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: 12/31/09
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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
2009 ANNUAL REPORT
MASSMUTUAL CORPORATE INVESTORS
c/o Babson Capital Management LLC
1500 Main Street
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
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, 2009 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.
OFFICERS OF THE TRUST
---------------------
Clifford M. Noreen
Chairman
Michael L. Klofas
President
Michael P. Hermsen
Vice President
Richard E. Spencer, II
Vice President
Jill A. Fields
Vice President
James M. Roy
Vice President
& Chief Financial
Officer
Patricia J. Walsh
Vice President,
Secretary & Chief
Legal Officer
MASSMUTUAL CORPORATE INVESTORS
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
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 16, 2010 at 1:30 P.M. in
Springfield, Massachusetts.
1
PORTFOLIO COMPOSITION AS OF 12/31/09*
[PIE CHART APPEARS HERE]
Private / 144A Private / Restricted
High Yield Debt Equity 11.3%
66.2%
Public High Cash
Yield Debt 6.9%
14.7%
Public Equity
0.9%
*Based on value of total investments (including cash)
TOTAL ANNUAL PORTFOLIO RETURN (AS OF 12/31 EACH YEAR)*
[BAR CHART APPEARS HERE]
MASSMUTUAL CORPORATE 7.28 5.91 4.80 22.61 22.76 20.04 18.06 8.72 -10.34 12.64
INVESTORS (BASED ON
CHANGE IN THE NET
ASSET VALUE WITH
REINVESTED DIVIDENDS)
RUSSELL 2000 INDEX -3.03 2.49 -20.48 47.25 18.33 4.55 18.37 -1.57 -33.79 27.17
BARCLAYS CAPITAL U.S. -5.86 5.28 -1.41 28.97 11.13 2.74 11.85 1.87 -26.16 58.21
CORPORATE HIGH YIELD
INDEX
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
* 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.
2
TO OUR SHAREHOLDERS
As the Trust announced in January of 2009, 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 Executive Officer of Massachusetts Mutual Life Insurance
Company. Clifford M. Noreen, the Trust's former President, was appointed as a
Trustee and elected to replace Mr. Crandall as Chairman of the Board of
Trustees. Additionally, I was elected to succeed Mr. Noreen as President of the
Trust.
I am pleased to share with you the Trust's Annual Report for the year ended
December 31, 2009.
THE TRUST'S 2009 PORTFOLIO PERFORMANCE
The Trust's net total portfolio rate of return for 2009 was 12.64%, 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 $214,436,954, or $22.89 per
share, as of December 31, 2009. This compares to $208,143,519, or $22.33 per
share, as of December 31, 2008. The Trust paid a quarterly dividend of 54 cents
per share for each of the four quarters of 2009. Including the fourth quarter
dividend paid in January 2010, total dividends for the year were $2.16 per
share, which was unchanged from the prior year. We are pleased to be able to
maintain the Trust's dividend despite the extremely challenging economic
environment during 2009.
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 Index for the 1, 3, 5 and 10 years ended
December 31, 2009 are provided for comparison purposes only.
Barclays Capital U.S. Russell
The Trust Corporate High Yield Index 2000 Index
--------------------------------------------------------------------------------
1 Year 12.64% 58.21% 27.17%
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3 Year 3.17% 5.97% -6.07%
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5 Year 9.25% 6.46% 0.51%
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10 Year 10.80% 6.71% 3.51%
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Past performance is no guarantee of future results.
3
MARKET CONDITIONS
The year 2009 opened with the entire global economy mired in a deep recession
rooted in the mortgage and credit crisis that unfolded in mid-2007. This grim
environment continued into March. With unprecedented stimulus from governments
around the world, however, the financial markets began a rally that lifted both
equity and bond markets through the end of the year. The Dow Jones Industrial
Average gained 18.8% for the year, but was up nearly 60% from its March 2009
low. Asset classes that were among the poorest performers in 2008 had some of
the largest advances in 2009. These asset classes included high yield bonds and
loans, which both reported gains of more than 50%, according to Barclays
Capital.
After the celebrated rally, however, questions remain about what is next for the
U.S. economy. The unemployment rate, according to the U.S. Department of Labor,
ended 2009 at 10%, up from 7.1% at year-end 2008, with expectations that it will
remain high throughout 2010. Inflation was 2.7% in 2009, compared to just 0.1%
in 2008. The value of the dollar varied widely versus the currencies of the main
U.S. trading partners in 2009, and the 2010 outlook remains unclear. The massive
U.S. stimulus spending also raises concerns about potential tax increases to
finance the national debt, which creates uncertainty for investors and companies
alike. It is possible that corporate credit defaults have peaked: after rising
for 23 straight months since January 2008, the Moody's Investors Service global
issuer-weighted speculative-grade default rate declined in December 2009, though
it still finished the year at 12.5%, well above its historical average of 5%.
Moody's predicts defaults will fall dramatically in 2010.
PORTFOLIO ACTIVITY
Similar to 2008, the Trust's investment activity was very sporadic during 2009.
During the first and second quarters of the year, middle market buyout activity
was quite low due to a shortage of available credit. Senior lending capacity,
one of the key drivers of buyout activity, was limited as these capital
providers refrained from taking risk. As a result, the Trust was able to
complete only three new private placement transactions during the first half of
2009. Beginning in the third quarter of 2009, banks and other senior debt
providers slowly began to make more capital available to finance middle market
transactions and the Trust's investment activity increased correspondingly.
During the second half of 2009, the Trust completed seven new private placement
transactions.
For the full year 2009, the Trust closed ten new private placement transactions
and made add-on investments in seven existing portfolio companies. Total private
placement investments in 2009 were $25,976,473. In 2008, the Trust closed 23 new
private placement transactions and nine add-on investments aggregating
$52,612,864. While the Trust invested fewer dollars in 2009, we are nonetheless
pleased with the Trust's level of investment activity given the significant
decline in middle market buyout transactions that occurred during the year and
reports of other middle
4
market mezzanine investors struggling to close any deals. We are also pleased to
report that the trend towards lower leverage and more conservative capital
structures which began in early 2008 continued throughout 2009. In addition,
return expectations for the Trust's new investments continued to be more
favorable than they have been for several years.
New private placement investments completed during 2009 were: A E Company, Inc.;
A S C Group, Inc.; Apex Analytix Holding Corporation; Custom Engineered Wheels,
Inc.; International Offshore Services LLC; Northwest Mailing Services, Inc.;
Precision Wire Holding Company; Sencore Holding Company; Spartan Foods Holding
Company; and Telecorps Holdings, Inc.
In addition, the Trust added to existing private placement investments in Arrow
Tru-Line Holdings, Inc.; K P I Holdings, Inc.; NetShape Technologies, Inc.;
Postle Aluminum Company LLC; Telecorps Holdings, Inc.; Visioneering, Inc.; and
Vitex Packaging Group, Inc.
As 2009 drew to a close, we had some very positive news from the portfolio. A T
I Acquisition Company and Vitality Foodservice, Inc. were both sold in late
December and the Trust realized significant gains on its investments in these
companies. These transactions represented the first meaningful realization
activity for the Trust's portfolio since the early part of 2008.
In contrast to the positive developments around realization activity, however,
is the fact that the weak economy that existed during most of 2009 negatively
impacted the financial performance of many of the Trust's portfolio companies.
Many of these companies had to amend their debt covenants, raise additional
capital, or request relief from their debt service requirements. We spent
considerable time working closely with the transaction sponsors and the
management teams of these portfolio companies to remedy these situations during
2009.
2009 Record Ordinary Tax Long-Term
Dividends Date Income Effect Gains
--------------------------------------------------------------------------------
Regular 5/4/2009 0.5400 --
8/3/2009 0.5400 --
10/26/2009 0.5400 --
12/31/2009 0.5400 --
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$ 2.1600 $ 2.1600 $ --
================================================================================
The Trust did not have distributable net long-term capital gains in 2009.
Annual Qualified for Dividend Interest Earned on
Dividend Received Deduction* Qualified Dividends** U .S. Gov't. Obligations
Amount Amount Amount Amount
Per Share Percent Per Share Percent Per Share Percent Per Share
------------------------------------------------------------------------------------
$2.16 0.0000% 0.0000 0.0000% 0.00000 0.0000% 0.0000
====================================================================================
* Not available to individual shareholders
** Qualified dividends are reported in Box 1b on IRS Form 1099-Div for 2009
5
OUTLOOK FOR 2010
The year 2010 opened with many breathing a sigh of relief, looking back on how
difficult the previous 18 months had been and how the worst now seems to be
behind us. The housing market, where much of the trouble started, seems to have
bottomed out. Companies have begun to report improved profits, primarily due to
cost-cutting rather than sales growth. The Federal Reserve has held fast on a
policy of near zero interest rates, providing needed liquidity to the market.
But companies still need to grow revenues to create more jobs, and financial
institutions need to lend money to fund expansion and capital investments.
Government stimulus cannot continue forever and the Federal Reserve will
eventually have to move away from its easy money policy. It is uncertain how the
economy will react in 2010 to these and other developments.
We have begun 2010 with a reasonable backlog of new investment opportunities and
an expectation that leverage and pricing conditions will also continue to be
favorable for the Trust. We are hopeful that realization activity will increase
in 2010 due to the pent-up demand for such transactions. However, we still
expect 2010 to be another challenging year as the Trust's portfolio companies
rebound from the affects of the economic recession.
Regardless of the economic environment, the Trust continues to 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, along with Babson
Capital's seasoned investment-management team, positions the Trust well 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/ Michael L. Klofas
Michael L. Klofas
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.
6
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
7
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
December 31, 2009
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost - $213,701,071) $ 180,783,191
Corporate restricted securities at market value
(Cost - $11,909,685) 11,449,792
Corporate public securities at market value
(Cost - $42,701,613) 38,326,665
--------------------------------------------------------------------------------
230,559,648
--------------------------------------------------------------------------------
Cash 17,216,779
Interest and dividends receivable 3,156,068
Receivable for investments sold 47,302
--------------------------------------------------------------------------------
TOTAL ASSETS 250,979,797
--------------------------------------------------------------------------------
Liabilities:
Dividend payable 5,058,513
Investment advisory fee payable 670,115
Note payable 30,000,000
Interest payable 202,105
Accrued taxes payable 221,290
Accrued expenses 164,947
Other payables 225,873
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TOTAL LIABILITIES 36,542,843
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TOTAL NET ASSETS $ 214,436,954
--------------------------------------------------------------------------------
Net Assets:
Common shares, par value $1.00 per share; an unlimited
number authorized $ 9,367,616
Additional paid-in capital 113,863,819
Retained net realized gain on investments, prior years 127,688,004
Undistributed net investment income 2,305,051
Accumulated net realized loss on investments (869,525)
Net unrealized depreciation of investments (37,918,011)
--------------------------------------------------------------------------------
TOTAL NET ASSETS $ 214,436,954
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON SHARES ISSUED AND OUTSTANDING 9,367,616
--------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $ 22.89
--------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
8
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 2009
INVESTMENT INCOME:
Interest $ 24,031,881
Dividends 27,518
Other 31,827
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TOTAL INVESTMENT INCOME 24,091,226
--------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 2,642,607
Interest 1,584,000
Trustees' fees and expenses 218,400
Professional fees 154,750
Reports to shareholders 120,000
Custodian fees 25,000
Transfer agent/registrar's expenses 23,000
Other 153,057
--------------------------------------------------------------------------------
TOTAL EXPENSES 4,920,814
--------------------------------------------------------------------------------
INVESTMENT INCOME - NET 19,170,412
--------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments before taxes 910,579
Income tax expense (42,167)
--------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS AFTER TAXES 868,412
--------------------------------------------------------------------------------
Net change in unrealized depreciation of investments before taxes 5,451,067
Net change in deferred income tax expense (165,290)
--------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION OF INVESTMENTS AFTER TAXES 5,285,777
--------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 6,154,189
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 25,324,601
--------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
9
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended December 31, 2009
NET INCREASE IN CASH:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term
portfolio securities, net $ 6,251,321
Purchases of portfolio securities (53,362,568)
Proceeds from disposition of portfolio securities 62,049,113
Interest, dividends and other income received 23,083,181
Interest expense paid (1,584,000)
Operating expenses paid (3,099,425)
Income tax refund, net 247,833
--------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 33,585,455
--------------------------------------------------------------------------------
Cash flows from financing activities:
Cash dividends paid from net investment income (20,142,902)
Receipts for shares issued on reinvestment of dividends 1,137,714
--------------------------------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES (19,005,188)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET INCREASE IN CASH 14,580,267
--------------------------------------------------------------------------------
Cash - beginning of year 2,636,512
--------------------------------------------------------------------------------
CASH - END OF YEAR $ 17,216,779
--------------------------------------------------------------------------------
RECONCILIATION OF NET INCREASE IN NET ASSETS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 25,324,601
--------------------------------------------------------------------------------
Decrease in investments 7,231,565
Decrease in interest and dividends receivable 291,425
Decrease in receivable for investments sold 138,115
Decrease in payable for investments purchased (3,578)
Increase in investment advisory fee payable 19,667
Decrease in accrued expenses (8,149)
Increase in accrued taxes payable 455,290
Increase in other payables 136,519
--------------------------------------------------------------------------------
TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS 8,260,854
--------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 33,585,455
--------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
10
MASSMUTUAL CORPORATE INVESTORS
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASETS
For the years ended December 31, 2009 and 2008
2009 2008
--------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income - net $ 19,170,412 $ 21,472,294
Net realized gain (loss) on investments 868,412 (2,459,420)
Net change in unrealized depreciation of
investments 5,285,777 (44,140,369)
--------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS 25,324,601 (25,127,495)
--------------------------------------------------------------------------------
Increase from common shares issued on reinvestment
of dividends
Common shares issued (2009 - 48,107; 2008 - 81,890) 1,137,714 2,186,860
Dividends to shareholders from:
Net investment income (2009 - $2.16 per share;
2008 - $2.16 per share) (20,168,880) (20,078,868)
--------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 6,293,435 (43,019,503)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSETS, BEGINNING OF YEAR 208,143,519 251,163,022
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF $2,305,051 AND
$3,174,832, RESPECTIVELY) $214,436,954 $208,143,519
--------------------------------------------------------------------------------
See Notes to Consolidated Financial
11
MassMutual Corporate Investors
CONSOLIDATED FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding:
FOR THE YEARS ENDED DECEMBER 31,
2009 2008 2007 2006 2005
------------------------------------------------------------------------------------------------------
NET ASSET VALUE: BEGINNING OF YEAR $ 22.33 $ 27.19 $ 27.51 $ 26.06 $ 24.34
------------------------------------------------------------------------------------------------------
Net investment income (a) 2.05 2.31 2.56 2.27 2.03
Net realized and unrealized gain (loss)
on investments 0.66 (5.02) (0.35) 1.62 1.96(b)
------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.71 (2.71) 2.21 3.89 3.99
------------------------------------------------------------------------------------------------------
Dividends from net investment income to
common shareholders (2.16) (2.16) (2.57) (2.47) (2.11)
Dividends from net realized gain on
investments to common shareholders -- -- -- (0.01) (0.18)
Increase from dividends reinvested 0.01 0.01 0.04 0.04 0.02
------------------------------------------------------------------------------------------------------
TOTAL DIVIDENDS (2.15) (2.15) (2.53) (2.44) (2.27)
------------------------------------------------------------------------------------------------------
NET ASSET VALUE: END OF YEAR $ 22.89 $ 22.33 $ 27.19 $ 27.51 $ 26.06
------------------------------------------------------------------------------------------------------
PER SHARE MARKET VALUE: END OF YEAR $ 25.10 $ 19.25 $ 30.20 $ 34.89 $ 30.05
------------------------------------------------------------------------------------------------------
Total investment return Net asset value(c) 12.64% (10.34%) 8.72% 18.06% 20.04%
Market value 39.89% (30.44%) (8.78%) 29.04% 16.95%
Net assets (in millions): End of year $ 214.44 $ 208.14 $ 251.16 $ 251.69 $ 236.28
Ratio of operating expenses to average
net assets 1.58% 1.49% 1.55% 1.43% 1.78%
Ratio of interest expense to average
net assets 0.75% 0.67% 0.59% 0.60% 0.73%
Ratio of income tax expense to average
net assets (d) 0.00% 0.00% 0.35% 2.46% 2.84%
Ratio of total expenses before custodian
reduction to average net assets (d) 2.33% 2.16% 2.49% 4.53% 5.36%
Ratio of net expenses after custodian
reduction to average net assets (d) 2.33% 2.16% 2.49% 4.49% 5.35%
Ratio of net investment income to
average net assets 9.06% 9.01% 9.17% 8.19% 7.98%
Portfolio turnover 23% 32% 44% 35% 35%
(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 $ 30 $ 20 $ 20
Asset coverage per $1,000 of
indebtedness $ 8,148 $ 7,938 $ 9,372 $ 13,584 $ 12,814
See Notes to Consolidated Financial Statements
12
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES - 89.65%:(A) PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
PRIVATE PLACEMENT INVESTMENTS - 83.87%
A E COMPANY, INC.
