Gold & Special Minerals Oppenheimer Rochester National
Fund Municipals
Oppenheimer International Bond Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer International Growth Fund Oppenheimer Small Cap Value Fund
Oppenheimer International Small Oppenheimer Total Return Bond Fund
Company Fund
Oppenheimer Limited Term Municipal Limited Term New York Municipal Fund
Fund

o Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
shares of any other fund.
o Class B, Class C and Class N shares of Oppenheimer Cash Reserves are
generally available only by exchange from the same class of shares of
other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k)
plans.
o Class M shares of Oppenheimer Convertible Securities Fund may be
exchanged only for Class A shares of other Oppenheimer funds. They may
not be acquired by exchange of shares of any class of any other
Oppenheimer funds except Class A shares of Oppenheimer Money Market
Fund or Oppenheimer Cash Reserves acquired by exchange of Class M
shares.
o Class X shares of Limited Term New York Municipal Fund may be exchanged
only for Class B shares of other Oppenheimer funds and no exchanges may
be made to Class X shares.
o Shares of Oppenheimer Capital Preservation Fund may not be exchanged
for shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash
Reserves or Oppenheimer Limited-Term Government Fund. Only participants
in certain retirement plans may purchase shares of Oppenheimer Capital
Preservation Fund, and only those participants may exchange shares of
other Oppenheimer funds for shares of Oppenheimer Capital Preservation
Fund.
o Class A shares of Oppenheimer Senior Floating Rate Fund are not
available by exchange of shares of Oppenheimer Money Market Fund or
Class A shares of Oppenheimer Cash Reserves.
o Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any money market fund offered by the Distributor. Shares
of any money market fund purchased without a sales charge may be
exchanged for shares of Oppenheimer funds offered with a sales charge
upon payment of the sales charge. They may also be used to purchase
shares of Oppenheimer funds subject to an early withdrawal charge or
contingent deferred sales charge.
o Shares of Oppenheimer Money Market Fund, Inc. purchased with the
redemption proceeds of shares of other mutual funds (other than funds
managed by the Manager or its subsidiaries) redeemed within the 30 days
prior to that purchase may subsequently be exchanged for shares of
other Oppenheimer funds without being subject to an initial sales
charge or contingent deferred sales charge. To qualify for that
privilege, the investor or the investor's dealer must notify the
Distributor of eligibility for this privilege at the time the shares of
Oppenheimer Money Market Fund, Inc. are purchased. If requested, they
must supply proof of entitlement to this privilege.
o Shares of the Fund acquired by reinvestment of dividends or
distributions from any of the other Oppenheimer funds or from any unit
investment trust for which reinvestment arrangements have been made
with the Distributor may be exchanged at net asset value for shares of
any of the Oppenheimer funds.

o Shares of Oppenheimer Principal Protected Main Street Fund may be
exchanged at net asset value for shares of any of the Oppenheimer
funds. However, shareholders are not permitted to exchange shares of
other Oppenheimer funds for shares of Oppenheimer Principal Protected
Main Street Fund until after the expiration of the warranty period
(8/5/2010).

The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund may impose these changes at any time, it will provide
you with notice of those changes whenever it is required to do so by
applicable law. It may be required to provide 60 days' notice prior to
materially amending or terminating the exchange privilege. That 60 day notice
is not required in extraordinary circumstances.

|X| How Exchanges Affect Contingent Deferred Sales Charges. No
contingent deferred sales charge is imposed on exchanges of shares of any
class purchased subject to a contingent deferred sales charge, with the
following exceptions:

o When Class A shares of any Oppenheimer fund (other than Rochester
National Municipals and Rochester Fund Municipals) acquired by exchange of
Class A shares of any Oppenheimer fund purchased subject to a Class A
contingent deferred sales charge are redeemed within 18 months measured from
the beginning of the calendar month of the initial purchase of the exchanged
Class A shares, the Class A contingent deferred sales charge is imposed on
the redeemed shares.

o When Class A shares of Rochester National Municipals and Rochester Fund
Municipals acquired by exchange of Class A shares of any Oppenheimer fund
purchased subject to a Class A contingent deferred sales charge are redeemed
within 24 months of the beginning of the calendar month of the initial
purchase of the exchanged Class A shares, the Class A contingent deferred
sales charge is imposed on the redeemed shares.

o If any Class A shares of another Oppenheimer fund that are exchanged
for Class A shares of Oppenheimer Senior Floating Rate Fund are subject to
the Class A contingent deferred sales charge of the other Oppenheimer fund at
the time of exchange, the holding period for that Class A contingent deferred
sales charge will carry over to the Class A shares of Oppenheimer Senior
Floating Rate Fund acquired in the exchange. The Class A shares of
Oppenheimer Senior Floating Rate Fund acquired in that exchange will be
subject to the Class A Early Withdrawal Charge of Oppenheimer Senior Floating
Rate Fund if they are repurchased before the expiration of the holding period.

o When Class A shares of Oppenheimer Cash Reserves and Oppenheimer Money
Market Fund, Inc. acquired by exchange of Class A shares of any Oppenheimer
fund purchased subject to a Class A contingent deferred sales charge are
redeemed within the Class A holding period of the fund from which the shares
were exchanged, the Class A contingent deferred sales charge of the fund from
which the shares were exchanged is imposed on the redeemed shares.

o With respect to Class B shares, the Class B contingent deferred sales
charge is imposed on Class B shares acquired by exchange if they are redeemed
within six years of the initial purchase of the exchanged Class B shares.

o With respect to Class C shares, the Class C contingent deferred sales
charge is imposed on Class C shares acquired by exchange if they are redeemed
within 12 months of the initial purchase of the exchanged Class C shares.

o With respect to Class N shares, a 1% contingent deferred sales charge
will be imposed if the retirement plan (not including IRAs and 403(b) plans)
is terminated or Class N shares of all Oppenheimer funds are terminated as an
investment option of the plan and Class N shares are redeemed within 18
months after the plan's first purchase of Class N shares of any Oppenheimer
fund or with respect to an individual retirement plan or 403(b) plan, Class N
shares are redeemed within 18 months of the plan's first purchase of Class N
shares of any Oppenheimer fund.

o When Class B, Class C or Class N shares are redeemed to effect an
exchange, the priorities described in "How To Buy Shares" in the Prospectus
for the imposition of the Class B, Class C or Class N contingent deferred
sales charge will be followed in determining the order in which the shares
are exchanged. Before exchanging shares, shareholders should take into
account how the exchange may affect any contingent deferred sales charge that
might be imposed in the subsequent redemption of remaining shares.

Shareholders owning shares of more than one class must specify which
class of shares they wish to exchange.

|X| Limits on Multiple Exchange Orders. The Fund reserves the right
to reject telephone or written exchange requests submitted in bulk by anyone
on behalf of more than one account. The Fund may accept requests for
exchanges of up to 50 accounts per day from representatives of authorized
dealers that qualify for this privilege.

|X| Telephone Exchange Requests. When exchanging shares by telephone,
a shareholder must have an existing account in the fund to which the exchange
is to be made. Otherwise, the investors must obtain a prospectus of that fund
before the exchange request may be submitted. If all telephone lines are busy
(which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.

Processing Exchange Requests. Shares to be exchanged are redeemed on the
regular business day the Transfer Agent receives an exchange request in
proper form (the "Redemption Date"). Normally, shares of the fund to be
acquired are purchased on the Redemption Date, but such purchases may be
delayed by either fund up to five business days if it determines that it
would be disadvantaged by an immediate transfer of the redemption proceeds.
The Fund reserves the right, in its discretion, to refuse any exchange
request that may disadvantage it. For example, if the receipt of multiple
exchange requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the Fund,
the Fund may refuse the request.

When you exchange some or all of your shares from one fund to another,
any special account feature such as an Asset Builder Plan or Automatic
Withdrawal Plan, will be switched to the new fund account unless you tell the
Transfer Agent not to do so. However, special redemption and exchange
features such as Automatic Exchange Plans and Automatic Withdrawal Plans
cannot be switched to an account in Oppenheimer Senior Floating Rate Fund.

In connection with any exchange request, the number of shares exchanged
may be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information, or would include shares covered by a
share certificate that is not tendered with the request. In those cases, only
the shares available for exchange without restriction will be exchanged.

The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks. A shareholder should assure that
the fund selected is appropriate for his or her investment and should be
aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of one
fund and a purchase of shares of another. "Reinvestment Privilege," above,
discusses some of the tax consequences of reinvestment of redemption proceeds
in such cases. The Fund, the Distributor, and the Transfer Agent are unable
to provide investment, tax or legal advice to a shareholder in connection
with an exchange request or any other investment transaction.

Dividends, Capital Gains and Taxes

Dividends and Distributions. Dividends will be payable on shares held of
record at the time of the previous determination of net asset value, or as
otherwise described in "How to Buy Shares." Daily dividends will not be
declared or paid on newly purchased shares until such time as Federal Funds
(funds credited to a member bank's account at the Federal Reserve Bank) are
available from the purchase payment for such shares. Normally, purchase
checks received from investors are converted to Federal Funds on the next
business day. Shares purchased through dealers or brokers normally are paid
for by the third business day following the placement of the purchase order.

Shares redeemed through the regular redemption procedure will be paid
dividends through and including the day on which the redemption request is
received by the Transfer Agent in proper form. Dividends will be declared on
shares repurchased by a dealer or broker for three business days following
the trade date (that is, up to and including the day prior to settlement of
the repurchase). If all shares in an account are redeemed, all dividends
accrued on shares of the same class in the account will be paid together with
the redemption proceeds.

The Fund's practice of attempting to pay dividends on Class A shares at
a constant level requires the Manager to monitor the Fund's portfolio and, if
necessary, to select higher-yielding securities when it is deemed appropriate
to seek income at the level needed to meet the target. Those securities must
be within the Fund's investment parameters, however. The Fund expects to pay
dividends at a targeted level from its net investment income and other
distributable income without any impact on the net asset values per share.

The Fund has no fixed dividend rate for Class B, Class C, Class N and
Class Y shares, and the rate can change for Class A shares. There can be no
assurance as to the payment of any dividends or the realization of any
capital gains. The dividends and distributions paid by a class of shares will
vary from time to time depending on market conditions, the composition of the
Fund's portfolio, and expenses borne by the Fund or borne separately by a
class. Dividends are calculated in the same manner, at the same time, and on
the same day for each class of shares. However, dividends on Class B, Class C
and Class N shares are expected to be lower than dividends on Class A and
Class Y shares. That is because of the effect of the asset-based sales charge
on Class B, Class C and Class N shares. Those dividends will also differ in
amount as a consequence of any difference in the net asset values of the
different classes of shares.

Dividends, distributions and proceeds of the redemption of Fund shares
represented by checks returned to the Transfer Agent by the Postal Service as
undeliverable will be invested in shares of Oppenheimer Money Market Fund,
Inc. Reinvestment will be made as promptly as possible after the return of
such checks to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds. Unclaimed accounts may be subject to state escheatment
laws, and the Fund and the Transfer Agent will not be liable to shareholders
or their representatives for compliance with those laws in good faith.

Dividends and Distributions. The Fund has no fixed dividend rate and there
can be no assurance as to the payment of any dividends or the realization of
any capital gains. The dividends and distributions paid by a class of shares
will vary from time to time depending on market conditions, the composition
of the Fund's portfolio, and expenses borne by the Fund or borne separately
by a class. Dividends are calculated in the same manner, at the same time,
and on the same day for each class of shares. However, dividends on Class B,
Class C and Class N shares are expected to be lower than dividends on Class A
and Class Y shares. That is because of the effect of the asset-based sales
charge on Class B, Class C and Class N shares. Those dividends will also
differ in amount as a consequence of any difference in the net asset values
of the different classes of shares.

Dividends, distributions and proceeds of the redemption of Fund shares
represented by
checks returned to the Transfer Agent by the Postal Service as undeliverable
will be invested in shares of Oppenheimer Money Market Fund, Inc.
Reinvestment will be made as promptly as possible after the return of such
checks to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds. Unclaimed accounts may be subject to state escheatment
laws, and the Fund and the Transfer Agent will not be liable to shareholders
or their representatives for compliance with those laws in good faith.

Tax Status of the Fund's Dividends, Distributions and Redemptions of Shares.
The federal tax treatment of the Fund's dividends and capital gains
distributions is briefly highlighted in the Prospectus. The following is only
a summary of certain additional tax considerations generally affecting the
Fund and its shareholders.

The tax discussion in the Prospectus and this Statement of Additional
Information is based on tax law in effect on the date of the Prospectus and
this Statement of Additional Information. Those laws and regulations may be
changed by legislative, judicial, or administrative action, sometimes with
retroactive effect. State and local tax treatment of ordinary income
dividends and capital gain dividends from regulated investment companies may
differ from the treatment under the Internal Revenue Code described below.
Potential purchasers of shares of the Fund are urged to consult their tax
advisers with specific reference to their own tax circumstances as well as
the consequences of federal, state and local tax rules affecting an
investment in the Fund.

Qualification as a Regulated Investment Company. The Fund has elected
to be taxed as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended. As a regulated investment company,
the Fund is not subject to federal income tax on the portion of its net
investment income (that is, taxable interest, dividends, and other taxable
ordinary income, net of expenses) and capital gain net income (that is, the
excess of net long-term capital gains over net short-term capital losses)
that it distributes to shareholders. That qualification enables the Fund to
"pass through" its income and realized capital gains to shareholders without
having to pay tax on them. This avoids a "double tax" on that income and
capital gains, since shareholders normally will be taxed on the dividends and
capital gains they receive from the Fund (unless their Fund shares are held
in a retirement account or the shareholder is otherwise exempt from tax).

The Internal Revenue Code contains a number of complex tests relating
to qualification that the Fund might not meet in a particular year. If it did
not qualify as a regulated investment company, the Fund would be treated for
tax purposes as an ordinary corporation and would receive no tax deduction
for payments made to shareholders.

To qualify as a regulated investment company, the Fund must distribute
at least 90% of its investment company taxable income (in brief, net
investment income and the excess of net short-term capital gain over net
long-term capital loss) for the taxable year. The Fund must also satisfy
certain other requirements of the Internal Revenue Code, some of which are
described below. Distributions by the Fund made during the taxable year or,
under specified circumstances, within 12 months after the close of the
taxable year, will be considered distributions of income and gains for the
taxable year and will therefore count toward satisfaction of the
above-mentioned requirement.

To qualify as a regulated investment company, the Fund must derive at
least 90% of its gross income from dividends, interest, certain payments with
respect to securities loans, gains from the sale or other disposition of
stock or securities or foreign currencies (to the extent such currency gains
are directly related to the regulated investment company's principal business
of investing in stock or securities) and certain other income.

In addition to satisfying the requirements described above, the Fund
must satisfy an asset diversification test in order to qualify as a regulated
investment company. Under that test, at the close of each quarter of the
Fund's taxable year, at least 50% of the value of the Fund's assets must
consist of cash and cash items (including receivables), U.S. government
securities, securities of other regulated investment companies, and
securities of other issuers. As to each of those issuers, the Fund must not
have invested more than 5% of the value of the Fund's total assets in
securities of each such issuer and the Fund must not hold more than 10% of
the outstanding voting securities of each such issuer. No more than 25% of
the value of its total assets may be invested in the securities of any one
issuer (other than U.S. government securities and securities of other
regulated investment companies), or in two or more issuers which the Fund
controls and which are engaged in the same or similar trades or businesses.
For purposes of this test, obligations issued or guaranteed by certain
agencies or instrumentalities of the U.S. government are treated as U.S.
government securities.

Excise Tax on Regulated Investment Companies. Under the Internal
Revenue Code, by December 31 each year, the Fund must distribute 98% of its
taxable investment income earned from January 1 through December 31 of that
year and 98% of its capital gains realized in the period from November 1 of
the prior year through October 31 of the current year. If it does not, the
Fund must pay an excise tax on the amounts not distributed. It is presently
anticipated that the Fund will meet those requirements. To meet this
requirement, in certain circumstances the Fund might be required to liquidate
portfolio investments to make sufficient distributions to avoid excise tax
liability. However, the Board of Trustees and the Manager might determine in
a particular year that it would be in the best interests of shareholders for
the Fund not to make such distributions at the required levels and to pay the
excise tax on the undistributed amounts. That would reduce the amount of
income or capital gains available for distribution to shareholders.

Taxation of Fund Distributions. The Fund anticipates distributing
substantially all of its investment company taxable income for each taxable
year. Those distributions will be taxable to shareholders as ordinary income
and treated as dividends for federal income tax purposes.

Special provisions of the Internal Revenue Code govern the eligibility
of the Fund's dividends for the dividends-received deduction for corporate
shareholders. Long-term capital gains distributions are not eligible for the
deduction. The amount of dividends paid by the Fund that may qualify for the
deduction is limited to the aggregate amount of qualifying dividends that the
Fund derives from portfolio investments that the Fund has held for a minimum
period, usually 46 days. A corporate shareholder will not be eligible for the
deduction on dividends paid on Fund shares held for 45 days or less. To the
extent the Fund's dividends are derived from gross income from option
premiums, interest income or short-term gains from the sale of securities or
dividends from foreign corporations, those dividends will not qualify for the
deduction.

The Fund may either retain or distribute to shareholders its net
capital gain for each taxable year. The Fund currently intends to distribute
any such amounts. If net long term capital gains are distributed and
designated as a capital gain distribution, it will be taxable to shareholders
as a long-term capital gain and will be properly identified in reports sent
to shareholders in January of each year. Such treatment will apply no matter
how long the shareholder has held his or her shares or whether that gain was
recognized by the Fund before the shareholder acquired his or her shares.

If the Fund elects to retain its net capital gain, the Fund will be
subject to tax on it at the 35% corporate tax rate. If the Fund elects to
retain its net capital gain, the Fund will provide to shareholders of record
on the last day of its taxable year information regarding their pro rata
share of the gain and tax paid. As a result, each shareholder will be
required to report his or her pro rata share of such gain on their tax return
as long-term capital gain, will receive a refundable tax credit for his/her
pro rata share of tax paid by the Fund on the gain, and will increase the tax
basis for his/her shares by an amount equal to the deemed distribution less
the tax credit.

Investment income that may be received by the Fund from sources within
foreign countries may be subject to foreign taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries which
entitle the Fund to a reduced rate of, or exemption from, taxes on such
income.

Distributions by the Fund that do not constitute ordinary income
dividends or capital gain distributions will be treated as a return of
capital to the extent of the shareholder's tax basis in their shares. Any
excess will be treated as gain from the sale of those shares, as discussed
below. Shareholders will be advised annually as to the U.S. federal income
tax consequences of distributions made (or deemed made) during the year. If
prior distributions made by the Fund must be re-characterized as a
non-taxable return of capital at the end of the fiscal year as a result of
the effect of the Fund's investment policies, they will be identified as such
in notices sent to shareholders.

Distributions by the Fund will be treated in the manner described above
regardless of whether the distributions are paid in cash or reinvested in
additional shares of the Fund (or of another fund). Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the fair market value of the shares
received, determined as of the reinvestment date.

The Fund will be required in certain cases to withhold 28% of ordinary
income dividends, capital gains distributions and the proceeds of the
redemption of shares, paid to any shareholder (1) who has failed to provide a
correct taxpayer identification number or to properly certify that number
-------
when required, (2) who is subject to backup withholding for failure to report
the receipt of interest or dividend income properly, or (3) who has failed to
certify to the Fund that the shareholder is not subject to backup withholding
or is an "exempt recipient" (such as a corporation). All income and any tax
withheld by the Fund is remitted by the Fund to the U.S. Treasury and is
identified in reports mailed to shareholders in January of each year.

Tax Effects of Redemptions of Shares. If a shareholder redeems all or a
portion of his/her shares, the shareholder will recognize a gain or loss on
the redeemed shares in an amount equal to the difference between the proceeds
of the redeemed shares and the shareholder's adjusted tax basis in the
shares. All or a portion of any loss recognized in that manner may be
disallowed if the shareholder purchases other shares of the Fund within 30
days before or after the redemption.
In general, any gain or loss arising from the redemption of shares of
the Fund will be considered capital gain or loss, if the shares were held as
a capital asset. It will be long-term capital gain or loss if the shares were
held for more than one year. However, any capital loss arising from the
redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of the amount of capital gain dividends
received on those shares. Special holding period rules under the Internal
Revenue Code apply in this case to determine the holding period of shares and
there are limits on the deductibility of capital losses in any year.

Foreign Shareholders. Under U.S. tax law, taxation of a shareholder who
is a foreign person (to include, but not limited to, a nonresident alien
individual, a foreign trust, a foreign estate, a foreign corporation, or a
foreign partnership) primarily depends on whether the foreign person's income
from the Fund is effectively connected with the conduct of a U.S. trade or
business. Typically, ordinary income dividends paid from a mutual fund are
not considered "effectively connected" income.

Ordinary income dividends that are paid by the Fund (and are deemed not
"effectively connected income") to foreign persons will be subject to a U.S.
tax withheld by the Fund at a rate of 30%, provided the Fund obtains a
properly completed and signed Certificate of Foreign Status. The tax rate may
be reduced if the foreign person's country of residence has a tax treaty with
the U.S. allowing for a reduced tax rate on ordinary income dividends paid by
the Fund. All income and any tax withheld by the Fund is remitted by the Fund
to the U.S. Treasury and is identified in reports mailed to shareholders in
March of each year.

If the ordinary income dividends from the Fund are effectively
---
connected with the conduct of a U.S. trade or business, then the foreign
person may claim an exemption from the U.S. tax described above provided the
Fund obtains a properly completed and signed Certificate of Foreign Status.
If the foreign person fails to provide a certification of his/her foreign
status, the Fund will be required to withhold U.S. tax at a rate of 28% on
ordinary income dividends, capital gains distributions and the proceeds of
the redemption of shares, paid to any foreign person. All income and any tax
withheld (in this situation) by the Fund is remitted by the Fund to the U.S.
Treasury and is identified in reports mailed to shareholders in January of
each year.

The tax consequences to foreign persons entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisors or the U.S.
Internal Revenue Service with respect to the particular tax consequences to
them of an investment in the Fund, including the applicability of the U.S.
withholding taxes described above.

Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the
same class of any of the other Oppenheimer funds listed above. Reinvestment
will be made without sales charge at the net asset value per share in effect
at the close of business on the payable date of the dividend or distribution.
To elect this option, the shareholder must notify the Transfer Agent in
writing and must have an existing account in the fund selected for
reinvestment. Otherwise the shareholder first must obtain a prospectus for
that fund and an application from the Distributor to establish an account.
Dividends and/or distributions from shares of certain other Oppenheimer funds
(other than Oppenheimer Cash Reserves) may be invested in shares of this Fund
on the same basis.

Additional Information About the Fund

The Distributor. The Fund's shares are sold through dealers, brokers and
other financial institutions that have a sales agreement with
OppenheimerFunds Distributor, Inc., a subsidiary of the Manager that acts as
the Fund's Distributor. The Distributor also distributes shares of the other
Oppenheimer funds and is sub-distributor for funds managed by a subsidiary of
the Manager.

The Transfer Agent. OppenheimerFunds Services, the Fund's Transfer Agent, is
a division of the Manager. It is responsible for maintaining the Fund's
shareholder registry and shareholder accounting records, and for paying
dividends and distributions to shareholders. It also handles shareholder
servicing and administrative functions. It serves as the Transfer Agent for
an annual per account fee. It also acts as shareholder servicing agent for
the other Oppenheimer funds. Shareholders should direct inquiries about their
accounts to the Transfer Agent at the address and toll-free numbers shown on
the back cover.

The Custodian. J.P. Morgan Chase Bank is the custodian of the Fund's assets.
The custodian's responsibilities include safeguarding and controlling the
Fund's portfolio securities and handling the delivery of such securities to
and from the Fund. It is the practice of the Fund to deal with the custodian
in a manner uninfluenced by any banking relationship the custodian may have
with the Manager and its affiliates. The Fund's cash balances with the
custodian in excess of $100,000 are not protected by federal deposit

insurance. Those uninsured balances at times may be substantial.A-2

Independent Auditors. Deloitte & Touche LLP are the independent auditors of
the Fund. They audit the Fund's financial statements and perform other
related audit services. They also act as auditors for the Manager and certain
other funds advised by the Manager and its affiliates. Audit and non-audit
services provided to the Fund must be pre-approved by the Audit Committee.
Non-audit services provided by Deloitte & Touche LLP to the Manager and
certain related companies must also be pre-approved by the Audit Committee.

INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of Oppenheimer Strategic Income Fund:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Strategic Income Fund, including the statement of investments, as
of September 30, 2003, 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 the periods
indicated. 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 auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of September 30, 2003, by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Strategic Income Fund as of September 30, 2003, 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 the
periods indicated, in conformity with accounting principles generally accepted
in the United States of America.

Deloitte & Touche LLP

Denver, Colorado
November 14, 2003

STATEMENT OF INVESTMENTS September 30, 2003
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities--4.9%

American Money Management Corp., Commercial Debt Obligations
Sub. Bonds, Series I, Cl. D1, 13.602%, 1/15/12
1 $ 8,642,914 $ 6,222,898
---------------------------------------------------------------------------------------------------------------------------
Asset Backed Securities Corp., Home Equity Loan Trust Asset-Backed
Pass-Through Certificates, Series 2001-HE1, Cl. B, 3.62%, 4/15/31
2 5,000,000 4,905,027
---------------------------------------------------------------------------------------------------------------------------
BMW Vehicle Owner Trust, Automobile Loan Certificates,
Series 2003-A, Cl. A2, 1.45%,
11/25/05 12,610,000
12,626,566
---------------------------------------------------------------------------------------------------------------------------
Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts.,
Series 2003-2, Cl. A2A, 1.20%,
5/16/05 7,930,000
7,927,683
---------------------------------------------------------------------------------------------------------------------------
Caterpillar Financial Asset Trust, Equipment Loan Pass-Through
Certificates, Series 2003-A, Cl. A2, 1.25%,
10/25/05 4,770,000 4,772,292
---------------------------------------------------------------------------------------------------------------------------
Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates:
Series 2003-A, Cl. AF1, 1.836%,
10/25/17 2,027,781
2,030,752
Series 2003-B, Cl. AF1, 1.64%,
2/25/18 2,634,865
2,635,494
Series 2003-C, Cl. AF1, 2.14%, 7/25/18
1 9,310,000
9,310,000
---------------------------------------------------------------------------------------------------------------------------
Chase Funding Mortgage Loan Asset-Backed Certificates, Home
Equity Mtg. Obligations:
Series 2003-3, Cl. 1A1, 1.20%, 8/25/17
2 4,686,865
4,686,908
Series 2003-4, Cl. 1A1, 1.24%, 9/25/17
1,2 9,324,826
9,325,243
---------------------------------------------------------------------------------------------------------------------------
Chase Manhattan Auto Owner Trust, Automobile Loan
Pass-Through Certificates:
Series 2003-A, Cl. A2, 1.26%,
1/16/06
3,420,000 3,420,464
Series 2003-B, Cl. A2, 1.287%,
3/15/06 3,720,000
3,721,570
---------------------------------------------------------------------------------------------------------------------------
CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized
Mtg. Obligations:
Series 2003-1, Cl. AF1, 1.94%, 1/25/33
1 4,298,112
4,306,920
Series 2003-2, Cl. AF1, 1.21%, 5/25/33
2 5,277,571
5,276,670
Series 2003-3, Cl. AF1, 1.24%, 12/15/05
2 6,780,000 6,780,000
---------------------------------------------------------------------------------------------------------------------------
Conseco Finance Securitizations Corp., Home Equity Loan
Pass-Through Certificates, Series 2001-D, Cl. M2, 2.87%, 11/15/32
2 8,500,000 8,301,512
---------------------------------------------------------------------------------------------------------------------------
Conseco Finance Securitizations Corp., Manufactured Housing
Contract Sr. Sub. Pass-Through Certificates, Series 2000-2, Cl. M2,
10.32%, 12/1/30
1
5,000,000 1,153,125
---------------------------------------------------------------------------------------------------------------------------
Consumer Credit Reference Index Securities Program, Credit Card
Asset-Backed Certificates, Series 2002-B, Cl. FX, 10.421%, 3/22/07
1 15,000,000 15,863,672
---------------------------------------------------------------------------------------------------------------------------
Countrywide Asset-Backed Certificates, Inc., Home Equity Asset-Backed
Certificates, Series 2000-1, Cl. BV, 3.22%, 3/25/31
1,2 4,161,328 4,148,599
---------------------------------------------------------------------------------------------------------------------------
DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates:
Series 2002-B, Cl. A2, 2.20%,
4/6/05
1,270,568 1,274,146
Series 2003-A, Cl. A2, 1.52%, 12/8/05
1 13,960,000
13,995,941
---------------------------------------------------------------------------------------------------------------------------
DLJ Ltd., Collateralized Bond Obligations, Series1A, Cl. C2, 11.96%, 4/15/11
1,3,4 15,000,000 1,500
---------------------------------------------------------------------------------------------------------------------------
DVI Receivables Corp., Equipment Asset-Backed Certificates,
Series 2001-2, Cl. C, 4.405%, 11/11/09
1 3,083,887
2,006,454
---------------------------------------------------------------------------------------------------------------------------
Embarcadero Aircraft Securitization Trust, Airplane Collateral
Obligations, Series 2000-A, Cl. B, 0.678%, 8/15/25
1,3 2,275,078 11,375
---------------------------------------------------------------------------------------------------------------------------
First U.S.A. Credit Card Master Trust, Asset-Backed Certificates,
Series 2001-2, Cl. C, 2.07%, 11/20/06
2,5 10,000,000
10,020,426
---------------------------------------------------------------------------------------------------------------------------
Ford Credit Auto Owner Trust, Automobile Installment Sales,
Series 2003-A, Cl. A2A, 1.62%,
8/15/05 5,919,717
5,930,348

11 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities Continued

Goldman Sachs Asset Management CBO Ltd., Sub. Collateralized Bond
Obligations, Series 1A, Cl. D, 12.54%, 6/13/11
1 $ 7,200,842 $ 360,042
---------------------------------------------------------------------------------------------------------------------------
Green Tree Financial Corp., Manufactured Housing Contract Sr. Sub.
Pass-Through Certificates, Series 1997-5, Cl. M1, 6.95%, 5/15/29
1 5,000,000 3,340,625
---------------------------------------------------------------------------------------------------------------------------
Greenpoint Credit Manufactured Housing Contract Trust, Pass-Through
Certificates, Series 2000-3, Cl. IM1, 9.01%, 6/20/31
1 5,214,000 2,435,064
---------------------------------------------------------------------------------------------------------------------------
Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.:
Series 2002-2, Cl. A1, 1.91%,
4/16/07
3,988,720 4,003,065
Series 2003-3, Cl. A1, 1.50%,
1/15/08 12,398,618
12,432,693
---------------------------------------------------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust, Automobile Receivables Obligations:
Series 2003-1, Cl. A2, 1.46%,
9/19/05
7,810,000 7,817,915
Series 2003-3, Cl. A2, 1.52%, 4/21/06
1 15,520,000
15,565,638
---------------------------------------------------------------------------------------------------------------------------
Lehman ABS Manufactured Housing Contract, Commercial Mtg.
Pass-Through Certificates, Series 2001-B, Cl. A4, 5.27%,
9/15/18 5,258,697 5,538,548
---------------------------------------------------------------------------------------------------------------------------
Madison Avenue CDO Ltd., Commercial Debt Obligations, Series 2A,
Cl. C1, 3.43%, 3/24/14
1,2
3,000,000 30,000
---------------------------------------------------------------------------------------------------------------------------
MBNA Master Credit Card Trust, Asset-Backed Nts., Series 2000-H,
Cl. C, 2.32%, 1/15/13
2,5
5,000,000 4,901,246
---------------------------------------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations, Series 1999-I,
Cl. ECFD, 8.75%, 12/25/28
1
4,737,986 1,421,396
---------------------------------------------------------------------------------------------------------------------------
Nissan Auto Receivables Owner Trust, Auto Receivable Nts.:
Series 2003-A, Cl. A2, 1.45%,
5/16/05 11,140,000
11,152,204
Series 2003-B, Cl. A2, 1.20%,
11/15/05 13,170,000
13,166,272
---------------------------------------------------------------------------------------------------------------------------
Providian Master Trust, Sub. Collateralized Mtg. Obligations,
Series 2000-2, Cl. C, 7.98%, 4/15/09
5 6,200,000
6,394,203
---------------------------------------------------------------------------------------------------------------------------
Residential Funding Mortgage Securities II, Inc., Home Equity Loan
Pass-Through Certificates, Series 2003-HS1, Cl. AI2, 1.22%, 1/25/33
1,2 5,645,372 5,647,055
---------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc., Home Equity
Pass-Through Certificates, Series 2002-WM1, Cl. M2, 2.675%, 1/25/32
1,2 8,000,000 8,014,746
---------------------------------------------------------------------------------------------------------------------------
SB Finance Trust, Mtg. Pass-Through Certificates, Series 1999-1, Cl. D,
10.50%, 6/25/29
1
129,279 129,198
---------------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Collateralized Mtg. Obligations
Pass-Through Certificates, Series 1999-SP1, Cl. B, 9%,
5/25/29 5,417,369 5,461,807
---------------------------------------------------------------------------------------------------------------------------
Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed Obligations:
Series 2002-B, Cl. A3, 3.76%,
6/15/06
3,960,000 4,025,346
Series 2003-A, Cl. A2, 1.28%,
8/15/05 11,870,000
11,871,170
Series 2003-B, Cl. A2, 1.43%,
2/15/06
8,990,000 8,990,000
---------------------------------------------------------------------------------------------------------------------------
USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.,
Series 2003-1, Cl. A2, 1.22%,
4/17/06
7,860,000 7,861,295
---------------------------------------------------------------------------------------------------------------------------
Volkswagen Auto Loan Enhanced Trust, Automobile Loan Receivables,
Series 2003-1, Cl. A2, 1.11%,
12/20/05 15,550,000
15,535,814
---------------------------------------------------------------------------------------------------------------------------
Whole Auto Loan Trust, Automobile Loan Receivables, Series 2003-1,
Cl. A2A, 1.40%, 4/15/06
6
12,860,000 12,864,019

-----------------
Total Asset-Backed Securities (Cost
$358,500,746)
319,614,946

12 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------
Mortgage-Backed Obligations--20.3%
---------------------------------------------------------------------------------------------------------------------------
Government Agency--15.1%
---------------------------------------------------------------------------------------------------------------------------

FHLMC/FNMA/Sponsored--14.5%
Federal Home Loan Mortgage Corp.:
7%, 9/1/33
6 $
8,090,000 $ 8,542,534
7.50%,
2/1/32
7,975,595 8,533,969
8.50%,
8/1/31
5,280,441 5,679,184
10%,
4/1/20-5/1/20
779,243 881,100
10.50%,
5/1/20
833,912 969,337
11.50%,
10/1/16-1/1/18
741,148 839,849
12%,
6/1/17
1,656,698 1,890,606
---------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates:
Series 2347, Cl. PD, 6.50%,
8/15/31
15,413,000 16,300,675
Series 2368, Cl. PN, 6.50%,
7/15/28
4,746,158 4,774,015
Series 2410, Cl. NE, 6.50%,
9/15/30
25,000,000 26,322,532
Series 2413, Cl. MH, 6.50%,
2/15/32
25,000,000 26,698,632
Series 2423, Cl. PD, 6.50%,
11/15/30
13,700,000 14,002,838
Series 2430, Cl. GD, 6.50%,
11/15/30
25,000,000 25,782,032
Series 2430, Cl. ND, 6.50%,
1/15/31
25,000,000 25,703,235
Series 2500, Cl. FD, 1.62%, 6/15/32
2 3,786,591
3,820,565
Series 2526, Cl. FE, 1.52%, 6/15/29
2 3,695,839
3,717,110
Series 2551, Cl. FD, 1.52%, 1/15/33
2 3,215,663
3,228,173
---------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 204, Cl. IO, (16.409)%, 5/15/29
7 685,987
98,646
Series 206, Cl. IO, (29.393)%, 12/15/29
7 4,813,005 782,151
Series 207, Cl. IO, (41.686)%, 4/15/30
7 5,581,108
753,777
Series 208, Cl. IO, (40.435)%, 6/1/30
7 4,855,628
651,810
Series 212, Cl. IO, (24.476)%, 5/1/31
7 6,216,783
771,843
Series 214, Cl. IO, (41.10)%, 6/1/31
7 4,504,298
623,844
Series 217, Cl. IO, (38.747)%, 2/1/32
7 5,557,590
738,276
---------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Structured Pass-Through Securities,
Collateralized Mtg. Obligations:
Series H003, Cl. A2, 1.88%,
1/15/07
2,840,754 2,855,881
Series H006, Cl. A1, 1.724%, 4/15/08
1 2,987,562
2,990,982
Series T-42, Cl. A2, 5.50%,
2/25/42
2,106,457 2,151,730
---------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
5%, 10/1/33
6
15,474,000 15,478,828
5.50%,
10/1/33
75,104,000 76,629,512
6%, 10/25/33
6
107,052,000 110,497,790
6.50%,
1/1/29-11/25/33
64,755,341 67,428,786
6.50%, 10/25/33
6
111,971,000 116,729,767
7%,
9/1/29-12/1/29
1,297,209 1,374,138
7%, 10/25/33
6
307,357,000 324,934,132
8.50%,
7/1/32
1,325,134 1,427,739
9.50%,
4/1/20-3/15/21
332,213 368,056
10.50%,
10/1/19
82,565 94,053
11%,
10/15/15-2/1/26
1,210,973 1,383,415
15%,
4/15/13
808,615 969,054

