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, P.O. Box 15189, Springfield, MA 01115-5189
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(Address of principal executive offices) (Zip code)
Patricia J. Walsh, Vice President, Secretary and Chief Legal Officer
1500 Main Street, Suite 2800, P.O. Box 15189, Springfield, MA 01115-5189
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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: 12/31/08
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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, 100 F Street NE,
Washington, DC 20549. 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 annual shareholder report transmitted to
shareholders pursuant to Rule 30e-1 of the Investment Company Act of
1940, as amended.
[LOGO] MASSMUTUAL CORPORATE INVESTORS
2008 ANNUAL REPORT
MASSMUTUAL CORPORATE INVESTORS
c/o Babson Capital Management LLC
1500 Main Street
Suite 600, P.O. Box 15189
Springfield, Massachusetts 01115-5189
(413) 226-1516
http://www.BabsonCapital.com/mci
ADVISER
Babson Capital Management LLC
1500 Main Street, P.O. Box 15189
Springfield, Massachusetts 01115-5189
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
MCI
Listed
NYSE
PROXY VOTING POLICIES & PROCEDURES;
PROXY VOTING RECORD
The Trustees of MassMutual Corporate Investors (the "Trust") have delegated
proxy voting responsibilities relating to the voting of securities held by the
Trust to Babson Capital Management LLC ("Babson Capital"). A description of
Babson Capital's proxy voting policies and procedures is available (1) without
charge, upon request, by calling, toll-free 1-866-399-1516; (2) on the Trust's
website at http://www.BabsonCapital.com/mci; and (3) on the U.S. Securities and
Exchange Commission's ("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, 2008 is available (1) on the
Trust's web-site at http://www.BabsonCapital.com/mci; and (2) on the SEC's
website at http://www.sec.gov.
FORM N-Q
The Trust files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. This information is
available (i) on the SEC's website at http://www. sec.gov; and (ii) at the SEC'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 on the Trust's website at http://
www.BabsonCapital.com/mci or upon request by calling, toll-free, 1-866-399-1516.
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MassMutual Corporate Investors
MASSMUTUAL CORPORATE INVESTORS
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MassMutual Corporation Investors is a closed-end investment company, first
offered to the public over 35 years ago, whose shares are traded on the New York
Stock Exchange.
INVESTMENT OBJECTIVE & POLICY
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MassMutual Corporate Investors (the "Trust") is a closed-end 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 either the New York Stock Exchange listings or Closed-End Fund Listings.
The Trust's investment objective is to maintain a portfolio of securities
providing a fixed yield and at the same time offering an opportunity for capital
gains. The Trust's principal investments are privately placed, below-investment
grade, long-term 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 in private placement transactions. These
investments are typically mezzanine debt instruments with accompanying private
equity securities made to small or middle market 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. Below-investment grade or
high yield securities have predominantly speculative characteristics with
respect to the capacity of the issuer to pay interest and repay principal.
Babson Capital Management LLC ("Babson Capital") 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.
In this report you will find a complete listing of the Trust's holdings. We
encourage you to read this section carefully for a better understanding of the
Trust. We cordially invite all shareholders to attend the Trust's Annual Meeting
of Shareholders, which will be held on April 24, 2009 at 1:30 P.M. in
Springfield, Massachusetts.
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MassMutual Corporate Investors 1
TOTAL ANNUAL PORTFOLIO RETURN (AS OF 12/31 EACH YEAR)*
[BAR CHART APPEARS HERE]
MASSMUTUAL CORPORATE 7.53 7.28 5.91 4.80 22.61 22.76 20.04 18.06 8.72 -10.34
INVESTORS (BASED ON CHANGE
IN THE NET ASSET VALUE WITH
REINVESTED DIVIDENDS)
RUSSELL 2000 INDEX 21.26 -3.03 2.49 -20.48 47.25 18.33 4.55 18.37 -1.57 -33.79
BARCLAYS CAPITAL U.S. 2.39 -5.86 5.28 -1.41 28.97 11.13 2.74 11.85 1.87 -26.16
CORPORATE HIGH YIELD INDEX
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
* Data for MassMutual Corporate Investors (the "Trust") represents portfolio
returns based on change in the Trust's net asset value assuming the reinvestment
of all dividends and distributions. These returns differ from the total
investment return based on market value of the Trust's shares due to the
difference between the Trust's net asset value and the market value of its
shares outstanding (see page 12 for total investment return based on market
value). Past performance is no guarantee of future results.
PORTFOLIO COMPOSITION AS OF 12/31/08*
[PIE CHART APPEARS HERE]
Private / 144A Public High
High Yield Debt Yield Debt
64.6% 15.7%
Private / Restricted Public Equity
Equity 1.1%
14.9%
Cash & Short Term
Investments
3.7%
*Based on value of total investments (including cash)
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2 MassMutual Corporate Investors
TO OUR SHAREHOLDERS
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I am pleased to share with you the Trust's Annual Report for the year ended
December 31, 2008.
THE TRUST'S 2008 PORTFOLIO PERFORMANCE
The Trust's net total portfolio rate of return for 2008 was negative 10.34%, as
measured by the change in net asset value and assuming the reinvestment of all
dividends and distributions. The Trust's total net assets were $208,143,519, or
$22.33 per share, as of December 31, 2008. This compares to $251,163,022, or
$27.19 per share, as of December 31, 2007. The Trust paid a quarterly dividend
of 54 cents per share for each of the four quarters of 2008. Including the
fourth quarter dividend paid in January 2009, total dividends for the year were
$2.16 per share.
The table below lists the average annual net returns of the Trust's portfolio,
based on the change in net assets and assuming the reinvestment of all dividends
and distributions. Average annual returns of the Barclays Capital U.S. Corporate
High Yield Index and the Russell 2000 Small Cap Equity Index for the 1, 3, 5 and
10 years ended December 31, 2008 are provided for comparison.
Barclays Capital U.S. Russell
The Trust Corporate High Yield Index 2000 Index
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1 Year -10.34% -26.16% -33.79%
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3 Year 4.79% -5.59% -8.29%
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5 Year 11.14% -0.80% -0.93%
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10 Year 10.29% 2.17% 3.02%
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Past performance is no guarantee of future results.
The year 2008 was a challenging one at all levels. The U.S. economy declined
into a recession and most asset classes performed below expectations. The
mortgage and credit market crisis that began in mid-2007 expanded into a
widespread economic recession that reached beyond the U.S. into every corner of
the world. As credit markets weakened, businesses that relied on borrowing,
including a number of well known financial firms, could not get the funds they
needed and either closed or were acquired by others. Governments around the
globe pumped capital into various institutions to try to improve the situation,
but this had limited success. A crisis in investor confidence led to a flight to
quality. This resulted in U.S. Treasury bills and bonds at record low yields.
As 2008 came to an end, significant concerns existed about the U.S. economy. How
far will the downturn extend? When will the downturn end? What events will lead
to a recovery? The unemployment rate was 7.2 percent in December and is expected
to rise in 2009, according to the U.S. Department of Labor. Inflation spiked to
5.4 percent in August, but then plummeted to just 0.1 percent by year-end. The
value of the dollar versus several other currencies rebounded in 2008 after
dropping precipitously in 2007. Corporate credit defaults around the globe rose
after five straight years of decline, according to Moody's Investors Service.
Moody's global issuer-weighted speculative-grade default rate finished the year
at 4 percent, up from 0.9 percent in 2007. Moody's expects the default rate to
jump in 2009 to more than 15 percent in the U.S., well beyond its historical
average of 5 percent.
PORTFOLIO ACTIVITY
The Trust's investment activity during 2008 was very lumpy. During the first
quarter of the year, the mezzanine and private equity markets in which the Trust
participates continued to be affected by the credit dislocation that began in
2007. Less credit was available to fund transactions than had previously been
available, so new investment activity was very slow. Credit became more readily
available during the second and third quarters of 2008. As a result, new
investment activity and
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MassMutual Corporate Investors 3
portfolio company sale activity increased during both quarters. Equally as
important, the trend towards more conservative capital structures that began
toward the end of 2007 continued into 2008. New investments were structured with
lower leverage than had generally been the case during the last several years.
At the same time, pricing on these investments was also more favorable than it
has been for several years. As the third quarter ended, however, the turmoil in
the financial markets once again impacted middle market leveraged buyout
activity. Senior debt financing became increasingly scarce and significantly
more expensive as a number of senior debt providers withdrew from the market.
Investment activity in the fourth quarter slowed dramatically as a result, and
the slowdown has continued into 2009.
Overall, the Trust closed 23 new private placement transactions during 2008 and
added to nine existing private placement investments. Total private placement
purchases in 2008 were $52,612,864.
Left to right:
Clifford M. Noreen
PRESIDENT
Roger W. Crandall
CHAIRMAN
[PHOTO OF PRESIDENT AND CHAIRMAN]
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4 MassMutual Corporate Investors
New private placement investments completed during 2008 were: ASAP Industries
LLC; AWX Holdings Corporation; All Current Holding Company; CDNT, Inc.; Clough,
Harbour and Associates; Coeur, Inc.; Crane Rental Corporation; ESP Holdco, Inc.;
FCX Holdings Corporation; GQ Holdings LLC; Hospitality Mints Holding Company;
KPI Holdings, Inc.; MVI Holding, Inc.; MedSystems Holdings LLC; MEGTEC Holdings,
Inc.; Milwaukee Gear Company; Power Services Holding Company; REI Delaware
Holding, Inc.; Specialty Commodities, Inc.; Synteract Holdings Corporation; THI
Acquisition, Inc.; UMA Enterprises, Inc.; and Xaloy Superior Holdings, Inc.
In addition, the Trust added to existing private placement investments in
American Hospice Management Holding LLC; Fuel Systems Holding Corporation;
Morton Industrial Group, Inc.; Navis Global; NetShape Technologies, Inc.; Power
Services Holding Company; Smart Source Holdings LLC; Tangent Rail Corporation
and Truck Bodies & Equipment International.
Left to right:
Richard E. Spencer, II
Vice President
Michael P. Hermsen
Vice President
Jill A. Fields
Vice President
Patricia J. Walsh
Vice President,
Secretary & Chief
Legal Officer
Michael L. Klofas [PHOTO OF OFFICERS]
Vice President
James M. Roy
Vice President
& Chief Financial
Officer
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MassMutual Corporate Investors 5
OUTLOOK FOR 2009
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The year 2009 opened with a new U.S. President and with the worldwide economy
and financial markets still in a state of uncertainty. The recession has
businesses and consumers in a self-perpetuating negative cycle. Nervous
consumers and companies cut back spending, which puts pressure on company
earnings, often necessitating businesses to lay off staff, further fanning fear.
Governments continue to look at capital injections to help start a recovery, but
banks are hesitant to lend, despite the fact that they are able to borrow from
the Federal Reserve at interest rates near zero. How long will it take before
the world's economies return to a healthier state? As always, no one can predict
the future with any degree of certainty.
The current recessionary economic conditions have adversely affected the
financial performance of many of the Trust's portfolio companies. In addition,
middle market leveraged buyout activity, which drives new investment and
portfolio company sale activity for the Trust, remains very slow. This will
continue until senior debt financing becomes more widely available. As a result,
we expect 2009 to be another challenging year, and one during which we will
spend significant efforts on managing the Trust's existing portfolio of
companies.
Regardless of the economic environment the Trust continues to repeatedly employ
the investment philosophy that has served it well since its inception: investing
in companies which we believe have a strong business proposition, solid cash
flow and experienced, ethical management. This philosophy, combined with Babson
Capital's seasoned investment-management team and the Trust's financial
position, contributes to the Trust's being well positioned to meet its
investment objectives and policies. As always, I would like to thank you for
your continued interest in and support of MassMutual Corporate Investors.
Sincerely,
/s/ Clifford M. Noreen
Clifford M. Noreen,
President
Cautionary Notice: Certain statements contained in this report may be "forward
looking" statements. Investors are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date in which they are
made and which reflect management's current estimates, projections, expectations
or beliefs, and which are subject to risks and uncertainties that may cause
actual results to differ materially. These statements are subject to change at
any time based upon economic, market or other conditions and may not be relied
upon as investment advice or an indication of the Trust's trading intent.
References to specific securities are not recommendations of such securities,
and may not be representative of the Trust's current or future investments. We
undertake no obligation to publicly update forward looking statements, whether
as a result of new information, future events, or otherwise.
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2008 Record Net Investment Short-Term Tax Long-Term
Dividends Date Income Gains Effect Gains
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Regular 5/5/2008 0.5400 -- --
8/1/2008 0.5400 -- --
10/31/2008 0.5400 -- --
12/31/2008 0.5400 -- --
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$2.1600 $ -- $2.1600 $ --
================================================================================
The Trust did not have distributable net long-term capital gains in 2008.
Qualified for Dividend Interest Earned on
Annual Dividend Received Deduction* Qualified Dividends** U.S. Gov't. Obligations
Amount Per Share Percent Amount Per Share Percent Amount Per Share Percent Amount Per Share
---------------------------------------------------------------------------------------------------------
$2.16 6.4459% 0.1389 6.6790% 0.1439 0% 0.0000
=========================================================================================================
* Not available to individual shareholders
** Qualified dividends are reported in Box 1b on IRS Form 1099-Div for 2008
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6 MassMutual Corporate Investors
FINANCIAL REPORT
Consolidated Statement of Assets and Liabilities 8
Consolidated Statement of Operations 9
Consolidated Statement of Cash Flows 10
Consolidated Statements of Changes in Net Assets 11
Consolidated Financial Highlights 12
Consolidated Schedule of Investments 13-35
Notes to Consolidated Financial Statements 36-41
Report of Independent Registered Public Accounting Firm 42
Interested Trustees 43-44
Independent Trustees 45-47
Officers of the Trust 48
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MassMutual Corporate Investors 7
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost - $213,841,105) $ 191,135,415
Corporate public securities at market value
(Cost - $60,920,630) 40,422,532
Short-term securities at amortized cost 6,233,266
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237,791,213
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Cash 2,636,512
Interest and dividends receivable 3,447,493
Receivable for investments sold 185,417
Prepaid taxes 250,000
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TOTAL ASSETS 244,310,635
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LIABILITIES:
Dividend payable 5,032,535
Payable for investments purchased 3,578
Investment advisory fee payable 650,448
Note payable 30,000,000
Interest payable 202,105
Accrued expenses 173,096
Accrued taxes payable 16,000
Other payables 89,354
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TOTAL LIABILITIES 36,167,116
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TOTAL NET ASSETS $ 208,143,519
==============
NET ASSETS:
Common shares, par value $1.00 per share; an unlimited
number authorized $ 9,319,509
Additional paid-in capital 112,902,899
Retained net realized gain on investments, prior years 127,688,004
Undistributed net investment income 3,174,832
Accumulated net realized loss on investments (1,737,937)
Net unrealized depreciation of investments (43,203,788)
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TOTAL NET ASSETS $ 208,143,519
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COMMON SHARES ISSUED AND OUTSTANDING 9,319,509
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NET ASSET VALUE PER SHARE $ 22.33
==============
See Notes to Consolidated Financial Statements
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8 MassMutual Corporate Investors
CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 2008
INVESTMENT INCOME:
Interest $ 25,240,896
Dividends 1,294,265
Other 88,292
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TOTAL INVESTMENT INCOME 26,623,453
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EXPENSES:
Investment advisory fees 2,943,631
Interest 1,599,574
Trustees' fees and expenses 213,400
Professional fees 166,900
Reports to shareholders 132,500
Custodian fees 30,000
Transfer agent/registrar's expenses 26,000
Other 39,154
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TOTAL EXPENSES 5,151,159
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INVESTMENT INCOME - NET 21,472,294
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NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments before taxes (2,584,195)
Income tax benefit 124,775
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NET REALIZED LOSS ON INVESTMENTS AFTER TAXES (2,459,420)
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NET CHANGE IN UNREALIZED DEPRECIATION OF INVESTMENTS (44,140,369)
--------------
NET LOSS ON INVESTMENTS (46,599,789)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (25,127,495)
==============
See Notes to Consolidated Financial Statements
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MassMutual Corporate Investors 9
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended December 31, 2008
NET INCREASE IN CASH:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term portfolio
securities, net $ 13,836,396
Purchases of portfolio securities (93,704,805)
Proceeds from disposition of portfolio securities 81,680,294
Interest, dividends and other received 28,408,656
Interest expense paid (1,609,026)
Operating expenses paid (3,581,173)
Income taxes paid (1,242,326)
--------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 23,788,016
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Cash flows from financing activities:
Cash dividends paid from net investment income (24,006,823)
Receipts for shares issued on reinvestment of dividends 2,186,860
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NET CASH USED FOR FINANCING ACTIVITIES (21,819,963)
--------------
NET INCREASE IN CASH 1,968,053
Cash - beginning of year 668,459
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CASH - END OF YEAR $ 2,636,512
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RECONCILIATION OF NET DECREASE IN NET ASSETS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (25,127,495)
--------------
Decrease in investments 46,360,020
Decrease in interest and dividends receivable 2,607,682
Decrease in receivable for investments sold 1,350,368
Increase in prepaid taxes (250,000)
Increase in payable for investments purchased 3,578
Decrease in investment advisory fee payable (134,436)
Decrease in interest payable (9,452)
Increase in accrued expenses 17,228
Decrease in accrued taxes payable (1,117,101)
Increase in other payables 87,624
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TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS 48,915,511
--------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 23,788,016
==============
See Notes to Consolidated Financial Statements
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10 MassMutual Corporate Investors
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 2008 and 2007
2008 2007
--------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income - net $ 21,472,294 $ 23,586,915
Net realized (loss) gain on investments (2,459,420) 1,411,465
Net change in unrealized depreciation of investments (44,140,369) (4,596,952)
-------------- --------------
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS (25,127,495) 20,401,428
-------------- --------------
Increase from common shares issued on reinvestment of dividends
Common shares issued (2008 - 81,890; 2007 - 87,700) 2,186,860 2,751,359
Dividends to shareholders from:
Net investment income (2008 - $2.16 per share;
2007 - $2.57 per share) (20,078,868) (23,679,411)
-------------- --------------
TOTAL DECREASE IN NET ASSETS (43,019,503) (526,624)
-------------- --------------
NET ASSETS, BEGINNING OF YEAR 251,163,022 251,689,646
-------------- --------------
NET ASSETS, END OF YEAR (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $3,174,832 AND $1,765,219 RESPECTIVELY) $ 208,143,519 $ 251,163,022
============== ==============
See Notes to Consolidated Financial Statements
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MassMutual Corporate Investors 11
CONSOLIDATED FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding:
For the years ended December 31,
2008 2007 2006 2005 2004
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE: BEGINNING OF YEAR $ 27.19 $ 27.51 $ 26.06 $ 24.34 $ 21.84
---------- ---------- ---------- ---------- ----------
Net investment income (a) 2.31 2.56 2.27 2.03 2.00
Net realized and unrealized
gain (loss) on investments (5.02) (0.35) 1.62 1.96(b) 2.64
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS (2.71) 2.21 3.89 3.99 4.64
---------- ---------- ---------- ---------- ----------
Dividends from net investment
income to common shareholders (2.16) (2.57) (2.47) (2.11) (2.16)
Dividends from net realized gain
on investments to common shareholders -- -- (0.01) (0.18) --
Increase from dividends reinvested 0.01 0.04 0.04 0.02 0.02
---------- ---------- ---------- ---------- ----------
TOTAL DIVIDENDS (2.15) (2.53) (2.44) (2.27) (2.14)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE: END OF YEAR $ 22.33 $ 27.19 $ 27.51 $ 26.06 $ 24.34
---------- ---------- ---------- ---------- ----------
PER SHARE MARKET VALUE: END OF YEAR $ 19.25 $ 30.20 $ 34.89 $ 30.05 $ 28.50
========== ========== ========== ========== ==========
Total investment return
Net asset value (c) (10.34%) 8.72% 18.06% 20.04% 22.76%
Market value (30.44%) (8.78%) 29.04% 16.95% 36.10%
Net assets (in millions): End of year $ 208.14 $ 251.16 $ 251.69 $ 236.28 $ 218.51
Ratio of operating expenses to average
net assets 1.49% 1.55% 1.43% 1.78% 1.93%
Ratio of interest expense to average
net assets 0.67% 0.59% 0.60% 0.73% 0.77%
Ratio of income tax expense to average
net assets (d) 0.00% 0.35% 2.46% 2.84% 0.69%
Ratio of total expenses before custodian
reduction to average net assets (d) 2.16% 2.49% 4.53% 5.36% 3.39%
Ratio of net expenses after custodian
reduction to average net assets (d) 2.16% 2.49% 4.49% 5.35% 3.39%
Ratio of net investment income to average
net assets 9.01% 9.17% 8.19% 7.98% 8.68%
Portfolio turnover 32% 44% 35% 35% 53%
(a) Calculated using average shares.