A designer and manufacturer of machined parts and assembly structures for the commercial and military aerospace industries.
11% Senior Secured Note due 2015 $ 1,413,462 * $ 1,385,193 $ 1,411,013
13% Senior Subordinated Note due 2016 $ 1,413,461 11/10/09 1,265,201 1,410,469
Common Stock (B) 323,077 shs. 11/10/09 323,077 306,923
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 161,538 shs. 11/10/09 119,991 1,615
------------- -------------
* 11/10/09 and 11/18/09. 3,093,462 3,130,020
------------- -------------
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 $ 2,478,917 11/21/07 2,427,269 2,503,706
Limited Partnership Interest (B) 23.16% int. 11/21/07 224,795 277,539
------------- -------------
2,652,064 2,781,245
------------- -------------
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 1,157,411
Limited Liability Company Unit Class A-2 (B) 1,276 uts. 12/31/08 140,406 216,224
Limited Liability Company Unit Class A-3 (B) 1,149 uts. 12/31/08 126,365 194,602
------------- -------------
1,252,308 1,568,237
------------- -------------
A S C GROUP, INC.
A designer and manufacturer of high reliability encryption equipment, communications products, computing systems and electronic
components primarily for the military and aerospace sectors.
12.75% Senior Subordinated Note due 2016 $ 2,318,182 10/09/09 1,986,875 2,334,756
Limited Liability Company Unit Class A (B) 2,359 uts. 10/09/09 231,818 220,215
Limited Liability Company Unit Class B (B) 2,782 uts. 10/09/09 273,352 28
------------- -------------
2,492,045 2,554,999
------------- -------------
A W X HOLDINGS CORPORATION
A provider of aerial equipment rental, sales and repair services to non-residential construction and maintenance contractors
operating in the State of Indiana.
10.5% Senior Secured Term Note due 2014 $ 735,000 05/15/08 720,300 685,815
13% Senior Subordinated Note due 2015 $ 735,000 05/15/08 667,812 663,849
Common Stock (B) 105,000 shs. 05/15/08 105,000 --
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 36,923 shs. 05/15/08 62,395 --
------------- -------------
1,555,507 1,349,664
------------- -------------
ADVANCED TECHNOLOGIES HOLDINGS
A provider of factory maintenance services to industrial companies.
15% Senior Subordinated Note due 2013 $ 2,166,378 12/27/07 2,123,785 2,180,395
Preferred Stock (B) 1,031 shs. 12/27/07 510,000 422,136
------------- -------------
2,633,785 2,602,531
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
13
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
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 $ 1,649,330
14% Senior Subordinated Note due 2015 $ 1,260,000 03/09/07 1,151,553 1,272,600
Common Stock (B) 262,500 shs. 03/09/07 262,500 59,408
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 66,116 shs. 03/09/07 111,528 14,963
------------- -------------
3,128,669 2,996,301
------------- -------------
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 1,045,791 1,132,474
Common Stock (B) 1,347 shs. 09/26/08 134,683 99,555
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 958 shs. 09/26/08 87,993 70,805
------------- -------------
1,268,467 1,302,834
------------- -------------
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 3,187,495
Preferred Class A Unit (B) 3,223 uts. ** 322,300 509,115
Preferred Class B Unit (B) 1,526 uts. 06/09/08 152,626 191,618
Common Class B Unit (B) 30,420 uts. 01/22/04 1 37,448
Common Class D Unit (B) 6,980 uts. 09/12/06 1 8,593
------------- -------------
* 01/22/04 and 06/09/08. ** 01/22/04 and 09/12/06. 3,508,593 3,934,269
------------- -------------
APEX ANALYTIX HOLDING CORPORATION
A provider of audit recovery and fraud detection services and software to commercial and retail businesses in the U.S. and Europe.
12.5% Senior Subordinated Note due 2016 $ 1,912,500 04/28/09 1,585,159 1,969,875
Preferred Stock Series B (B) 3,065 shs. 04/28/09 306,507 31
Common Stock (B) 1,366 shs. 04/28/09 1,366 14
------------- -------------
1,893,032 1,969,920
------------- -------------
ARROW TRU-LINE HOLDINGS, INC.
A manufacturer of hardware for residential and commercial overhead garage doors in North America.
14% Senior Subordinated Note due 2012 $ 1,796,193 05/18/05 1,617,055 1,436,954
Preferred Stock (B) 63 shs. 10/16/09 62,756 31,380
Common Stock (B) 497 shs. 05/18/05 497,340 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 130 shs. 05/18/05 112,128 --
------------- -------------
2,289,279 1,468,334
------------- -------------
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 2,172,588 2,205,719
Preferred Stock Class A (B) 879 shs. 06/30/06 268,121 80,539
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 28,305
------------- -------------
2,533,097 2,314,563
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
14
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
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 $ 698,301
12.5% Senior Subordinated Note due 2015 $ 750,872 08/07/08 686,843 668,097
Common Stock (B) 73,256 shs. 08/07/08 73,256 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 57,600 shs. 08/07/08 57,689 --
------------- -------------
1,553,643 1,366,398
------------- -------------
CAPITAL SPECIALTY PLASTICS, INC.
A producer of desiccant strips used for packaging pharmaceutical products.
Common Stock (B) 109 shs. * 503 795,663
------------- -------------
* 12/30/97 and 05/29/99.
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 2,448,000
Preferred Stock (B) 277 shs. 12/02/08 276,900 263,148
------------- -------------
2,502,000 2,711,148
------------- -------------
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 1,238,572
Common Stock (B) 607 shs. 10/10/08 60,714 50,645
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 934 shs. 10/10/08 91,071 77,916
------------- -------------
1,250,714 1,367,133
------------- -------------
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 1,196,977
Limited Liability Company Unit Class A (B) 156,046 uts. 01/12/07 156,046 --
Limited Liability Company Unit Class C (B) 112,873 uts. 01/12/07 112,873 --
------------- -------------
2,502,121 1,196,977
------------- -------------
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. 07/05/07 300,168 898,560
Common Stock (B) 718 shs. 07/05/07 7 56
Limited Partnership Interest (B) 12.64% int. * 189,586 --
------------- -------------
* 08/12/04 and 01/14/05. 1,190,153 2,613,863
------------- -------------
COREPHARMA LLC
A manufacturer of oral dose generic pharmaceuticals targeted at niche applications.
12% Senior Subordinated Note due 2013 $ 2,550,000 08/04/05 2,465,391 2,550,000
Warrant, exercisable until 2013, to purchase
common stock at $.001 per share (B) 20 shs. 08/04/05 137,166 215,048
------------- -------------
2,602,557 2,765,048
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
15
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
CRANE RENTAL CORPORATION
A crane rental company.
13% Senior Subordinated Note due 2015 $ 2,295,000 08/21/08 $ 2,079,900 $ 2,340,900
Common Stock (B) 255,000 shs. 08/21/08 255,000 161,164
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 136,070 shs. 08/21/08 194,826 85,998
------------- -------------
2,529,726 2,588,062
------------- -------------
CUSTOM ENGINEERED WHEELS, INC.
A manufacturer of custom engineered, non-pneumatic plastic wheels and plastic tread cap tires used primarily for lawn and garden
products and wheelchairs.
12.5% Senior Subordinated Note due 2016 $ 2,182,212 10/27/09 1,892,808 2,193,057
Preferred Stock PIK 296 shs. 10/27/09 295,550 280,773
Preferred Stock Series A 216 shs. 10/27/09 197,152 2
Common Stock (B) 72 shs. 10/27/09 72,238 68,628
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 53 shs. 10/27/09 48,608 1
------------- -------------
2,506,356 2,542,461
------------- -------------
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 1,752,855 1,833,967
Limited Partnership Interest (B) 1.82% int. 10/30/06 702,174 748,507
Warrant, exercisable until 2014, to purchase
preferred stock at $.01 per share (B) 50 shs. 10/30/06 49,830 66,784
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 34 shs. 10/30/06 34,000 27,733
------------- -------------
2,538,859 2,676,991
------------- -------------
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) 2,586 shs. 12/14/01 2,186,976 1,643,701
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. 3,324,493 1,643,701
------------- -------------
DUNCAN SYSTEMS, INC.
A distributor of windshields and side glass for the recreational vehicle market.
10% Senior Secured Term Note due 2013 $ 405,000 11/01/06 398,925 411,836
13% Senior Subordinated Note due 2014 $ 855,000 11/01/06 782,125 855,000
Common Stock (B) 180,000 shs. 11/01/06 180,000 167,655
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 56,514 shs. 11/01/06 78,160 52,638
------------- -------------
1,439,210 1,487,129
------------- -------------
DWYER GROUP, INC.
A franchiser of a variety of home repair services.
Common Stock (B) 6,906 shs. * 690,600 1,163,888
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 342,727
------------- -------------
* 10/30/03 and 01/02/04. 877,069 1,506,615
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
16
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
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 $ 2,309,614 01/08/08 $ 2,267,124 $ 2,151,316
Common Stock (B) 660 shs. 01/08/08 329,990 71,162
------------- -------------
2,597,114 2,222,478
------------- -------------
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 77,208 225,244
------------- -------------
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 $ 2,192,379 10/06/08 2,148,358 2,204,830
Preferred Stock (B) 4,341 shs. 10/06/08 434,074 207,706
Common Stock (B) 3,069 shs. 10/06/08 3,069 --
------------- -------------
2,585,501 2,412,536
------------- -------------
F H S HOLDINGS LLC
A national provider of customized disease management services to large self-insured employers.
12% Senior Subordinated Note due 2014 (D) $ 2,390,625 06/01/06 2,220,452 1,195,313
Limited Liability Company Units of Linden/
FHS Holdings LLC (B) 159 uts. 06/01/06 159,362 --
Common Unit Class B (B) 1,386 uts. 06/01/06 122,361 --
------------- -------------
2,502,175 1,195,313
------------- -------------
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 (D) $ 918,385 04/13/06 904,609 229,596
14% Senior Subordinated Note due 2014 (D) $ 555,059 04/13/06 495,635 --
------------- -------------
1,400,244 229,596
------------- -------------
GOLDEN COUNTY FOODS HOLDING, INC.
A manufacturer of frozen appetizers and snacks.
16% Senior Subordinated Note due 2015 $ 1,912,500 11/01/07 1,727,592 1,530,000
16% PIK Note due 2015 $ 367,165 12/31/08 300,426 293,732
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 --
------------- -------------
2,174,676 1,823,732
------------- -------------
H M HOLDING COMPANY
A designer, manufacturer, and importer of promotional and wood furniture.
