UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-2183
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MassMutual Corporate Investors
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(Exact name of registrant as specified in charter)
1500 Main Street, Suite 600, Springfield, MA 01115
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(Address of principal executive offices) (Zip code)
Stephen L. Kuhn, Vice President and Secretary
1500 Main Street, Suite 2800, Springfield, MA 01115
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(Name and address of agent for service)
Registrant's telephone number, including area code: 413-226-1000
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Date of fiscal year end: 12/31
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Date of reporting period: 6/30/05
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORT TO STOCKHOLDERS.
Attached hereto is the semi-annual shareholder report transmitted to
shareholders pursuant to Rule 30e-1 of the Investment Company Act of
1940, as amended.
MassMutual
CORPORATE
INVESTORS
REPORT for the SIX
MONTHS ENDED 6/30/05
MASSMUTUAL CORPORATE INVESTORS
c/o Babson Capital Management LLC
1500 Main Street, Suite 600
Springfield, Massachusetts 01115
(413) 226-1516
ADVISER
Babson Capital Management LLC
1500 Main Street
Springfield, Massachusetts 01115
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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.babsoncapital.com/mci
INVESTMENT OBJECTIVE AND POLICY
MassMutual Corporate Investors (the "Trust") is a closed-end management
investment company, first offered to the public in 1971, whose shares are traded
on the New York Stock Exchange under the trading symbol "MCI". The Trust's share
price can be found in the financial section of most newspapers as "MassCp" or
"MassMuInv" under the New York Stock Exchange listings.
The Trust's investment objective is to maintain a portfolio of securities
providing a fixed yield while providing 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.
Babson Capital Management LLC 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.
FORM N-Q
MassMutual Corporate Investors files its complete schedule of portfolio holdings
with the U.S. Securities and Exchange Commission for the first and third
quarters of each fiscal year on Form N-Q. This information is available (i) on
the U.S. Securities and Exchange Commission's website at http://www.sec.gov; and
(ii) at the U.S. Securities and Exchange Commission's Public Reference Room in
Washington, DC (which information on their operation may be obtained by calling
1-800-SEC-0330). A complete schedule of portfolio holdings as of each
quarter-end is available upon request by calling, toll-free, 866-399-1516.
PROXY VOTING POLICIES & PROCEDURES; PROXY VOTING RECORD
The Trustees of MassMutual Corporate Investors have delegated proxy voting
responsibilities relating to the voting of securities held by the Trust to
Babson Capital Management LLC. A description of Babson Capital's proxy voting
policies and procedures is available (1) without charge, upon request, by
calling, tollfree 866-399-1516; (2) on MassMutual Corporate Investors' website:
http://www.babsoncapital.com/mci; and (3) on the U.S. Securities and Exchange
Commission ("SEC") website at http://www.sec.gov. Information regarding how the
Trust voted proxies relating to portfolio securities during the most recent
12-month period ended June 30 is available (1) on MassMutual Corporate
Investors' website: http://www.babsoncapital.com/mci; and (2) on the SEC's
website at http://www.sec.gov.
TO OUR SHAREHOLDERS
August 9, 2005
We are pleased to present the June 30, 2005 Semi-Annual Report of MassMutual
Corporate Investors (the "Trust"). At the Trust's Quarterly Board of Trustees
Meeting, which was held on July 15, 2005, the Trustees announced that Stuart H.
Reese had stepped down as Trustee and Chairman of the Board of Trustees as a
result of his new position as President and CEO of Massachusetts Mutual Life
Insurance Company ("MassMutual"). Subsequently, Roger W. Crandall, former
President of the Trust, was appointed as a Trustee and elected to succeed Mr.
Reese as Chairman of the Board of Trustees. Mr. Crandall currently serves as
Chairman of Babson Capital Management LLC ("Babson"), the Trust's investment
advisor, and Executive Vice President and Chief Investment Officer of
MassMutual, Babson's parent company. In addition, the Trustees appointed Michael
H. Brown as a Trustee, thereby increasing the size of the Board from seven to
eight. Mr. Brown recently retired from Morgan Stanley, where he held the role of
Managing Director in the Fixed Income Division. Mr. Brown has 24 years of
investment experience.
The Board of Trustees elected me, Clifford M. Noreen, to succeed Mr. Crandall as
President of the Trust at their July 15, 2005 meeting. I was previously a Vice
President of the Trust, and am currently the head of the Corporate Securities
Group at Babson, where I oversee all corporate credit related investments,
including public and private bonds, mezzanine, and private equity investments,
as well as structured credit products. Prior to this role, I was responsible for
all public corporate bond investments for Babson. I look forward to serving as
President of the Trust.
The Trust's Board of Trustees declared a quarterly dividend of 46 cents per
share, payable on August 12, 2005 to shareholders of record on July 29, 2005. A
dividend of 46 cents per share was paid in the previous quarter.
U.S. equity markets, as measured by several broad market indices, posted mixed
returns. During the quarter ended June 30, 2005, large stocks, as approximated
by the Dow Jones Industrial Average, decreased 1.63%, while smaller stocks, as
approximated by the Russell 2000 Index, increased 4.32%. For the six months
ended June 30, 2005, returns were -3.65% and -1.25%, respectively. U.S. fixed
income markets, as measured by selected indices, increased during the quarter.
The Lehman Brothers Government/Credit Index and the Lehman Brothers U.S.
Corporate High Yield Index increased 3.44% and 2.76%, respectively, for the
quarter. For the six months ended June 30, 2005, returns were 2.75% and 1.11%,
respectively.
For the quarter ended June 30, 2005, the Trust earned 47 cents per share. The
Trust earned 46 cents per share in the previous quarter. The Trust's net assets
as of June 30, 2005 totaled $233,074,253 or $25.82 per share compared to
$224,686,048 or $24.94 per share on March 31, 2005. This translated into a
portfolio return of 5.47% for the quarter, and 8.07% for the six months ended
June 30, 2005, based on the change in the Trust's net assets assuming the
reinvestment of all dividends. Long term, the Trust's portfolio had average
annualized returns of 21.79%, 11.18%, 14.97%, and 15.30% for the 1-, 5-, 10- and
25- year time periods ended June 30, 2005, respectively, based on change in net
assets with the reinvestment of all dividends.
During the quarter, the Trust made private placement investments in three new
issuers and closed one "follow on" investment, totaling approximately $6.9
million. The follow on investment purchased by the Trust was in Tomah Holdings,
Inc. The three new issuers the Trust invested in were AmerCable, Inc., Arrow
Tru-Line Holdings, Inc., and Consolidated Foundries Holdings. The weighted
average coupon of these investments was 12.00%. (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/ Clifford M. Noreen
Clifford M. Noreen
President
PORTFOLIO COMPOSITION AS OF 06/30/05*
[PIE CHART APPEARS HERE]
Public High
Yield Debt 31%
Public Equity 4%
Private/Restricted
Equity 15%
Private Investment
Grade Debt 3%
Private High
Yield Debt 39%
Cash & Short Term
Investments 8%
*Based on market value of total investments
CONSOLIDATED STATEMENT OF MASSMUTUAL CORPORATE INVESTORS
ASSETS AND LIABILITIES
June 30, 2005
(Unaudited)
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost - $162,564,816) $ 161,345,878
Corporate public securities at market value
(Cost - $72,041,181) 75,877,534
Short-term securities at cost plus earned discount which
approximates market value 16,646,292
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253,869,704
Cash 3,056,767
Interest receivable 4,926,162
Receivable for investments sold 3,113,140
Other assets 12,805
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TOTAL ASSETS $ 264,978,578
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LIABILITIES:
Payable for investments purchased $ 937,844
Management fee payable 853,382
Note payable 20,000,000
Revolving Credit Agreement 9,000,000
Interest payable 215,183
Accrued expenses 119,402
Accounts payable 40,788
Accrued taxes payable (See Footnote 2.D) 737,726
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TOTAL LIABILITIES 31,904,325
=============
NET ASSETS:
Common shares, par value $1.00 per share; an unlimited
number authorized 9,028,531
Additional paid-in capital 105,546,598
Retained net realized gain on investments, prior years 100,547,585
Undistributed net investment income 5,559,944
Undistributed net realized gain on investments 10,510,549
Net unrealized appreciation of investments 1,881,046
TOTAL NET ASSETS 233,074,253
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TOTAL LIABILITIES AND NET ASSETS $ 264,978,578
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COMMON SHARES ISSUED AND OUTSTANDING 9,028,531
=============
NET ASSET VALUE PER SHARE $ 25.82
=============
See Notes to Consolidated Financial Statements.
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2
CONSOLIDATED STATEMENT OF OPERATIONS MASSMUTUAL CORPORATE INVESTORS
For the six months ended June 30, 2005
(Unaudited)
INVESTMENT INCOME:
Interest $ 11,079,490
Dividends 246,209
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TOTAL INVESTMENT INCOME 11,325,699
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EXPENSES:
Management fees 1,582,418
Interest 909,469
Trustees' fees and expenses 90,000
Transfer agent/registrar's expenses 24,000
Reports to shareholders 60,000
Professional fees 175,200
Other 51,067
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TOTAL EXPENSES 2,892,154
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NET INVESTMENT INCOME ($0.93 PER SHARE) 8,433,545
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NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 8,120,138
Net change in unrealized appreciation of investments before taxes 1,739,449
Provision for taxes (929,143)
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NET GAIN ON INVESTMENTS 8,930,444
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 17,363,989
=============
See Notes to Consolidated Financial Statements.
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3
CONSOLIDATED STATEMENT OF CASH FLOWS MASSMUTUAL CORPORATE INVESTORS
For the six months ended June 30, 2005
(Unaudited)
NET DECREASE IN CASH:
Cash flows from operating activities:
Interest and dividends received $ 9,533,199
Interest expense paid (904,598)
Operating expenses paid (1,809,819)
Income taxes paid (2,403,067)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 4,415,715
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases/Proceeds/Maturities from short-term portfolio
securities, net (14,261,773)
Purchase of portfolio securities (42,832,447)
Proceeds from disposition of portfolio securities 60,587,075
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NET CASH PROVIDED BY INVESTING ACTIVITIES 3,492,855
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NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES 7,908,570
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Cash flows from financing activities:
Cash dividends paid from net investment income (10,788,334)
Receipts for shares issued on reinvestment of dividends 1,349,414
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NET CASH USED FOR FINANCING ACTIVITIES (9,438,920)
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NET DECREASE IN CASH (1,530,350)
Cash - beginning of year 4,587,117
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CASH - END OF PERIOD $ 3,056,767
=============
Reconciliation of net increase in net assets to net
cash provided by operating and investing activities:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 17,363,989
-------------
Increase in investments (6,643,466)
Increase in interest and dividends receivable (1,213,301)
Increase in receivable for investments sold (1,117,505)
Increase in other assets (12,805)
Increase in payable for investments purchased 827,844
Increase in management fee payable 227,307
Increase in interest payable 4,871
Decrease in accrued expenses (95,228)
Increase in accounts payable 40,788
Decrease in accrued taxes payable (1,473,924)
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TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (9,455,419)
-------------
NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES $ 7,908,570
=============
See Notes to Consolidated Financial Statements.
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4
CONSOLIDATED STATEMENTS OF MASSMUTUAL CORPORATE INVESTORS
CHANGES IN NET ASSETS
For the six months ended June 30, 2005 and the year ended December 31, 2004
For the six
months ended For the
06/30/2005 year ended
(Unaudited) 12/31/2004
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INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 8,433,545 $ 17,949,347
Net realized gain on investments before taxes 8,120,138 7,032,428
Net change in unrealized appreciation of
investments before taxes 1,739,449 19,012,223
Provision for taxes (929,143) (2,377,709)
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Net increase in net assets resulting from
operations 17,363,989 41,616,289
Receipts for shares issued on reinvestment
of dividends 1,349,414 2,432,514
Common shares issued (2005 - 50,104;
2004 - 105,634)
Dividends to shareholders from:
Net investment income (2005 - $0.46 per share;
2004 - $2.16 per share) (4,144,298) (19,329,769)
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TOTAL INCREASE IN NET ASSETS 14,569,105 24,719,034
NET ASSETS, BEGINNING OF YEAR 218,505,148 193,786,114
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NET ASSETS, END OF PERIOD / YEAR $ 233,074,253 $ 218,505,148
============= =============
See Notes to Consolidated Financial Statements.