(b) Amount includes $0.19 per share in litigation proceeds.
(c) 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 the Trust's 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.
(d) As additional information, this ratio is included to reflect the taxes paid on retained long-term
gains. These taxes paid are netted against realized capital gains in the Statement of Operations.
The taxes paid are treated as deemed distributions and a credit for the taxes paid are passed on to
the shareholders.
Senior borrowings:
Total principal amount (in millions) $ 30 $ 30 $ 20 $ 20 $ 29
Asset coverage per $1,000 of indebtedness $ 7,938 $ 9,372 $ 13,584 $ 12,814 $ 8,535
See Notes to Consolidated Financial Statements
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12 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES - 91.83%:(A) PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
PRIVATE PLACEMENT INVESTMENTS - 87.82%
A H C HOLDING COMPANY, INC.
A designer and manufacturer of boilers and water heaters for the commercial sector.
15% Senior Subordinated Note due 2015 $ 2,404,929 11/21/07 $ 2,354,304 $ 2,274,518
Limited Partnership Interest (B) 23.16% int. 11/21/07 224,795 217,161
------------- -------------
2,579,099 2,491,679
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A S A P INDUSTRIES LLC
A designer and manufacturer of components used on oil and natural gas wells.
12.5% Senior Subordinated Note due 2015 $ 1,134,594 12/31/08 985,537 1,173,363
Limited Liability Company Unit Class A-2 (B) 1,276 uts. 12/31/08 140,406 133,386
Limited Liability Company Unit Class A-3 (B) 1,149 uts. 12/31/08 126,365 11
------------- -------------
1,252,308 1,306,760
------------- -------------
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 2,125,000
Warrant, exercisable until 2012, to purchase
preferred stock at $.01 per share (B) 13 shs. 11/16/07 -- 20,271
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 2,323 shs. 04/08/04 -- 1,035,536
------------- -------------
2,125,000 3,180,807
------------- -------------
A W X HOLDINGS CORPORATION
A provider of aerial equipment rental, sales and repair services to non-residential construction and maintenance contractors
operating in Indiana.
10.5% Senior Secured Term Note due 2014 $ 735,000 05/15/08 720,300 706,172
13% Senior Subordinated Note due 2015 $ 735,000 05/15/08 661,374 696,761
Common Stock (B) 105,000 shs. 05/15/08 105,000 99,750
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 36,923 shs. 05/15/08 62,395 369
------------- -------------
1,549,069 1,503,052
------------- -------------
ADVANCED TECHNOLOGIES HOLDINGS
A provider of factory maintenance services to industrial companies.
15% Senior Subordinated Note due 2013 $ 2,102,587 12/27/07 2,059,849 2,053,571
Preferred Stock (B) 1,031 shs. 12/27/07 510,000 517,501
------------- -------------
2,569,849 2,571,072
------------- -------------
AERO HOLDINGS, INC.
A provider of geospatial services to corporate and government clients.
10.5% Senior Secured Term Note due 2014 $ 1,627,500 03/09/07 1,603,088 1,587,648
14% Senior Subordinated Note due 2015 $ 1,260,000 03/09/07 1,140,120 1,221,182
Common Stock (B) 262,500 shs. 03/09/07 262,500 435,822
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 66,116 shs. 03/09/07 111,527 109,771
------------- -------------
3,117,235 3,354,423
------------- -------------
MassMutual Corporate Investors 13
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
ALL CURRENT HOLDING COMPANY
A specialty re-seller of essential electrical parts and components primarily serving wholesale distributors.
12% Senior Subordinated Note due 2015 $ 1,140,317 09/26/08 $ 1,037,101 $ 1,086,252
Common Stock (B) 1,347 shs. 09/26/08 134,683 127,965
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 958 shs. 09/26/08 87,993 10
------------- -------------
1,259,777 1,214,227
------------- -------------
AMERICAN HOSPICE MANAGEMENT HOLDING LLC
A for-profit hospice care provider in the United States.
12% Senior Subordinated Note due 2013 $ 3,187,495 * 3,033,665 3,211,067
Preferred Class A Unit (B) 3,223 uts. ** 322,300 257,840
Preferred Class B Unit (B) 1,526 uts. 06/09/08 152,626 152,626
Common Class B Unit (B) 30,420 uts. 01/22/04 1 --
Common Class D Unit (B) 6,980 uts. 09/12/06 1 --
------------- -------------
* 01/22/04 and 06/09/08. ** 01/22/04 and 09/12/06. 3,508,593 3,621,533
------------- -------------
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 1,560,657 1,499,691
Common Stock (B) 497 shs. 05/18/05 497,340 35,980
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 130 shs. 05/18/05 112,128 9,432
------------- -------------
2,170,125 1,545,103
------------- -------------
BRAVO SPORTS HOLDING CORPORATION
A designer and marketer of niche branded consumer products including canopies, trampolines, in-line skates, skateboards, and
urethane wheels.
12.5% Senior Subordinated Note due 2014 $ 2,281,593 06/30/06 2,163,017 2,119,052
Preferred Stock Class A (B) 879 shs. 06/30/06 268,121 139,554
Common Stock (B) 1 sh. 06/30/06 286 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 309 shs. 06/30/06 92,102 49,046
------------- -------------
2,523,526 2,307,652
------------- -------------
C D N T, INC.
A value-added converter and distributor of specialty pressure sensitive adhesives, foams, films, and foils.
10.5% Senior Secured Term Note due 2014 $ 750,872 08/07/08 735,855 726,756
12.5% Senior Subordinated Note due 2015 $ 750,872 08/07/08 680,397 716,238
Common Stock (B) 73,256 shs. 08/07/08 73,256 69,593
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 57,600 shs. 08/07/08 57,689 576
------------- -------------
1,547,197 1,513,163
------------- -------------
CAPESUCCESS LLC
A provider of diversified staffing services.
Preferred Membership Interests (B) 1,881 uts. 04/29/00 8,395 --
Common Membership Interests (B) 24,318 uts. 04/29/00 108,983 --
------------- -------------
117,378 --
------------- -------------
CAPITAL SPECIALTY PLASTICS, INC.
A producer of desiccant strips used for packaging pharmaceutical products.
Common Stock (B) 109 shs. * 503 279,466
------------- -------------
*12/30/97 and 05/29/99.
14 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
CLOUGH, HARBOUR AND ASSOCIATES
An engineering service firm that is located in Albany, NY.
12.25% Senior Subordinated Note due 2015 $ 2,400,000 12/02/08 $ 2,225,100 $ 2,401,099
Preferred Stock (B) 277 shs. 12/02/08 276,900 263,055
------------- -------------
2,502,000 2,664,154
------------- -------------
COEUR, INC.
A producer of proprietary, disposable power injection syringes.
12% Senior Subordinated Note due 2016 $ 1,214,286 10/10/08 1,098,929 1,172,468
Common Stock (B) 607 shs. 10/10/08 60,714 57,678
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 934 shs. 10/10/08 91,071 9
------------- -------------
1,250,714 1,230,155
------------- -------------
CONNECTICUT ELECTRIC, INC.
A supplier and distributor of electrical products sold into the retail and wholesale markets.
12% Senior Subordinated Note due 2014 $ 2,393,954 01/12/07 2,233,202 1,984,601
Limited Liability Company Unit Class A (B) 156,046 uts. 01/12/07 156,046 44,718
Limited Liability Company Unit Class C (B) 112,873 uts. 01/12/07 112,873 32,346
------------- -------------
2,502,121 2,061,665
------------- -------------
CONNOR SPORT COURT INTERNATIONAL, INC.
A designer and manufacturer of outdoor and indoor synthetic sports flooring and other temporary flooring products.
Preferred Stock Series B-2 (B) 17,152 shs. 07/05/07 700,392 1,715,247
Preferred Stock Series C (B) 8,986 shs. 07/05/07 300,168 808,704
Common Stock (B) 718 shs. 07/05/07 7 7
Limited Partnership Interest (B) 12.64% int. * 189,586 --
------------- -------------
*08/12/04 and 01/14/05. 1,190,153 2,523,958
------------- -------------
COREPHARMA LL
A manufacturer of oral dose generic pharmaceuticals targeted at niche applications.
12% Senior Subordinated Note due 2013 $ 2,550,000 08/04/05 2,450,764 2,419,833
Warrant, exercisable until 2013, to purchase
common stock at $.001 per share (B) 20 shs. 08/04/05 137,166 89,997
------------- -------------
2,587,930 2,509,830
------------- -------------
CRANE RENTAL CORPORATION
A crane rental company.
13% Senior Subordinated Note due 2015 $ 2,295,000 08/21/08 2,060,608 2,198,879
Common Stock (B) 255,000 shs. 08/21/08 255,000 242,250
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 136,070 shs. 08/21/08 194,826 1,361
------------- -------------
2,510,434 2,442,490
------------- -------------
DAVIS-STANDARD LLC
A manufacturer, assembler, and installer of a broad range of capital equipment that is used in the extrusion, conversion, and
processing of plastic materials.
12% Senior Subordinated Note due 2014 $ 1,847,826 10/30/06 1,743,484 1,819,998
Limited Partnership Interest (B) 1.82% int. 10/30/06 702,174 1,558,017
Warrant, exercisable until 2014, to purchase
preferred stock at $.01 per share (B) 50 shs. 10/30/06 49,830 60,503
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 34 shs. 10/30/06 34,000 166,231
------------- -------------
2,529,488 3,604,749
------------- -------------
MassMutual Corporate Investors 15
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
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) 27.20% int. 08/27/98 $ 734,090 $ --
Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 1,319,430
Warrants, exercisable until 2011, to purchase common
stock of DHI Holdings, Inc. at $.01 per share (B) 13,352 shs. * 403,427 --
------------- -------------
*10/24/96 and 08/28/98. 3,921,650 1,319,430
------------- -------------
DUNCAN SYSTEMS, INC.
A distributor of windshields and side glass for the recreational vehicle market.
10% Senior Secured Term Note due 2013 $ 540,000 11/01/06 531,900 502,858
13% Senior Subordinated Note due 2014 $ 855,000 11/01/06 773,745 776,739
Common Stock (B) 180,000 shs. 11/01/06 180,000 138,244
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 56,514 shs. 11/01/06 78,160 43,404
------------- -------------
1,563,805 1,461,245
------------- -------------
DWYER GROUP, INC.
A franchiser of a variety of home repair services.
Common Stock (B) 6,906 shs. * 690,600 1,152,242
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 339,297
------------- -------------
*10/30/03 and 01/02/04. 877,069 1,491,539
------------- -------------
E S P HOLDCO, INC.
A manufacturer of power protection technology for commercial office equipment, primarily supplying the office equipment dealer
network.
14% Senior Subordinated Note due 2015 $ 2,263,993 01/08/08 2,223,390 2,102,162
Common Stock (B) 660 shs. 01/08/08 329,990 313,500
------------- -------------
2,553,380 2,415,662
------------- -------------
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 77,208 210,822
------------- -------------
ELECTRA BICYCLE COMPANY LLC
A designer and marketer of branded leisure bicycles.
Limited Liability Company Unit Series F 64,597 uts. 04/12/07 64,597 185,598
Limited Liability Company Unit Series G 4,990 uts. 04/12/07 4,990 14,337
------------- -------------
69,587 199,935
------------- -------------
EVANS CONSOLES, INC.
A designer and manufacturer of consoles and control center systems.
Common Stock (B) 90,000 shs. 05/06/04 6 1,684,302
------------- -------------
F C X HOLDINGS CORPORATION
A distributor of specialty/technical valves, actuators, accessories, and process instrumentation supplying a number of industrial,
high purity, and energy end markets in North America.
15% Senior Subordinated Note due 2015 $ 2,112,857 10/06/08 2,070,600 2,005,978
Preferred Stock (B) 4,341 shs. 10/06/08 434,074 412,395
Common Stock (B) 3,069 shs. 10/06/08 3,069 2,916
------------- -------------
2,507,743 2,421,289
------------- -------------
16 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
F H S HOLDINGS LLC
A national provider of customized disease management services to large self-insured employers.
12% Senior Subordinated Note due 2014 $ 2,390,625 06/01/06 $ 2,249,367 $ 2,151,563
Limited Liability Company Units of
Linden/FHS Holdings LLC (B) 159 uts. 06/01/06 159,362 80,250
Common Unit Class B (B) 1,386 uts. 06/01/06 122,361 --
------------- -------------
2,531,090 2,231,813
------------- -------------
FLUTES, INC.
An independent manufacturer of micro fluted corrugated sheet material for the food and consumer products packaging industries.
10% Senior Secured Term Note due 2013 $ 918,385 04/13/06 904,609 810,372
14% Senior Subordinated Note due 2014 $ 555,059 04/13/06 506,106 486,538
Common Stock (B) 109,436 shs. 04/13/06 109,436 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 30,940 shs. 04/13/06 48,433 --
------------- -------------
1,568,584 1,296,910
------------- -------------
FOWLER HOLDING, INC.
A provider of site development services to residential homebuilders and developers in the Raleigh/Durham region of North Carolina.
12% Senior Subordinated Note due 2013 $ 2,365,217 02/03/06 2,121,304 --
Common Stock (B) 185 shs. 02/03/06 184,783 --
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 254 shs. 02/03/06 208,435 --
------------- -------------
2,514,522 --
------------- -------------
FUEL SYSTEMS HOLDING CORPORATION
An independent North American supplier of fuel tanks for a wide variety of commercial vehicles.
12% Senior Subordinated Note due 2014 (D) $ 2,337,500 01/31/06 2,171,538 584,375
Preferred Stock (B) 31,718 shs. 06/12/08 31,718 --
Common Stock (B) 212,500 shs. 01/31/06 212,500 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 138,408 shs. 01/31/06 119,213 --
------------- -------------
2,534,969 584,375
------------- -------------
GOLDEN COUNTRY FOODS HOLDING, INC.
