As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 6/19/15  Oppenheimer Municipal Fund        N-CSRS/A    3/31/15    3:3.3M                                   RR Donnelley/FA
          → Oppenheimer Rochester Short Duration High Yield Municipal Fund ⇒ A — B — C — Y

Document/Exhibit                   Description                      Pages   Size 

 1: N-CSRS/A    Oppenheimer Rochester Limited Term Municipal Fund   HTML   1.56M 
 3: EX-99.906CERT  Section 906 Certifications                       HTML      7K 
 2: EX-99.CERT  Section 302 Certifications                          HTML     16K 

MARKET OVERVIEW

Overall, the muni market rallied during this reporting period, thanks in part to positive reports from the Federal Reserve. After several months of lowering its spending on mortgage-backed securities and long-term Treasuries, the Federal Open Market Committee (FOMC) voted in October 2014 to end quantitative easing the next month.

Considered by many to be the largest intervention in the Fed’s history, this program was initiated in 2008 to help stimulate the economy. According to a statement released November 19, 2014, the

 

The average distribution yield in Lipper’s Short Intermediate Municipal Debt Funds category was 1.46% at the end of this reporting period. At 4.04%, the distribution yield at NAV for this Fund’s Class A shares was 258 basis points higher than the category average.

FOMC observed solid job gains, a lower unemployment rate and increases in household and business spending. The

 

committee’s concerns about inflation and falling energy prices, among other factors, played into its decision to “maintain its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities and rolling over maturing Treasury securities at auction.”

During this reporting period, the carefully worded announcements regarding the Fed’s plans for the Fed Funds target rate led to considerable speculation about the timing of an adjustment to its short-term rate, and market movements were generally based on analysts’ interpretations of subtle changes in the text. In October 2014, for example, the FOMC said it planned to keep the Fed Funds target rate at its current level “for a considerable time” after the end of its bond-buying program.

In December 2014, the Committee said it could “be patient in beginning to normalize the stance of monetary policy.” However, the committee removed the word “patient” from the minutes of the February 2015 meeting. In a press conference, Federal Reserve Chairman Janet Yellen cautioned that “just because we removed the word ‘patient’ doesn’t mean we will be impatient.” The committee will increase the Fed Funds rate only when it “has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2% objective over the medium term.”

With the current Fed Funds rate set between zero and 0.25% since December 2008, the

only plausible change would be an increase. We remind investors that a change in the Fed Funds rate does not automatically translate into a change in longer-term interest rates, which are determined by the marketplace.

The Fund’s investment team will continue to search for value in the muni market as it seeks to produce competitive levels of tax-free income amid stable or changing market conditions.

As of March 31, 2015, the average yield on 30-year, AAA-rated muni bonds was 2.94%, down 37 basis points from September 30, 2014. The average yield on 10-year, AAA-rated muni bonds was 2.05% on March 31, 2015, down 14 basis points from the September 2014 date, and the average yield on 1-year, AAA-rated muni bonds was 0.22%, up 7 basis points from the September 2014 date.

Successful investors, we have found, maintain a long-term perspective regardless of the specific developments associated with any given reporting period. To maximize the benefits that municipal bond funds seek to provide, many investors reinvest their dividends and allow the income generated from their investments to compound over time.

FUND PERFORMANCE

Oppenheimer Rochester Limited Term Municipal Fund held more than 1,050 securities as of March 31, 2015. The Fund was invested in a broad range of sectors, providing

shareholders with a diversity of holdings that we believe would be difficult and costly to replicate in an individual portfolio.

The Fund’s Class A distribution yield at NAV was ranked second in Lipper’s Short Intermediate Municipal Debt Funds category as of March 31, 2015, trailing only the Y shares of this Fund. At 4.04% on that date, the Class A distribution yield was 258 basis points higher than the category average, which was 1.46%. Additionally, for a taxable investment to have provided a greater benefit than an investment in this Fund, it would have had to yield more than 5.65%, based on the Fund’s standardized yield as of March 31, 2015, and the current top federal income tax rates. As long-time investors know, yields on fixed-income funds rise when share prices fall, and yields have historically contributed the lion’s share of the long-term total returns generated by bonds.

The Fund’s dividend trend this reporting period demonstrates the power a yield-driven approach can have amid challenging market conditions. This Fund’s Class A dividend remained steady at 4.8 cents per share throughout this reporting period. In all, the Fund distributed 28.8 cents per Class A share this reporting period.

Securities issued in the Commonwealth of Puerto Rico, which are exempt from federal, state and local income taxes, represented 18.5% of the Fund’s total assets (20.2% of net assets) at the end of this reporting period. Puerto Rico’s “tobacco bonds” are excluded

from this figure, as they are backed by proceeds from the tobacco Master Settlement Agreement (MSA) and included in this Fund’s tobacco holdings, as discussed later in this report.

The Fund’s holdings, some of which are insured, include G.O. debt and securities from many different sectors. Most of the Fund’s investments in securities issued in Puerto Rico are supported by taxes and other revenues and are designed to help finance electric utilities, highways and education, among other things.