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5
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS MASSMUTUAL CORPORATE INVESTORS
Selected data for each common share outstanding:
For the
six months
ended For the years ended December 31,
06/30/2005 -----------------------------------------------------------------------
(Unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value:
Beginning of year $ 24.34 $ 21.84 $ 19.40 $ 20.07 $ 20.74 $ 22.00
Net investment income 0.93 2.00 1.44 1.53 1.70 1.96
Net realized and unrealized gain
(loss) on investments 0.99 2.64 2.83 (0.59) (0.53) (0.46)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations 1.92 4.64 4.27 0.94 1.17 1.50
----------- ----------- ----------- ----------- ----------- -----------
Dividends from net investment
income to common shareholders (0.46) (2.16) (1.84) (1.44) (1.79) (1.96)
Distributions from net realized
gain on investments to common
shareholders 0.00 0.00 0.00 (0.18) (0.09) (0.80)
Change from issuance of shares 0.02 0.02 0.01 0.01 0.04 0.00
----------- ----------- ----------- ----------- ----------- -----------
Total distributions (0.44) (2.14) (1.83) (1.61) (1.84) (2.76)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value:
End of period/year $ 25.82 $ 24.34 $ 21.84 $ 19.40 $ 20.07 $ 20.74
----------- ----------- ----------- ----------- ----------- -----------
Per share market value:
End of period/year $ 29.99 $ 28.50 $ 22.90 $ 19.49 $ 20.70 $ 22.00
=========== =========== =========== =========== =========== ===========
Total investment return
Market value 7.05%* 36.10% 27.53% 1.35% 1.88% 17.55%
Net asset value** 8.07%* 22.76% 22.61% 4.80% 5.91% 7.28%
Net assets (in millions):
End of period/year $ 233.07 $ 218.51 $ 193.79 $ 171.03 $ 175.11 $ 178.13
Ratio of operating expenses to
average net assets 0.88%* 1.93% 2.04% 1.82% 1.72% 1.47%
Ratio of interest expense to
average net assets 0.41%* 0.77% 0.82% 0.86% 0.84% 0.58%
Ratio of total expenses to
average net assets 1.29%* 2.70% 2.86% 2.68% 2.56% 2.05%
Ratio of net investment income
to average net assets 3.75%* 8.68% 6.95% 7.65% 8.20% 8.56%
Portfolio turnover 18.23%* 53.45% 56.10% 34.02% 24.48% 59.75%
* Percentages represent results for the period and are not annualized.
** Net asset value return represents portfolio returns based on change in the
Trust's net asset value assuming the reinvestment of all dividends and
distributions which differs from the total investment return based on market
value due to the difference between the Trust's net asset value and the
market value of its shares outstanding; past performance is no guarantee of
future results.
See Notes to Consolidated Financial Statements.
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6
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities - 69.23%: (A) Principal Amount Date Cost Fair Value
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Private Placement Investments - 62.68%
A T I ACQUISITION COMPANY
A for-profit post-secondary school serving students in
Texas, Florida and Arizona.
12% Senior Subordinated Note due 2012 $ 2,125,000 04/08/04 $ 2,125,000 $ 2,007,245
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 2,323 shs. 04/08/04 -- 23
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2,125,000 2,007,268
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A W C HOLDING COMPANY
A manufacturer and distributor of aluminum and vinyl
windows and doors in the Southwest and Southeast regions
of the U.S.
12% Senior Subordinated Note due 2012 $ 2,125,000 05/18/04 1,929,934 2,035,324
Limited Partnership interest of AWC Investments, LLC (B) 250 uts. 05/18/04 212,500 191,251
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2,142,434 2,226,575
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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 1,949,590 2,125,000
Warrant, exercisable until 2010, to purchase
common stock at $.02 per share (B) 364 shs. 02/29/00 307,759 343,901
------------- -------------
2,257,349 2,468,901
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AMERCABLE, INC.
A manufacturer of electric power, instrumentation and
control cables, primarily for the mining and oil and
gas industries.
12% Senior Subordinated Note due 2013 $ 2,046,296 04/08/05 1,925,768 2,045,262
Limited Partnership Interest (B) 79 uts. 04/07/05 78,704 70,830
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 125 shs. 04/08/05 122,463 1
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2,126,935 2,116,093
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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 3,500,001
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 80 shs. * 513,334 1
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2,263,334 3,500,002
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AMERICAN HOSPICE MANAGEMENT HOLDING LLC
A for-profit hospice care provider in the United States.
12% Senior Subordinated Note due 2010 $ 2,125,000 01/22/04 1,904,408 2,188,750
Preferred Class A Unit (B) 2,525 uts. 01/22/04 252,500 227,250
Common Class B Unit (B) 3,042 uts. 01/22/04 -- 239,422
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2,156,908 2,655,422
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*11/02/98 and 12/16/03.
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7
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
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ARROW TRU-LINE HOLDINGS, INC.
A manufacturer of hardware for residential and
commercial overhead garage doors in North America.
12% Senior Subordinated Note due 2012 $ 1,627,660 05/18/05 $ 1,516,661 $ 1,629,931
Common Stock (B) 497 shs. 05/18/05 497,340 447,606
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 130 shs. 05/18/05 112,128 1
------------- -------------
2,126,129 2,077,538
------------- -------------
AUGUSTA SPORTSWEAR HOLDING CO.
A manufacturer and distributor of athletic apparel,
activewear and team uniforms.
12% Senior Subordinated Note due 2012 $ 1,686,800 12/31/04 1,571,674 1,707,079
Common Stock (B) 493 shs. * 492,975 443,682
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 137 shs. 12/31/04 119,482 1
------------- -------------
2,184,131 2,150,762
------------- -------------
BEACON MEDICAL PRODUCTS, INC.
A designer, manufacturer and marketer of medical air and
gas distribution systems.
Senior Secured Floating Rate Revolving Credit
Facility due 2007 $ 230,636 04/09/02 230,636 231,025
Senior Secured Tranche A Floating Rate Note due 2008 $ 721,813 04/09/02 721,813 721,813
12% Senior Secured Note due 2010 $ 721,196 04/09/02 627,395 750,044
Limited Partnership Interest of Riverside Capital
Appreciation Fund IV, L.P. (B) 11.16% int. 04/09/02 152,329 141,209
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 1,390 shs. 04/09/02 127,497 128,861
------------- -------------
1,859,670 1,972,952
------------- -------------
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 until 2009, to purchase
common stock at $.01 per share (B) 4,895 shs. 03/31/04 1 --
------------- -------------
195,499 --
------------- -------------
BETTER MINERALS & AGGREGATES
A producer of high grade industrial and specialty
silica sands.
14% Redeemable Preferred Stock (B) 997 shs. 09/30/99 545,858 108,991
Convertible Preferred 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
------------- -------------
*12/31/04 and 03/31/05.
**12/19/96 and 09/30/99.
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8
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
BRAMPTON FASTENER CO. LTD
A value-added national distributor of maintenance, repair
and operating supplies such as fasteners, electrical
components and tools.
Limited Partnership Interest of Brafasco Investors LLC (B) 82,500 uts. 12/31/04 $ 82,500 $ 74,250
------------- -------------
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 $ 996,235 09/13/02 996,235 1,010,056
11% Senior Subordinated Note due 2010 $ 838,102 09/13/02 800,508 861,633
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
------------- -------------
2,173,258 2,126,073
------------- -------------
CAINS FOODS, L.P.
A producer of mayonnaise and sauce products for both the
retail and food service markets.
Limited Partnership Interest (B) 117 uts. 09/29/95 158,369 599,276
------------- -------------
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 2,156
------------- -------------
CHEMED CORPORATION
An operator in the residential and commercial repair-andmaintenance
service industry through two wholly owned
subsidiaries, Roto-Rooter and Service America.
Common Stock 38,000 shs. 02/24/04 950,000 1,553,440
------------- -------------
COEUR, INC.
A producer of proprietary, disposable power injection
syringes.
Senior Secured Floating Rate Revolving Credit
Facility due 2010 $ 63,406 02/02/05 63,406 62,501
8.75% Senior Secured Term Note due 2010 $ 570,652 04/30/03 570,652 590,485
11.5% Senior Subordinated Note due 2011 $ 424,819 04/30/03 391,194 440,026
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
------------- -------------
1,192,868 1,208,020
------------- -------------
*12/30/97 and 05/29/99.
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9
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(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 $ 140,432 01/07/02 $ 140,432 $ 136,954
Senior Secured Floating Rate Tranche A Note due 2007 $ 889,517 06/26/01 889,517 833,655
13% Senior Secured Tranche B Note due 2006 $ 648,148 06/26/01 648,148 634,061
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
------------- -------------
2,081,569 1,864,999
------------- -------------
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 1,445,592 1,593,750
28% Preferred Stock (B) 71 shs. 11/02/01 70,833 169,337
20% Preferred Stock (B) 66 shs. 03/09/04 66,406 79,687
Common Stock (B) 1,429 shs. 09/22/00 531,250 101,794
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 843 shs. 09/22/00 265,625 60,065
------------- -------------
2,379,706 2,004,633
------------- -------------
CONNOR SPORT COURT INTERNATIONAL, INC.
A designer and manufacturer of outdoor and indoor
synthetic sports flooring and other temporary flooring
products.
12% Senior Subordinated Note due 2012 $ 2,001,121 * 1,846,067 1,983,032
Limited Partnership Interest (B) 189,585 uts. ** 189,586 170,627
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 174 shs. * 160,233 2
------------- -------------
2,195,886 2,153,661
------------- -------------
CONSOLIDATED FOUNDRIES HOLDINGS
A manufacturer of engineered cast metal components for
the global aerospace and defense industries.
12% Senior Subordinated Note due 2013 $ 2,185,714 06/15/05 2,085,228 2,174,708
Common Stock (B) 364 shs. 06/15/05 364,286 327,861
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 103 shs. 06/15/05 100,668 1
------------- -------------
2,550,182 2,502,570
------------- -------------
CORVEST GROUP, INC.
A manufacturer and distributor of promotional products.
12% Senior Subordinated Note due 2007 $ 3,863,636 *** 3,773,581 3,477,272
Common Stock (B) 56 shs. *** 96,591 24,145
Limited Partnership Interest (B) 19.32% int. *** 297,203 71,692
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 324 shs. *** 284,869 139,251
------------- -------------
4,452,244 3,712,360
------------- -------------
*08/12/04 and 01/18/05.
**08/12/04 and 01/14/05.
***03/05/99 and 03/24/99.
--------------------------------------------------------------------------------
10
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
DELSTAR HOLDING CORPORATION
A manufacturer of plastic netting for a wide variety
of industries.
Convertible Preferred Stock, convertible into common
stock at $10 per share (B) 3,514 shs. 10/05/01 $ 427,153 $ 395,243
Convertible Preferred Stock, convertible into common
stock at $11.84 per share (B) 412 shs. 09/16/04 48,793 46,353
------------- -------------
475,946 441,596
------------- -------------
DEXTER MAGNETICS TECHNOLOGIES, INC.
A designer, fabricator, assembler and distributor of
industrial magnets and subassemblies in North America
and Europe.
Common Stock (B) 585 shs. 07/19/01 585,145 694,854
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 297 shs. 07/19/01 250,611 352,183
------------- -------------
835,756 1,047,037
------------- -------------
DIRECTED ELECTRONICS, INC.
A designer and distributor of brand name automotive
security systems, audio products and installation
accessories.
Class B Common Stock (B) 36,633 shs. 12/22/99 -- 560,480
Limited Partnership Interest (B) 8.70% int. 12/22/99 1 839,839
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 48,569 shs. 12/22/99 -- 743,106
------------- -------------
1 2,143,425
------------- -------------
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 2,088,103
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 2,088,103
------------- -------------
DWYER GROUP, INC.
A franchiser of a variety of home repair services.
14% Senior Subordinated Note due 2011 $ 1,859,375 10/30/03 1,694,715 1,915,156
Common Stock (B) 6,906 shs. ** 690,600 506,928
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 149,255
------------- -------------
2,571,784 2,571,339
------------- -------------
E X C ACQUISITION CORPORATION
A manufacturer of pre-filled syringes and pump systems
used for intravenous drug delivery.
