MassMutual Corporate Investors
2001 Annual Report
G R O W T H
S T R E N G T H
D I V E R S I T Y
[LOGO]
MassMutual Corporate Investors
Investment Objective and Policy
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 principal investments are long-term corporate debt obligations and
occasionally preferred stocks purchased directly from issuers. These provide a
fixed yield and potential capital gains through warrants, conversion rights, or
other equity features which are a prerequisite to every private placement
purchased.
The Trust holds investments in a number of companies that are not publicly
traded at this time. Capital gains may be realized on holdings of private
companies through various methods, including directly negotiated sales, put
options and initial public offerings of stock.
The Trust is managed on a total return basis. Based on change in net asset value
with reinvested dividends, the Trust was ranked #1 for the five- and ten-year
periods (out of 297 and 147 funds, respectively) ended December 31, 2001 among
the closed-end bond funds tracked by Lipper, Inc. Dividends are paid to
shareholders quarterly in January, May, August and November. The Trust intends
to distribute nearly all of its net income to shareholders each year. Dividends
are paid 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 MassMutual Corporate
Investors Annual Meeting of Shareholders, which will be held on April 19, 2002
at 2:00 p.m. in Springfield, Massachusetts.
MassMutual Corporate Investors is a closed-end investment company,
[PHOTO] first offered to the public nearly 30 years ago and is listed on the
New York Stock Exchange.
1
[PHOTO OF ROBERT E. JOYAL AND STUART H. REESE]
Robert E. Joyal, CFA Stuart H. Reese, CFA
President Chairman
Accumulated value of $100 reinvested in MassMutual Corporate Investors vs. the
average of stocks and bonds
Value of $100 invested 01/01/77
[LINE GRAPH APPEARS HERE]
MassMutual Corporate Investors(1)
S&P Industrial Index(2)
50% S&P Industrial Index and
50% Lehman Brothers Government/
Credit Bond Index
Lehman Brothers Government/
Credit Bond Index(3)
1 The Trust's return reflects change in the net asset value per share assuming
reinvestment of all distributions. Past performance is no indicator of future
results.
2 The S&P Industrial Index is a capitalization-weighted index of stocks
designed to measure the performance of the industrial sector of the Standard
and Poor's 500 Index(R) (the S&P 500 Index(R) minus financials, utilities and
transportation stocks). The index does not incur expenses and cannot be
purchased directly by investors.
3 The Lehman Brothers Government/Credit Bond Index (formerly Lehman Brothers
Government/Corporate Bond Index) is an unmanaged measure of major U.S.
Government and investment grade corporate bonds with more than one year
remaining until the scheduled payment of principal. The index does not incur
expenses and cannot be purchased directly by investors.
2
MassMutual Corporate Investors
To Our Shareholders
I am pleased to share with you MassMutual Corporate Investors' (the "Trust")
Annual Report covering the year ended December 31, 2001. This past year is one
that will be imbedded in our consciousness for a great many years. In addition
to the events of September 11th that touched all of our lives, 2001 was a
challenging year at every level. The American economy softened through the year
as unemployment rose, corporate performance was weak and the stock market
continued to lose value. The Federal Reserve Board, led by Chairman Alan
Greenspan, attempted to solidify the economy by lowering rates 11 times
throughout the year; but their action was to no avail. By early August, the S&P
500 had already lost more than 7% for the year. The events of September 11
solidified a downturn that was already in place. On the positive side, the
reduction in rates more than compensated for increasing credit concerns and
resulted in the Lehman Brothers Government/Credit Bond Index increasing 8.5% in
2001.
The tough market environment had a significant impact on Initial Public
Offerings (IPOs). The market for IPOs was white hot in 1999 and early 2000, led
by technology issues. In the year 2000, 386 companies went public, raising
roughly $60 billion as a whole. But then the Internet bubble burst. A severely
weakened NASDAQ soured the market for new issues in 2001. IPO activity dropped
by two thirds, as only 111 companies went public in 2001.
The leveraged-buyout activity dropped considerably during 2001. The number of
transactions decreased by 50% to 171, representing a volume of $10 billion,
which was down 75% from the previous year. The deals that closed in this market
typically required more equity than in previous years, as lenders reduced the
amount of leverage that they were willing to accept.
The year closed with the NASDAQ down by 21.1%, the S&P 500 down 11.9% and the
Dow Jones Industrial Average down 5.4% for the year. Investors heaved a
collective sigh of relief, and hoped the new year would bring better news.
This past year brought home to us the core investment thesis that we believe is
critical to the success of the Trust: investing in companies that
The Trust's total rate of return for the year, as measured by the
change in the net asset value with reinvested dividends, amounted to
[PHOTO] 5.9%. This compares favorably to the average of the S&P 500 at a
negative 11.9% and the Lehman Brothers Government/Credit Bond Index at
8.5%.
3
Total Annual Return (as of 12/31 each year)
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
MassMutual 27.14 17.12 7.53 7.28 5.91
Corporate Investors
(Based on earnings
and change in net
asset value)
S&P Industrial 31.04 33.77 25.89 -16.26 -11.67
Index
Lehman Brothers 9.75 9.46 -2.15 11.84 8.50
Government/Credit Bond Index*
*Formerly Lehman Brothers Government/Corporate Bond Index
[PHOTO OF STEPHEN L. KUHN, CLIFFORD M. NOREEN & CHARLES C. MCCOBB]
Left to right: Stephen L. Kuhn, Vice President and Secretary; Clifford M.
Noreen, Vice President; Charles C. McCobb, CFA, Vice President and Chief
Financial Officer
offer a strong fundamental business proposition, that demonstrate good cash
flow, and are managed by people of high ethics who are talented, experienced
managers. We look to invest in the everyday products and services that will
always be important, regardless of the economic climate.
Over time, we expect the Trust's return to be positioned in-between the returns
that are produced by the bond and stock markets. The Trust's total rate of
return for the year, as measured by the change in the net asset value with
reinvested dividends, amounted to 5.9%. This compares favorably to the average
of the S&P 500 at a negative 11.9% and the Lehman Brothers Government/Credit
Bond Index at 8.5%. The Trust's total net assets amounted to $175.1 million at
the end of 2001. Dividends totaling $1.88 per share ($.47 per quarter) were
distributed during the year. The net asset value per share decreased from $20.74
in 2000 to $20.07 in 2001.
While the Trust was able to maintain its $.47 per share quarterly dividend
throughout the year, the current dividend level may not be sustainable in 2002.
The current normalized quarterly earnings of the Trust are approximately $.40
per share. The decline in earnings is generally attributable to the recent
economic environment, which resulted in both a continued decline in interest
rates and recessionary conditions adversely impacting the ability of some
borrowers to pay their obligations. Portfolio earnings are unlikely to rebound
to the $.47 per share level in the near future. This dividend has been
maintained in current quarters by the distribution of short-term capital gains,
which cannot necessarily be counted on to sustain future distributions.
This past year brought home to us the core investment thesis that we
believe is critical to the success of the Trust: investing in
[PHOTO] companies that offer a strong fundamental business proposition, that
demonstrate good cash flow, and are managed by people of high ethics
who are talented, experienced managers.
4
MassMutual Corporate Investors
Overall, the Trust closed 13 deals in 2001, including 9 new investments and 4
additions to current positions. Among the new holdings in the portfolio:
o Coining Corporation of America,
a manufacturer of close tolerance parts and metal stampings.
o Dexter Magnetics Technologies, Inc.,
a designer, fabricator, assembler and distributor of industrial magnets and
subassemblies in North America and Europe.
o DHD Healthcare, Inc.,
a designer, manufacturer and distributor of plastic, non-invasive medical
devices used for respiratory care.
o Kenan-Advantage Transport Company,
a transporter of light petroleum, petrochemicals, lubricants and residual
fuels.
o PGT Industries,
a manufacturer of residential windows and patio doors and a provider of custom
patio rooms and porch enclosures.
You will find details of all the Trust's holdings in the Consolidated Schedule
of Investments.
[PHOTO] The Trust will continue its disciplined approach of focusing on
investing in companies that offer good value on a risk-adjusted basis.
[PHOTO OF RICHARD E. SPENCER, II, MICHAEL L. KLOFAS, MICHAEL P. HERMSEN &
RICHARD C. MORRISON]
Officers of the Trust (left to right): Richard E. Spencer, II, Michael L.
Klofas, Michael P. Hermsen, Richard C. Morrison
5
Preview of 2002
Although the current economic environment remains challenging, we believe that
this is an opportune time to invest for the future. As an example, one of the
types of investments that the Trust makes consists of Senior or Subordinated
Notes issued by companies that are being purchased in a leveraged-buyout.
Leveraged-buyout opportunities have become significantly more conservative
during the past year, as sponsors have been required to contribute a higher
percentage of equity to the deal resulting in less leverage to the Senior and
Subordinated Notes.
The Trust will continue its disciplined approach of focusing on investing in
companies that offer good value on a risk-adjusted basis. We believe that our
investment approach has provided solid returns in the past and is particularly
well suited to do so in this unsettled future.
Sincerely,
/s/ Robert Joyal
--------------------------
Robert Joyal
President
Tax Information
2001 Dividend Payments Record Date Net Investment Income Short-Term Gains Tax Effect
-----------------------------------------------------------------------------------------------------
Regular 5/8/01 0.3846 0.0854
8/3/01 0.4700 -
10/31/01 0.4700 -
12/31/01 0.4700 -
-----------------------------------------------------------------------------------------------------
Total Dividends 1.7946 0.0854 $1.88
The Trust did not have net long-term capital gains in 2001.
-----------------------------------------------------------
Annual Dividend Qualified for Dividend Received Deduction* Interest Earned on Gov't. Obligations
Amount per Share Percent Amount per Share Percent Amount per Share
----------------------------------------------------------------------------------------------------------------
$1.88 2.95489% 0.055552 0.02% 0.0000
* Not available to individual shareholders.
