================================================================================
MassMutual
CORPORATE
INVESTORS
REPORT for the THREE
MONTHS ENDED 3/31/04
================================================================================
MASSMUTUAL CORPORATE INVESTORS ADVISER
c/o David L. Babson & Company Inc. David L. Babson & Company Inc.,
1500 Main Street, Suite 1100 a member of the MassMutual Financial Group
Springfield, Massachusetts 01115 1500 Main Street
(413) 226-1516 Springfield, Massachusetts 01115
AUDITOR
KPMG LLP
Boston, Massachusetts 02110
COUNSEL TO THE TRUST
Ropes & Gray LLP
Boston, Massachusetts 02110
CUSTODIAN
Citibank, N.A.
New York, New York 10043
TRANSFER AGENT & REGISTRAR
Shareholder Financial Services, Inc.
P.O. Box 173673
Denver, Colorado 80217-3673
1-800-647-7374
Internet website: www.massmutual.com/mci
INVESTMENT OBJECTIVE AND POLICY
MassMutual Corporate Investors (the "Trust"), a closed-end investment company,
was offered to the public in September 1971 and its shares are listed on the New
York Stock Exchange. The share price of Corporate Investors can be found in the
financial section of most newspapers as "MassCp" or "MassMuInv" under the New
York Stock Exchange listings. The Trust's New York Stock Exchange trading symbol
is "MCI".
The Trust's investment objective is to maintain a portfolio of securities
providing a fixed yield and at the same time offering an opportunity for capital
gains. The Trust's principal investments are privately placed, below-investment
grade, long-term corporate debt obligations with equity features such as
warrants, conversion rights, or other equity features and, occasionally,
preferred stocks. The Trust typically purchases these investments, which are not
publicly tradable, directly from their issuers, which tend to be smaller
companies. In addition, the Trust may temporarily invest, subject to certain
limitations, in marketable investment grade debt securities, other marketable
debt securities (including high yield securities) and marketable common stocks.
David L. Babson & Company Inc. manages the Trust on a total return basis. The
Trust distributes substantially all of its net income to shareholders each year.
Accordingly, the Trust pays dividends to shareholders quarterly in January, May,
August, and November. The Trust pays dividends to its shareholders in cash,
unless the shareholder elects to participate in the Dividend Reinvestment and
Share Purchase Plan.
PROXY VOTING POLICIES & PROCEDURES
A copy of MassMutual Corporate Investors' Proxy Voting policy and procedures
used to determine how to vote proxies relating to portfolio securities is
available (1) without charge, upon request, by calling, toll-free, 866-399-1516;
(2) on MassMutual Corporate Investors' website: www.massmutual.com/mci; and (3)
on the U.S. Securities and Exchange Commission website at http://www.sec.gov.
TO OUR SHAREHOLDERS
April 30, 2004
We are pleased to present the March 31, 2004 Quarterly Report of MassMutual
Corporate Investors (the "Trust"). At the Trust's Annual Shareholder Meeting,
which was held on April 30, 2004, shareholders re-elected Donald E. Benson,
Donald Glickman and Robert E. Joyal as Trustees, each for a three-year term. The
shareholders also approved the continuance of the Investment Services Contract
between the Trust and David L. Babson & Company Inc. ("Babson").
The Board of Trustees declared an increase in the quarterly dividend to 41 cents
per share, payable on May 17, 2004 to shareholders of record on May 7, 2004. A
quarterly dividend of 36 cents per share was paid in the previous quarter.
U.S. equity markets, as measured by several broad market indices, were mixed.
During the quarter ended March 31, 2004, large stocks, as approximated by the
Dow Jones Industrial Average, decreased 0.43%. On the other hand, smaller
stocks, as approximated by the Russell 2000 Index, increased 6.26%. A large part
of this return on the Russell 2000 Index was earned in the month of January
(4.34%) with more modest returns posted in February and March (0.90% and 0.93%,
respectively). U.S. fixed income markets, as measured by selected indices,
posted positive returns for the quarter. The Lehman Brothers Government/Credit
Index and the Lehman Brothers U.S. Corporate High Yield Index increased 3.08%
and 2.34%, respectively, for the quarter.
During the quarter ended March 31, 2004, net assets of the Trust increased to
$202,618,278 or $22.74 per share compared to $193,786,114 or $21.84 per share on
December 31, 2003, which translates into a 4.12% return for the quarter, based
on change in net assets with reinvestment of dividends. Long term, the Trust's
portfolio had average annualized returns of 21.47%, 10.78%, 14.20% and 14.65%
for the 1-, 5-, 10- and 25- year time periods ended March 31, 2004,
respectively, based on change in net assets with reinvestment of dividends. The
Trust earned 42 cents per share of net investment income for the quarter,
compared to 44 cents per share in the previous quarter.
During the quarter, the Trust made private placement investments in four new
issuers and closed two "follow-on" investments, totaling approximately $8.9
million. The follow-on investments purchased by the Trust were in securities of
Colibri Holdings Corp. and Dwyer Group, Inc. The four new issuers the Trust
invested in were American Hospice Management, Kele and Associates, Inc., Nonni's
Food Company and Roto-Rooter, Inc. The weighted average coupon of these
investments was 12.1%. (A brief description of these investments can be found in
the Schedule of Investments.)
Thank you for your continued interest in and support of MassMutual Corporate
Investors.
Sincerely,
/s/ Roger W. Crandall
Roger W. Crandall
President
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1
CONSOLIDATED STATEMENT OF MASSMUTUAL CORPORATE INVESTORS
ASSETS AND LIABILITIES
March 31, 2004
(Unaudited)
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost - $196,270,900) $179,322,217
Corporate public securities at market value
(Cost - $29,266,471) 30,234,024
Short-term securities at cost plus earned discount
which approximates market value 8,579,592
------------
218,135,833
Cash 1,396,480
Interest and dividends receivable 4,774,323
Receivable for investments sold 2,319,973
------------
TOTAL ASSETS $226,626,609
============
LIABILITIES:
Payable for investments purchased $ 2,781,142
Management fee payable 762,679
Note payable 20,000,000
Interest payable 187,711
Accrued expenses 130,641
Accrued taxes payable 146,158
------------
TOTAL LIABILITIES 24,008,331
============
NET ASSETS:
Common shares, par value $1.00 per share;
an unlimited number authorized 8,910,216
Additional paid-in capital 102,590,695
Retained net realized gain on investments, prior years 100,547,585
Undistributed net investment income 5,136,793
Undistributed net realized gain on investments 1,414,119
Net unrealized depreciation of investments (15,981,130)
------------
TOTAL NET ASSETS 202,618,278
============
TOTAL LIABILITIES AND NET ASSETS $226,626,609
============
COMMON SHARES ISSUED AND OUTSTANDING 8,910,216
============
NET ASSET VALUE PER SHARE $ 22.74
============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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2
CONSOLIDATED STATEMENT OF OPERATIONS MASSMUTUAL CORPORATE INVESTORS
For the three months ended March 31, 2004
(Unaudited)
INVESTMENT INCOME:
Interest $ 4,947,877
Dividends 97,350
------------
TOTAL INVESTMENT INCOME 5,045,227
------------
EXPENSES:
Management fees 762,678
Trustees' fees and expenses 29,000
Transfer agent/registrar's expenses 12,000
Interest 378,849
Reports to shareholders 30,000
Audit and legal 54,600
Other 14,000
------------
TOTAL EXPENSES 1,281,127
------------
NET INVESTMENT INCOME ($0.42 PER SHARE) 3,764,100
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 2,079,277
Net change in unrealized depreciation of investments 2,153,127
------------
NET GAIN ON INVESTMENTS 4,232,404
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,996,504
============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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3
CONSOLIDATED STATEMENT OF CASH FLOWS MASSMUTUAL CORPORATE INVESTORS
For the three months ended March 31, 2004
(Unaudited)
NET DECREASE IN CASH:
Cash flows from operating activities:
Interest and dividends received $ 3,222,235
Interest expenses paid (378,849)
Operating expenses paid (933,913)
Income taxes paid (1,631,311)
------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 278,162
------------
Cash flows from investing activities:
Purchases/Proceeds/Maturities from short-term
portfolio securities, net (2,302,913)
Purchase of portfolio securities (17,962,986)
Proceeds from disposition of portfolio securities 18,242,439
------------
NET CASH USED FOR INVESTING ACTIVITIES (2,023,460)
------------
NET CASH USED FOR OPERATING AND INVESTING ACTIVITIES (1,745,298)
------------
Cash flows from financing activities:
Increase in receipts for shares issued on reinvestment
of dividends 835,660
Cash dividends paid from net investment income (6,743,323)
------------
NET CASH USED FOR FINANCING ACTIVITIES (5,907,663)
------------
NET DECREASE IN CASH (7,652,961)
Cash - beginning of year 9,049,441
------------
CASH - END OF PERIOD $ 1,396,480
============
RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET
CASH USED FOR OPERATING AND INVESTING ACTIVITIES:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,996,504
------------
Increase in investments (10,852,310)
Increase in interest and dividends receivable (1,498,156)
Decrease in receivable for investments sold 1,484,123
Increase in payable for investments purchased 2,781,142
Increase in management fee payable 33,246
Decrease in accrued expenses (58,536)
Decrease in accrued taxes payable (1,631,311)
------------
TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (9,741,802)
------------
NET CASH USED FOR OPERATING AND INVESTING ACTIVITIES $ (1,745,298)
============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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4
CONSOLIDATED STATEMENTS OF MASSMUTUAL CORPORATE INVESTORS
CHANGES IN NET ASSETS
For the three months ended March 31, 2004 and the year ended December 31, 2003
For the three
months ended For the
03/31/2004 year ended
(Unaudited) 12/31/2003
------------ ------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 3,764,100 $ 12,804,578
Net realized gain on investments 2,079,277 4,989,717
Net change in unrealized depreciation of investments 2,153,127 20,089,741
------------ ------------
Net increase in net assets resulting from operations 7,996,504 37,884,036
Net increase in shares of beneficial interest transactions 835,660 1,167,125
Dividends to shareholders from:
Net investment income (2003 - $1.84 per share) -- (16,293,478)
------------ ------------
TOTAL INCREASE IN NET ASSETS 8,832,164 22,757,683
NET ASSETS, BEGINNING OF YEAR
193,786,114 171,028,431
------------ ------------
NET ASSETS, END OF PERIOD/YEAR (INCLUDING UNDISTRIBUTED NET
INVESTMENT INCOME IN 2004 - $5,136,793; 2003 - $1,372,693) $202,618,278 $193,786,114
============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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5
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS MASSMUTUAL CORPORATE INVESTORS
Selected data for each share of beneficial
interest outstanding:
For the
three months
ended For the years ended December 31,
03/31/2004 --------------------------------------------------------------
(Unaudited) 2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ---------- ----------
Net asset value:
Beginning of year $ 21.84 $ 19.40 $ 20.07 $ 20.74 $ 22.00 $ 23.87
---------- ---------- ---------- ---------- ---------- ----------
Net investment income 0.42 1.44 1.53 1.70 1.96 1.80
Net realized and unrealized
gain (loss) on investments 0.48 2.83 (0.59) (0.53) (0.46) (0.94)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.90 4.27 0.94 1.17 1.50 0.86
---------- ---------- ---------- ---------- ---------- ----------
Dividends from net investment
income to common shareholders 0.00 (1.84) (1.44) (1.79) (1.96) (1.73)
Distributions from net realized
gain on investments to common
shareholders 0.00 0.00 (0.18) (0.09) (0.80) (1.00)
Change from issuance of shares 0.00 0.01 0.01 0.04 0.00 0.00
---------- ---------- ---------- ---------- ---------- ----------
Total distributions 0.00 (1.83) (1.61) (1.84) (2.76) (2.73)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value:
End of period/year $ 22.74 $ 21.84 $ 19.40 $ 20.07 $ 20.74 $ 22.00
---------- ---------- ---------- ---------- ---------- ----------
Per share market value:
End of period/year $ 24.00 $ 22.90 $ 19.49 $ 20.70 $ 22.00 $ 21.38
Total investment return
Market value 4.80%* 27.53% 1.35% 1.88% 17.55% 7.35%
Net asset value 4.12%* 22.61% 4.80% 5.91% 7.28% 7.53%
Net assets (in millions):
End of period/year $ 202.62 $ 193.79 $ 171.03 $ 175.11 $ 178.13 $ 188.96
Ratio of operating expenses
to average net assets 0.46%* 2.04% 1.82% 1.72% 1.47% 1.30%
Ratio of interest expense to
average net assets 0.19%* 0.82% 0.86% 0.84% 0.58% 0.52%
Ratio of total expenses to average
net assets 0.65%* 2.86% 2.68% 2.56% 2.05% 1.82%
Ratio of net investment income to
average net assets 1.90%* 6.95% 7.65% 8.20% 8.56% 7.63%
Portfolio turnover 8.23%* 56.10% 34.02% 24.48% 59.75% 68.04%
*Percentages represent results for the period and are not annualized.