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 22 shs. 06/28/04 77,208 --
------------- -------------
*10/24/96 and 08/28/98.
**10/30/03 and 01/02/04.
--------------------------------------------------------------------------------
11
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
EAGLE PACK PET FOODS, INC.
A manufacturer of premium pet food sold through
independent pet stores.
14% Senior Subordinated Note due 2011 $ 1,062,500 09/24/04 $ 1,025,647 $ 1,092,331
Warrant, exercisable until 2011, to purchase
common stock at $.02 per share (B) 4,085 shs. 09/24/04 39,464 41
------------- -------------
1,065,111 1,092,372
------------- -------------
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 28,718 22,685
------------- -------------
ENZYMATIC THERAPY, INC.
A manufacturer and distributor of branded natural
medicines and nutritional supplements.
13% Senior Subordinated Note due 2006 (B) $ 1,593,750 09/17/02 1,349,781 1,434,375
Limited Partnership Interest (B) 1.32% int. 03/30/00 531,250 5,313
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 478 shs. 03/30/00 255,000 5
------------- -------------
2,136,031 1,439,693
------------- -------------
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 2,094,361 1,700,000
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 43,878 shs. 09/09/03 35,641 439
------------- -------------
2,130,002 1,700,439
------------- -------------
EVANS CONSOLES, INC.
A designer and manufacturer of consoles and control
center systems.
Limited Partnership Interest of CM
Equity Partners (B) 2.24% int. 02/11/98 128,464 --
Common Stock (B) 90,000 shs. 05/06/04 6 --
------------- -------------
128,470 --
------------- -------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in
manufacturing and marketing entities.
Series A Preferred Units (B) 1.19% int. 7/21/94 385,258 2,723
------------- -------------
HOME DECOR HOLDING COMPANY
A designer, manufacturer and marketer of framed art and
wall decor products.
12.5% Senior Subordinated Note due 2012 $ 2,043,269 * 1,855,165 2,116,061
Common Stock (B) 63 shs. * 62,742 56,466
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 200 shs. * 199,501 2
------------- -------------
2,117,408 2,172,529
------------- -------------
*06/30/04 and 08/19/04.
--------------------------------------------------------------------------------
12
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
HUSSEY SEATING CORPORATION
A manufacturer of spectator seating products.
Senior Secured Floating Rate Revolving Note due 2006 $ 1,544,856 06/12/96 $ 1,544,846 $ 772,430
Senior Secured Floating Rate Note due 2006 $ 433,125 * 433,125 216,563
12% Senior Subordinated Note due 2006 $ 1,350,000 03/31/03 1,350,000 13,500
Common Stock (B) 4,771 shs. 03/12/04 225,000 --
------------- -------------
3,552,971 1,002,493
------------- -------------
INTEGRATION TECHNOLOGY SYSTEMS, INC.
A manufacturer of steel protective computer and network
systems for the industrial and office environments.
16.5% Senior Secured Note due 2006 $ 1,548,607 03/01/04 1,594,505 1,197,573
Common Stock (B) 228 shs. 06/01/00 262,200 --
------------- -------------
1,856,705 1,197,573
------------- -------------
JASON, INC.
A diversified manufacturing company serving various
industrial markets.
13% Senior Subordinated Note due 2008 $ 963,687 08/04/00 899,326 983,738
14% Cumulative Redeemable Preferred Stock Series A (B) 289 shs. 08/04/00 289,224 290,630
Limited Partnership Interests of
Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,361 664,880
Warrants, exercisable until 2008 and 2009, to purchase
common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 46,927
------------- -------------
2,190,323 1,986,175
------------- -------------
JUSTRITE MANUFACTURING ACQUISITION CO.
A manufacturer of safety products such as storage cabinets
and containers.
12% Senior Subordinated Note due 2011 1,593,750 12/15/04 1,497,247 1,595,232
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 11
------------- -------------
1,598,356 1,595,243
------------- -------------
KEEPSAKE QUILTING, INC.
A seller of quilting fabrics, books, patterns, kits and
notions to consumers.
Senior Secured Floating Rate Revolving Note due 2005 $ 36,693 06/16/00 36,693 36,700
Senior Secured Floating Rate Tranche A Note due 2007 $ 550,392 06/16/00 550,392 551,659
12% Senior Secured Tranche B Note due 2008 $ 550,392 06/16/00 527,711 561,400
Limited Partnership Interest of
Riverside XVI Holding Company, L.P. (B) 5.29% int. 06/12/00 333,490 346,731
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 1,108 shs. 06/12/00 45,866 116,231
------------- -------------
1,494,152 1,612,721
------------- -------------
KELE AND ASSOCIATES, INC.
A distributor of building automation control products.
12% Senior Subordinated Note due 2012 $ 1,831,548 02/27/04 1,672,484 1,844,567
Common Stock (B) 35 shs. 02/27/04 462,035 415,776
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 11 shs. 02/27/04 7,793 --
------------- -------------
2,142,312 2,260,343
------------- -------------
*06/12/96 and 08/03/01.
--------------------------------------------------------------------------------
13
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
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 $ 1,835,609
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 2,449,612
------------- -------------
KEYSTONE NORTH AMERICA, INC.
An operator of funeral homes in North America.
Common Stock (B) 49,216 shs. 02/08/05 236,709 387,822
------------- -------------
Lancaster Laboratories, Inc.
A laboratory testing operation in the United States.
Common Stock (B) 860,842 shs. 09/25/00 589,813 1,530,147
------------- -------------
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 * 3,507,704 3,845,000
Common Stock (B) 5,800 shs. * 406,003 284,200
Warrant, exercisable until 2006, to purchase
common stock at $.11 per share (B) 15,572 shs. * 602,127 763,028
------------- -------------
4,515,834 4,892,228
------------- -------------
MAVERICK ACQUISITION COMPANY
A manufacturer of capsules that cover the cork and neck of
wine bottles.
Senior Secured Floating Rate Tranche A Note due 2010 $ 783,582 09/03/04 783,582 774,777
12% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 276,715 322,489
Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 52,892
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 4
------------- -------------
1,158,539 1,150,162
------------- -------------
MAXON CORPORATION
A manufacturer of industrial combustion equipment and
related shut-off valves and control valves.
12% Senior Subordinated Note due 2012 $ 962,215 09/30/04 876,479 960,758
8.75% Senior Subordinated Note due 2012 $ 1,281,112 09/30/04 1,281,112 1,294,269
Common Stock (B) 381,672 shs. 09/30/04 381,672 343,505
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 153,572 shs. 09/30/04 90,897 1,536
------------- -------------
2,630,160 2,600,068
------------- -------------
*12/23/98 and 01/28/99.
--------------------------------------------------------------------------------
14
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
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 $ 2,091,841 $ 2,146,250
8% Preferred Stock (B) 84 shs. 10/28/04 83,658 84,203
Common Stock (B) 26,185 shs. 10/02/04 35,088 36,030
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 83,214 shs. 05/01/03 40,675 113,836
------------- -------------
2,251,262 2,380,319
------------- -------------
MOSS, INC.
A manufacturer and distributor of large display and exhibit
structures.
Senior Secured Floating Rate Revolving Note due 2005 $ 100,860 03/24/05 100,860 100,860
Senior Secured Floating Rate Tranche A Note due 2007 $ 791,906 09/21/00 791,906 791,906
12% Senior Secured Tranche B Note due 2008 $ 336,200 09/21/00 318,813 336,200
Limited Partnership Interest of
Riverside Capital Appreciation Fund I, L.P. (B) 37.37% int. * 311,481 389,333
Warrant, exercisable until 2008, to purchase
common stock at $100 per share (B) 463 shs. 09/21/00 40,344 19,235
------------- -------------
1,563,404 1,637,534
------------- -------------
MUSTANG VENTURES COMPANY
A natural gas gathering and processing operation located in
Oklahoma and Texas.
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 16,535 shs. 12/11/02 493,501 694,833
------------- -------------
NEFF MOTIVATION, INC.
A manufacturer and distributor of customized awards and
sportswear to schools.
12.5% Senior Subordinated Note due 2011 $ 1,062,500 01/31/03 913,508 1,094,375
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 212 shs. 01/31/03 180,625 86,937
------------- -------------
1,094,133 1,181,312
------------- -------------
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 1,938,000
10% Preferred Stock (B) 255 shs. 03/29/04 255,083 265,568
Common Stock (B) 6,455 shs. 03/29/04 6,455 48,025
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 8,622 shs. 03/29/04 7,323 64,080
------------- -------------
2,125,000 2,315,673
------------- -------------
*09/20/00 and 05/23/02.
--------------------------------------------------------------------------------
15
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(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 $ 881,134
11.5% Senior Subordinated Note due 2012 $ 1,500,000 01/28/02 1,374,970 1,629,246
Common Stock (B) 312,500 shs. 01/28/02 312,500 213,750
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 243,223 shs. 01/28/02 162,045 164,176
------------- -------------
2,662,015 2,888,306
------------- -------------
OLYMPIC SALES, INC.
A boat retailer in Washington state, Oregon, California
and British Columbia.
12% Senior Subordinated Note due 2006 $ 2,774,000 08/07/98 2,774,000 2,682,018
12% Senior Subordinated Note due 2008 $ 307,071 02/09/00 291,495 286,170
Limited Partnership Interest of Riverside VIII,
VIII-A and VIII-B Holding Company, L.P. (B) 1,531,250 uts. * 1,555,820 1,106,616
Warrants, exercisable until 2007 and 2008, to purchase
common stock at $.01 per share (B) 28,648 shs. ** 389,188 88,695
------------- -------------
5,010,503 4,163,499
------------- -------------
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 1,972,280 2,125,000
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 478,125
------------- -------------
2,237,905 2,603,125
------------- -------------
PRECISION DYNAMICS, INC.
A manufacturer of custom-designed solenoid valves
and controls.
Senior Secured Floating Rate Revolving Credit
Facility due 2005 $ 619,400 07/22/96 619,400 619,400
Senior Secured Floating Rate Term Note due 2005 $ 8,150 07/22/96 8,150 8,150
12% Senior Secured Term Note due 2005 $ 326,000 07/22/96 323,815 326,000
8% Preferred Stock (B) 456 shs. 07/22/96 232,046 232,046
Common Stock (B) 599 shs. 07/22/96 28,978 28,978
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 322 shs. 07/22/96 97,800 3
------------- -------------
1,310,189 1,214,577
------------- -------------
*08/07/98, 02/23/99, 12/22/99 and 02/25/03.
**08/07/98 and 02/09/00.
--------------------------------------------------------------------------------
16
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
PROCESS CHEMICALS LLC
A specialty chemical company that manufactures
processed chemicals for the fertilizer, asphalt and
concrete industries,
Common Membership Interests 2 uts. * $ 4 $ 288,000
------------- -------------
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 Preferred Stock (B) 1,004 shs. 08/12/94 100,350 --
Common Stock (B) 2,600 shs. ** 126,866 --
------------- -------------
227,216 --
------------- -------------
QUALIS AUTOMOTIVE LLC
A distributor of aftermarket automotive brake and
chassis products
12% Senior Subordinated Note due 2012 $ 1,770,834 05/28/04 1,426,659 1,842,536
Common Stock (B) 354,166 shs. 05/28/04 354,166 318,749
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 377,719 shs. 05/28/04 377,719 3,777
------------- -------------
2,158,544 2,165,062
------------- -------------
QUALSERV CORPORATION
A provider of foodservice equipment and supplies, to
major restaurant chains and their franchisees.
14% Senior Subordinated Note due 2012 $ 1,893,563 07/09/04 1,847,454 1,704,207
Limited Partnership Interest (B) 9.26% int. 07/09/04 259,146 181,402
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 528 shs. 07/09/04 49,061 5
------------- -------------
2,155,661 1,885,614
------------- -------------
RIVER RANCH FRESH FOODS LLC
A supplier of fresh produce to the retail and foodservice
channels.