Expanding on the fiscal discipline that was the hallmark of Luis Fortuño, his predecessor, first-time Governor Alejandro García Padilla has strengthened the island’s balance sheet, cut the government payrolls, enacted comprehensive pension reforms, and raised revenues via tax rate changes and improved enforcement. In late June 2014, the Commonwealth announced its first balanced general fund budget in more than 20 years. On the recommendation of a government task force, a value-added tax (VAT) was added to the list of tax reforms being discussed. However, the sales and use tax that the VAT would replace has its supporters and, at the end of this reporting period, the Legislature had not voted.

A decision that we believe has important implications for the muni industry – and our funds in particular – was announced on February 6, 2015: On that date, a federal judge ruled that the Puerto Rico Public

Corporation Debt Enforcement and Recovery Act (the “Recovery Act”) violated the U.S. Constitution and was invalid. As you may recall, the Recovery Act was passed in late June 2014 and OppenheimerFunds filed suit immediately, challenging the legislation that was designed to allow PREPA (the island’s electric utility authority), PRASA (the aqueduct and sewer authority) and PRHTA (the highway authority) to restructure their debt through a process overseen by a Commonwealth court. The Commonwealth of Puerto Rico and PREPA have appealed the court’s ruling.

Late in this reporting period, a forbearance agreement between PREPA and many of its creditors, including this Fund, was extended beyond March 31, 2015, its original end date. Under the agreement, which was reached in August 2014, the bondholders had agreed to forbear from exercising rights in connection with events that would constitute a default on PREPA bonds and PREPA had agreed to a variety of financial terms and to submit a 5-year restructuring plan. At the end of this reporting period, the forbearance agreement was still in effect.

Our investment team is determined to protect our shareholders’ best interests and enforce all bond covenants that have been negotiated. We will also continue to monitor credit rating changes and other developments related to our Puerto Rico holdings closely and will post information on our website (oppenheimer-funds.com) and on our Twitter feed (twitter.com/RochesterFunds). Investors should note that deterioration of the Puerto

Rican economy could have an adverse impact on Puerto Rico bonds and the performance of the Oppenheimer Rochester municipal funds that hold them, including this Fund. We encourage investors to contact their financial advisors for the latest information, as the situation remains quite fluid.

Given the degree to which Oppenheimer Rochester funds have been cited in news coverage about the economic and fiscal challenges facing Puerto Rico, we feel compelled to remind investors that all fund investments are actively managed. Our team is responsive to the dynamics of the market and may choose to adjust investment strategies in the interest of maximizing the potential benefits to our shareholders. Further, while we remain committed to keeping investors informed about our basic investing strategies, we do not provide comment about near-term trading strategies as we believe doing so might allow other market participants to impair our team’s ability to deliver shareholder value.

General Obligation (G.O.) securities, which are backed by the full faith and taxing authority of state and local governments, comprised 17.7% of total assets (19.4% of net assets) as of March 31, 2015. The Fund’s holdings in this sector include bonds issued in various U.S. municipalities and the Commonwealth of Puerto Rico.

As of March 31, 2015, the Fund was invested in the hospital/healthcare sector, which

represented 14.7% of total assets (16.1% of net assets). Our holdings in this sector consist of securities across the credit spectrum, but most are investment grade.

The Fund was also invested in securities used to finance marine and aviation facilities this reporting period. Many of these securities are high-grade investments that are backed by the valuable collateral of the projects whose construction they finance. Of the Fund’s total assets on March 31, 2015, 10.3% (11.2% of

net assets) were invested in the marine/aviation facilities sector.

The sales tax revenue bond sector represented 8.3% of the Fund’s total assets (9.2% of net assets) as of March 31, 2015. Debt-service payments on securities in this sector are paid using the issuing municipality’s sales tax revenue. Many of the Fund’s holdings in this sector were issued in Puerto Rico.

Municipal bonds backed by proceeds from the tobacco MSA, the national litigation

settlement with U.S. tobacco manufacturers, represented 6.8% of the Fund’s total assets (7.5% of net assets) at the end of this reporting period.

We believe the securities we hold in this sector are fundamentally sound credits, and we like that “tobacco bonds” can provide tax-exempt income for investors as well as benefits to the issuing states and territories.

Our long-term view of the sector remains bullish and, given attractive valuations, we believe that it is likely we will continue to hold a greater percentage of tobacco bonds in our portfolios than our peers. As in prior reporting periods, the tobacco bonds this Fund held during this reporting period made all scheduled payments of interest and principal on time and in full.

The Fund’s holdings in municipal bonds issued by utilities represented 6.7% of total assets (7.3% of net assets) at the end of this reporting period. As of March 31, 2015, this set of holdings included electric utilities with 4.8% of total assets (5.3% of net assets), water utilities with 1.0% (1.1% of net assets), and gas utilities with 0.9% (0.9% of net assets). Our holdings in this sector consist of securities in the mid-range of the credit spectrum.

During this reporting period, the Fund maintained an investment in municipal inverse-floating rate securities, which are tax-exempt securities with interest payments that move inversely to changes in short-term

interest rates. “Inverse floaters” continued to provide high levels of income to funds across the industry during this reporting period, which was characterized by rising prices among high-grade municipal securities. We continue to believe that “inverse floaters” are an essential element of this Fund’s portfolio because they can produce attractive yields under certain market conditions.