A manufacturer of frozen appetizers and snacks.
12% Senior Subordinated Note due 2015 $ 1,912,500 11/01/07 1,727,592 1,530,000
8% Series A Convertible Preferred Stock, convertible into
4.25% of the fully dilluted common shares (B) 146,658 shs. 11/01/07 146,658 --
------------- -------------
1,874,250 1,530,000
------------- -------------
GQ HOLDINGS LLC
A developer and distributor of tools, equipment, and supplies to the natural and engineered stone industry.
15% Senior Subordinated Note due 2015 $ 2,316,895 06/27/08 2,270,014 2,086,715
Common Stock (B) 7,304 shs. 06/27/08 250,923 200,739
------------- -------------
2,520,937 2,287,454
------------- -------------
MassMutual Corporate Investors 17
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
H M HOLDING COMPANY
A designer, manufacturer, and importer of promotional and wood furniture.
12% Senior Subordinated Note due 2013 (D) $ 2,210,000 02/10/06 $ 2,048,925 $ --
Preferred Stock (B) 40 shs. * 40,476 --
Common Stock (B) 340 shs. 02/10/06 340,000 --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 126 shs. 02/10/06 116,875 --
------------- -------------
* 09/18/07 and 06/27/08 2,546,276 --
------------- -------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in manufacturing and marketing entities.
Series A Preferred Units (B) 1.19% int. 7/21/94 367,440 --
------------- -------------
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 * 1,914,272 1,943,618
Common Stock (B) 63 shs. * 62,742 51,123
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 200 shs. * 199,501 162,562
------------- -------------
*06/30/04 and 08/19/04. 2,176,515 2,157,303
------------- -------------
HOSPITALITY MINTS HOLDING COMPANY
A manufacturer of individually-wrapped imprinted promotional mints.
12% Senior Subordinated Note due 2016 $ 2,075,581 08/19/08 1,920,297 1,969,332
Common Stock (B) 474 shs. 08/19/08 474,419 450,699
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 123 shs. 08/19/08 113,773 1
------------- -------------
2,508,489 2,420,032
------------- -------------
INSURANCE CLAIMS MANAGEMENT, INC.
A third party administrator providing auto and property claim administration services for insurance companies.
Common Stock (B) 69 shs. 02/27/07 2,077 100,939
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 20 shs. 02/27/07 612 29,729
------------- -------------
2,689 130,668
------------- -------------
INTEGRATION TECHNOLOGY SYSTEMS, INC.
A manufacturer of steel protective computer and network systems for the industrial and office environments.
12% Senior Subordinated Note due on demand $ 43,943 03/01/04 1 --
Common Stock (B) 228 shs. 06/01/00 262,200 --
------------- -------------
262,201 --
------------- -------------
JASON, INC.
A diversified manufacturing company serving various industrial markets.
13% Senior Subordinated Note due 2010 $ 963,687 08/04/00 928,273 927,293
Limited Partnership Interest of
Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,302 97,294
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 19,539
------------- -------------
1,929,987 1,044,126
------------- -------------
18 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
JUSTRITE MANUFACTURING AQUISITION CO.
A manufacturer of safety products such as storage cabinets and containers.
12% Senior Subordinated Note due 2011 $ 1,593,750 12/15/04 $ 1,536,598 $ 1,562,410
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 258,503
------------- -------------
1,637,707 1,820,913
------------- -------------
K H O F HOLDINGS, INC.
A manufacturer of premium disposable tableware products serving both the foodservice and consumer channels.
14% Senior Subordinated Note due 2014 $ 2,386,297 10/15/07 2,338,611 2,286,324
Common Stock (B) 220,673 shs. 10/15/07 220,673 228,058
------------- -------------
2,559,284 2,514,382
------------- -------------
K N B HOLDINGS CORPORATION
A designer, manufacturer and marketer of products for the custom framing market.
13.5% Senior Subordinated Note due 2013 $ 2,511,688 05/25/06 2,410,052 2,398,738
Common Stock (B) 134,210 shs. 05/25/06 134,210 112,876
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 82,357 shs. 05/25/06 71,534 69,266
------------- -------------
2,615,796 2,580,880
------------- -------------
K P I HOLDINGS, INC.
Pace Industries is the largest player in the U.S. non-automotive, non-ferrous die casting segment.
13% Senior Subordinated Note due 2014 $ 2,106,522 07/16/08 1,968,368 2,004,269
Common Stock (B) 443 shs. 07/15/08 443,478 421,306
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 96 shs. 07/16/08 96,024 1
------------- -------------
2,507,870 2,425,576
------------- -------------
K W P I HOLDINGS CORPORATION
A manufacturer and distributor of vinyl windows and patio doors throughout the northwestern United States.
12.75% Senior Subordinated Note due 2014 $ 2,322,346 03/14/07 2,141,830 1,992,000
Common Stock (B) 232 shs. 03/13/07 232,000 90,009
Warrant, exercisable until 2017, to purchase
common stock at $.01 per share (B) 167 shs. 03/14/07 162,260 64,791
------------- -------------
2,536,090 2,146,800
------------- -------------
K-TEK HOLDING CORPORATION
A manufacturer of instrumentation for liquid and bulk solids level detection for process and storage tanks.
14% Senior Subordinated Note due 2015 $ 2,231,113 12/20/07 2,189,914 2,127,248
Preferred Stock (B) 363,260 shs. 12/20/07 363,260 386,427
Common Stock (B) 102,616 shs. 12/20/07 1,026 149,535
------------- -------------
2,554,200 2,663,210
------------- -------------
M V I HOLDING, INC.
A manufacturer of large precision machined metal components used in equipment which services a variety of industries, including the
oil & gas, mining, and defense markets.
13% Senior Subordinated Note due 2016 $ 1,217,929 09/12/08 1,127,857 1,148,110
Common Stock (B) 61 shs. 09/12/08 60,714 57,675
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 66 shs. 09/12/08 65,571 1
------------- -------------
1,254,142 1,205,786
------------- -------------
MassMutual Corporate Investors 19
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
MAIL COMMUNICATIONS GROUP, INC.
A provider of mail processing and handling services, lettershop services, and commercial printing services.
12.5% Senior Subordinated Note due 2014 $ 975,000 05/04/07 $ 912,469 $ 936,586
Limited Liability Company Unit (B) 24,109 uts. * 314,464 419,617
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3,375 shs. 05/04/07 43,031 58,742
------------- -------------
* 05/04/07 and 01/02/08. 1,269,964 1,414,945
------------- -------------
MAVERICK ACQUISITION COMPANY
A manufacturer of capsules that cover the cork and neck of wine bottles.
8.26% Senior Secured Tranche A Note due 2010 (C) $ 364,721 09/03/04 364,721 360,567
12% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 293,117 291,421
Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 18,229
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 13,171
------------- -------------
756,080 683,388
------------- -------------
MEDSYSTEMS HOLDINGS LLC
A manufacturer of enteral feeding products,such as feeding tubes and other products related to assisted feeding.
13% Senior Subordinated Note due 2015 $ 1,149,202 08/29/08 1,009,344 1,098,539
Preferred Unit (B) 126 uts. 08/29/08 125,519 119,244
Common Unit Class A (B) 1,268 uts. 08/29/08 1,268 1,205
Common Unit Class B (B) 472 uts. 08/29/08 120,064 5
------------- -------------
1,256,195 1,218,993
------------- -------------
MEGTEC HOLDINGS, INC.
A supplier of industrial and environmental products and services to a broad array of industries.
12% Senior Subordinated Note due 2016 $ 2,161,017 09/24/08 1,981,274 2,046,581
Preferred Stock (B) 107 shs. 09/24/08 103,255 1
Limited Partnership Interest (B) 388,983 int. 09/16/08 388,983 369,534
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 35 shs. 09/24/08 33,268 --
------------- -------------
2,506,780 2,416,116
------------- -------------
MICROGROUP, INC.
A manufacturer of precision parts and assemblies, and a value-added supplier of metal tubing and bars.
12% Senior Subordinated Note due 2013 $ 2,685,614 * 2,558,691 2,599,737
Common Stock (B) 450 shs. * 450,000 805,943
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 164 shs. * 162,974 293,686
------------- -------------
* 08/12/05 and 09/11/06. 3,171,665 3,699,366
------------- -------------
MILWAUKEE GEAR COMPANY
A manufacturer of high-precision custom gears and gear drives used by original equipment manufacturers operating in a number of
industries.
13% Senior Subordinated Note due 2014 $ 2,353,846 07/21/08 2,215,299 2,272,781
Preferred Stock (B) 263 shs. 07/21/08 261,830 248,732
Common Stock (B) 18 shs. 07/21/08 20,000 19,000
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 10 shs. 07/21/08 11,285 --
------------- -------------
2,508,414 2,540,513
------------- -------------
20 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
MOMENTUM HOLDING CO.
A designer and supplier of upholstery fabric to commercial furniture manufacturers and architectural and design firms.
Limited Partnership Interest (B) 21.23% int. 08/04/06 $ 106,153 $ 252,813
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 1,107 shs. 08/04/06 107,109 263,528
------------- -------------
213,262 516,341
------------- -------------
MONESSEN HOLDING CORPORATION
A designer and manufacturer of a broad line of gas, wood, and electric hearth products and accessories.
14% Senior Subordinated Note due 2014 $ 2,814,540 07/25/08 2,629,138 2,533,086
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 152 shs. 03/31/06 138,125 --
------------- -------------
2,767,263 2,533,086
------------- -------------
MORTON INDUSTRIAL GROUP, INC.
A manufacturer of highly engineered metal fabricated components.
12% Senior Subordinated Note due 2014 (D) $ 2,440,909 08/25/06 2,242,151 2,196,818
30% Convertible Preferred Stock (B) 77,993 shs. 07/28/08 37,227 70,194
Common Stock (B) 1 sh. 08/25/06 1 --
------------- -------------
2,279,379 2,267,012
------------- -------------
NABCO, INC.
A producer of explosive containment vessels in the United States.
14% Senior Subordinated Note due 2014 $ 815,419 02/24/06 695,769 407,710
Limited Liability Company Unit (B) 825 uts. * 825,410 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 129 shs. 02/24/06 37,188 --
------------- -------------
* 02/24/06 and 06/22/07. 1,558,367 407,710
------------- -------------
NAVIS GLOBAL
A designer, manufacturer, seller and servicer of finishing machinery for the knit and woven segments of the global textile industry.
12% Senior Secured Term Note Series A due 2009 $ 252,809 11/14/08 252,809 251,390
14% Senior Subordinated Note due 2014 (D) $ 1,338,613 05/28/04 1,103,764 --
10.75% Senior Secured Note due 2011 (D) $ 609,200 05/28/04 573,029 152,300
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 203,912 shs. 05/28/04 130,789 --
------------- -------------
2,060,391 403,690
------------- -------------
NESCO HOLDINGS CORPORATION
A sales and leasing company that provides equipment to the electric utility, telecommunications, and various other industries.
12% Senior Secured Subordinated Note due 2015 $ 2,125,000 08/02/07 1,888,243 2,069,963
Common Stock (B) 425,000 shs. 08/02/07 425,000 540,874
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 119,360 shs. 08/02/07 194,257 151,903
------------- -------------
2,507,500 2,762,740
------------- -------------
MassMutual Corporate Investors 21
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
NETSHAPE TECHNOLOGIES, INC.
A manufacturer of powder metal and metal injection molded precision components used in industrial, consumer, and other applications.
12% Senior Subordinated Note due 2014 $ 1,530,000 02/02/07 $ 1,408,570 $ 1,339,367
Limited Partnership Interest of
Saw Mill PCG Partners LLC (B) 2.61% int. 02/01/07 1,019,958 214,228
Limited Liability Company Unit Class D of
Saw Mill PCG Partners LLC (B) 15 uts. 12/18/08 15,389 15,390
Preferred Stock Class A (B) 1 sh. 12/18/08 1,370 1,371
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 91 shs. 02/02/07 90,830 19,077
------------- -------------
2,536,117 1,589,433
------------- -------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the automotive industry.
9% Senior Secured Note due 2009 $ 812,500 01/28/02 812,500 609,375
11.5% Senior Subordinated Note due 2012 $ 1,500,000 01/28/02 1,435,279 750,000
Common Stock (B) 312,500 shs. 01/28/02 312,500 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 243,223 shs. 01/28/02 162,045 --
------------- -------------
2,722,324 1,359,375
------------- -------------
OAKRIVER TECHNOLOGY, INC.
Designs, engineers and assembles high precision automated process equipment for the medical device industry, with a focus on
defibrillators and stents.
10% Senior Secured Note due 2012 $ 478,459 01/03/06 471,282 451,027
13% Senior Subordinated Note due 2013 $ 687,241 01/03/06 627,485 628,513
Common Stock (B) 322,307 shs. 01/03/06 322,307 --
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 75,378 shs. 01/03/06 62,824 --
------------- -------------
1,483,898 1,079,540
------------- -------------
OLYMPIC SALES, INC.
A boat retailer in Washington state, Oregon, California and British Columbia.
12% Senior Subordinated Note due 2009 (D) $ 1,022,000 08/07/98 1,022,000 204,400
12% Senior Subordinated Note due 2009 (D) $ 307,071 02/09/00 268,283 61,414
Warrants, exercisable until 2009, to purchase
common stock at $.01 per share (B) 2,855 shs. * 38,788 --
------------- -------------
*08/07/98 and 02/09/00. 1,329,071 265,814
------------- -------------
ONTARIO DRIVE & GEAR LTD.
A manufacturer of all-wheel drive, off-road amphibious vehicles and related accessories.
Limited Liability Company Unit (B) 3,667 uts. 01/17/06 572,115 1,125,650
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 619 shs. 01/17/06 170,801 190,049
------------- -------------
742,916 1,315,699
------------- -------------
22 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
P A S HOLDCO LLC
An independent provider of maintenance, repair and overhaul services to the aerospace gas turbine engine and airframe markets.
14% Senior Subordinated Note due 2014 $ 2,278,333 07/03/06 $ 2,178,270 $ 2,183,657
Preferred Unit (B) 382 uts. 07/03/06 382,150 486,796
Preferred Unit (B) 69 uts. 07/03/06 68,790 87,627
Common Unit Class I (B) 148 uts. 07/03/06 -- 7,633
Common Unit Class L (B) 31 uts. 07/03/06 -- 1,613
------------- -------------
2,629,210 2,767,326
------------- -------------
P I I HOLDING CORPORATION
A manufacturer of plastic film and bags for the general industrial, medical, and food industries.
12% Senior Subordinated Note due 2013 $ 2,295,000 03/31/06 2,171,286 2,254,384
Preferred Stock (B) 36 shs. 03/31/06 329,596 397,558
Common Stock (B) 23 shs. 03/31/06 25,500 71,659
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 13 shs. 03/31/06 11,122 41,684
------------- -------------
2,537,504 2,765,285
------------- -------------
PACIFIC CONSOLIDATED HOLDINGS LLC
A manufacturer of rugged, mobile liquid and gaseous oxygen and nitrogen generating systems used in the global defense, oil & gas,
and medical sectors.
14% Senior Subordinated Note due 2012 $ 1,324,584 04/27/07 1,228,824 1,223,441
Limited Liability Company Unit (B) 1,754,707 uts. 04/27/07 63,233 --
------------- -------------
1,292,057 1,223,441
------------- -------------
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 2011 $ 2,125,000 12/19/00 2,017,414 2,015,537
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 --
2,283,039 2,015,537
POSTLE ALUMINUM COMPANY LLC
A manufacturer and distributor of aluminum extruded products.
12% Senior Subordinated Note due 2014 $ 2,040,000 10/02/06 1,907,486 1,020,000
Limited Liability Company Unit 1,384 uts. 10/02/06 510,000 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 344 shs. 10/02/06 124,644 --
------------- -------------
2,542,130 1,020,000
------------- -------------
POWER SERVICES HOLDING COMPANY
A provider of industrial motor repair services, predictive and preventative maintenance, and performance improvement consulting,
serving the petrochemical, mining, power generation, metals, and paper industries.
12% Senior Subordinated Note due 2016 $ 2,372,093 02/11/08 2,167,765 2,280,937
Limited Partnership Interest (B) 23.70% int. 02/11/08 177,729 168,843
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 1,322 shs. 02/11/08 167,588 13
------------- -------------
2,513,082 2,449,793
------------- -------------
MassMutual Corporate Investors 23
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
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 --
------------- -------------
*08/12/94 and 11/14/01. 227,216 --
------------- -------------
QUALIS AUTOMOTIVE LLC
A distributor of aftermarket automotive brake and chassis products.
12% Senior Subordinated Note due 2012 $ 1,770,833 05/28/04 1,584,633 1,705,311
Common Stock 354,167 shs. 05/28/04 354,166 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share 377,719 shs. 05/28/04 377,719 --
------------- -------------
2,316,518 1,705,311
------------- -------------
R A J MANUFACTURING HOLDINGS LLC
A designer and manufacturer of women's swimwear sold under a variety of licensed brand names.