13 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored Continued

Federal National Mortgage Assn., Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates:
Trust 1994-27, Cl. PH, 6.50%,
9/25/22 $ 1,938,885
$ 1,969,079
Trust 2001-38, Cl. CD, 6.50%,
5/25/29
3,342,427 3,349,381
Trust 2001-50, Cl. LD, 6.50%,
5/25/30 11,012,000
11,254,761
Trust 2002-77, Cl. WF, 1.52%, 12/18/32
2 5,601,063
5,616,953
---------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates Interest-Only Stripped Mtg.-Backed Security:
Trust 2001-T3, Cl. IO, (11.625)%, 2/25/29
1,7 58,756,450 1,193,490
Trust 2001-T4, Cl. IO, (11.932)%, 7/25/28
1,7 98,012,124 2,511,561
---------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Security, Trust 2001-T10,
Cl. IO, 1.32%, 12/25/31
1,7
583,834,118 9,122,408
---------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Trust 313, Cl. 2, (42.47)%, 6/25/31
7 24,595,679
3,311,137
Trust 321, Cl. 2, (9.30)%, 3/1/32
7 5,761,283
854,430

-----------------

946,603,796

---------------------------------------------------------------------------------------------------------------------------
GNMA/Guaranteed--0.6%
Government National Mortgage Assn.:
7%,
1/15/28-1/20/30
11,490,514 12,228,672
8%,
1/15/28-9/15/28
6,320,906 6,834,851
12.50%,
12/15/13-11/15/15
4,095,620 4,753,760
13%,
10/15/15
6,294,786 7,367,476
13.50%,
6/15/15
7,843,554 9,238,266

-----------------

40,423,025

---------------------------------------------------------------------------------------------------------------------------
Private--5.2%
---------------------------------------------------------------------------------------------------------------------------
Agricultural--0.0%
Prudential Agricultural Credit, Inc., Farmer Mac Agricultural Real Estate
Trust Sr. Sub. Mtg. Pass-Through Certificates:
Series 1992-2, Cl. B2, 2.638%,1/15/03
1,3 661,737
--
Series 1992-2, Cl. B3, 8.13%, 4/15/09
1,2 1,388,705
305,515

-----------------

305,515

---------------------------------------------------------------------------------------------------------------------------
Commercial--3.9%
Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates:
Series 1995-MD4, Cl. A4, 7.384%,
8/13/29 5,000,000
5,773,433
Series 1995-MD4, Cl. A5, 7.384%,
8/13/29 20,000,000
23,051,082
Series 1997-MD7, Cl. A1B, 7.41%,
1/13/30 7,000,000
7,746,072
Series 1996-D2, Cl. A3, 4.786%, 2/14/29
2 11,767,000 12,518,736
Series 1997-D4, Cl. B1, 7.525%,
4/14/29 9,875,000
9,504,508
Series 1996-MD6, Cl. A7, 7.962%, 11/13/29
2 18,860,000 16,918,465
---------------------------------------------------------------------------------------------------------------------------
CBA Mortgage Corp., Commercial Mtg. Pass-Through Certificates,
Series 1993-C1, Cl. F, 6.72%, 12/25/03
1 14,300,000
14,180,461
---------------------------------------------------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp., Collateralized Mtg.
Obligations, Series 1996-C2, Cl. F, 7.691%, 9/15/23
2,5 2,500,000 2,667,966
---------------------------------------------------------------------------------------------------------------------------
CS First Boston Mortgage Securities Corp., Commercial Mtg.
Interest-Only Certificates, Series 2002-CKP1, Cl. AX, 12.06%, 12/15/35
5,7 415,485,486 6,324,354

14 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------
Commercial Continued

DLJ Commercial Mortgage Corp., Commercial Mtg. Pass-Through
Certificates, Series 1999-STF1, Cl. B6, 7/5/08
1,3 $ 55,709,338 $ 55,709
---------------------------------------------------------------------------------------------------------------------------
DLJ Mortgage Acceptance Corp., Commercial Mtg. Obligations,
Series 1997-CF2, Cl. B30C, 6.99%, 10/15/30
1 36,400,000 18,149,040
---------------------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates:
Series 1997-CHL1, Cl. D, 7.975%, 4/29/39
1,2 8,500,001 8,538,515
Series 1997-CHL1, Cl. E, 7.975%, 4/29/39
1,2 14,500,002 12,184,540
---------------------------------------------------------------------------------------------------------------------------
GE Capital Mortgage Services, Inc., Interest-Only Gtd. Real Estate
Mtg. Investment Conduit Pass-Through Certificates:
Series 1999-5, Cl. S, (94.877)%, 5/25/29
1,7 71,892,440 179,731
Series 1999-11, Cl. S, (92.407)%, 7/25/29
1,7 94,224,085 206,115
---------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Commercial Mortgage Finance Corp., Commercial
Interest-Only Mtg. Obligations, Series 1999-PLS1, Cl. X, 13.964%, 2/15/32
1,7 115,301,812 2,274,905
---------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Commercial Mortgage Finance Corp., Commercial Mtg.
Obligations, Series 2000-C9, Cl. A2, 7.77%,
10/15/32 10,700,000 12,746,804
---------------------------------------------------------------------------------------------------------------------------
LB Commercial Mortgage Trust, Commercial Mtg. Pass-Through
Certificates, Series 1999-C2, Cl. C, 7.47%,
10/15/32 8,429,000 9,914,057
---------------------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust, Commercial Mtg. Pass-Through
Certificates, Series 2000-C3, Cl. A2, 7.95%,
1/15/10 10,000,000 12,100,766
---------------------------------------------------------------------------------------------------------------------------
Lehman Structured Securities Corp., Collateralized Mtg. Obligations,
Series 2002-GE1, Cl. A, 2.514%, 7/26/24
1,2 1,864,242 1,789,672
---------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates,
Series 1995-C2, Cl. D, 7.689%, 6/15/21
2 1,311,423
1,428,387
---------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates:
Series 1996-C1, Cl. F, 7.442%, 2/15/28
2,5 13,360,980
12,133,603
Series 1997-RR, Cl. D, 7.702%, 4/30/39
2,5 2,950,159
2,736,414
Series 1997-RR, Cl. E, 7.702%, 4/30/39
2,5 9,200,496
7,387,271
Series 1997-RR, Cl. F, 7.702%, 4/30/39
2,5 30,801,659
20,834,333
Series 1997-XL1, Cl. G, 7.695%, 10/3/30
5 14,358,000 13,372,315
---------------------------------------------------------------------------------------------------------------------------
Norwest Asset Securities Corp., Collateralized Mtg. Obligations
Pass-Through Certificates, Series 1999-18, Cl. A2, 6%,
7/25/29 731,409 731,221
---------------------------------------------------------------------------------------------------------------------------
PNC Mortgage Acceptance Corp., Commercial Mtg. Obligations,
Series 2001-C1, Cl. A2, 6.36%,
3/12/34 10,000,000
11,287,300
---------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg.
Pass-Through Certificates, Series 1996-C1, Cl. F, 8.467%, 1/20/06
1,2 9,632,000 8,993,880
---------------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Commercial Mtg. Obligations,
Series 1995-C4, Cl. E, 8.598%, 6/25/26
1,2 234,418
234,453

-----------------

255,964,108

---------------------------------------------------------------------------------------------------------------------------
Multifamily--0.0%
Countrywide Funding Corp., Mtg. Pass-Through Certificates:
Series 1993-11, Cl. B1, 6.25%,
2/25/09
219,164 219,119
Series 1993-11, Cl. B3, 6.25%, 2/25/09
1 117,412
88,059

-----------------

307,178

---------------------------------------------------------------------------------------------------------------------------
Other--0.1%
CIT Equipment Collateral, Equipment Receivable-Backed Nts.,
Series 2003-EF1, Cl. A2, 1.49%,
12/20/05 3,370,000
3,370,000

15 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Residential--1.2%
Citicorp Mortgage Securities, Inc., Collateralized Mtg. Obligations,
Series 2001-6, Cl. A4, 6.50%,
5/25/29 $ 19,550,000 $
20,002,324
---------------------------------------------------------------------------------------------------------------------------
Countrywide Funding Corp., Mtg. Pass-Through Certificates,
Series 1993-12, Cl. B1, 6.625%,
2/25/24
506,787 506,701
---------------------------------------------------------------------------------------------------------------------------
Granite Mortgages plc, Mtg.-Backed Obligations, Series 2002-2,
Cl. 1A1, 1.22%, 1/21/17
2
193,154 193,148
---------------------------------------------------------------------------------------------------------------------------
Lehman Structured Securities Corp., Collateralized Interest-Only Mtg.
Pass-Through Certificates, Series 2001-GE9, Cl. A, (99.999)%, 1/25/31
1,7 24,110,812 1,446,649
---------------------------------------------------------------------------------------------------------------------------
Lehman Structured Securities Corp., Collateralized Mtg. Obligations,
Series 2001-GE4, Cl. A, 8.946%, 10/25/30
2 3,665,102 3,710,916
---------------------------------------------------------------------------------------------------------------------------
Norwest Asset Securities Corp., Collateralized Mtg. Obligations,
Mtg. Pass-Through Certificates, Series 1999-18, Cl. A17, 6.75%,
7/25/29 11,886,286 11,977,596
---------------------------------------------------------------------------------------------------------------------------
Residential Accredit Loans, Inc., Collateralized Mtg. Obligations,
Mtg. Asset-Backed Pass-Through Certificates, Series 1997-QS8, Cl. M3,
7.50%,
8/25/27
2,428,578 2,426,890
---------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc., Collateralized
Mtg. Obligations:
Series 2000-UP1, Cl. A2, 8%,
9/25/30
3,443,924 3,592,303
Series 2001-UP2, Cl. AF2, 7.25%,
10/25/31 4,088,518
4,291,014
---------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg.
Pass-Through Certificates, Series 1996-B, Cl. 1, 7.254%, 4/25/26
1,2 3,307,453 2,842,342
---------------------------------------------------------------------------------------------------------------------------
Salomon Smith Barney RV Trust, Recreational Vehicles Mtg. Obligations,
Series 2001-1, Cl. B, 6.64%, 4/15/18
1 2,500,000
2,614,287
---------------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Collateralized Mtg. Obligations
Pass-Through Certificates, Series 2001-9, Cl. 3A7, 6.75%,
6/25/31 14,000,000 14,420,248
---------------------------------------------------------------------------------------------------------------------------
Vendee Mortgage Trust, Interest-Only Stripped Mtg.-Backed Security:
Series 1992-2, Cl. IO, (15.256)%, 9/15/22
7 43,278,975 764,025
Series 1995-2B, Cl. 2IO, 17.595%, 6/15/25
7 3,594,545 56,228
Series 1995-3, Cl. 1IO, (20.741)%, 9/15/25
7 111,790,469 681,922
---------------------------------------------------------------------------------------------------------------------------
Washington Mutual Mortgage Securities Corp., Collateralized Mtg.
Obligations, Pass-Through Certificates, Series 2003-AR7, Cl. A1,
1.51%, 8/25/33
2
8,394,074 8,379,766

-----------------

77,906,359

-----------------
Total Mortgage-Backed Obligations (Cost
$1,322,093,175) 1,324,879,981

---------------------------------------------------------------------------------------------------------------------------
U.S. Government Obligations--6.8%
Federal Home Loan Mortgage Corp. Unsec. Nts.:
2.75%, 8/15/06
8
80,000,000 81,346,000
4.50%,
1/15/13
16,000,000 16,217,024
4.50%, 7/15/13
8
16,000,000 16,188,976
4.875%, 3/15/07
8
2,000,000 2,159,886
---------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Unsec. Nts.:
4.25%, 7/15/07
8
43,000,000 45,517,005
5.50%, 2/15/06
8
33,480,000 36,317,430
7.25%, 5/15/30
8
48,000,000 60,229,536
---------------------------------------------------------------------------------------------------------------------------
Resolution Funding Corp. Federal Book Entry Principal Strips,
6.14%, 1/15/21
8,9
52,460,000 20,486,574

16 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------
U.S. Government Obligations Continued

U.S. Treasury Bonds:
5.375%, 2/15/31
8 $
4,553,000 $ 4,887,363
5.50%, 8/15/28
8,10
48,750,000 52,234,894
6.125%, 11/15/27
8
3,909,000 4,528,791
6.25%, 5/15/30
8
2,594,000 3,078,858
9.25%, 2/15/16
8,11,12
32,000,000 47,106,272
STRIPS, 4.93%, 2/15/16
9
34,499,000 19,300,293
STRIPS, 4.94%, 8/15/17
8,9
19,980,000 10,166,763
STRIPS, 5.94%, 11/15/24
8,9
32,490,000 10,542,973
---------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
5.75%,
8/15/10
7,000,000 8,016,372
6.50%, 2/15/10
8
4,615,000 5,477,973

-----------------
Total U.S. Government Obligations (Cost
$436,627,514) 443,802,983

---------------------------------------------------------------------------------------------------------------------------
Foreign Government Obligations--27.2%
---------------------------------------------------------------------------------------------------------------------------
Argentina--0.9%
Argentina (Republic of) Bonds:
1.162%, 8/3/12
2
83,835,000 50,586,961
1.278%, 5/3/05
3,4
1,218,000 1,120,560
2%, 9/30/08 1
[ARP]
12,985,000 3,446,747
Series PR12, 2%, 1/3/16 1,3,4
[ARP]
224,891 52,314
---------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Disc. Bonds, 2.345%, 3/31/23
3,4 3,800,000 1,881,000
---------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Par Bonds, 5.984%, 3/31/23
3 5,450,000 2,697,750
---------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Treasury Bills, 14.75%, 10/8/04 9
[ARP] 253,000 76,791
---------------------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas,
Series PBA1, 3.257%, 4/1/07 1,3
[ARP]
1,374,528 454,303
---------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank, Argentina (Republic of) Treasury Bills, 8.84%,
2/20/04 1,9
[ARP]
480,000 157,555

-----------------

60,473,981

---------------------------------------------------------------------------------------------------------------------------
Austria--0.7%
Austria (Republic of) Nts.:
5.50%, 10/20/07
[EUR]
19,935,000 25,405,662
Series 98-3, 3.90%, 10/20/05
[EUR]
8,085,000 9,712,487
---------------------------------------------------------------------------------------------------------------------------
Austria (Republic of) Sr. Unsec. Unsub. Nts., Series 1, 5%, 7/15/12
[EUR] 7,740,000 9,735,245

-----------------

44,853,394

---------------------------------------------------------------------------------------------------------------------------
Belgium--0.9%
Belgium (Kingdom of) Bonds:
5%, 9/28/11
[EUR]
4,695,000 5,898,405
Series 19, 6.50%, 3/31/05
[EUR]
11,800,000 14,601,916
Series 26, 6.25%, 3/28/07
[EUR]
19,320,000 24,980,751
Series 28, 5.75%, 3/28/08
[EUR]
8,780,000 11,323,907

-----------------

56,804,979

---------------------------------------------------------------------------------------------------------------------------
Brazil--1.4%
Brazil (Federal Republic of) Bonds, Series 15 yr., 2.188%, 4/15/09
2 165,583 149,645

17 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Brazil Continued
Brazil (Federal Republic of) Unsec. Unsub. Bonds:
10%,
8/7/11
$ 38,482,000 $ 37,904,770
11%,
8/17/39
200 190
Cl. B, 8.875%,
4/15/24
63,760,000 51,071,760

-----------------

89,126,365

---------------------------------------------------------------------------------------------------------------------------
Canada--0.3%
Canada (Government of) Bonds, 5.50%, 6/1/10
[CAD] 21,195,000 16,919,561
---------------------------------------------------------------------------------------------------------------------------
Colombia--0.1%
Colombia (Republic of) Unsec. Unsub. Bonds, 8.375%,
2/15/27 7,235,000 6,620,025
---------------------------------------------------------------------------------------------------------------------------
Denmark--0.3%
Denmark (Kingdom of) Nts., 4%, 8/15/08
[DKK] 119,500,000
19,232,599
---------------------------------------------------------------------------------------------------------------------------
Dominican Republic--0.1%
Dominican Republic Unsec. Unsub. Bonds, 9.50%,
9/27/06 4,968,000 4,918,320
---------------------------------------------------------------------------------------------------------------------------
Finland--0.1%
Finland (Republic of) Sr. Unsec. Unsub. Bonds, 2.75%, 7/4/06
[EUR] 2,990,000 3,497,760
---------------------------------------------------------------------------------------------------------------------------
France--1.9%
France (Government of) Obligations Assimilables du Tresor Bonds:
5%, 4/25/12
[EUR]
19,197,000 24,052,671
5.50%, 10/25/07
[EUR]
6,225,000 7,930,033
---------------------------------------------------------------------------------------------------------------------------
France (Government of) Treasury Nts.:
3.50%, 7/12/04
[EUR]
42,210,000 49,713,068
3 yr., 3.50%, 1/12/05
[EUR]
20,895,000 24,763,357
5 yr., 4.75%, 7/12/07
[EUR]
795,000 985,773
5 yr., 5%, 7/12/05
[EUR]
15,700,000 19,152,807

-----------------

126,597,709

---------------------------------------------------------------------------------------------------------------------------
Germany--2.0%
Germany (Republic of) Bonds:
2%, 6/17/05
[EUR]
42,040,000 48,786,318
5.375%, 1/4/10
[EUR]
19,385,000 24,884,198
Series 01, 5%, 7/4/11
[EUR]
9,800,000 12,326,735
Series 02, 5%, 7/4/12
[EUR]
26,650,000 33,468,413
Series 140, 4.50%, 8/17/07
[EUR]
10,185,000 12,507,360

-----------------

131,973,024

---------------------------------------------------------------------------------------------------------------------------
Great Britain--0.5%
United Kingdom Treasury Nts., 7.50%, 12/7/06
[GBP] 19,525,000 35,510,793
---------------------------------------------------------------------------------------------------------------------------
Greece--1.0%
Greece (Republic of) Bonds:
3.50%, 4/18/08
[EUR]
41,835,000 49,345,706
4.60%, 5/20/13
[EUR]
2,720,000 3,282,099
5.35%, 5/18/11
[EUR]
10,900,000 13,930,963

-----------------

66,558,768

18 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Guatemala--0.1%
Guatemala (Republic of) Nts.:
10.25%,
11/8/11
$ 4,235,000 $ 4,870,250
10.25%, 11/8/11
5
2,910,000 3,346,500

-----------------

8,216,750

---------------------------------------------------------------------------------------------------------------------------
Italy--1.2%
Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali:
4%, 3/1/05
[EUR]
6,635,000 7,926,911
5%, 10/15/07
[EUR]
9,855,000 12,354,600
5%, 2/1/12
[EUR]
15,000,000 18,825,528
5.25%, 8/1/11
[EUR]
10,850,000 13,844,569
5.25%, 12/15/05
[EUR]
21,165,000 26,133,951

-----------------

79,085,559

---------------------------------------------------------------------------------------------------------------------------
Ivory Coast--0.0%
Ivory Coast (Government of) Front Loaded Interest Reduction Bonds,
2%, 3/29/18
1,3,4
87,000 14,817
---------------------------------------------------------------------------------------------------------------------------
Ivory Coast (Government of) Past Due Interest Bonds, 1.90%, 3/29/18 1,3,4
[FRF] 93,959,750 2,981,746

-----------------

2,996,563

---------------------------------------------------------------------------------------------------------------------------
Japan--6.7%
Japan (Government of) Bonds, 5 yr., Series 14, 0.40%, 6/20/06
[JPY] 48,740,000,000 437,340,227
---------------------------------------------------------------------------------------------------------------------------
Mexico--1.7%
Mexican Williams Sr. Nts., 1.258%, 11/15/08
1,2 1,500,000 1,563,750
---------------------------------------------------------------------------------------------------------------------------
United Mexican States Bonds:
6.75%, 6/6/06
[JPY]
707,000,000 7,241,822
7.50%,
4/8/33
10,545,000 11,045,887
8.30%,
8/15/31
6,210,000 7,066,980
---------------------------------------------------------------------------------------------------------------------------
United Mexican States Global Bonds, 9.875%,
1/15/07 38,925,000 47,332,800
---------------------------------------------------------------------------------------------------------------------------
United Mexican States Nts., 7.50%,
1/14/12 9,202,000
10,430,467
---------------------------------------------------------------------------------------------------------------------------
United Mexican States Sr. Nts., 9.75%,
4/6/05 3,485,000
3,911,913
---------------------------------------------------------------------------------------------------------------------------
United Mexican States Unsec. Unsub. Nts.:
8.50%,
2/1/06
10,455,000 11,929,155
Series 6 BR, 6.75%, 6/6/06
[JPY]
755,000,000 7,733,487

-----------------

108,256,261

---------------------------------------------------------------------------------------------------------------------------
Nigeria--0.1%
Central Bank of Nigeria Gtd. Bonds, Series WW, 6.25%,
11/15/20 3,695,000 3,288,550
---------------------------------------------------------------------------------------------------------------------------
Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%,
1/5/10 3,978,570 3,335,211

-----------------

6,623,761

---------------------------------------------------------------------------------------------------------------------------
Peru--0.6%
Peru (Republic of) Sr. Nts., 4.53%, 2/28/16
9 64,200,557 38,282,792
---------------------------------------------------------------------------------------------------------------------------
Philippines--0.5%
Philippines (Republic of) Bonds, 9.375%,
1/18/17 12,665,000 13,915,669

19 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Philippines Continued
Philippines (Republic of) Nts.:
9.875%,
3/16/10
$ 2,975,000 $ 3,369,187
10.625%,
3/16/25
2,920,000 3,387,200
---------------------------------------------------------------------------------------------------------------------------
Philippines (Republic of) Unsec. Bonds:
8.875%,
4/15/08
5,910,000 6,523,163
9.875%,
1/15/19
4,489,000 4,898,621

-----------------

32,093,840

---------------------------------------------------------------------------------------------------------------------------
Portugal--0.1%
Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Unsub.
Bonds, 5.85%, 5/20/10
[EUR]
4,365,000 5,742,914
---------------------------------------------------------------------------------------------------------------------------
Russia--3.0%
Ministry Finance of Russia Debs.:
Series V, 3%,
5/14/08
38,330,000 34,305,350
Series VI, 3%,
5/14/06
25,680,000 24,906,390
---------------------------------------------------------------------------------------------------------------------------
Russian Federation Unsec. Unsub. Nts.:
8.75%,
7/24/05
73,565,000 81,197,369
10%,
6/26/07
44,060,000 52,541,550
---------------------------------------------------------------------------------------------------------------------------
Russian Federation Unsub. Nts., 5%, 3/31/30
2 510,250 484,020

-----------------

193,434,679

---------------------------------------------------------------------------------------------------------------------------
Spain--1.0%
Spain (Kingdom of) Bonds, Bonos y Obligacion del Estado,
4.80%, 10/31/06
[EUR]
20,670,000 25,589,657
---------------------------------------------------------------------------------------------------------------------------
Spain (Kingdom of) Treasury Bills, 2.02%, 10/10/03 9
[EUR] 34,790,000 40,494,427

-----------------

66,084,084

---------------------------------------------------------------------------------------------------------------------------
Sweden--0.8%
Sweden (Kingdom of) Debs., Series 1040, 6.50%, 5/5/08
[SEK] 369,070,000 52,983,974
---------------------------------------------------------------------------------------------------------------------------
The Netherlands--0.9%
The Netherlands (Government of) Bonds:
4%, 7/15/05
[EUR]
4,475,000 5,367,701
5%, 7/15/11
[EUR]
8,795,000 11,080,028
Series 1, 5.75%, 2/15/07
[EUR]
34,200,000 43,571,394

-----------------

60,019,123

---------------------------------------------------------------------------------------------------------------------------
Turkey--0.1%
Turkey (Republic of) Sr. Unsec. Unsub. Nts., 11.875%,
1/15/30 5,045,000 5,852,200
---------------------------------------------------------------------------------------------------------------------------
Ukraine--0.2%
Ukraine (Government of) Bonds, 7.65%,
6/11/13 9,475,000
9,475,000
---------------------------------------------------------------------------------------------------------------------------
Ukraine (Government of) Sr. Unsec. Nts., 11%,
3/15/07 4,625,647 5,179,568

-----------------

14,654,568

-----------------
Total Foreign Government Obligations (Cost
$1,685,272,874) 1,774,754,573

20 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Loan Participations--1.1%
Algeria (Republic of) Loan Participation Nts., 2.063%, 3/4/10
1,2 $ 8,624,817 $ 8,290,605
---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, OAO Gazprom Loan Participation Nts., 6.50%,
8/4/05 25,000,000 25,090,000
---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Indonesian Rupiah Loan Participation Nts.:
2.636%,
3/25/05
23,680,000 20,542,400
2.636%,
5/21/04
20,675,000 18,969,313
---------------------------------------------------------------------------------------------------------------------------
Telergy, Inc., Sr. Sec. Credit Facilities Term Loan Participation Nts.,
Tranche A,
11.111%, 1/1/02
1,3,4
8,877,258 --

-----------------
Total Loan Participations (Cost
$76,504,437)
72,892,318

---------------------------------------------------------------------------------------------------------------------------
Corporate Bonds and Notes--35.4%
---------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary--10.2%
---------------------------------------------------------------------------------------------------------------------------
Auto Components--0.7%
Cambridge Industries, Inc., Liquidating Trust Interests, 7/15/07
1 5,189,534 --
---------------------------------------------------------------------------------------------------------------------------
Collins & Aikman Floorcoverings, Inc., 9.75% Sr. Sub. Nts., Series B, 2/15/10
1 1,900,000 2,014,000
---------------------------------------------------------------------------------------------------------------------------
Collins & Aikman Products Co., 10.75% Sr. Nts., 12/31/11
8 2,700,000 2,349,000
---------------------------------------------------------------------------------------------------------------------------
Dana Corp.:
9% Unsec. Nts., 8/15/11
8
8,920,000 9,812,000
10.125% Nts., 3/15/10
8
3,500,000 3,928,750
---------------------------------------------------------------------------------------------------------------------------
Dura Operating Corp.:
8.625% Sr. Nts., Series B, 4/15/12
8 2,500,000
2,606,250
9% Sr. Sub. Nts., Series B, 5/1/09
[EUR] 3,000,000
3,231,625
9% Sr. Unsec. Sub. Nts., Series D, 5/1/09
8 1,550,000 1,449,250
---------------------------------------------------------------------------------------------------------------------------
Eagle-Picher, Inc., 9.75% Sr. Nts., 9/1/13
5 2,500,000 2,637,500
---------------------------------------------------------------------------------------------------------------------------
Lear Corp., 8.11% Sr. Unsec. Nts., Series B,
5/15/09 1,300,000 1,501,500
---------------------------------------------------------------------------------------------------------------------------
Metaldyne Corp., 11% Sr. Sub. Nts., 6/15/12
8 4,900,000 4,410,000
---------------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12
8 7,750,000 8,893,125
---------------------------------------------------------------------------------------------------------------------------
Tenneco Automotive, Inc., 10.25% Sr. Sec. Nts., 7/15/13
5 3,100,000 3,379,000
---------------------------------------------------------------------------------------------------------------------------
United Components, Inc., 9.375% Sr. Sub. Nts., 6/15/13
5 1,600,000 1,672,000

-----------------

47,884,000

---------------------------------------------------------------------------------------------------------------------------
Automobiles--0.3%
DirecTV Holdings LLC, 8.375% Sr. Nts., 3/15/13
5 11,450,000 12,967,125
---------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co., 7.375% Nts.,
10/28/09 2,896,000
3,090,634

-----------------

16,057,759

---------------------------------------------------------------------------------------------------------------------------
Hotels, Restaurants & Leisure--2.8%
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08
1 4,875,000 1,730,625
---------------------------------------------------------------------------------------------------------------------------
Aztar Corp., 9% Sr. Unsec. Sub. Nts.,
8/15/11 4,000,000
4,345,000
---------------------------------------------------------------------------------------------------------------------------
Boca Resorts, Inc., 9.875% Sr. Sub. Nts.,
4/15/09 6,800,000 7,284,500
---------------------------------------------------------------------------------------------------------------------------
Boyd Gaming Corp., 8.75% Sr. Sub. Nts., 4/15/12
8 3,600,000 3,919,500
---------------------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/1995
1,3,4 33,500 --
---------------------------------------------------------------------------------------------------------------------------
Choctaw Resort Development Enterprise, 9.25% Sr. Unsec. Nts.,
4/1/09 3,000,000 3,232,500
---------------------------------------------------------------------------------------------------------------------------
Coast Hotels & Casinos, Inc., 9.50% Sr. Unsec. Sub. Nts.,
4/1/09 4,000,000 4,290,000
---------------------------------------------------------------------------------------------------------------------------
Dominos, Inc., 8.25% Sr. Sub. Nts., 7/1/11
5,8 3,200,000 3,396,000

21 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Hotels, Restaurants & Leisure Continued
Family Restaurants, Inc., 10.875% Sr. Sub. Disc. Nts., 2/1/04
1,3,4 $ 4,800,000 $ 48,000
---------------------------------------------------------------------------------------------------------------------------
Hilton Hotels Corp., 7.625% Nts., 12/1/12
8 6,800,000 7,463,000
---------------------------------------------------------------------------------------------------------------------------
Hollywood Park, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 2/15/07
8 5,250,000 5,387,812
---------------------------------------------------------------------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Nts., 8/15/08
8 8,050,000 8,502,813
---------------------------------------------------------------------------------------------------------------------------
Isle of Capri Casinos, Inc.:
8.75% Sr. Unsec. Nts.,
4/15/09
2,900,000 3,088,500
9% Sr. Sub. Nts., 3/15/12
8
7,200,000 7,866,000
---------------------------------------------------------------------------------------------------------------------------
John Q. Hammons Hotels, Inc., 8.875% Sr. Nts., Series B,
5/15/12 3,100,000 3,371,250
---------------------------------------------------------------------------------------------------------------------------
Jupiters Ltd., 8.50% Sr. Unsec. Nts., 3/1/06
1 7,100,000 7,783,375
---------------------------------------------------------------------------------------------------------------------------
Mandalay Resort Group:
9.375% Sr. Sub. Nts., 2/15/10
8
3,500,000 4,033,750
10.25% Sr. Unsec. Sub. Nts., Series B, 8/1/07
8 4,800,000 5,544,000
---------------------------------------------------------------------------------------------------------------------------
MGM Mirage, Inc., 8.375% Sr. Unsec. Sub. Nts., 2/1/11
8 5,100,000 5,635,500
---------------------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority:
6.375% Sr. Sub. Nts., 7/15/09
5
3,300,000 3,345,375
8% Sr. Sub. Nts., 4/1/12
8
1,900,000 2,061,500
8.125% Sr. Nts.,
1/1/06
3,750,000 4,064,063
8.375% Sr. Sub. Nts.,
7/1/11
1,600,000 1,752,000
---------------------------------------------------------------------------------------------------------------------------
Park Place Entertainment Corp., 7.875% Sr. Sub. Nts., 3/15/10
8 7,000,000 7,525,000
---------------------------------------------------------------------------------------------------------------------------
Penn National Gaming, Inc.:
8.875% Sr. Sub. Nts.,
3/15/10
3,700,000 4,000,625
11.125% Sr. Unsec. Sub. Nts., 3/1/08
8 8,000,000
9,010,000
---------------------------------------------------------------------------------------------------------------------------
Premier Cruise Ltd., 11% Sr. Nts., 3/15/08
1,3,4 10,800,000 --
---------------------------------------------------------------------------------------------------------------------------
Premier Parks, Inc., 9.75% Sr. Nts., 6/15/07
8 4,950,000 4,888,125
---------------------------------------------------------------------------------------------------------------------------
Prime Hospitality Corp., 8.375% Sr. Sub. Nts., 5/1/12
1 3,900,000 3,861,000
---------------------------------------------------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd.:
8% Sr. Unsec. Nts., 5/15/10
8
1,000,000 1,060,000
8.75% Sr. Unsub. Nts., 2/2/11
1,8
3,100,000 3,394,500
---------------------------------------------------------------------------------------------------------------------------
Six Flags, Inc.:
8.875% Sr. Nts., 2/1/10
8
6,000,000 5,535,000
9.75% Sr. Nts., 4/15/13
5,8
7,500,000 7,087,500
---------------------------------------------------------------------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, Inc., 7.875% Sr. Nts.,
5/1/12 8,000,000 8,800,000
---------------------------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
8.875% Sr. Unsec. Sub. Nts., 12/1/08
1 4,500,000
4,725,000
9.875% Sr. Unsec. Sub. Nts.,
7/1/10
3,500,000 3,889,375
---------------------------------------------------------------------------------------------------------------------------
Sun International Hotels Ltd., 8.875% Sr. Unsec. Sub. Nts.,
8/15/11 5,000,000 5,443,750
---------------------------------------------------------------------------------------------------------------------------
Trump Casino Holdings LLC/Trump Casino Funding, Inc.,
11.625% Sr. Sec. Nts.,
3/15/10
4,300,000 3,864,625
---------------------------------------------------------------------------------------------------------------------------
Universal City Development Partners, 11.75% Sr. Nts., 4/1/10
1 3,800,000 4,294,000
---------------------------------------------------------------------------------------------------------------------------
Vail Resorts, Inc., 8.75% Sr. Unsec. Sub. Nts., 5/15/09
1 2,000,000 2,112,500
---------------------------------------------------------------------------------------------------------------------------
Venetian Casino Resort LLC/Las Vegas Sands, Inc., 11% Sec. Nts., 6/15/10
8 3,800,000 4,351,000

-----------------

181,987,063

22 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Household Durables--1.0%
Beazer Homes USA, Inc., 8.375% Sr. Nts.,
4/15/12 $ 6,600,000 $ 7,161,000
---------------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc.:
9.375% Sr. Unsec. Sub. Nts., 3/15/11
1 2,100,000
2,299,500
9.75% Sr. Sub. Nts., 9/15/10
10
2,325,000 2,627,250
---------------------------------------------------------------------------------------------------------------------------
Del Webb Corp., 10.25% Sr. Unsec. Sub. Debs.,
2/15/10 8,000,000 8,640,000
---------------------------------------------------------------------------------------------------------------------------
Interface, Inc., 10.375% Sr. Nts., 2/1/10
8 1,500,000 1,511,250
---------------------------------------------------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc., 8.875% Sr. Sub. Nts.,
4/1/12 2,600,000 2,795,000
---------------------------------------------------------------------------------------------------------------------------
KB Home:
7.75% Sr. Nts.,
10/15/04
10,350,000 10,815,750
8.625% Sr. Sub. Nts.,
12/15/08
2,050,000 2,229,375
9.50% Sr. Unsec. Sub. Nts.,
2/15/11
700,000 770,875
---------------------------------------------------------------------------------------------------------------------------
Meritage Corp., 9.75% Sr. Nts., 6/1/11
5 2,500,000
2,750,000
---------------------------------------------------------------------------------------------------------------------------
Salton, Inc.:
10.75% Sr. Unsec. Sub. Nts.,
12/15/05
3,200,000 3,160,000
12.25% Sr. Sub. Nts., 4/15/08
8
2,000,000 1,965,000
---------------------------------------------------------------------------------------------------------------------------
Standard Pacific Corp., 9.25% Sr. Sub. Nts., 4/15/12
1 2,000,000 2,195,000
---------------------------------------------------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11
1 2,000,000 2,190,000
---------------------------------------------------------------------------------------------------------------------------
WCI Communities, Inc., 9.125% Sr. Sub. Nts.,
5/1/12 3,500,000 3,762,500
---------------------------------------------------------------------------------------------------------------------------
William Lyon Homes, Inc., 10.75% Sr. Nts.,
4/1/13 3,450,000 3,760,500
---------------------------------------------------------------------------------------------------------------------------
Williams Scotsman, Inc., 9.875% Sr. Unsec. Nts.,
6/1/07 4,800,000 4,752,000