13% Senior Subordinated Note due 2011 $ 1,841,667 09/29/04 1,693,918 1,831,810
Limited Partnership Interest (B) 40,610 uts. 09/29/04 283,333 255,000
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 23,715 shs. 09/29/04 157,903 236
------------- -------------
2,135,154 2,087,046
------------- -------------
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 11/14/03 954,548 1,047,344
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 1
------------- -------------
1,077,494 1,047,345
------------- -------------
*07/31/97 and 01/04/99.
**11/14/01 and 08/12/94.
--------------------------------------------------------------------------------
17
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
SAFETY SPEED CUT MANUFACTURING COMPANY, INC.
A manufacturer of vertical panel saws and routers for the
wood working industry.
Senior Secured Floating Rate Tranche A Note due 2007 $ 1,036,431 06/02/99 $ 1,036,431 $ 1,036,431
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. 06/02/99 256,212 508,125
------------- -------------
2,423,295 2,675,208
------------- -------------
SAVAGE SPORTS HOLDING, INC.
A manufacturer of sporting firearms.
12% Senior Subordinated Note due 2012 $ 1,538,793 09/10/04 1,431,271 1,571,126
Common Stock (B) 586 shs. 09/10/04 586,207 527,589
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 1
------------- -------------
2,131,056 2,098,716
------------- -------------
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 1,382,207 1,517,857
Common Stock (B) 901,775 shs. * 901,775 1,352,663
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 263,444 shs. 08/01/02 216,446 395,165
------------- -------------
2,500,428 3,265,685
------------- -------------
SNYDER INDUSTRIES, INC.
A manufacturer of proprietary rotationally molded
polyethylene containers.
12.25% Senior Subordinated Note due 2008 $ 3,125,000 12/06/99 2,889,408 3,125,000
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 513 shs. 12/06/99 426,136 277,020
------------- -------------
3,315,544 3,402,020
------------- -------------
SPECIALTY FOODS GROUP, INC.
A manufacturer and distributor of branded meat products.
Limited Partnership Interest of MHD Holdings LLC (B) 1.43% int. 08/29/00 579,736 140,156
------------- -------------
STRATEGIC EQUIPMENT & SUPPLY CORPORATION, INC.
A provider of kitchen and restaurant design, equipment
fabrication and installation services.
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 106,539 shs. 01/14/00 658,751 --
------------- -------------
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 1,786,975 1,878,500
Limited Partnership Interest (B) 1.99% int. 08/20/03 283,333 1,405,332
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 86,780 shs. 08/21/03 85,000 430,429
------------- -------------
2,155,308 3,714,261
------------- -------------
*08/01/02, 01/17/03 and 12/31/04.
--------------------------------------------------------------------------------
18
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
TERRA RENEWAL SERVICES, INC.
A provider of wastewater residual management and
required environmental reporting, permitting, nutrient
management planning and record keeping to companies
involved in poultry and food processing.
Senior Secured Floating Rate Term A Note due 2010 $ 298,730 03/01/05 $ 298,730 $ 297,978
Senior Secured Floating Rate Term B Note due 2012 $ 368,262 03/01/05 368,262 367,062
12% Senior Subordinated Note due 2013 $ 1,025,391 03/01/05 970,770 1,020,228
Limited Partnership Interest of
Saw Mill Capital Fund V, L.P. (B) 412 uts. 03/01/05 412,207 370,989
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 65 shs. 03/01/05 56,171 1
------------- -------------
2,106,140 2,056,258
------------- -------------
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 2,509,431 2,712,000
Common Stock (B) 630 shs. 02/04/98 630,000 348,705
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 245,754
------------- -------------
3,508,263 3,306,459
------------- -------------
TIDEWATER HOLDINGS, INC.
An operator of a barge transportation line on the
Columbia/Snake River system.
17% Preferred Stock (B) 560 shs. 12/23/02 560,000 756,000
Convertible Preferred Stock, convertible into
common stock at $1,000 per share (B) 1,120 shs. 07/25/96 1,120,000 1,512,000
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 474 shs. 07/25/96 48,216 639,576
------------- -------------
1,728,216 2,907,576
------------- -------------
TOMAH HOLDINGS, INC.
A manufacturer of specialty chemicals.
16% Senior Subordinated Note due 2011 $ 1,461,764 12/08/03 1,414,728 1,520,235
16% Preferred Stock Series A (B) 37 shs. 12/08/03 631,630 660,890
Common Stock (B) 15,806 shs. 12/08/03 131,471 204,989
------------- -------------
2,177,829 2,386,114
------------- -------------
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 $ 1,184,565 01/20/00 1,184,565 1,195,309
12% Senior Subordinated Note due 2010 $ 1,326,500 01/20/00 1,269,707 1,350,481
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
------------- -------------
2,780,212 2,730,316
------------- -------------
--------------------------------------------------------------------------------
19
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
TRUSTILE DOORS, INC.
A manufacturer and distributor of interior doors.
12.5% Senior Subordinated Note due 2010 $ 1,062,500 04/11/03 $ 987,743 $ 1,060,557
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 5,781 shs. 04/11/03 95,625 58
------------- -------------
1,083,368 1,060,615
------------- -------------
TUBULAR TEXTILE MACHINERY
A designer, manufacturer, seller and servicer of finishing
machinery for the knit and woven segments of the global
textile industry.
12% Senior Subordinated Note due 2014 $ 1,234,551 05/28/04 1,112,536 1,201,900
8.75% Senior Secured Note due 2011 $ 716,292 05/28/04 716,292 704,241
Common Stock (B) 674,157 shs 05/28/04 674,157 505,618
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 203,912 shs. 05/28/04 130,789 2,039
------------- -------------
2,633,774 2,413,798
------------- -------------
TVI, INC.
A retailer of used clothing in the United States, Canada
and Australia.
Common Stock (B) 354,167 shs. 05/02/00 354,167 382,500
------------- -------------
U S M HOLDINGS CORPORATION
A provider of facility maintenance services to retail and
corporate clients with multiple locations.
12% Senior Subordinated Note due 2011 $ 894,737 08/06/03 766,724 918,242
Preferred Stock (B) 2,571 shs. 08/06/03 257,096 257,096
Common Stock (B) 1,032 shs. 08/06/03 1,032 1,032
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 949 shs. 08/06/03 298,198 949
------------- -------------
1,323,050 1,177,319
------------- -------------
U-LINE CORPORATION
A manufacturer of high-end, built-in, undercounter
icemaking, wine storage and refrigeration appliances.
12.5% Senior Subordinated Note due 2012 $ 1,882,100 04/30/04 1,687,244 1,975,856
10% Junior Subordinated Note due 2012 $ 66,922 04/30/04 66,967 69,411
Common Stock (B) 182 shs 04/30/04 182,200 163,980
Warrant, exercisable until 2012, to purchase
common stock at $1 per share (B) 230 shs. 04/30/04 211,736 2
------------- -------------
2,148,147 2,209,249
------------- -------------
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
------------- -------------
--------------------------------------------------------------------------------
20
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value
----------------------------------------------------------------------------------------------------------------------------------
VITALITY FOODSERVICE, INC.
A non-carbonated beverage dispensing company focused
on the foodservice industry.
13% Senior Subordinated Note due 2011 $ 1,887,288 09/24/04 $ 1,712,762 $ 1,922,767
Common Stock (B) 23,771 shs. 09/24/04 237,710 213,939
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 23,787 shs. 09/24/04 186,883 238
------------- -------------
2,137,355 2,136,944
------------- -------------
VITEX PACKAGING GROUP, INC.
A manufacturer of specialty packaging, primarily
envelopes and tags used on tea bags and medical and
food products.
12.5% Senior Subordinated Note due 2012 $ 1,700,000 07/19/04 1,483,065 1,718,718
Limited Partnership Interest Class A (B) 414,375 uts. 07/19/04 414,375 372,938
Limited Partnership Interest Class B (B) 182,935 uts. 07/19/04 182,935 164,642
------------- -------------
2,080,375 2,256,298
------------- -------------
WALLS INDUSTRIES, INC.
A provider of branded workwear and sporting goods
apparel.
10% Senior Subordinated Lien Note due 2009 $ 1,006,579 07/12/04 1,006,579 1,009,304
14% Senior Subordinated Note due 2012 $ 1,064,098 07/12/04 1,061,294 1,070,153
Limited Partnership Interest (B) 0.40% int. 07/12/04 37,281 33,553
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 4,029 shs. 07/12/04 2,833 40
------------- -------------
2,107,987 2,113,050
------------- -------------
WEASLER HOLDINGS LLC
A manufacturer of mechanical power transmission
components for the agricultural, lawn and turf industries.
Limited Partnership Interest (B) 1.55% int. 02/03/03 101,190 176,374
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 256 shs. 02/04/03 209,829 446,661
------------- -------------
311,019 623,035
------------- -------------
Total Private Placement Investments 147,121,653 146,086,156
------------- -------------
--------------------------------------------------------------------------------
21
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares or
Interest Due Principal
CORPORATE RESTRICTED SECURITIES:(A) continued Rate Date Amount Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
RULE 144A SECURITIES - 6.55%:
BONDS - 6.20%
A E P Industries, Inc. 7.875% 03/15/13 $ 175,000 $ 175,000 $ 175,388
A E S Corporation 9.000 05/15/15 200,000 200,000 224,500
Activant Solutions, Inc. 9.090 04/01/10 825,000 825,000 853,875
Affinia Group, Inc. 9.000 11/30/14 460,000 460,000 386,400
Blockbuster, Inc. 9.000 09/01/12 475,000 477,096 444,125
Bombardier, Inc. 6.300 05/01/14 1,000,000 890,000 905,000
C C O Holdings LLC 7.135 12/15/10 500,000 500,000 486,250
Calpine Corporation 8.750 07/15/13 500,000 465,000 370,000
Charter Communications Op LLC 8.000 04/30/12 250,000 249,375 248,750
Compression Polymers Holding 10.460 07/01/12 130,000 129,350 129,350
Douglas Dynamics, LLC 7.750 01/15/12 630,000 634,028 617,400
IAAI Finance Corporation 11.000 04/01/13 800,000 799,438 823,701
Intelsat Bermuda Ltd. 7.805 01/15/12 450,000 450,000 457,875
Intelsat Bermuda Ltd. 8.250 01/15/13 500,000 500,000 516,250
Interactive Health LLC 7.250 04/01/11 900,000 746,425 801,000
Lazard LLC 7.125 05/15/15 750,000 749,408 756,553
Magnachip Semiconductor 8.000 12/15/14 100,000 100,000 96,000
Markwest Energy 6.875 11/01/14 475,000 475,000 472,625
Metaldyne Corporation 10.000 11/01/13 510,000 513,884 418,200
N R G Energy, Inc. 8.000 12/15/13 548,000 548,000 578,140
P Q Corporation 7.500 02/15/13 1,100,000 1,088,750 1,080,750
Service Corporation International 7.000 06/15/17 1,000,000 990,030 1,027,500