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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6
CONSOLIDATED SCHEDULE OF INVESTMENTS MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES - 88.50% (A) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
PRIVATE PLACEMENT INVESTMENTS - 76.79%
ADORN, INC.
A manufacturer of wall panels, cabinets, moldings and
countertops for houses and recreational vehicles.
12.5% Subordinated Note due 2010 $ 2,125,000 02/29/00 $ 1,908,619 $ 2,146,250
Warrant, exercisable until 2010, to purchase
common stock at $.02 per share (B) 364 shs. 02/29/00 307,759 137,429
------------ ------------
2,216,378 2,283,679
------------ ------------
America's Body Company, Inc./LCP Holding Co.
A designer and manufacturer of commercial work vehicles.
12% Preferred Stock Series C(B) $ 395 shs. 12/16/03 1,750,000 1,750,000
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 58 shs. * 513,334 1
------------ ------------
2,263,334 1,750,001
------------ ------------
American Hospice Management
A for-profit hospice care provider in the United States.
12% Senior Subordinated Note due 2010 $ 2,125,000 01/22/04 1,888,695 2,168,342
Preferred Class A Unit (B) 2,525 uts. 01/22/04 240,789 216,710
Common Class B Unit (B) 3,042 uts. 01/22/04 -- 30
------------ ------------
2,129,484 2,385,082
------------ ------------
Ames True Temper Group
A manufacturer and distributor of non-powered lawn and
garden tools and accessories in North America.
13% Senior Subordinated Note due 2010 $ 1,888,889 01/14/02 1,883,871 1,992,777
10% Preferred Stock 161 shs. ** 161,093 175,480
Class A Common Stock (B) 2,105 shs. 02/28/02 2,105 2,105
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 5,018 shs. 01/14/02 5,018 50
------------ ------------
2,052,087 2,170,412
------------ ------------
Beacon Medical Products, Inc.
A designer, manufacturer and marketer of medical air and
gas distribution systems.
Senior Secured Tranche A Floating Rate Note due 2008 $ 967,555 04/09/02 967,555 962,349
12% Senior Secured Note due 2010 $ 721,196 04/09/02 612,284 755,154
Limited Partnership Interest of Riverside Capital
Appreciation Fund IV, L.P (B) 1.12% int. 04/09/02 152,329 137,096
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 1,390 shs. 04/09/02 127,497 14
------------ ------------
1,859,665 1,854,613
------------ ------------
Beta Brands Ltd
A manufacturer of hard candy and chocolate-coated
products sold primarily to the Canadian market.
5% Promissory Note due 2009 (B)
$ 195,498 03/31/04 195,498 --
Warrant, exercisable unti12009, to purchase
common stock at $.01 per share (B) 4,895 shs. 03/31/04 1 --
------------ ------------
195,499 --
------------ ------------
*11/02/98 and 12/16/03.
**02/28/02 and 11/15/02.
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7
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
BETTER MINERALS & AGGREGATES
A producer of high grade industrial and specialty
silica sands.
14% Redeemable Freferred Stock 997 shs. 09/30/99 $ 545,858 $ 108,991
Convertible Freferred Stock Series A and B,
convertible into common stock at $9.26 per share (B) 126,003 shs. 12/19/96 1,166,700 --
Common Stock (B) 20,027 shs. 09/30/99 799,068 --
Warrants, exercisable until 2005 and 2010, to
purchase common stock at $.01 per share (B) 11,399 shs. * 128,502 --
------------ ------------
2,640,128 108,991
------------ ------------
C & M CONVEYOR, INC.
A manufacturer and supplier of material handling
systems to the corrugated sheet and container industry.
9.5% Senior Secured Term Note due 2007 $ 1,233,434 09/13/02 1,233,434 1,245,499
11% Senior Subordinated Note due 2010 $ 838,102 09/13/02 789,552 854,321
Common Stock (B) 316,265 shs. 09/13/02 316,265 253,012
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 137,175 shs. 09/13/02 60,250 1,372
------------ ------------
2,399,501 2,354,204
------------ ------------
CAINS FOODS, L.P
A producer of mayonnaise and sauce products for both the
retail and food service markets.
8% Junior Subordinated Convertible
Note due 2004, convertible into partnership
points at $1,388.89 per point $ 108,108 09/29/95 108,108 113,611
Warrant, exercisable until 2006, to purchase
partnership points at $.01 per point (B) 39 pts. 09/29/95 50,261 --
------------ -----------
158,369 113,611
------------ -----------
CAPESUCCESS LLC
A provider of diversified staffing services.
Preferred Membership Interests (B) 1,882 uts. 04/29/00 8,396 420
Common Membership Interests (B) 24,318 uts. 04/29/00 108,983 5,442
------------ ------------
117,379 5,862
------------ ------------
CAPITAL SPECIALTY PLASTICS, INC.
A producer of desiccant strips used for packaging
pharmaceuticals products.
Common Stock (B) 109 shs. ** 503 403
------------ ------------
COEUR, INC.
A producer of proprietary, disposable power
injection syringes.
8.75% Senior Secured Term Note due 2010 $ 570,652 04/30/03 570,652 581,952
11.5% Senior Subordinated Note due 2011 $ 424,819 04/30/03 386,839 437,066
Common Stock (B) 126,812 shs. 04/30/03 126,812 114,131
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 87,672 shs. 04/30/03 40,804 877
------------ ------------
1,125,107 1,134,026
------------ ------------
*12/19/96 and 09/30/99.
**12/30/97 and OS/29/99.
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8
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
COINING CORPORATION OF AMERICA LLC
A manufacturer of close tolerance parts and metal
stampings.
Senior Secured Floating Rate Revolving
Credit Facility due 2006 $ 162,037 01/07/02 $ 162,037 $ 154,677
Senior Secured Floating Rate Tranche A Note due 2007 $ 1,047,840 06/26/01 1,047,840 981,359
12% Senior Secured Tranche B Note due 2008 $ 648,148 06/26/01 590,911 643,249
Limited Partnership Interest (B) 6.38% int. 06/26/01 324,074 259,259
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 107,036 shs. 06/26/01 79,398 1,070
------------ ------------
2,204,260 2,039,614
------------ ------------
COLIBRI HOLDINGS CORPORATION
A manufacturer and distributor of wild bird feeders
and accessories.
12.5% Senior Subordinated Note due 2008 $ 1,593,750 09/22/00 1,405,847 1,542,675
28% Preferred Stock 71 shs. 11/02/01 70,833 69,766
20% Preferred Stock 66,406 shs. 03/09/04 66,406 64,274
Common Stock (B) 1,429 shs. 09/22/00 531,250 265,624
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 843 shs. 09/22/00 265,625 8
------------ ------------
2,339,961 1,942,347
------------ ------------
CORVEST GROUP, INC.
A manufacturer and distributor of promotional products.
12% Senior Subordinated Note due 2007 (B) $ 3,863,636 * 3,712,233 3,477,272
Common Stock (B) 56 shs. * 96,591 24,145
Limited Partnership Interest (B) 19.32% int. * 285,769 71,692
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 183 shs. * 297,203 78,894
------------ ------------
4,391,796 3,652,003
------------ ------------
DELSTAR HOLDING CORPORATION
A manufacturer of plastic netting for a wide variety of
industries.
Convertible Preferred Stock, convertible into common
stock at $12.16 per share (B) 3,514 shs. 10/05/01 427,153 390,886
------------ ------------
DEXTER MAGNETICS TECHNOLOGIES, INC.
A designer, fabricator, assembler, and distributor of
industrial magnets and subassemblies in North America
and Europe.
12% Senior Subordinated Note due 2006 $ 1,231,884 07/19/01 1,109,831 1,194,558
Common Stock (B) 585 shs. 07/19/01 585,145 409,605
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 297 shs. 07/19/01 250,611 3
------------ ------------
1,945,587 1,604,166
------------ ------------
*03/05/99 and 03/24/99.
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9
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
DHD HEALTHCARE, INC.
A designer, manufacturer and distributor of
plastic, noninvasive medical devices used for
respiratory care.
Senior Secured Floating Rate Tranche A Note due 2008 $ 943,358 02/08/O1 $ 943,358 $ 929,613
12% Senior Secured Tranche B Note due 2009 $ 451,173 02/08/O1 386,721 444,832
Limited Partnership Interest of Riverside
Capital Appreciation Fund III, L.P (B) 2.73% int. 02/08/O1 163,896 236,010
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 927 shs. 02/08/O1 82,030 155,783
------------ ------------
1,576,005 1,766,238
------------ ------------
DIRECTED ELECTRONICS, INC.
A designer and distributor of brand name automotive
security systems, audio products and installation
accessories.
12% Senior Subordinated Note due 2007 $ 3,355,267 12/22/99 3,105,461 3,388,820
8% Convertible Class B Subordinated
Promissory Note due 2008 $ 96,598 12/22/99 96,489 100,500
Class B Common Stock (B) 26,097 shs. 12/22/99 260,965 730,703
Limited Partnership Interest (B) 8.70% int. 12/22/99 548,920 1,152,720
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 45,255 shs. 12/22/99 413,816 1,267,139
------------ ------------
4,425,651 6,639,882
------------ ------------
DIVERSCO, INC./DHI HOLDINGS, INC.
A contract provider of janitorial and equipment
maintenance services and temporary production labor
to industrial customers.
Membership Interests of MM/Lincap
Diversco Investments Ltd. LLC (B) 27.19% int. 08/27/98 734,090 --
Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 1,113,655
Warrants, exercisable until 2011, to purchase common
stock of DHI Holdings, Inc. at $.01 per share (B) 13,352 shs. * 403,427 --
------------ ------------
3,921,650 1,113,655
------------ ------------
DWYER GROUP, INC.
A franchiser of a variety of home repair services.
14% Senior Subordinated Note due 2011 $ 1,859,375 10/30/03 1,677,883 1,828,852
Common Stock (B) 6,906 shs. ** 690,600 621,540
Warrant, exercisable until 2011, to purchase common
stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 20
------------ ------------
2,554,952 2,450,412
------------ ------------
EAGLE WINDOW & DOOR HOLDING CO.
A manufacturer of wood and aluminum-clad wood
windows and doors.