-----------------

63,385,000

---------------------------------------------------------------------------------------------------------------------------
Internet & Catalog Retail--0.1%
InterActiveCorp, 7% Nts.,
1/15/13
6,842,000 7,730,995
---------------------------------------------------------------------------------------------------------------------------
Leisure Equipment & Products--0.0%
Remington Arms Co., Inc., 10.50% Sr. Unsec. Nts., 2/1/11
8 2,200,000 2,266,000
---------------------------------------------------------------------------------------------------------------------------
Media--4.2%
Adelphia Communications Corp.:
7.875% Sr. Unsec. Nts., 5/1/09
3,4
1,400,000 962,500
8.125% Sr. Nts., Series B, 7/15/03
3,4 3,750,000
2,587,500
8.375% Sr. Nts., Series B, 2/1/08
3,4 10,700,000
7,449,000
9.875% Sr. Nts., Series B, 3/1/07
3,4 1,500,000
1,053,750
10.25% Sr. Unsec. Nts., 11/1/06
3,4 6,300,000
4,378,500
10.25% Sr. Unsec. Sub. Nts., 6/15/11
3,4 2,600,000
1,872,000
10.50% Sr. Unsec. Nts., Series B, 7/15/04
3,4 4,000,000 2,800,000
10.875% Sr. Unsec. Nts., 10/1/10
3,4
100,000 70,500
---------------------------------------------------------------------------------------------------------------------------
Allbritton Communications Co., 7.75% Sr. Unsec. Sub. Nts.,
12/15/12 5,000,000 5,125,000
---------------------------------------------------------------------------------------------------------------------------
AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts.,
2/1/11 12,200,000 12,871,000
---------------------------------------------------------------------------------------------------------------------------
Block Communications, Inc., 9.25% Sr. Sub. Nts.,
4/15/09 3,000,000 3,225,000
---------------------------------------------------------------------------------------------------------------------------
British Sky Broadcasting Group plc, 8.20% Sr. Unsec. Nts.,
7/15/09 5,537,000 6,578,742
---------------------------------------------------------------------------------------------------------------------------
Callahan Nordrhein-Westfalen GmbH, 14.125% Sr. Nts., 7/15/11 1,3,4
[EUR] 3,000,000 157,214
---------------------------------------------------------------------------------------------------------------------------
CanWest Media, Inc., 7.625% Sr. Unsec. Sub. Nts., Cl. B, 4/15/13
8 900,000 967,500
---------------------------------------------------------------------------------------------------------------------------
Carmike Cinemas, Inc., 10.375% Gtd. Sr. Sub. Nts., Series B,
2/1/09 1,000,000 1,055,000
---------------------------------------------------------------------------------------------------------------------------
CBD Media LLC/CBD Finance, Inc., 8.625% Sr. Sub. Nts., 6/1/11
5 900,000 960,750

23 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Media Continued
Charter Communications Holdings LLC/
Charter Communications Holdings Capital Corp.:
0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11
13 $ 21,600,000 $
15,390,000
8.625% Sr. Unsec. Nts., 4/1/09
8 16,600,000
12,782,000
10% Sr. Nts.,
4/1/09
1,000,000 795,000
10% Sr. Unsec. Sub. Nts., 5/15/11
8 2,000,000
1,535,000
10.75% Sr. Unsec. Nts.,
10/1/09
1,300,000 1,069,250
11.125% Sr. Unsec. Nts., 1/15/11
8 3,200,000
2,632,000
---------------------------------------------------------------------------------------------------------------------------
Cinemark USA, Inc., 9% Sr. Unsec. Sub. Nts.,
2/1/13 3,200,000 3,432,000
---------------------------------------------------------------------------------------------------------------------------
Classic Cable, Inc., 10.50% Sr. Sub. Nts., 3/1/10
1,3,4 2,725,000 --
---------------------------------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc.:
7.65% Sr. Nts.,
9/15/10
4,690,000 5,569,347
7.875% Sr. Nts.,
6/15/05
1,000,000 1,098,662
---------------------------------------------------------------------------------------------------------------------------
Comcast Cable Communications, Inc.:
6.75% Sr. Unsub. Nts., 1/30/11
8
374,000 422,502
8.875% Unsub. Nts.,
5/1/17
1,845,000 2,409,957
---------------------------------------------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 11.20% Sr. Unsec. Disc. Debs.,
11/15/07 6,260,000 6,299,125
---------------------------------------------------------------------------------------------------------------------------
Corus Entertainment, Inc., 8.75% Sr. Sub. Nts.,
3/1/12 2,200,000 2,409,000
---------------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 7.625% Sr. Unsec. Unsub. Nts., Series B, 4/1/11
8 19,000,000 19,047,500
---------------------------------------------------------------------------------------------------------------------------
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08
8 1,600,000 1,602,000
---------------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp.:
9.125% Sr. Nts.,
1/15/09
2,206,000 2,509,325
9.375% Sr. Unsec. Nts.,
2/1/09
8,000,000 8,570,000
10.375% Sr. Unsec. Nts.,
10/1/07
11,850,000 13,242,375
---------------------------------------------------------------------------------------------------------------------------
Emmis Communications Corp.:
0%/12.50% Sr. Unsec. Disc. Nts., 3/15/11
8,13 8,128,000 7,274,560
8.125% Sr. Unsec. Sub. Nts., Series B, 3/15/09
8 5,925,000 6,206,438
---------------------------------------------------------------------------------------------------------------------------
Entercom Radio LLC/Entercom Capital, Inc., 7.625% Sr. Unsec.
Sub. Nts.,
3/1/14
2,000,000 2,115,000
---------------------------------------------------------------------------------------------------------------------------
Entravision Communications Corp., 8.125% Sr. Sub. Nts., 3/15/09
8 1,400,000 1,473,500
---------------------------------------------------------------------------------------------------------------------------
Hollinger International Publishing, Inc., 9% Sr. Unsec. Nts.,
12/15/10 3,175,000 3,361,531
---------------------------------------------------------------------------------------------------------------------------
Houghton Mifflin Co., 8.25% Sr. Unsec. Nts., 2/1/11
8 1,700,000 1,789,250
---------------------------------------------------------------------------------------------------------------------------
Insight Midwest LP/Insight Capital, Inc., 9.75% Sr. Nts., 10/1/09
8 1,500,000 1,518,750
---------------------------------------------------------------------------------------------------------------------------
Lamar Media Corp., 7.25% Sr. Unsec. Sub. Nts., 1/1/13
8 1,800,000 1,890,000
---------------------------------------------------------------------------------------------------------------------------
Lin Television Corp., 6.50% Sr. Sub. Nts., 5/15/13
5 2,200,000 2,150,500
---------------------------------------------------------------------------------------------------------------------------
LodgeNet Entertainment Corp., 9.50% Sr. Sub. Debs.,
6/15/13 1,550,000 1,650,750
---------------------------------------------------------------------------------------------------------------------------
Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec. Nts., 1/15/13
8 2,700,000 2,571,750
---------------------------------------------------------------------------------------------------------------------------
PanAmSat Corp., 8.50% Sr. Unsec. Nts., 2/1/12
8 9,200,000 9,683,000
---------------------------------------------------------------------------------------------------------------------------
PRIMEDIA, Inc., 8% Sr. Nts., 5/15/13
5 7,600,000
7,714,000
---------------------------------------------------------------------------------------------------------------------------
R.H. Donnelley Financial Corp. I:
8.875% Sr. Nts., 12/15/10
5,8
2,800,000 3,150,000
10.875% Sr. Sub. Nts., 12/15/12
5 4,300,000
5,095,500
---------------------------------------------------------------------------------------------------------------------------
Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11
8 2,900,000 3,168,250
---------------------------------------------------------------------------------------------------------------------------
Regal Cinemas, Inc., 9.375% Sr. Sub. Nts., Series B,
2/1/12 5,400,000 6,102,000
---------------------------------------------------------------------------------------------------------------------------
Shaw Communications, Inc., 8.54% Debs., 9/30/27
[CAD] 14,580,000 9,419,277

24 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Media Continued
Sinclair Broadcast Group, Inc.:
8% Sr. Unsec. Sub. Nts., 3/15/12
8 $ 11,400,000 $
12,084,000
8.75% Sr. Sub. Nts.,
12/15/11
800,000 874,000
---------------------------------------------------------------------------------------------------------------------------
Spanish Broadcasting System, Inc., 9.625% Sr. Unsec. Sub. Nts.,
11/1/09 10,850,000 11,528,125
---------------------------------------------------------------------------------------------------------------------------
Vertis, Inc., 9.75% Sr. Sec. Nts., 4/1/09
5 2,250,000 2,379,375
---------------------------------------------------------------------------------------------------------------------------
Vivendi Universal SA, 9.25% Sr. Nts., 4/15/10
5 3,100,000 3,576,625
---------------------------------------------------------------------------------------------------------------------------
World Color Press, Inc., 7.75% Sr. Unsec. Sub. Nts.,
2/15/09 2,500,000 2,642,863
---------------------------------------------------------------------------------------------------------------------------
WRC Media, Inc./Weekly Reader Corp./Compass Learning Corp.,
12.75% Sr. Sub. Nts.,
11/15/09
7,900,000 7,949,375

-----------------

270,297,418

---------------------------------------------------------------------------------------------------------------------------
Multiline Retail--0.3%
J. C. Penney Co., Inc., 8% Nts., 3/1/10
8 7,050,000 7,772,625
---------------------------------------------------------------------------------------------------------------------------
Saks, Inc.:
8.25% Sr. Unsec. Nts.,
11/15/08
5,420,000 5,962,000
9.875% Nts., 10/1/11
1
2,700,000 3,199,500

-----------------

16,934,125

---------------------------------------------------------------------------------------------------------------------------
Specialty Retail--0.6%
Asbury Automotive Group, Inc., 9% Sr. Sub. Nts., 6/15/12
8 5,900,000 5,929,500
---------------------------------------------------------------------------------------------------------------------------
AutoNation, Inc., 9% Sr. Unsec. Nts.,
8/1/08 5,500,000
6,187,500
---------------------------------------------------------------------------------------------------------------------------
CSK Auto, Inc., 12% Sr. Unsec. Nts., 6/15/06
8 6,700,000 7,520,750
---------------------------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 9.125% Sr. Unsec. Sub. Nts.,
5/1/08 3,775,000 3,737,250
---------------------------------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 9% Debs.,
5/1/08 3,200,000
3,196,000
---------------------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08
1,8 3,125,000 3,234,375
---------------------------------------------------------------------------------------------------------------------------
Gap, Inc. (The):
6.90% Nts.,
9/15/07
500,000 540,000
10.55% Unsub. Nts.,
12/15/08
1,200,000 1,449,000
---------------------------------------------------------------------------------------------------------------------------
Hollywood Entertainment Corp., 9.625% Sr. Sub. Nts.,
3/15/11 3,200,000 3,496,000
---------------------------------------------------------------------------------------------------------------------------
Just For Feet, Inc., 11% Sr. Sub. Nts., 5/1/09
1,3,4 4,300,000 --
---------------------------------------------------------------------------------------------------------------------------
Petco Animal Supplies, Inc., 10.75% Sr. Sub. Nts., 11/1/11
1 4,000,000 4,620,000
---------------------------------------------------------------------------------------------------------------------------
Rent-A-Center, Inc., 7.50% Sr. Sub. Nts., Cl. B,
5/1/10 1,250,000 1,320,313
---------------------------------------------------------------------------------------------------------------------------
United Auto Group, Inc., 9.625% Sr. Unsec. Sub. Nts., 3/15/12
8 400,000 439,000

-----------------

41,669,688

---------------------------------------------------------------------------------------------------------------------------
Textiles, Apparel & Luxury Goods--0.2%
Broder Brothers Co., 11.25% Sr. Nts., 10/15/10
5 2,800,000 2,849,000
---------------------------------------------------------------------------------------------------------------------------
Galey & Lord, Inc., 9.125% Sr. Unsec. Sub. Nts., 3/1/08
1,3,4 5,050,000 63,125
---------------------------------------------------------------------------------------------------------------------------
Levi Strauss & Co.:
11.625% Sr. Unsec. Nts.,
1/15/08
1,950,000 1,608,750
12.25% Sr. Nts., 12/15/12
8
2,200,000 1,771,000
---------------------------------------------------------------------------------------------------------------------------
Oxford Industries, Inc., 8.875% Sr. Nts., 6/1/11
5 1,500,000 1,605,000
---------------------------------------------------------------------------------------------------------------------------
Phillips/Van Heusen Corp.:
8.125% Sr. Nts., 5/1/13
1
600,000 631,500
9.50% Sr. Unsec. Sub. Nts., 5/1/08
1 3,750,000
3,881,250

25 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Textiles, Apparel & Luxury Goods Continued
Russell Corp., 9.25% Sr. Nts., 5/1/10
1 $ 2,500,000 $
2,662,500

-----------------

15,072,125

---------------------------------------------------------------------------------------------------------------------------
Consumer Staples--1.5%
---------------------------------------------------------------------------------------------------------------------------
Beverages--0.1%
Canandaigua Brands, Inc.:
8.50% Sr. Unsec. Sub. Nts.,
3/1/09
1,500,000 1,590,000
8.625% Sr. Unsec. Nts., 8/1/06
8 1,300,000
1,425,125
---------------------------------------------------------------------------------------------------------------------------
Constellation Brands, Inc., 8.125% Sr. Sub. Nts.,
1/15/12 2,000,000 2,170,000

-----------------

5,185,125

---------------------------------------------------------------------------------------------------------------------------
Food & Staples Retailing--0.3%
Delhaize America, Inc., 8.125% Unsub. Debs.,
4/15/11 9,605,000 10,613,525
---------------------------------------------------------------------------------------------------------------------------
Fleming Cos., Inc.:
10.125% Sr. Unsec. Nts., 4/1/08
3 6,000,000
1,020,000
10.625% Sr. Unsec. Sub. Nts., Series D, 7/31/07
1,3,8 1,000,000 5,100
---------------------------------------------------------------------------------------------------------------------------
Great Atlantic & Pacific Tea Co., Inc. (The), 9.125% Sr. Nts., 12/15/11
8 1,400,000 1,323,000
---------------------------------------------------------------------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub. Nts.,
10/15/07 3,450,000 3,588,000
---------------------------------------------------------------------------------------------------------------------------
Real Time Data Co., 13% Disc. Nts., 5/31/09
1,3,4,14 8,836,185 176,724
---------------------------------------------------------------------------------------------------------------------------
Rite Aid Corp.:
8.125% Sr. Sec. Nts., 5/1/10
5
4,000,000 4,280,000
9.50% Sr. Sec. Nts., 2/15/11
8
2,000,000 2,270,000

-----------------

23,276,349

---------------------------------------------------------------------------------------------------------------------------
Food Products--0.8%
American Seafoods Group LLC, 10.125% Sr. Sub. Nts., 4/15/10
1 4,700,000 5,522,500
---------------------------------------------------------------------------------------------------------------------------
Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08
3 2,400,000 1,368,000
---------------------------------------------------------------------------------------------------------------------------
Burns Philp Capital Pty Ltd., 9.75% Sr. Sub. Nts., 7/15/12
5 4,350,000 4,371,750
---------------------------------------------------------------------------------------------------------------------------
Chiquita Brands International, Inc., 10.56% Sr. Unsec. Nts., 3/15/09
8 622,000 688,865
---------------------------------------------------------------------------------------------------------------------------
Del Monte Corp., 8.625% Sr. Sub. Nts., 12/15/12
5 3,900,000 4,280,250
---------------------------------------------------------------------------------------------------------------------------
Doane Pet Care Co., 10.75% Sr. Nts., 3/1/10
1 3,200,000 3,536,000
---------------------------------------------------------------------------------------------------------------------------
Dole Food Co., Inc.:
8.625% Sr. Nts.,
5/1/09
7,500,000 8,025,000
8.875% Sr. Unsec. Nts.,
3/15/11
1,700,000 1,819,000
---------------------------------------------------------------------------------------------------------------------------
Hines Nurseries, Inc., 10.25% Sr. Nts., 10/1/11
5 1,800,000 1,890,000
---------------------------------------------------------------------------------------------------------------------------
New World Pasta Co., 9.25% Sr. Nts.,
2/15/09 1,000,000
270,000
---------------------------------------------------------------------------------------------------------------------------
Smithfield Foods, Inc.:
7.625% Sr. Unsec. Sub. Nts., 2/15/08
8 3,050,000
3,187,250
8% Sr. Nts., Series B, 10/15/09
8 1,000,000
1,095,000
---------------------------------------------------------------------------------------------------------------------------
Swift & Co., 10.125% Sr. Nts., 10/1/09
8 2,000,000
2,220,000
---------------------------------------------------------------------------------------------------------------------------
Tembec Industries, Inc., 7.75% Sr. Nts.,
3/15/12 5,500,000 5,197,500
---------------------------------------------------------------------------------------------------------------------------
United Biscuits Finance plc, 10.75% Sr. Sub. Nts., 4/15/11 1
[GBP] 4,000,000 7,310,160

-----------------

50,781,275

26 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Household Products--0.3%
AKI, Inc., 10.50% Sr. Unsec. Nts., 7/1/08
1 $ 3,700,000 $ 3,903,500
---------------------------------------------------------------------------------------------------------------------------
Holmes Products Corp.:
9.875% Sr. Sub. Nts., Series C, 11/15/07
1 1,000,000 960,000
9.875% Sr. Unsec. Sub. Nts., Series B, 11/15/07
1 4,610,000 4,425,600
---------------------------------------------------------------------------------------------------------------------------
Playtex Products, Inc., 9.375% Sr. Unsec. Sub. Nts.,
6/1/11 4,500,000 4,342,500
---------------------------------------------------------------------------------------------------------------------------
Rayovac Corp., 8.50% Sr. Sub. Nts., 10/1/13
5 1,600,000 1,644,000
---------------------------------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp., 12% Sr. Sec. Nts., 12/1/05
8 3,450,000 3,467,250
---------------------------------------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08
1,3,4 6,340,000 --

-----------------

18,742,850

---------------------------------------------------------------------------------------------------------------------------
Energy--2.6%
---------------------------------------------------------------------------------------------------------------------------
Energy Equipment & Services--0.6%
Dresser, Inc., 9.375% Sr. Sub. Nts., 4/15/11
8 1,900,000 2,004,500
---------------------------------------------------------------------------------------------------------------------------
Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08
1,3,4 5,925,000 1,481,250
---------------------------------------------------------------------------------------------------------------------------
Hanover Equipment Trust 2001A, 8.50% Sr. Sec. Nts., Series A, 9/1/08
8 1,900,000 1,966,500
---------------------------------------------------------------------------------------------------------------------------
Hornbeck-Leevac Marine Services, Inc., 10.625% Sr. Nts.,
8/1/08 12,750,000 14,056,875
---------------------------------------------------------------------------------------------------------------------------
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts.,
6/1/08 14,250,000 12,753,750
---------------------------------------------------------------------------------------------------------------------------
Petroleum Helicopters, Inc., 9.375% Sr. Nts.,
5/1/09 2,000,000 2,190,000
---------------------------------------------------------------------------------------------------------------------------
Universal Compression, Inc., 7.25% Sr. Unsec. Sub. Nts.,
5/15/10 3,200,000 3,312,000

-----------------

37,764,875

---------------------------------------------------------------------------------------------------------------------------
Oil & Gas--2.0%
Chesapeake Energy Corp.:
7.75% Sr. Unsec. Nts., 1/15/15
8 9,300,000
9,858,000
8.125% Sr. Unsec. Nts., 4/1/11
8 3,650,000
3,978,500
9% Sr. Nts.,
8/15/12
1,000,000 1,130,000
---------------------------------------------------------------------------------------------------------------------------
El Paso Energy Partners LP:
8.50% Sr. Unsec. Sub. Nts., Series B,
6/1/11 2,300,000
2,489,750
10.625% Sr. Sub. Nts.,
12/1/12
3,900,000 4,592,250
---------------------------------------------------------------------------------------------------------------------------
Forest Oil Corp., 7.75% Sr. Nts.,
5/1/14 3,500,000
3,657,500
---------------------------------------------------------------------------------------------------------------------------
Frontier Escrow Corp., 8% Sr. Nts., 4/15/13
5 1,500,000 1,530,000
---------------------------------------------------------------------------------------------------------------------------
Frontier Oil Corp., 11.75% Sr. Nts.,
11/15/09 9,735,000
11,049,225
---------------------------------------------------------------------------------------------------------------------------
GulfTerra Energy Partners LP, 8.50% Sr. Sub. Unsec. Nts., Series B,
6/1/10 2,700,000 2,922,750
---------------------------------------------------------------------------------------------------------------------------
Leviathan Gas Pipeline Partners LP/Leviathan Finance Corp.,
10.375% Sr. Unsec. Sub. Nts., Series B, 6/1/09
1 7,000,000 7,980,000
---------------------------------------------------------------------------------------------------------------------------
Newfield Exploration Co., 8.375% Sr. Sub. Nts.,
8/15/12 3,250,000 3,542,500
---------------------------------------------------------------------------------------------------------------------------
Pemex Project Funding Master Trust:
6.625% Nts., 4/4/10
[EUR]
8,610,000 10,670,993
8.50% Unsub. Nts., 2/15/08
8
3,450,000 4,019,250
---------------------------------------------------------------------------------------------------------------------------
Petroleos Mexicanos:
6.50% Unsub. Nts.,
2/1/05
11,855,000 12,536,663
9.375% Sr. Unsec. Bonds,
12/2/08
9,030,000 10,836,000
---------------------------------------------------------------------------------------------------------------------------
Pioneer Natural Resources Co., 7.50% Sr. Nts., 4/15/12
8 3,000,000 3,420,000
---------------------------------------------------------------------------------------------------------------------------
Premcor Refining Group, Inc., 9.50% Sr. Nts.,
2/1/13 5,800,000 6,409,000

27 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Oil & Gas Continued
Stone Energy Corp., 8.25% Sr. Unsec. Sub. Nts.,
12/15/11 $ 1,000,000 $ 1,065,000
---------------------------------------------------------------------------------------------------------------------------
Teekay Shipping Corp., 8.875% Sr. Nts.,
7/15/11 2,000,000 2,220,000
---------------------------------------------------------------------------------------------------------------------------
Tesoro Petroleum Corp.:
8% Sr. Sec. Nts.,
4/15/08
7,800,000 8,034,000
9.625% Sr. Sub. Nts., 4/1/12
8
2,250,000 2,250,000
---------------------------------------------------------------------------------------------------------------------------
Tom Brown, Inc., Units (each unit consists of $512 principal amount of
7.25% sr. sub. nts., due 2013 and $488 principal amount of Tom Brown
Resources Funding Corp., 7.25% sr. sub. nts., due 2013)
15 1,800,000 1,872,000
---------------------------------------------------------------------------------------------------------------------------
Westport Resources Corp.:
8.25% Sr. Sub. Nts., 11/1/11
5
2,000,000 2,195,000
8.25% Sr. Unsec. Sub. Nts.,
11/1/11
6,700,000 7,353,250
---------------------------------------------------------------------------------------------------------------------------
XTO Energy, Inc., 7.50% Sr. Nts.,
4/15/12 5,200,000
5,811,000

-----------------

131,422,631

---------------------------------------------------------------------------------------------------------------------------
Financials--2.1%
---------------------------------------------------------------------------------------------------------------------------
Commercial Banks--0.5%
Bank Plus Corp., 12% Sr. Nts., 7/18/07
1 4,167,000
4,479,525
---------------------------------------------------------------------------------------------------------------------------
BankUnited Capital Trust, 10.25% Capital Securities, 12/31/26
1 10,050,000 10,979,625
---------------------------------------------------------------------------------------------------------------------------
Local Financial Corp., 11% Sr. Nts., 9/8/04
1 10,000,000 10,200,000
---------------------------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/04
1,3,4 4,970,000 31,062
---------------------------------------------------------------------------------------------------------------------------
Sovereign Bancorp, Inc., 10.50% Sr. Unsec. Nts.,
11/15/06 1,000,000 1,191,326
---------------------------------------------------------------------------------------------------------------------------
Western Financial Bank, 9.625% Unsec. Sub. Debs.,
5/15/12 3,800,000 4,132,500

-----------------

31,014,038

---------------------------------------------------------------------------------------------------------------------------
Diversified Financial Services--0.4%
Berry Plastics Corp., 10.75% Sr. Sub. Nts.,
7/15/12 3,200,000 3,584,000
---------------------------------------------------------------------------------------------------------------------------
Finova Group, Inc. (The), 7.50% Nts.,
11/15/09 8,848,000
4,424,000
---------------------------------------------------------------------------------------------------------------------------
LaBranche & Co., Inc., 12% Sr. Unsec. Sub. Nts.,
3/2/07 5,900,000 6,696,500
---------------------------------------------------------------------------------------------------------------------------
MBNA Corp., 6.125% Nts., 3/1/13
8 3,740,000
4,005,428
---------------------------------------------------------------------------------------------------------------------------
Pemex Project Funding Master Trust, 7.375%
Bonds,12/15/14 8,570,000 9,255,600
---------------------------------------------------------------------------------------------------------------------------
SBS Agro Finance BV, 10.25% Bonds, 7/21/00
1,3,4 14,961,000 --

-----------------

27,965,528

---------------------------------------------------------------------------------------------------------------------------
Insurance--0.1%
Arbor I Ltd., 16.64% Nts., 6/15/06
1,2 6,250,000
6,339,063
---------------------------------------------------------------------------------------------------------------------------
Conseco, Inc., Escrow Shares, 6/15/09
3,4 3,050,000
--

-----------------

6,339,063

---------------------------------------------------------------------------------------------------------------------------
Real Estate--0.9%
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07
8 7,700,000 7,642,250
---------------------------------------------------------------------------------------------------------------------------
CB Richard Ellis Services, Inc., 11.25% Sr. Unsec. Sub. Nts.,
6/15/11 1,450,000 1,576,875
---------------------------------------------------------------------------------------------------------------------------
Corrections Corp. of America:
7.50% Sr. Nts., 5/1/11
8
1,500,000 1,554,375
9.875% Sr. Nts.,
5/1/09
2,000,000 2,255,000

28 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Real Estate Continued
Felcor Lodging LP, 9% Sr. Nts.,
6/1/11 $ 2,609,000 $
2,791,630
---------------------------------------------------------------------------------------------------------------------------
Felcor Suites LP, 7.375% Sr. Nts.,
10/1/04 2,200,000
2,263,250
---------------------------------------------------------------------------------------------------------------------------
HMH Properties, Inc.:
7.875% Sr. Nts., Series B,
8/1/08
6,300,000 6,504,750
8.45% Sr. Nts., Series C, 12/1/08
8 3,000,000
3,138,750
---------------------------------------------------------------------------------------------------------------------------
Host Marriott LP, 9.50% Sr. Nts.,
1/15/07 5,000,000
5,500,000
---------------------------------------------------------------------------------------------------------------------------
MeriStar Hospitality Corp.:
8.75% Sr. Unsec. Sub. Nts.,
8/15/07
6,800,000 6,749,000
9.125% Sr. Unsec. Nts.,
1/15/11
4,850,000 5,116,750
---------------------------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., Series B,
4/1/08 15,590,000 15,745,900

-----------------

60,838,530

---------------------------------------------------------------------------------------------------------------------------
Thrifts & Mortgage Finance--0.2%
Ocwen Capital Trust I, 10.875% Capital Nts.,
8/1/27 5,250,000 4,856,250
---------------------------------------------------------------------------------------------------------------------------
Ocwen Financial Corp., 11.875% Nts., 10/1/03
1 4,817,000 4,817,000

-----------------

9,673,250

---------------------------------------------------------------------------------------------------------------------------
Health Care--1.2%
---------------------------------------------------------------------------------------------------------------------------
Health Care Equipment & Supplies--0.2%
Fisher Scientific International, Inc., 8.125% Sr. Sub. Nts.,
5/1/12 3,400,000 3,629,500
---------------------------------------------------------------------------------------------------------------------------
HMP Equity Holdings Corp., Units (each unit consists of $1,000 principal
amount of 15.43% Sr. Sec. Disc. Nts., 5/15/08 and one warrant to purchase
2.8094 shares of Huntsman Corp. common stock)
9,15 3,500,000 1,715,000
---------------------------------------------------------------------------------------------------------------------------
Sybron Dental Specialties, Inc., 8.125% Sr. Sub. Nts.,
6/15/12 4,150,000 4,440,500
---------------------------------------------------------------------------------------------------------------------------
Vanguard Health Systems, Inc., 9.75% Sr. Unsec. Sub. Nts.,
8/1/11 550,000 588,500

-----------------

10,373,500

---------------------------------------------------------------------------------------------------------------------------
Health Care Providers & Services--1.0%
Alliance Imaging, Inc., 10.375% Sr. Unsec. Sub. Nts.,
4/15/11 800,000 836,000
---------------------------------------------------------------------------------------------------------------------------
AmeriPath, Inc., 10.50% Sr. Unsec. Sub. Nts.,
4/1/13 2,800,000 3,010,000
---------------------------------------------------------------------------------------------------------------------------
AmerisourceBergen Corp., 7.25% Sr. Unsec. Nts.,
11/15/12 2,200,000 2,249,500
---------------------------------------------------------------------------------------------------------------------------
Extendicare Health Services, Inc., 9.50% Sr. Unsec. Sub. Nts., 7/1/10
8 1,900,000 2,071,000
---------------------------------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust II, 7.875% Nts.,
2/1/08 3,290,000 3,429,825
---------------------------------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust III, 7.375% Nts., 2/1/08
[DEM] 1,700,000 1,042,589
---------------------------------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust IV, 7.875% Trust Preferred Nts.,
6/15/11 3,000,000 3,150,000
---------------------------------------------------------------------------------------------------------------------------
Hanger Orthopedic Group, Inc., 10.375% Sr. Nts.,
2/15/09 2,850,000 3,195,562
---------------------------------------------------------------------------------------------------------------------------
HCA, Inc., 6.30% Sr. Unsec. Nts.,
10/1/12 3,900,000
3,981,756
---------------------------------------------------------------------------------------------------------------------------
Healthsouth Corp., 7.625% Nts.,
6/1/12 10,500,000
9,082,500
---------------------------------------------------------------------------------------------------------------------------
Medquest, Inc., 11.875% Sr. Unsec. Sub. Nts., Series B, 8/15/12
8 3,300,000 3,498,000
---------------------------------------------------------------------------------------------------------------------------
NDCHealth Corp., 10.50% Sr. Unsec. Sub. Nts.,
12/1/12 3,700,000 4,033,000
---------------------------------------------------------------------------------------------------------------------------
PacifiCare Health Systems, Inc., 10.75% Sr. Unsec. Unsub. Nts.,
6/1/09 4,600,000 5,313,000
---------------------------------------------------------------------------------------------------------------------------
Quintiles Transnational Corp., 10% Sr. Sub. Nts., 10/1/13
5 2,450,000 2,541,875
---------------------------------------------------------------------------------------------------------------------------
Rotech Healthcare, Inc., 9.50% Sr. Unsec. Sub. Nts., 4/1/12
8 5,200,000 5,512,000
---------------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 6.375% Sr. Nts.,
12/1/11 6,931,000 6,671,087

29 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Health Care Providers & Services Continued
Triad Hospitals, Inc., 8.75% Sr. Unsec. Nts., Series B,
5/1/09 $ 4,000,000 $ 4,370,000
---------------------------------------------------------------------------------------------------------------------------
US Oncology, Inc., 9.625% Sr. Sub. Nts.,
2/1/12 1,600,000 1,704,000

-----------------

65,691,694

---------------------------------------------------------------------------------------------------------------------------
Pharmaceuticals--0.0%
aaiPharma, Inc., 11% Sr. Sub. Nts., 4/1/10
8 1,200,000 1,344,000
---------------------------------------------------------------------------------------------------------------------------
Industrials--4.3%
---------------------------------------------------------------------------------------------------------------------------
Aerospace & Defense--0.4%
Alliant Techsystems, Inc., 8.50% Sr. Unsec. Sub. Nts.,
5/15/11 2,900,000 3,175,500
---------------------------------------------------------------------------------------------------------------------------
American Plumbing & Mechanical, Inc., 11.625% Sr. Sub. Nts.,
Series B, 10/15/08
1,3
6,700,000 1,917,875
---------------------------------------------------------------------------------------------------------------------------
BE Aerospace, Inc.:
8.875% Sr. Unsec. Sub. Nts., 5/1/11
8 1,800,000
1,566,000
9.50% Sr. Unsec. Sub. Nts., 11/1/08
8 2,500,000
2,287,500
---------------------------------------------------------------------------------------------------------------------------
K&F Industries, Inc., 9.625% Sr. Unsec. Sub. Nts., 12/15/10
8 2,100,000 2,320,500
---------------------------------------------------------------------------------------------------------------------------
L-3 Communications Corp., 7.625% Sr. Sub. Nts.,
6/15/12 1,700,000 1,848,750
---------------------------------------------------------------------------------------------------------------------------
Rexnord Corp., 10.125% Sr. Unsec. Sub. Nts.,
12/15/12 2,150,000 2,397,250
---------------------------------------------------------------------------------------------------------------------------
TD Funding Corp., 8.375% Sr. Sub. Nts., 7/15/11
5 3,100,000 3,348,000
---------------------------------------------------------------------------------------------------------------------------
TRW Automotive, Inc.:
9.375% Sr. Nts., 2/15/13
5,8
2,200,000 2,486,000
11% Sr. Sub. Nts., 2/15/13
5,8
2,500,000 2,925,000
---------------------------------------------------------------------------------------------------------------------------
Vought Aircraft Industries, Inc., 8% Sr. Nts., 7/15/11
5 1,950,000 1,998,750

-----------------

26,271,125

---------------------------------------------------------------------------------------------------------------------------
Air Freight & Logistics--0.1%
Atlas Air, Inc.:
9.25% Sr. Nts., 4/15/08
3
6,200,000 2,790,000
9.375% Sr. Unsec. Nts., 11/15/06
3 2,700,000
1,215,000

-----------------

4,005,000

---------------------------------------------------------------------------------------------------------------------------
Airlines--0.4%
America West Airlines, Inc., 10.75% Sr. Nts.,
9/1/05 22,273,000 16,843,956
---------------------------------------------------------------------------------------------------------------------------
Amtran, Inc., 10.50% Sr. Nts.,
8/1/04 9,750,000
7,556,250

-----------------

24,400,206

---------------------------------------------------------------------------------------------------------------------------
Building Products--0.2%
Associated Materials, Inc., 9.75% Sr. Sub. Nts.,
4/15/12 2,400,000 2,550,000
---------------------------------------------------------------------------------------------------------------------------
Green Star Products, Inc., 10.15% Bonds, 6/24/10
5 577,603 600,588
---------------------------------------------------------------------------------------------------------------------------
Jacuzzi Brands, Inc., 9.625% Sr. Sec. Nts., 7/1/10
5 3,100,000 3,231,750
---------------------------------------------------------------------------------------------------------------------------
Nortek, Inc.:
9.125% Sr. Unsec. Nts., Series B, 9/1/07
1 5,200,000 5,382,000
9.25% Sr. Nts., Series B, 3/15/07
1 2,990,000
3,094,650
9.875% Sr. Unsec. Sub. Nts., 6/15/11
1 1,150,000
1,221,875