12.5% Senior Subordinated Note due 2014 $ 2,267,190 12/15/06 2,090,363 2,150,912
Limited Liability Company Unit (B) 2,828 uts. 12/15/06 282,810 201,086
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3 shs. 12/15/06 131,483 94,829
------------- -------------
2,504,656 2,446,827
------------- -------------
R E I DELAWARE HOLDING, INC.
An engineer and manufacturer of highly complex, close tolerance components, assemblies, tooling and custom automation equipment
primarily for aerospace, medical and defense/radar markets.
12% Senior Subordinated Note due 2016 $ 2,550,000 01/18/08 2,467,911 2,376,802
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 6 shs. 01/18/08 31,089 --
------------- -------------
2,499,000 2,376,802
------------- -------------
RADIAC ABRASIVES, INC.
A manufacturer of bonded abrasive and super abrasive grinding wheels in the United States.
12% Senior Subordinated Note due 2014 $ 2,260,638 02/10/06 2,124,912 2,262,330
Common Stock (B) 289,362 shs. 02/10/06 289,362 457,523
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 131,555 shs. 02/10/06 119,796 208,008
------------- -------------
2,534,070 2,927,861
------------- -------------
ROYAL BATHS MANUFACTURING COMPANY
A manufacturer and distributor of acrylic and cultured marble bathroom products.
12.5% Senior Subordinated Note due 2011 $ 1,062,500 11/14/03 1,002,977 990,611
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 25,172
------------- -------------
1,125,923 1,015,783
------------- -------------
SAFETY SPEED CUT MANUFACTURING COMPANY, INC.
A manufacturer of vertical panel saws and routers for the wood working industry.
Class B Common Stock (B) 1,480 shs. 06/02/99 256,212 1,020,728
------------- -------------
24 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
SAVAGE SPORTS HOLDING, INC.
A manufacturer of sporting firearms.
12% Senior Subordinated Note due 2012 $ 1,538,793 09/10/04 $ 1,469,008 $ 1,434,941
Common Stock (B) 612 shs. * 642,937 634,633
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 138,561
------------- -------------
*09/10/04 and 10/05/07. 2,225,523 2,208,135
------------- -------------
SMART SOURCE HOLDINGS LLC
A short-term computer rental company.
12% Senior Subordinated Note due 2015 $ 2,223,076 * 2,029,552 2,145,848
Limited Liability Company Unit (B) 619 uts. * 637,996 761,140
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 157 shs. * 164,769 192,822
------------- -------------
* 08/31/07 and 03/06/08. 2,832,317 3,099,810
------------- -------------
SPECIALTY COMMODITIES, INC.
A distributor of specialty food ingredients.
13.25% Senior Subordinated Note due 2016 $ 2,250,000 10/23/08 2,104,770 2,317,500
Common Stock (B) 30,000 shs. 10/23/08 300,000 285,000
Warrant, excercisable until 2018, to purchase
common stock at $.01 per share (B) 11,054 shs. 10/23/08 100,650 111
------------- -------------
2,505,420 2,602,611
------------- -------------
STANTON CARPET HOLDING CO.
A designer and marketer of high and mid-priced decorative carpets and rugs.
12.13% Senior Subordinated Note due 2014 $ 2,239,024 08/01/06 2,119,186 2,068,074
Common Stock (B) 311 shs. 08/01/06 310,976 327,810
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 104 shs. 08/01/06 93,293 109,175
------------- -------------
2,523,455 2,505,059
------------- -------------
SYNTERACT HOLDINGS CORPORATION
A provider of outsourced clinical trial management services to pharmaceutical and biotechnology companies.
14% Senior Subordinated Note due 2016 $ 2,558,505 09/02/08 2,384,428 2,449,711
Redeemable Preferred Stock Series A (B) 1,280 shs. 09/02/08 12,523 13
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 12,803 shs. 09/02/08 112,693 128
------------- -------------
2,509,644 2,449,852
------------- -------------
T H I ACQUISITION, INC.
A machine servicing company providing value-added steel services to long steel products.
12% Senior Subordinated Note due 2016 $ 2,550,000 01/14/08 2,410,946 2,375,300
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 9 shs. 01/14/08 88,054 --
------------- -------------
2,499,000 2,375,300
------------- -------------
TANGENT RAIL CORPORATION
A manufacturer of rail ties and provider of specialty services to the North American railroad industry.
13% Senior Subordinated Note due 2015 $ 2,217,385 10/14/05 1,952,116 2,156,264
Common Stock 2,203 shs. 10/14/05 2,203 633,181
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share 1,192 shs. 09/30/08 568,009 342,602
------------- -------------
2,522,328 3,132,047
------------- -------------
MassMutual Corporate Investors 25
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
TERRA RENEWAL LLC
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.
6.46% Senior Secured Tranche B Note due 2012 (C) $ 1,514,744 * $ 1,509,610 $ 1,475,058
6.50% Senior Secured Tranche B Note due 2012 (C) $ 1,443 09/30/08 1,443 1,435
12% Senior Subordinated Note due 2014 $ 1,162,110 ** 1,112,703 1,117,665
Limited Partnership Interest of
Saw Mill Capital Fund V, LLC (B) 3.97% int. *** 149,259 542,885
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 72 shs. 04/28/06 59,041 87,721
------------- -------------
* 04/28/06 and 12/21/06. ** 04/28/06 and 09/13/06. *** 03/01/05 and 10/10/08. 2,832,056 3,224,764
------------- -------------
TORRENT GROUP HOLDINGS, INC.
A contractor specializing in the sales and installation of engineered drywells for the retention and filtration of stormwater and
nuisance water flow.
12.5% Senior Subordinated Note due 2013 $ 2,239,024 10/26/07 2,102,363 2,112,976
Series A Preferred Stock (B) 414 shs. 10/26/07 414,051 190,554
------------- -------------
2,516,414 2,303,530
------------- -------------
TOTAL E & S, INC.
A manufacturer of a wide variety of equipment used in the oil and gas industry.
10.5% Senior Secured Term Note due 2013 $ 851,351 03/02/07 838,581 827,348
13% Senior Subordinated Note due 2014 $ 598,450 03/02/07 490,608 573,161
Common Stock (B) 125,199 shs. 03/02/07 125,199 115,439
Warrant, exercisable until 2014 to purchase
common stock at $.01 per share (B) 34,533 shs. 03/02/07 95,873 31,841
------------- -------------
1,550,261 1,547,789
------------- -------------
TRANSPAC HOLDING COMPANY
A designer, importer, and wholesaler of home decor and seasonal gift products.
12% Senior Subordinated Note due 2015 $ 1,773,006 10/31/07 1,657,424 1,551,799
Common Stock (B) 209 shs. 10/31/07 208,589 187,731
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 94 shs. 10/31/07 87,607 1
------------- -------------
1,953,620 1,739,531
------------- -------------
TRANSTAR HOLDING COMPANY
A distributor of aftermarket automotive transmission parts.
12% Senior Subordinated Note due 2014 $ 1,734,000 08/31/05 1,674,945 1,639,601
Common Stock (B) 1,078 shs. * 1,078,450 991,539
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 86 shs. 08/31/05 77,485 79,014
------------- -------------
*08/31/05 and 04/30/07. 2,830,880 2,710,154
------------- -------------
TRANZONIC COMPANIES (THE)
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 2010 $ 2,712,000 02/05/98 2,615,097 2,709,940
Common Stock (B) 630 shs. 02/04/98 630,000 707,010
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 498,274
------------- -------------
3,613,929 3,915,224
------------- -------------
26 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
TRUCK BODIES & EQUIPMENT INTERNATIONAL
A designer and manufacturer of accessories for heavy and medium duty trucks, primarily dump bodies, hoists, various forms of
flat-bed bodies, landscape bodies and other accessories.
16% Senior Subordinated Note due 2010 (D) $ 2,309,541 * $ 2,141,949 $ 577,385
16% PIK Note due 2010 $ 215,219 12/30/08 -- 53,805
Preferred Stock Series B (B) 241 shs. 10/20/08 241,172
Common Stock (B) 742 shs. * 800,860 --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 153 shs. * 159,894 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 1,054 shs. 10/20/08 -- --
------------- -------------
* 07/19/05 and 12/22/05. 3,343,875 631,190
------------- -------------
TRUSTILE DOORS, INC.
A manufacturer and distributor of interior doors.
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 5,781 shs. 04/11/03 71,438 252,803
------------- -------------
U M A ENTERPRISES, INC.
An importer and wholesaler of home decor products.
15% Senior Subordinated Note due 2015 $ 1,708,255 02/08/08 1,672,705 1,554,708
Convertible Preferred Stock (B) 887 shs. 02/08/08 886,956 798,264
------------- -------------
2,559,661 2,352,972
------------- -------------
U-LINE CORPORATION
A manufacturer of high-end, built-in, undercounter ice making, wine storage and refrigeration appliances.
12.5% Senior Subordinated Note due 2012 $ 1,882,100 04/30/04 1,760,845 1,790,581
Common Stock (B) 182 shs. 04/30/04 182,200 126,037
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 230 shs. 04/30/04 211,736 159,393
------------- -------------
2,154,781 2,076,011
------------- -------------
VISIONEERING, INC.
A designer and manufacturer of tooling and fixtures for the aerospace industry.
10.5% Senior Secured Term Loan due 2013 $ 802,941 05/17/07 790,897 786,195
13% Senior Subordinated Note due 2014 $ 648,530 05/17/07 588,317 627,053
Common Stock (B) 123,529 shs. 05/17/07 123,529 157,490
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 35,006 shs. 05/17/07 55,055 44,630
------------- -------------
1,557,798 1,615,368
------------- -------------
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 1,790,297 1,753,909
Common Stock (B) 26,456 shs. * 264,558 276,317
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 23,787 shs. 09/24/04 186,883 248,441
------------- -------------
* 09/24/04 and 12/22/06. 2,241,738 2,278,667
------------- -------------
MassMutual Corporate Investors 27
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) Continued PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
VITEX PACKAGING GROUP, INC.
A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags.
12.5% Senior Subordinated Note due 2012 $ 1,700,000 07/19/04 $ 1,483,065 $ --
14.5% PIK Note due 2010 $ 407,956 06/30/07 340,945 --
Limited Liability Company Unit Class A (B) 414,375 uts. 07/19/04 414,375 --
Limited Liability Company Unit Class B (B) 182,935 uts. 07/19/04 182,935 --
------------- -------------
2,421,320 --
------------- -------------
WAGGIN' TRAIN HOLDINGS LLC
A producer of premium quality meat dog treats.
14% Senior Subordinated Note due 2014 $ 2,175,761 11/15/07 2,130,736 1,985,743
Limited Liability Company Unit Class B (B) 423 uts. 11/15/07 422,652 182,948
Limited Liability Company Unit Class C (B) 423 uts. 11/15/07 -- 182,948
------------- -------------
2,553,388 2,351,639
------------- -------------
WALLS INDUSTRIES, INC.
A provider of branded workwear and sporting goods apparel.
Limited Partnership Interest (B) 0.40% int. 07/12/04 3,728 --
Common Stock (B) 4,028 shs. 12/21/07 -- --
------------- -------------
3,728 --
------------- -------------
WELLBORN FOREST HOLDING CO.
A manufacturer of semi-custom kitchen and bath cabinetry.
12.13% Senior Subordinated Note due 2014 $ 1,721,250 11/30/06 1,614,828 1,520,527
Common Stock (B) 191 shs. 11/30/06 191,250 82,806
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 95 shs. 11/30/06 86,493 41,340
------------- -------------
1,892,571 1,644,673
------------- -------------
WORKPLACE MEDIA HOLDING CO.
A direct marketer specializing in providing advertisers with access to consumers in the workplace.
13% Senior Subordinated Note due 2015 $ 1,159,196 05/14/07 1,062,393 1,030,065
Limited Partnership Interest (B) 23.16% int. 05/14/07 115,804 --
Warrant, exercisable until 2015, to purchase
common stock at $.02 per share (B) 88 shs. 05/14/07 83,462 --
------------- -------------
1,261,659 1,030,065
------------- -------------
XALOY SUPERIOR HOLDINGS, INC.
A provider of melt processing components and ancillary equipment for both plastic injection molding and extrusion applications.
15% Senior Subordinated Note due 2015 $ 2,266,667 09/08/08 2,221,334 2,118,256
Common Stock (B) 283 shs. 09/08/08 283,329 254,995
2,504,663 2,373,251
------------- -------------
TOTAL PRIVATE PLACEMENT INVESTMENTS (E) 202,377,655 182,799,290
------------- -------------
28 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
SHARES OR
INTEREST DUE PRINCIPAL
CORPORATE RESTRICTED SECURITIES:(A) (CONTINUED) RATE DATE AMOUNT COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
RULE 144A SECURITIES - 4.01%: (A)
BONDS - 4.01%
American Tire Distributor (C) 10.133% 04/01/12 $ 1,000,000 $ 950,000 $ 740,000
Cenveo Corporation 10.500 08/15/16 100,000 100,000 58,000
Charter Communications Op LLC 8.000 04/30/12 1,350,000 1,152,250 1,107,000
Compucom Systems, Inc. 12.500 10/01/15 1,330,000 1,288,710 904,400
Douglas Dynamics LLC 7.750 01/15/12 1,010,000 955,115 525,200
G F S I, Inc. (C) 10.500 06/01/11 715,000 685,658 597,025
Intergen NV 9.000 06/30/17 750,000 743,918 615,000
Packaging Dynamics Corporation of America 10.000 05/01/16 1,200,000 1,195,153 546,000
Rock-Tenn Co. 9.250 03/15/16 1,075,000 1,115,554 999,750
SandRidge Energy, Inc. 8.000 06/01/18 360,000 364,387 199,800
Ticketmaster Entertainment, Inc. 10.750 08/01/16 500,000 500,000 270,000
Tunica-Biloxi Gaming Authority 9.000 11/15/15 1,075,000 1,102,608 849,250
TXU Energy Company LLC 10.250 11/01/15 1,250,000 1,261,623 887,500
Videotron, Ltd. 9.125 04/15/18 40,000 39,373 37,200
------------ ------------
TOTAL BONDS 11,454,349 8,336,125
------------ ------------
CONVERTIBLE PREFERRED STOCK - 0.00%
ETEX Corporation (B) 777 716 --
------------ ------------
TOTAL CONVERTIBLE PREFERRED STOCK 716 --
------------ ------------
PREFERRED STOCK - 0.00%
TherOX, Inc. (B) 103 4,131 --
------------ ------------
TOTAL PREFERRED STOCK 4,131 --
------------ ------------
COMMON STOCK - 0.00%
Touchstone Health Partnership (B) 1,168 4,254 --
------------ ------------
TOTAL COMMON STOCK 4,254 --
------------ ------------
TOTAL RULE 144A SECURITIES 11,463,450 8,336,125
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $213,841,105 $191,135,415
------------ ------------
MassMutual Corporate Investors 29
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
INTEREST DUE PRINCIPAL
CORPORATE PUBLIC SECURITIES - 19.42%:(A) RATE DATE AMOUNT COST MARKET VALUE
---------------------------------------------------------------------------------------------------------------------------------
BONDS - 18.00%
A M C Entertainment, Inc. 11.000% 02/01/16 $ 1,315,000 $ 1,321,956 $ 918,856
Activant Solutions, Inc. 9.500 05/01/16 150,000 150,000 69,750
Appleton Papers, Inc. 8.125 06/15/11 300,000 300,000 207,000
Aramark Corporation (C) 6.693 02/01/15 200,000 200,000 151,000
Aramark Corporation 8.500 02/01/15 500,000 502,379 452,500
Bally Total Fitness Holdings Corporation (F) 14.000 10/01/13 104,062 74,053 260
Basic Energy Services 7.125 04/15/16 225,000 225,000 128,250
Berry Plastics Corporation (C) 7.463 02/15/15 500,000 473,489 345,000
Brigham Exploration Co. 9.625 05/01/14 1,200,000 1,167,903 684,000
Cablevision Systems Corporation 8.000 04/15/12 1,000,000 1,009,071 890,000
Cablevision Systems Corporation (C) 8.334 04/01/09 300,000 300,000 299,250
Cenveo Corporation 7.875 12/01/13 1,300,000 1,192,500 679,250
Chaparral Energy, Inc. 8.875 02/01/17 1,500,000 1,491,780 300,000
Cincinnati Bell, Inc. 7.000 02/15/15 1,100,000 789,250 841,500
Community Health Systems, Inc. (C) 8.875 07/15/15 1,200,000 1,169,415 1,104,000
Dynegy Holdings, Inc. 7.750 06/01/19 830,000 564,400 572,700
El Paso Corporation 12.000 12/12/13 55,000 48,947 54,588
Enterprise Products Operating Co. 9.750 01/31/14 750,000 750,000 763,716