12% Senior Subordinated Note due 2010 $ 1,900,000 05/06/02 1,655,544 1,976,000
Common Stock (B) 225 shs. 05/06/02 225,000 291,584
Warrant, exercisable until 2010, to purchase common
stock at $.01 per share (B) 441 shs. 05/06/02 285,000 571,086
------------ ------------
2,165,544 2,838,670
------------ ------------
*10/24/96 and 08/28/98.
**10/30/03 and 01/02/04.
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10
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
EAST RIVER VENTURES I, L.P
An acquirer of controlling or substantial
interests in other entities.
Limited Partnership Interest (B) 0.14% int. 01/01/01 $ 29,976 $ 27,148
------------ ------------
ENZYMATIC THERAPY, INC.
A manufacturer and distributor of branded natural
medicines and nutritional supplements.
13% Senior Subordinated Note due 2005 (B) $ 1,593,750 09/17/02 1,349,781 956,250
Limited Partnership Interest (B) 1.32% int. 03/30/00 531,250 5,312
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 478 shs. 03/30/00 255,000 5
------------ ------------
2,136,031 961,567
------------ ------------
EURO-PRO CORPORATION
A designer, marketer and distributor of floor care,
steam cleaning and small kitchen products and appliances.
13.25% Senior Subordinated Note due 2011 $ 2,125,000 09/09/03 2,090,688 2,206,354
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 43,878 shs. 09/09/03 35,641 439
------------ ------------
2,126,329 2,206,793
------------ ------------
EVANS CONSOLES, INC.
A designer and manufacturer of consoles and control
center systems.
Senior Secured Tranche A Floating Rate Note due 2004 $ 242,000 01/21/03 242,000 242,000
Senior Secured Tranche A Floating Rate Note due
2006 (B) $ 974,300 03/02/98 974,300 48,715
8.85% Senior Secured Tranche A Note due 2006 (B) $ 974,300 03/02/98 974,300 48,715
11.75% Senior Secured Tranche B Note due 2006 (B) $ 700,000 03/02/98 642,897 35,000
Senior Secured Floating Rate Revolving Credit
Facility due 2006 (B) $ 984,242 03/02/98 984,242 49,212
Convertible Preferred Stock, convertible on a one share
for one share basis into non voting common stock (B) 293,071 shs. 01/21/03 1 3
Limited Partnership Interest of CM Equity Partners (B) 2.24% int. 02/11/98 126,648 --
------------ ------------
3,944,388 423,645
------------ ------------
EXAMINATION MANAGEMENT SERVICES, INC.
A national full-service evidence provider to the
insurance industry and a provider of occupational
health testing.
12% Senior Subordinated Note due 2007 $ 2,109,637 03/16/99 2,021,398 1,742,116
Limited Partnership Interest (B) 13.14% int. 03/02/99 2,140,363 1,284,218
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 77,233 shs. 03/16/99 175,803 772
------------ ------------
4,337,564 3,027,106
------------ ------------
FASTENERS FOR RETAIL, INC.
A designer and marketer of low-cost fasteners for
point of purchase displays and signage in retail
environments.
12.5% Senior Subordinated Note due 2007 $ 3,650,000 12/22/99 3,367,737 3,650,000
Class B Common Stock (B) 600 shs. 12/22/99 600,000 2,106,000
Warrant, exercisable until 2007, to purchase
common stock at $.02 per share (B) 589 shs. 12/22/99 462,927 2,066,442
------------ ------------
4,430,664 7,822,442
------------ ------------
--------------------------------------------------------------------------------
11
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
G C-SUN HOLDINGS, L.P
A value-added national distributor of maintenance, repair
and operating supplies such as fasteners, electrical
components and tools.
12% Senior Subordinated Note due 2008 (B) $ 1,725,000 03/02/00 $ 1,451,784 $ 1,293,750
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 880 shs. 03/02/00 347,288 --
------------ ------------
1,799,072 1,293,750
------------ ------------
HAMILTON FUNERAL SERVICES CENTERS, INC.
A privately held owner and operator of funeral homes in
the United States.
16.5% Senior Subordinated Note due 2007 (B) $ 3,802,712 * 3,697,924 380,271
Warrant, exercisable until 2007, to purchase
common stock at $1 per share (B) 338,280 shs. * 48,447 --
------------ ------------
3,746,371 380,271
------------ ------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in
manufacturing and marketing entities.
Series A Preferred Units (B) 1.19% int. 07/21/94 398,280 19,008
------------ ------------
HUSSEY SEATING CORPORATION
A manufacturer of spectator seating products.
Senior Secured Floating Rate Revolving Note due 2006 $ 560,962 06/12/96 560,963 560,966
Senior Secured Floating Rate Note due 2006 $ 579,375 ** 579,375 579,375
12% Senior Subordinated Note due 2006 $ 1,350,000 03/31/03 1,350,000 1,355,350
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 4,771 shs. *** 225,000 700,764
------------ ------------
2,715,338 3,196,455
------------ ------------
INTEGRATION TECHNOLOGY SYSTEMS, INC.
A manufacturer of steel protective computer and network
systems for the industrial and office environments.
11% Senior Secured Note due 2007 $ 1,284,011 06/01/00 1,284,011 1,206,484
13% Senior Secured Note due 2007 $ 261,838 02/28/03 327,297 308,097
Common Stock (B) 228 shs. 06/01/00 262,200 131,100
------------ ------------
1,873,508 1,645,681
------------ ------------
JASON, INC.
A diversified manufacturing company serving various
industrial markets.
13% Senior Subordinated Note due 2008 $ 963,687 08/04/00 882,500 880,656
14% Cumulative Redeemable Preferred Stock Series A(B) 289 shs. 08/04/00 289,224 260,153
Limited Partnership Interests of
Saw Mill Capital Fund II, L.P (B) 2.50% int. 08/03/00 886,451 443,253
Warrants, exercisable until 2008 and 2009, to purchase
common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 509
------------ ------------
2,173,587 1,584,571
------------ ------------
*O1/25/99 and 07/16/99.
**06/12/96 and 08/03/O1.
***06/12/96 and O1/19/00.
--------------------------------------------------------------------------------
12
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
KEEPSAKE QUILTING, INC.
A seller of quilting fabrics, books, patterns, kits and
notions to consumers.
Senior Secured Floating Rate Revolving Note Due 2005 $ 91,732 06/16/00 $ 91,732 $ 91,474
Senior Secured Floating Rate Tranche A Note due 2007 $ 889,800 06/16/00 839,347 830,351
12% Senior Secured Tranche B Note due 2008 $ 550,392 06/16/00 520,422 572,408
Limited Partnership Interest of Riverside XVI
Holding Company, L.P (B) 5.29% int. 06/12/00 333,490 300,132
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 1,108 shs. 06/12/00 45,866 31,815
------------ ------------
1,830,857 1,826,857
------------ ------------
KELE AND ASSOCIATES, INC.
A distributor of building automation control products.
12% Senior Subordinated Note due 2012 $ 1,831,548 02/27/04 1,656,118 1,836,211
Preferred Stock Class A(B) 23 shs. 02/27/04 449,164 483,545
Common Stock (B) 12 shs. 02/27/04 12,871 11,581
Warrant, exercisable until 2012, to
purchase common stock at $.01 per share (B) 11 shs. 02/27/04 7,792 --
------------ ------------
2,125,945 2,331,337
------------ ------------
KENAN-ADVANTAGE TRANSPORT COMPANY
A transporter of light petroleum, petrochemicals,
lubricants and residual fuels.
12.5% Senior Subordinated Note due 2009 $ 1,817,435 04/30/01 1,817,435 1,837,211
Preferred Stock (B) 307 shs. 04/30/01 307,000 614,000
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 269 shs. 04/30/01 14 3
------------ ------------
2,124,449 2,451,214
------------ ------------
LANCASTER LABORATORIES, INC.
A laboratory testing operation in the United States.
12% Senior Subordinated Note due 2007 $ 1,669,643 09/25/00 1,446,179 1,703,036
Common Stock (B) 455,357 shs. 09/25/00 455,357 409,821
Warrant, exercisable until 2007, to purchase common
stock at $.01 per share (B) 405,485 shs. 09/25/00 348,348 4,055
------------ ------------
2,249,884 2,116,912
------------ ------------
LIH INVESTORS, L.P
A manufacturer and marketer of a broad line of
external accessories for new and used sport
utility vehicles, trucks and vans.
12.5% Senior Subordinated Note due 2008 $ 3,845,000 * 3,435,826 3,853,808
Common Stock (B) 5,800 shs. * 406,003 203,000
Warrant, exercisable until 2006, to purchase
common stock at $.11 per share (B) 15,572 shs. * 602,127 545,020
------------ ------------
4,443,956 4,601,828
------------ ------------
MEDASSIST, INC.
A provider of patient eligibility and accounts
receivable management services to hospitals and
physician practices.
12% Senior Subordinated Note due 2011 $ 2,125,000 05/01/03 2,087,155 2,167,257
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 83,214 shs. 05/01/03 40,675 832
------------ ------------
2,127,830 2,168,089
------------ ------------
* 12/23/98 and O1/28/99.
--------------------------------------------------------------------------------
13
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
MOSS, INC.
A manufacturer and distributor of large display and
exhibit structures.
Senior Secured Floating Rate Revolving Note due 2005 $ 33,182 09/21/00 $ 33,182 $ 29,864
Senior Secured Floating Rate Tranche A Note due 2007 $ 1,109,460 09/21/00 1,109,460 998,514
12% Senior Secured Tranche B Note due 2008 $ 420,250 09/21/00 392,420 378,225
Limited Partnership Interest of
Riverside Capital Appreciation Fund I, L.P (B) 7.47% int. * 311,481 155,733
Warrant, exercisable unti12008, to purchase
common stock at $100 per share (B) 463 shs. 09/21/00 40,344 5
------------ ------------
1,886,887 1,562,341
------------ ------------
MUSTANG VENTURES COMPANY
A natural gas gathering and processing operation
located in Oklahoma and Texas.
11.5% Subordinated Note due 2011 $ 566,667 12/11/02 473,276 592,188
8.5% Redeemable Preferred Stock 155,833 shs. 12/11/02 1,108,087 1,142,660
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 18,425 shs. 12/11/02 553,539 435,567
------------ ------------
2,134,902 2,170,415
------------ ------------
NEFF MOTIVATION, INC.
A manufacturer and distributor of customized awards and
sportswear to schools.
12.5% Senior Subordinated Note due 2011 $ 1,062,500 01/31/03 895,357 1,088,889
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 212 shs. 01/31/03 180,625 2
------------ ------------
1,075,982 1,088,891
------------ ------------
NONNI'S FOOD COMPANY
A producer and distributor of premium biscotti and bagel
chips in North America.
12.25% Senior Subordinated Note due 2012 $ 1,863,462 03/29/04 1,856,139 1,863,462
10% Preferred Stock 255 shs. 03/29/04 255,083 251,520
Common Stock (B) 6,455 shs. 03/29/04 6,455 5,810
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 8,622 shs. 03/29/04 7,323 86
------------ ------------
2,125,000 2,120,878
------------ ------------
NPC, INC.
A manufacturer of flexible connectors and equipment used
in the installation of sewers and storm drain pipelines.
Senior Secured Floating Rate Revolving Note due 2006 $ 414,182 06/25/99 414,182 399,702
Senior Secured Floating Rate Note due 2006 $ 2,157,839 06/25/99 2,157,792 2,080,207
12% Senior Secured Tranche B Note due 2007 $ 978,814 06/25/99 900,499 973,584
Limited Partnership Interest of Riverside IHII
Holding Company L.P (B) 3.38% int. 06/11/99 296,883 221,438
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 201 shs. 06/25/99 142,373 2
------------ ------------
3,911,729 3,674,933
------------ ------------
*09/20/00 and 05/23/02.