7.5% Senior Subordinated Note due 2013 (D) $ 685,100 10/15/09 512,231 --
Preferred Stock (B) 40 shs. * 40,476 --
Preferred Stock Series B (B) 2,055 shs. 10/15/09 1,536,694
Common Stock (B) 340 shs. 02/10/06 340,000 --
Common Stock Class C (B) 560 shs. 10/15/09 -- --
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 --
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
17
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in manufacturing and marketing entities.
Series A Preferred Units (B) 1.19% int. 07/21/94 $ 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 * 1,937,059 2,043,269
Common Stock (B) 63 shs. * 62,742 62,272
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 200 shs. * 199,501 198,013
------------- -------------
* 06/30/04 and 08/19/04. 2,199,302 2,303,554
------------- -------------
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 1,971,802
Common Stock (B) 474 shs. 08/19/08 474,419 103,677
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 123 shs. 08/19/08 113,773 26,797
------------- -------------
2,508,489 2,102,276
------------- -------------
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 2,077 154,381
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 20 shs. 02/27/07 612 45,469
------------- -------------
2,689 199,850
------------- -------------
INTERNATIONAL OFFSHORE SERVICES LLC
A leading provider of marine transportation services, platform decommissioning, and salvage services to oil and gas producers, in
the shallow waters of the Gulf of Mexico.
14.25% Senior Subordinated Secured Note due 2017 $ 2,550,000 07/07/09 2,299,566 2,626,500
Limited Liability Company Unit (B) 3,112 uts. 07/07/09 186,684 31
------------- -------------
2,486,250 2,626,531
------------- -------------
JASON, INC.
A diversified manufacturing company serving various industrial markets.
13% Senior Subordinated Note due 2010 $ 963,687 08/04/00 848,275 240,922
Limited Partnership Interest of
Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,470 --
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 --
------------- -------------
1,850,157 240,922
------------- -------------
JUSTRITE MANUFACTURING ACQUISITION CO.
A manufacturer of safety products such as storage cabinets and containers.
12% Senior Subordinated Note due 2011 $ 1,593,750 12/15/04 1,551,608 1,593,750
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 192,235
1,652,717 1,785,985
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 $ 2,434,382 10/15/07 2,386,137 2,452,083
Common Stock (B) 220,673 shs. 10/15/07 220,673 168,410
------------- -------------
2,606,810 2,620,493
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
18
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
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 $ 2,390,795 $ 1,255,844
Common Stock (B) 134,210 shs. 05/25/06 134,210 --
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 82,357 shs. 05/25/06 71,534 --
------------- -------------
2,596,539 1,255,844
------------- -------------
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 1,579,892
Convertible Preferred Stock Series C (B) 55 shs. 06/30/09 55,435 --
Convertible Preferred Stock Series D (B) 24 shs. 09/17/09 24,476 --
Common Stock (B) 443 shs. 07/15/08 443,478 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 734 shs. * 96,024 --
------------- -------------
* 07/16/08 and 09/17/09. 2,587,781 1,579,892
------------- -------------
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 $ 2,690,787 03/14/07 2,456,785 2,152,630
Common Stock (B) 232 shs. 03/13/07 232,000 --
Warrant, exercisable until 2019, to purchase
preferred stock at $.01 per share (B) 134 shs. 07/07/09 -- --
Warrant, exercisable until 2017, to purchase
common stock at $.01 per share (B) 167 shs. 03/14/07 162,260 --
------------- -------------
2,851,045 2,152,630
------------- -------------
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 $ 2,276,071 12/20/07 2,234,623 2,298,832
Preferred Stock (B) 363,260 shs. 12/20/07 363,260 418,280
Common Stock (B) 102,616 shs. 12/20/07 1,026 39,572
------------- -------------
2,598,909 2,756,684
------------- -------------
L H D EUROPE HOLDING, INC.
A non-carbonated beverage dispensing company focused on the food service industry.
Common Stock (B) 85 shs. 12/28/09 7,916 24,225
------------- -------------
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 $ 1,230,154 09/12/08 1,139,999 1,211,999
Common Stock (B) 61 shs. 09/12/08 60,714 10,098
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 66 shs. 09/12/08 65,571 10,906
------------- -------------
1,266,284 1,233,003
------------- -------------
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 05/04/07 912,469 975,000
Limited Liability Company Unit (B) 24,109 uts. * 314,464 331,330
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3,375 shs. 05/04/07 43,031 46,383
------------- -------------
* 05/04/07 and 01/02/08. 1,269,964 1,352,713
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
19
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
MAVERICK ACQUISITION COMPANY
A manufacturer of capsules that cover the cork and neck of wine bottles.
7.1% Senior Secured Tranche A Note due 2010 (C) $ 275,429 09/03/04 $ 275,429 $ 273,814
12.5% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 299,580 302,618
7.72% Senior Secured Revolver due 2011 (C) $ 50,933 09/03/04 50,932 50,015
Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 11,933
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 8,622
------------- -------------
724,183 647,002
------------- -------------
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 $ 1,163,639 08/29/08 1,034,349 1,186,912
Preferred Unit (B) 126 uts. 08/29/08 125,519 136,820
Common Unit Class A (B) 1,268 uts. 08/29/08 1,268 54,910
Common Unit Class B (B) 472 uts. 08/29/08 120,064 20,431
------------- -------------
1,281,200 1,399,073
------------- -------------
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 2,070,591
Preferred Stock (B) 107 shs. 09/24/08 103,255 82,048
Limited Partnership Interest (B) 1.40% int. 09/16/08 388,983 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 35 shs. 09/24/08 33,268 --
------------- -------------
2,506,780 2,152,639
------------- -------------
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 * 2,578,171 2,626,489
Common Stock (B) 450 shs. * 450,000 492,561
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 164 shs. * 162,974 179,489
------------- -------------
* 08/12/05 and 09/11/06. 3,191,145 3,298,539
------------- -------------
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 2,226,834 2,118,461
Preferred Stock (B) 263 shs. 07/21/08 261,830 52,489
Common Stock (B) 18 shs. 07/21/08 20,000 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 10 shs. 07/21/08 11,285 --
------------- -------------
2,519,949 2,170,950
------------- -------------
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. 08/04/06 106,153 239,757
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 1,107 shs. 08/04/06 107,109 249,919
------------- -------------
213,262 489,676
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
20
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
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 $ 2,550,000 07/25/08 $ 2,404,930 $ 1,275,000
14% PIK Note due 2014 $ 792,791 07/25/08 646,821 396,395
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 152 shs. 03/31/06 138,125 --
------------- -------------
3,189,876 1,671,395
------------- -------------
NABCO, INC.
A producer of explosive containment vessels in the United States.
14% Senior Subordinated Note due 2014 $ 625,000 02/24/06 588,676 468,750
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. 1,451,274 468,750
------------- -------------
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 2010 $ 73,736 11/14/08 73,736 73,736
14% Senior Subordinated Note due 2014 (D) $ 1,338,613 05/28/04 1,155,793 --
10.75% Senior Secured Note due 2011 (D) $ 609,206 05/28/04 607,397 152,302
------------- -------------
1,836,926 226,038
------------- -------------
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 2,146,250
Common Stock (B) 425,000 shs. 08/02/07 425,000 564,213
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 119,360 shs. 08/02/07 194,257 158,458
------------- -------------
2,507,500 2,868,921
------------- -------------
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 1,114,584
Limited Partnership Interest of
Saw Mill PCG Partners LLC (B) 2.61% int. 02/01/07 1,019,958 --
Limited Liability Company Unit Class D of
Saw Mill PCG Partners LLC (B) 15 uts. * 15,389 7,695
Limited Liability Company Unit Class D-1 of
Saw Mill PCG Partners LLC (B) 55 uts. 09/30/09 54,518 27,262
Preferred Stock Class A (B) 1 sh. 12/18/08 1,370 686
Preferred Stock Class A-1 (B) 5 shs. 09/30/09 4,730 2,365
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 91 shs. 02/02/07 90,830 --
------------- -------------
* 12/18/08 and 09/30/09. 2,595,365 1,152,592
------------- -------------
NORTHWEST MAILING SERVICES, INC.
A producer of promotional materials for companies that use direct mail as part of their customer retention and loyalty programs.
12% Senior Subordinated Note due 2016 $ 2,281,579 07/09/09 1,899,712 2,371,717
Limited Partnership Interest (B) 2,684 uts. 07/09/09 268,421 255,000
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 3,498 shs. 07/09/09 349,753 35
------------- -------------
2,517,886 2,626,752
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
21
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the automotive industry.
9% Senior Secured Note due 2012 $ 812,500 01/28/02 $ 812,500 $ 609,375
15% Senior Subordinated Note due 2012 (D) $ 500,000 01/28/02 473,642 --
Convertable Preferred Stock A (B) 1,000 shs. 01/28/02 961,637 --
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 --
------------- -------------
2,722,324 609,375
------------- -------------
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 $ 141,907 01/03/06 140,993 144,668
13% Senior Subordinated Note due 2013 $ 687,241 01/03/06 635,084 687,241
Common Stock (B) 322,307 shs. 01/03/06 322,307 256,948
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 75,378 shs. 01/03/06 62,824 60,092
------------- -------------
1,161,208 1,148,949
------------- -------------
OLYMPIC SALES, INC.
A boat retailer in Washington state, Oregon, California and British Columbia.
12% Senior Subordinated Note due 2010 (D) $ 1,022,000 08/07/98 1,022,000 153,300
12% Senior Subordinated Note due 2010 (D) $ 307,071 02/09/00 268,283 46,061
------------- -------------
1,290,283 199,361
------------- -------------
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. 01/17/06 572,115 357,487
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 619 shs. 01/17/06 170,801 60,356
------------- -------------
742,916 417,843
------------- -------------
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 $ 2,324,243 07/03/06 2,230,549 2,347,485
Preferred Unit (B) 382 uts. 07/03/06 382,150 547,893
Preferred Unit (B) 69 uts. 07/03/06 68,790 98,625
Common Unit Class I (B) 148 uts. 07/03/06 -- 528,513
Common Unit Class L (B) 31 uts. 07/03/06 -- 111,689
------------- -------------
2,681,489 3,634,205
------------- -------------
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 2,186,643 2,295,000
Preferred Stock (B) 36 shs. 03/31/06 329,596 444,161
Common Stock (B) 23 shs. 03/31/06 25,500 159,127
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 13 shs. 03/31/06 11,122 92,564
------------- -------------
2,552,861 2,990,852
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
22
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
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 $ 1,331,354 04/27/07 $ 1,252,064 $ 1,140,696
Limited Liability Company Unit (B) 1,754,707 uts. 04/27/07 63,233 --
------------- -------------
1,315,297 1,140,696
------------- -------------
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 2,052,254 2,111,319
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 241,304
------------- -------------
2,317,879 2,352,623
------------- -------------
PEARLMAN ENTERPRISES, INC.
A developer and distributor of tools, equipment, and supplies to the natural and engineered stone industry.
Preferred Stock Series A (B) 2,334 shs. 05/22/09 111,508 --
Preferred Stock Series B (B) 13,334 shs. 05/22/09 547,872 --
Common Stock (B) 40,540 shs. 05/22/09 1,877,208 --
------------- -------------
2,536,588 --
------------- -------------
POSTLE ALUMINUM COMPANY LLC
A manufacturer and distributor of aluminum extruded products.
3% Senior Subordinated PIK Note due 2014 (D) $ 2,198,100 10/02/06 2,014,226 --
Limited Liability Company Unit Class A 1,384 uts. 10/02/06 510,000 --
Limited Liability Company Unit 143 uts. 05/22/09 72,042 67,828
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 8,595 shs. 10/02/06 124,644 --
------------- -------------
2,720,912 67,828
------------- -------------
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 2,181,466 2,329,310
Limited Partnership Interest (B) 23.70% int. 02/11/08 177,729 64,710
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 1,322 shs. 02/11/08 167,588 127,531
------------- -------------
2,526,783 2,521,551
------------- -------------
PRECISION WIRE HOLDING COMPANY
A manufacturer of specialty medical wires that are used in non-elective minimally invasive surgical procedures.
14.25% Senior Subordinated Note due 2016 $ 2,550,000 11/12/09 2,288,681 2,540,179
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 206 shs. 11/12/09 203,944 2
------------- -------------
2,492,625 2,540,181
------------- -------------
QUALIS AUTOMOTIVE LLC
A distributor of aftermarket automotive brake and chassis products.
12% Senior Subordinated Note due 2012 $ 1,742,711 05/28/04 1,598,853 1,838,380
Common Stock (B) 354,167 shs. 05/28/04 354,166 196,499
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 377,719 shs. 05/28/04 377,719 209,566
------------- -------------
2,330,738 2,244,445
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
23
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
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 $ 2,153,831
Limited Liability Company Unit (B) 2,828 uts. 12/15/06 282,810 133,714
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3 shs. 12/15/06 131,483 63,057
------------- -------------
2,504,656 2,350,602
------------- -------------
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 2,565,167
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 6 shs. 01/18/08 31,089 78,729
------------- -------------
2,499,000 2,643,896
------------- -------------
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 1,021,996 1,035,195
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 41,760
------------- -------------
1,144,942 1,076,955
------------- -------------
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. 06/02/99 256,212 197,881
------------- -------------
SAVAGE SPORTS HOLDING, INC.
A manufacturer of sporting firearms.
12% Senior Subordinated Note due 2012 $ 1,538,793 09/10/04 1,483,409 1,538,447
Common Stock (B) 612 shs. * 642,937 980,094
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 213,987
------------- -------------
* 09/10/04 and 10/05/07. 2,239,924 2,732,528
------------- -------------
SENCORE HOLDING COMPANY
A designer, manufacturer, and marketer of decoders, receivers and modulators sold to broadcasters, satellite, cable and telecom
operators for encoding/decoding analog and digital transmission video signals.