6
Financial Report
Consolidated Statements of Assets and Liabilities 8
Consolidated Statements of Operations 9
Consolidated Statements of Cash Flows 10
Consolidated Statements of Changes in Net Assets 11
Consolidated Selected Financial Highlights 12
Consolidated Schedule of Investments 13-32
Notes to Consolidated Financial Statements 33-35
Interested Trustees 36
Independent Trustees 37
Independent Auditors' Report 38
MassMutual Corporate Investors
Consolidated Statements of Assets and Liabilities
DECEMBER 31, 2001 AND 2000
2001 2000
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost 2001 - $197,075,841; 2000 - $197,300,778) $ 165,049,591 $ 176,899,997
Corporate public securities at market value
(Cost 2001 - $21,113,626; 2000 - $30,146,217) 17,867,779 22,247,567
Short-term securities at cost plus earned discount which
approximates market value 10,543,243 6,964,699
------------------------------------------------------------------------------------------------------------
193,460,613 206,112,263
Cash 2,279,910 1,077,699
Interest and dividends receivable, net 4,197,482 4,601,363
Receivable for investments sold 233,314 1,241,408
------------------------------------------------------------------------------------------------------------
Total assets $ 200,171,319 $ 213,032,733
============================================================================================================
LIABILITIES:
Dividend payable $ 4,100,864 $ 11,764,868
Payable for investments purchased - 725,788
Management fee payable 658,419 597,105
Note payable 20,000,000 20,000,000
Interest payable 187,711 187,711
Accrued expenses 101,295 113,128
Accounts payable 10,483 353,516
Accrued taxes - 1,160,120
------------------------------------------------------------------------------------------------------------
Total liabilities 25,058,772 34,902,236
------------------------------------------------------------------------------------------------------------
NET ASSETS:
Common shares, par value $1.00 per share; an unlimited number authorized 8,725,242 8,587,495
Additional paid-in capital 98,991,865 96,064,219
Retained net realized gain on investments, prior years 100,353,354 98,201,268
Undistributed net investment income 234,208 939,837
Undistributed net realized gain on investments 2,079,975 2,637,109
Net unrealized depreciation of investments (35,272,097) (28,299,431)
------------------------------------------------------------------------------------------------------------
Total net assets 175,112,547 178,130,497
------------------------------------------------------------------------------------------------------------
Total liabilities and net assets $ 200,171,319 $ 213,032,733
============================================================================================================
Common shares issued and outstanding 8,725,242 8,587,495
============================================================================================================
Net asset value per share $ 20.07 $ 20.74
============================================================================================================
See Notes to Financial Statements.
8
MassMutual Corporate Investors
Consolidated Statements of Operations
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
INVESTMENT INCOME:
Interest $ 19,005,030 $ 20,494,108
Dividends 484,706 417,888
------------------------------------------------------------------------------------------------------------
Total income 19,489,736 20,911,996
------------------------------------------------------------------------------------------------------------
EXPENSES:
Management fees 2,704,609 2,410,765
Trustees' fees and expenses 132,122 140,139
Transfer agent/registrar's expenses 36,000 68,000
Interest 1,515,397 1,136,507
Reports to shareholders 105,000 94,000
Audit and legal 80,688 63,582
Other 58,786 130,159
------------------------------------------------------------------------------------------------------------
Total expenses 4,632,602 4,043,152
------------------------------------------------------------------------------------------------------------
Net investment income (2001 - $1.70 per share; 2000 - $1.96 per share) 14,857,134 16,868,844
------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain on investments 2,340,659 10,191,648
Provision for federal income taxes - (1,160,120)
------------------------------------------------------------------------------------------------------------
Net realized gain on investments 2,340,659 9,031,528
Net change in unrealized depreciation of investments (6,972,666) (13,029,149)
------------------------------------------------------------------------------------------------------------
Net loss on investments (4,632,007) (3,997,621)
------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 10,225,127 $ 12,871,223
============================================================================================================
See Notes to Financial Statements.
9
MassMutual Corporate Investors
Consolidated Statements of Cash Flows
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
NET INCREASE IN CASH:
Cash flows from operating activities:
Interest and dividends received $ 18,409,290 $ 18,606,011
Interest expense paid (1,515,397) (1,085,007)
Operating expenses paid (3,410,757) (2,397,218)
Federal income tax paid (1,160,120) (7,499,999)
------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 12,323,016 7,623,787
------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
(Decrease) increase in short-term portfolio securities, net (3,257,071) 7,590,766
Purchase of portfolio securities (47,296,277) (124,946,860)
Proceeds from disposition of portfolio securities 60,339,624 135,075,183
------------------------------------------------------------------------------------------------------------
Net cash provided by investing activities 9,786,276 17,719,089
------------------------------------------------------------------------------------------------------------
Net cash provided by operating and investing activities 22,109,292 25,342, 876
------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Increase in receipts for shares issued on reinvestment of dividends 3,097,428 -
Cash dividends paid from net investment income (16,379,360) (15,858,240)
Cash dividends paid from net realized gain on investments (7,625,149) (8,616,121)
------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (20,907,081) (24,474,361)
------------------------------------------------------------------------------------------------------------
Net increase in cash 1,202,211 868,515
Cash - beginning of year 1,077,699 209,184
------------------------------------------------------------------------------------------------------------
Cash - end of year $ 2,279,910 $ 1,077,699
============================================================================================================
RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET
CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES:
Net decrease in net assets resulting from operations $ 10,225,127 $ 12,871,223
------------------------------------------------------------------------------------------------------------
Decrease in investments 12,651,650 19,482, 205
Decrease (increase) in interest and dividends receivable, net 403,881 (933,390)
Decrease (increase) in receivable for investments sold 1,008,094 (1,023,996)
(Decrease) increase in payable for investments purchased (725,788) 725,788
Increase in management fee payable 61,314 123,519
Increase in interest payable - 51,500
(Decrease) increase in accounts payable (343,033) 353,516
(Decrease) increase in accrued expenses (11,833) 32,390
Decrease in accrued taxes (1,160,120) (6,339,879)
------------------------------------------------------------------------------------------------------------
Total adjustments to net assets from operations 11,884,165 12,471,653
------------------------------------------------------------------------------------------------------------
Net cash provided by operating and investing activities $ 22,109,292 $ 25,342,876
============================================================================================================
See Notes to Financial Statements.
10
MassMutual Corporate Investors
Consolidated Statements of Changes in Net Assets
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
DECREASE IN NET ASSETS:
Operations:
Net investment income $ 14,857,134 $ 16,868,844
Net realized gain on investments 2,340,659 9,031,528
Net change in unrealized depreciation of investments (6,972,666) (13,029,149)
------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 10,225,127 12,871,223
Net increase in shares of beneficial interest transactions 3,097,428 -
Dividends to shareholders from:
Net investment income (2001 - $1.79 per share; 2000 - $1.96 per share) (15,594,798) (16,822,044)
Net realized gains on investments (2001 - $.09 per share;
2000 - $.80 per share) (745,707) (6,879,442)
------------------------------------------------------------------------------------------------------------
Total decrease in net assets (3,017,950) (10,830,263)
Net Assets, beginning of year 178,130,497 188,960,760
------------------------------------------------------------------------------------------------------------
Net Assets, end of year (including undistributed net
investment income in 2001 - $234,208; 2000 - $939,837) $ 175,112,547 $ 178,130,497
============================================================================================================
See Notes to Financial Statements.
11
MassMutual Corporate Investors
Consolidated Selected Financial Highlights
SELECTED DATA FOR EACH COMMON SHARE OUTSTANDING:
For the years ended December 31,
-----------------------------------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value:
Beginning of year $ 20.74 $ 22.00 $ 23.87 $ 22.65 $ 20.23 $ 19.80 $ 16.47 $ 17.47 $ 15.38 $ 14.37
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 1.70 1.96 1.80 1.62 1.49 1.32 1.32 1.16 1.08 1.11
Net realized and unrealized
(loss) gain on investments (0.53) (0.46) (0.94) 1.51 2.87 0.92 3.88 (0.76) 2.41 1.30
-----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.17 1.50 0.86 3.13 4.36 2.24 5.20 0.40 3.49 2.41
-----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income to common shareholders (1.79) (1.96) (1.73) (1.60) (1.42) (1.35) (1.32) (1.16) (1.08) (1.12)
Distributions from net realized gain on
investments to common shareholders (0.09) (0.80) (1.00) (0.31) (0.52) (0.46) (0.55) (0.24) (0.32) (0.28)
Change from issuance of shares 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.84) (2.76) (2.73) (1.91) (1.94) (1.81) (1.87) (1.40) (1.40) (1.40)
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value: End of year $ 20.07 $ 20.74 $ 22.00 $ 23.87 $ 22.65 $ 20.23 $ 19.80 $ 16.47 $ 17.47 $ 15.38
-----------------------------------------------------------------------------------------------------------------------------------
Per share market value: End of year $ 20.70 $ 22.00 $ 21.38 $ 23.31 $ 25.75 $ 19.25 $ 17.88 $ 15.57 $ 14.88 $ 13.07
===================================================================================================================================
Total investment return
Market value 1.88% 17.55% 7.35% 0.77% 52.43% 22.44% 29.19% 14.03% 24.84% 3.18%
Net asset value 5.91% 7.28% 7.53% 17.12% 27.14% 15.42% 33.76% 2.36% 23.41% 17.36%
Net assets (in millions):
End of period $175.11 $178.13 $188.96 $205.02 $192.86 $172.27 $168.56 $140.20 $148.70 $131.00
Ratio of operating expenses
to average net assets 1.72% 1.47% 1.30% 1.62% 1.69% 1.70% 1.78% 1.76% 1.63% 1.27%
Ratio of interest expense
to average net assets 0.84% 0.58% 0.52% 0.52% 0.56% 0.61% 0.67% 0.72% 1.30% 1.42%
Ratio of total expenses
to average net assets 2.56% 2.05% 1.82% 2.14% 2.25% 2.31% 2.45% 2.48% 2.93% 2.69%
Ratio of net investment income
to average net assets 8.20% 8.56% 7.63% 6.76% 6.66% 6.44% 7.09% 6.75% 6.61% 7.44%
Portfolio turnover 24.48% 59.75% 68.04% 60.14% 66.23% 64.89% 66.90% 46.68% 76.01% 60.59%
All per share amounts have been restated after giving effect to the two-for-one
split on the Trust's common shares authorized on December 19, 1997 effective
January 20, 1998.
See Notes to Financial Statements.
12
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities - 94.25%: (A) or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
Private Placement Investments - 91.07%
ADORN, INC.
A manufacturer of wall panels, cabinets, moldings and countertops for houses and recreational vehicles.
12.5% Subordinated Note due 2010 $ 2,125,000 2/29/00 $ 1,850,672 $ 2,104,388
Warrant, exercisable until 2010, to purchase
common stock at $.02 per share (B) 364 shs. 2/29/00 307,759 37,119
------------------------------------------------------------------------------------------------------------------------------------
2,158,431 2,141,507
------------------------------------------------------------------------------------------------------------------------------------
ADVENTURE ENTERTAINMENT CORPORATION
An owner and operator of themed family entertainment centers.
19% Senior Subordinated Note due 2004 (B) $ 207,048 12/9/99 207,048 20,705
7% Redeemable Preferred Stock 2,188 10/31/97 2,009,220 -
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 6,447 shs. 10/31/97 25,005 -
------------------------------------------------------------------------------------------------------------------------------------
2,241,273 20,705
------------------------------------------------------------------------------------------------------------------------------------
ALPHA SHIRT COMPANY
A domestic distributor of imprintable apparel and other related items.
12% Senior Subordinated Note due 2007 $ 3,181,500 4/30/99 2,832,363 3,243,539
Common Stock (B) 1,060 shs. 4/30/99 1,059,950 465,482
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 576 shs. 4/30/99 445,410 253,119
------------------------------------------------------------------------------------------------------------------------------------
4,337,723 3,962,140
------------------------------------------------------------------------------------------------------------------------------------
AMERICA'S BODY CO., INC./LCP HOLDING CO.