--------------------------------------------------------------------------------
14
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the
automotive industry.
9% Senior Secured Note due 2009 $ 812,500 01/28/02 $ 812,500 $ 851,754
11.5% Senior Subordinated Note due 2012 $ 1,500,000 01/28/02 1,359,396 1,582,413
Common Stock (B) 312,500 shs. 01/28/02 312,500 315,000
Warrant, exercisable until 2012, to purchase common
stock at $.01 per share (B) 243,223 shs. 01/28/02 162,045 242,980
------------ ------------
2,646,441 2,992,147
------------ ------------
OLYMPIC SALES, INC.
An operator of boat dealerships in Washington state,
Oregon, California and British Columbia.
12% Senior Subordinated Note due 2006 $ 2,774,000 08/07/98 2,646,366 2,481,647
12% Senior Subordinated Note due 2008 $ 307,071 02/09/00 284,368 256,147
Limited Partnership Interest of Riverside VIII,
VIII-A and VIII-B Holding Company, L.P (B) 1,531,250 shs. * 1,555,729 798,930
Warrants, exercisable until 2007and 2008, to purchase
common stock at $.01 per share (B) 28,648 shs. ** 389,188 287
------------ ------------
4,875,651 3,537,011
------------ ------------
PARADIGM PACKAGING, INC.
A manufacturer of plastic bottles and closures for the
nutritional, pharmaceutical, personal care and food
packaging markets.
12% Senior Subordinated Note due 2008 $ 2,125,000 12/19/00 1,934,313 2,167,500
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 265,625
------------ ------------
2,199,938 2,433,125
------------ ------------
PHARMACEUTICAL BUYERS, INC.
A group purchasing organization which specializes in
arranging and negotiating contracts for the purchase of
pharmaceutical goods and medical equipment.
10.5% Senior Secured Note due 2005 $ 34,553 11/30/95 34,553 36,227
10.5% Senior Secured Convertible Note due 2005,
convertible into common stock at $50,000 per share $ 195,000 11/30/95 195,000 303,868
Common Stock 6 shs. 11/30/95 337,500 478,101
------------ ------------
567,053 818,196
------------ ------------
P H I HOLDING COMPANY
A retailer of mid-priced gift items, home and
garden decor, accessories and other similar
consumer products.
12.5% Senior Subordinated Note due 2010 $ 2,125,000 10/25/02 1,850,204 2,210,000
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 351 shs. 10/25/02 296,747 4
------------ ------------
2,146,951 2,210,004
------------ ------------
*08/07/98, 02/23/99, 12/22/99 and 02/25/03.
**08/07/98 and 02/09/00.
--------------------------------------------------------------------------------
15
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
POLYMER TECHNOLOGIES, INC./POLI-TWINE WESTERN, INC.
A manufacturer of polypropylene twine for the
hay bailing marketplace.
8% Senior Subordinated Note due 2010 (B) $ 743,750 09/27/02 $ 743,722 $ 223,125
------------ ------------
PRECISION DYNAMICS, INC.
A manufacturer of custom-designed solenoid valves and
controls.
Senior Secured Floating Rate Revolving Credit
Facility due 2004 $ 733,500 07/22/96 733,500 733,500
Senior Secured Floating Rate Term Note
due 2004 $ 1,051,350 07/22/96 1,051,350 1,051,350
12% Senior Secured Term Note due 2004 $ 3,260,000 07/22/96 316,077 326,000
8% Preferred Stock (B) 374 shs. 07/22/96 231,964 115,982
Common Stock (B) 599 shs. 07/22/96 28,978 14,489
Warrant, exercisable until 2004, to purchase
common stock at $.O1 per share (B) 322 shs. 07/22/96 97,800 3
------------ ------------
2,459,669 2,241,324
------------ ------------
PROCESS CHEMYCALS LLC
A specialty chemical company that manufactures
processed chemicals for the fertilizer, asphalt
and concrete industries.
Common Membership Interests 9,863 uts * 4 --
------------ ------------
PROGRESSIVE SOFTWARE HOLDING, INC.
A designer and manufacturer of point-of-sale monitors and
keyboards used by retailers and restaurants.
Common Stock (B) 729,946 shs. 07/09/02 3,500,003 13,139
------------ ------------
PROTEIN GENETICS, INC.
A producer of bovine artificial insemination products,
related breeding and healthcare products and specialty
genetics sold to the dairy and beef industries.
9.8% Redeemable Exchangeable Freferred Stock (B) 1,004 shs. 08/12/94 100,350 --
Common Stock (B) 2,600 shs. ** 126,866 --
------------ ------------
227,216 --
------------ ------------
PW EAGLE, INC. - O.T.C.
An extruder of small and medium diameter plastic pipe
and tubing in the United States.
6% Senior Subordinated Note due 2007 $ 3,574,133 09/16/99 3,571,115 2,501,893
Warrant, exercisable until 2007, to purchase
common stock at $.O1 per share (B) 197,040 shs. 09/16/99 1 396,149
------------ ------------
3,571,116 2,898,042
------------ ------------
*07/31/97 and O1/04/99.
**11/14/O1 and 08/12/94.
--------------------------------------------------------------------------------
16
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
ROTO-ROOTER, INC.
An operator in the residential and commercial
repair-and maintenance service industry through two
wholly owned subsidiaries, Roto-Rooter and Service
America.
8.75% Senior Note due 2011 $ 1,125,000 02/24/04 $ 1,125,000 $ 1,114,053
Common Stock (B) 20,000 shs. 02/24/04 1,000,000 909,900
------------ ------------
2,125,000 2,023,953
------------ ------------
ROYAL BATHS MANUFACTURING COMPANY
A manufacturer and distributor of acrylic and cultured
marble bathroom products.
12.5% Senior Subordinated Notes due 2011 $ 1,062,500 11/14/03 942,075 1,081,635
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 1
------------ ------------
1,065,021 1,081,636
------------ ------------
SABEX 2002, INC.
A Canadian specialty pharmaceutical company which
manufactures and distributes generic injectable drugs
and eye products.
12% Senior Subordinated Note due 2009 $ 2,125,000 04/19/02 2,013,501 2,210,000
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 51,088 shs. 04/19/02 138,052 575,660
------------ ------------
2,151,553 2,785,660
------------ ------------
SAFETY SPEED CUT MANUFACTURING COMPANY, INC.
A manufacturer of vertical panel saws and routers for
the wood working industry.
Senior Secured Floating Rate Revolving Note due 2006 $ 282,663 05/01/03 282,663 288,927
Senior Secured Floating Rate Tranche A Note due 2007 $ 1,625,312 06/02/99 1,625,312 1,625,312
12% Senior Secured Tranche B Note Due 2007 $ 1,130,652 06/02/99 1,130,652 1,130,652
Class B Common Stock (B) 1,480 shs. 06/02/99 256,212 463,418
------------ ------------
3,294,839 3,508,309
------------ ------------
SELIG ACQUISITION CORPORATION
A manufacturer of container sealing materials for
bottles used in consumer products.
12% Senior Subordinated Note due 2009 $ 2,125,000 06/13/02 1,974,485 2,184,500
Warrant, exercisable until 2009, to purchase
common stock at $.O1 per share (B) 2,011 shs. 06/13/02 182,023 254,271
------------ ------------
2,156,508 2,438,771
------------ ------------
SHELTER ACQUISITION, INC.
A distributor of roofing supplies and products
throughout the Midwest.
12.5% Senior Subordinated Note due 2008 $ 1,517,857 08/01/02 1,342,889 1,543,831
Common Stock (B) 758,929 shs. * 758,929 683,036
Warrant, exercisable until 2009, to purchase common
stock at $.O1 per share (B) 263,444 shs. 08/01/02 216,446 2,634
------------ ------------
2,318,264 2,229,501
------------ ------------
*08/01/02 and 01/17/03.
--------------------------------------------------------------------------------
17
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
SNYDER INDUSTRIES, INC.
A manufacturer of proprietary rotationally molded
polyethylene containers.
12.25% Senior Subordinated Note due 2007 $ 3,125,000 12/06/99 $ 2,867,740 $ 3,156,250
Warrant, exercisable unti12007, to purchase
common stock at $.O1 per share (B) 513 shs. 12/06/99 426,136 77,187
------------ ------------
3,293,876 3,233,437
------------ ------------
SPECIALTY FOODS GROUP, INC.
A manufacturer and distributor of branded meat products.
Limited Partnership Interest of MHD Holdings LLC (B) 1.43% int. 08/29/00 525,155 367,609
------------ ------------
STRATEGIC EQUIPMENT & Supply Corp., Inc.
A provider of kitchen and restaurant design, equipment
fabrication and installation services.
12% Senior Subordinated Note due 2008 $ 3,875,000 01/14/00 3,464,581 3,862,332
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 106,539 shs. 01/14/00 658,751 --
------------ ------------
4,123,332 3,862,332
------------ ------------
SYNVENTIVE EQUITY LLC
A manufacturer of hot runner systems used in the
plastic injection molding process.
12% Senior Subordinated Note due 2007 $ 1,841,667 08/21/03 1,765,834 1,896,917
Limited Partnership Interest (B) 0.61% int. 08/20/03 283,333 255,000
Warrant, exercisable until 2011, to purchase common
stock at $.01 per share (B) 86,780 shs. 08/21/03 54,543 868
------------ ------------
2,103,710 2,152,785
------------ ------------
THE TRANZONIC COMPANIES
A producer of commercial and industrial supplies, such
as safety products, janitorial supplies, work apparel,
washroom and restroom supplies and sanitary care
products.
13% Senior Subordinated Note due 2009 $ 2,712,000 02/05/98 2,467,638 2,712,000
Common Stock (B) 630 shs. 02/04/98 630,000 570,856
Warrant, exercisable until 2006, to purchase common
stock at $.O1 per share (B) 444 shs. 02/05/98 368,832 402,313
------------ ------------
3,466,470 3,685,169
------------- ------------
TIDEWATER HOLDINGS, INC.
An operator of a barge transportation line on the
Columbia/Snake River system.
17% Preferred Stock (B) 560 shs. 12/23/02 560,000 532,000
Convertible Preferred Stock, convertible into
common stock at $1,000 per share (B) 1,120 shs. 07/25/96 1,120,000 896,000
Warrant, exercisable unti12008, to purchase
common stock at $.O1 per share (B) 474 shs. 07/25/96 48,216 379,008
------------ ------------
1,728,216 1,807,008
------------ ------------
--------------------------------------------------------------------------------
18
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
TINNERMAN-PALNUT ENGINEERED COMPONENTS
A manufacturer of precision engineered metal and
plastic fasteners and assembly components.
12.75% Senior Subordinated Note due 2008 $ 1,875,000 12/06/01 $ 863,812 $ 1,136,250
Class B Unit (B) 73,529 uts. 12/06/01 73,529 66,177
Class C Unit (B) 128,033 uts. 12/06/01 128,033 115,231
------------ -------------
1,065,374 1,317,658
------------ ------------
TOMAH HOLDINGS, INC.
A manufacturer of specialty chemicals.
16% Senior Subordinated Note due 2011 (B) $ 1,416,667 12/08/03 1,364,974 1,408,318
16% Preferred Stock Series A (B) 37 shs. 12/08/03 631,630 627,722
Common Stock 5,269 shs. 12/08/03 131,471 118,323
------------ ------------
2,128,075 2,154,363
------------ ------------
TRONAIR, INC.
A designer, engineer and manufacturer of ground
support equipment for the business, commuter and
commercial aviation markets.