Ford Motor Credit Co. 7.375 10/28/09 500,000 498,750 439,111
General Motors Acceptance Corporation 7.750 01/19/10 815,000 733,174 733,182
Gencorp, Inc. 9.500 08/15/13 259,000 259,000 207,200
Goodyear Tire & Rubber Co. 7.857 08/15/11 1,150,000 1,097,750 954,500
Graham Packaging Corporation 8.500 10/15/12 280,000 268,800 199,500
Great Lakes Dredge & Dock Corporation 7.750 12/15/13 1,000,000 948,750 771,250
H C A, Inc. 9.125 11/15/14 1,125,000 919,688 1,043,438
Hawker Beechcraft Acquisition Co. 9.750 04/01/17 1,000,000 1,008,488 270,000
Hughes Network Systems 9.500 04/15/14 1,325,000 1,346,781 1,076,563
Inergy LP 8.250 03/01/16 470,000 481,218 366,600
Intelsat Bermuda Ltd. 9.250 06/15/16 1,365,000 1,412,750 1,064,700
Interline Brands, Inc. 8.125 06/15/14 1,300,000 1,291,107 1,027,000
Kar Holdings, Inc. 8.750 05/01/14 50,000 50,000 22,000
L-3 Communications Holdings, Inc. 6.125 07/15/13 1,000,000 995,000 920,000
Leucadia National Corporation 7.000 08/15/13 450,000 450,821 357,750
Liberty Media Corporation 5.700 05/15/13 1,000,000 951,610 655,577
Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 152,000
30 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
INTEREST DUE PRINCIPAL
CORPORATE PUBLIC SECURITIES:(A) Continued RATE DATE AMOUNT COST MARKET VALUE
---------------------------------------------------------------------------------------------------------------------------------
BONDS, CONTINUED
Markwest Energy Operating Co. 6.875% 11/01/14 $ 950,000 $ 930,563 $ 598,500
Markwest Energy Operating Co. 8.750 04/15/18 125,000 123,979 77,500
Mediacom Broadband LLC 8.500 10/15/15 1,250,000 975,000 943,750
N R G Energy, Inc. 7.375 02/01/16 175,000 175,000 162,750
Newark Group, Inc. 9.750 03/15/14 850,000 796,863 80,750
Nortek, Inc. 10.000 12/01/13 175,000 173,175 119,000
North American Energy Partners 8.750 12/01/11 1,165,000 1,173,490 885,400
O E D Corp./Diamond Jo Company Guarantee 8.750 04/15/12 1,000,000 985,960 685,000
Pliant Corporation 11.125 09/01/09 550,000 539,000 27,500
Pliant Corporation (C) 11.850 06/15/09 1,111,500 1,085,040 594,654
Polypore, Inc. 8.750 05/15/12 1,460,000 1,410,050 1,051,200
Pregis Corporation 12.375 10/15/13 1,000,000 981,490 450,000
Quebecor Media, Inc. 7.750 03/15/16 1,050,000 978,235 708,750
Rental Service Corporation 9.500 12/01/14 500,000 484,385 275,000
Scholastic Corporation 5.000 04/15/13 1,500,000 1,278,750 1,170,000
Seneca Gaming Corporation 7.250 05/01/12 500,000 477,500 402,500
Shaw Communications, Inc. 7.250 04/06/11 400,000 411,641 378,000
Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 262,969
Stanadyne Corporation 10.000 08/15/14 1,500,000 1,500,000 1,020,000
Stewart & Stevenson LLC 10.000 07/15/14 1,465,000 1,497,451 908,300
Tekni-Plex, Inc. 8.750 11/15/13 650,000 654,573 377,000
Tenneco, Inc. 8.125 11/15/15 1,100,000 540,000 506,000
Texas Industries, Inc. 7.250 07/15/13 70,000 70,000 54,075
Time Warner Telecom Holdings 9.250 02/15/14 1,000,000 1,008,981 820,000
Titan International, Inc. 8.000 01/15/12 1,070,000 1,062,100 791,800
Transdigm, Inc. 7.750 07/15/14 500,000 503,488 410,000
Trimas Corporation 9.875 06/15/12 1,073,000 982,375 536,500
Tube City IMS Corporation 9.750 02/01/15 1,500,000 1,485,219 525,000
United Components, Inc. 9.375 06/15/13 1,080,000 1,080,604 453,600
United Rentals, Inc. 6.500 02/15/12 1,125,000 815,625 888,750
Virgin Media Finance PLC 9.125 08/15/16 1,380,000 1,414,129 1,021,200
Vought Aircraft Industries 8.000 07/15/11 1,150,000 1,115,399 776,250
Waste Services, Inc. 9.500 04/15/14 1,100,000 1,119,041 781,000
------------ ------------
TOTAL BONDS 52,842,937 37,464,689
------------ ------------
MassMutual Corporate Investors 31
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
SHARES OR
INTEREST DUE PRINCIPAL
CORPORATE PUBLIC SECURITIES:(A) (CONTINUED) RATE DATE AMOUNT COST MARKET VALUE
---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - 1.22%
Chase Packaging Corporation (B) 9,541 $ -- $ 477
CKX, Inc. (B) 97,500 784,875 357,825
Directed Electronics, Inc. (B) 368,560 1,856,534 147,424
El Paso Corporation (B) 65,000 808,362 508,950
EnerNOC, Inc. (B) 46,500 1,283,262 345,960
ITC^DeltaCom, Inc. (B) 178,666 1,563,328 89,333
Intrepid Potash, Inc. (B) 365 11,680 7,581
PepsiAmericas, Inc. 48,206 1,049,637 981,474
Supreme Industries, Inc. 125,116 267,315 106,346
------------ ------------
TOTAL COMMON STOCK 7,624,993 2,545,370
------------ ------------
CONVERTIBLE BONDS - 0.20%
Citadel Broadcasting Corporation 4.000% 02/15/11 $ 583,000 452,556 412,473
------------ ------------
TOTAL CONVERTIBLE BONDS 452,556 412,473
------------ ------------
PREFERRED STOCK - 0.00%
Preferred Blocker, Inc. 144 144 --
TOTAL PREFERRED STOCK 144 --
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 60,920,630 $ 40,422,532
------------ ------------
INTEREST DUE PRINCIPAL
SHORT-TERM SECURITIES: RATE/YIELD DATE AMOUNT COST MARKET VALUE
---------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 2.99%
Dow Chemical Co. 5.154% 01/05/09 $ 1,070,000 $ 1,069,388 $ 1,069,388
Dow Chemical Co. 5.155 01/06/09 1,287,000 1,286,079 1,286,079
Dow Chemical Co. 5.164 01/12/09 711,000 709,886 709,886
Wisconsin Gas Co. 0.250 01/05/09 3,168,000 3,167,913 3,167,913
TOTAL SHORT-TERM SECURITIES $ 6,233,266 $ 6,233,266
------------ ------------
TOTAL INVESTMENTS 114.24% $280,995,001 $237,791,213
------ ------------ ------------
Other Assets 3.13 6,519,422
Liabilities (17.37) (36,167,116)
------ ------------
TOTAL NET ASSETS 100.00% $208,143,519
====== ============
(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.
(C) Variable rate security; rate indicated is as of 12/31/08.
(D) Defaulted security; interest not accrued.
(E) Illiquid securities. At December 31, 2008, the value of these securities amounted to $182,799,290 or 87.82% of net assets.
(F) Security valued at fair value using methods determined in good faith by or under the direction of the Board of Trustees.
^ Effective yield at purchase
PIK - Payment-in-kind
32 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
AEROSPACE - 3.73% CHEMICAL, PLASTICS & RUBBER - 0.13%
Gencorp, Inc. $ 207,200 Capital Specialty Plastics, Inc. $ 279,466
Hughes Network Systems 1,076,563 ------------
L-3 Communications Holdings, Inc. 920,000 279,466
P A S Holdco LLC 2,767,326 ------------
Transdigm, Inc. 410,000 CONSUMER PRODUCTS - 8.05%
Visioneering, Inc. 1,615,368 Aero Holdings, Inc. 3,354,423
Vought Aircraft Industries 776,250 Bravo Sports Holding Corporation 2,307,652
------------ G F S I, Inc. 597,025
7,772,707 K N B Holdings Corporation 2,580,880
------------ Kar Holdings, Inc. 22,000
AUTOMOBILE - 5.84% Momentum Holding Co. 516,341
American Tire Distributor 740,000 R A J Manufacturing Holdings LLC 2,446,827
Fuel Systems Holding Corporation 584,375 Royal Baths Manufacturing Company 1,015,783
Goodyear Tire & Rubber Co. 954,500 The Tranzonic Companies 3,915,224
Jason, Inc. 1,044,126 Walls Industries, Inc. --
Nyloncraft, Inc. 1,359,375 ------------
Ontario Drive & Gear Ltd. 1,315,699 16,756,155
Qualis Automotive LLC 1,705,311 ------------
Tenneco, Inc. 506,000 CONTAINERS, PACKAGING & GLASS - 4.47%
Titan International, Inc. 791,800 Berry Plastics Corporation 345,000
Transtar Holding Company 2,710,154 Chase Packaging Corporation 477
United Components, Inc. 453,600 Flutes, Inc. 1,296,910
------------ Graham Packaging Corporation 199,500
12,164,940 Maverick Acquisition Company 683,388
------------ P I I Holding Corporation 2,765,285
BEVERAGE, DRUG & FOOD - 5.00% Packaging Dynamics Corporation of America 546,000
Aramark Corporation 603,500 Paradigm Packaging, Inc. 2,015,537
Golden County Foods Holding, Inc. 1,530,000 Pliant Corporation 622,154
Hospitality Mints Holding Company 2,420,032 Pregis Corporation 450,000
PepsiAmericas, Inc. 981,474 Tekni-Plex, Inc. 377,000
Specialty Commodities, Inc. 2,602,611 Vitex Packaging Group, Inc. --
Vitality Foodservice, Inc. 2,278,667 ------------
------------ 9,301,251
10,416,284 ------------
------------ DISTRIBUTION - 1.87%
BROADCASTING & ENTERTAINMENT - 3.41% Duncan Systems, Inc. 1,461,245
Cablevision Systems Corporation 1,189,250 F C X Holdings Corporation 2,421,289
Charter Communications Op LLC 1,107,000 ------------
Citadel Broadcasting Corporation 412,473 3,882,534
CKX, Inc. 357,825 ------------
Liberty Media Corporation 655,577 DIVERSIFIED/CONGLOMERATE, MANUFACTURING - 11.84%
Mediacom Broadband LLC 943,750 A H C Holding Company, Inc. 2,491,679
Shaw Communications, Inc. 378,000 Activant Solutions, Inc. 69,750
Virgin Media Finance PLC 1,021,200 Arrow Tru-Line Holdings, Inc. 1,545,103
Workplace Media Holding Co. 1,030,065 C D N T, Inc. 1,513,163
------------ Douglas Dynamics LLC 525,200
7,095,140 Evans Consoles, Inc. 1,684,302
------------ Great Lakes Dredge & Dock Corporation 771,250
BUILDINGS & REAL ESTATE - 1.18% K P I Holdings, Inc. 2,425,576
K W P I Holdings Corporation 2,146,800 MEGTEC Holdings, Inc. 2,416,116
Texas Industries, Inc. 54,075 Milwaukee Gear Company 2,540,513
TruStile Doors, Inc. 252,803 Nortek, Inc. 119,000
------------ Polypore, Inc. 1,051,200
2,453,678 Postle Aluminum Company LLC 1,020,000
------------
MassMutual Corporate Investors 33
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
Radiac Abrasives, Inc. $ 2,927,861 HOME & OFFICE FURNISHINGS, HOUSEWARES, AND
Trimas Corporation 536,500 DURABLE CONSUMER PRODUCTS - 10.51%
Truck Bodies & Equipment International 631,190 Connor Sport Court International, Inc. $ 2,523,958
Xaloy Superior Holdings, Inc. 2,373,250 H M Holding Company --
------------ Home Decor Holding Company 2,157,303
24,641,653 Justrite Manufacturing Acquisition Co. 1,820,913
------------ K H O F Holdings, Inc. 2,514,382
DIVERSIFIED/CONGLOMERATE, SERVICE - 9.44% Monessen Holding Corporation 2,533,086
A W X Holdings Corporation 1,503,052 Stanton Carpet Holding Co. 2,505,059
Advanced Technologies Holdings 2,571,072 Transpac Holdings Company 1,739,531
CapeSuccess LLC -- U M A Enterprises, Inc. 2,352,972
Clough, Harbour and Associates 2,664,154 U-Line Corporation 2,076,011
Crane Rental Corporation 2,442,490 Wellborn Forest Holding Co. 1,644,673
Diversco, Inc./DHI Holdings, Inc. 1,319,430 ------------
Dwyer Group, Inc. 1,491,539 21,867,888
Fowler Holding, Inc. -- ------------
GQ Holdings LLC 2,287,454 LEISURE, AMUSEMENT, ENTERTAINMENT - 2.66%
Insurance Claims Management, Inc. 130,668 A M C Entertainment, Inc. 918,856
Interline Brands, Inc. 1,027,000 Bally Total Fitness Holding Corporation 260
Mail Communications Group, Inc. 1,414,945 Electra Bicycle Company LLC 199,935
Nesco Holdings Corporation 2,762,740 O E D Corp/Diamond Jo Company Guarantee 685,000
Videotron, Ltd. 37,200 Savage Sports Holding, Inc. 2,208,135
------------ Seneca Gaming Corporation 402,500
19,651,744 Ticketmaster Entertainment, Inc. 270,000
------------ Tunica-Biloxi Gaming Authority 849,250
ELECTRONICS - 1.06% ------------
Connecticut Electric, Inc. 2,061,665 5,533,936
Directed Electronics, Inc. 147,424 ------------
------------ MACHINERY - 11.87%
2,209,089 A S A P Industries LLC 1,306,760
------------ Davis-Standard LLC 3,604,749
FARMING & AGRICULTURE - 1.13% E S P Holdco, Inc. 2,415,662
Protein Genetics, Inc. -- Integration Technology Systems, Inc. --
Waggin' Train Holdings LLC 2,351,639 K-Tek Holdings Corporation 2,663,210
------------ M V I Holding, Inc. 1,205,786
2,351,639 Manitowoc Company, Inc. 152,000
------------ Morton Industrial Group, Inc. 2,267,012
FINANCIAL SERVICES - 0.87% Navis Global 403,690
Ford Motor Credit Co. 439,111 NetShape Technologies, Inc. 1,589,433
General Motors Acceptance Corporation 733,182 Pacific Consolidated Holdings LLC 1,223,441
Hawker Beechcraft Acquisition Co. 270,000 Power Services Holding Company 2,449,793
Highgate Capital LLC -- R E I Delaware Holding, Inc. 2,376,802
Leucadia National Corporation 357,750 Safety Speed Cut Manufacturing Company, Inc. 1,020,728
------------ Stanadyne Corporation 1,020,000
1,800,043 Stewart & Stevenson LLC 908,300
------------ Supreme Industries, Inc. 106,347
HEALTHCARE, EDUCATION & CHILDCARE - 6.55% ------------
A T I Acquisition Company 3,180,807 24,713,713
American Hospice Management Holding LLC 3,621,533 ------------
Community Health Systems, Inc. 1,104,000
F H S Holdings LLC 2,231,813
H C A, Inc. 1,043,438
Synteract Holdings Corporation 2,449,852
Touchstone Health Partnership --
------------
13,631,443
------------
34 MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2008
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
MEDICAL DEVICES/BIOTECH - 3.57% TECHNOLOGY - 2.09%
Coeur, Inc. $ 1,230,155 Compucom Systems, Inc. $ 904,400
E X C Acquisition Corporation 210,822 EnerNOC, Inc. 345,960
ETEX Corporation -- Smart Source Holdings LLC 3,099,810
MedSystems Holdings LLC 1,218,993 ------------
MicroGroup, Inc. 3,699,366 4,350,170
OakRiver Technology, Inc. 1,079,540 ------------
TherOX, Inc. -- TELECOMMUNICATIONS - 1.94%
------------ All Current Holding Company 1,214,227
7,438,876 Cincinnati Bell, Inc. 841,500
------------ Intelsat Bermuda Ltd. 1,064,700
MINING, STEEL, IRON & NON PRECIOUS ITC^DeltaCom, Inc. 89,333
METALS - 1.39% Time Warner Telecom Holdings 820,000
T H I Acquisition, Inc. 2,375,300 ------------
Tube City IMS Corporation 525,000 4,029,760
------------ ------------
2,900,300 TRANSPORTATION - 1.70%
------------ NABCO, Inc. 407,710
NATURAL RESOURCES - 1.03% Tangent Rail Corporation 3,132,047
Appleton Papers, Inc. 207,000 ------------
Cenveo Corporation 737,250 3,539,757
Intrepid Potash, Inc. 7,581 ------------
Rock-Tenn Co. 999,750 UTILITIES - 1.85%
SandRidge Energy, Inc. 199,800 Dynegy Holdings, Inc. 572,700
------------ El Paso Corporation 563,538
2,151,381 Inergy LP 366,600
------------ Intergen NV 615,000
OIL & GAS - 2.07% Markwest Energy Operating Co. 676,000
Basic Energy Services 128,250 N R G Energy, Inc. 162,750
Brigham Exploration Co. 684,000 TXU Energy Company LLC 887,500
Chaparral Energy, Inc. 300,000 ------------
Enterprise Products Operating Co. 763,716 3,844,088
North American Energy Partners 885,400 ------------
Total E & S, Inc. 1,547,789 WASTE MANAGEMENT / POLLUTION - 3.03%
------------ Terra Renewal LLC 3,224,764
4,309,155 Torrent Group Holdings, Inc. 2,303,530
------------ Waste Services, Inc. 781,000
PHARMACEUTICALS - 1.21% ------------
CorePharma LLC 2,509,830 6,309,294
------------ ------------
2,509,830 TOTAL CORPORATE RESTRICTED AND PUBLIC
------------ SECURITIES - 111.25% $231,557,947
PUBLISHING/PRINTING - 1.07% ============
Newark Group, Inc. 80,750
Quebecor Media, Inc. 708,750
Scholastic Corporation 1,170,000
Sheridan Acquisition Corporation 262,969
------------
2,222,469
------------
RETAIL STORES - 0.69%
Olympic Sales, Inc. 265,814
Rental Service Corporation 275,000
United Rentals, Inc. 888,750
------------
1,429,564
------------
MassMutual Corporate Investors 35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2008
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 ("Babson Capital"), a wholly-owned 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 and at the same time offering
an opportunity for capital gains. The Trust's principal investments are
privately placed, below-investment grade, long-term debt obligations with
equity features such as common stock, 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 in private placement transactions. These investments are
typically mezzanine debt instruments with accompanying private equity
securities made to small or middle market 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. Below-investment grade
or high yield securities have predominantly speculative characteristics with
respect to the capacity of the issuer to pay interest and repay capital.