Siebe PLC 6.500 01/15/10 650,000 572,000 560,625
Tekni-Plex, Inc. 10.875 08/15/12 250,000 250,000 270,000
Tekni-Plex, Inc. 8.750 11/15/13 650,000 656,370 576,875
Tenaska Alabama Partners LP 7.000 06/30/21 360,000 360,000 364,500
Texas Genco LLC 6.875 12/15/14 705,000 705,000 742,013
Texas Industries, Inc. 7.250 07/15/13 70,000 70,000 71,750
------------ ------------ ------------
TOTAL BONDS $ 14,963,000 14,579,154 14,455,395
============ ------------ ------------
COMMON STOCK - 0.00%
Jordan Telecom Products (B) 70 $ 14,000 --
------------ ------------
TOTAL COMMON STOCK 14,000 --
------------ ------------
CONVERTIBLE BONDS - 0.35%
Cymer, Inc. 3.500% 02/15/09 850,000 $ 850,000 $ 804,313
------------ ------------ ------------
TOTAL CONVERTIBLE BONDS $ 850,000 850,000 804,313
============ ------------ ------------
WARRANTS - 0.00%
Winsloew Furniture, Inc. (B) 900 $ 9 $ 14
------------ ------------
TOTAL WARRANTS 9 14
------------ ------------
TOTAL RULE 144A SECURITIES 15,443,163 15,259,722
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $162,564,816 $161,345,878
------------ ------------
--------------------------------------------------------------------------------
22
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Interest Due Principal
CORPORATE PUBLIC SECURITIES -- 32.55%:(A) Rate Date Amount Cost Market Value
---------------------------------------------------------------------------------------------------------------------------------
RULE 144A SECURITIES - 6.55%: (A)
BONDS -- 27.91%
Abitibi-Consolidated, Inc. 7.750% 06/15/11 $ 1,000,000 $ 1,034,388 $ 1,005,000
Activant Solutions, Inc. 10.500 06/15/11 585,000 584,886 634,725
Aearo Company 8.250 04/15/12 450,000 450,000 450,000
Alamosa Delaware, Inc. 11.000 07/31/10 325,000 329,945 364,406
Alamosa Delaware, Inc. 8.500 01/31/12 400,000 400,000 419,500
Alh Fin LLC/ALH Fin Corporation 8.500 01/15/13 475,000 472,625 435,219
Allied Waste NA 7.875 04/15/13 1,000,000 1,026,096 1,022,500
American Media Operation, Inc. 8.875 01/15/11 900,000 901,571 852,750
Appleton Papers, Inc. 8.125 06/15/11 300,000 300,000 292,500
Argo Tech Corporation 9.250 06/01/11 850,000 850,000 922,250
Bally Total Fitness Hldng Corporation 9.875 10/15/07 135,000 128,925 117,787
BCP Crystal US Holdings Corporation 9.625 06/15/14 485,000 485,000 543,200
C S C Holdings, Inc. 7.625 04/01/11 500,000 502,036 493,750
Cablevision Systems Corporation 7.890 04/01/09 1,000,000 1,000,000 1,002,500
Cadmus Communications Corporation 8.375 06/15/14 750,000 750,000 771,562
Cenveo Corporation 7.875 12/01/13 1,100,000 1,100,000 1,045,000
Charter Comm Holdings LLC 10.000 04/01/09 1,000,000 815,000 772,500
Chemed Corporation 8.750 02/24/11 1,125,000 1,125,000 1,217,812
Chesapeake Energy Corporation 7.000 08/15/14 1,075,000 1,116,181 1,139,500
Cincinnati Bell, Inc. 8.375 01/15/14 1,100,000 1,007,500 1,127,500
Collins & Aikman Products Co. (B) 10.750 12/31/11 1,000,000 1,026,201 225,000
Del Monte Corporation 8.625 12/15/12 225,000 225,000 247,500
Dollar Financial Group 9.750 11/15/11 600,000 600,000 618,750
Dominos, Inc. 8.250 07/01/11 292,000 289,892 310,980
Dynegy Holdings, Inc. 6.875 04/01/11 500,000 422,500 493,750
El Paso Corporation 7.875 06/15/12 1,050,000 1,063,806 1,081,500
Esterline Technologies 7.750 06/15/13 200,000 200,000 212,000
Flextronics Intl Ltd 6.500 05/15/13 400,000 400,000 414,000
Ford Motor Credit Company 7.375 10/28/09 1,000,000 997,500 977,187
G F S I, Inc. 9.625 03/01/07 750,000 678,734 682,500
Gencorp, Inc. 9.500 08/15/13 259,000 259,000 279,720
General Motors Accept Corporation 7.750 01/19/10 1,000,000 1,061,392 977,544
Goodyear Tire & Rubber Company 7.857 08/15/11 1,400,000 1,342,750 1,361,500
Great Lakes Dredge & Dock Corporation 7.750 12/15/13 750,000 679,250 568,125
GulfMark Offshore, Inc. 7.750 07/15/14 565,000 562,599 594,662
Houghton Mifflin Company 9.875 02/01/13 1,000,000 1,053,094 1,067,500
Huntsman LLC 11.625 10/15/10 324,000 320,160 379,485
Interpool, Inc. 7.350 08/01/07 750,000 763,238 766,875
Jostens I H Corporation 7.625 10/01/12 750,000 750,000 740,625
Koppers Inc. 9.875 10/15/13 700,000 700,000 756,000
Land O'Lakes, Inc. 9.000 12/15/10 750,000 750,000 808,125
Leucadia National Corporation 7.000 08/15/13 650,000 662,923 650,000
Liberty Media Corporation 5.700 05/15/13 1,000,000 951,610 930,103
Lodgenet Entertainment Corporation 9.500 06/15/13 425,000 425,000 463,250
Lyondell Chemical Company 9.500 12/15/08 900,000 916,752 957,375
M C I, Inc. 8.735 05/01/14 500,000 452,500 560,625
M G M Mirage, Inc. 6.000 10/01/09 375,000 379,881 376,875
M S X International, Inc. 11.000 10/15/07 350,000 347,004 344,750
Majestic Star Casino LLC 9.500 10/15/10 500,000 500,000 515,000
Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 209,000
Mediacom LLC/Mediacom Capital 9.500 01/15/13 1,000,000 1,003,470 997,500
Merrill Corporation 12.000 05/01/09 1,500,000 1,581,832 1,597,500
--------------------------------------------------------------------------------
23
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Interest Due Principal
CORPORATE PUBLIC SECURITIES (A) (Continued) Rate Date Amount Cost Market Value
---------------------------------------------------------------------------------------------------------------------------------
Metaldyne Corporation 11.000% 06/15/12 $ 750,000 $ 601,250 $ 485,625
Moog, Inc. 6.250 01/15/15 120,000 120,000 119,700
Mrs. Fields Brands/Finance 11.500 03/15/11 750,000 713,710 705,000
Nalco Company 7.750 11/15/11 500,000 500,000 532,500
Natl Wine & Spirits, Inc. 10.125 01/15/09 745,000 733,922 752,450
Neff Corporation 10.250 06/01/08 170,000 168,062 172,904
North Amer Energy Partner 8.750 12/01/11 400,000 400,000 344,000
Numatics, Inc. 9.625 04/01/08 550,000 539,171 551,375
O E D Corp/Diamond Jo Company Guarantee 8.750 04/15/12 1,000,000 985,960 932,500
O M Group, Inc. 9.250 12/15/11 750,000 775,708 750,000
Offshore Logistics, Inc. 6.125 06/15/13 450,000 450,000 434,250
Pacific Energy Partners 7.125 06/15/14 500,000 504,263 520,625
Pinnacle Foods Group 8.250 12/01/13 450,000 450,000 402,750
Pliant Corporation 11.625 06/15/09 744,611 761,148 796,734
Pliant Corporation 13.000 06/01/10 1,000,000 936,875 810,000
Primedia, Inc. 8.000 05/15/13 1,000,000 1,026,609 1,002,500
Quintiles Transnational Corporation 10.000 10/01/13 500,000 500,000 547,500
Rayovac Corporation 8.500 10/01/13 200,000 200,000 209,000
Rent-A-Center, Inc. 7.500 05/01/10 400,000 400,000 400,000
Rent-Way, Inc. 11.875 06/15/10 800,000 842,931 896,000
Rhodia SA 10.250 06/01/10 800,000 827,180 858,000
Rhodia SA 8.875 06/01/11 500,000 499,668 481,250
Rogers Wireless, Inc. 7.250 12/15/12 165,000 165,000 178,200
Rogers Wireless, Inc. 7.500 03/15/15 870,000 935,491 946,125
Rogers Wireless, Inc. 8.000 12/15/12 165,000 165,000 177,788
Samsonite Corporation 8.875 06/01/11 1,000,000 1,046,454 1,062,500
Sea Containers Ltd 10.500 05/15/12 785,000 766,414 802,663
Service Corp International 6.000 12/15/05 41,000 41,090 41,256
Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 389,531
Ship Finance Intl Ltd 8.500 12/15/13 750,000 750,000 713,438
Sports Club Co. 11.375 03/15/06 150,000 145,500 148,500
Stanadyne Corporation 10.000 08/15/14 1,500,000 1,500,000 1,417,500
Tekni-Plex, Inc. 12.750 06/15/10 1,000,000 960,125 685,000
Telex Communications, Inc. 11.500 10/15/08 500,000 500,000 533,750
Telex Communications, Inc. -- 01/15/09 471,915 206,820 283,149
Tenet Healthcare Corporation 6.375 12/01/11 500,000 482,500 476,250
Tenet Healthcare Corporation 9.875 07/01/14 500,000 488,370 536,250
Thermadyne Holdings Corporation 9.250 02/01/14 1,000,000 986,250 925,000
Triton P C S, Inc. 8.500 06/01/13 550,000 550,000 507,375
United Components, Inc. 9.375 06/15/13 500,000 501,875 503,750
United Rentals, Inc. 7.750 11/15/13 625,000 625,000 614,063
United Rentals, Inc. 7.000 02/15/14 500,000 500,000 476,250
Universal City Florida 7.960 05/01/10 200,000 200,000 207,500
Universal City Florida 8.375 05/01/10 200,000 200,000 208,500
Utilicorp United, Inc. 9.950 02/01/11 1,000,000 1,100,181 1,085,000
Vicorp Restaurants Inc 10.500 04/15/11 600,000 592,746 606,000
Vought Aircraft Industries 8.000 07/15/11 1,000,000 1,000,727 990,000
Warner Music Group 7.375 04/15/14 275,000 275,000 277,750
Williams Scotsman, Inc. 9.875 06/01/07 1,000,000 987,500 1,005,000
Wornick Co. 10.875 07/15/11 750,000 750,000 761,250
------------ ------------ ------------
TOTAL BONDS $ 66,272,526 65,673,742 65,059,268
============ ------------ ------------
--------------------------------------------------------------------------------
24
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.)
June 30, 2005
(Unaudited)
Shares or
Interest Due Principal
CORPORATE PUBLIC SECURITIES (A) (Continued) Rate Date Amount Cost Market Value
---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - 4.21%
D S W, Inc. (B) 200 $ 3,800 $ 4,990
H C I Direct, Inc. (B) 1,000 -- --
Lazard Ltd (B) 39,700 992,500 923,025
NeuStar, Inc. (B) 2,900 63,800 74,240
P W Eagle, Inc. (B) 196,518 1 1,149,630
PepsiAmericas, Inc. 92,145 2,006,365 2,364,441
Rent-Way, Inc. (B) 92,866 916,263 913,802
Supreme Industries, Inc. 115,722 267,325 847,085
Telex Communications, Inc. (B) 489 7 489
Telex Communications, Inc. (B) 17,707 1 17,707
Transmontaigne, Inc. (B) 258,720 798,595 2,716,560
Transmontaigne, Inc. (B) 74,606 310,582 783,363
Volcom, Inc. (B) 200 3,800 5,354
Western Alliance Bancorp (B) 200 4,400 5,080
------------ ------------
TOTAL COMMON STOCK 5,367,439 9,805,766
------------ ------------
CONVERTIBLE BONDS - 0.43%
Leucadia National Corporation 3.750% 04/15/14 $ 1,000,000 $ 1,000,000 $ 1,012,500
------------ ------------ ------------
TOTAL CONVERTIBLE BONDS $ 1,000,000 1,000,000 1,012,500
============ ------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 72,041,181 $ 75,877,534
------------ ------------
Interest Due Principal
SHORT-TERM SECURITIES: Rate/Yield Date Amount Cost Market Value
---------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 7.14%
Baxter International, Inc. 3.220% 07/01/05 $ 1,902,000 $ 1,902,000 $ 1,902,000
Centex Corporation 3.300 07/06/05 4,288,000 4,286,035 4,286,035
DaimlerChrysler NA Hldg Corporation 3.290 07/05/05 2,573,000 2,572,059 2,572,059
First Data Corporation 3.130 07/01/05 1,445,000 1,445,000 1,445,000
First Data Corporation 3.280 07/07/05 3,250,000 3,248,223 3,248,223
Verizon Network Funding 3.260 07/08/05 3,195,000 3,192,975 3,192,975
------------ ------------ ------------
TOTAL SHORT-TERM SECURITIES $ 16,653,000 $ 16,646,292 $ 16,646,292
============ ------------ ------------
TOTAL INVESTMENTS 108.92% $251,252,289 $253,869,704
============ ------------
Other Assets 4.77 11,108,874
Liabilities (13.69) (31,904,325)
------ ------------
TOTAL NET ASSETS 100.00% $233,074,253
====== ============
(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.
--------------------------------------------------------------------------------
25
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.)