-----------------

16,080,863

30 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Commercial Services & Supplies--1.5%
Allied Waste North America, Inc.:
7.875% Sr. Nts.,
4/15/13 $
3,800,000 $ 3,999,500
7.875% Sr. Unsec. Nts., Series B,
1/1/09 800,000
834,000
8.50% Sr. Sub. Nts., 12/1/08
8
10,300,000 11,175,500
8.875% Sr. Nts., Series B,
4/1/08
14,800,000 16,095,000
9.25% Sr. Sec. Debs., Series B,
9/1/12 15,550,000
17,260,500
10% Sr. Unsec. Sub. Nts., Series B, 8/1/09
8 1,900,000 2,068,625
---------------------------------------------------------------------------------------------------------------------------
American Color Graphics, Inc., 10% Sr. Sec. Nts., 6/15/10
5,8 1,550,000 1,646,875
---------------------------------------------------------------------------------------------------------------------------
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05
1,3,4 3,462,000 24,234
---------------------------------------------------------------------------------------------------------------------------
Budget Group, Inc., 9.125% Sr. Unsec. Nts., 4/1/06
1,3,4 10,175,000 2,403,844
---------------------------------------------------------------------------------------------------------------------------
Buhrmann US, Inc., 12.25% Sr. Unsec. Sub. Nts.,
11/1/09 2,500,000 2,787,500
---------------------------------------------------------------------------------------------------------------------------
Coinmach Corp., 9% Sr. Nts.,
2/1/10
3,300,000 3,531,000
---------------------------------------------------------------------------------------------------------------------------
Comforce Operating, Inc., 12% Sr. Nts., Series B,
12/1/07 2,920,000 1,941,800
---------------------------------------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07
1 5,800,000 4,089,000
---------------------------------------------------------------------------------------------------------------------------
IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09
1,3,4 5,300,000 --
---------------------------------------------------------------------------------------------------------------------------
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts.,
2/15/09 3,050,000 3,080,500
---------------------------------------------------------------------------------------------------------------------------
Mail-Well I Corp., 9.625% Sr. Nts.,
3/15/12 5,900,000
6,431,000
---------------------------------------------------------------------------------------------------------------------------
Moore North American Finance, Inc., 7.875% Sr. Nts., 1/15/11
5 1,600,000 1,708,000
---------------------------------------------------------------------------------------------------------------------------
Protection One, Inc./Protection One Alarm Monitoring, Inc.,
7.375% Sr. Unsec. Nts.,
8/15/05
5,150,000 4,255,187
---------------------------------------------------------------------------------------------------------------------------
Safety-Kleen Corp., 9.25% Sr. Unsec. Nts., 5/15/09
1,3,4 13,150,000 657,500
---------------------------------------------------------------------------------------------------------------------------
Synagro Technologies, Inc., 9.50% Sr. Sub. Nts., 4/1/09
8 2,400,000 2,640,000
---------------------------------------------------------------------------------------------------------------------------
United Rentals (North America), Inc.:
9% Sr. Unsec. Sub. Nts., Series B, 4/1/09
8 2,000,000 2,080,000
9.25% Sr. Unsec. Sub. Nts., Series B, 1/15/09
8 250,000 260,000
10.75% Sr. Nts., 4/15/08
5,8
3,000,000 3,337,500
10.75% Sr. Unsec. Nts., 4/15/08
8 3,450,000
3,838,125
10.75% Sr. Unsec. Nts., Series B,
4/15/08 2,800,000
3,115,000

-----------------

99,260,190

---------------------------------------------------------------------------------------------------------------------------
Construction & Engineering--0.1%
Integrated Electrical Services, Inc.:
9.375% Sr. Sub. Nts., Series B, 2/1/09
1 300,000
310,500
9.375% Sr. Sub. Nts., Series C,
2/1/09 2,150,000
2,225,250
---------------------------------------------------------------------------------------------------------------------------
URS Corp., 11.50% Sr. Unsec. Nts., 9/15/09
1 6,350,000 6,985,000

-----------------

9,520,750

---------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--0.0%
Dayton Superior Corp., 13% Sr. Unsec. Sub. Nts.,
6/15/09 2,900,000 2,595,500
---------------------------------------------------------------------------------------------------------------------------
Industrial Conglomerates--0.5%
Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec. Sub. Nts.,
8/15/08 7,105,000 7,540,181
---------------------------------------------------------------------------------------------------------------------------
Tyco International Group SA:
6.375% Nts.,
10/15/11
19,200,000 19,896,000
6.75% Sr. Unsub. Nts., 2/15/11
8 1,900,000
2,014,000

-----------------

29,450,181

31 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Machinery--0.8%
Actuant Corp., 13% Sr. Sub. Nts.,
5/1/09 $ 1,977,000 $
2,500,905
---------------------------------------------------------------------------------------------------------------------------
AGCO Corp., 9.50% Sr. Unsec. Nts.,
5/1/08 9,900,000
10,741,500
---------------------------------------------------------------------------------------------------------------------------
Blount, Inc., 13% Sr. Sub. Nts.,
8/1/09 4,750,000
4,251,250
---------------------------------------------------------------------------------------------------------------------------
Insilco Corp., 12% Sr. Sub. Nts., 8/15/07
1,3,4 10,550,000 105,500
---------------------------------------------------------------------------------------------------------------------------
NMHG Holding Co., 10% Sr. Nts.,
5/15/09 2,400,000
2,652,000
---------------------------------------------------------------------------------------------------------------------------
Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts., Series B,
6/15/07 10,400,000 9,620,000
---------------------------------------------------------------------------------------------------------------------------
SPX Corp., 7.50% Sr. Nts., 1/1/13
8 5,700,000
6,027,750
---------------------------------------------------------------------------------------------------------------------------
Terex Corp.:
8.875% Sr. Unsec. Sub. Nts.,
4/1/08
600,000 628,500
8.875% Sr. Unsec. Sub. Nts., Series C,
4/1/08 1,325,000
1,387,938
9.25% Sr. Unsec. Sub. Nts.,
7/15/11
2,700,000 2,970,000
10.375% Sr. Unsec. Sub. Nts., Series B, 4/1/11
8 6,000,000 6,750,000
---------------------------------------------------------------------------------------------------------------------------
Wolverine Tube, Inc., 10.50% Sr. Nts., 4/1/09
1 4,000,000 4,040,000

-----------------

51,675,343

---------------------------------------------------------------------------------------------------------------------------
Marine--0.2%
CP Ships Ltd., 10.375% Sr. Nts.,
7/15/12 6,350,000
7,270,750
---------------------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc., 12% Sr. Sec. Nts., 7/15/05
1,3,4 5,400,000 2,352,780
---------------------------------------------------------------------------------------------------------------------------
Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07
1,3 11,650,000 4,019,250

-----------------

13,642,780

---------------------------------------------------------------------------------------------------------------------------
Road & Rail--0.1%
Kansas City Southern Railway Co. (The), 7.50% Sr. Nts.,
6/15/09 2,000,000 2,085,000
---------------------------------------------------------------------------------------------------------------------------
Stena AB, 9.625% Sr. Nts., 12/1/12
8 2,150,000
2,348,875

-----------------

4,433,875

---------------------------------------------------------------------------------------------------------------------------
Transportation Infrastructure--0.0%
Worldspan LP/Worldspan Financial Corp., 9.625% Sr. Nts., 6/15/11
5,8 1,350,000 1,420,875
---------------------------------------------------------------------------------------------------------------------------
Information Technology--1.3%
---------------------------------------------------------------------------------------------------------------------------
Communications Equipment--0.1%
Orion Network Systems, Inc., 12.50% Sr. Disc. Nts., 1/15/07
3 11,975,000 5,155,237
---------------------------------------------------------------------------------------------------------------------------
Computers & Peripherals--0.1%
Seagate Technology Hdd Holdings, 8% Sr. Nts., 5/15/09
8 4,600,000 5,094,500
---------------------------------------------------------------------------------------------------------------------------
Electronic Equipment & Instruments--0.3%
Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05
1 12,553,000 12,804,060
---------------------------------------------------------------------------------------------------------------------------
Ingram Micro, Inc., 9.875% Sr. Unsec. Sub. Nts., 8/15/08
1 5,000,000 5,412,500
---------------------------------------------------------------------------------------------------------------------------
Xerox Capital plc (Europe), 5.875% Nts., 5/15/04
8 1,000,000 1,010,000

-----------------

19,226,560

---------------------------------------------------------------------------------------------------------------------------
Internet Software & Services--0.0%
Exodus Communications, Inc.:
10.75% Sr. Nts., 12/15/09 1,3,4
[EUR]
2,165,754 113,496
10.75% Sr. Unsec. Sub. Nts., 12/15/09
1,3,4 7,121,396
--
---------------------------------------------------------------------------------------------------------------------------
FirstWorld Communications, Inc., 0%/13% Sr. Disc. Nts., 4/15/08
1,3,4,13 5,700,000 570
---------------------------------------------------------------------------------------------------------------------------
Globix Corp., 11% Sr. Nts., 4/26/08
1 962,364
736,208

32 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Internet Software & Services Continued
PSINet, Inc., 10.50% Sr. Unsec. Nts., 12/1/06 1,3,4
[EUR] 6,150,000 $ 349,147

-----------------

1,199,421

---------------------------------------------------------------------------------------------------------------------------
IT Services--0.2%
Iron Mountain, Inc., 7.75% Sr. Sub. Nts.,
1/15/15 11,650,000 12,086,875
---------------------------------------------------------------------------------------------------------------------------
Titan Corp. (The), 8% Sr. Sub. Nts., 5/15/11
5 1,600,000 1,880,000

-----------------

13,966,875

---------------------------------------------------------------------------------------------------------------------------
Office Electronics--0.0%
ASAT Finance LLC, 12.50% Sr. Unsec. Nts., 11/1/06
1,8 1,430,000 1,508,650
---------------------------------------------------------------------------------------------------------------------------
Semiconductors & Semiconductor Equipment--0.6%
AMI Semiconductor, Inc., 10.75% Sr. Unsec. Sub. Nts.,
2/1/13 4,750,000 5,391,250
---------------------------------------------------------------------------------------------------------------------------
Amkor Technology, Inc.:
7.75% Sr. Nts., 5/15/13
5,8
6,500,000 6,565,000
9.25% Sr. Unsec. Sub. Nts., 2/15/08
8 5,850,000
6,347,250
---------------------------------------------------------------------------------------------------------------------------
ChipPAC International Co. Ltd., 12.75% Sr. Unsec. Sub. Nts., Series B, 8/1/09
8 4,000,000 4,480,000
---------------------------------------------------------------------------------------------------------------------------
Micron Technology, Inc., 6.50% Sub. Nts., 9/30/05
1 14,000,000 13,580,000

-----------------

36,363,500

---------------------------------------------------------------------------------------------------------------------------
Materials--4.2%
---------------------------------------------------------------------------------------------------------------------------
Chemicals--1.5%
Avecia Group plc, 11% Sr. Unsec. Nts., 7/1/09
8 3,600,000 3,168,000
---------------------------------------------------------------------------------------------------------------------------
ClimaChem, Inc., 10.75% Sr. Unsec. Nts., Series B, 12/1/07
1 1,700,000 688,500
---------------------------------------------------------------------------------------------------------------------------
Compass Minerals Group, Inc., 10% Sr. Sub. Nts.,
8/15/11 3,800,000 4,237,000
---------------------------------------------------------------------------------------------------------------------------
Equistar Chemicals LP/Equistar Funding Corp.:
8.75% Sr. Unsec. Nts., 2/15/09
8 3,400,000
3,196,000
10.625% Sr. Nts., 5/1/11
5
2,650,000 2,636,750
---------------------------------------------------------------------------------------------------------------------------
Huntsman Corp./ICI Chemical Co. plc:
13.09% Sr. Unsec. Disc. Nts., 12/31/09
9 14,040,000
5,616,000
10.125% Sr. Unsec. Sub. Nts., 7/1/09
[EUR] 3,300,000
3,372,245
10.125% Sr. Unsec. Sub. Nts., 7/1/09
8 14,350,000
13,704,250
---------------------------------------------------------------------------------------------------------------------------
Huntsman International LLC:
9.875% Sr. Nts.,
3/1/09
3,200,000 3,376,000
9.875% Sr. Nts., 3/1/09
5,8
2,300,000 2,426,500
---------------------------------------------------------------------------------------------------------------------------
ISP Holdings, Inc., 10.625% Sr. Sec. Nts.,
12/15/09 4,100,000 4,489,500
---------------------------------------------------------------------------------------------------------------------------
Koppers Industry, Inc., 9.875% Sr. Sec. Nts., 10/15/13
5,6 3,050,000 3,179,625
---------------------------------------------------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.50% Sec. Nts., 12/15/08
8
2,700,000 2,511,000
9.625% Sr. Sec. Nts., Series A,
5/1/07 6,000,000
5,730,000
9.875% Sec. Nts., Series B, 5/1/07
8 19,350,000
18,527,625
---------------------------------------------------------------------------------------------------------------------------
Millennium America, Inc., 9.25% Sr. Nts., 6/15/08
5 1,200,000 1,251,000
---------------------------------------------------------------------------------------------------------------------------
Noveon, Inc., 11% Sr. Unsec. Sub. Nts., Series B, 2/28/11
1,8 4,500,000 5,107,500
---------------------------------------------------------------------------------------------------------------------------
OM Group, Inc., 9.25% Sr. Sub. Nts., 12/15/11
8 4,500,000 4,488,750
---------------------------------------------------------------------------------------------------------------------------
PCI Chemicals Canada, 10% Sr. Sec. Nts., 12/31/08
8 2,557,668 2,231,565
---------------------------------------------------------------------------------------------------------------------------
Pioneer Cos., Inc., 4.64% Sr. Sec. Nts., 12/31/06
2 809,925 706,660
---------------------------------------------------------------------------------------------------------------------------
Rockwood Specialties Corp., 10.625% Sr. Sub. Nts., 5/15/11
5 1,200,000 1,284,000

33 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Chemicals Continued
Royster-Clark, Inc., 10.25% First Mtg. Nts., 4/1/09
1,8 $ 2,000,000 $ 1,605,000
---------------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.:
10% Sr. Sec. Nts., 12/19/07
1
1,816,791 1,716,867
11.25% Sr. Sub. Nts., 8/15/06
1,3,4
7,915,000 --
---------------------------------------------------------------------------------------------------------------------------
Westlake Chemical Corp., 8.75% Sr. Nts., 7/15/11
5 3,100,000 3,231,750

-----------------

98,482,087

---------------------------------------------------------------------------------------------------------------------------
Construction Materials--0.1%
Formica Corp., 10.875% Sr. Unsec. Sub. Nts., Series B, 3/1/09
3,4 4,300,000 1,096,500
---------------------------------------------------------------------------------------------------------------------------
Texas Industries, Inc., 10.25% Sr. Nts., 6/15/11
5 3,200,000 3,520,000

-----------------

4,616,500

---------------------------------------------------------------------------------------------------------------------------
Containers & Packaging--1.1%
Ball Corp.:
6.875% Sr. Unsec. Nts., 12/15/12
5 2,200,000
2,279,750
7.75% Sr. Unsec. Nts.,
8/1/06
2,300,000 2,507,000
---------------------------------------------------------------------------------------------------------------------------
Consumers International, Inc., 10.25% Sr. Sec. Nts., 4/1/05
1,3,4 5,875,000 14,688
---------------------------------------------------------------------------------------------------------------------------
Crown Euro Holdings SA:
9.50% Sr. Sec. Nts., 3/1/11
5,8
3,600,000 3,888,000
10.875% Sr. Sec. Nts., 3/1/13
5,8
1,850,000 2,048,875
---------------------------------------------------------------------------------------------------------------------------
Graphic Packaging International Corp.:
8.50% Sr. Nts., 8/15/11
5
5,700,000 6,198,750
9.50% Sr. Sub. Nts., 8/15/13
5
2,550,000 2,811,375
---------------------------------------------------------------------------------------------------------------------------
Jefferson Smurfit Corp., 8.25% Sr. Unsec. Nts.,
10/1/12 1,300,000 1,365,000
---------------------------------------------------------------------------------------------------------------------------
MDP Acquisitions plc, 9.625% Sr. Nts.,
10/1/12 3,200,000
3,520,000
---------------------------------------------------------------------------------------------------------------------------
Owens-Brockway Glass Container, Inc.:
7.75% Sr. Sec. Nts.,
5/15/11
2,900,000 3,016,000
8.25% Sr. Unsec. Nts., 5/15/13
5,8 1,500,000
1,537,500
8.75% Sr. Sec. Nts., 11/15/12
8 12,500,000
13,468,750
8.875% Sr. Sec. Nts.,
2/15/09
5,800,000 6,206,000
---------------------------------------------------------------------------------------------------------------------------
Stone Container Corp.:
8.375% Sr. Nts., 7/1/12
8
4,700,000 4,958,500
9.25% Sr. Unsec. Nts.,
2/1/08
4,500,000 4,916,250
9.75% Sr. Unsec. Nts.,
2/1/11
7,900,000 8,650,500
---------------------------------------------------------------------------------------------------------------------------
TriMas Corp., 9.875% Sr. Unsec. Sub. Nts.,
6/15/12 5,550,000 5,661,000

-----------------

73,047,938

---------------------------------------------------------------------------------------------------------------------------
Metals & Mining--0.9% AK Steel Corp.:
7.75% Sr. Unsec. Nts.,
6/15/12
7,000,000 4,865,000
7.875% Sr. Unsec. Nts., 2/15/09
8 3,925,000
2,826,000
---------------------------------------------------------------------------------------------------------------------------
Arch Western Finance LLC, 6.75% Sr. Nts., 7/1/13
5 3,200,000 3,312,000
---------------------------------------------------------------------------------------------------------------------------
Better Minerals & Aggregates Co., 13% Sr. Unsec. Sub. Nts., 9/15/09
1 1,050,000 672,000
---------------------------------------------------------------------------------------------------------------------------
California Steel Industries Corp., 8.50% Sr. Unsec. Nts., Series B, 4/1/09
8 3,000,000 3,135,000
---------------------------------------------------------------------------------------------------------------------------
Century Aluminum Co., 11.75% Sr. Sec. Nts.,
4/15/08 6,750,000 7,256,250
---------------------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 13% Unsec. Sub. Nts., 2/1/08
1,3,4 1,586,000 15,860
---------------------------------------------------------------------------------------------------------------------------
IPSCO, Inc., 8.75% Sr. Nts., 6/1/13
5,8 1,000,000
1,050,000

34 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Metals & Mining Continued
Jorgensen (Earle M.) Co., 9.75% Sr. Sec. Nts., 6/1/12
1 $ 5,200,000 $ 5,564,000
---------------------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 10.875% Sr. Nts., Series B, 10/15/06
1,3,4,8 4,500,000 3,487,500
---------------------------------------------------------------------------------------------------------------------------
Keystone Consolidated Industries, Inc., 9.625% Sr. Sec. Nts., 8/1/07
1 5,700,000 598,500
---------------------------------------------------------------------------------------------------------------------------
Metallurg, Inc., 11% Sr. Nts.,
12/1/07 9,595,000
5,037,375
---------------------------------------------------------------------------------------------------------------------------
National Steel Corp., 9.875% First Mtg. Bonds, Series D, 3/1/09
1,3,4 3,856,845 289,263
---------------------------------------------------------------------------------------------------------------------------
Northwest Pipeline Corp., 8.125% Sr. Nts., 3/1/10
8 1,100,000 1,199,000
---------------------------------------------------------------------------------------------------------------------------
Oregon Steel Mills, Inc., 10% Sr. Nts., 7/15/09
8 3,700,000 3,052,500
---------------------------------------------------------------------------------------------------------------------------
Peabody Energy Corp., 6.875% Sr. Unsec. Nts., Series B,
3/15/13 3,300,000 3,456,750
---------------------------------------------------------------------------------------------------------------------------
Steel Dynamics, Inc., 9.50% Sr. Nts., 3/15/09
8 2,000,000 2,150,000
---------------------------------------------------------------------------------------------------------------------------
UCAR Finance, Inc., 10.25% Sr. Nts.,
2/15/12 2,400,000
2,634,000
---------------------------------------------------------------------------------------------------------------------------
United States Steel Corp.:
9.75% Sr. Nts.,
5/15/10
3,200,000 3,296,000
10.75% Sr. Nts., 8/1/08
8
4,700,000 5,029,000

-----------------

58,925,998

---------------------------------------------------------------------------------------------------------------------------
Paper & Forest Products--0.6%
Abitibi-Consolidated, Inc., 8.55% Nts.,
8/1/10 1,700,000 1,859,122
---------------------------------------------------------------------------------------------------------------------------
Ainsworth Lumber Co. Ltd.:
12.50% Sr. Nts., 7/15/07
8,14
3,650,000 4,197,500
13.875% Sr. Sec. Nts.,
7/15/07
400,000 460,000
---------------------------------------------------------------------------------------------------------------------------
Buckeye Technologies, Inc., 8.50% Sr. Nts., 10/1/13
5 1,450,000 1,500,750
---------------------------------------------------------------------------------------------------------------------------
Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04
1,3 15,250,000 2,516,250
---------------------------------------------------------------------------------------------------------------------------
Domtar, Inc., 10.85% Debs., 8/5/17
[CAD] 1,700,000
1,764,576
---------------------------------------------------------------------------------------------------------------------------
Fort James Corp.:
6.625% Sr. Unsec. Nts., 9/15/04
8
500,000 515,000
6.875% Sr. Nts.,
9/15/07
2,500,000 2,587,500
---------------------------------------------------------------------------------------------------------------------------
Georgia-Pacific Corp.:
8.125% Sr. Unsec. Nts., 5/15/11
8 10,675,000
11,155,375
9.375% Sr. Unsec. Nts.,
2/1/13
6,400,000 7,176,000
---------------------------------------------------------------------------------------------------------------------------
Louisiana-Pacific Corp., 10.875% Sr. Sub. Nts., 11/15/08
1 3,000,000 3,502,500
---------------------------------------------------------------------------------------------------------------------------
PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/04
1,3,4 4,025,000 100,625
---------------------------------------------------------------------------------------------------------------------------
U.S. Timberlands Co. LP, 9.625% Sr. Nts.,
11/15/07 5,000,000 2,725,000

-----------------

40,060,198

---------------------------------------------------------------------------------------------------------------------------
Telecommunication Services--4.5%
---------------------------------------------------------------------------------------------------------------------------
Diversified Telecommunication Services--2.4%
360networks, Inc.:
13% Sr. Unsec. Nts., 5/1/08
1,3,4
1,100,000 110
13% Sr. Unsec. Nts., 5/1/08 1,3,4
[EUR]
1,900,000 221
---------------------------------------------------------------------------------------------------------------------------
Adelphia Business Solutions, Inc., 12% Sr. Sub. Nts., 11/1/07
1,3,4,8 2,490,000 18,675
---------------------------------------------------------------------------------------------------------------------------
American Tower Corp., 9.375% Sr. Nts., 2/1/09
8 5,400,000 5,535,000
---------------------------------------------------------------------------------------------------------------------------
COLO.com, Inc., 13.875% Sr. Nts., 3/15/10
3,4,5 5,340,408 40,053
---------------------------------------------------------------------------------------------------------------------------
Concentric Network Corp., Escrow Shares, 12/15/07
1,3,4 4,085,000 --
---------------------------------------------------------------------------------------------------------------------------
Deutsche Telekom International Finance BV, 8.50% Unsub. Nts.,
6/15/10 9,415,000 11,534,910

35 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Diversified Telecommunication Services Continued
Dex Media East LLC/Dex Media East Finance Co., 9.875% Sr. Unsec.
Nts.,
11/15/09
$ 4,300,000 $ 4,891,250
---------------------------------------------------------------------------------------------------------------------------
Dex Media West LLC/Dex Media West Finance Co.:
8.50% Sr. Nts., 8/15/10
5
2,450,000 2,676,625
9.875% Sr. Sub. Nts., 8/15/13
5
4,400,000 4,994,000
---------------------------------------------------------------------------------------------------------------------------
Focal Communications Corp.:
12.125% Sr. Unsec. Disc. Nts., 2/15/08
1,3 2,150,000
180,062
11.875% Sr. Unsec. Nts., Series B, 1/15/10
1,3 1,090,000 91,288
---------------------------------------------------------------------------------------------------------------------------
France Telecom SA, 9.25% Sr. Unsec. Nts.,
3/1/11 18,005,000 22,030,504
---------------------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc., 0%/12.25% Sr. Disc. Nts.,
Series B, 3/1/09
3,4,8,13
6,950,000 2,797,375
---------------------------------------------------------------------------------------------------------------------------
IPC Acquisition Corp., 11.50% Sr. Sub. Nts., 12/15/09
8 1,050,000 1,102,500
---------------------------------------------------------------------------------------------------------------------------
KPNQwest BV, 8.875% Sr. Nts., 2/1/08 1,3,4
[EUR] 5,000,000 14,557
---------------------------------------------------------------------------------------------------------------------------
Level 3 Communications, Inc.:
0%/10.50% Sr. Disc. Nts., 12/1/08
8,13 3,300,000
2,788,500
9.125% Sr. Unsec. Nts., 5/1/08
8 5,400,000
4,617,000
---------------------------------------------------------------------------------------------------------------------------
MCI Communications Corp., 7.75% Sr. Unsec. Debs., 3/23/25
3,4,8 2,150,000 1,703,875
---------------------------------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc., 10% Sr. Unsec. Nts., Series B, 11/15/08
3,4 10,100,000 782,750
---------------------------------------------------------------------------------------------------------------------------
Nextlink Communications, Inc.:
Escrow Shares, 10/1/07
1,3,4
9,283,000 --
Escrow Shares, 3/15/08
1,3,4
7,300,000 --
Escrow Shares, 4/15/08
1,3,4
2,750,000 --
Escrow Shares, 11/15/08
1,3,4
5,200,000 --
Escrow Shares, 6/1/09
1,3,4
1,400,000 --
---------------------------------------------------------------------------------------------------------------------------
NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10
3,4 2,400,000 519,000
---------------------------------------------------------------------------------------------------------------------------
Qwest Capital Funding, Inc.:
5.875% Nts.,
8/3/04
7,500,000 7,462,500
7.75% Nts., 8/15/06
8
2,300,000 2,265,500
---------------------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc., 7.50% Sr. Unsec. Nts.,
Series B,
11/1/08
5,000,000 4,825,000
---------------------------------------------------------------------------------------------------------------------------
Qwest Corp.:
7.20% Unsec. Nts.,
11/1/04
2,000,000 2,065,000
8.875% Nts., 3/15/12
5
15,200,000 16,948,000
---------------------------------------------------------------------------------------------------------------------------
Qwest Services Corp., 13.50% Nts., 12/15/10
5,8 6,900,000 8,073,000
---------------------------------------------------------------------------------------------------------------------------
Sprint Capital Corp.:
8.375% Nts., 3/15/12
8
5,100,000 6,027,129
8.75% Nts., 3/15/32
8
5,237,000 6,244,625
---------------------------------------------------------------------------------------------------------------------------
Telewest Communications plc:
0%/9.25% Sr. Disc. Nts., 4/15/09
3,4,8,13 11,300,000
4,463,500
0%/9.875% Sr. Disc. Nts., 4/15/09 1,3,4,13
[GBP] 9,500,000 6,273,862
---------------------------------------------------------------------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts., 12/1/07
1,3,4 4,835,000 --
---------------------------------------------------------------------------------------------------------------------------
Time Warner Telecom LLC/Time Warner Telecom, Inc.,
9.75% Sr. Nts.,
7/15/08
8,500,000 8,415,000
---------------------------------------------------------------------------------------------------------------------------
Time Warner Telecom, Inc., 10.125% Sr. Unsec. Sub. Nts., 2/1/11
8 1,200,000 1,203,000
---------------------------------------------------------------------------------------------------------------------------
Verizon Global Funding Corp., 7.375% Sr. Nts., 9/1/12
8 13,245,000 15,651,285
---------------------------------------------------------------------------------------------------------------------------
Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08
1,3,4 9,480,000 --

-----------------

156,235,656

36 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Wireless Telecommunication Services--2.1%
Alamosa Delaware, Inc., 12.50% Sr. Unsec. Nts., 2/1/11
8 $ 6,500,000 $ 6,305,000
---------------------------------------------------------------------------------------------------------------------------
American Tower Escrow Corp., Sr. Sub. Disc. Nts., 12.25%, 8/1/08
9 6,000,000 4,020,000
---------------------------------------------------------------------------------------------------------------------------
Arch Wireless Holdings, Inc., 12% Sub. Nts.,
5/15/09 233,000 273,775
---------------------------------------------------------------------------------------------------------------------------
AT&T Wireless Services, Inc., 7.50% Sr. Unsec. Nts.,
5/1/07 5,237,000 5,965,755
---------------------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., 14% Sr. Unsec. Disc. Nts., 10/1/07
1,3,4 21,148,000 --
---------------------------------------------------------------------------------------------------------------------------
Centennial Cellular Operating Co./Centennial Communications Corp.,
10.125% Sr. Nts., 6/15/13
5
5,100,000 5,278,500
---------------------------------------------------------------------------------------------------------------------------
Crown Castle International Corp.:
0%/10.375% Sr. Disc. Nts., 5/15/11
8,13 7,200,000
7,272,000
9% Sr. Nts., 5/15/11
8
1,000,000 1,037,500
---------------------------------------------------------------------------------------------------------------------------
Dobson Communications Corp.:
8.875% Sr. Nts., 10/1/13
5
4,100,000 4,166,625
10.875% Sr. Unsec. Nts., 7/1/10
8 3,200,000
3,504,000
---------------------------------------------------------------------------------------------------------------------------
Horizon PCS, Inc., 13.75% Sr. Nts., 6/15/11
3 1,000,000 255,000
---------------------------------------------------------------------------------------------------------------------------
IPCS, Inc., 0%/14% Sr. Unsec. Disc. Nts., 7/15/10
1,3,13 2,200,000 253,000
---------------------------------------------------------------------------------------------------------------------------
Leap Wireless International, Inc.:
0%/14.50% Sr. Unsec. Disc. Nts., 4/15/10
1,3,4,13 5,400,000 540,000
12.50% Sr. Nts., 4/15/10
1,3
5,775,000 721,875
---------------------------------------------------------------------------------------------------------------------------
Metrocall, Inc., 10.375% Sr. Sub. Nts., 10/1/07
3,4 7,470,000 --
---------------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc.:
7.375% Sr. Nts., 8/1/15
8
2,170,000 2,202,550
9.375% Sr. Unsec. Nts., 11/15/09
8 16,250,000
17,712,500
9.95% Sr. Disc. Nts.,
2/15/08
14,350,000 15,157,187
12% Sr. Unsec. Nts., 11/1/08
8
2,950,000 3,167,563
---------------------------------------------------------------------------------------------------------------------------
Nextel Partners, Inc.:
8.125% Sr. Nts., 7/1/11
5
1,300,000 1,274,000
11% Sr. Unsec. Nts.,
3/15/10
1,400,000 1,536,500
12.50% Sr. Nts.,
11/15/09
11,700,000 13,396,500
---------------------------------------------------------------------------------------------------------------------------
Orbcomm Global LP, Escrow Shares, 8/15/04
1,3,4 15,930,000 --
---------------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp.:
9.625% Sr. Sub. Nts., Series B,
5/15/08 4,300,000
3,934,500
9.75% Sr. Sub. Nts., 1/15/10
8
5,400,000 4,941,000
9.875% Sr. Nts., 2/1/10
5
4,550,000 4,515,875
---------------------------------------------------------------------------------------------------------------------------
SBA Communications Corp.:
10.25% Sr. Unsec. Nts.,
2/1/09
400,000 362,000
12% Sr. Unsec. Disc. Nts., 3/1/08
8 13,545,000
14,357,700
---------------------------------------------------------------------------------------------------------------------------
SpectraSite, Inc., 8.25% Sr. Nts., 5/15/10
5,8 1,400,000 1,484,000
---------------------------------------------------------------------------------------------------------------------------
Triton PCS, Inc.:
8.50% Sr. Unsec. Nts., 6/1/13
8
3,200,000 3,448,000
8.75% Sr. Unsec. Sub. Nts., 11/15/11
8 1,200,000
1,203,000
9.375% Sr. Unsec. Sub. Nts., 2/1/11
8 2,300,000
2,351,750
---------------------------------------------------------------------------------------------------------------------------
US Unwired, Inc., 0%/13.375% Sr. Unsec. Sub. Disc. Nts., Series B, 11/1/09
13 8,800,000 6,468,000
---------------------------------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, Escrow Shares, 11/1/04
1,3,4 5,885,000 --
---------------------------------------------------------------------------------------------------------------------------
Western Wireless Corp., 9.25% Sr. Nts., 7/15/13
5 4,200,000 4,305,000

-----------------

141,410,655

37 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Utilities--3.5%
---------------------------------------------------------------------------------------------------------------------------
Electric Utilities--1.6%
AES Corp. (The):
8.75% Sr. Sec. Nts., 5/15/13
5,8 $ 11,000,000
$ 11,605,000
8.75% Sr. Unsec. Unsub. Nts., 6/15/08
8 2,015,000
2,030,113
8.875% Sr. Unsec. Nts., 2/15/11
8 1,031,000
1,031,000
9.375% Sr. Unsec. Nts., 9/15/10
8 989,000
1,013,725
9.50% Sr. Unsec. Nts., 6/1/09
8
502,000 519,570
---------------------------------------------------------------------------------------------------------------------------
AES Drax Holdings Ltd., 10.41% Sr. Sec. Sub. Nts., Series B, 12/31/20
1,3 2,700,000 2,025,000
---------------------------------------------------------------------------------------------------------------------------
Caithness Coso Funding Corp., 9.05% Sr. Sec. Nts., Series B,
12/15/09 2,674,752 2,888,732
---------------------------------------------------------------------------------------------------------------------------
Calpine Corp.:
8.25% Sr. Unsec. Nts., 8/15/05
8 1,550,000
1,379,500
8.50% Sr. Sec. Nts., 7/15/10
5
16,300,000 15,077,500
8.50% Sr. Unsec. Nts.,
2/15/11
8,400,000 5,964,000
8.625% Sr. Nts., 8/15/10
8
600,000 426,000
8.75% Sr. Nts.,
7/15/07
5,700,000 4,275,000
8.75% Sr. Sec. Nts., 7/15/13
5
8,150,000 7,498,000
---------------------------------------------------------------------------------------------------------------------------
Central Termica Guemes SA, 2% Nts., 1/1/12
1 5,422,500 542,250
---------------------------------------------------------------------------------------------------------------------------
CMS Energy Corp.:
7.50% Sr. Nts., 1/15/09
8
1,200,000 1,194,000
7.75% Sr. Nts., 8/1/10
5
1,550,000 1,542,250
8.50% Sr. Nts.,
4/15/11
2,500,000 2,556,250
9.875% Sr. Unsec. Nts., 10/15/07
8 8,610,000
9,255,750
---------------------------------------------------------------------------------------------------------------------------
CMS Energy X-TRAS Pass-Through Trust I, 7% Sr. Unsec.
Pass-Through Certificates,
1/15/05
5,200,000 5,187,000
---------------------------------------------------------------------------------------------------------------------------
Edison Mission Energy:
9.875% Sr. Unsec. Nts.,
4/15/11
1,900,000 1,634,000
10% Sr. Unsec. Nts.,
8/15/08
5,200,000 4,602,000
---------------------------------------------------------------------------------------------------------------------------
El Paso Electric Co., 9.40% First Mtg. Sec. Nts., Series E,
5/1/11 4,000,000 4,720,128
---------------------------------------------------------------------------------------------------------------------------
Funding Corp./Beaver Valley Funding Corp., 9% Second Lease
Obligation Bonds,
6/1/17
956,000 1,062,030
---------------------------------------------------------------------------------------------------------------------------
Messer Griesheim Holding AG, 10.375% Sr. Nts., 6/1/11
[EUR] 3,000,000 3,991,494
---------------------------------------------------------------------------------------------------------------------------
Mirant Americas Generation LLC:
7.625% Sr. Unsec. Nts., 5/1/06
3 2,300,000
1,834,250
8.30% Sr. Unsec. Nts., 5/1/11
3
700,000 556,500
---------------------------------------------------------------------------------------------------------------------------
MSW Energy Holdings LLC/MSW Energy Finance Co., Inc.,
8.50% Sr. Sec. Nts., 9/1/10
5
1,550,000 1,627,500
---------------------------------------------------------------------------------------------------------------------------
PG&E Corp., 6.875% Sr. Sec. Nts., 7/15/08
5 3,100,000 3,270,500
---------------------------------------------------------------------------------------------------------------------------
Reliant Resources, Inc.:
9.25% Sr. Sec. Nts., 7/15/10
5
2,300,000 2,093,000
9.50% Sr. Sec. Nts., 7/15/13
5
3,000,000 2,715,000
---------------------------------------------------------------------------------------------------------------------------
Westar Energy, Inc., 9.75% Sr. Unsec. Nts.,
5/15/07 1,200,000 1,353,000