12.5% Senior Subordinated Note due 2014 $ 1,765,385 01/15/09 1,549,386 1,610,351
Common Stock (B) 131 shs. 01/15/09 130,769 32,693
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 282 shs. 01/15/09 281,604 3
------------- -------------
1,961,759 1,643,047
------------- -------------
SMART SOURCE HOLDINGS LLC
A short-term computer rental company.
12% Senior Subordinated Note due 2015 $ 2,223,076 * 2,043,496 2,167,583
Limited Liability Company Unit (B) 619 uts. * 631,592 275,415
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 157 shs. * 164,769 69,772
------------- -------------
* 08/31/07 and 03/06/08. 2,839,857 2,512,770
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
24
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
SPARTAN FOODS HOLDING COMPANY
A manufacturer of branded pizza crusts and pancakes.
12.5% Senior Subordinated Note due 2017 $ 1,912,500 12/15/09 $ 1,647,241 $ 1,905,830
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 257 shs. 12/15/09 227,109 3
------------- -------------
1,874,350 1,905,833
------------- -------------
SPECIALTY COMMODITIES, INC.
A distributor of specialty food ingredients.
13.25% Senior Subordinated Note due 2016 $ 2,283,557 10/23/08 2,145,453 2,329,228
Common Stock (B) 30,000 shs. 10/23/08 300,000 126,807
Warrant, excercisable until 2018, to purchase
common stock at $.01 per share (B) 11,054 shs. 10/23/08 100,650 46,724
------------- -------------
2,546,103 2,502,759
------------- -------------
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 2,128,786 2,084,157
Common Stock (B) 311 shs. 08/01/06 310,976 35,595
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 104 shs. 08/01/06 93,293 11,855
------------- -------------
2,533,055 2,131,607
------------- -------------
SYNTERACT HOLDINGS CORPORATION
A provider of outsourced clinical trial management services to pharmaceutical and biotechnology companies.
14% Senior Subordinated Note due 2016 $ 2,584,544 09/02/08 2,419,755 2,635,716
Redeemable Preferred Stock Series A (B) 1,280 shs. 09/02/08 12,523 37,361
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 12,803 shs. 09/02/08 112,693 --
------------- -------------
2,544,971 2,673,077
------------- -------------
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 2,422,500
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 9 shs. 01/14/08 88,054 31,380
------------- -------------
2,499,000 2,453,880
------------- -------------
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 2,217,385
Common Stock (B) 2,203 shs. 10/14/05 2,203 1,072,983
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 1,192 shs. 09/30/08 568,009 580,570
------------- -------------
2,522,328 3,870,938
------------- -------------
TELECORPS HOLDINGS, INC.
A provider of equipment and services to producers of television shows and motion pictures.
12.75% Senior Subordinated Note due 2016 $ 3,176,506 * 2,785,539 3,114,737
Common Stock (B) 270 shs. 09/02/09 10,994 9,895
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 7,906 shs. * 327,437 79
------------- -------------
* 05/20/09 and 09/02/09. 3,123,970 3,124,711
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
25
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
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.
12% Senior Subordinated Note due 2014 $ 1,162,110 * $ 1,116,616 $ 934,837
8.79% Term Note due 2012 (C) $ 1,369,040 * 1,364,590 1,252,291
7.75% Term Note due 2012 (C) $ 1,143 * 1,435 1,320
Limited Partnership Interest of
Saw Mill Capital Fund V, LLC (B) 3.97% int. ** 149,176 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 72 shs. 04/28/06 59,041 --
------------- -------------
* 04/28/06 and 09/13/06. ** 03/01/05 and 10/10/08. 2,690,858 2,188,448
------------- -------------
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 2,102,363 559,756
Series A Preferred Stock (B) 414 shs. 10/26/07 414,051 --
------------- -------------
2,516,414 559,756
------------- -------------
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 03/02/07 838,581 808,783
13% Senior Subordinated Note due 2014 $ 598,450 03/02/07 490,608 299,225
------------- -------------
1,329,189 1,108,008
------------- -------------
TRANSPAC HOLDING COMPANY
A designer, importer and wholesaler of home decor and seasonal gift products.
12% Senior Subordinated Note due 2015 (D) $ 1,733,006 10/31/07 1,649,939 1,507,055
Common Stock (B) 209 shs. 10/31/07 208,589 --
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 94 shs. 10/31/07 87,607 --
------------- -------------
1,946,135 1,507,055
------------- -------------
TRANSTAR HOLDING COMPANY
A distributor of aftermarket automotive transmission parts.
12% Senior Subordinated Note due 2014 $ 1,734,000 08/31/05 1,682,395 1,751,340
Common Stock (B) 1,078 shs. * 1,078,450 1,337,937
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 86 shs. 08/31/05 77,485 106,618
------------- -------------
* 08/31/05 and 04/30/07. 2,838,330 3,195,895
------------- -------------
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 2,668,276 2,712,000
Common Stock (B) 630 shs. 02/04/98 630,000 709,405
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 499,962
------------- -------------
3,667,108 3,921,367
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
26
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
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
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. 3,343,875 577,385
------------- -------------
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 68,059 151,268
------------- -------------
U M A ENTERPRISES, INC.
An importer and wholesaler of home decor products.
15% Senior Subordinated Note due 2015 $ 1,760,083 02/08/08 1,721,755 1,712,555
Convertible Preferred Stock (B) 887 shs. 02/08/08 886,956 --
------------- -------------
2,608,711 1,712,555
------------- -------------
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 1,789,594 1,599,785
14.5% PIK Note due 2012 $ 117,631 10/06/09 99,987 99,987
Common Stock (B) 182 shs. 04/30/04 182,200 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 230 shs. 04/30/04 211,736 --
------------- -------------
2,283,517 1,699,772
------------- -------------
VISIONEERING, INC.
A designer and manufacturer of tooling and fixtures for the aerospace industry.
10.5% Senior Secured Term Loan due 2013 $ 802,941 05/17/07 790,897 790,119
13% Senior Subordinated Note due 2014 $ 648,530 05/17/07 594,083 628,086
18% PIK Convertible Preferred Stock (B) 37,381 shs. 03/13/09 72,519 58,015
Common Stock (B) 123,529 shs. 05/17/07 123,529 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 35,006 shs. 05/17/07 55,055 --
------------- -------------
1,636,083 1,476,220
------------- -------------
VITEX PACKAGING GROUP, INC.
A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags.
10% Senior Subordinated PIK Note due 2011 (D) $ 154,545 07/19/04 136,956 146,809
5% Senior Subordinated PIK Note due 2011 (D) $ 850,000 06/30/07 741,532 212,500
Class B Unit (B) 767,881 uts. 10/29/09 348,058 --
Class C Unit (B) 850,000 uts. 10/29/09 780,572 --
Limited Liability Company Unit Class A (B) 723,465 uts. * 433,222 --
Limited Liability Company Unit Class B (B) 182,935 uts. 07/19/04 182,935 --
------------- -------------
* 07/19/04 and 10/29/09. 2,623,275 359,309
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
27
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
------------- -------- ------------- -------------
WAGGIN' TRAIN HOLDINGS LLC
A producer of premium quality meat dog treats.
14% Senior Subordinated Note due 2014 $ 2,219,604 11/15/07 $ 2,173,990 $ 2,241,800
Limited Liability Company Unit Class B (B) 423 uts. 11/15/07 422,652 490,413
Limited Liability Company Unit Class C (B) 423 uts. 11/15/07 -- 513,152
------------- -------------
2,596,642 3,245,365
------------- -------------
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.
14.13% Senior Subordinated Note due 2014 $ 1,721,250 11/30/06 1,621,114 1,463,063
Common Stock (B) 191 shs. 11/30/06 191,250 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 95 shs. 11/30/06 86,493 --
------------- -------------
1,898,857 1,463,063
------------- -------------
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 1,069,760 1,068,576
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 --
------------- -------------
1,269,026 1,068,576
------------- -------------
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 (D) $ 2,322,844 09/08/08 2,272,887 1,161,422
Common Stock (B) 283 shs. 09/08/08 283,333 --
------------- -------------
2,556,220 1,161,422
------------- -------------
TOTAL PRIVATE PLACEMENT INVESTMENTS (E) (F) 212,746,601 179,833,791
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
28
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
SHARES OR
INTEREST DUE PRINCIPAL MARKET
CORPORATE RESTRICTED SECURITIES:(A) (Continued) RATE DATE AMOUNT COST VALUE
------ -------- ------------ ------------ ------------
RULE 144A SECURITIES - 5.78%:(A)
BONDS -- 5.74%
ACCO Brands Corporation 10.625% 03/15/15 $ 100,000 $ 98,550 $ 109,750
Advanced Micro Devices, Inc. 8.125 12/15/17 750,000 714,024 746,250
American Tire Distributor (C) 6.540 04/01/12 1,000,000 950,000 830,000
Appleton Papers, Inc. 11.250 12/15/15 303,000 300,000 256,414
Cemex Finance LLC 9.500 12/14/16 375,000 393,239 386,588
Cenveo Corporation 10.500 08/15/16 100,000 100,000 102,500
Clear Channel Worldwide Holdings, Inc. 9.250 12/15/17 750,000 750,000 772,500
Compucom Systems, Inc. 12.500 10/01/15 1,330,000 1,292,771 1,353,275
Cricket Communications, Inc. 9.375 11/01/14 750,000 754,998 753,750
Douglas Dynamics LLC (F) 7.750 01/15/12 1,010,000 954,470 949,400
Easton-Bell Sports, Inc. 9.750 12/01/16 320,000 328,438 331,600
G F S I, Inc. (C) 10.500 06/01/11 715,000 685,658 530,888
Gannett Company, Inc. 9.375 11/15/17 125,000 123,228 129,063
Great Atlantic & Pacific Tea Co. 11.375 08/01/15 75,000 73,132 78,938
H C A, Inc. 9.875 02/15/17 35,000 33,920 38,588
Harrah's Operating Escrow LLC 11.250 06/01/17 325,000 313,250 343,688
Headwaters, Inc. 11.375 11/01/14 500,000 520,033 522,500
J D A Software Group, Inc. 8.000 12/15/14 75,000 74,241 77,063
JohnsonDiversey, Inc. 8.250 11/15/19 100,000 99,170 100,875
MGM Mirage, Inc. 10.375 05/15/14 45,000 43,855 48,825
MGM Mirage, Inc. 11.125 11/15/17 75,000 73,096 83,063
Packaging Dynamics Corporation of America 10.000 05/01/16 1,200,000 1,194,891 901,500
Pinnacle Foods Finance LLC 9.250 04/01/15 75,000 75,000 76,125
SandRidge Energy, Inc. 8.000 06/01/18 360,000 364,056 353,700
SandRidge Energy, Inc. 8.750 01/15/20 750,000 744,973 750,000
Sinclair Television Group, Inc. 9.250 11/01/17 425,000 413,543 442,000
Trimas Corporation 9.750 12/15/17 75,000 73,495 73,875
Tunica-Biloxi Gaming Authority 9.000 11/15/15 1,075,000 1,099,500 968,844
Viasystems, Inc. 12.000 01/15/15 175,000 168,513 187,250
------------ ------------
TOTAL BONDS 12,810,044 12,298,812
------------ ------------
CONVERTIBLE PREFERRED STOCK -- 0.00%
ETEX Corporation (B) 777 716 --
------------ ------------
TOTAL CONVERTIBLE PREFERRED STOCK 716 --
------------ ------------
PREFERRED STOCK -- 0.04%
General Motors Acceptance Corporation, Inc. 143 45,009 94,255
TherOX, Inc. (B) 103 4,131 --
------------ ------------
TOTAL PREFERRED STOCK 49,140 94,255
------------ ------------
COMMON STOCK -- 0.00%
Nortek, Inc. 175 1 6,125
Touchstone Health Partnership (B) 1,168 4,254 --
------------ ------------
TOTAL COMMON STOCK 4,255 6,125
------------ ------------
TOTAL RULE 144A SECURITIES 12,864,155 12,399,192
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $225,610,756 $192,232,983
------------ ------------
---------------------------------------------------------------------------------------------------------------------------------
29
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
INTEREST DUE PRINCIPAL MARKET
CORPORATE PUBLIC SECURITIES -- 17.87%: (A) RATE DATE AMOUNT COST VALUE
------ -------- ------------ ------------ ------------
BONDS -- 16.95%
A M C Entertainment, Inc. 11.000% 02/01/16 $ 1,315,000 $ 1,321,271 $ 1,374,175
Activant Solutions, Inc. 9.500 05/01/16 150,000 150,000 141,563
Affinia Group, Inc. 9.000 11/30/14 50,000 48,500 48,500
American Axle & Manufacturing Holding, Inc. 7.875 03/01/17 750,000 598,125 633,750
Aramark Corporation (C) 3.781 02/01/15 200,000 200,000 183,000
Atlas Pipeline Partners 8.125 12/15/15 250,000 206,875 221,250
Bally Total Fitness Holdings Corporation (F) 14.000 10/01/13 104,062 74,053 10
Basic Energy Services 7.125 04/15/16 225,000 225,000 187,313
Berry Plastics Corporation 8.875 09/15/14 500,000 460,000 486,250
Berry Plastics Corporation (C) 5.034 02/15/15 500,000 476,908 456,875
Boyd Gaming Corporation 6.750 04/15/14 150,000 137,250 135,188
Boyd Gaming Corporation 7.125 02/01/16 200,000 173,000 174,000
Brigham Exploration Co. 9.625 05/01/14 1,200,000 1,167,903 1,197,000
Cenveo Corporation 7.875 12/01/13 1,300,000 1,192,500 1,202,500
Chaparral Energy, Inc. 8.875 02/01/17 1,500,000 1,491,780 1,323,750
Denbury Resources, Inc. 9.750 03/01/16 50,000 46,730 53,375
Dynegy Holdings, Inc. 7.750 06/01/19 830,000 564,400 720,025
Ford Motor Credit Co. 7.500 08/01/12 100,000 92,575 100,846
Ford Motor Credit Co. 8.000 06/01/14 275,000 229,904 283,938
Gencorp, Inc. 9.500 08/15/13 259,000 259,000 259,648
Goodyear Tire & Rubber Co. 10.500 05/15/16 100,000 96,111 110,500
Great Lakes Dredge & Dock Corporation 7.750 12/15/13 1,000,000 948,750 995,000