June 30, 2005
(Unaudited)
Fair Value/ Fair Value/
INDUSTRY CLASSIFICATION: Market Value INDUSTRY CLASSIFICATION: (Cont.) Market Value
------------ ------------
AEROSPACE - 2.37% BUILDINGS & REAL ESTATE - 3.96%
Argo Tech Corporation $ 922,250 A W C Holding Company $ 2,226,575
Bombardier Capital, Inc. 905,000 Adorn, Inc. 2,468,901
Consolidated Foundries Holdings 2,502,570 Compression Polymers Holding 129,350
Esterline Technologies 212,000 Shelter Acquisition, Inc. 3,265,685
Vought Aircraft Industries 990,000 Texas Industries, Inc. 71,750
------------ TruStile Doors, Inc. 1,060,615
5,531,820 ------------
------------ 9,222,876
AUTOMOBILE - 8.03% ------------
America's Body Company, Inc./LCP Holding Co. 3,500,002 CARGO TRANSPORT - 2.61%
Collins & Aikman Products Co. 225,000 Kenan-Advantage Transport Company 2,449,612
Gencorp, Inc. 279,720 Ship Finance International Ltd. 713,438
Goodyear Tire & Rubber Co. 1,361,500 Tidewater Holdings, Inc. 2,907,576
Jason, Inc. 1,986,175 ------------
LIH Investors, L.P. 4,892,228 6,070,626
Metaldyne Corporation 903,825 ------------
Nyloncraft, Inc. 2,888,306 CHEMICAL, PLASTICS & RUBBER - 3.41%
Qualis Automotive LLC 2,165,062 Capital Specialty Plastics, Inc. 2,156
United Components, Inc. 503,750 Huntsman LLC 379,485
------------ Koppers Inc. 756,000
18,705,568 Lyondell Chemical Co. 957,375
------------ O M Group, Inc. 750,000
BEVERAGE, DRUG & FOOD - 6.28% P Q Corporation 1,080,750
Beta Brands Ltd - Process Chemicals LLC 288,000
Cains Foods, L.P. 599,276 Rhodia SA 1,339,250
Del Monte Corporation 247,500 Tomah Holdings, Inc. 2,386,114
Dominos, Inc. 310,980 ------------
Eagle Pack Pet Foods, Inc. 1,092,372 7,939,130
Land O'Lakes, Inc. 808,125 ------------
National Wine & Spirit Inc. 752,450 CONSUMER PRODUCTS - 7.45%
Nonni's Food Company, Inc. 2,315,673 Alh Fin LLC / ALH Fin Corporation 435,219
PepsiAmericas, Inc. 2,364,441 Appleton Papers, Inc. 292,500
Pinnacle Foods Holdings 402,750 Augusta Sportswear Holding Co. 2,150,762
River Ranch Fresh Foods LLC 2,087,046 Colibri Holdings Corporation 2,004,633
Specialty Foods Group, Inc. 140,156 Euro-Pro Corporation 1,700,439
Vicorp Restaurants, Inc. 606,000 G F S I, Inc. 682,500
Vitality Foodservice, Inc. 2,136,944 H C I Direct, Inc. --
Wornick Co. 761,250 Maverick Acquisition Company 1,150,162
------------ Neff Motivation, Inc. 172,904
14,624,963 Rayovac Corporation 209,000
------------ Royal Baths Manufacturing Company 1,047,345
BROADCASTING & Savage Sports Holdings, Inc. 2,098,716
ENTERTAINMENT - 2.76% The Tranzonic Companies 3,306,459
C C O Holdings LLC/Cap Corp 486,250 Volcom, Inc. 5,354
C S C Holdings, Inc. 493,750 Walls Industries, Inc. 2,113,050
Cablevision Systems Corporation 1,002,500 Winsloew Furniture, Inc. 14
Cenveo Corporation 1,045,000 ------------
Charter Communications Holdings LLC 248,750 17,369,057
Charter Communications Op LLC 772,500 ------------
Liberty Media Corporation 930,103 CONTAINERS, PACKAGING & GLASS - 5.31%
Lodgenet Entertainment Corporation 463,250 A E P Industries, Inc. 175,388
Mediacom Communications Corporation 997,500 Paradigm Packaging, Inc. 2,603,125
------------ Pliant Corporation 1,606,734
6,439,603 Sea Containers Ltd. 802,663
------------ Snyder Industries, Inc. 3,402,020
Tekni-Plex, Inc. 1,531,875
Vitex Packaging, Inc. 2,256,298
------------
12,378,103
------------
--------------------------------------------------------------------------------
26
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.)
June 30, 2005
(Unaudited)
Fair Value/ Fair Value/
INDUSTRY CLASSIFICATION:(Cont.) Market Value INDUSTRY CLASSIFICATION: (Cont.) Market Value
------------ ------------
DISTRIBUTION - 3.57% ARMING & AGRICULTURE - 0.00%
Affinia Group, Inc. $ 386,400 Protein Genetics, Inc. $ --
Brampton Fastener Co. Ltd 74,250 ------------
Corvest Group, Inc. 3,712,360 FINANCIAL SERVICES - 3.85%
Kele and Associates, Inc. 2,260,343 BCP Caylux Holding Lux SCA 543,200
QualServ Corporation 1,885,614 Dollar Financial Group 618,750
Strategic Equipment & Supply Corporation, Inc. -- East River Ventures I, L.P. 22,685
------------ Ford Motor Credit Co. 977,187
8,318,967 General Motors Acceptance Corporation 977,544
------------ Highgate Capital LLC 2,723
DIVERSIFIED/CONGLOMERATE, Interpool, Inc. 766,875
MANUFACTURING - 3.99% Lazard LLC 1,679,578
Activant Solutions Inc 1,488,600 Leucadia National Corporation 1,662,500
AmerCable, Inc. 2,116,093 Mrs. Fields Brands / Finance 705,000
Coining of America LLC 1,864,999 Victory Ventures LLC 2
Dexter Magnetics Technologies, Inc. 1,047,037 Western Alliance Bancorp 5,080
Douglas Dynamics LLC 617,400 Williams Scotsman, Inc. 1,005,000
Evans Consoles, Inc. -- ------------
Great Lakes Dredge & Dock Corp 568,125 8,966,124
Justrite Manufacturing Acquisition Co. 1,595,243 ------------
------------ HEALTHCARE, EDUCATION
9,297,497 & CHILDCARE - 4.03%
------------ A T I Acquisition Company 2,007,268
DIVERSIFIED/CONGLOMERATE, American Hospice Management 2,655,422
SERVICE - 6.88% Interactive Health LLC 801,000
Abitibi-Consolidated, Inc. 1,005,000 MedAssist, Inc. 2,380,319
Allied Waste NA 1,022,500 Quintiles Transnational Corporation 547,500
CapeSuccess LLC 5,862 Tenet Healthcare Corporation 1,012,500
Chemed Corporation 2,771,253 ------------
Diversco, Inc./DHI Holdings, Inc. 2,088,103 9,404,009
Dwyer Group, Inc. 2,571,339 ------------
Keystone North America, Inc. 387,822 HOME & OFFICE FURNISHINGS,
Lancaster Laboratories, Inc. 1,530,147 HOUSEWARES, AND DURABLE
Moss, Inc. 1,637,534 CONSUMER PRODUCTS - 3.69%
M S X International, Inc. 344,750 Connor Sport Court International, Inc. 2,153,661
Service Corporation International 1,068,756 Home Decor Holding Company 2,172,529
U S M Holdings Corp. 1,177,319 Hussey Seating Corporation 1,002,493
Universal City Florida 416,000 Samsonite Corporation 1,062,500
------------ U-Line Corporation 2,209,249
16,026,385 ------------
------------ 8,600,432
ELECTRONICS - 3.57% ------------
A E S Corporation 224,500 LEISURE, AMUSEMENT,
Arrow Electronics, Inc. 2,077,538 ENTERTAINMENT - 1.64%
Calpine Corporation 370,000 Bally Total Fitness Holding Corp 117,787
Directed Electronics, Inc. 2,143,425 Keepsake Quilting, Inc. 1,612,721
Flextronics International Ltd. 414,000 M G M Mirage, Inc. 376,875
N R G Energy, Inc. 578,140 Majestic Star Casino LLC 515,000
Precision Dynamics, Inc. 1,214,577 O E D Corp/Diamond Jo Company Guarantee 932,500
Siebe PLC 560,625 Warner Music Group 277,750
Texas Genco LLC/Financing 742,013 ------------
------------ 3,832,633
8,324,818 ------------
------------
--------------------------------------------------------------------------------
27
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.)
June 30, 2005
(Unaudited)
Fair Value/ Fair Value/
INDUSTRY CLASSIFICATION:(Cont.) Market Value INDUSTRY CLASSIFICATION: (Cont.) Market Value
------------ ------------
MACHINERY - 9.77% RETAIL STORES - 4.48%
Aearo Co. $ 450,000 Blockbuster, Inc. $ 444,125
C & M Conveyor, Inc. 2,126,073 D S W, Inc. 4,990
Integration Technology Systems, Inc. 1,197,573 IAAI Finance Corporation 823,701
Manitowoc Company, Inc. 209,000 Neff Corporation 1,181,312
Maxon Corporation 2,600,068 Olympic Sales, Inc. 4,163,499
Numatics, Inc. 551,375 Rent-A-Center, Inc. 400,000
P W Eagle, Inc. 1,149,630 Rent-Way, Inc. 1,809,801
Safety Speed Cut Manufacturing Company, Inc. 2,675,208 Sports Club Company 148,500
Stanadyne Corporation 1,417,500 TVI, Inc. 382,500
Synventive Equity LLC 3,714,261 United Rentals, Inc. 1,090,313
Thermadyne Holdings Corporation 925,000 ------------
Tronair, Inc. 2,730,316 10,448,741
Tubular Textile Machinery 2,413,798 ------------
Weasler Holdings LLC 623,035 TECHNOLOGY - 0.61%
------------ Cymer, Inc. 804,313
22,782,837 Delstar Holding Corp. 441,596
------------ Magnachip Semiconductor 96,000
MEDICAL DEVICES/BIOTECH - 1.36% NeuStar, Inc. 74,240
Bausch & Lomb, Inc. ------------
Beacon Medical Products, Inc. 1,972,952 1,416,149
Coeur, Inc. 1,208,020 ------------
E X C Acquisition Corporation -- TELECOMMUNICATIONS - 2.61%
------------ Alamosa Delaware, Inc. 783,906
3,180,972 Cincinnati Bell, Inc. 1,127,500
------------ Intelsat Bermuda, Ltd. 974,125
MINING, STEEL, IRON Jordan Telecom Products --
& NON PRECIOUS METALS - 0.05% MCI, Inc. 560,625
Better Minerals & Aggregates 108,991 Rogers Wireless, Inc. 1,302,113
------------ Telex Communications, Inc. 835,095
OIL AND GAS - 3.68% Triton P C S, Inc. 507,375
Chesapeake Energy Corporation 1,139,500 ------------
Dynegy Holdings, Inc. 493,750 6,090,739
GulfMark Offshore, Inc. 594,662 ------------
Mustang Ventures Company 694,833 UTILITIES - 1.57%
North American Energy Partners 344,000 Bill Barrett Corporation
Offshore Logistics, Inc. 434,250 El Paso Corporation 1,081,500
Pacific Energy Partners 520,625 Markwest Energy 472,625
Supreme Industries, Inc. 847,085 Moog, Inc. 119,700
Transmontaigne, Inc. 3,499,923 Nalco Co. 532,500
------------ Tenaska Alabama Partners LP 364,500
8,568,628 Utilicorp United, Inc. 1,085,000
------------ ------------
PHARMACEUTICALS - 0.62% 3,655,825
Enzymatic Therapy, Inc. 1,439,693 ------------
------------ WASTE MANAGEMENT/
PUBLISHING/PRINTING - 2.75% POLLUTION - 0.88%
American Media Operation, Inc. 852,750 Terra Renewal Services, Inc. 2,056,258
Cadmus Communications Corporation 771,562 ------------
Houghton Mifflin Co. 1,067,500 Corporate Restricted and
Jostens I H Corporation 740,625 Public Securities - 101.78% $237,223,412
Merrill Corporation 1,597,500 ============
Primedia, Inc. 1,002,500
Sheridan Acquisition Corporation 389,531
------------
6,421,968
------------
See Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------
28
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 diversified closed-end management investment company. Babson
Capital Management LLC, formerly David L. Babson & Company Inc. ("Babson
Capital"), a whollyowned indirect 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.