A designer and manufacturer of commercial work vehicles.
12% Senior Subordinated Note due 2007 $ 3,500,000 11/2/98 3,108,088 3,231,900
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 58 shs. 11/2/98 513,333 96,556
------------------------------------------------------------------------------------------------------------------------------------
3,621,421 3,328,456
------------------------------------------------------------------------------------------------------------------------------------
BETA BRANDS, INC. - T.S.E.
A manufacturer of hard candy and chocolate-coated products sold primarily to the Canadian market.
Senior Secured Revolving Credit Note due 2005 $ 634,253 12/23/97 634,253 634,253
Senior Secured Tranche A Floating Rate Note due 2004 $ 2,501,698 * 2,501,698 1,411,058
17.75% Senior Secured Tranche B Note due 2005 $ 867,935 12/23/97 867,935 480,336
Limited Partnership Interest of CM Equity Partners (B) 6.27% int. 12/22/97 783,881 7,868
Warrant, exercisable until 2005, to purchase
common stock at $.81 per share (B) 214,419 shs. 12/23/97 - 2,144
------------------------------------------------------------------------------------------------------------------------------------
*12/23/97 and 1/31/99. 4,787,767 2,535,659
------------------------------------------------------------------------------------------------------------------------------------
13
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
BETTER MINERALS & AGGREGATES
A producer of high grade industrial and specialty silica sands.
14% Redeemable Preferred Stock 869 shs. 9/30/99 $ 531,735 $ 511,611
Redeemable Preferred Stock Series A (B) 42,001 shs. 12/19/96 388,898 330,565
Convertible Preferred Stock Series B, convertible
into Series B common stock at $9.26 per share (B) 84,002 shs. 12/19/96 777,802 661,129
Common Stock (B) 20,027 shs. 9/30/99 799,068 679,208
Warrants, exercisable until 2005 and 2010, to
purchase Series A and B preferred stock and
common stock at $.01 per unit (B) 11,399 shs. * 128,502 114
------------------------------------------------------------------------------------------------------------------------------------
*12/19/96 and 9/30/99. 2,626,005 2,182,627
------------------------------------------------------------------------------------------------------------------------------------
C & K MANUFACTURING AND SALES COMPANY
A manufacturer and distributor of branded packaging and supply products.
Senior Secured Floating Rate Revolving Credit Facility
due 2002 $ 652,244 8/29/96 652,244 130,449
Senior Secured Series A Floating Rate Term Note due 2002 $ 2,159,798 8/29/96 2,159,798 431,960
12% Series B Term Note due 2004 $ 476,897 8/29/96 466,229 95,379
Membership Interests (B) 5.63% int. 8/29/96 125,750 -
Warrant, exercisable until 2004, to purchase
membership interests at $.01 per interest (B) 36 int. 8/29/96 26,650 -
------------------------------------------------------------------------------------------------------------------------------------
3,430,671 657,788
------------------------------------------------------------------------------------------------------------------------------------
CAINS FOODS, L.P.
A producer of mayonnaise and sauce products for both the retail and food service markets.
8% Junior Subordinated Convertible Note due 2004,
convertible into partnership points at $1,388.89 per point $ 108,108 9/29/95 108,108 527,016
Warrant, exercisable until 2006, to purchase
partnership points at $.01 per point (B) 39 pts. 9/29/95 50,261 296,453
------------------------------------------------------------------------------------------------------------------------------------
158,369 823,469
------------------------------------------------------------------------------------------------------------------------------------
CAPESUCCESS LLC
A provider of diversified staffing services.
Preferred Membership Interests (B) 1,882 int. 4/29/00 8,396 7,556
Common Membership Interests 24,318 int. 4/29/00 108,828 97,640
------------------------------------------------------------------------------------------------------------------------------------
117,224 105,196
------------------------------------------------------------------------------------------------------------------------------------
CAPITOL SPECIALTY PLASTICS, INC.
A producer of dessicant strips used for packaging pharmaceuticals products.
Common Stock (B) 109 shs. * 503 403
------------------------------------------------------------------------------------------------------------------------------------
*12/30/97 and 5/29/99.
------------------------------------------------------------------------------------------------------------------------------------
14
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
CHAPARRAL RESOURCES, INC. - O.T.C.
An international oil and gas exploration and production company.
Common Stock (B) 164 shs. 12/3/97 $ 6,395 $ 223
------------------------------------------------------------------------------------------------------------------------------------
COINING CORPORATION OF AMERICA
A manufacturer of close tolerance parts and metal stampings.
Senior Secured Floating Rate Tranche A Note due 2008 $ 1,436,729 6/26/01 1,436,729 1,427,103
12% Senior Secured Tranche B Note due 2008 $ 648,148 6/26/01 572,238 654,241
Limited Partnership Interest (B) 324 shs. 6/26/01 324,074 259,259
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 107,036 shs. 6/26/01 79,398 1,070
------------------------------------------------------------------------------------------------------------------------------------
2,412,439 2,341,673
------------------------------------------------------------------------------------------------------------------------------------
COLIBRI HOLDINGS CORPORATION
A manufacturer and distributor of wild bird feeders and accessories.
12.5% Senior Subordinated Note due 2008 $ 1,593,750 9/22/00 1,351,399 1,490,316
28% Preferred Stock 71 shs. 11/2/01 70,833 68,542
Common Stock (B) 1,429 shs. 9/22/00 531,250 478,120
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 843 shs. 9/22/00 265,625 8
------------------------------------------------------------------------------------------------------------------------------------
2,219,107 2,036,986
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER PRODUCT ENTERPRISES, INC.
A manufacturer of colored acrylic felt for consumer use.
Senior Secured Floating Rate Revolving Credit Note due 2003 $ 742,085 12/8/95 742,085 371,042
10.75% Senior Secured Term Note due 2003 $ 613,774 12/8/95 613,774 306,887
12% Senior Subordinated Note due 2005 $ 800,575 12/8/95 776,421 200,144
Common Stock (B) 184,560 shs. 12/8/95 184,560 -
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 138,420 shs. 12/8/95 50,853 -
------------------------------------------------------------------------------------------------------------------------------------
2,367,693 878,073
------------------------------------------------------------------------------------------------------------------------------------
CORVEST GROUP, INC.
A manufacturer and distributor of promotional products.
12% Senior Subordinated Note due 2007 $ 3,863,636 * 3,635,249 3,787,522
Common Stock (B) 56 shs. * 96,591 10,526
Limited Partnership Interest (B) 19.32% int. * 287,805 215,852
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 183 shs. * 297,203 34,392
------------------------------------------------------------------------------------------------------------------------------------
*3/5/99 and 3/24/99. 4,316,848 4,048,292
------------------------------------------------------------------------------------------------------------------------------------
15
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
DEXTER MAGNETICS TECHNOLOGIES, INC.
A designer, fabricator, assembler, and distributor of industrial magnets and subassemblies in North America and Europe.
12% Senior Subordinated Note due 2006 $ 1,539,855 7/19/01 $ 1,302,181 $ 1,532,464
Common Stock (B) 585 shs. 7/19/01 585,145 526,635
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 297 shs. 7/19/01 250,611 3
------------------------------------------------------------------------------------------------------------------------------------
2,137,937 2,059,102
------------------------------------------------------------------------------------------------------------------------------------
DHD HEALTHCARE, INC.
A designer, manufacturer and distributor of plastic, non-invasive medical devices used for respiratory care.
Senior Secured Floating Rate Tranche A Note due 2008 $ 1,394,530 2/8/01 1,394,530 1,375,425
12% Senior Secured Tranche B Note due 2009 $ 574,220 2/8/01 492,190 563,023
Limited Partnership Interest of Riverside
Capital Appreciation Fund III, L.P. (B) 2.81% 2/8/01 163,896 131,117
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 927 shs. 2/8/01 82,030 9
------------------------------------------------------------------------------------------------------------------------------------
2,132,646 2,069,574
------------------------------------------------------------------------------------------------------------------------------------
DIRECTED ELECTRONICS, INC.
A designer and distributor of brand name automotive security systems, audio products, and installation accessories.
12% Senior Subordinated Note due 2007 $ 3,355,267 12/22/99 3,007,733 3,458,610
8% Convertible Class B Subordinated
Promissory Note due 2008 $ 74,562 12/22/99 74,562 74,815
Class B Common Stock (B) 26,097 shs. 12/22/99 260,965 234,869
Limited Partnership Interest 8.70% int. 12/22/99 530,046 477,044
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 45,255 shs. 12/22/99 413,816 453
------------------------------------------------------------------------------------------------------------------------------------
4,287,122 4,245,791
------------------------------------------------------------------------------------------------------------------------------------
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) 3.48% int. 8/27/98 734,090 -
Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 1,311,204
Common Stock (B) 9,725 shs. 12/14/01
Warrants, exercisable until 2003 & 2011, to purchase
common stock of DHI Holdings, Inc. at $.01 per share (B) 3,627 shs. * 403,427 -
------------------------------------------------------------------------------------------------------------------------------------
*10/24/96 and 8/28/98. 3,921,650 1,311,204
------------------------------------------------------------------------------------------------------------------------------------
EAST RIVER VENTURES I, L.P.
An acquirer of controlling or substantial interests in other entities.
Limited Partnership Interest 32,191 int. 1/1/01 32,191 28,972
------------------------------------------------------------------------------------------------------------------------------------
16
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
ENZYMATIC THERAPY, INC.
A manufacturer and distributor of branded natural medicines and nutritional supplements.
12% Senior Subordinated Note due 2009 $ 1,593,750 3/30/00 $ 1,343,958 $ 1,567,931
Limited Partnership Interest (B) 1.43% int. 3/30/00 531,250 478,125
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 478 shs. 3/30/00 255,000 5
------------------------------------------------------------------------------------------------------------------------------------
2,130,208 2,046,061
------------------------------------------------------------------------------------------------------------------------------------
EVANS CONSOLES, INC.
A designer and manufacturer of consoles and control center systems.
Senior Secured Tranche A Floating Rate Note due 2005 $ 1,085,800 3/2/98 1,085,800 1,057,352
8.85% Senior Secured Tranche A Note due 2005 $ 1,085,800 3/2/98 1,085,800 1,023,801
11.75% Senior Secured Tranche B Note due 2006 $ 700,000 3/2/98 627,380 690,620
Senior Secured Floating Rate Revolving Credit
Facility due 2005 $ 240,000 3/2/98 240,000 233,088
Common Stock (B) 26,906 shs. 2/11/98 94,880 75,905
Limited Partnership Interest of CM Equity Partners (B) 126,445 int. 2/11/98 126,648 101,156
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 34,783 shs. 3/2/98 112,000 348
------------------------------------------------------------------------------------------------------------------------------------
3,372,508 3,182,270
------------------------------------------------------------------------------------------------------------------------------------
EVOLVE SOFTWARE, INC.
A provider of Internet-based end-to-end solutions for automating professional services organizations.