10.5% Senior Secured Term Note due 2008 $ 1,579,293 01/20/00 1,579,293 1,559,668
12% Senior Subordinated Note due 2010 $ 1,326,500 01/20/00 1,256,658 1,290,822
Common Stock (B) 227,400 shs. 01/20/00 227,400 181,920
Warrant, exercisable until 2010, to purchase
common stock at $1 per share (B) 260,563 shs. 01/20/00 98,540 2,606
------------ ------------
3,161,891 3,035,016
------------ ------------
TRUSTILE DOORS, INC.
A manufacturer and distributor of interior doors.
12.5% Senior Subordinated Note due 2010 $ 1,062,500 04/11/03 975,511 1,067,837
Warrant, exercisable unti12010, to purchase
common stock at $.O1 per share (B) 5,781 shs. 04/11/03 95,625 58
------------ ------------
1,071,136 1,067,895
------------ ------------
TVI, INC.
A retailer of used clothing m the United States,
Canada and Australia.
15.971% Senior Subordinated Note due 2008 $ 2,110,192 05/02/00 2,051,414 2,129,184
Common Stock (B) 354,167 shs. 05/02/00 354,167 414,375
------------ ------------
2,405,581 2,543,559
------------ ------------
U S M HOLDINGS CORP.
A provider of facility maintenance services to
retail and corporate clients with multiple locations.
12% Senior Subordinated Note due 2011 $ 1,789,474 08/06/03 1,504,509 1,812,985
Preferred Stock (B) 3,345 shs. 08/06/03 334,494 301,045
Common Stock (B) 1,032 shs. 08/06/03 1,032 929
Warrant, exercisable unti12011, to purchase common
stock at $.O1 per share (B) 949 shs. 08/06/03 298,198 9
------------ ------------
2,138,233 2,114,968
------------ ------------
VICTORY VENTURES LLC
An acquirer of controlling or substantial interests
in other entities.
Series A Preferred Units (B) 0.13% int. 12/02/96 1 2
------------ ------------
--------------------------------------------------------------------------------
19
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) Principal Amount Date Cost Fair Value
---------------- ----------- ------------ ------------
VITEX PACKAGING, INC.
A manufacturer of specialty packaging, primarily
envelopes and tags used on tea bags.
12% Senior Subordinated Note due 2008 $ 2,045,265 12/18/00 $ 1,925,883 $ 2,045,265
Limited Partnership Interest of Riverside VI
Holding Company, L.P (B) 4.80% int. * 351,323 452,366
Limited Partnership Interest of Riverside
Capital Appreciation Fund II L.P (B) 1.72% int. 12/18/00 79,735 102,699
Warrant, exercisable unti12008, to purchase
common stock at $.O1 per share (B) 308 shs. ** 227,729 188,999
------------ ------------
2,584,670 2,789,329
------------ ------------
WASHINGTON INVENTORY SERVICES, INC.
A provider of physical inventory taking and other
related services to retailers.
12.5% Senior Subordinated Note due 2008 $ 1,646,881 11/03/00 1,612,348 1,664,404
Senior Preferred Stock (B) 4,692 shs. 11/01/00 469,160 450,713
Class B Common Stock (B) 8,959 shs. 11/01/00 8,959 8,063
Warrant, exercisable until 2008, to purchase
common stock at $.O1 per share (B) 3,979 shs. 11/03/00 49,804 40
------------ ------------
2,140,271 2,123,220
------------ ------------
WEASLER HOLDINGS LLC
A manufacturer of mechanical power transmission
components for the agricultural, lawn and turf industries.
13.25% Senior Subordinated Note due 2010 $ 2,023,810 02/04/03 1,831,078 2,084,524
Limited Partnership Interest (B) 1.55% int. 02/03/03 101,190 80,952
Warrant, exercisable unti12010, to purchase
common stock at $.O1 per share (B) 256 shs. 02/04/03 209,829 3
------------ ------------
2,142,097 2,165,479
------------ ------------
W E C COMPANY, INC.
A maker of attachments for prime moving equipment.
Common Stock (B) 5,938 shs. 12/31/01 800,000 159,990
------------ ------------
WICOR AMERICAS, INC.
A manufacturer of cellulose based insulation products,
systems and services for electrical transformer
equipment manufacturers.
20% Senior Subordinated Secured Note due 2009 $ 2,434,821 11/09/01 2,431,334 2,286,834
------------ ------------
TOTAL PRIVATE PLACEMENT INVESTMENTS $172,216,893 $155,600,808
------------ ------------
*12/30/97 and 09/09/99.
**0l/02/98 and 12/18/00.
--------------------------------------------------------------------------------
20
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Interest Due Shares or
Rate Date Principal Amount Cost Fair Value
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED) ------- -------- ---------------- ------------ ------------
RULE 144A SECURITIES -11.71 % (A)
BONDS -10.44%
A E S Corporation 9.000% 05/15/15 $ 200,000 $ 200,000 $ 220,750
A E S Corporation 8.750 05/15/13 200,000 200,000 220,000
Alamosa Delaware, Inc. 8.500 01/31/12 400,000 400,000 380,000
Cablevision Systems Corporation 5.670 04/01/09 1,000,000 1,000,000 1,000,000
Calpine Corporation 8.750 07/15/13 500,000 465,000 457,500
Chesapeake Energy Corporation 6.875 01/15/16 500,000 494,885 525,000
Dana Credit Corporation 8.375 08/15/07 500,000 500,000 550,000
General Nutrition Center 8.500 12/01/10 800,000 800,000 840,000
Great Lakes Dredge & Dock Corporation 7.750 12/15/13 250,000 250,000 252,500
IMAX Corporation 9.625 12/01/10 500,000 500,000 520,000
Interactive Health LLC 7.250 04/01/11 900,000 724,023 729,000
Koppers, Inc. 9.875 10/15/13 1,200,000 1,200,000 1,320,000
Land O' Lakes, Inc. 9.000 12/15/10 1,500,000 1,500,000 1,515,000
Mail-Well, Inc. 7.875 12/01/13 11,000,000 1,100,000 1,039,500
Metaldyne Corporation 10.000 11/01/13 185,000 185,000 183,150
N R G Energy, Inc. 8.000 12/15/13 700,000 700,000 722,750
Nalco Company 7.750 11/15/11 500,000 500,000 522,500
North American Energy Partners 8.750 12/01/11 400,000 400,000 400,000
O E D Corp/Diamond 8.750 04/15/05 1,000,000 985,960 987,500
Pinnacle Food Holding 8.250 12/01/13 450,000 450,000 478,125
Pliant Corporation 0.000 06/15/09 875,000 652,841 700,000
Quintiles Transnational Corporation 10.000 10/01/13 500,000 500,000 520,000
Rhodia SA 8.875 06/01/11 500,000 490,000 417,500
River Rock Entertainment 9.750 11/01/11 300,000 295,953 324,000
Sheridan Acquisition Corporation 10.250 08/15/11 500,000 493,335 535,625
Ship Finance International Ltd. 8.500 12/15/13 1,500,000 1,500,000 1,470,000
Tekni-Plex, Inc. 8.750 11/15/13 1,500,000 1,500,000 1,492,500
Telex Communications, Inc. 11.500 10/15/08 500,000 500,000 535,000
United Rentals, Inc. 7.750 11/15/13 625,000 625,000 609,375
United Rentals, Inc. 7.000 02/15/14 1,000,000 1,000,000 940,000
Vought Aircraft Industries 8.000 07/15/11 725,000 730,552 750,375
------------ ------------ ------------
TOTAL BONDS $ 31,210,000 20,842,549 21,157,650
============ ------------ ------------
COMMON STOCK - 0.00 %
Jordan Telecom Products (B) 70 $ 14,000 --
------------ ------------
TOTAL COMMON STOCK 14,000 --
------------ ------------
CONVERTIBLE BONDS -1.22%
Advanced Micro Devices, Inc. 4.750% 02/01/22 $ 500,000 $ 397,449 $ 530,000
Centerpoint Energy, Inc. 3.750 05/15/23 350,000 350,000 402,063
Cymer, Inc. 3.500 02/15/09 850,000 850,000 894,625
F E I Company 5.500 08/15/08 175,000 175,000 178,062
Invitrogen Corporation 2.250 12/15/06 425,000 425,000 459,000
------------ ------------ ------------
TOTAL CONVERTIBLE BONDS $ 2,300,000 2,197,449 2,463,750
============ ------------ ------------
CONVERTIBLE PREFERRED STOCK - 0.05 %
D T Industries, Inc. (B) 20,000 $ 1,000,000 $ 100,000
------------ ------------
TOTAL CONVERTIBLE PREFERRED 1,000,000 100,000
------------ ------------
WARRANTS - 0.00 %
Winsloew Furniture, Inc. (B) 900 $ 9 $ 9
------------ ------------
TOTAL WARRANTS 9 9
------------ ------------
TOTAL RULE 144A SECURITIES 24,054,007 23,721,409
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $196,270,900 $179,322,217
------------ ------------
--------------------------------------------------------------------------------
21
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Interest Due Shares or
Rate Date Principal Amount Cost Market Value
CORPORATE PUBLIC SECURITIES - 14.92% : (A) ------- -------- ---------------- ------------ ------------
BONDS - 11.10%
A E P Industries, Inc. 9.875% 11/15/07 $ 350,000 $ 333,375 $ 361,375
Activant Solutions, Inc. 10.500 06/15/11 400,000 394,768 418,000
Alamosa Delaware, Inc 11.000 07/31/10 325,000 330,812 346,938
American Media Operation, Inc. 8.875 01/15/11 200,000 200,000 198,500
Bally Total Fitness Holding Corporation 9.875 10/15/07 135,000 128,925 110,700
Bausch & Lomb, Inc. 6.950 11/15/07 500,000 521,776 552,954
C S C Holdings, Inc. 7.625 04/01/11 500,000 502,375 527,500
Cincinnai Bell, Inc. 8.375 01/15/14 100,000 100,000 98,000
Dana Corporation 9.000 08/15/11 500,000 528,436 601,250
Del Monte Corporation 8.625 12/15/12 225,000 225,000 253,125
Dollar Financial Group 9.750 11/15/11 600,000 600,000 651,000
Dominos, Inc. 8.250 07/01/11 400,000 397,112 431,000
Dynegy Holding, Inc. 6.875 04/01/11 500,000 422,500 435,000
Esterline Technologies 7.750 06/15/13 200,000 200,000 213,000
Flextronics International Ltd. 6.500 05/15/13 400,000 400,000 421,000
G F S I, Inc. 9.625 03/01/07 500,000 434,733 485,000
Gencorp, Inc. 9.500 08/15/13 400,000 400,000 437,000
Host Marriott L.P 8.375 02/15/06 500,000 519,530 533,750
Huntsman LLC 11.625 10/15/10 500,000 494,075 525,000
Intrawest Corporation 7.500 10/15/13 500,000 500,000 516,250
Leucadia National Corporation 7.000 08/15/13 650,000 664,242 672,750
Lodgenet Entertainment Co. 9.500 06/15/13 425,000 425,000 471,750
Lyondell Chemical Co. 9.500 12/15/08 400,000 380,000 409,000
M G M Mirage, Inc. 6.000 10/01/09 500,000 502,354 525,000
M S X International, Inc. 11.000 10/15/07 350,000 347,004 336,437
Majestic Star Casino LLC 9.500 10/15/10 500,000 500,000 527,500
Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 213,000
National Wine & Spirit 10.125 01/15/09 500,000 485,250 480,000
Neff Corporation 10.250 06/01/08 170,000 168,063 119,000
Nextel Communications Corporation 7.375 08/01/15 400,000 392,000 433,000
Nextel Partners, Inc. 8.125 07/01/11 1,000,000 1,000,000 1,057,500
Numatics, Inc. 9.625 04/01/08 550,000 540,040 456,500
Offshore Logistics, Inc. 6.125 06/15/13 450,000 450,000 447,750
Rayovac Corporation 8.500 10/01/13 200,000 200,000 215,500
Rent-A-Center, Inc. 7.500 05/01/10 400,000 400,000 424,000
Rent-Way, Inc. 11.875 06/15/10 300,000 294,756 336,000
S P X Corporation 6.250 06/15/11 400,000 400,000 414,000
Service Corp International 6.000 12/15/OS 500,000 503,952 521,250
Sports Club Co. 11.375 03/15/06 300,000 291,000 282,000
Steelcase, Inc. 6.375 11/15/06 500,000 512,660 526,346
Tekni-Plex, Inc. 12.750 06/15/10 550,000 533,000 576,125
Telex Communications, Inc. (B) 0.000 01/15/09 471,915 206,820 306,745
Tenet Healthcare Corporation 6.375 12/01/11 500,000 482,500 432,500
Tenneco Automotive, Inc. 10.250 07/15/13 400,000 400,000 460,000
Triton P C S, Inc. 8.500 06/01/13 550,000 550,000 585,750
Tyco International Group SA 6.375 10/15/11 350,000 346,500 382,822
United Refining Co. 10.750 06/15/07 830,000 830,000 780,200
United Rentals, Inc. 9.000 04/01/09 350,000 343,000 366,975
Von Hoffman Press, Inc. 10.250 03/15/09 200,000 210,637 208,750
Williams Companies, Inc. 8.625 06/01/10 500,000 500,000 550,000
Williams Scotsman, Inc. 9.875 06/01/07 500,000 492,500 500,000