On January 27,1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary of the Trust ("MMCI Subsidiary Trust") for the
purpose of holding certain investments. The results of MMCI Subsidiary Trust
are consolidated in the accompanying 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 its 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, restricted securities can be sold only
in a public offering for which a registration statement is in effect under
the Securities Act of 1933, as amended (the "1933 Act"), or pursuant to a
transaction that is exempt from registration under the 1933 Act.
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 its acquisition 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 a security held
by the Trust; an estimate of the existence and the 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
--------------------------------------------------------------------------------
36 MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2008
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, as amended (the "1940
Act"). 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 1933 Act and any other
developments which are likely to increase the probability that the securities
may be publicly sold by the Trust without restriction.
The Trustees meet at least once each quarter to approve the value of the
Trust's portfolio securities as of the close of business on the last business
day of the preceding quarter. This valuation requires the approval of a
majority of the Trustees of the Trust, including a majority of the Trustees
who are not interested persons of the Trust or of Babson Capital. 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 $182,799,290 (87.82% of net assets) as of December 31,
2008 whose values have been estimated by the 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 Rule 144A restricted securities and corporate public
securities are stated at the last reported sales price or at prices based
upon quotations obtained from brokers and dealers as of December 31, 2008,
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.
Effective January 1, 2008, the Trust adopted FASB Statement of Financial
Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157
clarifies the definition of fair value, establishes a framework for measuring
fair values, and requires additional disclosures about the use of fair value
measurements. FAS 157 requires companies to provide expanded information
about the assets and liabilities measured at fair value and the potential
effect of these fair valuations on an entity's financial performance.
Various inputs are used in determining the value of the Trust's investments.
Using the hierarchy established under FAS 157, these inputs are summarized in
the three broad levels listed below:
Level 1: quoted prices in active markets for identical securities
Level 2: other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
etc.)
Level 3: significant unobservable inputs (including the Trust's own
assumptions in determining the fair value of investments)
The inputs and methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Trust's net assets
as of December 31, 2008:
Assets: Total Level 1 Level 2 Level 3
-----------------------------------------------------------------------------
Restricted
Securities $191,135,415 $ -- $ 8,336,125 $182,799,290
Public Securities 40,422,532 2,545,370 37,876,902 260
Short-term
Securities 6,233,266 -- 6,233,266 --
-----------------------------------------------------------------------------
Total $237,791,213 $ 2,545,370 $52,446,293 $182,799,550
-----------------------------------------------------------------------------
--------------------------------------------------------------------------------
MassMutual Corporate Investors 37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2008
Following is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value:
Restricted Public Short-term
Assets Securities Securities Securities Total
-----------------------------------------------------------------------------
Beginning
Balance at
12/31/2007 $175,656,605 $ 74,700 $ -- $175,731,305
Total gains
or losses
(realized/
unrealized)
included in
earnings * (16,135,320) (75,143) -- (16,210,463)
Purchases, sales,
issuances &
Settlements(net) 23,278,005 703 -- 23,278,708
-----------------------------------------------------------------------------
Ending balance
at 12/31/08 $182,799,290 $ 260 $ -- $182,799,550
-----------------------------------------------------------------------------
* The amount of total gains or losses for the period included in earnings
attributable to the change in unrealized gains or losses relating to Level 3
assets still held at 12/31/08 is ($20,269,679).
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, including the amortization of premiums and accretion of
discounts on bonds held using the yield-to-maturity method. The Trust does
not accrue income when payment is delinquent and when management believes
payment is questionable.
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:
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 that the Trustees either designate the net realized long-term gains
as undistributed and pay the federal capital gains taxes thereon or
distribute all or a portion of such net gains. For the year ended December
31, 2008, the Trust did not have any realized taxable long-term capital gain.
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.
Net investment income and net realized gains or losses of the Trust as
presented under accounting principles generally accepted in the United States
of America may differ from distributable taxable earnings due to earnings
from the MMCI Subsidiary Trust as well as certain permanent and temporary
differences in the recognition of income and realized gains or losses on
certain investments. Permanent differences will result in re-classifications
to the capital accounts. In 2008, the Trust increased undistributed net
investment income and decreased additional paid in capital by a total of
$16,187 to more accurately display the Trust's capital financial position on
a tax-basis in accordance with accounting principles generally accepted in
the United States of America. These re-classifications had no impact on net
asset value.
--------------------------------------------------------------------------------
38 MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2008
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 year ended December
31, 2008, the MMCI Subsidiary Trust has accrued income tax expense of
$25,780.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of the existing assets and liabilities and their respective
tax basis. As of December 31, 2008, the MMCI Subsidiary Trust has a deferred
tax asset of $77,177 for which a full valuation reserve has been recorded. No
future tax benefit is expected to be realized from this asset as of December
31, 2008.
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes -- An
interpretation of FASB Statement No. 109 ("FIN 48"). Management has analyzed
the Trust's tax positions taken on federal income tax returns for all open
tax years and has concluded that as of December 31, 2008, no provision for
income tax would be required in the Trust's financial statements. The Trust's
federal and state income and federal excise tax returns for tax years for
which the applicable statutes of limitations have not expired are subject to
examination by the Internal Revenue Service and state departments of revenue.
E. DISTRIBUTIONS TO SHAREHOLDERS:
The Trust records distributions to shareholders from net investment income
and net realized gains, if any, on the ex-dividend date. The Trust's net
investment income dividend is declared four times per year, in April, July,
October, and December. The Trust's net realized capital gain distribution, if
any, is declared in December.
As of December 31, 2008, the components of distributable earnings on a tax
basis included $3,247,560 of undistributed ordinary income and ($2,101,113)
of a net realized capital loss carryforward. The loss carryforward will
expire on December 31, 2016. Such distributions and distributable earnings on
a tax basis are determined in conformity with income tax regulations, which
may differ from accounting principles generally accepted in the United States
of America (GAAP).
The difference between net taxable distributable earnings to GAAP earnings is
$290,448 which is comprised of various timing differences.
The tax character of distributions declared during the years ended December
31, 2008 and 2007 was as follows:
DISTRIBUTIONS PAID FROM: 2008 2007
------------ ------------
Ordinary Income $ 20,078,868 $ 23,679,411
Long-term Capital gains $ -- $ --
F. EXPENSE REDUCTION:
Citibank, N.A. ("Citibank") serves as custodian to the Trust. Pursuant to the
custodian agreement, Citibank receives a fee reduced by credits on cash
balances the Trust maintains with Citibank. All credit balances, if any, used
to reduce the Trust's custodian fees are reported as fees paid indirectly on
the Statement of Operations. For the year ended December 31, 2008, there were
no credit balances used to reduce custodian fees.
3. INVESTMENT SERVICES CONTRACT
A. SERVICES:
Under an Investment Services Contract (the "Contract") with the Trust, 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 represents the Trust in
any negotiations with issuers, investment banking firms, securities brokers
or dealers and other institutions or investors relating to the Trust's
investments. Under the Contract, Babson Capital also 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.
--------------------------------------------------------------------------------
MassMutual Corporate Investors 39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2008
B. FEE:
For its services under the Contract, Babson Capital is paid a quarterly
investment advisory fee equal to 0.3125% of the value of the Trust's net
assets as of the last business day of each fiscal quarter, an amount
approximately equivalent to 1.25% annually. A majority of the Trustees,
including a majority of the Trustees who are not interested persons of the
Trust or of Babson Capital, approve the valuation of the Trust's net assets
as of such day.
4. SENIOR SECURED INDEBTEDNESS
A. NOTE PAYABLE:
MassMutual holds the Trust's $30,000,000 Senior Fixed Rate Convertible Note
(the "Note") issued by the Trust on November 15, 2007. The Note, is due
November 15, 2017 and accrues interest at 5.28% 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 year ended
December 31, 2008, the Trust incurred total interest expense on the Note of
$1,584,000.
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 a 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 Note proposed to be redeemed.
B. REVOLVING CREDIT AGREEMENT:
The Trust's $25,000,000 revolving credit agreement (the "Revolver") with The
Royal Bank of Scotland PLC matured on May 31, 2008.
For the year ended December 31, 2008, the Trust incurred total expense on the
Revolver of $15,574. The expense was incurred on the undrawn portion of the
Revolver from January 1, 2008 to the maturity date on May 31, 2008.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE YEAR ENDED COST OF INVESTMENTS
12/31/2008 ACQUIRED
-----------------------------------------------------------------------------
Corporate restricted securities $ 60,772,970
Corporate public securities 32,935,413
-----------------------------------------------------------------------------
PROCEEDS FROM
SALES OR MATURITIES
-----------------------------------------------------------------------------
Corporate restricted securities $ 45,929,176
Corporate public securities 34,400,750
-----------------------------------------------------------------------------
The aggregate cost of investments is substantially the same for financial
reporting and federal income tax purposes as of December 31, 2008. The net
unrealized depreciation of investments for financial reporting and federal
tax purposes as of December 31, 2008 is $43,203,788 and consists of
$15,321,967 appreciation and $58,525,755 depreciation.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED)
AMOUNT PER SHARE
-----------------------------------------------------------------------------
MARCH 31, 2008
-----------------------------------------------------------------------------
Investment income $ 6,551,682
Net investment income 5,208,711 $ 0.56
Net realized and unrealized
loss on investments (net of taxes) (7,409,784) (0.80)
-----------------------------------------------------------------------------
JUNE 30, 2008
-----------------------------------------------------------------------------
Investment income $ 5,878,119
Net investment income 4,557,413 $ 0.49
Net realized and unrealized
loss on investments (net of taxes) (3,210,632) (0.35)
-----------------------------------------------------------------------------
SEPTEMBER 30, 2008
-----------------------------------------------------------------------------
Investment income $ 7,783,534
Net investment income 6,492,880 $ 0.70
Net realized and unrealized
loss on investments (net of taxes) (11,520,796) (1.24)
-----------------------------------------------------------------------------
DECEMBER 31, 2008
-----------------------------------------------------------------------------
Investment income $ 6,410,118
Net investment income 5,213,290 $ 0.56
Net realized and unrealized
loss on investments (net of taxes) (24,458,577) (2.63)
-----------------------------------------------------------------------------
--------------------------------------------------------------------------------
40 MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2008
7. AGGREGATE REMUNERATION PAID TO OFFICERS, TRUSTEES AND THEIR AFFILIATED
PERSONS
For the year ended December 31, 2008, the Trust paid its Trustees aggregate
remuneration of $200,250. During the year the Trust did not pay any
compensation to any of its Trustees who are "interested persons" (as defined
by the 1940 Act) of the Trust. The Trust classifies Messrs. Crandall and
Joyal as "interested persons" of the Trust.
All of the Trust's officers are employees of Babson Capital or MassMutual.
Pursuant to the Contract, the Trust does not compensate its officers who are
employees of Babson Capital or MassMutual (except for the Chief Compliance
Officer of the Trust unless assumed by Babson Capital). For the year ended
December 31, 2008, Babson Capital paid the compensation of the Chief
Compliance Officer of the Trust.
Mr. Crandall, one of the Trust's Trustees, is 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 year ended
December 31, 2008, other than amounts payable to Babson Capital pursuant to
the Contract. For the year ended December 31, 2008, the Trust paid the
following amounts to MassMutual, exclusive of interest expense on the Note
explained in Footnote 4.A:
Preparation of Certain of the Trust's
Shareholder communications $ 1,376
8. CERTIFICATIONS (UNAUDITED)
As required under New York Stock Exchange ("NYSE") Corporate Governance
Rules, the Trust's principal executive officer has certified to the NYSE that
he was not aware, as of the certification date, of any violation by the Trust
of the NYSE's Corporate Governance listing standards. In addition, as
required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC
rules, the Trust's principal executive and principal financial officers have
made quarterly certifications, included in filings with the Securities and
Exchange Commission on Forms N-CSR and N-Q, relating to, among other things,
the Trust's disclosure controls and procedures and internal control over
financial reporting, as applicable.
9. SUBSEQUENT EVENTS
On January 23, 2009, the Trust announced that Roger W. Crandall stepped down
as a Trustee and Chairman of the Board of Trustees as a result of his new
position as President and Chief Operating Officer of MassMutual. Clifford M.
Noreen was appointed as a Trustee and elected to succeed Mr. Crandall as
Chairman of the Board of Trustees. He previously held the role of President
of the Trust. Mr. Noreen is currently the President of Babson Capital.
Filling the vacancy left by Mr. Noreen, Michael L. Klofas will become
President of the Trust. He was formerly a Vice President of the Trust. Mr.
Klofas is currently a Managing Director and co-head of Babson Capital's
Mezzanine and Private Equity Group.
--------------------------------------------------------------------------------
MassMutual Corporate Investors 41
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Shareholders and Board of Trustees of MassMutual Corporate Investors
We have audited the accompanying consolidated statement of assets and
liabilities of MassMutual Corporate Investors (the Trust), including the
consolidated schedule of investments, as of December 31, 2008, and the related
consolidated statements of operations and cash flows for the year then ended,
the consolidated statements of changes in net assets for each of the years in
the two-year period then ended and the consolidated financial highlights for
each of the years in the five-year period then ended. These consolidated
financial statements and consolidated financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these consolidated financial statements and consolidated financial
highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 2008 by counting securities at the custodian
and by correspondence with the custodian, or by other appropriate auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements and consolidated financial
highlights referred to above present fairly, in all material respects, the
financial position of MassMutual Corporate Investors as of December 31, 2008,
and the results of its operations, its cash flows, its changes in net assets,
and the financial highlights for the years described above, in conformity with
U.S. generally accepted accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
February 11, 2009
--------------------------------------------------------------------------------
42 MassMutual Corporate Investors
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
ROGER W. CRANDALL*(44) Trustee 3 years/ President, Chief Operating 2 Trustee, Chairman (since 2005),
Massachusetts Mutual Life (since 2005) 2 years/ Officer and member of Board President (2003- 2005), and
Insurance Company 10 months (since November 2008); and Vice President (2002-2003), of
1295 State Street Executive Vice President and the Trust; Director (since
Springfield, MA 01111 Chairman 1 year/ Chief Investment Officer 2004), Babson Capital Europe
(since 2005) 7 months (since 2005) and Co-Chief Limited (an institutional
Operating Officer (since debt-fund manager); Director
2007) of MassMutual; and (since 2004), Babson Capital
Chairman (since 2005), Guernsey Limited (an investment
President (2006-2007) and management company);
Chief Executive Officer Non-Executive Director (since
(since 2006), Vice Chairman 2005), Baring Asset Management
(2005), Member of the Board Limited (an investment manager/
of Managers (since 2004), adviser); Chairman (since
Member of the Board of 2005), Cornerstone Real Estate
Directors (2003-2004), and Advisers LLC (an investment
Managing Director of Babson adviser); Director (since
Capital (2000-2005). 2003), MassMutual Corporate
Value Partners Limited
(investment company); Director
(since 2003), MassMutual
Corporate Value Limited
(investment company); Director
(since 2005), MassMutual
Holdings (Bermuda) Ltd.
(holding company); Director
(since 2004), MML Assurance,
Inc. (a New York insurance
company); Director (since
2005), Oppenheimer Acquisition
Corp. (holding company);
Director (since 2004),
Jefferies Finance LLC (a
finance company); Director
(since 2004), Great Lakes LLC
(investment company); Director
(since 1999), SAAR Holdings CDO
Ltd. (investment company);
Chairman, Director, and Chief
Executive Officer (since 2006),
MassMutual Capital Partners LLC
(investment company); Director
(since 2006), Invicta Advisers
LLC (derivative trading
company); Director (since
2006), Invicta Capital LLC
(derivative trading company);
Director (since 2006), Invicta
Credit LLC (derivative trading
company); Director (since
2006), Invicta Holdings LLC
(derivative trading company);
Director (since 2006),
MassMutual International LLC
(holding company); Trustee
(since 2003), President
(2003-2005), and Chairman
(since 2005), MMCI Subsidiary
Trust and MMPI Subsidiary
Trust; and Trustee (since
2005), Chairman (since 2005),
President (2003-2005), and Vice
President (2002-2003), of
MassMutual Participation
Investors (closed-end
investment company advised by
Babson Capital).
* Mr. Crandall is classified as an "interested person" of the Trust and Babson Capital (as defined in the Investment Company Act of
1940, as amended) because of his position as an Officer of the Trust; and Chairman, Chief Executive Officer, and Member of the
Board of Managers of Babson Capital.