Common Stock (B) 175 shs. 4/20/01 735 58
------------------------------------------------------------------------------------------------------------------------------------
EXAMINATION MANAGEMENT SERVICES, INC.
A national full-service evidence provider to the insurance industry and a provider of occupational health testing.
12% Senior Subordinated Note due 2007 $ 2,109,637 3/16/99 1,975,085 1,916,394
Limited Partnership Interest (B) 5.27% int. 3/1/99 2,140,363 1,712,290
Warrants, exercisable until 2007, to purchase
common stock at $.01 per share (B) 77,233 shs. 3/16/99 175,803 772
------------------------------------------------------------------------------------------------------------------------------------
4,291,251 3,629,456
------------------------------------------------------------------------------------------------------------------------------------
FAIRMARKET, INC.
A developer and deliverer of e-business selling and marketing solutions for retailers, distributors, and manufacturers.
Common Stock (B) 217 shs. 4/20/01 371 219
------------------------------------------------------------------------------------------------------------------------------------
FASTENERS FOR RETAIL, INC.
A designer and marketer of low-cost fasteners for point of purchase displays and signage in retail environments.
12.5% Senior Subordinated Note due 2007 $ 3,650,000 12/22/99 3,259,303 3,796,000
Class B Common Stock (B) 600 shs. 12/22/99 600,000 480,000
Warrant, exercisable until 2007, to purchase
common stock at $.02 per share (B) 589 shs. 12/22/99 462,927 6
------------------------------------------------------------------------------------------------------------------------------------
4,322,230 4,276,006
------------------------------------------------------------------------------------------------------------------------------------
17
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
G C-SUN HOLDINGS, L.P.
A value-added national distributor of maintenance, repair and operating supplies such as fasteners, electrical components and tools.
12% Senior Subordinated Note due 2008 $ 1,725,000 3/2/00 $ 1,423,481 $ 1,629,090
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 880 shs. 3/2/00 347,288 71,086
------------------------------------------------------------------------------------------------------------------------------------
1,770,769 1,700,176
------------------------------------------------------------------------------------------------------------------------------------
GRAND EXPEDITIONS, INC.
A luxury travel tour operation provider.
15% Senior Subordinated Note due 2010 (B) $ 2,125,000 6/21/01 1,117,467 1,275,000
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 10,018 shs. 6/21/01 1,007,533 100
------------------------------------------------------------------------------------------------------------------------------------
2,125,000 1,275,100
------------------------------------------------------------------------------------------------------------------------------------
HAMILTON FUNERAL SERVICES CENTERS, INC.
The largest privately held owner and operator of funeral homes in the United States.
16.5% Senior Subordinated Note due 2007 $ 3,593,136 * 3,593,136 1,796,568
Warrant, exercisable until 2007, to purchase
common stock at $1 per share (B) 338,280 shs. * 48,447 -
------------------------------------------------------------------------------------------------------------------------------------
*1/25/99 and 7/16/99. 3,641,583 1,796,568
------------------------------------------------------------------------------------------------------------------------------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in manufacturing and marketing entities.
Series A Preferred Units (B) 100,000 uts. 7/21/94 514,014 700,000
------------------------------------------------------------------------------------------------------------------------------------
HUSSEY SEATING COMPANY
A manufacturer of spectator seating products.
Senior Secured Floating Rate Revolving Note due 2006 $ 1,282,500 6/12/96 1,282,500 832,599
Senior Secured Floating Rate Note due 2006 $ 1,203,750 * 1,203,750 781,474
Preferred Stock 13,500 shs. 6/12/96 1,223,211 405,000
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 7,744 shs. ** 225,000 -
------------------------------------------------------------------------------------------------------------------------------------
*6/12/96 and 6/11/99. 3,934,461 2,019,073
------------------------------------------------------------------------------------------------------------------------------------
**6/12/96 and 1/19/00.
------------------------------------------------------------------------------------------------------------------------------------
IBEAM BROADCASTING CORPORATION
A provider of an Internet broadcast network that delivers streaming media with viewing and listening quality.
Common Stock (B) 461 shs. 4/20/01 2,360 10
------------------------------------------------------------------------------------------------------------------------------------
IMMEDIENT CORPORATION
A provider of diversified staffing services.
Common Stock (B) 6,855 shs. 4/29/00 37,702 33,932
------------------------------------------------------------------------------------------------------------------------------------
18
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
INTEGRATION TECHNOLOGY SYSTEMS, INC.
A manufacturer of steel protective computer and network systems for the industrial and office environments.
11% Senior Secured Note due 2007 $ 1,963,781 6/1/00 $ 1,913,428 $ 1,852,198
Common Stock (B) 228 shs. 6/1/00 262,200 209,760
------------------------------------------------------------------------------------------------------------------------------------
2,175,628 2,061,958
------------------------------------------------------------------------------------------------------------------------------------
JACKSON PRODUCTS, INC.
A manufacturer and distributor of a variety of industrial and highway safety products.
Common Stock (B) 226 shs. 8/16/95 22,634 54,887
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 1,042 shs. 8/16/95 95,627 252,395
------------------------------------------------------------------------------------------------------------------------------------
118,261 307,282
------------------------------------------------------------------------------------------------------------------------------------
JASON, INC.
A diversified manufacturing company serving various industrial markets.
13% Senior Subordinated Note due 2008 $ 963,687 8/4/00 859,228 933,813
14% Cumulative Redeemable Preferred Stock Series A 289 shs. 8/4/00 289,224 276,494
Limited Partnership Interest of Saw Mill Capital
Fund II, L.P. (B) 2.52% int. 8/3/00 886,550 709,506
Warrants, exercisable until 2008 and 2009, to purchase
common stock at $.01 per share (B) 50,870 shs. 8/4/00 115,412 21,518
------------------------------------------------------------------------------------------------------------------------------------
2,150,414 1,941,331
------------------------------------------------------------------------------------------------------------------------------------
KAPPLER SAFETY GROUP, INC.
A manufacturer of protective apparel for the industrial /safety, clean room and healthcare markets.
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 57,418 shs. 12/2/96 333,300 -
------------------------------------------------------------------------------------------------------------------------------------
KEEPSAKE QUILTING, INC.
A seller of quilting fabrics, books, patterns, kits and notions to consumers.
Senior Secured Floating Rate Tranche A Note due 2007 $ 1,220,035 6/16/00 1,220,035 1,207,224
12% Senior Secured Tranche B Note due 2008 $ 550,392 6/16/00 510,020 551,823
Limited Partnership Interest of Riverside XVI Holding
Company, L.P. (B) 5.29% int. 6/12/00 412,888 374,407
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 1,108 shs. 6/12/00 45,866 11
------------------------------------------------------------------------------------------------------------------------------------
2,188,809 2,133,465
------------------------------------------------------------------------------------------------------------------------------------
KENAN-ADVANTAGE TRANSPORT COMPANY
A transporter of light petroleum, petrochemicals, lubricants, and residual fuels.
12.5% Senior Subordinated Note due 2009 $ 1,817,435 4/30/01 1,817,435 1,819,071
Preferred Stock (B) 307 shs. 4/30/01 307,000 245,600
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 269 shs. 4/30/01 14 3
------------------------------------------------------------------------------------------------------------------------------------
2,124,449 2,064,674
------------------------------------------------------------------------------------------------------------------------------------
19
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
LANCASTER LABORATORIES, INC.
One of the largest laboratory testing operations in the United States.
12% Senior Subordinated Note due 2007 $ 1,669,643 9/25/00 $ 1,358,153 $ 1,655,451
Common Stock (B) 455,357 shs. 9/25/00 455,357 409,821
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 405,485 shs. 9/25/00 348,348 4,055
------------------------------------------------------------------------------------------------------------------------------------
2,161,858 2,069,327
------------------------------------------------------------------------------------------------------------------------------------
LIH INVESTORS, L.P.
A manufacturer and marketer of a broad line of external accessories for new and used sport utility vehicles, trucks and vans.
12.5% Senior Subordinated Note due 2006 $ 3,845,000 * 3,367,408 3,558,932
Common Stock (B) 58,001 shs. * 406,003 12,064
Warrant, exercisable until 2006, to purchase
common stock at $.11 per share (B) 108,404 shs. * 602,127 13,009
------------------------------------------------------------------------------------------------------------------------------------
*12/23/98 and 1/28/99. 4,375,538 3,584,005
------------------------------------------------------------------------------------------------------------------------------------
MAGNETIC DATA TECHNOLOGIES, INC./MDT HOLDINGS LLC
A provider of post-sales and warranty repair services to electronic component manufacturers.
12% Senior Subordinated Note due 2007 $ 2,700,000 4/8/99 2,221,818 2,015,280
Limited Partnership Interest of MDT Holdings LLC (B) 4.18% int. 4/8/99 1,099,500 109,950
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 665,776 shs. 4/8/99 603,257 6,658
------------------------------------------------------------------------------------------------------------------------------------
3,924,575 2,131,888
------------------------------------------------------------------------------------------------------------------------------------
MAXTEC INTERNATIONAL CORP.
A manufacturer and distributor of remote control operating systems for overhead cranes.
Senior Floating Rate Revolving Credit Facility due 2002 $ 461,536 6/28/95 461,536 456,967
Common Stock (B) 76,923 shs. 6/28/95 230,769 207,692
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 39,563 shs. 6/28/95 171,429 396
------------------------------------------------------------------------------------------------------------------------------------
863,734 665,055
------------------------------------------------------------------------------------------------------------------------------------
MERIT INDUSTRIES, INC.
A designer and manufacturer of coin-operated video and dart games.
12% Senior Subordinated Note due 2006 $ 2,796,524 8/19/98 2,669,780 2,514,076
Limited Partnership Interest of
Riverside X Holding Company, L.P. (B) 6.30% int. * 1,575,033 1,102,458
Warrant, exercisable until 2006, to purchase
limited partnership interest at $.01 per share (B) 1,855 int. 8/19/98 185,411 19
------------------------------------------------------------------------------------------------------------------------------------
*8/12/98, 8/11/99 and 3/3/00. 4,430,224 3,616,553
------------------------------------------------------------------------------------------------------------------------------------
20
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
MOSS, INC.
A manufacturer and distributor of large display and exhibit structures.
Senior Secured Floating Rate Revolving Note due 2005 $ 184,910 9/21/00 $ 184,910 $ 106,989
Senior Secured Tranche A Floating Rate Note due 2007 $ 1,344,800 9/21/00 1,344,800 606,101
12% Senior Secured Tranche B Note due 2008 $ 420,250 9/21/00 383,773 298,546
Limited Partnership Interest of
Riverside Capital Appreciation Fund I, L.P. (B) 6.23% int. 9/20/00 186,899 93,452
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 463 shs. 9/21/00 40,344 5
------------------------------------------------------------------------------------------------------------------------------------
2,140,726 1,105,093
------------------------------------------------------------------------------------------------------------------------------------
NEXELL THERAPEUTICS, INC.