-----------------

105,470,042

---------------------------------------------------------------------------------------------------------------------------
Gas Utilities--1.1%
AmeriGas Partners LP/AmeriGas Eagle Finance Corp.,
8.875% Sr. Unsec. Nts., Series B, 5/20/11
10 6,400,000 6,896,000
---------------------------------------------------------------------------------------------------------------------------
ANR Pipeline Co., 8.875% Sr. Nts.,
3/15/10 1,800,000
1,935,000
---------------------------------------------------------------------------------------------------------------------------
El Paso Corp., 7.875% Sr. Unsec. Nts., 6/15/12
8 9,185,000 7,761,325

38 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Gas Utilities Continued
El Paso Energy Corp., 7.625% Nts., 7/15/11
8 $ 6,875,000 $ 5,706,250
---------------------------------------------------------------------------------------------------------------------------
NiSource Finance Corp., 7.875% Sr. Unsec. Nts.,
11/15/10 1,259,000 1,503,073
---------------------------------------------------------------------------------------------------------------------------
SEMCO Energy, Inc.:
7.125% Sr. Nts., 5/15/08
5
1,200,000 1,212,000
7.75% Sr. Nts., 5/15/13
5,8
1,200,000 1,215,000
---------------------------------------------------------------------------------------------------------------------------
Southern Natural Gas Co.:
7.35% Nts.,
2/15/31
3,100,000 2,867,500
8% Sr. Unsub. Nts.,
3/1/32
4,500,000 4,398,750
8.875% Sr. Nts., 3/15/10
8
2,700,000 2,902,500
---------------------------------------------------------------------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50% Bonds,
4/1/17 14,050,000 13,488,000
---------------------------------------------------------------------------------------------------------------------------
Williams Cos., Inc. (The), 7.125% Nts.,
9/1/11 18,450,000 18,311,625

-----------------

68,197,023

---------------------------------------------------------------------------------------------------------------------------
Multi-Utilities & Unregulated Power--0.8%
AES Red Oak LLC, 8.54% Sr. Sec. Bonds, Series A,
11/30/19 3,892,946 4,019,467
---------------------------------------------------------------------------------------------------------------------------
Aquila, Inc., 7% Sr. Unsec. Nts., 7/15/04
8 1,000,000 1,000,000
---------------------------------------------------------------------------------------------------------------------------
Consumers Energy Co.:
6.375% Sr. Sec. Nts.,
2/1/08
1,200,000 1,317,395
7.375% Nts.,
9/15/23
1,900,000 1,969,801
---------------------------------------------------------------------------------------------------------------------------
Dynegy Holdings, Inc.:
6.875% Sr. Unsec. Unsub. Nts.,
4/1/11 18,850,000
15,881,125
8.75% Sr. Nts., 2/15/12
8
6,950,000 6,394,000
10.125% Sr. Sec. Nts., 7/15/13
5,8 6,600,000
6,996,000
---------------------------------------------------------------------------------------------------------------------------
El Paso Production Holding Co., 7.75% Sr. Nts., 6/1/13
5 4,800,000 4,584,000
---------------------------------------------------------------------------------------------------------------------------
Mirant Mid-Atlantic LLC, 8.625% Sec. Pass-Through Certificates,
Series A,
6/30/12
3,141,232 3,127,489
---------------------------------------------------------------------------------------------------------------------------
Williams Cos., Inc. (The):
8.625% Sr. Nts., 6/1/10
8
3,200,000 3,416,000
9.25% Sr. Unsec. Unsub. Nts., 3/15/04
8 2,800,000
2,870,000
---------------------------------------------------------------------------------------------------------------------------
Williams Holdings of Delaware, Inc., 6.50% Nts.,
12/1/08 1,100,000 1,072,500

-----------------

52,647,777

---------------------------------------------------------------------------------------------------------------------------
Water Utilities--0.0%
National Waterworks, Inc., 10.50% Sr. Unsec. Sub. Nts., Series B, 12/1/12
1 1,900,000 2,085,250

-----------------
Total Corporate Bonds and Notes (Cost
$2,435,075,581)
2,310,147,436

Shares
---------------------------------------------------------------------------------------------------------------------------
Preferred Stocks--0.9%
---------------------------------------------------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg.
1,4,14 338,141 3,381
---------------------------------------------------------------------------------------------------------------------------
Crown American Realty Trust, 11% Cum., Series A,
Non-Vtg. 49,500 2,838,825
---------------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 11.125% Cum., Series M, Non-Vtg.
14 85,396 8,945,231
---------------------------------------------------------------------------------------------------------------------------
Doane Pet Care Co., 14.25% Jr. Sub. Debs., Non-Vtg.
1,4 255,000 10,263,750
---------------------------------------------------------------------------------------------------------------------------
Dobson Communications Corp.:
6% Cv., Series F (converts into Dobson Communications Corp.,
Cl. A common stock), Non-Vtg.
4
6,800 1,372,750
12.25% Sr. Exchangeable, Non-Vtg.
14
1 1,064
---------------------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-Vtg.
1,4,14 11,723 1,172

39 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Market Value

Shares See Note 1
---------------------------------------------------------------------------------------------------------------------------

Preferred Stocks Continued
Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg.
1,4 39,000 $ 2,583,750
---------------------------------------------------------------------------------------------------------------------------
Global Crossing Holdings Ltd., 10.50% Sr. Exchangeable, Non-Vtg.
1,4,14 21,050 --
---------------------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg.
1,4,14 5,773 --
---------------------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc., 13.50% Exchangeable, Series B
1,4,14 1 32
---------------------------------------------------------------------------------------------------------------------------
McLeodUSA, Inc., 2.50% Cv., Series A
4 6,516
46,198
---------------------------------------------------------------------------------------------------------------------------
Metrocall Holdings, Inc., 15% Cum., Series A
1 5,863 65,959
---------------------------------------------------------------------------------------------------------------------------
Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable Exchangeable,
Non-Vtg.
1,4,14
96,993 --
---------------------------------------------------------------------------------------------------------------------------
NTL Europe, Inc., 10% Nts., Series A, Non-Vtg.
1 323 1,131
---------------------------------------------------------------------------------------------------------------------------
Paxson Communications Corp.:
14.25% Cum.
4,14
-- 2,166
14.25% Cum. Jr. Exchangeable, Non-Vtg.
14 1,447
13,059,175
---------------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Cum., Series B, Non-Vtg.
14 10,825 8,849,438
---------------------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., 13.75% Exchangeable, Non-Vtg.
1,4 3 2,985
---------------------------------------------------------------------------------------------------------------------------
Sovereign Real Estate Investment Trust, 12% Non-Cum., Series A
1 57,800 8,568,850
---------------------------------------------------------------------------------------------------------------------------
Supermarkets General Holdings Corp., $14.08 Exchangeable
1,4,14 200,000 --
---------------------------------------------------------------------------------------------------------------------------
XO Communications, Inc., 14% Cum. Sr. Exchangeable Redeemable,
Non-Vtg.
1,4,14
3 --
---------------------------------------------------------------------------------------------------------------------------
Ziff Davis Holdings, Inc., 10% Nts., Series E-1
1,4 240 600

-----------------
Total Preferred Stocks (Cost
$92,360,273)
56,606,457

---------------------------------------------------------------------------------------------------------------------------
Common Stocks--2.3%
Adelphia Business Solutions, Inc.
4
6,272 69
---------------------------------------------------------------------------------------------------------------------------
Adobe Systems,
Inc.
30,496 1,197,273
---------------------------------------------------------------------------------------------------------------------------
Albertson's,
Inc.
56,926 1,170,968
---------------------------------------------------------------------------------------------------------------------------
Allegheny Energy, Inc.
4
128,913 1,178,265
---------------------------------------------------------------------------------------------------------------------------
Altera Corp.
4
53,714 1,015,195
---------------------------------------------------------------------------------------------------------------------------
Altria Group,
Inc.
28,770 1,260,126
---------------------------------------------------------------------------------------------------------------------------
AO VimpelCom, Sponsored ADR
4
20,685 1,258,889
---------------------------------------------------------------------------------------------------------------------------
Apache
Corp.
17,511 1,214,213
---------------------------------------------------------------------------------------------------------------------------
Arch Wireless, Inc., Cl. A
4
53,116 597,024
---------------------------------------------------------------------------------------------------------------------------
AutoNation, Inc.
4
63,288 1,110,072
---------------------------------------------------------------------------------------------------------------------------
Bank Pekao SA, Sponsored
GDR
52,692 1,508,730
---------------------------------------------------------------------------------------------------------------------------
Bear Stearns Cos., Inc.
(The)
16,641 1,244,747
---------------------------------------------------------------------------------------------------------------------------
Best Buy Co., Inc.
4
22,573 1,072,669
---------------------------------------------------------------------------------------------------------------------------
Brasil Telecom Participacoes SA, Sponsored
ADR 86,125 3,298,587
---------------------------------------------------------------------------------------------------------------------------
Burlington Resources,
Inc.
24,860 1,198,252
---------------------------------------------------------------------------------------------------------------------------
Capital One Financial
Corp.
21,637 1,234,174
---------------------------------------------------------------------------------------------------------------------------
Cavco Industries, Inc.
4
770 16,555
---------------------------------------------------------------------------------------------------------------------------
CenterPoint Energy,
Inc.
136,700 1,253,539
---------------------------------------------------------------------------------------------------------------------------
Centex
Corp.
16,215 1,262,824
---------------------------------------------------------------------------------------------------------------------------
Cesky Telecom AS, GDR
4
121,441 1,196,194

40 | OPPENHEIMER STRATEGIC INCOME FUND

Market Value

Shares See Note 1
---------------------------------------------------------------------------------------------------------------------------

Common Stocks Continued
Charles River Laboratories International, Inc.
4 45,220 $ 1,387,802
---------------------------------------------------------------------------------------------------------------------------
Chesapeake Energy
Corp.
875,000 9,432,500
---------------------------------------------------------------------------------------------------------------------------
Chiquita Brands International, Inc.
4 88,293
1,562,786
---------------------------------------------------------------------------------------------------------------------------
Citrix Systems, Inc.
4
57,530 1,270,262
---------------------------------------------------------------------------------------------------------------------------
Classic Cable, Inc.
4
7,208 --
---------------------------------------------------------------------------------------------------------------------------
Companhia de Bebidas das Americas,
ADR 188,400
4,078,860
---------------------------------------------------------------------------------------------------------------------------
Companhia Siderurgica Nacional SA, Sponsored
ADR 10,390 369,053
---------------------------------------------------------------------------------------------------------------------------
Companhia Vale do Rio Doce,
ADR
51,520 2,103,046
---------------------------------------------------------------------------------------------------------------------------
Compuware Corp.
4
194,175 1,040,778
---------------------------------------------------------------------------------------------------------------------------
Conseco, Inc.
4
142,199 2,568,114
---------------------------------------------------------------------------------------------------------------------------
Cooper Industries Ltd., Cl.
A
23,424 1,125,055
---------------------------------------------------------------------------------------------------------------------------
Countrywide Financial
Corp.
17,423 1,363,872
---------------------------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc.
4 168,383
931,158
---------------------------------------------------------------------------------------------------------------------------
Criimi MAE, Inc.
4
431,792 4,482,001
---------------------------------------------------------------------------------------------------------------------------
Devon Energy
Corp.
23,220 1,118,972
---------------------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., Cl. A
4 437,675
2,843,137
---------------------------------------------------------------------------------------------------------------------------
Dollar General
Corp.
52,379 1,047,580
---------------------------------------------------------------------------------------------------------------------------
Edison International
4
63,517 1,213,175
---------------------------------------------------------------------------------------------------------------------------
Equinix, Inc.
4
133,114 2,481,245
---------------------------------------------------------------------------------------------------------------------------
Federated Department Stores,
Inc.
27,041 1,133,018
---------------------------------------------------------------------------------------------------------------------------
Freddie
Mac
22,272 1,165,939
---------------------------------------------------------------------------------------------------------------------------
Gap, Inc.
(The)
57,061 976,884
---------------------------------------------------------------------------------------------------------------------------
Gedeon Richter Rt, GDR, S
Shares
10,499 1,028,902
---------------------------------------------------------------------------------------------------------------------------
General Motors
Corp.
28,249 1,156,232
---------------------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc.
1,4
6,475 --
---------------------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc., Series B, Escrow Shares
1,4 625 --
---------------------------------------------------------------------------------------------------------------------------
Globix Corp.
1,4
100,917 252,292
---------------------------------------------------------------------------------------------------------------------------
Horizon Natural Resources Co.
1,4
133,333 --
---------------------------------------------------------------------------------------------------------------------------
ICO Global Communication Holdings Ltd.
1,4 276,705
235,199
---------------------------------------------------------------------------------------------------------------------------
J. C. Penney Co., Inc. (Holding
Co.) 54,595
1,166,695
---------------------------------------------------------------------------------------------------------------------------
JSC Mining & Metallurgical Co. Norilsk Nickel,
ADR 28,135 1,396,199
---------------------------------------------------------------------------------------------------------------------------
KB
Home
20,856 1,244,269
---------------------------------------------------------------------------------------------------------------------------
KGHM Polska Miedz SA, GDR
4
48,216 501,446
---------------------------------------------------------------------------------------------------------------------------
Komercni Banka AS,
GDR
81,233 2,367,942
---------------------------------------------------------------------------------------------------------------------------
Kroger Co. (The)
4
62,048 1,108,798
---------------------------------------------------------------------------------------------------------------------------
Ladish Co., Inc.
4
30,000 187,500
---------------------------------------------------------------------------------------------------------------------------
LUKOIL, Sponsored
ADR
13,205 1,090,205
---------------------------------------------------------------------------------------------------------------------------
Magyar Tavkozlesi Rt, Sponsored
ADR 68,963
1,288,918
---------------------------------------------------------------------------------------------------------------------------
Manitowoc Co., Inc.
(The)
7,919 171,763
---------------------------------------------------------------------------------------------------------------------------
Marathon Oil
Corp.
42,328 1,206,348
---------------------------------------------------------------------------------------------------------------------------
MBIA,
Inc.
21,138 1,161,956

41 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Market Value

Shares See Note 1
---------------------------------------------------------------------------------------------------------------------------

Common Stocks Continued
Metrocall Holdings, Inc.
4 6,801
$ 986,145
---------------------------------------------------------------------------------------------------------------------------
MGIC Investment
Corp.
20,819 1,084,045
---------------------------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc.
4 45,738
584,668
---------------------------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc., Cl. A
4 381 4,659
---------------------------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc., Cl. B
4 45,465 539,401
---------------------------------------------------------------------------------------------------------------------------
MOL Magyar Olaj-es Gazipari Rt, Sponsored
GDR 44,938 1,244,783
---------------------------------------------------------------------------------------------------------------------------
Network Appliance, Inc.
4
53,050 1,089,117
---------------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., Cl. A
4 61,567
1,212,254
---------------------------------------------------------------------------------------------------------------------------
Nordstrom,
Inc.
45,714 1,134,164
---------------------------------------------------------------------------------------------------------------------------
NTL, Inc.
4
259,147 12,211,007
---------------------------------------------------------------------------------------------------------------------------
OAO Gazprom, Sponsored
ADR
50,020 1,240,496
---------------------------------------------------------------------------------------------------------------------------
Occidental Petroleum
Corp.
33,987 1,197,362
---------------------------------------------------------------------------------------------------------------------------
Orbital Sciences Corp.
4
36,365 337,467
---------------------------------------------------------------------------------------------------------------------------
OTP Bank Ltd., GDR, S Shares
4
86,263 2,053,059
---------------------------------------------------------------------------------------------------------------------------
Paccar,
Inc.
13,984 1,044,465
---------------------------------------------------------------------------------------------------------------------------
PerkinElmer,
Inc.
73,037 1,118,196
---------------------------------------------------------------------------------------------------------------------------
Petroleo Brasileiro SA, Sponsored
ADR 189,770
4,351,426
---------------------------------------------------------------------------------------------------------------------------
Pioneer Cos., Inc.
4
165,394 756,678
---------------------------------------------------------------------------------------------------------------------------
Polski Koncern Naftowy Orlen SA,
GDR 123,888
1,499,045
---------------------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., Cl. A
1,4
6,989 38,824
---------------------------------------------------------------------------------------------------------------------------
Prandium, Inc.
4,16
1,019,757 316,125
---------------------------------------------------------------------------------------------------------------------------
Premier Holdings Ltd.
1,4,16
799,833 --
---------------------------------------------------------------------------------------------------------------------------
Public Service Enterprise Group,
Inc. 27,759
1,165,878
---------------------------------------------------------------------------------------------------------------------------
Pulte Homes,
Inc.
18,013 1,225,064
---------------------------------------------------------------------------------------------------------------------------
RadioShack
Corp.
38,011 1,079,893
---------------------------------------------------------------------------------------------------------------------------
Scientific-Atlanta,
Inc.
33,441 1,041,687
---------------------------------------------------------------------------------------------------------------------------
Sears Roebuck &
Co.
26,226 1,146,863
---------------------------------------------------------------------------------------------------------------------------
Sempra
Energy
39,894 1,171,288
---------------------------------------------------------------------------------------------------------------------------
Sibneft, Sponsored ADR
4
42,555 1,244,734
---------------------------------------------------------------------------------------------------------------------------
Southern Pacific Funding Corp., Liquidating Trust
1 7,946,502 --
---------------------------------------------------------------------------------------------------------------------------
Sprint Corp. (Fon
Group)
80,731 1,219,038
---------------------------------------------------------------------------------------------------------------------------
Staples, Inc.
4
48,465 1,151,044
---------------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.
4
9,927 155,109
---------------------------------------------------------------------------------------------------------------------------
Surgutneftegaz, Sponsored
ADR
48,075 1,088,899
---------------------------------------------------------------------------------------------------------------------------
Symantec Corp.
4
20,833 1,312,896
---------------------------------------------------------------------------------------------------------------------------
Telekomunikacja Polska SA,
GDR
388,030 1,389,147
---------------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp.
4
74,086 1,072,765
---------------------------------------------------------------------------------------------------------------------------
Toys 'R' Us, Inc.
4
87,912 1,057,581
---------------------------------------------------------------------------------------------------------------------------
TVMAX Holdings, Inc.
1,4
56,750 --
---------------------------------------------------------------------------------------------------------------------------
UGC Europe, Inc.
4
171,530 8,979,596
---------------------------------------------------------------------------------------------------------------------------
United States Steel
Corp.
65,217 1,198,688

42 | OPPENHEIMER STRATEGIC INCOME FUND

Market Value

Shares See Note 1
---------------------------------------------------------------------------------------------------------------------------

Common Stocks Continued
Viatel Holding Ltd. (Bermuda)
1,4 37,131
$ 144,811
---------------------------------------------------------------------------------------------------------------------------
Walter Industries,
Inc.
60,000 643,800
---------------------------------------------------------------------------------------------------------------------------
Washington Mutual,
Inc.
30,395 1,196,651
---------------------------------------------------------------------------------------------------------------------------
Wilshire Financial Services Group, Inc.
4 560,000 2,598,400
---------------------------------------------------------------------------------------------------------------------------
Winn-Dixie Stores,
Inc.
117,302 1,131,964
---------------------------------------------------------------------------------------------------------------------------
WRC Media Corp.
1,4
15,559 311
---------------------------------------------------------------------------------------------------------------------------
XO Communications, Inc.
4
28,777 166,907
---------------------------------------------------------------------------------------------------------------------------
YUKOS,
ADR
20,670 1,281,747

-----------------
Total Common Stocks (Cost
$171,488,642)
150,456,413

Units
---------------------------------------------------------------------------------------------------------------------------
Rights, Warrants and Certificates--1.1%
American Tower Corp. Wts., Exp. 8/1/08
1,4 6,000
738,000
---------------------------------------------------------------------------------------------------------------------------
ASAT Finance LLC Wts., Exp. 11/1/06
1,4 2,200
3,025
---------------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp. Wts.:
Exp. 5/1/05
1,4
27,926 279
Exp. 9/1/04
4
36,061 1,848
---------------------------------------------------------------------------------------------------------------------------
Citigroup, Inc. Litigation Wts., Exp. 12/31/50
4 48,080 51,926
---------------------------------------------------------------------------------------------------------------------------
COLO.com, Inc. Wts., Exp. 3/15/10
1,4
6,350 64
---------------------------------------------------------------------------------------------------------------------------
Comunicacion Celular SA Wts., Exp. 11/15/03
1,4 8,109 81
---------------------------------------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/15/07
1,4 4,650 --
---------------------------------------------------------------------------------------------------------------------------
Covergent Communications, Inc. Wts., Exp. 4/1/08
1,4 18,300 183
---------------------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/1/05
1,4 5,225 52
---------------------------------------------------------------------------------------------------------------------------
HF Holdings, Inc. Wts., Exp. 9/27/09
1,4 34,425
4,647
---------------------------------------------------------------------------------------------------------------------------
Horizon PCS, Inc. Wts., Exp. 10/1/10
1,4
11,000 --
---------------------------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05
1,4 46,860 469
---------------------------------------------------------------------------------------------------------------------------
ICO Global Communication Holdings Ltd. Wts.:
Exp. 5/16/06
1,4
69,399 347
Exp. 5/16/06
1,4
103 --
---------------------------------------------------------------------------------------------------------------------------
Imperial Credit Industries, Inc. Wts., Exp. 1/31/08
1,4 86,946 --
---------------------------------------------------------------------------------------------------------------------------
Insilco Corp. Wts., Exp. 8/15/07
1,4
7,780 --
---------------------------------------------------------------------------------------------------------------------------
IPCS, Inc. Wts., Exp. 6/15/10
1,4
6,600 66
---------------------------------------------------------------------------------------------------------------------------
Leap Wireless International, Inc. Wts., Exp. 4/15/10
1,4 6,700 --
---------------------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08
1,4 4,160 --
---------------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07
1,4 6,250 63
---------------------------------------------------------------------------------------------------------------------------
McLeodUSA, Inc. Wts., Exp. 4/16/07
1,4 14,440
7,509
---------------------------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc.:
Cl. A Wts., Exp. 5/1/05
4
16,888 19,773
Cl. B Wts., Exp. 5/1/08
4
28,147 48,599
---------------------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc. Wts., Exp. 7/15/05
1,4 5,800 58
---------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc. All Country Asia Free
(except for Japan) Wts., Exp. 3/4/05
4 1,413,050
18,169,138
---------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc. Basket of countries Wts., Exp. 3/4/05
4 2,187,446 26,159,229

43 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Market Value

Units See Note 1
---------------------------------------------------------------------------------------------------------------------------

Rights, Warrants and Certificates Continued
Morgan Stanley Capital III, Inc. All Country Asia Free
(except for Japan) Wts., Exp. 3/4/05
4 2,733,566 $
29,486,156
---------------------------------------------------------------------------------------------------------------------------
Ntelos, Inc. Wts., Exp. 8/15/10
1,4
8,000 7,000
---------------------------------------------------------------------------------------------------------------------------
Occidente y Caribe Celular SA Wts., Exp. 3/15/04
1,4 21,600 --
---------------------------------------------------------------------------------------------------------------------------
PLD Telekom, Inc. Wts., Exp. 6/1/06
(cv. into Metromedia International Group, Inc.)
1,4 16,650 167
---------------------------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts.:
Exp. 11/1/03
1,4
182,000 --
Exp. 6/30/05
1,4
13,440 --
---------------------------------------------------------------------------------------------------------------------------
Real Time Data Co. Wts., Exp. 5/31/04
1,4 2,251,489
--
---------------------------------------------------------------------------------------------------------------------------
Republic Technologies International LLC Wts., Exp. 7/15/09
1,4 4,900 49
---------------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc. Wts., Exp. 12/19/08
1,4 16,111 --
---------------------------------------------------------------------------------------------------------------------------
Telergy, Inc. Wts., Exp. 9/25/10
1,4
18,175 --
---------------------------------------------------------------------------------------------------------------------------
Telus Corp. Wts., Exp. 9/15/05
4
12,147 71,522
---------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Oil Linked Payment Obligation Wts.,
Exp. 4/15/20
1,4
18,600 --
---------------------------------------------------------------------------------------------------------------------------
Verado Holdings, Inc., Cl. B Wts., Exp. 4/15/08
1,4 7,000 105
---------------------------------------------------------------------------------------------------------------------------
XO Communications, Inc.:
Cl. A Wts., Exp. 1/16/10
4
57,557 105,042
Cl. B Wts., Exp. 1/16/10
4
43,168 69,069
Cl. C Wts., Exp. 1/16/10
4
43,168 44,463
---------------------------------------------------------------------------------------------------------------------------
Ziff Davis Holdings, Inc. Wts., Exp. 8/12/12
1,4 44,000 440

-----------------
Total Rights, Warrants and Certificates (Cost
$65,578,044) 74,989,369

Principal

Amount
---------------------------------------------------------------------------------------------------------------------------
Structured Notes--8.4%
Citigroup Global Capital Markets Holdings, Inc.,
Brazilian Real Linked Nts., 23.18%, 5/20/04 9
[BRR] 7,236,940 2,177,386
---------------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Holdings, Inc.,
Argentine Peso Linked Nts.,
7/6/04
3,325,000 3,265,815
---------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (Cayman):
Russia (Government of) Linked Bonds, Series 24, 15%, 9/2/05
[RUR] 82,770,000 2,888,710
Russia (Government of) Linked Bonds, Series 26, 15%, 3/11/05
[RUR] 83,913,000 2,888,822
---------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (Nassau Branch),
U.S. Dollar/Philippine Peso Linked Nts., 12.50%, 3/5/12 2
[PHP] 804,270,000 14,688,645
---------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (New York Branch):
Russian Obligatzii Federal'nogo Zaima Linked Nts., Series 27011,
10.028%, 10/8/03 1,2
[RUR]
131,512,500 4,301,771
Russian Obligatzii Federal'nogo Zaima Linked Nts., Series 27011,
10.028%, 10/8/03 1,2
[RUR]
10,781,020 352,647
Russian Obligatzii Federal'nogo Zaima Linked Nts., Series 28001,
10.028%, 1/21/04 1,2
[RUR]
10,781,020 354,973
---------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston International, U.S. Dollar/
South African Rand Linked Nts., Series FBi 43, 1.065%, 5/23/22
2 13,740,000 13,329,174

44 | OPPENHEIMER STRATEGIC INCOME FUND

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Structured Notes Continued
---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Basket of Emerging Market Currencies Linked Nts.:
0.85%,
1/20/04
$ 25,470,000 $ 25,808,751
0.85%,
3/24/04
27,465,000 27,602,325
---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Indonesian Rupiah Linked Nts.:
14%,
6/22/09
13,171,778 15,331,950
14%,
6/22/09
6,708,285 7,383,139
14%,
6/22/09
6,147,455 7,055,434
---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Peru Credit Default Linked Nts., 4.716%, 4/29/06
2 22,035,000 22,458,072
---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Turkish Lira Treasury Bill Linked Nts, 0.985%, 8/20/04
2 13,210,000 14,437,209
---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Venezuela (Republic of) Credit Linked Certificate
of Deposit, 8.18%, 9/20/06
2
16,900,000 16,455,530
---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Venezuela (Republic of) Credit Linked Nts.,
1.094%, 6/15/04
2
10,685,000 11,216,044
---------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank:
High Yield Beta Index Linked Nts., 10%, 6/20/08
8 32,000,000 31,440,000
High Yield Index B Linked Nts., 9%, 6/20/08
8 157,037,037 160,177,778
High Yield Index-100 Linked Nts., 8%, 6/20/08
8 89,100,000 90,882,000
---------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank, Venezuela (Republic of) Credit Linked
Certificate of Deposit:
7.79%, 9/20/05
2
15,385,000 15,372,692
7.84%, 9/20/05
2
15,225,000 15,226,522
---------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank, Venezuela (Republic of) Credit Linked
Default Bonds, 7.94%, 9/20/05
2 15,225,000
15,253,927
---------------------------------------------------------------------------------------------------------------------------
Parametric RE Ltd., Catastrophe Linked Nts., 5.54%, 11/19/07
2,5 2,400,000 2,444,856
---------------------------------------------------------------------------------------------------------------------------
Pioneer 2002 Ltd., Sec. Catastrophe Linked Nts.:
Series 2002-1, Cl. E-A, 5.39%, 6/15/06
2 1,250,000
1,251,812
Series 2003-II, Cl. A, 7.14%, 6/15/06
1,2 6,250,000
6,385,937
Series 2003-II, Cl. B, 6.14%, 6/15/06
1,2 6,250,000
6,329,063
Series 2003-II, Cl. C, 6.89%, 6/15/06
1,2 6,250,000
6,304,063
---------------------------------------------------------------------------------------------------------------------------
Swiss Re Capital Markets Corp./Fujiyama Ltd.,
Catastrophe Linked Nts., 5.13%, 5/16/05
2,5 2,500,000 2,510,225

-----------------
Total Structured Notes (Cost
$546,574,997)
545,575,272

Date
Strike Contracts
---------------------------------------------------------------------------------------------------------------------------
Options Purchased--0.2%
Chilean Peso Call 1,4 3/22/04
655CLP 18,986,184 400,267
---------------------------------------------------------------------------------------------------------------------------
Euro Call 1,4 4/1/04
1.20EUR 192,325,000 3,577,245
---------------------------------------------------------------------------------------------------------------------------
Japanese Yen Call 1,4 6/1/04
107JPY 8,608,000,000 1,768,083
---------------------------------------------------------------------------------------------------------------------------
Japanese Yen Put 1,4 2/25/04
122EUR 42,280,000 417,304
---------------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index Futures,
12/18/03 Put 11/21/03
$1,005 414 3,736,350

-----------------
Total Options Purchased (Cost
$8,976,593)
9,899,249

45 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------

Principal Market Value

Amount See Note 1
---------------------------------------------------------------------------------------------------------------------------

Joint Repurchase Agreements--1.2%
Undivided interest of 12.92% in joint repurchase agreement (Principal
Amount/Market Value $626,785,000, with a maturity value of $626,801,192) with
Banc One Capital Markets, Inc., 0.93%, dated 9/30/03, to be repurchased at
$80,999,092 on 10/1/03, collateralized by U.S. Treasury Nts., 7.25%, 5/15/04,
with a value of $53,265,500, U.S. Treasury Bonds, 1.75%--9%, 9/30/05--8/15/23,
with a value of $448,490,782 and U.S. Treasury Bills, 2/5/04--2/19/04, with
a value of $138,244,579 (Cost
$80,997,000) $ 80,997,000 $
80,997,000

---------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost
$7,280,049,876) 109.8%
7,164,615,997
---------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other
Assets (9.8)
(636,700,790)

------------------------------------
Net
Assets
100.0% $ 6,527,915,207

====================================

Footnotes to Statement of Investments
Principal amount and strike are reported in U.S. dollars, except for those
denoted in the following currencies:

ARP Argentine Peso
BRR Brazilian Real
CAD Canadian Dollar
CLP Chilean Peso
DEM German Mark
DKK Danish Krone
EUR Euro
FRF French Franc
GBP British Pound Sterling
JPY Japanese Yen
PHP Philippines Peso
RUR Russian Ruble
SEK Swedish Krona

1. Identifies issues considered to be illiquid or restricted. See Note 11 of
Notes to Financial Statements.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Issuer is in default. See Note 1 of Notes to Financial Statements.
4. Non-income producing security.
5. 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 $371,018,228 or 5.68% of the Fund's net
assets as of September 30, 2003.
6. Delayed settlement security to be delivered and settled after September 30,
2003. See Note 1 of Notes to Financial Statements.
7. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $33,347,302 or 0.51% of the Fund's net assets
as of September 30, 2003.
8. Partial or fully-loaned security--See Note 12 of Notes to Financial
Statements.
9. Zero coupon bond reflects effective yield on the date of purchase.
10. Securities with an aggregate market value of $23,186,304 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
11. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.

46 | OPPENHEIMER STRATEGIC INCOME FUND

12. A sufficient amount of liquid assets has been designated to cover
outstanding written options, as follows:

Contracts Expiration
Exercise Premium Market Value
Subject to Call Dates
Price Received See Note 1
--------------------------------------------------------------------------------------------------------------

Chilean Peso 18,986 3/22/04
665.00CLP $ 446,173 $ 562,938
Japanese Yen 84,560 4/28/04
141.00JPY 1,178,420 289,195
Japanese Yen 42,280 2/25/04
132.00EUR 485,887 655,763
Japanese Yen 31,174 10/23/03-10/30/03
110.00JPY 2,840,757 2,318,022
Thailand Baht 8,600 10/27/03
140.00THB 56,330 56,760

----------------------------

5,007,567 3,882,678

----------------------------
Contracts
Subject to Put
--------------------------------------------------------------------------------------------------------------
Japanese Yen 9,703 6/1/04
120.00JPY 1,811,227 595,764
Thailand Baht 8,600 10/27/03
40.50THB 34,830 20,210

----------------------------

1,846,057 615,974

----------------------------

$6,853,624 $4,498,652

============================

13. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
14. Interest or dividend is paid-in-kind.
15. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units, which
represent debt securities, principal amount disclosed represents total
underlying principal.
16. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended September 30,
2003. The aggregate fair value of securities of affiliated companies held by the
Fund as of September 30, 2003 amounts to $316,125. Transactions during the
period in which the issuer was an affiliate are as follows:

Shares Gross
Gross Shares Unrealized
Sept. 30, 2002 Additions Reductions
Sept. 30, 2003 Depreciation
------------------------------------------------------------------------------------------------------------

Stocks and/or Warrants
Prandium, Inc. 1,019,757 --
-- 1,019,757 $11,669,875
Premier Holdings Ltd. 799,833 --
-- 799,833 --

-----------

$11,669,875

===========

See accompanying Notes to Financial Statements.

47 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF ASSETS AND LIABILITIES September 30, 2003
--------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------

Assets
Investments, at value--see accompanying statement:
Unaffiliated companies (cost
$7,268,063,876) $7,164,299,872
Affiliated companies (cost
$11,986,000) 316,125

---------------

7,164,615,997
-----------------------------------------------------------------------------------------------------------

Cash
9,383,247
-----------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost
$35,702) 35,891
-----------------------------------------------------------------------------------------------------------
Collateral for securities
loaned 588,906,159
-----------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency
contracts 34,547,946
-----------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal
paydowns 102,015,903
Investments sold (including $15,860,173 sold on a delayed settlement
basis) 60,472,674
Shares of beneficial interest
sold 8,621,604
Futures
margins
6,740,676

Other
331,906

---------------
Total
assets
7,975,672,003

-----------------------------------------------------------------------------------------------------------
Liabilities
Return of collateral for securities
loaned 588,906,159
-----------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency
contracts 15,578,484
-----------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $6,853,624)--see accompanying
statement 4,498,652
-----------------------------------------------------------------------------------------------------------
Swaptions written, at value (premiums received $395,561)--see accompanying
statement 210,508
-----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $745,964,382 purchased on a delayed statement
basis) 803,960,305
Closed foreign currency
contracts
12,274,625
Shares of beneficial interest
redeemed 11,459,381

Dividends
3,941,132
Distribution and service plan
fees 3,833,112
Swap
contract
1,295,578
Transfer and shareholder servicing agent
fees 900,100
Shareholder
reports
643,607
Trustees'
compensation
37,209

Other
217,944

---------------
Total
liabilities
1,447,756,796

-----------------------------------------------------------------------------------------------------------
Net
Assets
$6,527,915,207

===============

-----------------------------------------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of beneficial
interest $ 1,598,743
-----------------------------------------------------------------------------------------------------------
Additional paid-in
capital
7,806,869,657
-----------------------------------------------------------------------------------------------------------
Overdistributed net investment
income (26,416,177)
-----------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency
transactions (1,179,105,482)
-----------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and
liabilities denominated in foreign
currencies (75,031,534)

---------------
Net
Assets
$6,527,915,207

===============

48 | OPPENHEIMER STRATEGIC INCOME FUND

----------------------------------------------------------------------------------------------
Net Asset Value Per Share

Class A Shares:
Net asset value and redemption price per share (based on net assets of
$3,873,017,762 and 949,148,024 shares of beneficial interest
outstanding) $4.08
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering
price) $4.28
----------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$1,686,295,194 and 411,775,837 shares of beneficial interest
outstanding) $4.10
----------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $698,196,252
and 171,429,718 shares of beneficial interest
outstanding) $4.07
----------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $30,109,834
and 7,373,613 shares of beneficial interest
outstanding) $4.08
----------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $240,296,165 and 59,015,579 shares of beneficial interest
outstanding) $4.07

See accompanying Notes to Financial Statements.