--------------------------------------------------------------------------------
MassMutual Corporate Investors 43
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
ROBERT E. JOYAL*(64) Trustee 3 years/ President (2001-2003) of 57 President (1999-2003) and
(since 2003) 1 year/ Babson Capital. Trustee (since 2003), of the
MassMutual 10 months Trust; Director (since 2006),
Corporate Investors Jefferies Group, Inc.
1500 Main Street (financial services); Director
Suite 600, P.O. Box 15189 (since 2003), Alabama Aircraft
Springfield, MA 01115-5189 Industries, Inc. (aircraft
maintenance and overhaul);
Director (since 2007), Scottish
Re Group Ltd. (global life
reinsurance specialist);
Trustee (since 2003),
MassMutual Select Funds,
formerly MassMutual
Institutional Funds, (an
open-end investment company
advised by MassMutual); Trustee
(since 2003), MML Series
Investment Fund (an open-end
investment company advised by
MassMutual); Trustee
(1998-2003), Senior Vice
President (1998-2001) and
President (2001-2003), MMCI
Subsidiary Trust and MMPI
Subsidiary Trust; and President
(1999-2003), Trustee (since
2003), MassMutual Participation
Investors (closed-end
investment company advised by
Babson Capital).
* Mr. Joyal retired as President of Babson Capital in June 2003. In addition and as noted above, Mr. Joyal is a director of
Jefferies Group, Inc., which has a wholly owned broker-dealer subsidiary that may execute portfolio transactions and/or engage in
principal transactions with the Trust, other investment companies advised by Babson Capital or any other advisory accounts over
which Babson Capital has brokerage placement discretion. Accordingly, the Trust has determined to classify Mr. Joyal as an
"interested person" of the Trust and Babson Capital (as defined in the Investment Company Act of 1940, as amended).
--------------------------------------------------------------------------------
44 MassMutual Corporate Investors
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
WILLIAM J. BARRETT(69) Trustee 2 years/ President (since 2002), 2 Trustee (since 2006),
(since 2006) 1 year/ Barrett-Gardner Associates, MassMutual Participation
MassMutual 10 months Inc. (private merchant bank); Investors (a closed-end
Corporate Investors and Senior Vice President investment company advised by
1500 Main Street (1976-2002), Janney Montgomery Babson Capital).
Suite 600, P.O. Box 15189 Scott LLC (investments).
Springfield, MA 01115-5189
DONALD E. BENSON(78) Trustee 3 years/ Executive Vice President 2 Director (1997-2008), MAIR
(since 1986) 1 year/ and Director (since 1992), Holdings, Inc. (commuter
MassMutual 10 months Marquette Financial airline holding company);
Corporate Investors Companies (financial services); Director (since 1997), First
1500 Main Street Partner (since 1996), Benson California Financial Group, Inc.
Suite 600, P.O. Box 15189 Family Limited Partnership (bank holding company); and
Springfield, MA 01115-5189 No. 1 and Benson Family Trustee (since 1988), MassMutual
Limited Partnership No. 2 Participation Investors
(investment partnerships); and (closed-end investment company
Partner (1987-2004), Benson, advised by Babson Capital).
Pinckney, Oates Partnership
(building partnership).
--------------------------------------------------------------------------------
MassMutual Corporate Investors 45
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
MICHAEL H. BROWN(52) Trustee 3 years/ Private Investor; and Managing 2 Trustee (since 2005),
(since 2005) 10 months Director (1994-2005), Morgan MassMutual Participation
MassMutual Stanley. Investors (a closed-end
Corporate Investors investment company advised by
1500 Main Street Babson Capital); Independent
Suite 600, P.O. Box 15189 Director (since 2006), Invicta
Springfield, MA 01115-5189 Holdings LLC and its subsidiaries
(a derivative trading company
owned indirectly by MassMutual).
DONALD GLICKMAN(75) Trustee 3 years/ Chairman (since 1992), Donald 2 Director (since 1984), Monro
(since 1992) 1 year/ Glickman and Company, Muffler and Brake, Inc.
MassMutual 10 months Inc. (private investments); (automobile repair service);
Corporate Investors and Partner (since 1992), Lead Director (since 1998), MSC
1500 Main Street J.F. Lehman & Co. (private Software Corp. (simulation
Suite 600, P.O. Box 15189 investments). software); and Trustee (since
Springfield, MA 01115-5189 1992), MassMutual Participation
Investors (closed-end
investment company advised by
Babson Capital).
--------------------------------------------------------------------------------
46 MassMutual Corporate Investors
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
MARTIN T. HART(73) Trustee 3 years/ Private Investor; and 2 Director (since 2004), Texas
(since 1991) 2 years/ President and Director Roadhouse, Inc. (operates
MassMutual 10 months (since 1983), H Investment restaurant chain); Director
Corporate Investors Company LLC(family (since 1999), ValueClick Inc.
1500 Main Street partnership). (internet advertising company);
Suite 600, P.O. Box 15189 Director (since 2002),
Springfield, MA 01115-5189 Spectranetics Corp. (medical
device company); and Trustee
(since 1991), MassMutual
Participation Investors
(closed-end investment company
advised by Babson Capital).
CORINE T. NORGAARD(71) Trustee 3 years/ President, (2004-2005), 34 Trustee (since 2005), MML
(since 1998) 10 months Thompson Enterprises Real Series Investment Fund II (an
MassMutual Estate Investment; and Dean open-end investment company
Corporate Investors (1996-2004), Barney School advised by MassMutual); Trustee
1500 Main Street of Business, University of (since 2004), MassMutual
Suite 600, P.O. Box 15189 Hartford. Premier Funds, formerly The DLB
Springfield, MA 01115-5189 Fund Group (an open-end
investment company advised by
MassMutual); Trustee (since
1993), ING Series Fund
(investment company); Director
(since 1992), ING Variable
Series Fund; and Trustee (since
1998), MassMutual Participation
Investors (a closed-end
investment company advised by
Babson Capital).
MALEYNE M. SYRACUSE(52) Trustee 3 years/ Managing Director (2000- 2 Trustee (since 2007),
(since 2007) 10 months 2007), JP Morgan Securities, MassMutual Participation
MassMutual Inc. (investments and Investors (a closed-end
Corporate Investors banking). investment company advised by
1500 Main Street Babson Capital).
Suite 600, P.O. Box 15189
Springfield, MA 01115-5189
--------------------------------------------------------------------------------
MassMutual Corporate Investors 47
OFFICERS OF THE TRUST
PRINCIPAL
POSITION OCCUPATION(S)
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST
ADDRESS THE TRUST OF TIME SERVED 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
CLIFFORD M. NOREEN(51) President 1 year/ President (since 2005), Vice President (1993-2005) of the Trust;
7 months Vice Chairman (since 2007), Member of the Board of Managers (since
MassMutual 2006), and Managing Director (since 2000) of Babson Capital;
Corporate Investors Trustee (since 2005), and President (since 2005) MMCI Subsidiary
1500 Main Street Trust and MMPI Subsidiary Trust; and President (since 2005), Vice
Suite 600, P.O. Box 15189 President (1993-2005), MassMutual Participation Investors.
Springfield, MA 01115-5189
PATRICIA J. WALSH+(43) Vice 9 months/ Vice President, Secretary, and Chief Legal Officer (since 2008) of
President, 4 months the Trust; Vice President and Associate General Counsel (since
MassMutual Secretary, and 2005) of MassMutual; General Counsel and Secretary (since 2008) of
Corporate Investors Chief Legal Babson Capital; Secretary (since 2009), MMCI Subsidiary Trust and
1500 Main Street Officer MMPI Subsidiary Trust; and Vice President, Secretary, and Chief
Suite 600, P.O. Box 15189 Legal Officer (since 2008), MassMutual Participation Investors.
Springfield, MA 01115-5189
JAMES M. ROY(46) Vice 1 year/ Vice President and Chief Financial Officer (since 2005), Treasurer
President 7 months (2003-2005), and Associate Treasurer (1999-2003) of the Trust;
MassMutual and Chief Managing Director (since 2005), and Director (2000-2005) of Babson
Corporate Investors Financial Capital; Trustee (since 2005), Treasurer (since 2005), and
1500 Main Street Officer Controller (2003-2005), MMCI Subsidiary Trust and MMPI Subsidiary
Suite 600, P.O. Box 15189 Trust; and Vice President and Chief Financial Officer (since 2005),
Springfield, MA 01115-5189 Treasurer (2003-2005) and Associate Treasurer (1999-2003),
MassMutual Participation Investors.
JOHN T. DAVITT, JR.(41) Comptroller 1 year/ Comptroller (since 2001) of the Trust; Director (since 2000) of
7 months Babson Capital; Controller (since 2005), MMCI Subsidiary Trust and
MassMutual MMPI Subsidiary Trust; and Comptroller (since 2001), MassMutual
Corporate Investors Participation Investors.
1500 Main Street
Suite 600, P.O. Box 15189
Springfield, MA 01115-5189
MELISSA M. LAGRANT(35) Chief 1 year/ Chief Compliance Officer (since 2006) of the Trust; Managing
Compliance 7 months Director (since 2005) of Babson Capital; Vice President and Senior
MassMutual Officer Compliance Trading Manager (2003-2005), Loomis, Sayles & Company,
Corporate Investors L.P.; Assistant Vice President-Business Risk Management Group
1500 Main Street (2002-2003), and Assistant Vice President-Investment Compliance
Suite 600, P.O. Box 15189 (2001-2002), Zurich Scudder Investments/Deutsche Asset Management;
Springfield, MA 01115-5189 and Chief Compliance Officer (since 2006), MassMutual Participation
Investors.
DANIEL J. FLORENCE*(36) Treasurer 1 year/ Treasurer (since 2008), Associate Treasurer (2006-2008) of the
7 months Trust; Associate Director (since 2008), Analyst (2000-2008) of
MassMutual Babson Capital; and Treasurer (since 2008), Associate Treasurer
Corporate Investors (2006-2008), MassMutual Participation Investors.
1500 Main Street
Suite 600, P.O. Box 15189
Springfield, MA 01115-5189
+ Ms. Walsh was elected as Vice President, Secretary, and Chief Legal Officer of the Trust on October 17, 2008.
* Mr. Florence was elected as Treasurer of the Trust on July 22, 2008.
--------------------------------------------------------------------------------
48 MassMutual Corporate Investors
MEMBERS OF THE BOARD OF DIVIDEND REINVESTMENT AND SHARE PURCHASE
TRUSTEES PLAN
LEFT TO RIGHT:
MassMutual Corporate Investors (the
Donald Glickman "Trust") offers a Dividend Reinvestment
Chairman, and Share Purchase Plan (the "Plan").
Donald Glickman & Company, Inc. The Plan provides a simple way for
shareholders to add to their holdings in
Robert E. Joyal the Trust through the receipt of
Retired President, dividend shares issued by the Trust or
Babson Capital Management LLC through the investment of cash dividends
in Trust shares purchased in the open
William J. Barrett market. A shareholder may join the Plan
President, by filling out and mailing an
Barrett-Gardner Associates, Inc. authorization card to Shareholder
Financial Services, Inc., the Transfer
Michael H. Brown* Agent.
Private Investor
Participating shareholders will continue
Donald E. Benson* to participate until they notify the
Executive Vice President Transfer Agent, in writing, of their
and Director, desire to terminate participation.
Marquette Financial Companies Unless a shareholder elects to
participate in the Plan, he or she will,
Dr. Corine T. Norgaard* in effect, have elected to receive
President, dividends and distributions in cash.
Thompson Enterprises Participating shareholders may also make
Real Estate Investment additional contributions to the Plan
from their own funds. Such contributions
Roger W. Crandall may be made by personal check or other
President and Chief means in an amount not less than $10 nor
Operating Officer more than $5,000 per quarter. Cash
Massachusetts Mutual Life contributions must be received by the
Insurance Company Transfer Agent at least five days (but
no more then 30 days) before the payment
Martin T. Hart date of a dividend or distributions.
Private Investor
Whenever the Trust declares a dividend
Maleyne M. Syracuse payable in cash or shares, the Transfer
Private Investor Agent, acting on behalf of each
participating shareholder, will take the
*Member of the Audit Committee dividend in shares only if the net asset
value is lower than the market price
plus an estimated brokerage commission
OFFICERS as of the close of business on the
valuation day. The valuation day is the
Roger W. Crandall last day preceding the day of dividend
Chairman payment.
Clifford M. Noreen When the dividend is to be taken in
President shares, the number of shares to be
received is determined by dividing the
James M. Roy cash dividend by the net asset value as
Vice President & Chief of the close of business on the
Financial Officer valuation date or, if greater than net
asset value, 95% of the closing share
Patricia J. Walsh price. If the net asset value of the
Vice President, Secretary shares is higher than the market value
& Chief Legal Officer plus an estimated commission, the
Transfer Agent, consistent with
Jill A. Fields obtaining the best price and execution,
Vice President will buy shares on the open market at
current prices promptly after the
Michael P. Hermsen dividend payment date.
Vice President
The reinvestment of dividends does not,
Mary Wilson Kibbe in anyway, relieve participating
Vice President shareholders of any federal, state or
local tax. For federal income tax
Michael L. Klofas purposes, the amount reportable in
Vice President respect of a dividend received in
newly-issued shares of the Trust will be
Richard E. Spencer, II the fair market value of the shares
Vice President received, which will be reportable as
ordinary income and/or capital gains.
Daniel J. Florence
Treasurer As compensation for its services, the
Transfer Agent receives a fee of 5% of
John T. Davitt, Jr. any dividend and cash contribution (in
Comptroller no event in excess of $2.50 per
distribution per shareholder.)
Melissa M. LaGrant
Chief Compliance Officer 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.
--------------------------------------------------------------------------------
MassMutual Corporate Investors 49
[LOGO] MassMutual Corporate Investors
CI3848
ITEM 2. CODE OF ETHICS.
The Registrant adopted a Code of Ethics for Senior Financial Officers
(the "Code") on October 17, 2003, which is available on the
Registrant's website at www.babsoncapital.com/mci. During the period
covered by this Form N-CSR, there were no amendments to, or waivers
from, the Code.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant's Board of Trustees has determined that Mr. Donald E.
Benson, a Trustee of the Registrant and a member of its Audit
Committee, is an audit committee financial expert. Mr. Benson is
"independent" for purposes of this Item 3 as required by applicable
regulation.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
FEES BILLED TO THE REGISTRANT
KPMG LLP KPMG LLP
Year Ended Year Ended
December 31, December 31,
2008 2007
---------- ----------
Audit Fees $ 51,600 $ 47,500
Audit-Related Fees 6,125 5,700
Tax Fees 39,950 31,000
All Other Fees 0 0
---------- ----------
Total Fees $ 97,675 $ 84,200
========== ==========
NON-AUDIT FEES BILLED TO BABSON CAPITAL AND MASSMUTUAL
KPMG LLP KPMG LLP
Year Ended Year Ended
December 31, December 31,
2008 2007
---------- ----------
Audit-Related Fees $ 921,019 $1,102,280
Tax Fees 0 0
All Other Fees 0 75,000
---------- ----------
Total Fees $ 921,019 $1,177,280
========== ==========
The category "Audit Related Fees" reflects fees billed by KPMG for
various non-audit and non-tax services rendered to the Registrant,
Babson Capital Management LLC ("Babson Capital") and Massachusetts
Mutual Life Insurance Company ("MassMutual"), such as SAS 70 review,
agreed upon procedures reports. Preparation of Federal, state and local
income tax returns and compliance work are representative of the fees
billed in the "Tax Fees" category. The category "All Other Fees"
represents fees billed by KPMG for tax consulting rendered to Babson
Capital and MassMutual. The Sarbanes-Oxley Act of 2002 and its
implementing regulations allows the Registrant's Audit Committee to
establish a pre-approval policy for certain services rendered by the
Registrant's independent accountants. During 2008, the Registrant's
Audit Committee approved all of the services rendered to the Registrant
by KPMG and did not rely on such a pre-approval policy for any such
services.
The Audit Committee reviewed the aggregate fees billed for professional
services rendered by KPMG for the Registrant and for the non-audit
services provided to Babson Capital, and Babson Capital's parent,
MassMutual. As part of this review, the Audit Committee considered
whether the provision of such non-audit services were compatible with
maintaining the principal accountant's independence.
The 2007 fees billed represent final 2007 amounts, which may differ
from the preliminary figures available as of the filing date of the
Trust's 2008 Annual Form N-CSR and includes, among other things, fees
for services that may not have been billed as of the filing date of the
Trust's 2008 Annual Form N-CSR, but are now properly included in the
2007 fees billed to the Trust, Babson Capital, and MassMutual.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The Registrant maintains an Audit Committee composed exclusively of
Trustees of the Registrant who qualify as "independent" Trustees under
the current listing standards of the New York Stock Exchange and the
rules of U.S. Securities and Exchange Commission. The Committee
operates pursuant to a written Audit Committee Charter, which is
available (1) on the Registrant's website, www.babsoncapital.com/mci;
and (2) without charge, upon request, by calling, toll-free
866-399-1516. The current members of the Audit Committee are Donald E.
Benson, Michael H. Brown, and Corine T. Norgaard.
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.