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
29
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Trustees of the Trust, including a majority of the Trustees who are not
interested persons of the Trust or of Babson Capital, the Trust's
investment adviser. In making valuations, the Trustees will consider
reports by Babson Capital analyzing each portfolio security in accordance
with the relevant factors referred to above. Babson Capital has agreed to
provide such reports to the Trust at least quarterly. The consolidated
financial statements include private placement restricted securities valued
at $146,086,156 (62.68% of net assets) as of June 30, 2005 whose values
have been determined 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 June 30, 2005, 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 taxes on net investment income and short-term
capital gains is considered necessary because the Trust has elected to be
taxed as a "regulated investment company" under the Internal Revenue Code,
and intends to maintain this qualification and to distribute 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.
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
(described in Footnote 1, above) 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 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. For the six months
ended June 30, 2005 the MMCI Subsidiary Trust has accrued tax expense on
net realized and unrealized gains of $192,774 and $736,369, respectively.
E. DISTRIBUTIONS TO SHAREHOLDERS:
The Trust records distributions to shareholders from net investment income
and net realized gains, if any, on the exdividend date. The Trusts net
investment income dividend is declared four times per year, in April, July,
October and December. The Trusts net realized capital gain distribution, if
any, is declared in December.
30
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3. INVESTMENT SERVICES CONTRACT
A. SERVICES:
Under an Investment Services Contract with the Trust dated July 1, 1988
(the "Current Contract"), Babson Capital 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
Capital has further agreed that it will request each issuer of securities,
which MassMutual is prepared to purchase in a negotiated 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 Capital
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 ("SEC") as may apply, it will invest concurrently with
the Trust in any such investment. Babson Capital 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 Current Contract, Babson Capital 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.
B. FEES:
Under the Current Contract, the Trust pays Babson Capital 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% of net asset value, approximately equivalent to plus or minus
0.25% 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 of the
Standard & Poor's Industrials Composite (formerly called the Standard &
Poor's Industrial Price Index) and the Lehman Brothers Intermediate U.S.
Credit Index (formerly called the Lehman Brothers 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 readily
available to the general public. Babson Capital obtains the information for
this index from Factset Research Systems. The three-year annualized return
for the Standard & Poor's Industrials Composite for the period ended June
30, 2005 was 8.24%. 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. Under the Current Contract, 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.
In connection with a nationwide sweep examination of investment companies
having performance fees conducted by the staff of the Fort Worth, Texas
regional office of the SEC, the Trust recently received a letter (the "SEC
Letter") stating that the SEC staff interprets Section 205 of the
Investment Advisers Act of 1940 (the "Advisers Act") and the rules
promulgated thereunder in a way that is inconsistent with the methodology
for calculating the Performance Adjustment set forth in the Current
Contract. Retroactive adjustment to the calculation methodology for the
period since July 1, 1988 (the period during which the Performance
Adjustment has been in effect) using the staff's methodology would result
in a reduction in aggregate investment advisory fees for that period. As a
result, Babson Capital reduced its investment advisory fee for the quarters
ended December 31, 2004 and March 31, 2005 by an aggregate amount of
$269,788 ($176,223 for the quarter ended December 31, 2004 and $93,565 for
the quarter ended March 31, 2005), which represented the excess of the
aggregate investment advisory fee calculated total under the Current
Contract for the period from July 1, 1988 through March 31, 2005, over the
fee calculated using the methodology identified by the SEC staff, together
with interest. Babson Capital has also agreed to waive, for each quarter
beginning July 1, 2004, the amount, if any, by which (A) the investment
advisory fee calculated in the manner described in the Current Contract
exceeds (B) the sum of (i) 5/16 of 1% times the ending net asset value for
that quarter plus or minus (ii) the Performance Adjustment applied against
the average quarter end net assets for the Trust for the twelve-quarter
period ending on such quarter, which is consistent with the methodology
identified by the SEC staff (the "Fee Waiver"). The Performance Adjustments
for the three-month period ended March 31 and June 30, 2005 were:
31
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
PERFORMANCE
ADJUSTMENT AMOUNT
----------- ----------
MARCH 31, 2005 0.0625% $122,255*
JUNE 30, 2005 0.0625% $125,025**
*Net of waiver of $18,048.
**Net of waiver of $20,570.
C. BASIS FOR BOARD RENEWAL OF CURRENT CONTRACT AND RECOMMENDATION TO
APPROVE PROPOSED NEW CONTRACT
At a meeting of the Board of Trustees of the Trust held on April 22, 2005,
the Board of Trustees (including a majority of the Trustees who are not
"interested persons" of the Trust or Babson Capital) unanimously (1)
approved, and recommend that the shareholders of the Trust approve, a new
investment services contract (the "New Contract" and together with the
Current Contract the "Contracts"), and (2) approved the continuance of the
Current Contract until such time as the New Contract becomes effective
following its approval by the Trust's shareholders. See Footnote 10.
The proposed New Contract between the Trust and Babson Capital provides for
a quarterly investment advisory fee of 0.3125% of the net asset value of
the Trust each quarter, which is approximately equal to 1.25% annually,
with no performance adjustment (the "Flat Fee"). The proposed New Contract
requires the approval of a majority of the Trust's shareholders at a
Special Meeting of Shareholders on August 8, 2005 and, if approved, would
go into effect on October 1, 2005 (or the first day of the first quarter
following shareholder approval). The New Contract provides that for its
first eighteen months, the management fee cannot exceed the amount that
Babson Capital is paid under the Trust's existing investment advisory
arrangements.
Prior to the meeting, the Board of Trustees requested and received from
Ropes & Gray LLP ("Ropes & Gray"), counsel to the Trust, a memorandum
describing the Board of Trustees' legal responsibilities in connection with
its review and approval of the Contracts. The Board of Trustees also
requested and received from Babson Capital extensive written and oral
information regarding: the principal terms of the Contracts; the reasons
why Babson Capital was proposing the New Contract; Babson Capital and its
personnel; the Trust's investment performance, including comparative
performance information; the nature and quality of the services provided by
Babson Capital to the Trust; financial strength of Babson Capital; the fee
arrangements, including a comparison of the fees payable under the Current
and New Contracts; fee and expense information, including comparative fee
and expense information; profitability of the advisory arrangement to
Babson Capital; and "fall-out" benefits to Babson Capital resulting from
the Contracts.
Among other things, the Trustees discussed and considered with management
(i) the aforementioned guidance provided by Ropes & Gray and the
information provided by Babson Capital prior to the meeting and (ii) the
reasons Babson Capital put forth in support of its recommendation that the
Trustees approve the New Contract without the Current Contract's
Performance Adjustment. These reasons are summarized below.
o Performance Fees Have Come Under Increased Regulatory Scrutiny. Babson
Capital has addressed the issues raised in the SEC Letter temporarily
by means of the Fee Waiver Letter. Switching to the Flat Fee under the
proposed New Contract would represent a more permanent solution.
o The Fee Structure of the New Contract is Fair to Trust Shareholders.
Since 1990, the Trust would have paid Babson Capital and its
predecessor, MassMutual, an average annual advisory fee under the
Current Contract (calculated in accordance with the Fee Waiver) that
was higher than the 1.25% flat fee being proposed under the New
Contract. Moreover, for the first eighteen months of the New Contract,
shareholders of the Trust are guaranteed that they will not pay an
advisory fee greater than what would be due under the Current
Contract.
o The Fee Structure of the New Contract is Fair to Babson Capital. Even
without a performance incentive fee and, potentially, with a lower
overall fee under the New Contract, Babson Capital will be fairly
compensated and incented to provide high quality investment management
services to the Trust since the Trust is required to be offered the
opportunity to co-invest in portfolio securities with MassMutual,
Babson Capital's corporate parent.
o The Fee Structure of the New Contract is Fair in Light of the Services
to be Provided. There will be no change in the level of services
required to be delivered by Babson Capital under the New Contract.
o Changing from a Performance Fee to a Fixed Fee Results in Greater
Certainty. Since neither Babson Capital nor the Trust has any control
over the make-up or public availability of the two market indices used
as the performance measure under the Current Contract, there is no
certainty that the indices will always be available measures under
Section 205 of the Advisers Act. Switching
32
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
to the Flat Fee under the proposed New Contract would eliminate this
uncertainty.
In their deliberations, the Trustees considered all factors that they
believed relevant. Although, the Trustees did not identify any particular
information that was all-important or controlling, and individual Trustees
attributed different weight to various factors, the following is a summary
of the material factors and conclusions that formed the basis of the
Trustees' determination to (1) approve, and recommend that the shareholders
of the Trust approve, the proposed New Contract, and (2) approve the
continuance of the Current Contract subject to the Fee Waiver until such
time as the New Contract becomes effective following its approval by the
Trust's shareholders.
NATURE, EXTENT, AND QUALITY OF SERVICES TO BE PROVIDED BY BABSON CAPITAL
In evaluating the scope and quality of the services provided by Babson
Capital, the Trustees considered, among other factors: (i) the scope of
services required to be provided by Babson Capital under the Contracts;
(ii) Babson Capital's ability to find and negotiate private placement
securities having equity features; (iii) the experience and quality of
Babson Capital's staff; (iv) the financial strength of Babson Capital's
financial condition; (v) the nature of the private placement market
compared to public markets (including the fact that finding, analyzing,
negotiating and servicing private placement securities is more
labor-intensive than buying and selling public securities and the
administration of private placement securities is more extensive,
expensive, and requires greater time and expertise than a portfolio of only
public securities); (vi) the Trust's ability to co-invest in negotiated
private placements with MassMutual; and (vii) the expansion of the scope of
services provided by Babson Capital as result of regulatory and legislative
initiatives that have required increased legal, compliance and business
attention and diligence. Based on such considerations, the Board of
Trustees concluded that, overall, they are satisfied with the nature,
extent and quality of services provided, and expected to be provided in the
future, under both the renewed Current Contract and the proposed New
Contract.
INVESTMENT PERFORMANCE
The Board also examined the Trust's short-term, intermediate- term, and
long-term performance as compared against appropriate benchmark indices
presented at the meeting, which showed that the Trust had outperformed such
indices for the 1, 3, 5, and 10-year periods. In addition, the Trustees
considered comparisons of the Trust's performance with the performance of
(i) selected closed-end investment companies and funds that may invest in
private placement securities and/or bank loans; (ii) selected business
development companies with comparable types of investments; and (iii)
investment companies included in the Lipper closed-end bond universe. It
was acknowledged that, while such comparisons are helpful in judging
performance, they are not directly comparable in terms of types of
investments and due to the fact that the business development companies
often reported returns based on market value, which is affected by factors
other than the performance of the underlying portfolio investments. Based
on these considerations and the detailed performance information provided
to the Trustees at the regular Board meetings each quarter, the Trustees
concluded that the Trust's absolute and relative performance over time have
been sufficient to warrant approval of the Contracts.