49 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENT OF OPERATIONS For the Year Ended September 30, 2003
--------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

Investment Income
Interest (net of foreign withholding taxes of
$139,783) $ 455,805,209
----------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of
$57,828) 6,625,529
----------------------------------------------------------------------------------------------------------------
Lending
fees
180,468

---------------
Total investment
income
462,611,206

----------------------------------------------------------------------------------------------------------------
Expenses
----------------------------------------------------------------------------------------------------------------
Management
fees
32,424,727
Distribution and service plan fees:
Class
A
8,660,139
Class
B
17,575,847
Class
C
6,232,376
Class
N
112,928
----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class
A
5,069,181
Class
B
2,182,038
Class
C
780,257
Class
N
64,078
Class
Y
1,647,219
----------------------------------------------------------------------------------------------------------------
Shareholder
reports
747,393
----------------------------------------------------------------------------------------------------------------
Custodian fees and
expenses
698,630
----------------------------------------------------------------------------------------------------------------
Trustees'
compensation
194,499
----------------------------------------------------------------------------------------------------------------

Other
254,723

---------------
Total
expenses
76,644,035
Less reduction to custodian
expenses
(76,611)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class
Y (978,905)

---------------
Net
expenses
75,588,519

----------------------------------------------------------------------------------------------------------------
Net Investment
Income
387,022,687

----------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options
exercised) (197,258,234)
Closing of futures
contracts
(31,459,200)
Closing and expiration of option contracts
written 1,705,390
Foreign currency
transactions
48,585,976

---------------
Net realized
loss
(178,426,068)
----------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation on:

Investments
789,582,547
Translation of assets and liabilities denominated in foreign
currencies 80,586,248
Futures
contracts
(6,780,389)

---------------
Net change in unrealized
depreciation
863,388,406

----------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations $1,071,985,025

===============

See accompanying Notes to Financial Statements.

50 | OPPENHEIMER STRATEGIC INCOME FUND

STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------

Year Ended September
30,
2003 2002
---------------------------------------------------------------------------------------------------------------
Operations

Net investment income $
387,022,687 $ 457,975,004
---------------------------------------------------------------------------------------------------------------
Net realized loss
(178,426,068) (159,493,130)
---------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation
863,388,406 81,078,629

----------------------------------------
Net increase in net assets resulting from operations
1,071,985,025 379,560,503

---------------------------------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A
(228,607,620) (265,599,919)
Class B
(101,542,711) (151,627,069)
Class C
(35,917,109) (42,267,132)
Class N
(1,359,641) (694,273)
Class Y
(12,603,902) (10,529,269)
---------------------------------------------------------------------------------------------------------------
Tax return of capital distribution:
Class
A
-- (15,387,732)
Class
B
-- (9,696,394)
Class
C
-- (2,693,708)
Class
N
-- (42,219)
Class
Y
-- (603,497)

---------------------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Class A
271,084,579 84,394,819
Class B
(358,847,116) (304,556,289)
Class C
59,394,216 27,485,800
Class N
12,050,473 12,727,093
Class Y
65,509,777 52,746,414

---------------------------------------------------------------------------------------------------------------
Net Assets
Total increase (decrease)
741,145,971 (246,782,872)
---------------------------------------------------------------------------------------------------------------
Beginning of period
5,786,769,236 6,033,552,108

----------------------------------------
End of period [including overdistributed net investment income of
$26,416,177 and $68,166,742, respectively]
$6,527,915,207 $5,786,769,236

========================================

See accompanying Notes to Financial Statements.

51 | OPPENHEIMER STRATEGIC INCOME FUND

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

=================================================================

--------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 19.59%
6.63% (1.79)% 6.18% 2.91%

--------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $3,873,018 $3,202,825
$3,186,441 $3,431,763 $3,578,105
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $3,521,307 $3,263,490
$3,349,859 $3,517,517 $3,798,380
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 6.60%
7.91% 8.90% 9.98% 9.34%
Total expenses 0.95% 3 1.01%
3 0.93% 3 0.95% 3 0.94% 3
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 104%
117% 209% 136% 172%

1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

2. Annualized for periods of less than one full year.

3. Reduction to custodian expenses less than 0.01%.

See accompanying Notes to Financial Statements.

52 | OPPENHEIMER STRATEGIC INCOME FUND

======================================================================

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 18.62%
6.11% (2.53)% 5.37% 1.92%

1. 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 business day of the fiscal period. Sales charges are not reflected
in the total returns. Total returns are not annualized for periods of less than
one full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.

See accompanying Notes to Financial Statements.

53 | OPPENHEIMER STRATEGIC INCOME FUND

FINANCIAL HIGHLIGHTS Continued
--------------------------------------------------------------------------------

=============================================================

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 18.45%
6.15% (2.54)% 5.39% 1.92%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $698,196
$568,487 $553,399 $548,332 $610,686
------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $623,598
$571,292 $554,279 $568,742 $650,197
------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 5.85%
7.15% 8.15% 9.21% 8.58%
Total expenses 1.69% 3 1.75%
3 1.68% 3 1.71% 3 1.69% 3
------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 104%
117% 209% 136% 172%

1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less
than 0.01%.
See accompanying Notes to Financial Statements.

54 | OPPENHEIMER STRATEGIC INCOME FUND

Class N Year Ended September 30, 2003
2002 2001 1
-----------------------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period $3.65
$3.72 $4.13
-----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income
.25 .30 .22
Net realized and unrealized gain (loss) .42
(.05) (.41)

----------------------------------------------
Total from investment operations
.67 .25 (.19)
-----------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.24)
(.30) (.15)
Tax return of capital distribution --
(.02) (.07)

----------------------------------------------
Total dividends and/or distributions
to shareholders (.24)
(.32) (.22)
-----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.08
$3.65 $3.72

==============================================

-----------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 18.82%
6.70% (4.61)%

-----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $30,110
$15,508 $3,215
-----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $22,627 $
8,954 $1,348
-----------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.08%
7.07% 9.74%
Total expenses 1.34% 4
1.22% 4 0.98% 4
-----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
104% 117% 209%

1. For the period from March 1, 2001 (inception of offering) to September 30,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.

55 | OPPENHEIMER STRATEGIC INCOME FUND

FINANCIAL HIGHLIGHTS Continued
--------------------------------------------------------------------------------

Net asset value, beginning of period $3.64
$3.71 $4.17 $4.32 $4.59
-----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .26
.32 .36 .46 .44
Net realized and unrealized gain (loss) .42
(.06) (.42) (.19) (.30)

=============================================================

-----------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 19.33%
7.06% (1.58)% 6.55% 3.07%

1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.

See accompanying Notes to Financial Statements.

56 | OPPENHEIMER STRATEGIC INCOME FUND

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Strategic Income Fund (the Fund) is a separate series of
Oppenheimer Strategic Funds Trust, an open-end management investment company
registered under the Investment Company Act of 1940, as amended. The Fund's
investment objective is to seek high current income by investing mainly in debt
securities. 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. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per
share may differ by minor amounts due to each class having its own expenses
directly attributable to that class. Classes 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. Securities listed or traded on National Stock Exchanges
or other domestic or foreign exchanges are valued based on the last sale price
of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued.
In the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing bid and asked
prices, and if not, at the closing bid price. Securities (including restricted
securities) for which quotations are not readily available are valued primarily
using dealer-supplied valuations, a portfolio pricing service authorized by the
Board of Trustees, or at their fair value. Fair value is determined in good
faith using consistently applied procedures under the supervision of the Board
of Trustees. Short-term "money market type" debt securities with remaining
maturities of sixty days or less are valued at amortized cost (which
approximates market value).

--------------------------------------------------------------------------------
Structured Notes. The Fund invests in foreign currency-linked structured notes
whose market values and redemption prices are linked to foreign currency
exchange rates. The Fund also invests in "index-linked" notes whose principal
and/or interest payments depend on the performance of an underlying index. The
structured notes are leveraged, increasing the volatility of each note's market
value relative to the change in the underlying foreign currency exchange rate
or underlying index. Fluctuations in value of these securities are recorded as
unrealized gains and losses in the accompanying financial statements. The Fund
records a realized gain or loss when a structured note is sold or

57 | OPPENHEIMER STRATEGIC INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
matures. As of September 30, 2003, the market value of these securities
comprised 8.4% of the Fund's net assets and resulted in unrealized losses of
$999,725. The Fund also hedges a portion of the foreign currency exposure
generated by these securities, as discussed in Note 5.

--------------------------------------------------------------------------------
Securities on a Delayed Settlement Basis. Delivery and payment for securities
that have been purchased by the Fund on a delayed settlement basis can take
place a month 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 segregated assets with a market value
equal to or greater than the amount of its purchase commitments. The purchase
of securities on a deferred settlement basis may increase the volatility of the
Fund's net asset value to the extent the Fund executes such purchases while
remaining substantially fully invested. As of September 30, 2003, the Fund had
entered into delayed settlement purchase commitments of $745,964,382.
Additionally, the Fund had delayed settlement sale commitments of $15,860,173.
In connection with its ability to purchase securities on a delayed
settlement basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of
each forward roll as interest income or realized gain (loss) on investments.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities to what was sold to the counterparty
at redelivery; counterparty credit risk; and the potential pay down speed
variance between the mortgage-related pools.

--------------------------------------------------------------------------------
Security Credit Risk. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, market fluctuations and loss of
income and principal, and may be more sensitive to economic conditions than
lower-yielding, higher-rated fixed-income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. As of September 30, 2003, securities with an
aggregate market value of $86,491,371, representing 1.32% of the Fund's net
assets, were in default.

58 | OPPENHEIMER STRATEGIC INCOME FUND

--------------------------------------------------------------------------------
Foreign Currency Translation. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains
and losses in the Fund's Statement of Operations.

--------------------------------------------------------------------------------
Joint Repurchase Agreements. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint
trading accounts on a daily basis. Secured by U.S. government securities, these
balances are invested in one or more repurchase agreements. Securities pledged
as collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal. In the
event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.

--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.

--------------------------------------------------------------------------------
Federal Taxes. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.

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.

59 | OPPENHEIMER STRATEGIC INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. Significant Accounting Policies Continued

Net
Unrealized

Depreciation
Based on
Cost of

Securities and
Undistributed Undistributed Accumulated Other
Investments
Net Investment Long-Term Loss for Federal
Income
Income Gain Carryforward 1,2,3,4 Tax
Purposes

--------------------------------------------------------------------------------

$20,228,658 $-- $1,136,669,728
$117,865,111

1. As of September 30, 2003, the Fund had $1,022,131,149 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of September 30, 2003,
details of the capital loss carryforwards were as follows:

Expiring
------------------------------
2004 $ 114,650,580
2007 16,381,920
2008 358,683,799
2009 52,578,252
2010 185,647,798
2011 294,188,800
--------------
Total $1,022,131,149
==============

2. During the fiscal years ended September 30, 2003 and September 30, 2002, the
Fund did not utilize any capital loss carryforwards.
3. As of September 30, 2003, the Fund had $108,416,056 of post-October losses
available to offset future realized capital gains, if any. Such losses, if
unutilized, will expire in 2012.
4. The Fund had $6,122,523 of straddle losses which were deferred.

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, 2003. Net assets
of the Fund were unaffected by the reclassifications.

From To Net
Ordinary Capital Tax Return Investment
Loss Loss of Capital Loss
---------------------------------------------------------------
$34,758,861 $34,758,861 $-- $--

The tax character of distributions paid during the years ended September 30,
2003 and September 30, 2002 was as follows:
Year Ended Year Ended
September 30, 2003 September 30, 2002
--------------------------------------------------------------------
Distributions paid from:
Ordinary income $380,030,983 $470,717,662
Return of capital -- 28,423,550
------------------------------------
Total $380,030,983 $499,141,212
====================================

60 | OPPENHEIMER STRATEGIC INCOME FUND

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, 2003 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
and other investments $10,105,769,435
===============

Gross unrealized appreciation $ 423,704,765
Gross unrealized depreciation (541,569,876)
---------------
Net unrealized depreciation $ (117,865,111)
===============

-------------------------------------------------------------------------------
Trustees' Compensation. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. Under the plan, deferred amounts are treated as
though equal dollar amounts had been invested in shares of the Fund or are
invested in other selected Oppenheimer funds. Deferral of trustees' fees under
the plan will not affect the net assets of the Fund, and will not materially
affect the Fund's assets, liabilities or net investment income per share.
Amounts will be deferred until distributed in accordance to the Plan.

-------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are
declared daily and paid monthly. Capital gain distributions, if any, are
declared and paid annually.

-------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.

-------------------------------------------------------------------------------
Expense Offset Arrangement. The reduction of custodian fees represents earnings
on cash balances maintained by the Fund.

-------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.

-------------------------------------------------------------------------------
Other. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.

61 | OPPENHEIMER STRATEGIC INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
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, 2003
Year Ended September 30, 2002
Shares Amount
Shares Amount
-----------------------------------------------------------------------------------------------------------
Class A

Sold 239,075,415 $ 920,837,843
172,101,425 $ 646,946,497
Dividends and/or
distributions reinvested 39,925,641 153,907,293
48,064,194 180,500,573
Redeemed (208,815,336) (803,660,557)
(197,799,204) (743,052,251)

--------------------------------------------------------------------------
Net increase 70,185,720 $ 271,084,579
22,366,415 $ 84,394,819

==========================================================================

-----------------------------------------------------------------------------------------------------------
Class B
Sold 63,952,473 $ 246,602,223
72,239,653 $ 272,446,824
Dividends and/or
distributions reinvested 15,896,757 61,263,462
24,126,021 90,899,162
Redeemed (173,280,500) (666,712,801)
(177,141,272) (667,902,275)

--------------------------------------------------------------------------
Net decrease (93,431,270) $(358,847,116)
(80,775,598) $(304,556,289)

==========================================================================

-----------------------------------------------------------------------------------------------------------
Class C
Sold 44,468,531 $ 171,414,411
38,283,028 $ 143,665,045
Dividends and/or
distributions reinvested 6,320,901 24,316,496
7,553,119 28,283,682
Redeemed (35,649,094) (136,336,691)
(38,550,880) (144,462,927)

--------------------------------------------------------------------------
Net increase 15,140,338 $ 59,394,216
7,285,267 $ 27,485,800

==========================================================================

-----------------------------------------------------------------------------------------------------------
Class N
Sold 4,309,056 $ 16,669,277
3,786,342 $ 14,209,840
Dividends and/or
distributions reinvested 334,213 1,294,796
187,836 702,952
Redeemed (1,522,702) (5,913,600)
(585,248) (2,185,699)

--------------------------------------------------------------------------
Net increase 3,120,567 $ 12,050,473
3,388,930 $ 12,727,093

==========================================================================

-----------------------------------------------------------------------------------------------------------
Class Y
Sold 41,339,112 $ 159,458,161
25,193,404 $ 94,584,057
Dividends and/or
distributions reinvested 2,467,304 9,527,352
2,410,896 9,023,067
Redeemed (26,811,939) (103,475,736)
(13,562,379) (50,860,710)

--------------------------------------------------------------------------
Net increase 16,994,477 $ 65,509,777
14,041,921 $ 52,746,414

==========================================================================

-------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended September 30, 2003, were
$7,839,630,741 and $7,216,140,023, respectively.

62 | OPPENHEIMER STRATEGIC INCOME FUND

--------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets of
the Fund, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66%
of the next $200 million, 0.60% of the next $200 million, and 0.50% of average
annual net assets in excess of $1 billion.

--------------------------------------------------------------------------------
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, 2003, the
Fund paid $9,133,117 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 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.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% of average annual net assets for all
classes. This undertaking may be amended or withdrawn at any time.

--------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund.

The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.

Aggregate Class A Concessions
Concessions Concessions Concessions
Front-End Front-End on Class A
on Class B on Class C on Class N
Sales Charges Sales Charges
Shares Shares Shares Shares
on Class A Retained by Advanced by
Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor 1
Distributor 1 Distributor 1 Distributor 1
-------------------------------------------------------------------------------------------------------------------------

September 30, 2003 $5,134,030 $1,418,393 $594,870
$6,186,560 $1,150,531 $122,428

1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its
own resources at the time of sale.

Class A Class B Class
C Class N
Contingent Contingent
Contingent Contingent
Deferred Deferred
Deferred Deferred
Sales Charges Sales Charges Sales Charges
Sales Charges
Retained by Retained by Retained
by Retained by
Year Ended Distributor Distributor
Distributor Distributor
--------------------------------------------------------------------------------------------

September 30, 2003 $115,085 $6,274,772
$97,016 $41,724

-------------------------------------------------------------------------------
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
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the year ended September 30, 2003, expense
under the Class A Plan totaled $8,660,139, all of

63 | OPPENHEIMER STRATEGIC INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
which were paid by the Distributor to recipients, which included $25,427
retained by the Distributor and $554,215 which was paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years.

--------------------------------------------------------------------------------
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. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per
year under each plan.

Distribution fees paid to the Distributor for the year ended September 30,
2003, were as follows:

Distributor's

Distributor's Aggregate

Aggregate Uncompensated

Uncompensated Expenses as %
Total Expenses Amount Retained
Expenses of Net Assets
Under Plan by Distributor Under
Plan of Class
--------------------------------------------------------------------------------------------------

Class B Plan $17,575,847 $12,679,658
$101,273,876 6.01%
Class C Plan 6,232,376 1,064,235
18,958,511 2.72
Class N Plan 112,928 91,162
545,064 1.81

-------------------------------------------------------------------------------
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 gain or loss. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.

64 | OPPENHEIMER STRATEGIC INCOME FUND

As of September 30, 2003, the Fund had outstanding foreign currency contracts
as follows:

Contract
Valuation
Expiration
Amount as of Unrealized Unrealized
Contract Description Dates (000s) Sept.
30, 2003 Appreciation Depreciation
-----------------------------------------------------------------------------------------------------------------------------

Contracts to Purchase
Argentine Peso [ARP] 5/28/04-6/8/04 36,401ARP $
11,794,482 $ 415,253 $ --
British Pound
Sterling [GBP] 11/20/03 16,395GBP
27,139,961 1,252,256 --
Chilean Peso [CLP] 11/25/03 13,103,380CLP
19,812,088 1,096,984 --
Columbian Peso [COP] 10/29/03 12,299,560COP
4,237,371 -- 24,431
Euro [EUR] 11/20/03-3/8/04 184,960EUR
214,931,006 10,332,482 28,623
Japanese Yen [JPY] 10/14/03-3/17/04 58,830,545JPY
528,462,302 21,089,080 15,239
Swiss Franc [CHF] 10/29/03 20,390CHF
15,451,941 298,850 --
Turkish Lira [TRL] 10/27/03 5,114,912,000TRL
3,606,013 -- 26,737

--------------------------------

34,484,905 95,030

--------------------------------
Contracts to Sell
Australian Dollar [AUD] 10/29/03 25,410AUD
17,143,491 53,997 --
British Pound
Sterling [GBP] 10/29/03-3/9/04 23,570GBP
38,865,706 -- 1,007,924
Canadian Dollar [CAD] 2/23/04 20,695CAD
15,238,326 -- 603,058
Euro [EUR] 10/8/03-4/27/04 322,465EUR
374,381,698 -- 12,885,891
Indonesia Rupiah [IDR] 11/12/03 127,453,529IDR
15,182,137 -- 632,660
Japanese Yen [JPY] 4/27/04 800,000JPY
7,209,516 -- 353,921
New Zealand
Dollar [NZD] 10/29/03 27,415NZD
16,227,490 9,044 --

--------------------------------

63,041 15,483,454

--------------------------------
Total unrealized appreciation and
depreciation $34,547,946
$15,578,484

================================

--------------------------------------------------------------------------------
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 stock 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 fixed income
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.

65 | OPPENHEIMER STRATEGIC INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
6. Futures Contracts Continued
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 on the
Statement of Operations as closing and expiration of futures contracts. The net
change in unrealized appreciation and depreciation is reported on 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, 2003, the Fund had outstanding futures contracts as
follows:

Unrealized
Expiration Number of Valuation as
of Appreciation
Contract Description Dates Contracts Sept. 30,
2003 (Depreciation)
--------------------------------------------------------------------------------------------------

Contracts to Purchase
Euro-Bundesobligation 12/8/03 126 $
16,897,803 $ 225,467
NASDAQ 100 Index 12/18/03 126
16,455,600 (458,267)
U.S. Long Bonds 12/19/03 1,886
211,526,688 7,202,686
U.S. Treasury Nts., 10 yr. 12/19/03 5,031
576,678,375 22,083,034

------------

29,052,920

------------
Contracts to Sell
DAX Index 12/19/03 51
4,853,072 141,981
FTSE 100 Index 12/19/03 13
886,822 14,326
Japan (Government of) Bonds 12/11/03 86
105,449,403 1,001,387
Standard & Poor's 500 Index 12/18/03 401
99,658,525 1,929,792
U.S. Long Bonds 12/19/03 560
62,807,500 (4,325,428)
U.S. Treasury Nts., 2 yr. 12/29/03 1,203
259,359,281 (3,122,633)
U.S. Treasury Nts., 5 yr. 12/19/03 1,429
162,146,844 (4,930,367)
United Kingdom Long Gilt 12/29/03 25
4,918,159 (31,722)

------------

(9,322,664)

------------

$19,730,256

============

--------------------------------------------------------------------------------
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.

66 | OPPENHEIMER STRATEGIC INCOME FUND

When an option is exercised, the proceeds on sales for a written call option,
the purchase cost for a written put option, or the cost of the security for a
purchased put or call option is adjusted by the amount of premium received
or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss
if the market price of the security decreases and the option is exercised. The
risk in buying an option is that the Fund pays a premium whether or not the
option is exercised. The Fund also has the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not exist.

Written option activity for the year ended September 30, 2003 was as follows:

Call
Options Put Options
--------------------------------
------------------------------------
Principal (000s)/
Principal (000s)/
Number of Amount of
Number of Amount of
Contracts Premiums
Contracts Premiums
--------------------------------------------------------------------------------------------------------------

Options outstanding as of
September 30, 2002 -- $
-- -- $ --
Options written 31,540,373,204 7,285,837
9,753,444,550 3,755,725
Options closed or expired (14,030,000) (155,733)
(41,844,550) (1,909,668)
Options exercised (197,917,100)
(2,122,537) -- --

---------------------------------------------------------------------------
Options outstanding as of
September 30, 2003 31,328,426,104 $5,007,567
9,711,600,000 $1,846,057

===========================================================================

--------------------------------------------------------------------------------
8. Interest Rate Swap Contracts
The Fund may enter into an interest rate swap transaction to maintain a total
return or yield spread on a particular investment, or portion of its portfolio,
or for other non-speculative purposes. Interest rate swaps involve the exchange
of commitments to pay or receive interest, e.g., an exchange of floating rate
payments for fixed rate payments. The coupon payments are based on an agreed
upon principal amount and a specified index. Because the principal amount is
not exchanged, it represents neither an asset nor a liability to either
counterparty, and is referred to as notional. The Fund records an increase or
decrease to interest income, in the amount due to or owed by the Fund at
termination or settlement.
Interest rate swaps are subject to credit risk (if the counterparty fails to
meet its obligations) and interest rate risk. The Fund could be obligated to
pay more under its swap agreements than it receives under them, as a result of
interest rate changes.

67 | OPPENHEIMER STRATEGIC INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
8. Interest Rate Swap Contracts Continued
As of September 30, 2003, the Fund had entered into the following interest rate
swap agreements:

Floating Rate
Rate Paid by Received
by Unrealized
Swap Notional the Fund at the Fund at
Floating Termination Appreciation
Counterparty Principal Sept. 30, 2003 Sept. 30, 2003 Rate
Index Dates (Depreciation)
--------------------------------------------------------------------------------------------------------------------

Deutsche Bank
Three-Month
AG $ 43,910,000 3.1025% 1.330628%
LIBOR flat 3/4/08 $116,460
JPMorgan
Three-Month
Chase Bank 22,120,000 3.052 1.317499
LIBOR flat 3/10/08 306,541
JPMorgan
Six-Month
Chase Bank 11,025,000 0.0314 0.02081
LIBOR flat 7/14/08 114,936
JPMorgan
Six-Month
Chase Bank 3,075,000,000 9.13 7.00
LIBOR flat 7/14/08 (121,417)

---------

$416,520

=========

--------------------------------------------------------------------------------
9. Credit Swap Contracts
The Fund may enter into a credit swap transaction to maintain a total return on
a particular investment or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as a notional principal amount. The Fund records an increase or
decrease to interest income, in the amount due to or owed by the Fund at
termination or settlement. Credit swaps are subject to credit risks (if the
counterparty fails to meet its obligations).

During the year ended September 30, 2003, the Fund entered into a transaction
to hedge credit risk. The Fund pays an annual 2% interest fee on the notional
amount in exchange for the counterparty paying in a potential credit event.
Information regarding the credit swap is as follows:

68 | OPPENHEIMER STRATEGIC INCOME FUND

Unrealized
Expiration Notional
Valuation as of Appreciation
Contract Description Dates Amount
Sept. 30, 2003 (Depreciation)
----------------------------------------------------------------------------------------------------------------

Deutsche Bank AG, Colombia
(Republic of) Credit Nts. 9/20/13 $
3,355,000 $ 115,939 $ 115,939
Deutsche Bank AG, Colombia
(Republic of) Credit Nts. 9/20/13
3,355,000 72,627 72,627
Deutsche Bank AG,
United Mexican States Credit Bonds 9/20/13
14,505,000 (147,927) (147,927)
Deutsche Bank AG, Philippines
(Republic of) 5 yr. Credit Nts. 7/25/08
15,770,000 (11,381) (11,381)
Deutsche Bank AG, Philippines
(Republic of) 10 yr. Credit Bonds 7/25/13
15,770,000 15,300 15,300
Deutsche Bank AG, Philippines
(Republic of) Credit Nts. 12/20/08
3,725,000 (3,967) (3,967)
Deutsche Bank AG, Russia Federation
Credit Bonds 9/20/13
18,125,000 59,232 59,232
Deutsche Bank AG, Russia Federation
Credit Bonds 9/10/13
14,745,000 101,718 101,718
Deutsche Bank AG, Turkey
(Republic of) Credit Bonds 9/20/10
8,405,000 (48,387) (48,387)
JPMorgan Chase Bank, Jordan
(Kingdom of) Credit Nts. 6/6/06
4,350,000 26,025 26,025
JPMorgan Chase Bank, Peru
(Republic of) Credit Bonds 9/20/08
10,000,000 (587,938) (587,938)
JPMorgan Chase Bank, Peru
(Republic of) Credit Bonds 9/20/08
17,610,000 (856,790) (856,790)
JPMorgan Chase Bank, Peru
(Republic of) Credit Bonds 9/20/08
8,805,000 (446,549) (446,549)

------------

$(1,712,098)

============

--------------------------------------------------------------------------------
10. Swaption Transactions
The Fund may enter into a swaption transaction, whereby a contract that grants
the holder, in return for payment of the purchase price (the "premium") of the
option, the right, but not the obligation, to enter into an interest rate swap
at a preset rate within a specified period of time, with the writer of the
contract. The writer receives premiums and bears the risk of unfavorable
changes in the preset rate on the underlying interest rate swap. Swaption
contracts written by the Fund do not give rise to counterparty credit risk as
they obligate the Fund, not its counterparty, to perform. Swaptions written are
reported as a liability in the Statement of Assets and Liabilities.

As of September 30, 2003, the Fund had entered into the following swaption
contracts:

Contracts Expiration Exercise
Premium Market Value
Swaptions Subject to Call Date Price
Received See Note 1
----------------------------------------------------------------------------------------------------------

Deutsche Swaption 44,445,000 5/17/04 2.825%
$395,561 $210,508

69 | OPPENHEIMER STRATEGIC INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
11. Illiquid or Restricted Securities
As of September 30, 2003, investments in securities included issues that are
illiquid or restricted. Restricted securities are purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 10% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of September 30, 2003
was $500,248,561, which represents 7.66% of the Fund's net assets, of which
zero is considered restricted. Information concerning restricted securities is
as follows:

Acquisition
Valuation as of Unrealized
Security Dates Cost
September 30, 2003 Depreciation
---------------------------------------------------------------------------------------------------------------

Stocks and/or Warrants
Geotek Communications, Inc. 4/6/00 $
-- $-- $ --
Geotek Communications, Inc.,
Series B, Escrow Shares 1/4/01
2,500 -- 2,500
Real Time Data Co. Wts., Exp. 5/31/04 6/30/99
22,515 -- 22,515

--------------------------------------------------------------------------------
12. Securities Lending
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the
collateral. Cash collateral is invested in cash equivalents. As of September
30, 2003, the Fund had on loan securities valued at $579,509,275. Cash of
$588,906,159 was received as collateral for the loans, and has been invested in
approved instruments.

70 | OPPENHEIMER STRATEGIC INCOME FUND

--------------------------------------------------------------------------------
13. Borrowing and Lending Arrangements
The Fund entered into an "interfund borrowing and lending arrangement" with
other funds in the Oppenheimer funds complex, to allow funds to borrow for
liquidity purposes. The arrangement was initiated pursuant to exemptive relief
granted by the Securities and Exchange Commission to allow these affiliated
funds to lend money to, and borrow money from, each other, in an attempt to
reduce borrowing costs below those of bank loan facilities. Under the
arrangement the Fund may lend money to other Oppenheimer funds and may borrow
from other Oppenheimer funds at a rate set by the Fund's Board of Trustees,
based upon a recommendation by the Manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the year
ended or at September 30, 2003.

Appendix A

RATINGS DEFINITIONS
-------------------

Below are summaries of the rating definitions used by the
nationally-recognized rating agencies listed below. Those ratings represent
the opinion of the agency as to the credit quality of issues that they rate.
The summaries below are based upon publicly available information provided by
the rating organizations.

Moody's Investors Service, Inc. ("Moody's")

LONG-TERM RATINGS: BONDS AND PREFERRED STOCK ISSUER RATINGS

Aaa: Bonds and preferred stock rated "Aaa" are judged to be the best quality.
They carry the smallest degree of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, the
changes that can be expected are most unlikely to impair the fundamentally
strong position of such issues.

Aa: Bonds and preferred stock rated "Aa" are judged to be of high quality by
all standards. Together with the "Aaa" group, they comprise what are
generally known as high-grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as with "Aaa"
securities or fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term risk appear
somewhat larger than that of "Aaa" securities.

A: Bonds and preferred stock rated "A" possess many favorable investment
attributes and are to be considered as upper-medium grade obligations.
Factors giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment some
time in the future.

Baa: Bonds and preferred stock rated "Baa" are considered medium-grade
obligations; that is, they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and have speculative characteristics as well.

Ba: Bonds and preferred stock rated "Ba" are judged to have speculative
elements. Their future cannot be considered well-assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B: Bonds and preferred stock rated "B" generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.

Caa: Bonds and preferred stock rated "Caa" are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds and preferred stock rated "Ca" represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C: Bonds and preferred stock rated "C" are the lowest class of rated bonds
and can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa." The modifier "1" indicates that the
obligation ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a
ranking in the lower end of that generic rating category. Advanced refunded
issues that are secured by certain assets are identified with a # symbol.

PRIME RATING SYSTEM (SHORT-TERM RATINGS - TAXABLE DEBT)
These ratings are opinions of the ability of issuers to honor senior
financial obligations and contracts. Such obligations generally have an
original maturity not exceeding one year, unless explicitly noted.

Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.

Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions
may be more pronounced. Variability in earnings and profitability may result
in changes in the level of debt protection measurements and may require
relatively high financial leverage. Adequate alternate liquidity is
maintained.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The
McGraw-Hill Companies, Inc.
------------------------------------------------------------------------------

LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based in varying degrees, on the following
considerations:
o Likelihood of payment-capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance with the terms
of the obligation;
o Nature of and provisions of the obligation; and
o Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the
laws of bankruptcy and other laws affecting creditors' rights.
The issue ratings definitions are expressed in terms of default risk. As
such, they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority
in bankruptcy, as noted above.

AAA: An obligation rated "AAA" have the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.

AA: An obligation rated "AA" differ from the highest rated obligations only
in small degree. The obligor's capacity to meet its financial commitment on
the obligation is very strong.

A: An obligation rated "A" are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations
in higher-rated categories. However, the obligor's capacity to meet its
financial commitment on the obligation is still strong.

BBB: An obligation rated "BBB" exhibit adequate protection parameters.
However, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.

BB, B, CCC, CC, and C
An obligation rated `BB', `B', `CCC', `CC', and `C' are regarded as having
significant speculative characteristics. `BB' indicates the least degree of
speculation and `C' the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: An obligation rated "BB" are less vulnerable to nonpayment than other
speculative issues. However, they face major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to the obligor's inadequate capacity to meet its financial commitment on
the obligation.

B: An obligation rated "B" are more vulnerable to nonpayment than obligations
rated "BB", but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet
its financial commitment on the obligation.

CCC: An obligation rated "CCC" are currently vulnerable to nonpayment, and
are dependent upon favorable business, financial, and economic conditions for
the obligor to meet its financial commitment on the obligation. In the event
of adverse business, financial, or economic conditions, the obligor is not
likely to have the capacity to meet its financial commitment on the
obligation.

CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.

C: Subordinated debt or preferred stock obligations rated "C" are currently
highly vulnerable to nonpayment. The "C" rating may be used to cover a
situation where a bankruptcy petition has been filed or similar action taken,
but payments on this obligation are being continued. A "C" also will be
assigned to a preferred stock issue in arrears on dividends or sinking fund
payments, but that is currently paying.

D: An obligation rated "D" are in payment default. The "D" rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes
that such payments will be made during such grace period. The "D" rating also
will be used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.

The ratings from "AA" to "CCC" may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating
categories.

c: The `c' subscript is used to provide additional information to investors
that the bank may terminate its obligation to purchase tendered bonds if the
long-term credit rating of the issuer is below an investment-grade level
and/or the issuer's bonds are deemed taxable.

p: The letter `p' indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project financed by the debt
being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful, timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of or the risk
of default upon failure of such completion. The investor should exercise his
own judgment with respect to such likelihood and risk.

Continuance of the ratings is contingent upon Standard & Poor's receipt of an
executed copy of the escrow agreement or closing documentation confirming
investments and cash flows.
------------------------------------------------------------------------------

r: The `r' highlights derivative, hybrid, and certain other obligations that
Standard & Poor's believes may experience high volatility or high variability
in expected returns as a result of noncredit risks. Examples of such
obligations are securities with principal or interest return indexed to
equities, commodities, or currencies; certain swaps and options; and
interest-only and principal-only mortgage securities. The absence of an `r'
symbol should not be taken as an indication that an obligation will exhibit
no volatility or variability in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are
rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.

Bond Investment Quality Standards

Under present commercial bank regulations issued by the Comptroller of the
Currency, bonds rated in the top four categories (`AAA', `AA', `A', `BBB',
commonly known as investment-grade ratings) generally are regarded as
eligible for bank investment. Also, the laws of various states governing
legal investments impose certain rating or other standards for obligations
eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries in general

SHORT-TERM ISSUE CREDIT RATINGS
Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity of no more than 365 days-including
commercial paper.