A provider of cell therapy technology to the medical community.
3% Cumulative Convertible Preferred Stock Series B,
due 2008, convertible into common stock at $2.75 per share 3,875 shs. 11/24/99 3,875,000 3,865,700
Warrant, exercisable until 2008, to purchase
common stock at $12 per share (B) 184,525 shs. 11/24/99 - 1,845
------------------------------------------------------------------------------------------------------------------------------------
3,875,000 3,867,545
------------------------------------------------------------------------------------------------------------------------------------
NPC, INC.
A manufacturer of flexible connectors and equipment used in the installation of sewers and storm drain pipelines.
Senior Secured Floating Rate Revolving Note due 2006 $ 249,153 6/25/99 249,153 237,717
Senior Secured Floating Rate Note due 2006 $ 2,758,475 6/25/99 2,758,475 2,677,375
12% Senior Secured Tranche B Note due 2007 $ 978,814 6/25/99 864,638 931,733
Limited Partnership Interest of Riverside XIII Holding
Company, L.P. 4.45% int. 6/11/99 341,189 257,894
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 201 shs. 6/25/99 142,373 2
------------------------------------------------------------------------------------------------------------------------------------
4,355,828 4,104,721
------------------------------------------------------------------------------------------------------------------------------------
OLYMPIC BOAT CENTERS, INC.
An operator of boat dealerships in Washington state, Wisconsin, Minnesota, and British Columbia.
12% Senior Subordinated Note due 2006 $ 2,774,000 8/7/98 2,536,653 2,626,978
12% Senior Subordinated Note due 2008 $ 307,071 2/9/00 274,379 295,617
Limited Partnership Interest of Riverside VIII Holding
Company, L.P. (B) 13.14% int. * 1,430,542 1,113,378
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 28,648 shs. ** 350,400 258
------------------------------------------------------------------------------------------------------------------------------------
*8/7/98, 2/23/99 and 12/22/99. 4,591,974 4,036,231
------------------------------------------------------------------------------------------------------------------------------------
**8/7/98 and 2/9/00.
------------------------------------------------------------------------------------------------------------------------------------
PAR ACQUISITION CORP.
A manufacturer of fuel handling systems for nuclear power plants and hazardous waste.
Common Stock 83,333 shs. 2/5/93 166,667 513,333
Common Stock - Class B (B) 133,333 shs. 2/5/93 333,333 821,333
------------------------------------------------------------------------------------------------------------------------------------
500,000 1,334,666
------------------------------------------------------------------------------------------------------------------------------------
21
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
PARADIGM PACKAGING, INC.
A manufacturer of plastic bottles and closures for the nutritional, pharmaceutical, personal care and food packaging markets.
12% Senior Subordinated Note due 2008 $ 2,125,000 12/19/00 $ 1,878,885 $ 2,100,562
Membership Interests of MM/ Lincap PPI Investments,
Inc., LLC (B) 265,625 int. 12/21/00 265,625 212,500
------------------------------------------------------------------------------------------------------------------------------------
2,144,510 2,313,062
------------------------------------------------------------------------------------------------------------------------------------
PGT INDUSTRIES, INC.
A manufacturer of residential windows and patio doors and a provider of custom patio rooms and porch enclosures.
12.2% Senior Subordinated Note due 2009 $ 1,965,000 1/29/01 1,717,805 1,983,471
Common Stock (B) 115 shs. 1/29/01 115,000 92,000
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 325 shs. 1/29/01 264,519 3
------------------------------------------------------------------------------------------------------------------------------------
2,097,324 2,075,474
------------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICAL BUYERS, INC.
A group purchasing organization which specializes in arranging and negotiating contracts for the purchase of pharmaceutical goods
and medical equipment.
10.5% Senior Secured Note due 2005 $ 310,982 11/30/95 310,982 316,891
10.5% Senior Secured Convertible Note due 2005,
convertible into common stock at $50,000 per share $ 195,000 11/30/95 195,000 213,466
Common Stock 6 shs. 11/30/95 337,500 288,483
------------------------------------------------------------------------------------------------------------------------------------
843,482 818,840
------------------------------------------------------------------------------------------------------------------------------------
PLASSEIN PACKAGING, INC.
A manufacturer of flexible packaging products.
13% Senior Subordinated Note due 2007 $ 739,572 8/15/00 648,507 517,700
12% Junior Subordinated Note due 2008 $ 639,714 8/15/00 449,977 319,857
15% Junior Subordinated Note due 2008 $ 70,445 11/14/01 70,445 35,222
Convertible Preferred Stock, convertible into
common stock at $1 per share (B) 288,256 shs. 8/15/00 288,256 86,477
Common Stock (B) 446,960 shs. 8/15/00 289,552 86,844
Warrant, exercisable until 2007 and 2008, to purchase
common stock at $.01 per share (B) 482,594 shs. 8/15/00 95,840 4,827
------------------------------------------------------------------------------------------------------------------------------------
1,842,577 1,050,927
------------------------------------------------------------------------------------------------------------------------------------
POLYMER TECHNOLOGIES, INC./ POLI-TWINE WESTERN, INC.
A leading manufacturer of polypropylene twine for the hay bailing marketplace.
11% Senior Subordinated Note due 2010 (B) $ 1,806,250 3/1/00 1,702,709 903,125
10% Junior Subordinated Note due 2010 (B) $ 239,062 3/1/00 239,062 59,766
Common Stock (B) 159,375 shs. 3/1/00 79,688 -
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 159,000 shs. 3/1/00 103,541 -
------------------------------------------------------------------------------------------------------------------------------------
2,125,000 962,891
------------------------------------------------------------------------------------------------------------------------------------
22
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
PRECISION DYNAMICS, INC.
A manufacturer of custom-designed solenoid valves and controls.
Senior Secured Floating Rate Revolving Credit Facility
due 2003 $ 782,400 7/22/96 $ 782,400 $ 762,996
Senior Secured Floating Rate Term Note due 2003 $ 1,874,500 7/22/96 1,874,500 1,835,885
12% Senior Secured Term Note due 2004 $ 489,000 7/22/96 447,511 478,046
8% Preferred Stock 352 shs. 7/22/96 231,942 195,458
Common Stock (B) 599 shs. 7/22/96 28,978 14,489
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 322 shs. 7/22/96 97,800 3
------------------------------------------------------------------------------------------------------------------------------------
3,463,131 3,286,877
------------------------------------------------------------------------------------------------------------------------------------
PREMIUM FOODS GROUP
A manufacturer and distributor of branded meat products.
12% Senior Subordinated Note due 2008 $ 1,821,000 8/29/00 1,516,280 1,835,932
Limited Partnership Interest of MHD Holdings LLC (B) 1.79% int. 8/29/00 804,000 723,600
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 7,052 shs. 8/29/00 327,071 71
------------------------------------------------------------------------------------------------------------------------------------
2,647,351 2,559,603
------------------------------------------------------------------------------------------------------------------------------------
PROCESS CHEMICALS LLC
A specialty chemical company that manufactures processed chemicals for the fertilizer, asphalt and concrete industries.
6% Redeemable Preferred Membership Interests 2,525 int. * 2,780,992 2,527,086
Common Membership Interests 9,863 int. * 13,049 38,802
------------------------------------------------------------------------------------------------------------------------------------
*7/31/97 and 1/4/99. 2,794,041 2,565,888
------------------------------------------------------------------------------------------------------------------------------------
PROTEIN GENETICS, INC.
A producer of bovine artificial insemination products, related breeding and healthcare products and specialty genetics sold to the
dairy and beef industries.
9.8% Redeemable Exchangeable Preferred Stock 1,004 shs. 8/12/94 100,350 50,175
Common Stock (B) 2,046 shs. 8/12/94 126,866 -
------------------------------------------------------------------------------------------------------------------------------------
227,216 50,175
------------------------------------------------------------------------------------------------------------------------------------
PW EAGLE, INC. - O.T.C.
An extruder of small and medium diameter plastic pipe and tubing in the United States.
14% Senior Subordinated Note due 2007 $ 3,434,333 9/16/99 3,434,333 3,227,929
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 197,040 shs. 9/16/99 1 730,624
------------------------------------------------------------------------------------------------------------------------------------
3,434,334 3,958,553
------------------------------------------------------------------------------------------------------------------------------------
RENT-WAY, INC. - O.T.C.
An operator of rent-to-own stores across the United States.
Warrant, exercisable until 2002, to purchase
common stock at $9.94 per share (B) 20,000 shs. 7/18/95 - 200
------------------------------------------------------------------------------------------------------------------------------------
23
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
RK POLYMERS LLC
A producer of styrenic block copolymers and highly engineered synthetic elastomers.
13% Senior Subordinated Note due 2011 $ 2,125,000 2/28/01 $ 1,919,531 $ 2,102,688
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 205 shs. 2/28/01 205,469 2
------------------------------------------------------------------------------------------------------------------------------------
2,125,000 2,102,690
------------------------------------------------------------------------------------------------------------------------------------
SAFETY SPEED CUT MANUFACTURING COMPANY, INC.
A manufacturer of vertical panel saws and routers for the wood working industry.
Senior Secured Floating Rate Tranche A Note due 2007 $ 2,638,188 6/2/99 2,638,188 2,638,188
12% Senior Secured Tranche B Note Due 2007 $ 1,130,652 6/2/99 1,130,652 1,142,637
Class B Common Stock (B) 1,480 shs. 6/2/99 256,212 219,277
------------------------------------------------------------------------------------------------------------------------------------
4,025,052 4,000,102
------------------------------------------------------------------------------------------------------------------------------------
SNYDER INDUSTRIES, INC.
A manufacturer of proprietary rotationally molded polyethylene containers.
12.5% Senior Subordinated Note due 2007 $ 3,125,000 12/6/99 2,766,134 3,126,250
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 513 shs. 12/6/99 426,136 5
------------------------------------------------------------------------------------------------------------------------------------
3,192,270 3,126,255
------------------------------------------------------------------------------------------------------------------------------------
SPECTAGUARD ACQUISITION LLC
The tenth largest provider of security officers in the United States.
14% Senior Subordinated Note due 2008 $ 2,043,139 3/1/00 2,007,159 2,054,172
Preferred LLC Interests (B) 109 int. 3/1/00 108,854 95,965
Common LLC Interests (B) 100,178 int. 3/1/00 14,844 11,871
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 257,000 shs. 3/1/00 35,980 2,570
------------------------------------------------------------------------------------------------------------------------------------
2,166,837 2,164,578
------------------------------------------------------------------------------------------------------------------------------------
STAR INTERNATIONAL, INC.
A manufacturer of commercial cooking appliances.