Winsloew Furniture, Inc. 12.750 08/15/07 455,000 444,622 364,000
------------ ------------ ------------
Total Bonds $ 22,086,915 21,629,317 22,498,492
------------ ------------ ------------
--------------------------------------------------------------------------------
22
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Interest Due Shares or
Rate Date Principal Amount Cost Market Value
CORPORATE PUBLIC SECURITIES (A) (CONTINUED) ------- -------- ---------------- ------------ ------------
COMMON STOCK - 2.78 %
D T Industries, Inc. (B) $ 178,876 $ 1,168,093 $ 32,198
EOS International, Inc. (B) 100,000 300,000 59,000
H C I Direct, Inc. (B) 1,000 -- --
PepsiAmericas, Inc. 92,145 2,006,365 1,881,601
Rent-Way, Inc. (B) 92,866 916,263 817,221
Supreme Industries, Inc. (B) 115,722 267,325 800,796
T G C Industries (B) 6,361 9,497 7,887
Transmontaigne, Inc. (B) 333,326 1,109,176 2,033,289
------------ ------------
TOTAL COMMON STOCK 5,776,719 5,631,992
------------ ------------
CONVERTIBLE BONDS - 0.92%
Duke Energy Corporation 1.750% 05/15/23 $ 400,000 $ 400,000 $ 430,500
F E I Company 5.500 08/15/08 340,000 305,150 345,950
Mediacom Communications Corporation 5.250 07/01/06 400,000 400,000 389,000
S C I Systems, Inc. 3.000 03/15/07 500,000 427,862 478,750
Triquint Semiconductor, Inc. 4.000 03/01/07 225,000 168,442 224,156
------------ ------------ ------------
TOTAL CONVERTIBLE BONDS $ 1,865,000 1,701,454 1,868,356
============ ------------ ------------
CONVERTIBLE PREFERRED STOCK - 0.12 %
Alamosa Holdings, Inc. 500 $ 158,973 $ 235,000
------------ ------------
TOTAL CONVERTIBLE PREFERRED STOCK 158,973 235,000
------------ ------------
PREFERRED STOCK - 0.00 %
Telex Communications, Inc. 17,707 $ 1 $ 177
------------ ------------
TOTAL PREFERRED STOCK 1 177
------------ ------------
WARRANTS - 0.00 %
Telex Communications, Inc. 698 $ 7 $ 7
------------ ------------
TOTAL WARRANTS 7 7
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 29,266,471 $ 30,234,024
------------ ------------
SHORT-TERM SECURITIES: Interest Due
Rate/Yield Date Principal Amount Cost Market Value
-------- -------- ---------------- ------------ ------------
COMMERCIAL PAPER - 4.24 %
Baxter International, Inc. 1.100% 04/05/04 $ 2,460,000 $ 2,459,708 $ 2,459,708
Goldman Sachs Group, Inc. 1.050 04/02/04 3,960,000 3,959,884 3,959,884
Textron Financial Corporation 1.080 04/O1/04 2,160,000 2,160,000 2,160,000
------------ ------------ ------------
Total Short-Term Securities $ 8,580,000 $ 8,579,592 $ 8,579,592
============ ------------ ------------
TOTAL INVESTMENTS 107.66% $234,116,963 218,135,833
------------ ------------
Other Assets 4.19 8,490,776
Liabilities (11.85) (24,008,331)
------ ------------
TOTAL NET ASSETS 100.00% $202,618,278
------ ------------
(A) In each of the convertible note, warrant, convertible preferred and common
stock investments, the issuer has agreed to provide certain registration
rights.
(B) Non-income producing security.
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
23
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Fair Value/
INDUSTRY CLASSIFICATION: Market Value
------------
AEROSPACE - 0.48 %
Esterline Technologies $ 213,000
Vought Aircraft Industries 750,375
------------
963,375
------------
AUTOMOBILE - 6.22 %
America's Body Company, Inc./LCP Holding Co. 1,750,001
Dana Corporation 601,250
Gencorp, Inc. 437,000
Jason, Inc. 1,584,571
LIH Investors, L.P 4,601,828
Metaldyne Corporation 183,150
Nyloncraft, Inc. 2,992,147
Tenneco Automotive, Inc. 460,000
------------
12,609,947
------------
BEVERAGE, DRUG & FOOD - 4.17%
Beta Brands Ltd --
Cains Foods, L.P 113,611
Del Monte Corporation 253,125
Dominos, Inc. 431,000
Land O' Lakes, Inc. 1,515,000
National Wine & Spirit 480,000
Nonni's Food Company 2,120,878
PepsiAmericas, Inc. 1,881,601
Pharmaceutical Buyers, Inc. 818,196
Pinnacle Foods Holdings 478,125
Specialty Foods Group, Inc. 367,609
------------
8,459,145
------------
BROADCASTING & ENTERTAINMENT -1.18 %
C S C Holdings, Inc. 527,500
Cablevision Systems Corporation 1,000,000
Lodgenet Entertainment Corp. 471,750
Mediacom Communications Corp. 389,000
------------
2,388,250
------------
BUILDINGS & REAL ESTATE - 4.16 %
Adorn, Inc. 2,283,679
Eagle Window & Door Holding co. 2,838,670
Shelter Acquisition, Inc. 2,229,501
TruStile Doors, Inc. 1,067,895
------------
8,419,745
------------
CARGO TRANSPORT - 2.83%
Kenan Advantage Transport Company 2,451,214
Ship Finance International Ltd. 1,470,000
Tidewater Holdings, Inc. 1,807,008
------------
5,728,222
------------
CHEMICAL, PLASTICS & RUBBER - 2.38 %
Capital Specialty Plastics, Inc. 403
Huntsman LLC 525,000
Koppers Inc. 1,320,000
Lyondell Chemical Company 409,000
Process Chemicals LLC --
Rhodia SA 417,500
Tomah Holdings, Inc. 2,154,363
------------
4,826,266
------------
CONSUMER PRODUCTS - 4.98 %
Colibri Holdings Corporation 1,942,347
Euro-Pro Corporation 2,206,793
G F S I, Inc. 485,000
H C I Direct, Inc. --
Neff Motivation, Inc. 119,000
Rayovac Corporation 215,500
Royal Baths Manufacturing Company 1,081,636
The Tranzonic Companies 3,685,169
Winsloew Furniture, Inc. 364,009
------------
10,099,454
------------
CONTAINERS, PACKAGING & GLASS - 6.92%
A E P Industries, Inc. 361,375
Paradigm Packaging, Inc. 2,433,125
Pliant Corporation 700,000
Selig Acquisition Corporation 2,438,771
Snyder Industries, Inc. 3,233,437
Tekni-Plex, Inc. 2,068,625
Vitex Packaging, Inc. 2,789,329
------------
14,024,662
------------
DISTRIBUTION - 9.36 %
Corvest Group, Inc. 3,652,003
Fasteners for Retail, Inc. 7,822,442
G C-Sun Holdings LP 1,293,750
Kele and Associates, Inc. 2,331,337
Strategic Equip & Supply Corp., Inc. 3,862,332
------------
18,961,864
------------
DIVERSIFIED/CONGLOMERATE,
MANUFACTURING - 4.51 %
Activant Solutions Inc 418,000
Coining of America LLC 2,039,614
Dexter Magnetics Technologies, Inc. 1,604,166
Evans Consoles, Inc. 423,645
Great Lakes Dredge & Dock Corp 252,500
S P X Corporation 414,000
Tinnerman-Palnut Engineered Components 1,317,658
Tyco International Group SA 382,822
Wicor Americas, Inc. 2,286,834
------------
9,139,239
------------
--------------------------------------------------------------------------------
24
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Fair Value/
INDUSTRY CLASSIFICATION: Market Value
------------
DIVERSIFIED/CONGLOMERATE,
SERVICE - 8.77 %
CapeSuccess LLC 5,862
Diversco, Inc./DHI Holdings, Inc. 1,113,655
Dwyer Group, Inc. 2,450,412
Examination Management Services, Inc. 3,027,106
Hamilton Funeral Services Centers, Inc. 380,271
Lancaster Laboratories, Inc. 2,116,912
Moss, Inc. 1,562,341
M S X International, Inc. 336,437
Roto-Rooter, Inc. 2,023,953
Service Corp International 521,250
U S M Holdings Corp. 2,114,968
Washington Inventory Services, Inc. 2,123,220
------------
17,776,387
------------
ELECTRONICS - 5.63 %
A E S Corporation 440,750
Calpine Corporation 457,500
Directed Electronics, Inc. 6,639,882
Flextronics International Ltd. 421,000
N R G Energy, Inc. 722,750
Precision Dynamics, Inc. 2,241,324
Progressive Software Holding, Inc. 13,139
S C I Systems, Inc. 478,750
------------
11,415,095
------------
FARMING & AGRICULTURE - 0.11 %
Polymer Technologies, Inc./
Poli-Twine Western, Inc. 223,125
Protein Genetics, Inc. --
------------
223,125
------------
FINANCIAL SERVICES - 1.19%
Dana Credit Corporation 550,000
Dollar Financial Group 651,000
East River Ventures I, L.P 27,148
Highgate Capital LLC 19,008
Leucadia National Corporation 672,750
Victory Ventures LLC 2
Williams Scotsman, Inc. 500,000
------------
2,419,908
------------
HEALTHCARE, EDUCATION
& CHILDCARE - 3.08 %
American Hospice Management 2,385,082
Interactive Health LLC 729,000
Quintiles Transnational Corp. 520,000
MedAssist, Inc. 2,168,089
Tenet Healthcare Corporation 432,500
------------
6,234,671
------------
HOME & OFFICE FURNISHINGS,
HOUSEWARES, AND DURABLE
CONSUMER PRODUCTS -1.84 %
Hussey Seating Corporation 3,196,455
Steelcase, Inc. 526,346
------------
3,722,801
------------
LEISURE, AMUSEMENT,
ENTERTAINMENT - 2.90 %
Host Marriott L.P 533,750
Bally Total Fitness Hldng Corp 110,700
IMAX Corporation 520,000
Intrawest Corporation 516,250
Keepsake Quilting, Inc. 1,826,180
M G M Mirage, Inc. 525,000
Majestic Star Casino LLC 527,500
O E D Corp/Diamond Jo Company Guarantee 987,500
River Rock Entertainment 324,000
------------
5,870,880
------------
MACHINERY -12.12 %
Ames True Temper Group 2,170,412
C& M Conveyor, Inc. 2,354,204
D T Industries, Inc. 132,198
Integration Technology Systems, Inc. 1,645,681
Manitowoc Company, Inc. 213,000
N P C, Inc. 3,674,933
Numatics, Inc. 456,500
P W Eagle, Inc. 2,898,042
Safety Speed Cut Manufacturing Company, Inc 3,508,309
Synventive Equity LLC 2,152,785
Tronair, Inc. 3,035,016
Weasler Holdings LLC 2,165,479
W E C Company, Inc. 159,990
------------
24,566,549
------------
MEDICAL DEVICES / BIOTECH - 2.85 %
Bausch & Lomb, Inc. 552,954
Beacon Medical Products, Inc. 1,854,613
Coeur, Inc. 1,134,026
D H D Healthcare, Inc. 1,766,238
Invitrogen Corporation 459,000
------------
5,766,831
------------
MINING, STEEL, IRON & NON PRECIOUS
METALS - 0.05 %
Better Minerals & Aggregates 108,991
------------
--------------------------------------------------------------------------------
25
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT) MASSMUTUAL CORPORATE INVESTORS
March 31, 2004
(Unaudited)
Fair Value/
INDUSTRY CLASSIFICATION: Market Value
------------
OIL AND GAS - 4.22 %
Centerpoint Energy, Inc. 402,063
Chesapeake Energy Corporation 525,000
Dynegy Holdings, Inc. 435,000
Mustang Ventures Company 2,170,415
North American Energy Partners 400,000
Offshore Logistics, Inc. 447,750
Supreme Industries, Inc. 800,796
T G C Industries, Inc. 7,887
Transmontaigne, Inc. 2,033,289
United Refining Company 780,200
Williams Companies, Inc. 550,000
------------
8,552,400
------------
PHARMACEUTICALS -1.85 %
Enzymatic Therapy, Inc. 961,567
Sabex 2002, Inc. 2,785,660
------------
3,747,227
------------
PUBLISHING/PRINTING - 0.98 %
American Media Operation, Inc. 198,500
Mail-Well, Inc. 1,039,500
Sheridan Acquisition Corporation 535,625
Von Hoffman Press, Inc. 208,750
------------
1,982,375
------------
RETAIL STORES - 6.94%
E O S International, Inc. 59,000
General Nutrition Center 840,000
Neff Corporation 1,088,891
Olympic Sales, Inc. 3,537,011
P H I Holding Company 2,210,004
Rent-A-Center, Inc. 424,000
Rent-Way, Inc. 1,153,221
Sports Club Co. 282,000
TVI, Inc. 2,543,559
United Rentals, Inc. 1,916,350
------------
14,054,036
------------
TECHNOLOGY - 1.27%
Advanced Micro Devices, Inc. 530,000
Cymer, Inc. 894,625
Delstar Holding Corp. 390,886
F E I Company 524,012
TriQuint Semiconductor, Inc. 224,156
------------
2,563,679
------------
TELECOMMUNICATIONS - 1.96%
Alamosa Holdings, Inc. 961,938
Cincinnati Bell, Inc. 98,000
Jordan Telecom Products --
Nextel Communications Corporation 433,000
Nextel Partners, Inc. 1,057,500
Telex Communications, Inc. 841,929
Triton P C S, Inc. 585,750
------------
3,978,117
------------
UTILITIES - 0.47 %