A-1: A short-term obligation rated "A-1" is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

B: A short-term obligation rated "B" is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet
its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.

C: A short-term obligation rated "C" is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.

NOTES:
A Standard & Poor's note rating reflects the liquidity factors and market
access risks unique to notes. Notes due in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in
making that assessment:
o Amortization schedule-the larger the final maturity relative to other
maturities, the more likely it will
be treated as a note; and
o Source of payment-the more dependent the issue is on the market for its
refinancing, the more likely
it will be treated as a note.

SP-1: Strong capacity to pay principal and interest. An issue with a very
strong capacity to pay debt service is given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.
International credit ratings assess the capacity to meet foreign currency or
local currency commitments. Both "foreign currency" and "local currency"
ratings are internationally comparable assessments. The local currency rating
measures the probability of payment within the relevant sovereign state's
currency and jurisdiction and therefore, unlike the foreign currency rating,
does not take account of the possibility of foreign exchange controls
limiting transfer into foreign currency.

INTERNATIONAL LONG-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings.

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.

B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are
based on their prospects for achieving partial or full recovery in a
reorganization or liquidation of the obligor. While expected recovery values
are highly speculative and cannot be estimated with any precision, the
following serve as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding amounts and accrued
interest. "DD" indicates potential recoveries in the range of 50%-90%, and
"D" the lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy
a higher portion of their outstanding obligations, while entities rated "D"
have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the major rating categories. Plus and minus signs are
not added to the "AAA" category or to categories below "CCC," nor to
short-term ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings. A short-term rating has a time horizon of less than 12 months for
most obligations, or up to three years for U.S. public finance securities,
and thus places greater emphasis on the liquidity necessary to meet financial
commitments in a timely manner.

F1: Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.

F3: Fair credit quality. Capacity for timely payment of financial commitments
is adequate. However, near-term adverse changes could result in a reduction
to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business
and economic environment.

D: Default. Denotes actual or imminent payment default.

B-1
Appendix B

Industry Classifications

Aerospace & Defense Household Products
Air Freight & Couriers Industrial Conglomerates
Airlines Insurance
Auto Components Internet & Catalog Retail
Automobiles Internet Software & Services
Beverages IT Services
Biotechnology Leisure Equipment & Products
Building Products Machinery
Chemicals Marine
Consumer Finance Media
Commercial Banks Metals & Mining
Commercial Services & Supplies Multiline Retail
Communications Equipment Multi-Utilities
Computers & Peripherals Office Electronics
Construction & Engineering Oil & Gas
Construction Materials Paper & Forest Products
Containers & Packaging Personal Products
Distributors Pharmaceuticals
Diversified Financial Services Real Estate
Diversified Telecommunication Road & Rail
Services
Electric Utilities Semiconductors and Semiconductor

Equipment

Electrical Equipment Software
Electronic Equipment & Instruments Specialty Retail
Energy Equipment & Services Textiles, Apparel & Luxury Goods
Food & Staples Retailing Thrifts & Mortgage Finance
Food Products Tobacco
Gas Utilities Trading Companies & Distributors
Health Care Equipment & Supplies Transportation Infrastructure
Health Care Providers & Services Water Utilities
Hotels Restaurants & Leisure Wireless Telecommunication Services
Household Durables

C-1
Appendix C

OppenheimerFunds Special Sales Charge Arrangements and Waivers
--------------------------------------------------------------

In certain cases, the initial sales charge that applies to purchases of Class
A shares1 of the Oppenheimer funds or the contingent deferred sales charge
that may apply to Class A, Class B or Class C shares may be waived.2 That is
because of the economies of sales efforts realized by OppenheimerFunds
Distributor, Inc., (referred to in this document as the "Distributor"), or by
dealers or other financial institutions that offer those shares to certain
classes of investors.

Not all waivers apply to all funds. For example, waivers relating to
Retirement Plans do not apply to Oppenheimer municipal funds, because shares
of those funds are not available for purchase by or on behalf of retirement
plans. Other waivers apply only to shareholders of certain funds.

For the purposes of some of the waivers described below and in the Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds,
the term "Retirement Plan" refers to the following types of plans:
1) plans qualified under Sections 401(a) or 401(k) of the Internal
Revenue Code,
2) non-qualified deferred compensation plans,
3) employee benefit plans3
4) Group Retirement Plans4
5) 403(b)(7) custodial plan accounts
6) Individual Retirement Accounts ("IRAs"), including traditional
IRAs, Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

The interpretation of these provisions as to the applicability of a special
arrangement or waiver in a particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this document as the
"Transfer Agent") of the particular Oppenheimer fund. These waivers and
special arrangements may be amended or terminated at any time by a particular
fund, the Distributor, and/or OppenheimerFunds, Inc. (referred to in this
document as the "Manager").

Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request.
I.

Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
------------------------------------------------------------------------------

Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to
Initial Sales Charge but May Be Subject to the Class A Contingent Deferred
Sales Charge (unless a waiver applies).

There is no initial sales charge on purchases of Class A shares of any
of the Oppenheimer funds in the cases listed below. However, these purchases
may be subject to the Class A contingent deferred sales charge if redeemed
within 18 months (24 months in the case of Oppenheimer Rochester National
Municipals and Rochester Fund Municipals) of the beginning of the calendar
month of their purchase, as described in the Prospectus (unless a waiver
described elsewhere in this Appendix applies to the redemption).
Additionally, on shares purchased under these waivers that are subject to the
Class A contingent deferred sales charge, the Distributor will pay the
applicable concession described in the Prospectus under "Class A Contingent
Deferred Sales Charge."5 This waiver provision applies to:
|_| Purchases of Class A shares aggregating $1 million or more.
|_| Purchases of Class A shares by a Retirement Plan that was permitted to
purchase such shares at net asset value but subject to a contingent
deferred sales charge prior to March 1, 2001. That included plans
(other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares
costing $500,000 or more, 2) had at the time of purchase 100 or more
eligible employees or total plan assets of $500,000 or more, or 3)
certified to the Distributor that it projects to have annual plan
purchases of $200,000 or more.
|_| Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
purchases are made:
1) through a broker, dealer, bank or registered investment adviser
that has made special arrangements with the Distributor for those
purchases, or
2) by a direct rollover of a distribution from a qualified
Retirement Plan if the administrator of that Plan has made
special arrangements with the Distributor for those purchases.
|_| Purchases of Class A shares by Retirement Plans that have any of the
following record-keeping arrangements:
1) The record keeping is performed by Merrill Lynch Pierce Fenner &
Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the
Retirement Plan. On the date the plan sponsor signs the
record-keeping service agreement with Merrill Lynch, the Plan
must have $3 million or more of its assets invested in (a) mutual
funds, other than those advised or managed by Merrill Lynch
Investment Management, L.P. ("MLIM"), that are made available
under a Service Agreement between Merrill Lynch and the mutual
fund's principal underwriter or distributor, and (b) funds
advised or managed by MLIM (the funds described in (a) and (b)
are referred to as "Applicable Investments").
2) The record keeping for the Retirement Plan is performed on a
daily valuation basis by a record keeper whose services are
provided under a contract or arrangement between the Retirement
Plan and Merrill Lynch. On the date the plan sponsor signs the
record keeping service agreement with Merrill Lynch, the Plan
must have $3 million or more of its assets (excluding assets
invested in money market funds) invested in Applicable
Investments.
3) The record keeping for a Retirement Plan is handled under a
service agreement with Merrill Lynch and on the date the plan
sponsor signs that agreement, the Plan has 500 or more eligible
employees (as determined by the Merrill Lynch plan conversion
manager).
II.

Waivers of Class A Sales Charges of Oppenheimer Funds
------------------------------------------------------------------------------

A. Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers.

Class A shares purchased by the following investors are not subject to any
Class A sales charges (and no concessions are paid by the Distributor on such
purchases):
|_| The Manager or its affiliates.
|_| Present or former officers, directors, trustees and employees (and
their "immediate families") of the Fund, the Manager and its
affiliates, and retirement plans established by them for their
employees. The term "immediate family" refers to one's spouse,
children, grandchildren, grandparents, parents, parents-in-law,
brothers and sisters, sons- and daughters-in-law, a sibling's
spouse, a spouse's siblings, aunts, uncles, nieces and nephews;
relatives by virtue of a remarriage (step-children, step-parents,
etc.) are included.
|_| Registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the
Distributor for that purpose.
|_| Dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans
for their employees.
|_| Employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have
entered into sales arrangements with such dealers or brokers (and
which are identified as such to the Distributor) or with the
Distributor. The purchaser must certify to the Distributor at the
time of purchase that the purchase is for the purchaser's own
account (or for the benefit of such employee's spouse or minor
children).
|_| Dealers, brokers, banks or registered investment advisors that have
entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular
investment products made available to their clients. Those clients
may be charged a transaction fee by their dealer, broker, bank or
advisor for the purchase or sale of Fund shares.
|_| Investment advisors and financial planners who have entered into an
agreement for this purpose with the Distributor and who charge an
advisory, consulting or other fee for their services and buy shares
for their own accounts or the accounts of their clients.
|_| "Rabbi trusts" that buy shares for their own accounts, if the purchases
are made through a broker or agent or other financial intermediary
that has made special arrangements with the Distributor for those
purchases.
|_| Clients of investment advisors or financial planners (that have entered
into an agreement for this purpose with the Distributor) who buy
shares for their own accounts may also purchase shares without sales
charge but only if their accounts are linked to a master account of
their investment advisor or financial planner on the books and
records of the broker, agent or financial intermediary with which
the Distributor has made such special arrangements . Each of these
investors may be charged a fee by the broker, agent or financial
intermediary for purchasing shares.
|_| Directors, trustees, officers or full-time employees of OpCap Advisors
or its affiliates, their relatives or any trust, pension, profit
sharing or other benefit plan which beneficially owns shares for
those persons.
|_| Accounts for which Oppenheimer Capital (or its successor) is the
investment advisor (the Distributor must be advised of this
arrangement) and persons who are directors or trustees of the
company or trust which is the beneficial owner of such accounts.
|_| A unit investment trust that has entered into an appropriate agreement
with the Distributor.
|_| Dealers, brokers, banks, or registered investment advisers that have
entered into an agreement with the Distributor to sell shares to
defined contribution employee retirement plans for which the dealer,
broker or investment adviser provides administration services.
|-|

Retirement Plans and deferred compensation plans and trusts used to
fund those plans (including, for example, plans qualified or created
under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue
Code), in each case if those purchases are made through a broker,
agent or other financial intermediary that has made special
arrangements with the Distributor for those purchases.
|_| A TRAC-2000 401(k) plan (sponsored by the former Quest for Value
Advisors) whose Class B or Class C shares of a Former Quest for
Value Fund were exchanged for Class A shares of that Fund due to the
termination of the Class B and Class C TRAC-2000 program on November
24, 1995.
|_| A qualified Retirement Plan that had agreed with the former Quest for
Value Advisors to purchase shares of any of the Former Quest for
Value Funds at net asset value, with such shares to be held through
DCXchange, a sub-transfer agency mutual fund clearinghouse, if that
arrangement was consummated and share purchases commenced by
December 31, 1996.

B. Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions.

Class A shares issued or purchased in the following transactions are not
subject to sales charges (and no concessions are paid by the Distributor on
such purchases):
|_| Shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party.
|_| Shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other Oppenheimer funds
(other than Oppenheimer Cash Reserves) or unit investment trusts for
which reinvestment arrangements have been made with the Distributor.
|_| Shares purchased through a broker-dealer that has entered into a
special agreement with the Distributor to allow the broker's
customers to purchase and pay for shares of Oppenheimer funds using
the proceeds of shares redeemed in the prior 30 days from a mutual
fund (other than a fund managed by the Manager or any of its
subsidiaries) on which an initial sales charge or contingent
deferred sales charge was paid. This waiver also applies to shares
purchased by exchange of shares of Oppenheimer Money Market Fund,
Inc. that were purchased and paid for in this manner. This waiver
must be requested when the purchase order is placed for shares of
the Fund, and the Distributor may require evidence of qualification
for this waiver.
|_| Shares purchased with the proceeds of maturing principal units of any
Qualified Unit Investment Liquid Trust Series.
|_| Shares purchased by the reinvestment of loan repayments by a
participant in a Retirement Plan for which the Manager or an
affiliate acts as sponsor.

C. Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions.

The Class A contingent deferred sales charge is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are
redeemed in the following cases:
|_| To make Automatic Withdrawal Plan payments that are limited annually to
no more than 12% of the account value adjusted annually.
|_| Involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (please refer to "Shareholder Account
Rules and Policies," in the applicable fund Prospectus).
|_| For distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes:
1) Following the death or disability (as defined in the Internal
Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was
established.
2) To return excess contributions.
3) To return contributions made due to a mistake of fact.
4) Hardship withdrawals, as defined in the plan.6
5) Under a Qualified Domestic Relations Order, as defined in the
Internal Revenue Code, or, in the case of an IRA, a divorce or
separation agreement described in Section 71(b) of the Internal
Revenue Code.
6) To meet the minimum distribution requirements of the Internal
Revenue Code.
7) To make "substantially equal periodic payments" as described in
Section 72(t) of the Internal Revenue Code.
8) For loans to participants or beneficiaries.
9) Separation from service.7
10) Participant-directed redemptions to purchase shares of a
mutual fund (other than a fund managed by the Manager or a
subsidiary of the Manager) if the plan has made special
arrangements with the Distributor.
11) Plan termination or "in-service distributions," if the
redemption proceeds are rolled over directly to an
OppenheimerFunds-sponsored IRA.
|_| For distributions from 401(k) plans sponsored by broker-dealers that
have entered into a special agreement with the Distributor allowing
this waiver.
|_| For distributions from retirement plans that have $10 million or more
in plan assets and that have entered into a special agreement with
the Distributor.
|_| For distributions from retirement plans which are part of a retirement
plan product or platform offered by certain banks, broker-dealers,
financial advisors, insurance companies or record keepers which have
entered into a special agreement with the Distributor.
III. Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer
Funds
--------------------------------------------------------------------------------

The Class B, Class C and Class N contingent deferred sales charges will not
be applied to shares purchased in certain types of transactions or redeemed
in certain circumstances described below.

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases:
|_| Shares redeemed involuntarily, as described in "Shareholder Account
Rules and Policies," in the applicable Prospectus.
|_| Redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder. The death or
disability must have occurred after the account was established, and
for disability you must provide evidence of a determination of
disability by the Social Security Administration.
|_| The contingent deferred sales charges are generally not waived
following the death or disability of a grantor or trustee for a
trust account. The contingent deferred sales charges will only be
waived in the limited case of the death of the trustee of a grantor
trust or revocable living trust for which the trustee is also the
sole beneficiary. The death or disability must have occurred after
the account was established, and for disability you must provide
evidence of a determination of disability by the Social Security
Administration.
|_| Distributions from accounts for which the broker-dealer of record has
entered into a special agreement with the Distributor allowing this
waiver.
|_| Redemptions of Class B shares held by Retirement Plans whose records
are maintained on a daily valuation basis by Merrill Lynch or an
independent record keeper under a contract with Merrill Lynch.
|_| Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
accounts of clients of financial institutions that have entered into
a special arrangement with the Distributor for this purpose.
|_| Redemptions requested in writing by a Retirement Plan sponsor of Class
C shares of an Oppenheimer fund in amounts of $500,000 or more and
made more than 12 months after the Retirement Plan's first purchase
of Class C shares, if the redemption proceeds are invested in Class
N shares of one or more Oppenheimer funds.
|_| Distributions8 from Retirement Plans or other employee benefit plans
for any of the following purposes:
1) Following the death or disability (as defined in the Internal
Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was
established in an Oppenheimer fund.
2) To return excess contributions made to a participant's account.
3) To return contributions made due to a mistake of fact.
4) To make hardship withdrawals, as defined in the plan.9
5) To make distributions required under a Qualified Domestic
Relations Order or, in the case of an IRA, a divorce or
separation agreement described in Section 71(b) of the Internal
Revenue Code.
6) To meet the minimum distribution requirements of the Internal
Revenue Code.
7) To make "substantially equal periodic payments" as described in
Section 72(t) of the Internal Revenue Code.
8) For loans to participants or beneficiaries.10
9) On account of the participant's separation from service.11
10) Participant-directed redemptions to purchase shares of a
mutual fund (other than a fund managed by the Manager or a
subsidiary of the Manager) offered as an investment option in a
Retirement Plan if the plan has made special arrangements with
the Distributor.
11) Distributions made on account of a plan termination or
"in-service" distributions, if the redemption proceeds are rolled
over directly to an OppenheimerFunds-sponsored IRA.
12) For distributions from a participant's account under an
Automatic Withdrawal Plan after the participant reaches age 59 1/2,
as long as the aggregate value of the distributions does not
exceed 10% of the account's value, adjusted annually.
13) Redemptions of Class B shares under an Automatic Withdrawal
Plan for an account other than a Retirement Plan, if the
aggregate value of the redeemed shares does not exceed 10% of the
account's value, adjusted annually.
14) For distributions from 401(k) plans sponsored by
broker-dealers that have entered into a special arrangement with
the Distributor allowing this waiver.
|_| Redemptions of Class B shares or Class C shares under an Automatic
Withdrawal Plan from an account other than a Retirement Plan if the
aggregate value of the redeemed shares does not exceed 10% of the
account's value annually.

B. Waivers for Shares Sold or Issued in Certain Transactions.

The contingent deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases:
|_| Shares sold to the Manager or its affiliates.
|_| Shares sold to registered management investment companies or separate
accounts of insurance companies having an agreement with the Manager
or the Distributor for that purpose.
|_| Shares issued in plans of reorganization to which the Fund is a party.
|_| Shares sold to present or former officers, directors, trustees or
employees (and their "immediate families" as defined above in
Section I.A.) of the Fund, the Manager and its affiliates and
retirement plans established by them for their employees.
IV. Special Sales Charge Arrangements for Shareholders of Certain
Oppenheimer Funds Who Were Shareholders of Former Quest for Value Funds
------------------------------------------------------------------------------

The initial and contingent deferred sales charge rates and waivers for Class
A, Class B and Class C shares described in the Prospectus or Statement of
Additional Information of the Oppenheimer funds are modified as described
below for certain persons who were shareholders of the former Quest for Value
Funds. To be eligible, those persons must have been shareholders on November
24, 1995, when OppenheimerFunds, Inc. became the investment advisor to those
former Quest for Value Funds. Those funds include:

Oppenheimer Quest Value Fund, Inc. Oppenheimer Small Cap Value
Fund
Oppenheimer Quest Balanced Value Fund Oppenheimer Quest
International Value Fund, Inc.

Oppenheimer Quest Opportunity Value Fund

These arrangements also apply to shareholders of the following funds
when they merged (were reorganized) into various Oppenheimer funds on
November 24, 1995:

Quest for Value U.S. Government Income Fund Quest for Value New York
Tax-Exempt Fund
Quest for Value Investment Quality Income Fund Quest for Value
National Tax-Exempt Fund
Quest for Value Global Income Fund Quest for Value California
Tax-Exempt Fund

All of the funds listed above are referred to in this Appendix as the
"Former Quest for Value Funds." The waivers of initial and contingent
deferred sales charges described in this Appendix apply to shares of an
Oppenheimer fund that are either:
|_| acquired by such shareholder pursuant to an exchange of shares of an
Oppenheimer fund that was one of the Former Quest for Value Funds,
or
|_| purchased by such shareholder by exchange of shares of another
Oppenheimer fund that were acquired pursuant to the merger of any of
the Former Quest for Value Funds into that other Oppenheimer fund on
November 24, 1995.

A. Reductions or Waivers of Class A Sales Charges.

|X| Reduced Class A Initial Sales Charge Rates for Certain Former Quest for
Value Funds Shareholders.

Purchases by Groups and Associations. The following table sets forth the
initial sales charge rates for Class A shares purchased by members of
"Associations" formed for any purpose other than the purchase of securities.
The rates in the table apply if that Association purchased shares of any of
the Former Quest for Value Funds or received a proposal to purchase such
shares from OCC Distributors prior to November 24, 1995.

--------------------------------------------------------------------------------
Initial Sales Initial Sales Charge Concession as
Number of Eligible Charge as a % of as a % of Net Amount % of Offering
Employees or Members Offering Price Invested Price
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
9 or Fewer 2.50% 2.56% 2.00%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

At least 10 but not 2.00% 2.04% 1.60%
more than 49

--------------------------------------------------------------------------------

------------------------------------------------------------------------------
For purchases by Associations having 50 or more eligible employees or
members, there is no initial sales charge on purchases of Class A shares, but
those shares are subject to the Class A contingent deferred sales charge
described in the applicable fund's Prospectus.

Purchases made under this arrangement qualify for the lower of either
the sales charge rate in the table based on the number of members of an
Association, or the sales charge rate that applies under the Right of
Accumulation described in the applicable fund's Prospectus and Statement of
Additional Information. Individuals who qualify under this arrangement for
reduced sales charge rates as members of Associations also may purchase
shares for their individual or custodial accounts at these reduced sales
charge rates, upon request to the Distributor.

|X| Waiver of Class A Sales Charges for Certain Shareholders. Class A
shares purchased by the following investors are not subject to any Class A
initial or contingent deferred sales charges:
Shareholders who were shareholders of the AMA Family of Funds on
February 28, 1991 and who acquired shares of any of the Former
Quest for Value Funds by merger of a portfolio of the AMA Family
of Funds.
Shareholders who acquired shares of any Former Quest for Value Fund
by merger of any of the portfolios of the Unified Funds.

|X| Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions. The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares purchased by the following investors who were
shareholders of any Former Quest for Value Fund:

Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder
with whom that dealer has a fiduciary relationship, under the Employee
Retirement Income Security Act of 1974 and regulations adopted under that law.

B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.

|X| Waivers for Redemptions of Shares Purchased Prior to March 6, 1995. In
the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The
shares must have been acquired by the merger of a Former Quest for Value Fund
into the fund or by exchange from an Oppenheimer fund that was a Former Quest
for Value Fund or into which such fund merged. Those shares must have been
purchased prior to March 6, 1995 in connection with:
withdrawals under an automatic withdrawal plan holding only either
Class B or Class C shares if the annual withdrawal does not
exceed 10% of the initial value of the account value, adjusted
annually, and
liquidation of a shareholder's account if the aggregate net asset
value of shares held in the account is less than the required
minimum value of such accounts.

|X| Waivers for Redemptions of Shares Purchased on or After March 6, 1995
but Prior to November 24, 1995. In the following cases, the contingent
deferred sales charge will be waived for redemptions of Class A, Class B or
Class C shares of an Oppenheimer fund. The shares must have been acquired by
the merger of a Former Quest for Value Fund into the fund or by exchange from
an Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on
or after March 6, 1995, but prior to November 24, 1995:
redemptions following the death or disability of the shareholder(s)
(as evidenced by a determination of total disability by the U.S.
Social Security Administration);
withdrawals under an automatic withdrawal plan (but only for Class B
or Class C shares) where the annual withdrawals do not exceed 10%
of the initial value of the account value; adjusted annually, and
liquidation of a shareholder's account if the aggregate net asset
value of shares held in the account is less than the required
minimum account value.

A shareholder's account will be credited with the amount of any
contingent deferred sales charge paid on the redemption of any Class A, Class
B or Class C shares of the Oppenheimer fund described in this section if the
proceeds are invested in the same Class of shares in that fund or another
Oppenheimer fund within 90 days after redemption.
V. Special Sales Charge Arrangements for Shareholders of Certain
Oppenheimer Funds Who Were Shareholders of Connecticut Mutual
Investment Accounts, Inc.
---------------------------------------------------------------------------

The initial and contingent deferred sale charge rates and waivers for Class A
and Class B shares described in the respective Prospectus (or this Appendix)
of the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
Oppenheimer U. S. Government Trust,
Oppenheimer Bond Fund,
Oppenheimer Value Fund and
Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were
shareholders of the following funds (referred to as the "Former Connecticut
Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment adviser to the Former Connecticut Mutual Funds:
Connecticut Mutual Liquid Account Connecticut Mutual Total Return
Account
Connecticut Mutual Government Securities Account CMIA LifeSpan Capital
Appreciation Account
Connecticut Mutual Income Account CMIA LifeSpan Balanced Account
Connecticut Mutual Growth Account CMIA Diversified Income Account

A. Prior Class A CDSC and Class A Sales Charge Waivers.

|X| Class A Contingent Deferred Sales Charge. Certain shareholders of a
Fund and the other Former Connecticut Mutual Funds are entitled to continue
to make additional purchases of Class A shares at net asset value without a
Class A initial sales charge, but subject to the Class A contingent deferred
sales charge that was in effect prior to March 18, 1996 (the "prior Class A
CDSC"). Under the prior Class A CDSC, if any of those shares are redeemed
within one year of purchase, they will be assessed a 1% contingent deferred
sales charge on an amount equal to the current market value or the original
purchase price of the shares sold, whichever is smaller (in such redemptions,
any shares not subject to the prior Class A CDSC will be redeemed first).

Those shareholders who are eligible for the prior Class A CDSC are:
1) persons whose purchases of Class A shares of a Fund and other
Former Connecticut Mutual Funds were $500,000 prior to March 18,
1996, as a result of direct purchases or purchases pursuant to
the Fund's policies on Combined Purchases or Rights of
Accumulation, who still hold those shares in that Fund or other
Former Connecticut Mutual Funds, and
2) persons whose intended purchases under a Statement of Intention
entered into prior to March 18, 1996, with the former general
distributor of the Former Connecticut Mutual Funds to purchase
shares valued at $500,000 or more over a 13-month period entitled
those persons to purchase shares at net asset value without being
subject to the Class A initial sales charge

Any of the Class A shares of a Fund and the other Former Connecticut
Mutual Funds that were purchased at net asset value prior to March 18, 1996,
remain subject to the prior Class A CDSC, or if any additional shares are
purchased by those shareholders at net asset value pursuant to this
arrangement they will be subject to the prior Class A CDSC.

|X| Class A Sales Charge Waivers. Additional Class A shares of a Fund may
be purchased without a sales charge, by a person who was in one (or more) of
the categories below and acquired Class A shares prior to March 18, 1996, and
still holds Class A shares:
1) any purchaser, provided the total initial amount invested in the
Fund or any one or more of the Former Connecticut Mutual Funds
totaled $500,000 or more, including investments made pursuant to
the Combined Purchases, Statement of Intention and Rights of
Accumulation features available at the time of the initial
purchase and such investment is still held in one or more of the
Former Connecticut Mutual Funds or a Fund into which such Fund
merged;
2) any participant in a qualified plan, provided that the total
initial amount invested by the plan in the Fund or any one or
more of the Former Connecticut Mutual Funds totaled $500,000 or
more;
3) Directors of the Fund or any one or more of the Former
Connecticut Mutual Funds and members of their immediate families;
4) employee benefit plans sponsored by Connecticut Mutual Financial
Services, L.L.C. ("CMFS"), the prior distributor of the Former
Connecticut Mutual Funds, and its affiliated companies;
5) one or more members of a group of at least 1,000 persons (and
persons who are retirees from such group) engaged in a common
business, profession, civic or charitable endeavor or other
activity, and the spouses and minor dependent children of such
persons, pursuant to a marketing program between CMFS and such
group; and
6) an institution acting as a fiduciary on behalf of an individual
or individuals, if such institution was directly compensated by
the individual(s) for recommending the purchase of the shares of
the Fund or any one or more of the Former Connecticut Mutual
Funds, provided the institution had an agreement with CMFS.

Purchases of Class A shares made pursuant to (1) and (2) above may be
subject to the Class A CDSC of the Former Connecticut Mutual Funds described
above.

Additionally, Class A shares of a Fund may be purchased without a sales
charge by any holder of a variable annuity contract issued in New York State
by Connecticut Mutual Life Insurance Company through the Panorama Separate
Account which is beyond the applicable surrender charge period and which was
used to fund a qualified plan, if that holder exchanges the variable annuity
contract proceeds to buy Class A shares of the Fund.

B. Class A and Class B Contingent Deferred Sales Charge Waivers.

In addition to the waivers set forth in the Prospectus and in this Appendix,
above, the contingent deferred sales charge will be waived for redemptions of
Class A and Class B shares of a Fund and exchanges of Class A or Class B
shares of a Fund into Class A or Class B shares of a Former Connecticut
Mutual Fund provided that the Class A or Class B shares of the Fund to be
redeemed or exchanged were (i) acquired prior to March 18, 1996 or (ii) were
acquired by exchange from an Oppenheimer fund that was a Former Connecticut
Mutual Fund. Additionally, the shares of such Former Connecticut Mutual Fund
must have been purchased prior to March 18, 1996:
1) by the estate of a deceased shareholder;
2) upon the disability of a shareholder, as defined in Section 72(m)(7) of
the Internal Revenue Code;
3) for retirement distributions (or loans) to participants or
beneficiaries from retirement plans qualified under Sections 401(a) or
403(b)(7)of the Code, or from IRAs, deferred compensation plans created
under Section 457 of the Code, or other employee benefit plans;
4) as tax-free returns of excess contributions to such retirement or
employee benefit plans;
5) in whole or in part, in connection with shares sold to any state,
county, or city, or any instrumentality, department, authority, or
agency thereof, that is prohibited by applicable investment laws from
paying a sales charge or concession in connection with the purchase of
shares of any registered investment management company;
6) in connection with the redemption of shares of the Fund due to a
combination with another investment company by virtue of a merger,
acquisition or similar reorganization transaction;
7) in connection with the Fund's right to involuntarily redeem or
liquidate the Fund;
8) in connection with automatic redemptions of Class A shares and Class B
shares in certain retirement plan accounts pursuant to an Automatic
Withdrawal Plan but limited to no more than 12% of the original value
annually; or
9) as involuntary redemptions of shares by operation of law, or under
procedures set forth in the Fund's Articles of Incorporation, or as
adopted by the Board of Directors of the Fund.
VI. Special Reduced Sales Charge for Former Shareholders of Advance
America Funds, Inc.
------------------------------------------------------------------------------

Shareholders of Oppenheimer AMT-Free Municipals, Oppenheimer U.S. Government
Trust, Oppenheimer Strategic Income Fund and Oppenheimer Capital Income Fund
who acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those
Oppenheimer funds on October 18, 1991, and who held shares of Advance America
Funds, Inc. on March 30, 1990, may purchase Class A shares of those four
Oppenheimer funds at a maximum sales charge rate of 4.50%.
VII. Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer

Convertible Securities Fund
------------------------------------------------------------------------------

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to
purchase those shares at net asset value without sales charge:
|_| the Manager and its affiliates,
|_| present or former officers, directors, trustees and employees (and
their "immediate families" as defined in the Fund's Statement of
Additional Information) of the Fund, the Manager and its affiliates,
and retirement plans established by them or the prior investment
advisor of the Fund for their employees,
|_| registered management investment companies or separate accounts of
insurance companies that had an agreement with the Fund's prior
investment advisor or distributor for that purpose,
|_| dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans
for their employees,
|_| employees and registered representatives (and their spouses) of dealers
or brokers described in the preceding section or financial
institutions that have entered into sales arrangements with those
dealers or brokers (and whose identity is made known to the
Distributor) or with the Distributor, but only if the purchaser
certifies to the Distributor at the time of purchase that the
purchaser meets these qualifications,
|_| dealers, brokers, or registered investment advisors that had entered
into an agreement with the Distributor or the prior distributor of
the Fund specifically providing for the use of Class M shares of the
Fund in specific investment products made available to their
clients, and
|_| dealers, brokers or registered investment advisors that had entered
into an agreement with the Distributor or prior distributor of the
Fund's shares to sell shares to defined contribution employee
retirement plans for which the dealer, broker, or investment advisor
provides administrative services.C-14

|-|

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Oppenheimer Strategic Income Fund
------------------------------------------------------------------------------

Internet Website:
WWW.OPPENHEIMERFUNDS.COM
------------------------

Investment Adviser

OppenheimerFunds, Inc.
Two World Financial Center
225 Liberty Street - 11th Floor
New York, New York 10080

Distributor

OppenheimerFunds Distributor, Inc.
Two World Financial Center
225 Liberty Street - 11th Floor
New York, New York 10080

Transfer Agent
OppenheimerFunds Services

P.O. Box 5270
Denver, Colorado 80217
1.800.CALL OPP (225.5677)

Custodian Bank

JPMorgan Chase Bank
4 Chase MetroTech Center
Brooklyn, New York 11245

Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202

Counsel to the Fund
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202

Counsel to the Independent Trustees
Mayer, Brown, Rowe and Maw
1675 Broadway
New York, New York 10019

1234
PX230.001.1103

--------

1 In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to
those Trustees who are not "interested persons" of the Fund and who do not
have any direct or indirect financial interest in the operation of the
distribution plan or any agreement under the plan.

1 Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
2 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to contingent deferred sales
charges mean the Fund's Early Withdrawal Charges and references to
"redemptions" mean "repurchases" of shares.
3 An "employee benefit plan" means any plan or arrangement, whether or not it
is "qualified" under the Internal Revenue Code, under which Class N shares of
an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single
employer or of affiliated employers. These may include, for example, medical
savings accounts, payroll deduction plans or similar plans. The fund accounts
must be registered in the name of the fiduciary or administrator purchasing
the shares for the benefit of participants in the plan.
4 The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship,
members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the
group has made special arrangements with the Distributor and all members of
the group participating in (or who are eligible to participate in) the plan
purchase shares of an Oppenheimer fund or funds through a single investment
dealer, broker or other financial institution designated by the group. Such
plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans
other than plans for public school employees. The term "Group Retirement
Plan" also includes qualified retirement plans and non-qualified deferred
compensation plans and IRAs that purchase shares of an Oppenheimer fund or
funds through a single investment dealer, broker or other financial
institution that has made special arrangements with the Distributor.
5 However, that concession will not be paid on purchases of shares in amounts
of $1 million or more (including any right of accumulation) by a Retirement
Plan that pays for the purchase with the redemption proceeds of Class C
shares of one or more Oppenheimer funds held by the Plan for more than one
year.
6 This provision does not apply to IRAs.
7 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.
8 The distribution must be requested prior to Plan termination or the
elimination of the Oppenheimer funds as an investment option under the Plan.
9 This provision does not apply to IRAs.
10 This provision does not apply to loans from 403(b)(7) custodial plans and
loans from the OppenheimerFunds-sponsored Single K retirement plan.
11 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.

OPPENHEIMER STRATEGIC INCOME FUND

FORM N-1A

PART C

OTHER INFORMATION

Item 23. Exhibits
------------------

(a) Amended and Restated Declaration of Trust dated September 25, 2002:
Filed with Registrant's Post-Effective Amendment No. 23 (11/22/02), and
incorporated herein by reference.

(b) Amended By-Laws dated October 24, 2000: Filed with Registrant's
Post-Effective Amendment No. 21 (1/25/01), and incorporated herein by
reference.

(c) (i) Specimen Class A Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 22 (1/28/02), and incorporated herein by
reference.

(ii) Specimen Class B Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 22 (1/28/02), and incorporated herein by
reference.

(iii) Specimen Class C Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 22 (1/28/02), and incorporated herein by
reference.

(iv) Specimen Class N Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 22 (1/28/02), and incorporated herein by
reference.

(v) Specimen Class Y Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 22 (1/28/02), and incorporated herein by
reference.

(d) Investment Advisory Agreement dated 10/22/90: Filed with Registrant's
Post-Effective Amendment No. 3, 11/26/90 and refiled with Registrant's
Post-Effective Amendment No. 9, 1/31/95, pursuant to Item 102 of Regulation
S-T, and incorporated herein by reference.

(e) (i) General Distributor's Agreement dated 10/13/92: Filed with
Registrant's Post-Effective Amendment No. 5, 12/3/92 and refiled with
Registrant's Post-Effective Amendment No. 9, 1/31/95, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.

(ii) Form of Dealer Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
incorporated herein by reference.

(iii) Form of Broker Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
incorporated herein by reference.

(iv) Form of Agency Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
incorporated herein by reference.

(v) Form of Trust Company Fund/SERV Purchase Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Post-Effective Amendment No. 45 to
the Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
10/26/01, and incorporated herein by reference.

(vi) Form of Trust Company Agency Agreement of OppenheimerFunds Distributor,
Inc.: Previously filed with Post-Effective Amendment No. 45 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
10/26/01, and incorporated herein by reference.