11% Senior Secured Note due 2004 $ 2,498,350 1/25/00 2,400,405 2,463,626
9.65% Senior Secured Note due 2004 $ 703,881 5/27/94 703,881 686,565
10.5% Subordinated Note due 2004 $ 716,418 5/27/94 716,418 677,087
Common Stock (B) 4,310 shs. 5/27/94 259,735 137,874
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 4,621 shs. * 171,830 147,780
------------------------------------------------------------------------------------------------------------------------------------
*5/27/94 and 1/25/00. 4,252,269 4,112,932
------------------------------------------------------------------------------------------------------------------------------------
24
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
STRATEGIC EQUIPMENT & SUPPLY PARTNERS, INC.
A provider of kitchen and restaurant design, equipment fabrication and installation services.
12% Senior Subordinated Note due 2008 $ 3,875,000 1/14/00 $ 3,311,534 $ 3,100,000
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 34,162 shs. 1/14/00 658,750 342
------------------------------------------------------------------------------------------------------------------------------------
3,970,284 3,100,342
------------------------------------------------------------------------------------------------------------------------------------
SUPREME INDUSTRIES, INC. - A.S.E.
A manufacturer of specialized truck bodies.
Common Stock (B) 105,202 shs. * 267,325 397,664
Common Stock of TGC Industries, Inc. (B) 6,361 shs. 9/30/86 9,497 2,528
------------------------------------------------------------------------------------------------------------------------------------
*5/23/79, 12/15/95 and 6/9/96. 276,822 400,192
------------------------------------------------------------------------------------------------------------------------------------
THE TRANZONIC COMPANIES
A producer of commercial and industrial supplies, such as safety products, janitorial supplies, work apparel, washroom and restroom
supplies and sanitary care products.
12.5% Senior Subordinated Note due 2007 $ 2,712,000 2/5/98 2,444,218 2,725,289
Common Stock (B) 630 shs. 2/4/98 630,000 567,000
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 444 shs. 2/5/98 368,832 4
------------------------------------------------------------------------------------------------------------------------------------
3,443,050 3,292,293
------------------------------------------------------------------------------------------------------------------------------------
THERMA-TRU CORPORATION
A manufacturer of residential exterior entry door systems.
12.25% Senior Subordinated Note due 2009 $ 1,236,000 5/9/00 977,239 1,260,596
Limited Partnership Interest of KT Holding Company, L.P. (B) 0.52% int. 5/5/00 773,200 695,430
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 739 shs. 5/9/00 287,370 7
------------------------------------------------------------------------------------------------------------------------------------
2,037,809 1,956,033
------------------------------------------------------------------------------------------------------------------------------------
TIDEWATER HOLDINGS, INC.
An operator of a barge transportation line on the Columbia / Snake River system.
Convertible Preferred Stock, convertible into
common stock at $1,000 per share (B) 1,120 shs. 7/25/96 1,120,000 784,000
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 474 shs. 7/25/96 48,216 331,632
------------------------------------------------------------------------------------------------------------------------------------
1,168,216 1,115,632
------------------------------------------------------------------------------------------------------------------------------------
TRANSMONTAIGNE OIL COMPANY - A.S.E.
An independent petroleum products marketing company.
Common Stock (B) 333,326 shs. * 1,109,177 1,634,964
------------------------------------------------------------------------------------------------------------------------------------
*3/28/91, 12/18/91, 9/30/92, 9/30/93, 9/30/94, 3/31/95 and 5/9/95.
------------------------------------------------------------------------------------------------------------------------------------
25
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
TRANSTECHNOLOGY ENGINEERED COMPONENTS
A manufacturer of precision engineered metal and plastic fasteners and assembly components.
12.75% Senior Subordinated Note due 2008 $ 1,875,000 12/6/01 $ 1,875,000 $ 1,842,375
Membership Interests (B) 250,000 int. 12/6/01 250,000 225,000
------------------------------------------------------------------------------------------------------------------------------------
2,125,000 2,067,375
------------------------------------------------------------------------------------------------------------------------------------
TREND TECHNOLOGIES, INC.
A manufacturer and assembler of plastic injection molded and stamped metal parts.
Limited Partnership Interest of Riverside V Holding
Company, L.P. 4.23% int. * 646 99,078
Limited Partnership Interest of Riverside V-A Holding
Company, L.P. 12.29% int. * 1,410 243,528
------------------------------------------------------------------------------------------------------------------------------------
*3/21/97, 10/16/97, 11/19/97 and 3/12/99. 2,056 342,606
------------------------------------------------------------------------------------------------------------------------------------
TRIDEX CORP. - O.T.C.
A designer and manufacturer of point-of-sale monitors and keyboards used by retailers and restaurants.
12% Senior Subordinated Note due 2005 (B) $ 3,000,000 4/17/98 3,000,000 60,000
Common Stock (B) 71,429 shs. 4/17/98 500,003 -
Warrant, exercisable until 2005, to purchase
common stock at $2.03 per share (B) 218,182 shs. 5/26/98 1 -
------------------------------------------------------------------------------------------------------------------------------------
3,500,004 60,000
------------------------------------------------------------------------------------------------------------------------------------
TRONAIR, INC.
A designer, engineer and manufacturer of ground support equipment for the business, commuter and commercial aviation markets.
10.5% Senior Secured Term Note due 2008 $ 2,368,750 1/20/00 2,368,750 2,305,741
12% Senior Subordinated Note due 2010 $ 1,326,500 1/20/00 1,239,470 1,264,420
Common Stock (B) 227,400 shs. 1/20/00 227,400 181,920
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 260,563 shs. 1/20/00 98,540 2,606
------------------------------------------------------------------------------------------------------------------------------------
3,934,160 3,754,687
------------------------------------------------------------------------------------------------------------------------------------
TRUSEAL TECHNOLOGIES, INC.
A manufacturer of sealant systems for the North American window and door market.
12.25% Senior Subordinated Note due 2006 $ 2,675,000 6/23/97 2,448,922 2,696,935
Limited Partnership Interest (B) 10.04% int. 6/17/97 824,600 742,140
Warrant, exercisable until 2006, to purchase
limited partnership interest at $.01 per unit (B) 1,258 uts. 6/23/97 376,932 294
------------------------------------------------------------------------------------------------------------------------------------
3,650,454 3,439,369
------------------------------------------------------------------------------------------------------------------------------------
TVI, INC.
A retailer of used clothing in the United States, Canada and Australia.
15.971% Senior Subordinated Note due 2008 $ 1,952,320 5/2/00 1,873,637 1,959,348
Common Stock (B) 354,167 shs. 5/2/00 354,167 318,750
------------------------------------------------------------------------------------------------------------------------------------
2,227,804 2,278,098
------------------------------------------------------------------------------------------------------------------------------------
26
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Shares, Units
Warrants, Ownership Acquisition Fair Value
Corporate Restricted Securities: (A) continued or Principal Amount Date Cost At 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
U.S. NETTING, INC.
A manufacturer of plastic netting for a wide variety of industries.
Common Stock (B) 4,911 shs. 5/3/95 $ 391,230 $ 4,911
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 2,795 shs. 5/3/95 35,923 28
------------------------------------------------------------------------------------------------------------------------------------
427,153 4,939
------------------------------------------------------------------------------------------------------------------------------------
USFLOW CORPORATION
A distributor of industrial pipes, valves and fittings.
12.5% Senior Subordinated Note due 2007 $ 3,463,000 12/14/99 3,073,241 3,196,695
Class B Common Stock (B) 664 shs. 12/14/99 664,200 531,360
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 565 shs. 12/14/99 461,733 6
------------------------------------------------------------------------------------------------------------------------------------
4,199,174 3,728,061
------------------------------------------------------------------------------------------------------------------------------------
VICTORY VENTURES LLC
An acquirer of controlling or substantial interests in other entities.
Series A Preferred Units (B) 0.13% int. 12/2/96 1 2
------------------------------------------------------------------------------------------------------------------------------------
VITEX PACKAGING, INC.
A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags.
12% Senior Subordinated Note due 2008 $ 2,045,265 12/18/00 1,890,605 2,059,582
Limited Partnership Interest of Riverside VI Holding
Company, L.P. 4.80% int. * 351,315 281,043
Limited Partnership Interest of Riverside Capital
Appreciation Fund II, L.P. (B) 1.58% int. 12/18/00 79,735 63,804
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 308 shs. ** 227,729 3
------------------------------------------------------------------------------------------------------------------------------------
*12/30/97 and 9/9/99. 2,549,384 2,404,432
------------------------------------------------------------------------------------------------------------------------------------
**1/2/98 and 12/18/00.
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON INVENTORY SERVICES, INC.
A provider of physical inventory taking and other related services to retailers.
12.5% Senior Subordinated Note due 2008 $ 1,646,881 11/3/00 1,601,252 1,703,369
Senior Preferred Stock (B) 4,692 shs. 11/1/00 469,160 469,160
Class B Common Stock (B) 8,959 shs. 11/1/00 8,959 8,063
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 3,979 shs. 11/3/00 49,804 40
------------------------------------------------------------------------------------------------------------------------------------
2,129,175 2,180,632
------------------------------------------------------------------------------------------------------------------------------------
WICOR AMERICAS, INC.
A manufacturer of cellulose based insulation products, systems and services for electrical transformer equipment manufacturers.