Our approach to municipal bond investing is flexible and responsive to market conditions. Shareholders should note that market conditions during this reporting period did not affect the Fund’s overall investment goals or cause it to pay any capital gain distributions. In closing, we believe that the Fund’s structure and sector composition as well as our time-tested strategies will continue to benefit fixed-income investors through interest rate and economic cycles.

INVESTMENT STRATEGY

The Rochester investment team focuses exclusively on municipal bonds and has consistently used a time-tested, value-oriented and security-specific approach to fund management. We know that market conditions can and do fluctuate, but we do not waver in our belief in the power of tax-free yield to help investors achieve their long-term objectives.

This “maturity managed” Fund uses a dollar-weighted approach to measuring the average maturity of its securities and seeks an average effective maturity of 5 years or less for its portfolio. While the Fund invests primarily in

investment-grade municipal securities, it may invest up to 5% of its total assets in below-investment grade securities, or “junk” bonds; the percentage of assets is measured at the time of purchase as is the credit quality of the securities. Additionally, the credit quality is based on Nationally Recognized Statistical Rating Organization (“NRSRO”) ratings or, if no NRSRO rating, on internal ratings. As of March 31, 2015, market movements or rating changes of municipal bonds, notably the Fund’s investments in Puerto Rico paper, caused the Fund’s below-investment-grade holdings to exceed this threshold. As a result, no further purchases of below-investment-grade bonds will be made until the Fund’s holdings of these types of bonds is once again below 5% of total assets.

Our team continually searches for bonds that we believe are undervalued and can provide a meaningful level of tax-free income until maturity. Rather than making allocation shifts based on expected market conditions, we search the marketplace for what we believe to be the best values for generating income. It remains important to note that we do not manage our funds based on predictions of interest rate changes.

Instead, our investment approach involves scouring the market for municipal securities that meet our stringent credit criteria and buying bonds that we believe will deliver above-average yields relative to peer funds. We focus on identifying inefficiencies in market pricing that can lead to investment advantages. We seek to maintain a

thoughtful mix of industry sectors, maturities and credit ratings in this Fund’s portfolio.

The Rochester team also prospects for yield-enhancing opportunities in the secondary market, often picking up odd lots that we believe can add significant incremental yield to our portfolios. We will also look for non-rated issues with solid credit qualities, which we believe can often help enhance a fund’s tax-free yield. Investors should note that non-rated or unrated securities may or may not be the equivalent of investment grade securities.

The Rochester Way, we believe, distinguishes our approach to municipal investing from those of our competitors.

 

 

Daniel G. Loughran,

Senior Vice President, Senior Portfolio Manager and Team Leader, on behalf of the rest of the Rochester portfolio management team: Scott S. Cottier, Troy E. Willis, Mark R. DeMitry, Michael L. Camarella, Charles S. Pulire and Elizabeth S. Mossow.

Top Holdings and Allocations

 

TOP TEN CATEGORIES
General Obligation			17.7	%
Hospital/Healthcare			14 .7
Marine/Aviation Facilities			10.3
Sales Tax Revenue			8.3
Tobacco - Master Settlement Agreement			6.8
Electric Utilities			4.8
Government Appropriation			3.5
Municipal Leases			3.5
Multifamily Housing			3.2
Tax Increment Financing (TIF)			2.7

Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2015, and are based on total assets.

 

 

CREDIT ALLOCATION
		NRSRO- Rated				Sub-Adviser-Rated				Total
AAA			1.7	%			0.6	%			2.3	%
AA			31.8				0.0				31.8
A			26.3				0.7				27.0
BBB			16.6				3.9				20.5
BB or lower			18.1				0.3				18.4
Total			94.5	%			5.5	%			100.0	%

The percentages above are based on the market value of the securities as of March 31, 2015, and are subject to change. OppenheimerFunds, Inc. determines the credit allocation of the Fund’s assets using ratings by nationally recognized statistical rating organizations (NRSROs), such as Standard & Poor’s. For any security rated by an NRSRO other than S&P, the sub-adviser, OppenheimerFunds, Inc., converts that security’s rating to the equivalent S&P rating. If two or more NRSROs have assigned a rating to a security, the highest rating is used. For securities not rated by an NRSRO, the sub-adviser uses its own credit analysis to assign ratings in categories similar to those of S&P. The use of similar categories is not an indication that the sub-adviser’s credit analysis process is consistent or comparable with any NRSRO’s process were that NRSRO to rate the same security.

For the purposes of this Credit Allocation table, securities rated within the NRSROs’ four highest categories—AAA, AA, A and BBB—are investment-grade securities. For further details, please consult the Fund’s prospectus or Statement of Additional Information.

STANDARDIZED YIELDS

For the 30 Days Ended 3/31/15

Class A			3.20	%
Class B			2.52
Class C			2.53
Class Y			3.51

TAXABLE EQUIVALENT YIELDS   As of 3/31/15
Class A			5.65	%
Class B			4.45
Class C			4.47
Class Y			6.20