Hawker Beechcraft Acquisition Co. 9.750 04/01/17 1,000,000 1,007,745 620,000
Inergy LP 8.250 03/01/16 470,000 479,988 477,050
Intelsat Bermuda Ltd. 9.250 06/15/16 1,365,000 1,407,945 1,344,525
Interline Brands, Inc. 8.125 06/15/14 1,300,000 1,291,107 1,306,500
Interpublic Group of Companies 10.000 07/15/17 75,000 73,552 83,250
Kar Holdings, Inc. 8.750 05/01/14 50,000 50,000 51,563
Liberty Media Corporation 5.700 05/15/13 1,000,000 951,610 952,500
Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 188,000
Mariner Energy, Inc. 11.750 06/30/16 160,000 155,623 178,400
Markwest Energy Operating Co. 6.875 11/01/14 950,000 930,563 907,250
---------------------------------------------------------------------------------------------------------------------------------
30
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
INTEREST DUE PRINCIPAL MARKET
CORPORATE PUBLIC SECURITIES:(A) (Continued) RATE DATE AMOUNT COST VALUE
------ -------- ------------ ------------ ------------
BONDS, CONTINUED
Markwest Energy Operating Co. 6.875% 11/01/14 $ 70,000 $ 55,578 $ 66,150
Markwest Energy Operating Co. 8.750 04/15/18 125,000 123,979 128,750
Michaels Stores, Inc. 11.375 11/01/16 750,000 776,719 789,375
Navistar International Corporation 8.250 11/01/21 625,000 618,590 639,844
Newark Group, Inc. 9.750 03/15/14 850,000 796,863 415,438
Nortek, Inc. 11.000 12/01/13 175,000 174,924 182,875
North American Energy Partners 8.750 12/01/11 1,165,000 1,170,800 1,165,000
Owens Corning, Inc. 9.000 06/15/19 55,000 54,112 61,600
Polypore, Inc. 8.750 05/15/12 1,460,000 1,410,050 1,452,700
Pregis Corporation 12.375 10/15/13 1,000,000 981,490 968,750
Quebecor Media, Inc. 7.750 03/15/16 1,050,000 978,235 1,047,375
RailAmerica, Inc. 9.250 07/01/17 270,000 259,412 287,213
Rental Service Corporation 9.500 12/01/14 500,000 484,112 500,625
Sabre Holdings Corporation 8.350 03/15/16 500,000 455,000 455,625
Seneca Gaming Corporation 7.250 05/01/12 500,000 477,500 487,500
Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 350,156
Speedway Motorsports, Inc. 8.750 06/01/16 70,000 67,898 73,850
Stanadyne Corporation 10.000 08/15/14 1,500,000 1,500,000 1,365,000
Stewart & Stevenson LLC 10.000 07/15/14 1,465,000 1,492,731 1,362,450
T X U Energy Company LLC 10.250 11/01/15 1,250,000 1,260,666 1,012,500
Teck Resources Ltd. 10.750 05/15/19 65,000 61,829 77,675
Tekni-Plex, Inc. 8.750 11/15/13 650,000 653,780 478,563
Tenneco, Inc. 8.125 11/15/15 1,100,000 540,000 1,112,375
Texas Industries, Inc. 7.250 07/15/13 70,000 70,000 68,775
Ticketmaster Entertainment, Inc. 10.750 07/28/16 500,000 500,000 538,750
Titan International, Inc. 8.000 01/15/12 1,070,000 1,062,100 1,048,600
Tube City IMS Corporation 9.750 02/01/15 1,500,000 1,482,506 1,449,375
United Components, Inc. 9.375 06/15/13 1,080,000 1,080,031 1,042,200
United Rentals, Inc. 10.875 06/15/16 125,000 121,479 135,933
Videotron, Ltd. 9.125 04/15/18 40,000 39,373 44,000
Waste Services, Inc. 9.500 04/15/14 1,100,000 1,116,085 1,149,500
------------ ------------
TOTAL BONDS 36,944,611 36,356,016
------------ ------------
---------------------------------------------------------------------------------------------------------------------------------
31
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
SHARES OR
INTEREST DUE PRINCIPAL MARKET
CORPORATE PUBLIC SECURITIES:(A) (Continued) RATE DATE AMOUNT COST VALUE
------ -------- ------------ ------------ ------------
COMMON STOCK -- 0.90%
Chase Packaging Corporation (B) 9,541 $ -- $ 1,431
CKX, Inc. (B) 97,500 784,875 513,825
Directed Electronics, Inc. (B) 368,560 1,856,534 171,380
El Paso Corporation (B) 65,000 808,362 638,950
ITC^DeltaCom, Inc. (B) 178,666 1,563,328 330,532
Intrepid Potash, Inc. (B) 365 11,680 10,647
Rue21, Inc. (B) 650 12,350 18,259
Supreme Industries, Inc. 125,116 267,319 247,730
------------ ------------
TOTAL COMMON STOCK 5,304,448 1,932,754
------------ ------------
Convertible Bonds - 0.02%
Citadel Broadcasting Corporation 4.000% 02/15/11 $ 583,000 452,554 37,895
------------ ------------
TOTAL CONVERTIBLE BONDS 452,554 37,895
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 42,701,613 $ 38,326,665
------------ ------------
TOTAL INVESTMENTS 107.52% $268,312,369 $230,559,648
------ ------------ ------------
Other Assets 9.52 20,420,149
Liabilities (17.04) (36,542,843)
------ ------------
TOTAL NET ASSETS 100.00% $214,436,954
====== ============
(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 12/31/09.
(D) Defaulted security; interest not accrued.
(E) Illiquid securities. At December 31, 2009, the value of these securities amounted to $179,833,791 or 83.87% 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.
PIK - Payment-in-kind
---------------------------------------------------------------------------------------------------------------------------------
32
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
Fair Value/ Fair Value/
Industry Classification Market Value Market Value
------------ ------------
AEROSPACE - 3.96% CONSUMER PRODUCTS - 8.38%
A E Company, Inc. $ 3,130,020 Aero Holdings, Inc. $ 2,996,301
Gencorp, Inc. 259,648 Bravo Sports Holding Corporation 2,314,563
P A S Holdco LLC 3,634,205 Custom Engineered Wheels, Inc. 2,542,461
Visioneering, Inc. 1,476,220 Easton-Bell Sports, Inc. 331,600
------------ G F S I, Inc. 530,888
8,500,093 JohnsonDiversey, Inc. 100,875
------------ K N B Holdings Corporation 1,255,844
AUTOMOBILE - 5.36% Kar Holdings, Inc. 51,563
American Tire Distributor 830,000 Momentum Holding Co. 489,676
American Axle & Manufacturing Holding, Inc. 633,750 R A J Manufacturing Holdings LLC 2,350,602
Goodyear Tire & Rubber Co. 110,500 Royal Baths Manufacturing Company 1,076,955
Jason, Inc. 240,922 The Tranzonic Companies 3,921,367
Nyloncraft, Inc. 609,375 Walls Industries, Inc. --
Ontario Drive & Gear Ltd. 417,843 ------------
Qualis Automotive LLC 2,244,445 17,962,695
Tenneco, Inc. 1,112,375 ------------
Titan International, Inc. 1,048,600 CONTAINERS, PACKAGING & GLASS - 4.60%
Transtar Holding Company 3,195,895 Berry Plastics Corporation 943,125
United Components, Inc. 1,042,200 Chase Packaging Corporation 1,431
------------ Flutes, Inc. 229,596
11,485,905 Maverick Acquisition Company 647,002
------------ P I I Holding Corporation 2,990,852
BEVERAGE, DRUG & FOOD - 3.98% Packaging Dynamics Corporation of America 901,500
Aramark Corporation 183,000 Paradigm Packaging, Inc. 2,352,623
Golden County Foods Holding, Inc. 1,823,732 Pregis Corporation 968,750
Hospitality Mints Holding Company 2,102,276 Tekni-Plex, Inc. 478,563
L H D Europe Holding, Inc 24,225 Vitex Packaging Group, Inc. 359,309
Spartan Foods Holding Company 1,905,833 ------------
Specialty Commodities, Inc. 2,502,759 9,872,751
------------ ------------
8,541,825 DISTRIBUTION - 1.82%
------------ Duncan Systems, Inc. 1,487,129
BROADCASTING & ENTERTAINMENT - 1.84% F C X Holdings Corporation 2,412,536
Citadel Broadcasting Corporation 37,895 ------------
Clear Channel Worldwide Holdings, Inc. 772,500 3,899,665
CKX, Inc. 513,825 ------------
Interpublic Group of Companies 83,250 DIVERSIFIED/CONGLOMERATE, MANUFACTURING - 8.23%
Liberty Media Corporation 952,500 A H C Holding Company, Inc. 2,781,245
Sinclair Television Group, Inc. 442,000 Activant Solutions, Inc. 141,563
Speedway Motorsports, Inc. 73,850 Arrow Tru-Line Holdings, Inc. 1,468,334
Workplace Media Holding Co. 1,068,576 C D N T, Inc. 1,366,398
------------ Douglas Dynamics LLC 949,400
3,944,396 Great Lakes Dredge & Dock Corporation 995,000
------------ Headwaters, Inc. 522,500
BUILDINGS & REAL ESTATE - 1.13% K P I Holdings, Inc. 1,579,892
K W P I Holdings Corporation 2,152,630 MEGTEC Holdings, Inc. 2,152,639
Owens Corning, Inc. 61,600 Milwaukee Gear Company 2,170,950
Texas Industries, Inc. 68,775 Nortek, Inc. 189,000
TruStile Doors, Inc. 151,268 Polypore, Inc. 1,452,700
------------ Postle Aluminum Company LLC 67,828
2,434,273 Trimas Corporation 73,875
------------ Truck Bodies & Equipment International 577,385
CHEMICAL, PLASTICS & RUBBER - 0.37% Xaloy Superior Holdings, Inc. 1,161,422
Capital Specialty Plastics, Inc. 795,663 ------------
------------ 17,650,131
795,663 ------------
------------
----------------------------------------------------------------------------------------------------------------------------------
33
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
Fair Value/ Fair Value/
Industry Classification Market Value Market Value
------------ ------------
DIVERSIFIED/CONGLOMERATE, SERVICE - 12.10% K H O F Holdings, Inc. $ 2,620,493
ACCO Brands Corporation $ 109,750 Monessen Holding Corporation 1,671,395
A W X Holdings Corporation 1,349,664 Stanton Carpet Holding Co. 2,131,607
Advanced Technologies Holdings 2,602,531 Transpac Holdings Company 1,507,055
Affinia Group, Inc. 48,500 U M A Enterprises, Inc. 1,712,555
Apex Analytix Holding Corporation 1,969,920 U-Line Corporation 1,699,772
A S C Group, Inc. 2,554,999 Wellborn Forest Holding Co. 1,463,063
Clough, Harbour, and Associates 2,711,148 ------------
Crane Rental Corporation 2,588,062 19,509,342
Diversco, Inc./DHI Holdings, Inc. 1,643,701 ------------
Dwyer Group, Inc. 1,506,615 LEISURE, AMUSEMENT, ENTERTAINMENT - 3.21%
Insurance Claims Management, Inc. 199,850 A M C Entertainment, Inc. 1,374,175
Interline Brands, Inc. 1,306,500 Bally Total Fitness Holding Corporation 10
Mail Communications Group, Inc. 1,352,713 Boyd Gaming Corporation 309,188
Nesco Holdings Corporation 2,868,921 Harrah's Operating Escrow LLC 343,688
Northwest Mailing Services, Inc. 2,626,752 MGM Mirage, Inc. 131,888
Pearlman Enterprises, Inc. -- Savage Sports Holding, Inc. 2,732,528
Sabre Holdings Corporation 455,625 Seneca Gaming Corporation 487,500
Videotron, Ltd. 44,000 Ticketmaster Entertainment, Inc. 538,750
------------ Tunica-Biloxi Gaming Authority 968,844
25,939,251 ------------
------------ 6,886,571
ELECTRONICS - 0.64% ------------
Connecticut Electric, Inc. 1,196,977 MACHINERY - 10.03%
Directed Electronics, Inc. 171,380 A S A P Industries LLC 1,568,237
------------ Davis-Standard LLC 2,676,991
1,368,357 E S P Holdco, Inc. 2,222,478
------------ K-Tek Holdings Corporation 2,756,684
FARMING & AGRICULTURE - 1.51% M V I Holding, Inc. 1,233,003
Waggin' Train Holdings LLC 3,245,365 Manitowoc Company, Inc. 188,000
------------ Navis Global 226,038
3,245,365 NetShape Technologies, Inc. 1,152,592
------------ Pacific Consolidated Holdings LLC 1,140,696
FINANCIAL SERVICES - 0.69% Power Services Holding Company 2,521,551
Cemex Finance LLC 386,588 R E I Delaware Holding, Inc. 2,643,896
Ford Motor Credit Co. 384,784 Safety Speed Cut Manufacturing Company, Inc. 197,881
General Motors Acceptance Corporation, Inc. 94,255 Stanadyne Corporation 1,365,000
Hawker Beechcraft Acquisition Co. 620,000 Stewart & Stevenson LLC 1,362,450
Highgate Capital LLC -- Supreme Industries, Inc. 247,730
------------ ------------
1,485,627 21,503,227
------------ ------------
HEALTHCARE, EDUCATION & CHILDCARE - 3.66% MEDICAL DEVICES/BIOTECH - 4.65%
American Hospice Management Holding LLC 3,934,269 Coeur, Inc. 1,367,133
F H S Holdings LLC 1,195,313 E X C Acquisition Corporation 225,244
H C A, Inc. 38,588 ETEX Corporation --
Synteract Holdings Corporation 2,673,077 MedSystems Holdings LLC 1,399,073
Touchstone Health Partnership -- MicroGroup, Inc. 3,298,539
------------ OakRiver Technology, Inc. 1,148,949
7,841,247 Precision Wire Holding Company 2,540,181
------------ TherOX, Inc. --
HOME & OFFICE FURNISHINGS, HOUSEWARES, ------------
AND DURABLE CONSUMER PRODUCTS - 9.10% 9,979,119
Connor Sport Court International, Inc. 2,613,863 ------------
H M Holding Company --
Home Decor Holding Company 2,303,554
Justrite Manufacturing Acquisition Co. 1,785,985
----------------------------------------------------------------------------------------------------------------------------------
34
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2009
Fair Value/ Fair Value/
Industry Classification Market Value Market Value
------------ ------------
MINING, STEEL, IRON & NON PRECIOUS METALS - 1.86% TELECOMMUNICATIONS - 3.20%
T H I Acquisition, Inc. $ 2,453,880 All Current Holding Company $ 1,302,834
Teck Resources Ltd. 77,675 Cricket Communications, Inc. 753,750
Tube City IMS Corporation 1,449,375 Intelsat Bermuda Ltd. 1,344,525
------------ ITC^DeltaCom, Inc. 330,532
3,980,930 Telecorps Holdings, Inc. 3,124,711
------------ ------------
NATURAL RESOURCES - 1.25% 6,856,352
Appleton Papers, Inc. 256,414 ------------
Cenveo Corporation 1,305,000 TRANSPORTATION - 2.46%
Intrepid Potash, Inc. 10,647 NABCO, Inc. 468,750
SandRidge Energy, Inc. 1,103,700 Navistar International Corporation 639,844
------------ RailAmerica, Inc. 287,213
2,675,761 Tangent Rail Corporation 3,870,938
------------ ------------
OIL & GAS - 3.76% 5,266,745
Atlas Pipeline Partners 221,250 ------------
Basic Energy Services 187,313 UTILITIES - 1.84%
Brigham Exploration Co. 1,197,000 Dynegy Holdings, Inc. 720,025
Chaparral Energy, Inc. 1,323,750 El Paso Corporation 638,950
Denbury Resources, Inc. 53,375 Inergy LP 477,050
International Offshore Services LLC 2,626,531 Markwest Energy Operating Co. 1,102,150
Mariner Energy, Inc. 178,400 T X U Energy Company LLC 1,012,500
North American Energy Partners 1,165,000 ------------
Total E & S, Inc. 1,108,008 3,950,675
------------ ------------
8,060,627 WASTE MANAGEMENT / POLLUTION - 1.82%