20% Senior Subordinated Secured Note due 2009 $ 2,125,000 11/9/01 2,125,000 2,106,512
------------------------------------------------------------------------------------------------------------------------------------
Total Private Placement Investments 190,022,042 159,475,779
------------------------------------------------------------------------------------------------------------------------------------
27
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Interest Due Shares or Fair Value
Corporate Restricted Securities: (A) continued Rate Date Principal Amount Cost at 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
Rule 144A Securities - 3.18%: (A)
BONDS - 0.16%
Climachem, Inc. 10.750% 12/01/07 $ 175,000 $ 168,000 $ 78,750
Cuddy International Corp. (B) 10.750 12/01/07 496,353 488,938 208,468
------------- ------------- -------------
Total Bonds $ 671,353 656,938 287,218
============= ============= =============
CONVERTIBLE BONDS - 2.42%
Commscope, Inc. 4.000% 12/15/06 $ 145,000 145,000 118,900
Echostar Communications, Inc. 4.875 01/01/07 400,000 400,000 355,000
F E I Co. 5.500 08/15/08 375,000 375,000 368,906
Home Depot Exchangeable Trust 1.000 02/14/06 1,315,000 1,162,953 1,214,731
Hyperion Solutions Corp. 4.500 03/15/05 200,000 200,000 174,500
Invitrogen Corp. 2.250 12/15/06 425,000 425,000 411,719
Photronics, Inc. 4.750 12/15/06 425,000 425,000 465,906
Rite Aid Corp. 4.720 12/01/06 200,000 200,000 191,750
Sanmina-SCI Corp. 0.000 09/12/20 1,090,000 453,713 406,025
Telewest Finance 6.000 07/07/05 405,000 280,463 262,057
Triquint Semiconductor, Inc. 4.000 03/01/07 225,000 168,441 164,250
Viropharma, Inc. 6.000 03/01/07 215,000 147,282 107,500
------------- ------------- -------------
Total Convertible Bonds $ 5,420,000 4,382,852 4,241,244
============= ============= =============
CONVERTIBLE PREFERRED STOCK - 0.57%
D T Industries, Inc. (B) 40,000 2,000,000 1,000,000
------------- -------------
Total Convertible Preferred Stock 2,000,000 1,000,000
------------- -------------
COMMON STOCK - 0.00%
Jordan Telecom Products (B) 70 14,000 350
------------- -------------
Total Common Stock 14,000 350
------------- -------------
WARRANTS - 0.03%
Winsloew Escrow Corp. (B) 900 9 45,000
------------- -------------
Total Warrants 9 45,000
------------- -------------
Total Rule 144A Securities 7,053,799 5,573,812
------------- -------------
Total Corporate Restricted Securities $ 197,075,841 $ 165,049,591
------------- -------------
28
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Interest Due Shares or Market Value
Corporate Public Securities - 10.21%:(A) Rate Date Principal Amount Cost at 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
BONDS - 2.00%
Derby Cycle Corp. (B) 10.000% 05/15/08 $ 332,195 $ 332,195 $ 66,439
EV International, Inc. (B) 11.000 03/15/07 750,000 450,000 75,000
G F S I, Inc. 9.625 03/01/07 145,000 121,774 95,700
L L S Corp. (B) 11.625 08/01/09 500,000 445,000 50,000
Neff Corp. 10.250 06/01/08 230,000 227,687 135,700
Numatics, Inc. 9.625 04/01/08 820,000 788,485 287,000
Remington Products Co. 11.000 05/15/06 600,000 595,506 459,000
Sports Club Co. 11.375 03/15/06 600,000 582,000 539,250
United Refining Co. 10.750 06/15/07 1,365,000 1,365,000 1,085,175
W E C, Inc. (B) 12.000 07/15/09 800,000 800,000 80,000
Winsloew Escrow Corp. 12.750 08/15/07 900,000 879,472 630,000
------------- ------------- -------------
Total Bonds $ 7,042,195 6,587,119 3,503,264
============= ============= =============
COMMON STOCK - 3.76%
American Country Holdings, Inc. (B) 101,397 760,886 178,459
American Pharmaceutical PT (B) 700 11,200 14,560
Aramark Corp. (B) 14,300 328,900 384,670
Computer Horizons Corp. (B) 32,068 301,942 102,938
Florist Transworld Delivery, Inc. (B) 29,374 41,258 440,610
H C I Direct, Inc. (B) 1,000 - 100
Key3media Group, Inc. (B) 195,000 984,750 1,039,350
Magma Design Automation (B) 1,625 21,125 49,205
Nassda Corp. (B) 600 6,600 13,494
Netscreen Technologies, Inc. (B) 3,400 54,400 75,242
PepsiAmericas, Inc. 92,145 2,006,365 1,271,601
Proton Energy Systems, Inc. (B) 26,000 328,859 214,500
Prudential Financial, Inc. (B) 7,800 214,500 258,882
Rent-Way, Inc. (B) 60,363 600,009 361,574
Suprema Specialties, Inc. (B) 32,500 414,375 292,500
Swiss Army Brands, Inc. (B) 39,000 393,825 253,500
Titan Corp. (B) 58,052 173,221 1,448,398
Untied Defense Industries (B) 8,300 157,700 174,715
Vina Technologies, Inc. (B) 572 1,687 686
------------- -------------
Total Common Stock 6,801,602 6,574,984
------------- -------------
29
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Interest Due Shares or Market Value
Corporate Public Securities - 10.21% (A) Rate Date Principal Amount Cost at 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS - 4.14%
B E A Systems, Inc. 4.000% 12/15/06 $ 525,000 $ 382,594 $ 445,594
Charter Communications, Inc. 4.750 06/01/06 660,000 660,000 602,250
Commscope, Inc. 4.000 12/15/06 40,000 34,550 32,800
Corning Inc. 0.000 11/08/15 795,000 589,829 411,412
Cox Communications, Inc. 0.426 04/19/20 3,260,000 1,350,617 1,401,800
Cypress Semiconductor Corp. 4.000 02/01/05 210,000 210,000 179,813
Echostar Communications 4.875 01/01/07 1,000,000 805,000 887,500
Hyperion Solutions, Inc. 4.500 03/15/05 50,000 35,500 43,625
Mediacom Communications Corp. 5.250 07/01/06 1,400,000 1,400,000 1,646,750
Nextel Communications 5.250 01/15/10 825,000 608,625 498,094
S C I Systems, Inc. 3.000 03/15/07 800,000 727,038 660,000
Sanmina-SCI Corp. 0.000 09/12/20 1,190,000 425,373 443,275
------------- ------------- -------------
Total Convertible Bonds $ 10,755,000 7,229,126 7,252,913
============= ============= =============
CONVERTIBLE PREFERRED STOCK - 0.30%
Prudential Financial, Inc. 9,000 $ 450,000 $ 523,800
------------- -------------
Total Convertible Preferred Stock 450,000 523,800
------------- -------------
WARRANTS - 0.01%
American Country Holdings, Inc. (B) 183,117 45,779 12,818
------------- -------------
Total Warrants 45,779 12,818
------------- -------------
Total Corporate Public Securities $ 21,113,626 $ 17,867,779
============= =============
Interest Due Principal Market Value
Short-Term Securities: Rate/Yield Date Amount Cost at 12/31/01
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 6.02%
Ford Motor Credit Co. 2.530% 01/15/02 $ 2,420,000 $ 2,417,619 $ 2,417,619
Praxair, Inc. 2.500 01/14/02 2,880,000 2,877,400 2,877,400
Puplic Service Co. of Colorado 2.850 01/02/02 2,820,000 2,819,777 2,819,777
Textron Financial Corp. 2.300 01/11/02 2,430,000 2,428,447 2,428,447
------------- ------------- -------------
Total Short-Term Securities $ 10,550,000 $ 10,543,243 $ 10,543,243
============= ------------- -------------
Total Investments 110.48% $ 228,732,710 $ 193,460,613
============= -------------
Other Assets 3.83 6,710,706
Liabilities (14.31) (25,058,772)
------- -------------
Total Net Assets 100.00% $ 175,112,547
======= =============
(A) In each of the convertible note, warrant, convertible preferred and common
stock investments, the issuer has agreed to provide certain registration rights.
(B) Non-income producing security.
See Notes to Financial Statements.
30
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Fair Value
Corporate Restricted Securities: At 12/31/01
--------------------------------------------------------------------------------
AUTOMOBILE - 3.95%
America's Body Co., Inc. / LCP Holding Co. $ 3,328,456
LIH Investors, L.P. 3,584,005
--------------------------------------------------------------------------------
6,912,461
--------------------------------------------------------------------------------
BEVERAGE, FOOD & TOBACCO - 3.38%
Beta Brands, Inc. 2,535,659
Cains Foods, L.P. 823,469
Premium Foods Group 2,559,603
--------------------------------------------------------------------------------
5,918,731
--------------------------------------------------------------------------------
BROADCASTING & ENTERTAINMENT - 0.20%
Echostar Communications, Inc. 355,000
--------------------------------------------------------------------------------
BUILDINGS & REAL ESTATE - 7.49%
Adorn, Inc. 2,141,507
PGT Industries, Inc. 2,075,474
Strategic Equipment & Supply Partners, Inc. 3,100,342
Supreme Industries, Inc. 400,192
Therma-Tru Corporation 1,956,033
Truseal Technologies, Inc. 3,439,369
--------------------------------------------------------------------------------
13,112,917
--------------------------------------------------------------------------------
CARGO TRANSPORT - 1.82%
Kenan-Advantage Transport Company 2,064,674
Tidewater Holdings, Inc. 1,115,632
--------------------------------------------------------------------------------
3,180,306
--------------------------------------------------------------------------------
CHEMICAL, PLASTICS & RUBBER - 2.86%
Process Chemicals LLC 2,565,888
RK Polymers LLC 2,102,690
Trend Technologies, Inc. 342,606
U.S. Netting, Inc. 4,939
--------------------------------------------------------------------------------
5,016,123
--------------------------------------------------------------------------------
CONSUMER PRODUCTS - 11.48%
Alpha Shirt Company 3,962,140
Colibri Holdings Corporation 2,036,986
Consumer Product Enterprises, Inc. 878,073
Corvest Group, Inc. 4,048,292
Dexter Magnetic Technologies, Inc. 2,059,102
G C-Sun Holdings, L.P. 1,700,176
Keepsake Quilting, Inc. 2,133,465
The Tranzonic Companies 3,292,293
--------------------------------------------------------------------------------
20,110,527
--------------------------------------------------------------------------------
Fair Value
Corporate Restricted Securities: At 12/31/01
--------------------------------------------------------------------------------
CONTAINERS, PACKAGING & GLASS - 5.46%
C & K Manufacturing and Sales Company $ 657,788
Capitol Specialty Plastics, Inc. 403
Paradigm Packaging, Inc. 2,313,062
Plassein Packaging, Inc. 1,050,927
Snyder Industries, Inc. 3,126,255
Vitex Packaging, Inc. 2,404,432
--------------------------------------------------------------------------------
9,552,867
--------------------------------------------------------------------------------
DIVERSIFIED/CONGLOMERATE - MANUFACTURING - 15.64%
D T Industries, Inc. 1,000,000
Evans Consoles, Inc. 3,182,270
Highgate Capital LLC 700,000
Hussey Seating Company 2,019,073
Jackson Products, Inc. 307,282
Jason, Inc. 1,941,331
Maxtec International Corp. 665,055
NPC, Inc. 4,104,721
PAR Acquisition Corp. 1,334,666
PW Eagle, Inc. 3,958,553
Safety Speed Cut Manufacturing Company, Inc. 4,000,102
Transtechnology Engineered Components 2,067,375
Wicor Americas, Inc. 2,106,512
--------------------------------------------------------------------------------
27,386,940
--------------------------------------------------------------------------------
DIVERSIFIED/CONGLOMERATE - SERVICE - 9.20%
Diversco, Inc. / DHI Holdings, Inc. 1,311,204
Examination Management Services, Inc. 3,629,456
Hamilton Funeral Services Centers, Inc. 1,796,568
Lancaster Laboratories, Inc. 2,069,327
Magnetic Data Technologies, Inc. / MDT Holdings LLC 2,131,888
Pharmaceutical Buyers, Inc. 818,840
SpectaGuard Acquisition LLC 2,164,578
Washington Inventory Services, Inc. 2,180,632
--------------------------------------------------------------------------------
16,102,493
--------------------------------------------------------------------------------
ELECTRONICS - 7.34%
Coining Corporation of America 2,341,673
Commscope, Inc. 118,900
Directed Electronics, Inc. 4,245,791
Evolve Software, Inc. 58
Fairmarket, Inc. 219
Hyperion Solutions Corp. 174,500
IBEAM Broadcasting Corporation 10
Integration Technology Systems, Inc. 2,061,958
Precision Dynamics, Inc. 3,286,877
Sanmina-SCI Corp. 406,025
Tridex Corp. 60,000
Triquint Semiconductor, Inc. 164,250
--------------------------------------------------------------------------------
12,860,261
--------------------------------------------------------------------------------
31
MassMutual Corporate Investors
Consolidated Schedule of Investments
DECEMBER 31, 2001
Fair Value
Corporate Restricted Securities: At 12/31/01
--------------------------------------------------------------------------------
FARMING & AGRICULTURE - 0.70%
Cuddy International Corp. $ 208,468
Polymer Technologies, Inc. / Poli-Twine Western, Inc. 962,891
Protein Genetics, Inc. 50,175
--------------------------------------------------------------------------------
1,221,534
--------------------------------------------------------------------------------
FINANCE - 0.15%
Telewest Finance 262,057