Duke Energy Corporation 430,500
Nalco Company 522,500
------------
953,000
------------
Total Investments -103.42 % $209,556,241
============
--------------------------------------------------------------------------------
26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(Unaudited)
1. HISTORY
MassMutual Corporate Investors (the "Trust") commenced operations in 1971 as
a Delaware corporation. Pursuant to an Agreement and Plan of Reorganization
dated November 14, 1985, approved by shareholders, the Trust was reorganized
as a Massachusetts business trust under the laws of the Commonwealth of
Massachusetts, effective November 28, 1985.
The Trust is a closed-end management investment company. David L. Babson &
Company Inc. ("Babson"), a majority owned subsidiary of Massachusetts Mutual
Life Insurance Company, ("MassMutual"), acts as its investment adviser. The
Trust's investment objective is to maintain a portfolio of securities
providing a fixed yield while providing an opportunity for capital gains, by
investing primarily in a portfolio of privately placed below
investment-grade, long term corporate debt obligations with equity features,
such as warrants, conversions rights or other equity features and,
occasionally, preferred stocks purchased directly from their issuers.
On January 27,1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary ("MMCI Subsidiary Trust") for the purpose of holding
certain investments. The results of MMCI Subsidiary Trust have been included
in the accompanying consolidated financial statements. Footnote 2(D), below
discusses the Federal tax consequences of the MMCI Subsidiary Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of the consolidated financial
statements in conformity with accounting principles generally accepted in the
United States of America.
A. VALUATION OF INVESTMENTS:
Valuation of a security in the Trust's portfolio is made on the basis of
market price whenever market quotations are readily available and all
securities of the same class held by the Trust can be readily sold in such
market.
Nearly all securities which are acquired by the Trust directly from the
issuers and shares into which such securities may be converted or which may
be purchased on the exercise of warrants attached to such securities will be
subject to legal or contractual delays in, or restrictions on, resale and
will therefore be "restricted securities". Generally speaking, as contrasted
with open-market sales of unrestricted securities which may be effected
immediately if the market is adequate, absent an exemption from registration,
restricted securities can be sold only in a public offering for which a
registration statement is in effect under the Securities Act of 1933.
The value of restricted securities, and of any other assets for which there
are no reliable market quotations, is the fair value as determined in good
faith by the Trust's Board of Trustees (the "Trustees"). Each restricted
security is valued by the Trustees at the time of the acquisition thereof and
at least quarterly thereafter. The Trustees have established guidelines to
aid in the valuation of each security. Generally, restricted securities are
initially valued at cost or less at the time of acquisition by the Trust.
Values greater or less than cost are used thereafter for restricted
securities in appropriate circumstances. Among the factors ordinarily
considered are the existence of restrictions upon the sale of the security by
the Trust; an estimate of the existence and extent of a market for the
security; the extent of any discount at which the security was acquired; the
estimated period of time during which the security will not be freely
marketable; the estimated expenses of registering or otherwise qualifying the
security for public sale; estimated underwriting commissions if underwriting
would be required to effect a sale; in the case of a convertible security,
whether or not it would trade on the basis of its stock equivalent; in the
case of a debt obligation which would trade independently of any equity
equivalent, the current yields on comparable securities; the estimated amount
of the floating supply of such securities available for purchase; the
proportion of the issue held by the Trust; changes in the financial condition
and prospects of the issuer; the existence of merger proposals or tender
offers affecting the issuer; and any other factors affecting fair value, all
in accordance with the Investment Company Act of 1940. In making valuations,
opinions of counsel may be relied upon as to whether or not securities are
restricted securities and as to the legal requirements for public sale.
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27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(CONTINUED)
When market quotations are readily available for unrestricted securities of
an issuer, restricted securities of the same class are generally valued at a
discount from the market price of such unrestricted securities. The Trustees,
however, consider all factors in fixing any discount, including the filing of
a registration statement for such securities under the Securities Act of 1933
and any other developments which are likely to increase the probability that
the securities may be publicly sold by the Trust without restriction.
The Trust's Board of Trustees meets at least once in each quarter to value
the Trust's portfolio securities as of the close of business on the last
business day of the preceding quarter. This valuation requires the approval
of a majority of the Trustees of the Trust, including a majority of the
Trustees who are not interested persons of the Trust or of Babson, the
Trust's investment adviser. In making valuations, the Trustees will consider
reports by Babson analyzing each portfolio security in accordance with the
relevant factors referred to above. Babson has agreed to provide such reports
to the Trust at least quarterly.
The financial statements include restricted securities valued at $155,600,808
(76.79% of net assets) as of March 31, 2004 whose values have been estimated
by the Board of Trustees in the absence of readily ascertainable market
values. Due to the inherent uncertainty of valuation, those estimated values
may differ significantly from the values that would have been used had a
ready market for the securities existed, and the differences could be
material.
The values for corporate public securities are stated at the last reported
sales price or at prices based upon quotations obtained from brokers and
dealers as of March 31, 2004, subject to discount where appropriate, and are
approved by the Trustees.
Short-term securities with more than sixty days to maturity are valued at
fair value and short-term securities having a maturity of sixty days or less
are valued at amortized cost which approximates market value.
B. ACCOUNTING FOR INVESTMENTS:
Investment transactions are accounted for on the trade date. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. The Trust does not accrue income when payment is delinquent
and when management believes payment is questionable.
The Trust has elected to accrue, for financial reporting purposes, certain
premiums and discounts which are required to be accrued for federal income
tax purposes.
Realized gains and losses on investment transactions and unrealized
appreciation and depreciation of investments are reported for financial
statement and federal income tax purposes on the identified cost method.
C. USE OF ESTIMATES:
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 revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
D. FEDERAL INCOME TAXES:
No provision for federal income taxes on net investment income and short-term
capital gains is considered necessary for the Trust because it is a
"regulated investment company" under the Internal Revenue Code, and intends
to maintain this qualification by, among other things, distributing
substantially all of its net taxable income to its shareholders. In any year
when net long-term capital gains are realized by the Trust, management, after
evaluating the prevailing economic conditions, will recommend to the Trustees
either to designate the net realized long-term gains as undistributed and to
pay the federal capital gains taxes thereon or to distribute all or a portion
of such net gains.
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28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(CONTINUED)
The Trust is taxed as a regulated investment company and is therefore limited
as to the amount of non-qualified income that it may receive as the result of
operating a trade or business, e.g. the Trust's pro rata share of income
allocable to the Trust by a partnership operating company. The Trust's
violation of this limitation could result in the loss of its status as a
regulated investment company, thereby subjecting all of its net income and
capital gains to corporate taxes prior to distribution to its shareholders.
The Trust, from time-to-time, identifies investment opportunities in the
securities of entities that could cause such trade or business income to be
allocable to the Trust. The MMCI Subsidiary Trust (see Footnote 1) was formed
in order to allow investment in such securities without adversely affecting
the Trust's status as a regulated investment company.
The MMCI Subsidiary Trust is not taxed as a regulated investment company.
Accordingly, prior to the Trust's receiving any distributions from the MMCI
Subsidiary Trust, all of the MMCI Subsidiary Trust's taxable income and
realized gains, including non-qualified income and realized gains, is subject
to taxation at prevailing corporate tax rates.
3. INVESTMENT SERVICES FEE
Under an Investment Services Contract with the Trust dated July 1, 1988
Babson has agreed to use its best efforts to present to the Trust a
continuing and suitable investment program consistent with the investment
objectives and policies of the Trust. Babson has further agreed that it will
request each issuer of securities which MassMutual is prepared to purchase in
a private placement, and which would be consistent with the investment
objectives and policies of the Trust, to also offer such securities to the
Trust. Babson will use its best efforts to insure that issuers accede to such
requests. MassMutual has agreed that, subject to such orders of the
Securities and Exchange Commission as may apply, it will invest concurrently
with the Trust in any such investment. Babson represents the Trust in any
negotiations with issuers, investment banking firms, securities brokers or
dealers and other institutions or investors relating to the Trust's
investments. Under the contract, Babson provides administration of the
day-to-day operations of the Trust and provides the Trust with office space
and office equipment, accounting and bookkeeping services, and necessary
executive, clerical and secretarial personnel for the performance of the
foregoing services.