------------ Terra Renewal LLC 2,188,448
PHARMACEUTICALS - 1.29% Torrent Group Holdings, Inc. 559,756
CorePharma LLC 2,765,048 Waste Services, Inc. 1,149,500
------------ ------------
2,765,048 3,897,704
------------ ------------
PUBLISHING/PRINTING - 0.90% TOTAL INVESTMENTS - 107.52% $230,559,648
Gannett Company, Inc. 129,063 ============
Newark Group, Inc. 415,438
Quebecor Media, Inc. 1,047,375
Sheridan Acquisition Corporation 350,156
------------
1,942,032
------------
RETAIL STORES - 0.84%
Great Atlantic & Pacific Tea Co. 78,938
Michaels Stores, Inc. 789,375
Olympic Sales, Inc. 199,361
Pinnacle Foods Finance LLC 76,125
Rental Service Corporation 500,625
Rue21, Inc. 18,259
United Rentals, Inc. 135,933
------------
1,798,616
------------
TECHNOLOGY - 3.04%
Advanced Micro Devices, Inc. 746,250
Compucom Systems, Inc. 1,353,275
J D A Software Group, Inc. 77,063
Sencore Holding Company 1,643,047
Smart Source Holdings LLC 2,512,770
Viasystems, Inc. 187,250
------------
6,519,655
------------
----------------------------------------------------------------------------------------------------------------------------------
35
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009
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. 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
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
36
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009
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 determining 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 $179,833,791 (83.87% of net assets) as of December
31, 2009 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, 2009,
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.
In accordance with the authoritative guidance on fair value measurements
and disclosures under accounting principles generally accepted in the
United States of America ("U.S. GAAP"), the Trust discloses the fair value
of its investments in a hierarchy that prioritizes the inputs to valuation
techniques used to measure the fair value. The hierarchy gives the highest
priority to valuations based upon unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the
lowest priority to valuations based upon unobservable inputs that are
significant to the valuation (level 3 measurements). The guidance
establishes three levels of the fair value hierarchy as follows:
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, 2009:
ASSETS: TOTAL LEVEL 1 LEVEL 2 LEVEL 3
-----------------------------------------------------------------------------
Restricted Securities $192,232,983 $ -- $11,449,792 $180,783,191
Public Securities 38,326,665 1,932,754 36,393,901 10
Short-term Securities -- -- -- --
-----------------------------------------------------------------------------
TOTAL $230,559,648 $1,932,754 $47,843,693 $180,783,201
-----------------------------------------------------------------------------
37
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009
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
12/31/2008 $182,799,290 $ 260 $ -- $182,799,550
Total gains or
losses (realized/
unrealized)
included in
earnings* (15,529,769) (250) -- (15,530,019)
Purchases, sales,
issuances &
settlements (net) 13,513,670 -- -- 13,513,670
Transfers in and/or
out of Level 3 -- -- -- --
-----------------------------------------------------------------------------
ENDING BALANCE
AT 12/31/2009 $180,783,191 $ 10 $ -- $180,783,201
-----------------------------------------------------------------------------
*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 12/31/09 is $(21,466,374).
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, 2009, 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 nonqualified 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
reclassifications to the capital accounts. In 2009, the Trust increased
undistributed net investment income and decreased additional paid in
capital by a total of $128,687 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, 2009
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, 2009, the MMCI Subsidiary Trust has accrued income tax
expense of $42,167.
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, 2009, the MMCI Subsidiary Trust
has a deferred tax liability of $165,290.
Beginning with the 2009 annual financial statements, the Trust recognizes
a tax benefit from an uncertain position only if it is more likely than
not that the position is sustainable, based solely on its technical merits
and consideration of the relevant taxing authority's widely understood
administrative practices and precedents. If this threshold is met, the
Trust measures the tax benefit as the largest amount of benefit that is
greater than fifty percent likely of being realized upon ultimate
settlement. The Trust has evaluated and determined that the tax positions
did not have a material effect on the Trust's financial position and
results of operations for the year ended December 31, 2009.
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, 2009, the components of distributable earnings on a tax
basis included $2,315,840 of undistributed ordinary income and $1,198,988
of a net realized capital loss carry forward. The loss carry forward 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.
The difference between net taxable undistributed earnings to GAAP is
$318,674 comprised of various timing differences.
The tax character of distributions declared during the years ended
December 31, 2009 and 2008 was as follows:
DISTRIBUTIONS PAID FROM: 2009 2008
---------------------------
Ordinary Income $ 20,168,880 $ 20,078,868
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,
2009, 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 agrees 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.
39
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009
B. FEE:
For its services under the Contract, Babson Capital is paid a quarterly
investment advisory fee of 0.3125% of the net asset value of the Trust as
of the last business day of each fiscal quarter, which is approximately
equal 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, approved 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, 2009, 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.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE YEAR ENDED COST OF INVESTMENTS
12/31/2009 ACQUIRED
-----------------------------------------------------------------------------
Corporate restricted securities $46,383,194
Corporate public securities 6,975,796
-----------------------------------------------------------------------------
PROCEEDS FROM
SALES OR MATURITIES
-----------------------------------------------------------------------------
Corporate restricted securities $33,834,513
Corporate public securities 28,076,484
-----------------------------------------------------------------------------
The aggregate cost of investments is substantially the same for financial
reporting and federal income tax purposes as of December 31, 2009. The net
unrealized depreciation of investments for financial reporting and federal
tax purposes as of December 31, 2009 is $37,752,721 and consists of
$18,028,116 appreciation and $55,780,837 depreciation.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED)
AMOUNT PER SHARE
-----------------------------------------------------------------------------
MARCH 31, 2009
-----------------------------------------------------------------------------
Investment income $ 6,499,219
Net investment income 5,338,941 $ 0.57
Net realized and unrealized
gain on investments (net of taxes) (13,236,961) (1.42)
-----------------------------------------------------------------------------
JUNE 30, 2009
-----------------------------------------------------------------------------
Investment income $ 5,866,032
Net investment income 4,582,972 $ 0.49
Net realized and unrealized
gain on investments (net of taxes) 12,423,184 1.33
-----------------------------------------------------------------------------
SEPTEMBER 30, 2009
-----------------------------------------------------------------------------
Investment income $ 6,037,608
Net investment income 4,808,143 $ 0.52
Net realized and unrealized
gain on investments (net of taxes) 6,172,267 0.66
-----------------------------------------------------------------------------
DECEMBER 31, 2009
-----------------------------------------------------------------------------
Investment income $ 5,688,367
Net investment income 4,440,356 $ 0.47
Net realized and unrealized
gain on investments (net of taxes) 795,699 0.09
-----------------------------------------------------------------------------
40
MASSMUTUAL CORPORATE INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009
7. AGGREGATE REMUNERATION PAID TO OFFICERS, TRUSTEES AND THEIR AFFILIATED
PERSONS
For the year ended December 31, 2009 the Trust paid its Trustees aggregate
remuneration of $210,250. 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. Noreen 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, 2009, Babson Capital paid the compensation of the Chief
Compliance Officer of the Trust.
Mr. Noreen, 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, 2009, other than amounts payable to Babson Capital pursuant to
the Contract.
8. SUBSEQUENT EVENTS
The Trust has evaluated the possibility of subsequent events existing in this
report through February 17, 2010. The Trust has determined that there are no
material events that would require recognition or disclosure in this report
through this date.
41
MASSMUTUAL CORPORATE INVESTORS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACOUNTING 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, 2009, 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, 2009 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, 2009,
the results of its operations and cash flows for the year then ended, the
changes in its net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the years in the five-year
period then ended, in conformity with U.S. generally accepted accounting
principles.
/s/ KPMG LLP
Boston, Massachusetts
February 17, 2010
42
MASSMUTUAL CORPORATE INVESTORS
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATIONS 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
------------------------------------------------------------------------------------------------------------------------------------
CLIFFORD M. NOREEN* (52) Trustee Term expires President (since 2008), Vice 2 President (since 2009), Senior
(since 2009) 2012 Chairman (2007-2008), Vice President (1996-2009),
MassMutual Member of the Board of HYP Management LLC (LLC
Corporate Investors Chairman Managers (since 2006), Manager); Director (since
1500 Main Street (since 2009) Managing Director (since 2005), MassMutual Corporate
P.O. Box 15189 2000), Babson Capital; Value Limited (investment
Springfield, MA 01115-5189 President (2005-2009), Vice company); Director (since
President (1993-2005) of 2005), MassMutual Corporate
the Trust. Value Partners Limited
(investment company); Senior
Vice President (1996-2008),
MMHC Investment LLC (passive
investor); Managing Director
(2006-2009), MassMutual Capital
Partners LLC (investment
company); Director (since
2008), Jefferies Finance LLC (a
finance company); Chairman and
Chief Executive Officer (since
2009), Manager (since 2007),
MMC Equipment Finance LLC;
Chairman (since 2009), Trustee
(since 2005); President
(2005-2009), MMCI Subsidiary
Trust and MMPI Subsidiary
Trust; Chairman (since 2009),
Trustee (since 2009), President
(2005-2009), Vice President
(1993-2005), MassMutual
Participation Investors
(closed-end investment company
advised by Babson Capital); and
Member of Investment Committee
(since 1999), Diocese of
Springfield.
* Mr. Noreen is classified as an "interested person" of each Trust and Babson Capital (as defined by the Investment Act of 1940, as
amended) because of his position as an officer of each Trust and President of Babson Capital.
43
MASSMUTUAL CORPORATE INVESTORS
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATIONS 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* (65) Trustee Term expires President (2001-2003) of 57 President (1999-2003) and
(since 2003) 2010 Babson Capital. Trustee (since 2003), of the
MassMutual Trust; Director (since 2006),
Corporate Investors Jefferies Group, Inc.
1500 Main Street (financial services); Director
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, (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
INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATIONS 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 (70) Trustee Term expires President (since 2002), 2 Trustee (since 2006),
(since 2006) 2012 Barrett-Gardner MassMutual Participation
MassMutual Associates, Inc. Investors (a closed-end
Corporate Investors investment company advised by
1500 Main Street Babson Capital); Director
P.O. Box 15189 (since 1979), TGC Industries,
Springfield, MA 01115-5189 Inc. (geophysical services);
Director and Secretary (since
2001 and from 1996-1997), Chase
Packaging Corporation
(agricultural services);
Chairman and Director (since
2000), Rumson-Fair Haven Bank
and Trust Company (commercial
bank and trust company); and
Director (since 1983),
Executive Vice President,
Secretary and Assistant
Treasurer (since 2004), Supreme
Industries, Inc. (specialized
truck and body manufacturer).