ADVISORY FEE/COST OF SERVICES PROVIDED AND PROFITABILITY/ MANAGER'S
"FALL-OUT" BENEFITS
In connection with the Trustees' consideration of the advisory fee paid by
the Trust to Babson Capital under the Current Contract and the proposed New
Contract, Babson Capital noted that it was unaware of any closed-end
investment companies that are directly comparable to the Trust in terms of
the types of investments and percentages invested in private placement
securities (which require more extensive advisory and administrative
services than a portfolio of publicly traded securities, as previously
discussed) other than MassMutual Participation Investors ("Participation
Investors"), which also is advised by Babson Capital and pays a quarterly
advisory fee equal to 0.225% of the fund's NAV (an amount equivalent to
0.90% on an annual basis). In considering the fee rate recommended under
the New Contract, the Trustees noted: the Trust's different investment
objectives and that the 0.90% annual advisory fee for Participation
Investors has been in effect since 1988, whereas the annual advisory fee
for Tower Square Capital Partners, L.P., a more recent private mezzanine
fund managed by Babson Capital that commenced operations in 2002, is 1.5%
of committed capital during the 5 year investment period and 1.25% of net
invested capital thereafter plus an incentive allocation of 20% of net
realized gains after investors have received a cumulative 8% internal rate
of return. With respect to the proposed Flat Fee under the New Contract,
the Trustees also took into consideration the following factors: switching
to the Flat Fee provides a permanent response to the issues raised in the
SEC Letter and the increased regulatory scrutiny surrounding performance
fees more generally; the advisory fee proposed under the New Contract is
less than the average annual fee that had been paid pursuant to the
performance fee formula under the Current Contract; shareholders would be
guaranteed not to pay more fees under the New Contract during the
Transition Period than would have been paid under the Current Contract;
there would be no changes in the services being provided by Babson Capital
to the Trust
33
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
under the New Contract; and Babson Capital has sufficient incentives to
continue to provide the same high level of services under the New Contract
even without the performance fee. With respect to the advisory fee payable
under the Current Contract, the Trustees also considered the
appropriateness of the two indices that comprised the Trust's performance
benchmark and the Fee Waiver agreed to by Babson Capital. At the request of
the Trustees, Babson Capital also provided information concerning the
profitability of Babson Capital's advisory relationship with the Trust. The
Board also considered the noneconomic benefits Babson Capital and its
affiliates derived from its relationship with the Trust, including the
reputational benefits derived from having the Trust listed on the New York
Stock Exchange, and the de minimis amount of commissions resulting from the
Trust's portfolio transactions used by Babson Capital for third-party soft
dollar arrangements (less than $1,500). The Trustees recognized that Babson
Capital should be entitled to earn a reasonable level of profits for
services provided to the Trust and, based on their review, concluded that
they were satisfied that Babson Capital's level of profitability from its
relationship with the Trust was not excessive and that the advisory fee
structures under the Current Contract and the New Contract are reasonable.
ECONOMIES OF SCALE
The Trustees considered the concept of economies of scale and possible
advisory fee reductions if the Trust were to grow in assets. Given that the
Trust is not continuously offering shares, such growth seemed unlikely. The
Trustees also examined the scale down features of selected competitive
funds and noted that the minimum starting point for fee reductions in those
funds was at least $200 million whereas the Trust had $218,505,148 in net
assets as of December 31, 2004. The Trustees further noted that the Trust
is a relatively small, closed-end registered investment company that has
not grown significantly in the past and is not likely to grow significantly
in the future. The Trustees concluded that the absence of breakpoints in
the fee schedule under the Current Contract and the proposed New Contract
were acceptable given the Trust's size and circumstances.
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 six months
ended June 30, 2005, the Trust incurred total interest expense on the Note
of $739,000.
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 (ii) the principal of the Notes proposed to be redeemed.
B. REVOLVING CREDIT AGREEMENT:
The Revolving Credit Agreement with Fleet National Bank, dated June 29,
2000, matured on May 31, 2005. Effective May 31, 2005, the Trust has
entered into a Revolving Credit Agreement (the "New Revolver";
collectively, the "Revolvers") with The Royal Bank of Scotland PLC, in the
principal amount of $25,000,000, maturing May 31, 2008. The New Revolver
bears interest payable 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 .50% per annum. Per annum interest on
LIBOR Rate Loans equals .37% plus the London Inter Bank Offered Rate
("LIBOR") rate, divided by 1 minus LIBOR Reserve Rate. The Trust also
incurs expense on the undrawn portion of the total New Revolver at a rate
of .15% per annum. The Trust incurred closing costs on the New Revolver of
$25,000.
As of June 30, 2005, there was $9,000,000 in outstanding loans against the
New Revolver and the average rate of interest for the six months ended June
30, 2005 attributable to the Revolvers was 3.11%. For the six months ended
June 30, 2005, the Trust incurred total interest expense on the Revolvers
of $152,593, plus $17,876 related to the undrawn portion.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE SIX MONTHS
ENDED 6/30/2005
COST OF PROCEEDS FROM
INVESTMENTS SALES OR
ACQUIRED MATURITIES
------------ ------------
Corporate restricted securities $ 30,884,874 $ 52,082,440
Corporate public securities 12,775,417 9,622,140
Short-term securities 389,394,470 375,132,697
34
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The aggregate cost of investments was substantially the same for financial
reporting and federal income tax purposes as of June 30, 2005. The net
unrealized appreciation of investments for financial reporting and federal
tax purposes as of June 30, 2005 is $1,881,046 and consists of $25,378,697
appreciation and $23,497,651 depreciation.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS
MARCH 31, 2005
AMOUNT PER SHARE
------ ---------
Investment income $5,534,814
Net investment income 4,176,321 $0.46
Net realized and unrealized
gain on investments 1,164,599 0.13
JUNE 30, 2005
AMOUNT PER SHARE
------ ---------
Investment income $5,790,885
Net investment income 4,257,224 0.47
Net realized and unrealized gain
on investments (net of taxes) 7,765,845 0.86
7. AGGREGATE REMUNERATION PAID TO OFFICERS, TRUSTEES AND THEIR AFFILIATED
PERSONS
For the six months ended June 30, 2005, the Trust paid its Trustees
aggregate remuneration of $74,000. The Trust does not pay any compensation
to any of its Trustees who are "interested persons" (as defined by the
Investment Company Act of 1940, as amended (the "1940 Act")) of the Trust.
Messers. Reese and Joyal were each classified as "interested persons" of
the Trust.
All of the Trust's officers are employees of Babson Capital or MassMutual.
Pursuant to the Investment Services Contract, the Trust does not compensate
its officers who are employees of Babson Capital or MassMutual.
For the six months ended June 30, 2005, Mr. Reese, one of the Trust's
Trustees, was an "affiliated person" (as defined by the 1940 Act) of
MassMutual and Babson Capital. The Trust did not make any payments to
Babson Capital for the six months ended June 30, 2005, other than amounts
payable to Babson Capital pursuant to the Investment Services Contract. For
the six months ended June 30, 2005, the Trust paid the following amounts to
MassMutual, exclusive of interest expense on the Note explained in Footnote
4A:
Preparation of the Trust's Quarterly
and Annual Reports to Shareholders $11,868
Preparation of Certain of the Trust's
Shareholder communications 1,264
Preparation of the Trust's
Annual Proxy Statements 1,084
-------
$14,216
-------
8. CONTINGENCIES
The Trust, together with other investors, including MassMutual, is a
plaintiff in litigation connected with private placement investments made
by the Trust in Sharp International Corporation ("Sharp"). Three managing
shareholders of Sharp, which is currently being liquidated in Chapter 11
liquidation proceedings, have pleaded guilty to criminal fraud charges.
Initially, 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 was
settled in the Spring of 2005. Under the terms of the settlement agreement,
the Trust recovered all legal fees it incurred to prosecute the lawsuit, as
well as additional amounts. A related lawsuit brought by the Trustee of the
Sharp bankruptcy estate against Sharp's auditors on behalf of unsecured
creditors, including the Trust, was also settled at the same time. Total
net proceeds to be distributed to the Trust as a result of the settlement
of these two lawsuits against Sharp's auditors are expected to be
approximately $1,400,000, of which $866,275 has already been received by
the Trust.
9. RESULTS OF SHAREHOLDER MEETING
The Annual Meeting of Shareholders was held on Friday, April 22, 2005.
Prior to the Annual Meeting, Steve Kandarian resigned from the Board of
Trustees effective as of April 11, 2005. Mr. Kandarian also withdrew his
agreement to stand for re-election. As a result, the size of the Board of
Trustees was reduced from 8 to 7 members and only two Trustees stood for
re-election at the Annual Meeting.
At the Annual Meeting, the Shareholders were asked to vote to re-elect Jack
A. Laughery and Corine T. Norgaard as trustees, each for a three-year term.
The Trust's other trustees (Donald E. Benson, Donald Glickman, Martin T.
Hart, Robert E. Joyal and Stuart H. Reese) continued to serve their
respective terms following the April 22, 2005 Annual Shareholders Meeting.
The results of the Shareholders votes are set forth below.
35
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
JACK A. CORINE T.
TRUSTEE: LAUGHERY NORGAARD
------------------------------------------------------------------------
SHARES FOR: 7,060,588 7,055,303
WITHHELD 88,100 93,385
TOTAL 7,148,688 7,148,688
% OF SHARES
VOTED FOR 98.77% 98.69%
10. SUBSEQUENT EVENTS
Prior to the Board of Trustees July 15, 2005 quarterly meeting, Stuart H.
Reese stepped down as a Trustee and Chairman of the Board of Trustees as a
result of his new position as President and CEO of MassMutual. At the
quarterly meeting the Board appointed Roger W. Crandall as Trustee to
complete the unexpired term of the Board seat vacated by Mr. Reese. The
Board also elected Mr. Crandall to the office of Chairman of the Board. Mr.
Crandall is an "interested person" of the Trust as defined in the 1940 Act.
In addition, the Board of Trustees voted to expand the Board from seven to
eight Trustees and appointed Michael H. Brown as a Trustee to a three-year
term of office.
At the Special Meeting of Shareholders held on August 8, 2005, shareholders
of record of the Trust at the close of business on June 10, 2005 voted to
approve the new Investment Services Contract between the Trust and Babson
Capital described in Footnote 3.C.
36
TRUSTEES OFFICERS
Donald E. Benson* Roger W. Crandall Chairman
Michael H. Brown Clifford M. Noreen President
Roger W. Crandall James M. Roy Vice President &
Donald Glickman Chief Financial
Martin T. Hart* Officer
Robert E. Joyal Stephen L. Kuhn Vice President &
Jack A. Laughery Secretary
Corine T. Norgaard* Michael P. Hermsen Vice President
Mary Wilson Kibbe Vice President
Michael L. Klofas Vice President
Richard E. Spencer, II Vice President
Laura L. Grant Treasurer
John T. Davitt, Jr. Comptroller
Mary Ellen Wesneski Chief Compliance
Officer
*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.
[LOGO]
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D8 1039 805
ITEM 2. CODE OF ETHICS.
Not Applicable for this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not Applicable for this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not Applicable for this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not Applicable for this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable for this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END
MANAGEMENT INVESTMENT COMPANIES.
Not Applicable for this filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not Applicable for this filing.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not Applicable for this filing.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable for this filing.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The principal executive officer and principal financial officer
of the Registrant evaluated the effectiveness of the Registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")) as of a
date within 90 days of the filing date of this report and based
on that evaluation have concluded that such disclosure controls
and procedures are effective to provide reasonable assurance that
material information required to be disclosed by the Registrant
on Form N-CSR is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange
Commission's rules and forms.
(b) There were no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act)
during the second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to
materially affect, the Registrant's internal control over
financial reporting.
ITEM 12. EXHIBITS.
(a)(1) ANY CODE OF ETHICS, OR AMENDMENTS THERETO, THAT IS THE SUBJECT OF
DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT
INTENDS TO SATISFY THE ITEM 2 REQUIREMENTS THROUGH THE FILING OF
AN EXHIBIT.
Not Applicable for this filing.
(a)(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE OFFICER AND
PRINCIPAL FINANCIAL OFFICER OF THE REGISTRANT AS REQUIRED BY RULE
30a-2 UNDER THE ACT.
Attached hereto as EX-99.31.1
Attached hereto as EX-99.31.2
(a)(3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23c-1
UNDER THE ACT (17 CFR 270.23c-1) SENT OR GIVEN DURING THE PERIOD
COVERED BY THE REPORT BY OR ON BEHALF OF THE REGISTRANT TO 10 OR
MORE PERSONS.
Not Applicable for this filing.
(b) CERTIFICATIONS PURSUANT TO RULE 30a-2(b) UNDER THE ACT.
Attached hereto as EX-99.32
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): MassMutual Corporate Investors
----------------------------------
By: /s/ Clifford M. Noreen
----------------------------------
Clifford M. Noreen, President
----------------------------------
Date: September 6, 2005
----------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /s/ Clifford M. Noreen
----------------------------------
Clifford M. Noreen, President
----------------------------------
Date: September 6, 2005
----------------------------------
By: /s/ James M. Roy
----------------------------------
James M. Roy, Vice President, and
Chief Financial Officer
----------------------------------
Date: September 6, 2005
------------------------------