(f) Form of Deferred Compensation Plan for Disinterested
Trustees/Directors: Filed with Post-Effective Amendment No. 40 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
10/27/98, and incorporated herein by reference.

(g) Global Custody Agreement dated August 16, 2002 between Registrant and
JP Morgan Chase Bank: Previously filed with Post-Effective Amendment No. 9 to
the Registration Statement of Oppenheimer International Bond Fund (Reg. No.
33-58383), 11/21/02, and incorporated herein by reference.

(h) Not applicable.

(i) (i) Opinion and Consent of Counsel dated 8/30/89: Filed with
Registrant's Pre-Effective Amendment No. 2, 8/31/89 and refiled with
Registrant's Post-Effective Amendment No. 9, 1/31/95, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.

(ii) Opinion and Consent of Counsel for Class N shares dated January
24, 2001: Filed with Registrant's Post-Effective Amendment No. 21 (1/25/01),
and incorporated herein by reference.

(j) Independent Auditors Consent: Filed herewith.

(k) Not applicable.

(l) Investment Letter from Oppenheimer Management Corporation to Registrant
dated 8/24/89: Filed with Post-Effective Amendment No. 6, 1/29/93, and
incorporated herein by reference.

(m) (i) Amended and Restated Service Plan and Agreement for Class A
shares dated 4/23/02: Filed with Registrant's Post-Effective Amendment No.
23 (11/22/02), and incorporated herein by reference.

(ii) Amended and Restated Distribution and Service Plan and Agreement
for Class B shares dated 12/13/00: Filed with Registrant's Post-Effective
Amendment No. 21 (1/25/01), and incorporated herein by reference.

(iii) Amended and Restated Distribution and Service Plan and Agreement
for Class C shares dated February 24, 1998: Filed with Registrant's
Post-Effective Amendment No. 17, 11/25/98, and incorporated herein by
reference.

(iii) Distribution and Service Plan and Agreement for Class N shares dated
October 24, 2000: Filed with Registrant's Post-Effective Amendment No. 21
(1/25/01), and incorporated herein by reference.

(n) Oppenheimer Funds Multiple Class Plan under Rule 18f-3 March 18, 1996
and updated through 8/21/01: Previously filed with Post-Effective Amendment
No. 20 to the Registration Statement of Oppenheimer Cash Reserves (Reg. No.
33-23223), 9/27/01, and incorporated herein by reference.

(o) (i) Powers of Attorney for all Trustees/Directors (except for Richard
F. Grabish) and Officers dated 10/9/03: Previously filed with Pre-Effective
Amendment No. 1 to the Registration Statement of Oppenheimer Principal
Protected Trust II (Reg. No. 333-108093), 11/6/03, and incorporated herein by
reference.

(ii) Power of Attorney for Mr. Richard F. Grabish dated 10/27/03:
Previously filed with Post-Effective Amendment No. 11 to the Registration
Statement of Oppenheimer International Bond Fund (Reg. No. 33-583833),
11/20/03, and incorporated herein by reference.

(p) Amended and Restated Code of Ethics of the Oppenheimer Funds dated May
15, 2002 under Rule 17j-1 of the Investment Company Act of 1940: Previously
filed with Post-Effective Amendment No. 29 to the Registration Statement of
Oppenheimer Discovery Fund (Reg. No. 33-371), 11/22/02, and incorporated
herein by reference.

Item 24. - Persons Controlled by or Under Common Control with the Fund
----------------------------------------------------------------------

None.

Item 25. - Indemnification
--------------------------

Reference is made to the provisions of Article Seven of Registrant's Amended
and Restated Declaration of Trust filed as Exhibit 23(a) to this Registration
Statement, and incorporated herein by reference.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.

Item 26. - Business and Other Connections of the Investment Adviser
-------------------------------------------------------------------

(a) OppenheimerFunds, Inc. is the investment adviser of the Registrant; it
and certain subsidiaries and affiliates act in the same capacity to other
investment companies, including without limitation those described in Parts A
and B hereof and listed in Item 26(b) below.

(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of OppenheimerFunds, Inc. is, or at any time during the
past two fiscal years has been, engaged for his/her own account or in the
capacity of director, officer, employee, partner or trustee.

---------------------------------------------------------------------------------
Name and Current Position
with OppenheimerFunds, Inc. Other Business and Connections During the Past
Two Years
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Timothy L. Abbuhl, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Agan, Vice President of OppenheimerFunds Distributor,
Vice President Inc. and Centennial Asset Management
Corporation; Senior Vice President of
Shareholders Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Erik Anderson, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Janette Aprilante, Secretary of OppenheimerFunds Distributor, Inc.,
Vice President & Secretary Centennial Asset Management Corporation,
Oppenheimer Partnership Holdings, Inc.,
Oppenheimer Real Asset Management, Inc.,
Shareholder Financial Services, Inc.,
Shareholder Services, Inc., HarbourView Asset
Management Corporation, OFI Private Investments,
Inc., OFI Institutional Asset Management, Inc.
and OppenheimerFunds Legacy Program; Assistant
Secretary of OFI Trust Company.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Hany S. Ayad, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Michael Banta, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joanne Bardell, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lerae A. Barela, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin Baum, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeff Baumgartner, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Connie Bechtolt, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Behal Assistant Secretary of HarbourView Asset
Assistant Vice President Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Beichert, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gerald Bellamy, Assistant Vice President of OFI Institutional
Assistant Vice President Asset Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Erik S. Berg, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Victoria Best, Vice President of OFI Institutional Asset
Vice President Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rajeev Bhaman, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Billings, Formerly President of Lorac Technologies, Inc.
Assistant Vice President (June 1997-July 2001).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Binning, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert J. Bishop, Treasurer of OppenheimerFunds, Inc. and
Vice President Centennial Asset Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Blinzer, Assistant Vice President of OppenheimerFunds
Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John R. Blomfield, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Chad Boll, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Antulio N. Bomfim, A senior economist with the Federal Reserve
Vice President Board (June 1992-October 2003).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Bonomo, None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer Bosco, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lowell Scott Brooks, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joan Brunelle, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Buckmaster, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul Burke, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Burns, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bruce Burroughs, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Claudia Calich, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Debra Casey, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald G. Chibnik, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brett Clark, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
H.C. Digby Clements, None
Vice President: Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Peter V. Cocuzza, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan Cornwell, Vice President of Centennial Asset Management
Vice President Corporation, Shareholder Financial Services,
Inc. and Shareholder Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott Cottier, None
Vice President: Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Laura Coulston, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie C. Cusker, None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George Curry, None.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Damian, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John M. Davis, Assistant Vice President of OppenheimerFunds
Assistant Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ruggero de'Rossi, Vice President of HarbourView Asset Management
Senior Vice President Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig P. Dinsell, None
Executive Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Randall C. Dishmon, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rebecca K. Dolan None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven D. Dombrower, Senior Vice President of OFI Private
Vice President Investments, Inc.; Vice President of
OppenheimerFunds Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Doyle, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bruce C. Dunbar, None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Edmiston, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel R. Engstrom, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Robert Erven Formerly an Assistant Vice President/Senior
Assistant Vice President Trader with Morgan Stanley Investment Management
(1999-April 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George R. Evans, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward N. Everett, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathy Faber, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Falicia, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott T. Farrar, Vice President of OFI Private Investments, Inc.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Katherine P. Feld, Vice President of OppenheimerFunds, Distributor,
Vice President, Senior Counsel Inc. and of Oppenheimer Real Asset Management,
Inc.; Vice President, Assistant Secretary and
Director of Centennial Asset Management
Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Emmanuel Ferreira, Formerly a portfolio manager with Lashire
Vice President Investments (July 1999-December 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald H. Fielding, Vice President of OppenheimerFunds Distributor,
Chairman: Rochester Division Inc.; Director of ICI Mutual Insurance Company;
Governor of St. John's College; Chairman of the
Board of Directors of International Museum of
Photography at George Eastman House.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Finley, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John E. Forrest, Senior Vice President of OppenheimerFunds
Senior Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jordan Hayes Foster, Vice President of OFI Institutional Asset
Vice President Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
P. Lyman Foster, Senior Vice President of OppenheimerFunds
Senior Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Foxhoven, Assistant Vice President of OppenheimerFunds
Assistant Vice President Legacy Program.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Colleen M. Franca, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Frank, None
Vice President: Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dominic Freud, Formerly, a Partner and European Equity
Vice President Portfolio manager at SLS Management (January
2002-February 2003) prior to which he was head
of the European equities desk and managing
director at SG Cowen (May 1994-January 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dan Gagliardo, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Hazem Gamal, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dan P. Gangemi, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Subrata Ghose, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles W. Gilbert, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alan C. Gilston, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Sharon M. Giordano-Auleta, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill E. Glazerman, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mike Goldverg, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bejamin J. Gord, Vice President of HarbourView Asset Management
Vice President Corporation and of OFI Institutional Asset
Management, Inc. Formerly Executive Director
with Miller Anderson Sherrerd, a division of
Morgan Stanley Investment Management. (April
1992-March 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Laura Granger, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert B. Grill, None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Gwynn, None
Vice President: Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Haley, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marilyn Hall, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ping Han, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kelly Haney, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steve Hauenstein, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas B. Hayes, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Henry, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine Heron, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dennis Hess, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dorothy F. Hirshman, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Hoelscher, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Hrybenko, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott T. Huebl, Assistant Vice President of OppenheimerFunds
Vice President Legacy Program.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Margaret Hui, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Huttlin, Vice President (Director of the International
Vice President Division) of OFI Institutional Asset Management,
Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James G. Hyland, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steve P. Ilnitzki, None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen T. Ives, Vice President and Assistant Secretary of
Vice President and Assistant OppenheimerFunds Distributor, Inc. and
Secretary Shareholder Services, Inc.; Assistant Secretary
of Centennial Asset Management Corporation,
OppenheimerFunds Legacy Program and Shareholder
Financial Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Jaume, Senior Vice President of HarbourView Asset
Vice President Management Corporation and OFI Institutional
Asset Management, Inc.; Director of OFI Trust
Company.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Frank V. Jennings, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Jennings, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Michael Johnson, Formerly Vice President, Senior
Assistant Vice President Analyst/Portfolio Manager at Aladdin Capital
Holdings Inc. (February 2001-May 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles Kandilis, Formerly managing director of Kandilis Capital
Assistant Vice President Management (September 1993-August 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer E. Kane, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lynn O. Keeshan, Assistant Treasurer of OppenheimerFunds Legacy
Senior Vice President Program
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas W. Keffer, None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cristina J. Keller, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Keogh, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Walter G. Konops, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Kourkoulakos, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Kramer, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Lamentino, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Lange, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Latino, Formerly a Senior Trader/Portfolio Engineer at
Assistant Vice President Jacobs Levy Equity Management (June 1996-August
2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Guy E. Leaf, Formerly a Vice President of Merrill Lynch
Vice President (January 2000-September 2001).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher M. Leavy, None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dina C. Lee, Assistant Secretary of OppenheimerFunds Legacy
Assistant Vice President & Program.
Assistant Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dana Lehrer, Assistant Secretary of Oppenheimer Legacy Program
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Laura Leitzinger, Senior Vice President of Shareholder Services,
Vice President Inc.; Vice President of Shareholder Financial
Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael S. Levine, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gang Li, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Shanquan Li, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mitchell J. Lindauer, None
Vice President & Assistant
General Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bill Linden, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Malissa B. Lischin, Assistant Vice President of OppenheimerFunds
Assistant Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David P. Lolli, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel G. Loughran None
Vice President: Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patricia Lovett, Vice President of Shareholder Financial
Vice President Services, Inc. and Senior Vice President of
Shareholder Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dongyan Ma, Formerly an Assistant Vice President with
Assistant Vice President Standish Mellon Asset Management (October
2001-October 2003).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steve Macchia, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Magee, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jerry Madzij, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Angelo G. Manioudakis Senior Vice President of HarbourView Asset
Senior Vice President Management Corporation and of OFI Institutional
Asset Management, Inc. Formerly Executive
Director and portfolio manager for Miller,
Anderson & Sherrerd, a division of Morgan
Stanley Investment Management (August 1993-April
2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
LuAnn Mascia, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan Mattisinko, Formerly an Associate at Sidley Austin Brown and
Vice President Wood LLP (1995 - October 2003).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elizabeth McCormack, Assistant Secretary of HarbourView Asset
Assistant Vice President Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph McGovern, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles L. McKenzie, As of May 2003: Chief Executive Officer,
Senior Vice President President, Senior Managing Director and Director
of HarbourView Asset Management Corporation and
OFI Institutional Asset Management, Inc.;
President, Chairman and Director of Trinity
Investment Management Corporation
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew J. Mika, None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joy Milan, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Denis R. Molleur, None
Vice President & Senior
Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nikolaos D. Monoyios, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles Moon, Vice President of HarbourView Asset Management
Vice President Corporation and of OFI Institutional Asset
Management, Inc. Formerly an Executive Director
and Portfolio Manager with Miller Anderson &
Sherrerd, a division of Morgan Stanley
Investment Management (June 1999-March 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Murphy, Director of OppenheimerFunds Distributor, Inc.,
Chairman, President, Chief Centennial Asset Management Corporation,
Executive Officer & Director HarbourView Asset Management Corporation, OFI
Private Investments, Inc., OFI Institutional
Asset Management, Inc. and Tremont Advisers,
Inc.; Director of Trinity Investments Management
Corporation; President and Management Director
of Oppenheimer Acquisition Corp.; President and
Director of Oppenheimer Partnership Holdings,
Inc., Oppenheimer Real Asset Management, Inc.;
Chairman and Director of Shareholder Financial
Services, Inc. and Shareholder Services, Inc.;
Executive Vice President of MassMutual Life
Insurance Company; director of DLB Acquisition
Corp.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin Murray, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas J. Murray, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth Nadler, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina Nasta, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Annabel Neilon, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Nichols, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barbara Niederbrach, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Norman, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John O'Hare, Formerly Executive Vice President and Portfolio
Vice President Manager (June 2000 - August 2003) and Portfolio
Manager and Senior Vice President (August 1997 -
June 2000) at Geneva Capital Management, Ltd.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Frank J. Pavlak, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David P. Pellegrino, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Allison C. Pells, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan Pergament, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Petersen, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James F. Phillips, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gary Pilc, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Peter E. Pisapia, Formerly, Associate Counsel at SunAmerica Asset
Assistant Vice President & Management Corp. (December 2000-December 2002).
Assistant Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeaneen Pisarra, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Raghaw Prasad, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jane C. Putnam, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael E. Quinn, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie S. Radtke, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Norma J. Rapini, None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian N. Reid, Formerly an Assistant Vice President with Eaton
Assistant Vice President Vance Management (January 2000-January 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marc Reinganum, Formerly (until August 2002) Vaughn Rauscher
Vice President Chair in Financial Investments and Director,
Finance Institute of Southern Methodist
University, Texas.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Reiter, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kristina Richardson, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Claire Ring, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Robertson, Senior Vice President of OppenheimerFunds
Senior Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rob Robis, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Antoinette Rodriguez, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stacey Roode, Formerly, Assistant Vice President of Human
Vice President Resources of OFI (200-July 2002)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey S. Rosen, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stacy Roth, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James H. Ruff, President and Director of OppenheimerFunds
Executive Vice President Distributor, Inc. and Centennial Asset
Management Corporation; Executive Vice President
of OFI Private Investments, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew Ruotolo, Vice Chairman, Treasurer, Chief Financial
Executive Vice President, Officer and Management Director of Oppenheimer
Chief Financial Officer and Acquisition Corp.; President and Director of
Director Shareholder Services, Inc. and Shareholder
Financial Services, Inc.; Director of Trinity
Investment Management Corporation; Chairman of
the Board, Chief Executive Officer, President
and Director of OFI Trust Company.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rohit Sah, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Valerie Sanders, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Karen Sandler, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tricia Scarlata, Formerly, Marketing Manager of OppenheimerFunds,
Assistant Vice President Inc. (April 2001-August 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rudi Schadt, Formerly a consultant for Arthur Andersen
Vice President (August 2001-February 2002); director, senior
quantitative analyst at Brinson Partners
(September 2000,April 2001).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Schmitt, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ellen P. Schoenfeld, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maria Schulte, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott A. Schwegel, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Allan P. Sedmak None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer L. Sexton, Senior Vice President of OFI Private
Vice President Investments, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martha A. Shapiro, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Navin Sharma, Formerly, Manager at BNP Paribas Cooper Neff
Vice President Advisors (May 2001-April 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven J. Sheerin, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bonnie Sherman, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David C. Sitgreaves, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward James Sivigny Formerly a Director for ABN Amro Securities
Assistant Vice President (July 2001-July 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Enrique H. Smith, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Louis Sortino, None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Keith J. Spencer, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marco Antonio Spinar, Formerly, Director of Business Operations at AOL
Assistant Vice President Time Warner, AOL Time Warner Book Group (June
2000-December 2001).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard A. Stein, None
Vice President: Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Arthur P. Steinmetz, Senior Vice President of HarbourView Asset
Senior Vice President Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer Stevens, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gregory J. Stitt, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John P. Stoma, Senior Vice President of OppenheimerFunds
Senior Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wayne Strauss, None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Stricker, Vice President of Shareholder Services, Inc.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Deborah A. Sullivan, Since December 2001, Secretary of OFI Trust
Assistant Vice President, Company.
Assistant Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mary Sullivan, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Sussman, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan B. Switzer, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martin Telles, Senior Vice President of OppenheimerFunds
Senior Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul Temple, Formerly a Vice President of Merrill Lynch
Vice President (October 2001-January 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Toner, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eamon Tubridy, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Keith Tucker, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James F. Turner, Formerly portfolio manager for Technology
Vice President Crossover Ventures (May 2000-March 2001).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cameron Ullyat, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Angela Utaro, None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark S. Vandehey, Vice President of OppenheimerFunds Distributor,
Vice President Inc., Centennial Asset Management Corporation
and Shareholder Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maureen Van Norstrand, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Vermette, Assistant Vice President of OppenheimerFunds
Assistant Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Phillip F. Vottiero, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Teresa M. Ward, Vice President of OppenheimerFunds Distributor,
Vice President Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jerry A. Webman, Senior Vice President of HarbourView Asset
Senior Vice President Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher D. Weiler, None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barry D. Weiss, Vice President of HarbourView Asset Management
Vice President Corporation
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Melissa Lynn Weiss, Formerly an Associate at Hoguet Newman & Regal,
Vice President LLP (January 1998-May 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christine Wells, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph J. Welsh, Vice President of HarbourView Asset Management
Vice President Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Diederick Wermolder, Director of OppenheimerFunds International Ltd.;
Vice President Senior Vice President (Managing Director of the
International Division) of OFI Institutional
Asset Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine M. White, Assistant Vice President of OppenheimerFunds
Assistant Vice President Distributor, Inc.; member of the American
Society of Pension Actuaries (ASPA) since 1995.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William L. Wilby, Formerly Senior Vice President of HarbourView
Senior Vice President Asset Management Corporation (May 1999-July
2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donna M. Winn, President, Chief Executive Officer and Director
Senior Vice President of OFI Private Investments, Inc.; Director and
President of OppenheimerFunds Legacy Program;
Senior Vice President of OppenheimerFunds
Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth Winston, None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Philip Witkower, Senior Vice President of OppenheimerFunds
Senior Vice President Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian W. Wixted, Treasurer of HarbourView Asset Management
Senior Vice President and Corporation; OppenheimerFunds International
Treasurer Ltd., Oppenheimer Partnership Holdings, Inc.,
Oppenheimer Real Asset Management, Inc.,
Shareholder Services, Inc., Shareholder
Financial Services, Inc., OFI Private
Investments, Inc., OFI Institutional Asset
Management, Inc. and OppenheimerFunds Legacy
Program; Treasurer and Chief Financial Officer
of OFI Trust Company; Assistant Treasurer of
Oppenheimer Acquisition Corp.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Carol Wolf, Senior Vice President of HarbourView Asset
Senior Vice President Management Corporation; serves on the Board of
the Colorado Ballet.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kurt Wolfgruber, Director of Tremont Advisers, Inc. (as of
Executive Vice President, January 2002), HarbourView Asset Management
Chief Investment Officer and Corporation and OFI Institutional Asset
Director Management, Inc. (as of January 2003)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Caleb C. Wong, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward C. Yoensky, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Zachman, None
Vice President: Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lucy Zachman, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert G. Zack General Counsel and Director of OppenheimerFunds
Senior Vice President and Distributor, Inc.; General Counsel of Centennial
General Counsel Asset Management Corporation; Senior Vice
President and General Counsel of HarbourView
Asset Management Corporation and OFI
Institutional Asset Management, Inc.; Senior
Vice President, General Counsel and Director of
Shareholder Financial Services, Inc.,
Shareholder Services, Inc., OFI Private
Investments, Inc. and OFI Trust Company; Vice
President and Director of Oppenheimer
Partnership Holdings, Inc.; Secretary and
General Counsel of Oppenheimer Acquisition
Corp.; Director and Assistant Secretary of
OppenheimerFunds International Ltd.; Director of
Oppenheimer Real Asset Management, Inc.; Vice
President of OppenheimerFunds Legacy Program.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Neal A. Zamore, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark D. Zavanelli, None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alex Zhou, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Arthur J. Zimmer, Senior Vice President (since April 1999) of
Senior Vice President HarbourView Asset Management Corporation.
---------------------------------------------------------------------------------

The Oppenheimer Funds include the following:

Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Limited Term New York Municipal Fund (Rochester Portfolio Series)
Oppenheimer AMT-Free Municipals
Oppenheimer AMT-Free New York Municipals
Oppenheimer Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Capital Preservation Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Convertible Securities Fund (Bond Fund Series)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Fund, Inc.
Oppenheimer Global Fund
Oppenheimer Global Opportunities Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer High Yield Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer International Large-Cap Core Fund (a series of Oppenheimer
International Large-
Cap Core Trust)
Oppenheimer International Small Company Fund
Oppenheimer International Value Fund (a series of Oppenheimer International
Value Trust)
Oppenheimer Limited-Term Government Fund
Oppenheimer Limited Term Municipal Fund (a series of Oppenheimer Municipal
Fund)
Oppenheimer Main Street Fund (a series of Oppenheimer Main Street Funds, Inc.)
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer MidCap Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi Cap Value Fund
Oppenheimer Multiple Strategies Fund
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust (3 series):
Oppenheimer New Jersey Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Rochester National Municipals
Oppenheimer Principal Protected Main Street Fund (a series of Oppenheimer
Principal
Protected Trust)
Oppenheimer Principal Protected Main Street Fund II (a series of Oppenheimer
Principal Protected Trust II)
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)
Oppenheimer Quest Balanced Value Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Small Cap Value Fund
Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (2 series):
Oppenheimer Disciplined Allocation Fund
Oppenheimer Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Bond Fund
Oppenheimer Tremont Core Diversified Hedge Fund
Oppenheimer Tremont Market Neutral Fund LLC
Oppenheimer Tremont Market Neutral Hedge Fund
Oppenheimer Tremont Opportunity Fund LLC
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (11 series):
Oppenheimer Aggressive Growth Fund/VA
Oppenheimer Bond Fund/VA
Oppenheimer Capital Appreciation Fund/VA
Oppenheimer Global Securities Fund/VA
Oppenheimer High Income Fund/VA
Oppenheimer Main Street Fund/VA
Oppenheimer Main Street Small Cap Fund/VA
Oppenheimer Money Fund/VA
Oppenheimer Multiple Strategies Fund/VA
Oppenheimer Strategic Bond Fund/VA
Oppenheimer Value Fund/VA
Panorama Series Fund, Inc. (4 series):
Growth Portfolio
Government Securities Portfolio
Oppenheimer International Growth Fund/VA
Total Return Portfolio
Rochester Fund Municipals

The address of the Oppenheimer funds listed above, Shareholder Financial
Services, Inc., Shareholder Services, Inc., OppenheimerFunds Services,
Centennial Asset Management Corporation, Centennial Capital Corp.,
Oppenheimer Real Asset Management, Inc. and OppenheimerFunds Legacy Program
is 6803 South Tucson Way, Centennial, Colorado 80112-3924.

The address of OppenheimerFunds, Inc., OppenheimerFunds Distributor, Inc.,
HarbourView Asset Management Corporation, Oppenheimer Partnership Holdings,
Inc., Oppenheimer Acquisition Corp., OFI Private Investments, Inc., OFI
Institutional Asset Management, Inc. and Oppenheimer Trust Company is 2 World
Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10080.

The address of Tremont Advisers, Inc. is 555 Theodore Fremd Avenue, Suite
206-C, Rye, New York 10580.

The address of OppenheimerFunds International Ltd. is Bloc C, Irish Life
Center, Lower Abbey Street, Dublin 1, Ireland.

The address of Trinity Investment Management Corporation is 301 North Spring
Street, Bellefonte, Pennsylvania 16823.

Item 27. Principal Underwriter
------------------------------

(a) OppenheimerFunds Distributor, Inc. is the Distributor of the
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which OppenheimerFunds, Inc. is
the investment adviser, as described in Part A and B of this Registration
Statement and listed in Item 26(b) above (except Oppenheimer Multi-Sector
Income Trust and Panorama Series Fund, Inc.) and for MassMutual Institutional
Funds.

(b) The directors and officers of the Registrant's principal underwriter
are:

---------------------------------------------------------------------------------
Name & Principal Position & Office Position and Office
Business Address with Underwriter with Registrant
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Agan(1) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Janette Aprilante(1) Secretary None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Barker Vice President None
2901B N. Lakewood Avenue
Chicago, IL 60657
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Beichert(1) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gabriella Bercze(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert J. Bishop(1) Treasurer None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas S. Blankenship Vice President None
17011 Wood Bark Road
Springs, TX 77379
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Blinzler(1) Assistant Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David A Borrelli Vice President None
105 Black Calla Ct.
San Ramon, CA 94583
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michelle Brennan Assistant Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
L. Scott Brooks(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin E. Brosmith Senior Vice President None
5 Deer Path
South Natlick, MA 01760
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey W. Bryan Vice President None
1048 Malaga Avenue
Coral Gables, FL 33134
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan Burton Vice President None
4127 Towne Green Circle
Addison, TX 75001
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Mary Byron Vice President None
6 Dahlia Drive
Irvine, CA 92618
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew Chonofsky Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert A. Coli Vice President None
12 White Tail Lane
Bedminster, NJ 07921
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey D. Damia(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Davis(2) Assistant Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stephen J. Demetrovits(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph A. DiMauro Vice President None
522 Lakeland Avenue
Grosse Pointe, MI 48230
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven Dombrower(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George P. Dougherty Vice President None
328 Regency Drive
North Wales, PA 19454
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cliff H. Dunteman Vice President None
N 53 27761 Bantry Road
Sussex, WI 53089-45533
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Eiler(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent M. Elwell Vice President None
35 Crown Terrace
Yardley, PA 19067
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gregg A. Everett Vice President None
4328 Auston Way
Palm Harbor, FL 34685-4017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George R. Fahey Senior Vice President None
2 Pheasant Drive
Ringoes, NJ 08551
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric C. Fallon Vice President None
10 Worth Circle
Newton, MA 02458
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Katherine P. Feld(2) Vice President Assistant Secretary
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark J. Ferro(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald H. Fielding(3) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick W. Flynn (1) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John E. Forrest(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John ("J) Fortuna(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
P. Lyman Foster(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lucio Giliberti Vice President None
6 Cyndi Court
Flemington, NJ 08822
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Raquel Granahan(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ralph Grant Senior Vice President None
10 Boathouse Close
Mt. Pleasant, SC 29464
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael D. Guman Vice President None
3913 Pleasant Avenue
Allentown, PA 18103
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Clifford W. Heidinger Vice President None
111 Ipswich Road
Boxford, MA 01921
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Phillipe D. Hemery Vice President None
5 Duck Pond Lane
Ramsey, NJ 07446
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elyse R. Jurman Herman Vice President None
3150 Equestrian Drive
Boca Raton, FL 33496
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy G. Hetson Vice President None
4 Craig Street
Jericho, NY 11753
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William E. Hortz(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Hrybenko(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian F. Husch(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen T. Ives(1) Vice President & Assistant Secretary
Assistant Secretary
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric K. Johnson(1) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark D. Johnson Vice President None
15792 Scenic Green Court
Chesterfield, MO 63017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina J. Keller(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian G. Kelly Vice President None
76 Daybreak Road
Southport, CT 06490
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Keogh(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Klassen(1) Assistant Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Klein Senior Vice President None
4820 Fremont Avenue So.
Minneapolis, MN 55409
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Knott(1) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dean Kopperud(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brent A. Krantz Senior Vice President None
P. O. Box 1313
Seahurst, WA 98062
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David T. Kuzia Vice President None
19102 Miranda Circle
Omaha, NE 68130
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Lange(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul R. LeMire Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Evan M. Lereah Vice President None
1468 Catlin Lane
Alexandria, VA 22311
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Malissa Lischin(2) Assistant Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James V. Loehle Vice President None
30 Wesley Hill Lane
Warwick, NY 10990
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Montana Low Vice President None
1636 N. Wells Street, Apt. 3411
Chicago, IL 60614
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Lyman Vice President None
7578 Massachusetts Pl
Rancho Cucamonga, CA 91730
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John J. Lynch Vice President None
6325 Bryan Parkway
Dallas, TX 75214
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Macken Vice President None
462 Lincoln Avenue
Sayville, NY 11782
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Magee(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven C. Manns Vice President None
1627 N. Hermitage Avenue
Chicago, IL 60622
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Todd A. Marion Vice President None
24 Midland Avenue
Cold Spring Harbor, NY 11724
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
LuAnn Mascia(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Theresa-Marie Maynier Vice President None
2421 Charlotte Drive
Charlotte, NC 28203
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Anthony P. Mazzariello Vice President None
8 Fairway Road
Sewickley, PA 15143
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John C. McDonough Vice President None
3812 Leland Street
Chevy Chase, MD 20815
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent C. McGowan Vice President None
9510 190th Place SE
Edmonds, WA 98020
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Melehan Vice President None
906 Bridgeport Court
San Marcos, CA 92069
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Mezzanotte Vice President None
16 Cullen Way
Exeter, NH 03833
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Moser(1) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John V. Murphy(2) Director President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy Jean Murray Vice President None
32 Carolin Road
Upper Montclair, NJ 07043
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina Nasta(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin P. Neznek(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Chad V. Noel Vice President None
2408 Eagleridge Drive
Henderson, NV 89014
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bradford Norford Vice President None
2217 Ivan Street #911
Dallas, TX 75201
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alan Panzer Vice President None
6755 Ridge Mill Lane
Atlanta, GA 30328
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Perkes Vice President None
8734 Shady Shore Drive
Frisco, TX 75034
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles K. Pettit Vice President None
22 Fall Meadow Drive
Pittsford, NY 14534
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gazell Pettway, Jr. Vice President None
18970 Vogel Farm Trail
Eden Paire, MN 55347
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Presutti(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elaine Puleo-Carter(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher L. Quinson Vice President None
7675 Cayuga Drive
Cincinnati, OH 45243
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Minnie Ra Vice President None
100 Dolores Street, #203
Carmel, CA 93923
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gary D. Rakan Vice President None
10860 Fairwoods Drive
Fishers, IN 46038
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dusting Raring Vice President None
27 Blakemore Drive
Ladera Ranch, CA 92797
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael A. Raso Vice President None
3 Vine Place
Larchmont, NY 10538
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas Rentschler Vice President None
677 Middlesex Road
Grosse Pointe Park, MI 48230
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ruxandra Risko(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David R. Robertson(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth A. Rosenson Vice President None
24753 Vantage Pt. Terrace
Malibu, CA 90265
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James H. Ruff(2) President & Director None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William R. Rylander Vice President None
85 Evergreen Road
Vernon, CT 06066
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Sabow Vice President None
6617 Southcrest Drive
Edina, MN 55435
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Saunders Vice President None
911 North Orange Avenue #401
Orlando, FL 32801
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tonya Sax Vice President None
2625 N. Paula Drive
Dunedin, FL 34698
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alfredo Scalzo Vice President None
9616 Lake Chase Island Way
Tampa, FL 33626
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill E. Schmitt (Crockett)(2) Assistant Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Schmitt(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Sharp Vice President None
862 McNeill Circle
Woodland, CA 95695
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Debbie A. Simon Vice President None
1 W. Superior Street, Apt. 4101
Chicago, IL 60610
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas Bruce Smith Vice President None
8927 35th Street W.
University Place, WA 98466
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bryan Stein Vice President None
5897 NW 120th Terrace
Coral Springs, FL 33076
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Stoma(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Summe Vice President None
2479 Legends Way
Crestview Hills, KY 41017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Sussman(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George T. Sweeney Senior Vice President None
5 Smoke House Lane
Hummelstown, PA 17036
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Taylor(2) Assistant Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martin Telles(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David G. Thomas Vice President None
16628 Elk Run Court
Leesburg, VA 20176
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bryan K.Toma Vice President None
7311 W. 145th Terrace
Overland Park, KS 66223
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Vandehey(1) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Vermete Assistant Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth Lediard Ward Vice President None
1400 Cottonwood Valley Circle
N.
Irving, TX 75038
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Teresa Ward(1) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael J. Weigner Vice President None
4905 W. San Nicholas Street
Tampa, FL 33629
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donn Weise Vice President None
3249 Earlmar Drive
Los Angeles, CA 90064
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine White(2) Assistant Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Wilson(2) Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donna Winn(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Philip Witkower(2) Senior Vice President None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cary Patrick Wozniak Vice President None
18808 Bravata Court
San Diego, CA 92128
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Charles Young Vice President None
3914 Southwestern
Houston, TX 77005
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gregor D. Yuska Vice President None
16035 Canterbury Estates Dr.
Ellisville, MO 63021
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert G. Zack(2) General Counsel & Vice President &
Director Secretary
---------------------------------------------------------------------------------

(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY
10080
(3)350 Linden Oaks, Rochester, NY 14623

Item 28. Location of Accounts and Records
-----------------------------------------

The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940
and rules promulgated thereunder are in the possession of OppenheimerFunds,
Inc. at its offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.

Item 29. Management Services
----------------------------

Not applicable

Item 30. Undertakings
---------------------

Not applicable.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on
the 20th day of November 2003.

Oppenheimer Strategic Income Fund

By: /s/ John V. Murphy*

---------------------------------------------
John V. Murphy, President,
Principal Executive Officer & Trustee

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:

Signatures Title Date
---------- ----- ----

/s/ James C. Swain* Chairman of the Board
----------------------- of Trustees November 20, 2003
James C. Swain

/s/ William L. Armstrong* Vice Chairman of the November 20, 2003
------------------------------- Board of Trustees
William L. Armstrong

/s/ John V. Murphy* President, Principal November 20, 2003
------------------------ Executive Officer & Trustee
John V. Murphy

/s/ Brian W. Wixted* Treasurer, Principal November 20, 2003
------------------------- Financial &
Brian W. Wixted Accounting Officer

/s/ Robert G. Avis* Trustee November 20, 2003
----------------------
Robert G. Avis

/s/ George Bowen* Trustee November 20, 2003
----------------------
George Bowen

/s/ Edward Cameron* Trustee November 20, 2003
------------------------
Edward Cameron

/s/ Jon S. Fossel* Trustee November 20, 2003
--------------------
Jon S. Fossel

/s/ Sam Freedman* Trustee November 20, 2003
----------------------
Sam Freedman

/s/ Richard F. Grabish* Trustee November 20, 2003
-------------------------
Richard F. Grabish

/s/ Beverly L. Hamilton*
------------------------------ Trustee November
20, 2003
Beverly L. Hamilton

/s/ Robert J. Malone*
-------------------------- Trustee November 20, 2003
Robert J. Malone

/s/ F. William Marshall, Jr.* Trustee November
20, 2003
--------------------------------
F. William Marshall, Jr.

*By: /s/ Robert G. Zack
-----------------------------------------
Robert G. Zack, Attorney-in-Fact

OPPENHEIMER STRATEGIC INCOME FUND
Registration Statement No. 33-28598
Post-Effective Amendment No. 24

EXHIBIT INDEX

Exhibit No. Description
----------- -----------

23 (j) Independent Auditors Consent