DONALD E. BENSON (79) Trustee Term expires Executive Vice President Director (1997-2008), MAIR
(since 1986) 2010 and Director (since 1992), Holdings, Inc. (commuter
MassMutual Marquette Financial airline holding company);
Corporate Investors Companies (financial services); Director (since 1997), First
1500 Main Street Partner (since 1996), Benson California Financial Group,
P.O. Box 15189 Family Limited Partnership Inc. (bank holding company);
Springfield, MA 01115-5189 No. 1 and Benson Family and Trustee (since 1988),
Limited Partnership No. 2 MassMutual Participation
(investment partnerships). Investors (closed-end
investment company advised by
Babson Capital).
45
MASSMUTUAL CORPORATE INVESTORS
INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATIONS 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 (53) Trustee Term expires Private Investor; and 2 Trustee (since 2005),
(since 2005) 2011 Managing Director (1994 MassMutual Participation
MassMutual -2005), Morgan Stanley. Investors (a closed-end
Corporate Investors investment company advised by
1500 Main Street Babson Capital); Independent
P.O. Box 15189 Director (since 2006), Invicta
Springfield, MA 01115-5189 Holdings LLC and its
subsidiaries (a derivative
trading company).
DONALD GLICKMAN (76) Trustee Term expires Chairman (since 1992), Donald 2 Director (since 1984), Monro
(since 1992) 2010 Glickman and Company, Muffler and Brake, Inc.
MassMutual Inc. (private investments); (automobile repair service);
Corporate Investors and Partner (since 1992), Lead Director (1998-2009),
1500 Main Street J.F. Lehman & Co. (private MSC Software Corp. (simulation
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
INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATIONS 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 (74) Trustee Term expires Private Investor; and 2 Director (since 2004), Texas
(since 1991) 2012 President and Director Roadhouse, Inc. (operates
MassMutual (since 1983), H Investment restaurant chain); Director
Corporate Investors Company LLC (family (since 1999), ValueClick Inc.
1500 Main Street partnership). (internet advertising company);
P.O. Box 15189 Director (2002-2009),
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 (72) Trustee Term expires President and Owner (since 34 Trustee (since 2005), MML
(since 1998) 2011 2009), Retirement Options Series Investment Fund II (an
MassMutual (trains and certifies open-end investment company
Corporate Investors retirement coaches); President advised by MassMutual); Trustee
1500 Main Street (2004-2005), Thompson (since 2004), MassMutual
P.O. Box 15189 Enterprises Real Estate Premier Funds (an open-end
Springfield, MA 01115-5189 Investment. investment company advised by
MassMutual); Director (since
1991), ING Series Fund, Inc.
(investment company); Director
(since 1991), ING Variable
Series Fund; Director (since
1991), ING Strategic
Allocations Portfolios, Inc.
(investment company); Director
(1991-2009), ING GET Fund
(investment company); and
Trustee (since 1998),
MassMutual Participation
Investors (a closed-end
investment company advised by
Babson Capital).
MALEYNE M. SYRACUSE (53) Trustee Term expires Managing Director (2000- 2 Trustee (since 2007),
(since 2007) 2011 2007), JP Morgan Securities, MassMutual Participation
MassMutual Inc. (investments and banking). Investors (a closed-end
Corporate Investors investment company advised by
1500 Main Street Babson Capital).
P.O. Box 15189
Springfield, MA 01115-5189
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
------------------------------------------------------------------------------------------------------------------------------------
MICHAEL L. KLOFAS (49) President Since 2009 President (since 2009),Vice President (1998-2009) of the Trust;
Managing Director (since 2000), Babson Capital; President (since
MassMutual 2009), Vice President (2005-2009), MMCI Subsidiary Trust and MMPI
Corporate Investors Subsidiary Trust; President (since 2009), Vice President
1500 Main Street (1998-2009), MassMutual Participation Investors.
P.O. Box 15189
Springfield, MA 01115-5189
PATRICIA J. WALSH (44) Vice Since 2008 Vice President, Secretary, and Chief Legal Officer (since 2008)
President, of the Trust; Corporate Vice President and Associate General
MassMutual Secretary, Counsel (since 2005), MassMutual; General Counsel and Secretary
Corporate Investors and Chief (since 2008), Babson Capital; Secretary (since 2008), MMCI
1500 Main Street Legal Officer Subsidiary Trust and MMPI Subsidiary Trust; and Vice President,
P.O. Box 15189 Secretary, and Chief Legal Officer (since 2008), MassMutual
Springfield, MA 01115-5189 Participation Investors.
JAMES M. ROY (47) Vice Since 2005 Vice President and Chief Financial Officer (since 2005),
President Treasurer (2003-2005), and Associate Treasurer (1999-2003) of the
MassMutual and Chief Trust; Managing Director (since 2005), and Director (2000-2005),
Corporate Investors Financial Babson Capital; Trustee (since 2005), Treasurer (since 2005), and
1500 Main Street Officer Controller (2003-2005), MMCI Subsidiary Trust and MMPI Subsidiary
P.O. Box 15189 Trust; and Vice President and Chief Financial Officer (since
Springfield, MA 01115-5189 2005), Treasurer (2003-2005) and Associate Treasurer (1999-2003),
MassMutual Participation Investors.
JOHN T. DAVITT, JR. (42) Comptroller Since 2001 Comptroller (since 2001) of the Trust; Director (since 2000),
Babson Capital; Controller (since 2005), MMCI Subsidiary Trust
MassMutual and MMPI Subsidiary Trust; and Comptroller (since 2001),
Corporate Investors MassMutual Participation Investors.
1500 Main Street
P.O. Box 15189
Springfield, MA 01115-5189
MELISSA M. LAGRANT (36) Chief Since 2006 Chief Compliance Officer (since 2006) of the Trust; Managing
Compliance Director (since 2005), 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
P.O. Box 15189 (2001-2002), Zurich Scudder Investments/Deutsche Asset
Springfield, MA 01115-5189 Management; and Chief Compliance Officer (since 2006), MassMutual
Participation Investors.
DANIEL J. FLORENCE (37) Treasurer Since 2008 Treasurer (since 2008), Associate Treasurer (2006-2008) of the
Trust; Associate Director (since 2008), and Analyst (2000-2008),
MassMutual Babson Capital; and Treasurer (since 2008), Associate Treasurer
Corporate Investors (2006-2008), MassMutual Participation Investors.
1500 Main Street
P.O. Box 15189
Springfield, MA 01115-5189
48
MASSMUTUAL CORPORATE INVESTORS
MEMBERS OF THE BOARD OF DIVIDEND REINVESTMENT AND
TRUSTEES SHARE PURCHASE PLAN
LEFT TO RIGHT:
MassMutual Corporate Investors offers a
Donald Glickman Dividend Reinvestment and Share Purchase
Chairman, Plan. The Plan provides a simple way for
Donald Glickman & Company, Inc. shareholders to add to their holdings in
the Trust through the receipt of
Robert E. Joyal dividend shares issued by the Trust or
Retired President, through the investment of cash dividends
Babson Capital Management LLC in Trust shares purchased in the open
market. A shareholder may join the Plan
William J. Barrett by filling out and mailing an
President, authorization card to Shareholder
Barrett-Gardner Associates, Inc. Financial Services, Inc., the Transfer
Agent.
Michael H. Brown*
Private Investor Participating shareholders will continue
to participate until they notify the
Donald E. Benson* Transfer Agent, in writing, of their
Executive Vice President desire to terminate participation.
and Director, Unless a shareholder elects to
Marquette Financial Companies participate in the Plan, he or she will,
in effect, have elected to receive
Dr. Corine T. Norgaard* dividends and distributions in cash.
President, Participating shareholders may also make
Retirement Options additional contributions to the Plan
from their own funds. Such contributions
Clifford M. Noreen may be made by personal check or other
President, means in an amount not less than $10 nor
Babson Capital Management LLC more than $5,000 per quarter. Cash
contributions must be received by the
Martin T. Hart Transfer Agent at least five days (but
Private Investor no more then 30 days) before the payment
date of a dividend or distributions.
Maleyne M. Syracuse
Private Investor Whenever the Trust declares a dividend
*Member of the Audit Committee payable in cash or shares, the Transfer
Agent, acting on behalf of each
OFFICERS participating shareholder, will take the
dividend in shares only if the net asset
Clifford M. Noreen value is lower than the market price
Chairman plus an estimated brokerage commission
as of the close of business on the
Michael L. Klofas valuation day. The valuation day is the
President last day preceding the day of dividend
payment.
James M. Roy
Vice President & Chief When the dividend is to be taken in
Financial Officer shares, the number of shares to be
received is determined by dividing the
Patricia J. Walsh cash dividend by the net asset value as
Vice President, Secretary of the close of business on the
& Chief Legal Officer valuation date or, if greater than net
asset value, 95% of the closing share
Jill A. Fields price. If the net asset value of the
Vice President shares is higher than the market value
plus an estimated commission, the
Michael P. Hermsen Transfer Agent, consistent with
Vice President obtaining the best price and execution,
will buy shares on the open market at
Mary Wilson Kibbe current prices promptly after the
Vice President dividend payment date.
Richard E. Spencer, II The reinvestment of dividends does not,
Vice President in anyway, relieve participating
shareholders of any federal, state or
Daniel J. Florence local tax. For federal income tax
Treasurer purposes, the amount reportable in
respect of a dividend received in
John T. Davitt, Jr. newly-issued shares of the Trust will be
Comptroller the fair market value of the shares
received, which will be reportable as
Melissa M. LaGrant ordinary income and/or capital gains.
Chief Compliance Officer
As compensation for its services, the
Transfer Agent receives a fee of 5% of
any dividend and cash contribution (in
no event in excess of $2.50 per
distribution per shareholder.)
Any questions regarding the Plan should
be addressed to Shareholder Financial
Services, Inc., Agent for MassMutual
Corporate Investors' Dividend
Reinvestment and Share Purchase Plan,
P.O. Box 173673, Denver, CO 80217-3673.
49
[LOGO] MassMutual Corporate Investors
2009 Annual Report
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,
2009 2008
---------- ----------
Audit Fees $ 50,000 $ 51,600
Audit-Related Fees 0 6,125
Tax Fees 41,950 39,950
All Other Fees 0 0
---------- ----------
Total Fees $ 91,950 $ 97,675
========== ==========
NON-AUDIT FEES BILLED TO BABSON CAPITAL AND MASSMUTUAL
KPMG LLP KPMG LLP
Year Ended Year Ended
December 31, December 31,
2009 2008
---------- ----------
Audit-Related Fees $ 874,597 $ 864,409
Tax Fees 0 0
All Other Fees 350,000 0
---------- ----------
Total Fees $1,224,597 $ 864,409
========== ==========
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,
and agreed upon procedures reports. Preparation of Federal, state and
local income tax returns and tax compliance work are representative of
the fees reported in the "Tax Fees" category. The category "All Other
Fees" represents fees billed by KPMG for 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 2009, 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 2008 and 2009 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 2008 fees billed represent final 2008 amounts, which may differ
from the preliminary figures available as of the filing date of the
Registrant's 2009 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 Registrant's 2009 Annual Form N-CSR, but are now properly
included in the 2008 fees billed to the Registrant, 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 an integral part of its
investment management responsibility and believes, as a general
principle, that proxies should be acted upon (voted or abstained)
solely in the best interests of its clients (i.e. in a manner it
believes is most likely to enhance the economic value of the underlying
securities held in 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
if such vote is authorized by the Proxy Voting Policy. The procedures
set forth in the Proxy Voting 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"). For purposes of the Proxy
Voting Policy, a Material Conflict shall means any position,
relationship or interest, financial or otherwise, of Babson Capital (or
any person authorized under the Proxy Voting Policy to vote proxies on
behalf of Babson Capital) that would or could reasonably be expected to
affect Babson Capital's or such person's independence or judgment
concerning how to vote proxies.
Summary of Babson Capital's Proxy Voting Procedures
---------------------------------------------------
Babson Capital has (1) established a Best Execution and Proxy Committee
that is responsible for the implementation and governance of the Proxy
Voting Policy and (2) designated Proxy Administrators who will receive
and post proxies for voting with ISS. In accordance with the Proxy
Voting Policy, Babson Capital will generally vote all client proxies
for which it has proxy voting discretion in accordance with ISS's
recommendation or proxy voting guidelines, unless (i) a person
authorized by the Best Execution and Proxy Committee (each a "Proxy
Analyst") determines that it is in the clients' best interest to vote
against ISS's recommendation or proxy voting guidelines or (ii) Babson
Capital is unable or determines not to vote a proxy in accordance with
the Proxy Voting Policy. In these cases: if (i) a Proxy Analyst
recommends that a proxy should be voted against ISS's recommendation or
guidelines, (ii) no other Proxy Analyst reviewing such proxy disagrees
with such recommendation, and (iii) no known Material Conflict is
identified by the Proxy Analyst(s) or the Proxy Administrator, the
Proxy Administrator will vote the proxy or post the proxy for voting in
accordance with the Proxy Analyst's recommendation. Otherwise, the
proxy is to be submitted to a member of the Best Execution and 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 Best Execution and Proxy Committee
member has identified a Material Conflict personal to him or herself or
a Babson Capital Material Conflict. In such cases, the proxy shall be
submitted to the Best Execution and Proxy Committee, which may
authorize a vote against ISS's recommendation or proxy voting
guidelines only if the Best Execution and Proxy Committee determines
that such vote is in the clients' best interests.