Under the Investment Services Contract, the Trust pays Babson a quarterly
base rate (the "Base Fee Rate") of 5/16 of 1% of the value of the Trust's net
assets as of the end of each fiscal quarter, approximately equivalent to
1.25% of the net asset value of the Trust on an annual basis, plus or minus a
quarterly performance adjustment (the "Performance Adjustment") of up to 1/16
of 1% approximately equivalent to .25% on an annual basis.
The Performance Adjustment is based on the Trust's performance as compared to
a benchmark rate of return (the "Target Rate") equal to 5.0 percentage points
plus an unweighted, arithmetic average of the rates of return on the Standard
& Poor's Industrials Composite (formerly called the Standard & Poor's
Industrials Price Index) and the Lehman Brothers Intermediate U.S. Credit
Index (formerly called the Lehman Brothers Intermediate Corporate Bond Index)
over a rolling three-year period (the "Measurement Period") comprising the
twelve quarters ending on the last day of each quarter (the "Valuation
Date"). The Standard & Poor's Industrials Composite is not available to the
general public. Standard & Poor's provides Babson with the information for
this index. The 3-year annualized return for the Standard & Poor's
Industrials Composite for the period ending March 31, 2004 was 0.04%. The
Performance Adjustment is equal to 5% of the difference between the Trust's
actual rate of return over the Measurement Period and the Target Rate. If the
Trust's actual rate of return exceeds the Target Rate, the Base Fee Rate is
increased by an amount equal to the Performance Adjustment; if the Trust's
actual rate of return is less than the Target Rate, the Base Fee Rate is
reduced by the Performance Adjustment. The advisory fee payable by the Trust
is equal to the Base Fee Rate (as adjusted by the Performance Adjustment)
times the net asset value of the Trust as of the Valuation Date. The
Performance Adjustment for the quarter ended March 31, 2004 was:
PERFORMANCE
ADJUSTMENT AMOUNT
---------- ------
March 31, 2004 0.0625% $127,113
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29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(CONTINUED)
4. SENIOR SECURED INDEBTEDNESS
A. NOTE PAYABLE
MassMutual holds the Trust's $20,000,000 Senior Fixed Rate Convertible Note
(the "Note") issued by the Trust in 1995. The Note, as amended, is due
November 15, 2007 and accrues at 7.39% per annum. MassMutual, at its option,
can convert the principal amount of the Note into common shares. The dollar
amount of principal would be converted into an equivalent dollar amount of
common shares based upon the average price of the common shares for ten
business days prior to the notice of conversion. For the three months ended
March 31, 2004, the Trust incurred total interest expense on the Note of
$369,500.
The Trust may redeem the Note, in whole or in part, at the principal amount
proposed to be redeemed together with the accrued and unpaid interest thereon
through the redemption date plus the Make Whole Premium. The Make Whole
Premium equals the excess of (i) the present value of the scheduled payments
of principal and interest which the Trust would have paid but for the
proposed redemption, discounted at the rate of interest of U.S. Treasury
obligations whose maturity approximates that of the Note plus 0.50% over (u)
the principal of the Notes proposed to be redeemed.
B. REVOLVING CREDIT AGREEMENT
The Trust entered into a$25,000,000 Revolving Credit Agreement (the
"Revolver" with Fleet National Bank (the "Agent Bank") dated June 29, 2000,
which matures on May 31, 2005.
The Revolver bears interest payable quarterly in arrears at a per annum rate
that varies depending upon whether the Trust requests a Base Rate Loan or
LIBOR Rate Loan. Interest on Base Rate Loans equals the higher of: (i) the
annual "Base Rate" as set periodically by the Agent Bank and (ii) the most
recent Federal Funds Effective Rate plus a margin of .50% per annum. Per
annum interest on LIBOR Rate Loans equals a margin of .37% plus the London
Inter Bank Offered Rate ("LIBOR") rate (as presented on Telerate Page 3750),
divided by 1 minus the LIBOR Reserve Rate. The Trust also agreed to pay an
up-front fee equal to 0.10% on the total commitment. The facility fee is
0.15% per annum of the total commitment.
As of March 31, 2004, there were no outstanding loans drawn against the
revolving credit facility. For the three months ended March 31, 2004, the
Trust incurred $9,349 in expense related to the undrawn portion.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE THREE MONTHS ENDED 3/31/2004
------------------------------------
COST OF PROCEEDS FROM
INVESTMENTS SALES OR
ACQUIRED MATURITIES
------------------------------------
Corporate restricted securities $ 18,800,998 $ 12,761,051
Corporate public securities 1,943,130 3,997,265
Short-term securities 172,823,098 170,520,187
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of March 31, 2004. The net unrealized
depreciation of investments for financial reporting and federal tax purposes
as of March 31, 2004 is $15,981,130 and consists of $19,951,391 appreciation
and $35,932,521 depreciation.
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30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(CONTINUED)
6. CONTINGENCIES
The Trust, together with other investors including MassMutual, is a plaintiff
in litigation in connection with private placement investments made by the
Trust in Sharp International Corporation ("Sharp"). Three managing
shareholders of Sharp, have pleaded guilty to criminal fraud charges. Two
separate civil lawsuits were brought in New York state court in an attempt to
recover damages for lost investment funds from Sharp's working capital lender
and auditors. The first lawsuit involving Sharp's working capital lender was
dismissed prior to trial. An appeal of this dismissal was unsuccessful. The
second lawsuit against Sharp's auditors, KPMG LLP, is in its preliminary
stages. The parties to this lawsuit, including the Trust, have recently
agreed to submit the matters which are the subject of the lawsuit to a
non-binding mediation proceedings. The Trust is unable to estimate any
potential recovery from this lawsuit as of March 31, 2004.
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31
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TRUSTEES OFFICERS
DONALD E. BENSON* STUART H. REESE CHAIRMAN
DONALD GLICKMAN ROGER W. CRANDALL PRESIDENT
MARTIN T. HART* CHARLES C. MCCOBB, JR. VICE PRESIDENT &
CHIEF FINANCIAL
ROBERT E. JOYAL OFFICER
STEVEN A. KANDARIAN STEPHEN L. KUHN VICE PRESIDENT &
SECRETARY
JACK A. LAUGHERY
MICHAEL P. HERMSEN VICE PRESIDENT
CORINE T. NORGAARD*
MARY WILSON KIBBE VICE PRESIDENT
STUART H. REESE
MICHAEL L. KLOFAS VICE PRESIDENT
RICHARD C. MORRISON VICE PRESIDENT
CLIFFORD M. NOREEN VICE PRESIDENT
RICHARD E. SPENCER, II VICE PRESIDENT
JAMES M. ROY TREASURER
JOHN T. DAVITT, JR. COMPTROLLER
*MEMBER OF THE AUDIT COMMITTEE
DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN
MASSMUTUAL CORPORATE INVESTORS OFFERS A DIVIDEND REINVESTMENT AND SHARE PURCHASE
PLAN. THE PLAN PROVIDES A SIMPLE WAY FOR SHAREHOLDERS TO ADD TO THEIR HOLDINGS
IN THE TRUST THROUGH THE RECEIPT OF DIVIDEND SHARES ISSUED BY THE TRUST OR
THROUGH THE REINVESTMENT OF CASH DIVIDENDS IN TRUST SHARES PURCHASED IN THE OPEN
MARKET. A SHAREHOLDER MAY JOIN THE PLAN BY FILLING OUT AND MAILING AN
AUTHORIZATION CARD TO SHAREHOLDER FINANCIAL SERVICES, INC., THE TRANSFER AGENT.
PARTICIPATING SHAREHOLDERS WILL CONTINUE TO PARTICIPATE UNTIL THEY NOTIFY THE
TRANSFER AGENT, IN WRITING, OF THEIR DESIRE TO TERMINATE PARTICIPATION. UNLESS A
SHAREHOLDER ELECTS TO PARTICIPATE IN THE PLAN, HE OR SHE WILL, IN EFFECT, HAVE
ELECTED TO RECEIVE DIVIDENDS AND DISTRIBUTIONS IN CASH.
PARTICIPATING SHAREHOLDERS MAY ALSO MAKE ADDITIONAL CONTRIBUTIONS TO THE PLAN
FROM THEIR OWN FUNDS. SUCH CONTRIBUTIONS MAY BE MADE BY PERSONAL CHECK OR OTHER
MEANS IN AN AMOUNT NOT LESS THAN $10 NOR MORE THAN $5,000 PER QUARTER.
WHENEVER THE TRUST DECLARES A DIVIDEND PAYABLE IN CASH OR SHARES, THE TRANSFER
AGENT, ACTING ON BEHALF OF EACH PARTICIPATING SHAREHOLDER, WILL TAKE THE
DIVIDEND IN SHARES ONLY IF THE NET ASSET VALUE IS LOWER THAN THE MARKET PRICE
PLUS AN ESTIMATED BROKERAGE COMMISSION AS OF THE CLOSE OF BUSINESS ON THE
VALUATION DAY. THE VALUATION DAY IS THE LAST DAY PRECEDING THE DAY OF DIVIDEND
PAYMENT. WHEN THE DIVIDEND IS TO BE TAKEN IN SHARES, THE NUMBER OF SHARES TO BE
RECEIVED IS DETERMINED BY DIVIDING THE CASH DIVIDEND BY THE NET ASSET VALUE AS
OF THE CLOSE OF BUSINESS ON THE VALUATION DATE OR, IF GREATER THAN NET ASSET
VALUE, 95% OF THE CLOSING SHARE PRICE. IF THE NET ASSET VALUE OF THE SHARES IS
HIGHER THAN THE MARKET VALUE PLUS AN ESTIMATED COMMISSION, THE TRANSFER AGENT,
CONSISTENT WITH OBTAINING THE BEST PRICE AND EXECUTION, WILL BUY SHARES ON THE
OPEN MARKET AT CURRENT PRICES PROMPTLY AFTER THE DIVIDEND PAYMENT DATE.
THE REINVESTMENT OF DIVIDENDS DOES NOT, IN ANY WAY, RELIEVE PARTICIPATING
SHAREHOLDERS OF ANY FEDERAL, STATE OR LOCAL TAX. FOR FEDERAL INCOME TAX
PURPOSES, THE AMOUNT REPORTABLE IN RESPECT OF A DIVIDEND RECEIVED IN
NEWLY-ISSUED SHARES OF THE TRUST WILL BE THE FAIR MARKET VALUE OF THE SHARES
RECEIVED, WHICH WILL BE REPORTABLE AS ORDINARY INCOME AND/OR CAPITAL GAINS.
AS COMPENSATION FOR ITS SERVICES, THE TRANSFER AGENT RECEIVES A FEE OF 5% OF ANY
DIVIDEND AND CASH CONTRIBUTION (IN NO EVENT IN EXCESS OF $2.50 PER DISTRIBUTION
PER SHAREHOLDER.)
ANY QUESTIONS REGARDING THE PLAN SHOULD BE ADDRESSED TO SHAREHOLDER FINANCIAL
SERVICES, INC., AGENT FOR MASSMUTUAL CORPORATE INVESTORS' DIVIDEND REINVESTMENT
AND SHARE PURCHASE PLAN, P.O. BOX 173673, DENVER CO 80217-3673.