The Registrant's Board of Trustees has delegated proxy voting
responsibilities relating to voting securities held by the Registrant
to its investment adviser, Babson Capital Management LLC ("Babson
Capital"). A summary of Babson Capital's proxy voting policies and
procedures is set forth below.
Summary of Babson Capital's Proxy Voting Policy
-----------------------------------------------
Babson Capital views the voting of proxies as part of its investment
management responsibility and believes, as a general principle, that
proxies should be voted solely in the best interests of its clients
(i.e. in a manner it believes is most likely to enhance the economic
valve of the underlying securities and client accounts). To implement
this general principle, it is Babson Capital's policy to generally vote
proxies in accordance with the recommendations of Institutional
Shareholder Services ("ISS"), a recognized authority on proxy voting
and corporate governance, or, in cases where ISS has not made any
recommendations with respect to a proxy, in accordance with ISS's proxy
voting guidelines.
Babson Capital recognizes, however, that there may be times when Babson
Capital believes that it will be in the best interests of clients
holding the securities to (1) vote against ISS's recommendations or (2)
in cases where ISS has not provided Babson Capital with any
recommendations with respect to a proxy, vote against ISS's proxy
voting guidelines. Babson Capital may vote, in whole or part, against
ISS's recommendations or ISS's proxy voting guidelines, as applicable.
The procedures set forth in the Policy are designed to ensure that
votes against ISS's recommendations or proxy voting guidelines have
been made in the best interests of clients and are not the result of
any material conflict of interest (a "Material Conflict").
Summary of Babson Capital's Proxy Voting Procedures
---------------------------------------------------
Babson Capital has established a Proxy Committee that is responsible
for the implementation and governance of the Policy and designated
Proxy Administrators who will receive and post proxies for voting with
ISS. In accordance with the Policy, Babson Capital will generally vote
all client proxies in accordance with ISS's recommendation or proxy
voting guidelines, unless a person authorized by the Proxy Committee
(each a "Proxy Analyst"), the Proxy Committee or a designated member of
the Proxy Committee determines that it is in the clients' best interest
to vote against ISS's recommendation or proxy voting guidelines. In
these cases, Babson Capital will vote against ISS's recommendation or
proxy voting guidelines, so long as no other Proxy Analyst reviewing
such proxy disagrees with such recommendation, and no known Material
Conflict is identified by the Proxy Analyst(s) or the Proxy
Administrator. Otherwise, the proxy is to be submitted to a member of
the Proxy Committee, who shall determine how to vote the proxy unless
(i) the Proxy Analyst or Proxy Administrator has identified a Babson
Capital Material Conflict or (ii) said Proxy Committee member has
identified a Material Conflict pertinent to him or herself or a Babson
Material Conflict. In such cases, the proxy shall be
submitted to the Proxy Committee, which may authorize a vote against
ISS's recommendation or proxy voting guidelines only if the Proxy
Committee determines that such vote is in the clients' best interests.
No employee, officer, director, or a Board of Managers Member of Babson
Capital or its affiliates (other than those assigned such
responsibilities under the Policy) may influence how Babson Capital
votes any client proxy, unless such person has been requested to
provide such assistance by a Proxy Analyst or Proxy Committee member
and has disclosed any known Material Conflict. Any pre-vote
communications prohibited by the Policy shall be reported to the Proxy
Committee member prior to voting and to Babson Capital's Chief
Compliance Officer or General Counsel.
Obtaining a Copy of the Policy
------------------------------
The full text of Babson Capital's Policy is available (1) without
charge, upon request, by calling 1-866-399-1516 or (2) on the
Registrant's website, www.babsoncapital.com/mci.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The following disclosure item is made as of the date of this Form N-CSR
unless otherwise indicated.
PORTFOLIO MANAGER. Clifford M. Noreen serves as the President of the
Registrant (since 2005) and as its Portfolio Manager. Mr. Noreen began
his service to the Registrant in 1993 as a Vice President. With over 25
years of industry experience, Mr. Noreen is President, a Managing
Director and a Member of the Board of Managers of Babson Capital
Management LLC ("Babson Capital") and head of Babson Capital's
Corporate Securities Group, where he oversees public equities and
corporate credit related investments, including public and private
bonds, mezzanine, and private equity investments, and structured credit
products. Mr. Noreen joined Massachusetts Mutual Life Insurance Company
("MassMutual"), Babson Capital's parent company, in 1985 and began
leading its High Yield Team in 1992, where he was responsible for
oversight of all public high yield portfolios. In 2004, Mr. Noreen
assumed responsibility for Babson Capital's Public Corporate Credit
Group, which included the Investment Grade and High Yield Institutional
Fixed Income teams. Mr. Noreen also presently serves as President of
MassMutual Participation Investors, another closed-end registered
investment company advised by Babson Capital. Mr. Noreen holds a B.A.
from the University of Massachusetts and an M.B.A from American
International College.
PORTFOLIO MANAGEMENT TEAM. Mr. Noreen has primary responsibility for
overseeing the investment of the Registrant's portfolio, with the
day-to-day investment management responsibility of the Registrant's
portfolio being shared with the following Babson Capital investment
professionals (together with the Portfolio Manager, the "Portfolio
Team").
Michael P. Hermsen, Michael L. Klofas, and Richard E. Spencer II are
each a Vice President of the Registrant and a Managing Director of
Babson Capital. Together they are responsible for managing Babson
Capital's Mezzanine Investment and Private Equity Investments Team
within the Corporate Securities Group, which is responsible for
finding, analyzing, negotiating and servicing mezzanine private
placement securities for the Registrant.
Mr. Hermsen joined MassMutual in 1990 and has been an officer of the
Registrant since 1992. Previously, he worked at Teachers Insurance and
Annuity Association where he was a generalist private placement
analyst. At MassMutual and then Babson Capital, Mr. Hermsen has
analyzed and invested in traditional private placements, high yield
public and private bonds, and leveraged bank loans. He has also been
responsible for managing a small portfolio of distressed investments.
Since 1993, he has focused on originating, analyzing, structuring and
documenting mezzanine and private equity investments. He holds a B.A.
from Bowdoin College and an M.B.A. from Columbia University.
Mr. Klofas joined MassMutual in 1988 and has been an officer of the
Registrant since 1989. Prior to joining MassMutual, he spent two years
at a small venture capital firm and two years at a national public
accounting firm. At MassMutual and then Babson Capital, Mr. Klofas has
analyzed and invested in traditional private placements and high yield
public bonds. He also spent four years leading Babson Capital's workout
and restructuring activities. Since 1993, he has focused on
originating, analyzing, structuring and documenting mezzanine and
private equity investments. Mr. Klofas holds a B.A. from Brandeis
University and an M.B.A. from Babson College as well as a Certified
Public Accountant designation.
Mr. Spencer joined MassMutual in 1989 after three years as a corporate
loan analyst at a major New England bank. He has been an officer of
Registrant since 1990. At MassMutual and then Babson Capital, Mr.
Spencer has analyzed and invested in traditional private placements,
high yield public and private bonds, leveraged bank loans, mezzanine
debt and private equity. From 1993 to 1999, he was the lead
restructuring professional at Babson Capital. Since 1999, Mr. Spencer
has been focused on the origination, analysis, structuring and
documentation of mezzanine and private equity investments. He holds a
B.A. from Bucknell University and an M.B.A. from the State University
of New York at Buffalo.
Jill A. Fields is responsible for the day-to-day management of the
Registrant's public high yield and investment grade fixed income
portfolio. Ms. Fields has been a Vice President of the Registrant since
2006. Ms. Fields is a Managing Director of Babson Capital with over 20
years of industry experience in high yield total return structured
credit leveraged loans and private placement investing. Prior to
joining Babson Capital in 1997, she was a credit analyst at Shawmut
National Bank, and the Director of Corporate Bond Research at Hartford
Life Insurance Group. Ms. Fields holds a B.S. from Pennsylvania State
University and an M.B.A. from the University of Connecticut.
OTHER ACCOUNTS MANAGED BY THE PORTFOLIO TEAM. The members of the
Registrant's Portfolio Team also have primary responsibility for the
day-to-day management of other Babson Capital advisory accounts,
including, among others, closed-end and open-end investment companies,
private investment funds, MassMutual-affiliated accounts, as well as
separate accounts for institutional clients. These advisory accounts
are identified below.
NUMBER OF
ACCOUNTS APPROXIMATE
TOTAL WITH ASSET SIZE OF
NUMBER APPROXIMATE PERFORMANCE- PERFORMANCE-
PORTFOLIO ACCOUNT OF TOTAL ASSET BASED BASED ADVISORY
TEAM CATEGORY ACCOUNTS SIZE(A) ADVISORY FEE FEE ACCOUNTS(A)
------------ --------------------- -------- ------------ ------------ --------------
Clifford M. Registered Investment
Noreen(B) Companies 1 $110.2 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 1 $26.5 million 1 $26.5 million
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A 0 N/A
-----------------------------------------------------------------------------------------
Jill A. Registered Investment
Fields Companies 2 $222.8 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 1 $30.3 million 1 $30.3 million
-----------------------------------------------------------------------------------------
Other Accounts 5C $407.2 billion 0 N/A
-----------------------------------------------------------------------------------------
Michael P. Registered Investment
Hermsen Companies 1 $110.2 million N/A N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 5 $1.0 billion 5 $1.0 billion
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A N/A N/A
-----------------------------------------------------------------------------------------
Michael L. Registered Investment
Klofas Companies 1 $110.2 million N/A N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles(D) 5 $1 billion 5 $1 billion
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A N/A N/A
-----------------------------------------------------------------------------------------
Richard E. Registered Investment
Spencer II Companies 1 $110.2 million N/A N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 5 $1 billion 5 $1 billion
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A N/A N/A
(A) Account asset size has been calculated as of December 31, 2008.
(B) Mr. Noreen, as the head of Babson Capital's Corporate Securities
Group, has overall responsibility for all corporate credit related
investments, including public and private bonds, mezzanine, and
private equity investments, as well as structured credit products
managed by Babson Capital. Except for the accounts noted in the table
above, Mr. Noreen is not primarily responsible for the day-to-day
management of the other accounts managed by Babson Capital's Corporate
Securities Group.
(C) Ms. Fields manages the high yield sector of the general investment
account of Massachusetts Mutual Life Insurance Company; however these
assets are not represented in the table above.
(D) The listed account and managed assets represent a portion of the
general investment account of Massachusetts Mutual Life Insurance
Company and C.M. Life Insurance Company for which an individual
Portfolio Team member has primary day-to-day responsibility.
MATERIAL CONFLICTS OF INTEREST. The potential for material conflicts of
interest may exist as the members of the Portfolio Team have
responsibilities for the day-to-day management of multiple accounts.
These conflicts may be heightened to the extent the individual, Babson
Capital and/or an affiliate has an investment in one or much of such
accounts or an interest in the performance of such accounts. Babson
Capital has identified (and summarized below) areas where material
conflicts of interest are most likely to arise, and has adopted
policies and procedures that it believes are reasonably designed to
address such conflicts.
It is possible that an investment opportunity may be suitable for both
the Registrant and other accounts managed by a member of the Portfolio
Team, but may not be available in sufficient quantities for both the
Registrant and the other accounts to participate fully. Similarly,
there may be limited opportunity to sell an investment held by the
Registrant and another account. A conflict may arise where a member of
the Portfolio Team may have an incentive to treat an account
preferentially as compared to the Registrant because the account pays
Babson Capital a performance-based fee or a member of the Portfolio
Team, Babson Capital, or an affiliate has an interest in the account.
Babson Capital has adopted an investment allocation policy and trade
allocation procedures to address allocation of portfolio transactions
and investment opportunities across multiple clients. These policies
are designed to achieve fair and equitable treatment of all clients
over time, and specifically prohibit allocations based on performance
of an account, the amount or structure of the management fee,
performance fee or profit sharing allocations, participation or
investment by an employee, Babson Capital or an affiliate, whether the
account is public, private, proprietary or third party. Additionally,
the Registrant, MassMutual, Babson Capital, MassMutual Participation
Investors, and any private investment company advised or sub-advised by
Babson Capital have obtained a blanket order from the Securities and
Exchange Commission pursuant to Section 17(d), and Rule 17(d)-1
thereunder, of the Investment Company Act of 1940, as amended, which
sets forth the conditions by which the entities can engage in private
placement co-investment activities.
Potential material conflicts of interest may also arise related to the
knowledge and timing of the Registrant's trades, investment
opportunities and broker selection. A member of the Portfolio Team will
have information about the size, timing and possible market impact of
the Registrant's trades. It is theoretically possible that a member of
the Portfolio Team could use this information for his or her personal
advantage or the advantage of other accounts he manages or the possible
detriment of the Registrant. For example, a member of the Portfolio
Team could front run a fund's trade or short sell a security for an
account immediately prior to the Registrant's sale of that security. To
address these conflicts, Babson Capital has adopted policies and
procedures governing employees' personal securities transactions, the
use of short sales, and trading between the Registrant and other
accounts managed by members of the Portfolio Team or accounts owned by
Babson Capital or its affiliates.
With respect to securities transactions for the Registrant, Babson
Capital determines which broker to use to execute each order,
consistent with its duty to seek best execution of the transaction.
Babson Capital manages certain other accounts, however, where Babson
Capital may be limited by the client with respect to the selection of
brokers or directed to trade such client's transactions through a
particular broker. In these cases, trades for a fund in a particular
security may be placed separately from, rather than aggregated with,
such other accounts. Placing separate transaction orders for a security
may temporarily affect the market price of the security or otherwise
affect the execution of the transaction to the possible detriment of a
fund or the other account(s) involved. Babson Capital has policies and
procedures that address best execution and directed brokerage.
Members of the Portfolio Team may also face other potential conflicts
of interest in managing the Registrant, and the above is not a complete
description of every conflict of interest that could be deemed to exist
in managing both the Registrant and the other accounts listed above.
COMPENSATION. The current Babson Capital compensation and incentive
program for investment professionals is designed to attract, motivate
and retain high-performing individuals.
To help Babson Capital make informed decisions, the Company
participates in annual compensation surveys of investment management
firms using McLagan Partners, in addition to other industry specific
resources. The firms selected for periodic peer-group comparisons
typically have similar asset size or business mix. Annually, a review
is conducted of total compensation versus market, to ensure that
individual pay is competitive with the defined overall market.
The compensation package for the members of the Portfolio Team is
comprised of a market-driven base salary, a performance-driven annual
bonus, and discretionary long-term incentives. The performance-driven
bonus is based on the performance of the accounts managed by the
members of the Portfolio Team relative to appropriate benchmarks,
including with respect to the Registrant, to the Russell 2000 Index and
Lehman Brothers U.S. Corporate High Yield Index. Performance of the
Registrant, like other accounts Portfolio Team members manage, are
evaluated on a pre-tax basis, and are reviewed over one and three-year
periods, with greater emphasis given to the latter. There are other
factors that affect bonus awards to a lesser extent, such as client
satisfaction, teamwork, the assets under management, and the overall
success of Babson Capital. Such factors are considered as a part of the
overall annual bonus evaluation process by the management of Babson
Capital.
Long-Term incentives are designed to share with participants the
longer-term value created in Babson Capital. Long-term incentives may
take the form of deferred cash awards (including deferred cash awards
that provide a portfolio manager with the economic equivalent of a
"shareholder" interest in the firm by linking the value of the award to
a formula which ties to the value of the business), and/or, in the case
of a portfolio manager who manages a private investment fund with a
performance fee, a deferred cash award or a direct profit sharing
interest that results in the manager receiving amounts based on the
amount of the performance fee paid by such fund. These long-term
incentives vest over time and are granted annually, based upon the same
criteria used to determine the performance-driven annual bonus detailed
above. Because the Portfolio Team members are generally responsible for
multiple accounts (including the Registrant), they are compensated on
the overall performance of the accounts that they manage, rather than a
specific account, except for the portion of compensation relating to
any performance fee award.
BENEFICIAL OWNERSHIP. As of December 31, 2008, members of the Portfolio
Team beneficially owned the following dollar range of equity securities
in the Registrant:
DOLLAR RANGE OF BENEFICIALLY OWNED*
PORTFOLIO TEAM: EQUITY SECURITIES OF THE REGISTRANT
--------------- -----------------------------------
Clifford M. Noreen Over $100,001
Jill A. Fields $50,001-$100,000
Michael P. Hermsen Over $100,001
Michael L. Klofas Over $100,001
Richard E. Spencer II None
* Beneficial ownership has been determined in accordance with Rule
16a-1(a)(2) under the Securities Exchange Act of 1934, as amended. (Shares
"beneficially owned" include the number of shares of the Registrant
represented by the value of a Registrant-related investment option under
Babson Capital's non-qualified deferred compensation plan for certain
officers of Babson Capital (the "Plan"). The Plan has an investment option
that derives its value from the market value of the Registrant's shares.
However, neither the Plan nor the participant in the Plan has an actual
ownership interest in the Registrant's shares.)
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 Registrant's second fiscal half-year 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.
None.
(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
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By: /s/ Clifford M. Noreen
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Clifford M. Noreen, President
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Date: March 6, 2009
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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
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Clifford M. Noreen, President
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Date: March 6, 2009
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By: /s/ James M. Roy
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James M. Roy, Vice President, and
Chief Financial Officer
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Date: March 6, 2009
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