No associate, officer, director, or a Board of Managers Member of
Babson Capital or its affiliates (other than those assigned such
responsibilities under the Proxy Voting Policy) may influence how
Babson Capital votes client proxies, unless such person has been
requested to provide such assistance by a Proxy Analyst or Best
Execution and Proxy Committee member and has disclosed any known
Material Conflict. Any pre-vote communications prohibited by the Proxy
Voting Policy shall be reported to the Best Execution and Proxy
Committee member prior to voting and to Babson Capital's Chief
Compliance Officer or General Counsel.
Obtaining a Copy of the Policy
------------------------------
Clients may obtain a copy of the Proxy Voting Policy and information
about how Babson Capital voted proxies related to their securities,
free of charge, by contacting the Chief Compliance Officer, Babson
Capital Management LLC, Independence Wharf, 470 Atlantic Avenue,
Boston, MA 02210, or calling, toll-free, 1-877-766-0014.
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. Michael L. Klofas serves as the President of the
Registrant (since 2009) and as one of its Portfolio Managers. Mr.
Klofas began his service to the Registrant in 1998 as a Vice President.
With over 25 years of industry experience, Mr. Klofas is a Managing
Director of the Mezzanine and Private Equity Group of Babson Capital
Management LLC ("Babson Capital"). Mr. Klofas joined MassMutual in
1988. 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
and private bonds, and leveraged bank loans. He also spent three years
leading Babson Capital's workout and restructuring activities. Since
1992, 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 Chartered Financial Analyst and Certified Public Accountant
designations. Mr. Klofas also presently serves as President of
MassMutual Participation Investors, another closed-end management
investment company advised by Babson Capital.
PORTFOLIO MANAGEMENT TEAM. Mr. Klofas 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 and Richard E. Spencer, II are each a Vice President
of the Registrant and a Managing Director of Babson Capital. Together
with Mr. Klofas, they are responsible for managing Babson Capital's
Mezzanine and Private Equity Group 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 1998. 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 1992, 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, as well as
a Chartered Financial Analyst 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 the
Registrant since 2002. 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 focused on originating, analyzing, structuring and documenting
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, as well as a Chartered Financial Analyst designation.
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 $108.9 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 1 $16.1 million 1 $16.1 million
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A 0 N/A
-----------------------------------------------------------------------------------------
Jill A. Registered Investment
Fields Companies 3 $569.5 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 1 $74.7 million 1 $74.7 million
-----------------------------------------------------------------------------------------
Other Accounts (C) 5 $534.5 million 0 N/A
-----------------------------------------------------------------------------------------
Michael P. Registered Investment
Hermsen Companies 1 $108.9 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles (D) 5 $992 million 5 $992 million
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A 0 N/A
-----------------------------------------------------------------------------------------
Michael L. Registered Investment
Klofas Companies 1 $108.9 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles (D) 5 $992 million 5 $992 million
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A 0 N/A
-----------------------------------------------------------------------------------------
Richard E. Registered Investment
Spencer, II Companies 1 $108.9 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles (D) 5 $992 million 5 $992 million
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A 0 N/A
(A) Account asset size has been calculated as of December 31, 2009.
(B) Mr. Noreen, as 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 and C.M. Life
Insurance Company; however these assets are not represented in the
table above.
(D) Messrs. Hermsen, Klofas and Spencer manage private placement mezzanine
debt securities for the general investment account of Massachusetts
Mutual Life Insurance Company and C.M. Life Insurance Company; however
these assets are not represented in the table above.
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 advisory
accounts. These conflicts may be heightened to the extent the
individual, Babson Capital and/or an affiliate has an investment in one
or more of such accounts or an interest in the performance of one or
more of such accounts. Babson Capital has identified (and summarized
below) areas where material conflicts of interest are most likely to
arise, and has adopted polices and procedures that it believes are
reasonably designed to address such conflicts.
Babson Capital or its affiliates, including MassMutual and its
affiliates, may from time to time, acting as principal, buy securities
or other investments for itself from or sell securities or other
investments it owns to its advisory clients. Likewise, Babson Capital
may either directly or on behalf of MassMutual, purchase and/or hold
securities or other investments that are subsequently sold or
transferred to advisory clients. Babson Capital has a conflict of
interest in connection with a transaction where it or an affiliate is
acting as principal since it may have an incentive to favor itself or
its affiliates over its advisory clients in connection with the
transaction. To address these conflicts of interest, Babson Capital has
adopted certain policies and procedures, including but not limited to
policies and procedures on transactions with affiliates. Any such
transaction will be consistent with Babson Capital's fiduciary
obligation to act in the best interests of its clients, including its
ability to obtain best execution in connection with the transaction,
and will be in compliance with applicable legal and regulatory
requirements.
Babson Capital may effect cross-trades on behalf of its advisory
clients whereby one advisory client buys securities or other
investments from or sells securities or other investments to another
advisory client. Babson Capital may also effect cross-transactions
involving advisory accounts or funds in which it or its affiliates,
including MassMutual, and their respective employees, have an ownership
interest or for which Babson Capital is entitled to earn a performance
or incentive fee. As a result, Babson Capital has a conflict of
interest in connection with the cross-transaction since it may have an
incentive to favor the advisory client or fund in which it or its
affiliate has an ownership interest and/or is entitled to a performance
or incentive fee. To address these conflicts of interest, Babson
Capital has adopted certain policies and procedures, including but not
limited to policies and procedures on transactions with affiliates. Any
such cross-transaction will be consistent with Babson Capital's
fiduciary obligation to act in the best interests of each of its
advisory clients, including its ability to obtain best execution for
each advisory client in connection with the cross-trade transaction,
and will be in compliance with applicable legal and regulatory
requirements. Babson Capital will not receive a commission or any other
remuneration (other than its advisory fee) for effecting
cross-transactions between advisory clients.
Babson Capital may invest client assets in securities or other
investments that are also held by (i) Babson Capital or its affiliates,
including MassMutual, (ii) other Babson Capital advisory accounts,
(iii) funds or accounts in which Babson Capital or its affiliates or
their respective employees have an ownership or economic interest or
(iv) employees of Babson Capital or its affiliates. Babson Capital may
also, on behalf of its advisory clients, invest in the same or
different securities or instruments of issuers in which (i) Babson
Capital or its affiliates, including MassMutual, (ii) other Babson
Capital advisory accounts, (iii) funds or accounts in which Babson
Capital, its affiliates, or their respective employees have an
ownership or economic interest or (iv) employees of Babson Capital or
its affiliates, have an ownership interest as a holder of the debt,
equity or other instruments of the issuer. Babson Capital has a
conflict of interest in connection with any such transaction since
investments by its advisory clients may directly or indirectly benefit
Babson Capital and/or its affiliates and employees by potentially
increasing the value of the securities or instruments it holds in the
issuer. Any investment by Babson Capital on behalf of its advisory
clients will be consistent with its fiduciary obligations to act in the
best interests of its advisory clients, and otherwise be consistent
with such clients' investment objectives and restrictions.
Babson Capital or its affiliates may also recommend that clients invest
in registered or unregistered investment companies, including private
investment funds such as hedge funds, private equity funds or
structured funds, (i) advised by Babson Capital or an affiliate, (ii)
in which Babson Capital, an affiliate or their respective employees has
an ownership or economic interest or (iii) with respect to which Babson
Capital or an affiliate has an interest in the entity entitled to
receive the fees paid by such funds. Babson Capital has a conflict of
interest in connection with any such recommendation since it may have
an incentive to base its recommendation to invest in such investment
companies or private funds on the fees that Babson Capital or its
affiliates would earn as a result of the investment by its advisory
clients in the investment companies or private funds. Any
recommendation to invest in a Babson Capital advised fund or other
investment company will be consistent with Babson Capital's fiduciary
obligations to act in the best interests of its advisory clients,
consistent with such clients' investment objectives and restrictions.
Babson Capital may, in certain limited circumstances, offer to clients
that invest in private investment funds that it advises an equity
interest in entities that receive advisory fees and carried profits
interest from such funds.
Babson Capital may permit certain of its portfolio managers and other
employees to invest in private investment funds advised by Babson
Capital or its affiliates and/or share in the performance or incentive
fees received by Babson Capital from such funds. If the portfolio
manager or other employee was responsible for both the portfolio
management of the private fund and other Babson Capital advisory
accounts, such person would have a conflict of interest in connection
with investment decisions since the person may have an incentive to
direct the best investment ideas, or to allocate trades, in favor of
the fund in which he or she is invested or otherwise entitled to share
in the performance or incentive fees received from such fund. To
address these conflicts of interest, Babson Capital has adopted a
policy governing side by side management of private investment funds
and other advisory accounts, which policy requires, among others
things, that Babson Capital treat each of its advisory clients in a
manner consistent with its fiduciary obligations and prohibits Babson
Capital from favoring any particular advisory account as a result of
the ownership or economic interests of Babson Capital, its affiliates
or employees, in such advisory account. Any investment by a Babson
Capital employee in one of its private funds is also governed by Babson
Capital's employee co-investment policy.
As noted above, Babson Capital's portfolio managers are often
responsible for the day-to-day management of multiple accounts,
including, among others, separate accounts for institutional clients,
closed-end and open-end registered investment companies, and/or private
investment funds (such as hedge funds, private equity funds, and
structured funds), as well as for proprietary accounts of Babson
Capital and its affiliates, including MassMutual and its affiliates.
The potential for material conflicts of interest exist whenever a
portfolio manager has responsibility for the day-to-day management of
multiple advisory accounts. These conflicts may be heightened to the
extent a portfolio manager is responsible for managing a proprietary
account for Babson Capital or its affiliates or where the portfolio
manager, Babson Capital and/or an affiliate has an investment in one or
more of such accounts or an interest in the performance of one or more
of such accounts (e.g., through the receipt of a performance or
incentive fee).
Such potential conflicts include those relating to allocation of
investment opportunities. For example, it is possible that an
investment opportunity may be suitable for more than one account
managed by Babson Capital, but may not be available in sufficient
quantities for all accounts to participate fully. Similarly, there may
be limited opportunity to sell an investment held by multiple accounts.
A conflict arises where the portfolio manager has an incentive to treat
an account preferentially because the account pays Babson Capital or
its affiliates a performance-based fee or the portfolio manager, Babson
Capital or an affiliate has an ownership or other economic interest in
the account. As noted above, Babson Capital also acts as an investment
manager for certain of its affiliates, including MassMutual. These
affiliate accounts co-invest jointly and concurrently with Babson
Capital's other advisory clients and therefore share in the allocation
of such investment opportunities. To address these conflicts of
interest associated with the allocation of trading and investment
opportunities, Babson Capital has adopted an investment allocation
policy and trade allocation procedures that govern the allocation of
portfolio transactions and investment opportunities across multiple
advisory accounts, including affiliated accounts. In addition, as noted
above, to address these conflicts of interest, Babson Capital has
adopted a policy governing side-by-side management of private
investment funds and other advisory accounts, which policy requires,
among others things, that Babson Capital treat each of its advisory
clients in a manner consistent with its fiduciary obligations and
prohibits Babson Capital from favoring any particular advisory account
as a result of the ownership or economic interests of Babson Capital,
its affiliates or employees, in such advisory accounts. Any investment
by a Babson Capital employee in one of its private funds is also
governed by Babson Capital's employee co-investment policy.
Potential material conflicts of interest may also arise related to the
knowledge and timing of an account's trades, investment opportunities
and broker selection. Babson Capital and its portfolio managers have
information about the size, timing and possible market impact of the
trades of each account they manage. It is possible that portfolio
managers could use this information for their personal advantage and/or
the advantage or disadvantage of various accounts which they manage.
For example, a portfolio manager could, or cause a favored account to,
"front run" an account's trade or sell short a security for an account
immediately prior to another accounts sale of that security. To address
these conflicts, Babson Capital has adopted policies and procedures and
a Code of Ethics governing employees' personal securities transactions,
the use of short sales, and side-by-side management of private
investment funds and other advisory accounts.
Potential material conflicts of interest may also arise if a trade
error occurs in a client account. A trade error is deemed to occur if
there is a deviation by Babson Capital from the applicable standard of
care in connection with the placement, execution or settlement of a
trade for an advisory account that results in (1) Babson Capital
purchasing securities not permitted or authorized by a client's
investment advisory agreement or otherwise failing to follow a client's
specific investment directives; (2) Babson Capital purchasing or
selling the wrong security or the wrong amount of securities on behalf
of a client's account; or (3) Babson Capital purchasing or selling
securities for, or allocating securities to, the wrong client account.
When correcting these errors, conflicts of interest between Babson
Capital and its advisory accounts may arise as decisions are made on
whether to cancel, reverse or reallocate the erroneous trades. In order
to address these conflicts, Babson Capital has adopted policies and
procedures governing the resolution of trading errors, and will follow
these policies and procedures in order to ensure that trade errors are
handled promptly and appropriately and that no client account is harmed
by an erroneous trade.
With respect to securities transactions for most of the accounts it
manages, Babson Capital determines which broker to use to execute each
order, consistent with its fiduciary duty to seek best execution of the
transaction. Babson Capital manages certain accounts, however, for
clients who limit its discretion with respect to the selection of
brokers or direct it to execute such client's transaction through a
particular broker. In these cases, trades for such an account in a
particular security may be placed separately from, rather than
aggregated with, those in the same security for 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 one or more of the other
account(s) involved. Babson Capital has policies and procedures that
address best execution and directed brokerage arrangements.
Babson Capital and its portfolio managers or employees may have other
actual or potential conflicts of interest in managing an advisory
account, and the list above is not a complete description of every
conflict of interest that could be deemed to exist.
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, Babson Capital
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 Babson Capital 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 portfolio 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, 2009, 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 $10,001-$50,000
* 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/ Michael L. Klofas
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Michael L. Klofas, President
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Date: March 8, 2010
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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/ Michael L. Klofas
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Michael L. Klofas, President
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Date: March 8, 2010
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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 8, 2010
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