--------------------------------------------------------------------------------
HEALTHCARE, EDUCATION & CHILDCARE - 4.62%
DHD Healthcare, Inc. 2,069,574
Enzymatic Therapy, Inc. 2,046,061
Nexell Therapeutics, Inc. 3,867,545
Viropharma, Inc. 107,500
--------------------------------------------------------------------------------
8,090,680
--------------------------------------------------------------------------------
HOME & OFFICE FURNISHINGS, HOUSEWARES,
AND DURABLE CONSUMER PRODUCTS - 5.42%
Fasteners for Retail, Inc. 4,276,006
Moss, Inc. 1,105,093
Star International, Inc. 4,112,932
--------------------------------------------------------------------------------
9,494,031
--------------------------------------------------------------------------------
LEISURE, AMUSEMENT, ENTERTAINMENT - 5.11%
Adventure Entertainment Corporation 20,705
Grand Expeditions, Inc. 1,275,100
Merit Industries, Inc. 3,616,553
Olympic Boat Centers, Inc. 4,036,231
--------------------------------------------------------------------------------
8,948,589
--------------------------------------------------------------------------------
MINING, STEEL, IRON & NON PRECIOUS METALS - 1.25%
Better Minerals & Aggregates 2,182,627
--------------------------------------------------------------------------------
MISCELLANEOUS - 2.80%
CapeSuccess LLC 105,196
Climachem, Inc. 78,750
East River Ventures I, L.P. 28,972
Immedient Corp. 33,932
Invitrogen Corp. 411,719
Photronics, Inc. 465,906
USFlow Corp. 3,728,061
Victory Ventures LLC 2
Winsloew Escrow Corp. 45,000
--------------------------------------------------------------------------------
4,897,538
--------------------------------------------------------------------------------
Fair Value
Corporate Restricted Securities: At 12/31/01
--------------------------------------------------------------------------------
OIL AND GAS - 0.93%
Chaparral Resources, Inc. $ 223
TransMontaigne Oil Company 1,634,964
--------------------------------------------------------------------------------
1,635,187
--------------------------------------------------------------------------------
PERSONAL TRANSPORTATION - 2.14%
Tronair, Inc. 3,754,687
--------------------------------------------------------------------------------
RETAIL STORES - 2.10%
Home Depot Exchangeable Trust 1,214,731
Rent-Way, Inc. 200
Rite Aid Corp. 191,750
TVI, Inc. 2,278,098
--------------------------------------------------------------------------------
3,684,779
--------------------------------------------------------------------------------
TECHNOLOGY - 0.21%
F E I Co. 368,906
--------------------------------------------------------------------------------
TELECOMMUNICATIONS - 0.00%
Jordan Telecom Products 350
--------------------------------------------------------------------------------
TEXTILES - 0.00%
Kappler Safety Group, Inc. -
--------------------------------------------------------------------------------
Total Corporate Restricted Securities - 94.25% $165,049,591
================================================================================
32
MassMutual Corporate Investors
Notes to Consolidated Financial Statements
DECEMBER 31, 2001 AND 2000
1. HISTORY
MassMutual Corporate Investors (the "Trust") is a closed-end, non-diversified
investment company. David L. Babson & Company Inc., ("Babson"), a majority owned
subsidiary of Massachusetts Mutual Life Insurance Company, ("MassMutual"), acts
as its investment adviser.
The Trust 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 organized as a Massachusetts business trust under
the laws of the Commonwealth of Massachusetts, effective November 28, 1985.
On January 27,1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary ("MMCI Subsidiary Trust") for the purpose of holding
certain investments. The results of MMCI Subsidiary Trust have been consolidated
in the accompanying financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of the 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 directly negotiated transaction to a limited number of purchasers or in
a public offering for which a registration statement is in effect under the
Securities Act of 1933.
The value of restricted securities, and of any other assets for which there
are no reliable market quotations, is the fair value as determined in good
faith by the Board of Trustees of the Trust (the "Trustees"). Each restricted
security is valued by the Trustees at the time of the acquisition thereof and
at least quarterly thereafter. The Trustees have established guidelines to
aid in the valuation of each security. Generally, restricted securities are
initially valued at cost or less at the time of acquisition by the Trust.
Values greater or less than cost are used thereafter for restricted
securities in appropriate circumstances. Among the factors ordinarily
considered are the existence of restrictions upon the sale of the security by
the Trust; an estimate of the existence and extent of a market for the
security; the extent of any discount at which the security was acquired; the
estimated period of time during which the security will not be freely
marketable; the estimated expenses of registering or otherwise qualifying the
security for public sale; estimated underwriting commissions if underwriting
would be required to effect a sale; in the case of a convertible security,
whether or not it would trade on the basis of its stock equivalent; in the
case of a debt obligation which would trade independently of any equity
equivalent, the current yields on comparable securities; the estimated amount
of the floating supply of such securities available; the proportion of the
issue held by the Trust; changes in the financial condition and prospects of
the issuer; the existence of merger proposals or tender offers affecting the
issuer; and any other factors affecting fair value, all in accordance with
the Investment Company Act of 1940. In making valuations, opinions of counsel
may be relied upon as to whether or not securities are restricted securities
and as to the legal requirements for public sale.
When market quotations are readily available for unrestricted securities of
an issuer, restricted securities of the same class are generally valued at a
discount from the market price of such unrestricted securities. The Trustees,
however, consider all factors in fixing any discount, including the filing of
a registration statement for such securities under the Securities Act of 1933
and any other developments which are likely to increase the probability that
the securities may be publicly sold by the Trust without restriction.
The Board of Trustees of the Trust meets at least once in each quarter to
value the Trust's portfolio securities as of the close of business on the
last business day of the preceding quarter. This valuation requires the
approval of a majority of the Trustees of the Trust, including a majority of
the Trustees who are not interested persons of the Trust (otherwise than as
Trustees) or of Babson. In making valuations, the Trustees will consider
reports by Babson analyzing each portfolio security in accordance with the
relevant factors referred to above. Babson has agreed to provide such reports
to the Trust at least quarterly.
The financial statements include restricted securities valued at $165,049,591
(94.25% of net assets) as of December 31, 2001 ($176,899,997 at December 31,
2000) whose values have been estimated by the Board of Trustees in the
absence of readily ascertainable market values. Due to the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the differences could be material.
The values for corporate public securities are stated at the last reported
sales price or at prices based upon quotations obtained from brokers and
dealers as of December 31, 2001, subject to discount where appropriate, and
are approved by the Trustees.
Short-term securities with more than sixty days to maturity are valued at
fair value and short-term securities having a maturity of sixty days or less
are valued at amortized cost which approximates market value.
B. Accounting for Investments:
Investment transactions are accounted for on trade date. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis.
The Trust has elected to accrue, for financial reporting purposes, certain
premiums and discounts which are required to be accrued for federal income
tax purposes.
33
MassMutual Corporate Investors
Notes to Consolidated Financial Statements
DECEMBER 31, 2001 AND 2000
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.
The Trust does not accrue income when payment is delinquent and when
management believes payment is questionable.
C. Use of Estimates:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
D. Federal Income Taxes:
No provision for federal taxes on net investment income and short-term
capital gains is considered necessary because the Trust has elected to be
taxed as a "regulated investment company" under the Internal Revenue Code,
and intends to maintain this qualification and to distribute substantially
all of its net taxable income to its shareholders. In any year when net
long-term capital gains are realized by the Trust, management, after
evaluating the prevailing economic conditions, will recommend to the Trustees
either to designate the net realized long-term gains as undistributed and to
pay the federal capital gains taxes thereon or to distribute all or a portion
of such net gains.
In 2001, the Trust reclassed ($32,035) from undistributed net investment
income to additional paid-in capital to more accurately portray the Trust's
financial position. This reclass has no impact on the Trust's net asset value
per share.
E. Reclassifications:
Certain amounts from prior years' financial statements have been reclassed to
conform with current year presentation.
3. MANAGEMENT FEE
Under an investment services contract, Babson has agreed to invest for
MassMutual's general account concurrently with the Trust in each restricted
security purchased by the Trust. Babson, in addition to originating and sharing
in the purchase of such securities, 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. Babson provides a
continuing review of the investment operations of the Trust. Babson also
provides the Trust with office space and office equipment, safekeeping
facilities, accounting and bookkeeping services, and necessary executive,
clerical and secretarial personnel for the performance of the foregoing
services.
Under the investment services contract, as amended July 1, 1988, the Trust pays
Babson a quarterly base rate (the "Base Fee Rate") of 5/16 of 1% of the value of
the Trust's net assets as of the end of each fiscal quarter, approximately
equivalent to 1.25% of the net asset value of the Trust on an annual basis, plus
or minus a quarterly performance adjustment (the "Performance Adjustment") of up
to 1/16 of 1% approximately equivalent to .25% on an annual basis.
The Performance Adjustment is based on the Trust's performance as compared to a
benchmark rate of return (the "Target Rate") equal to 5.0 percentage points plus
an unweighted, arithmetic average of the rates of return on the Standard &
Poor's Industrial Stock Price Index and the Lehman Brothers Intermediate Credit
Bond Index (formerly called the Lehman Brothers Intermediate Corporate Bond
Index) over a rolling three-year period (the "Measurement Period") comprising
the twelve quarters ending on the last day of each quarter (the "Valuation
Date"). The Performance Adjustment is equal to 5% of the difference between the
Trust's actual rate of return over the Measurement Period and the Target Rate.
If the Trust's actual rate of return exceeds the Target Rate, the Base Fee Rate
is increased by an amount equal to the Performance Adjustment; if the Trust's
actual rate of return is less than the Target Rate, the Base Fee Rate is reduced
by the Performance Adjustment. The advisory fee payable by the Trust is equal to
the Base Fee Rate (as adjusted by the Performance Adjustment) times the net
asset value of the Trust as of the Valuation Date. The Performance Adjustment
for the quarters ended March 31, June 30, September 30 and December 31, 2001
was:
Performance
Adjustment Amount
--------------------------------------------------------------------------------
March 31, 2001 0.0625% $ 113,989
June 30, 2001 0.0625% 115,719
September 30, 2001 0.0625% 111,324
December 31, 2001 0.0625% 109,737
--------------------------------------------------------------------------------
Total 0.2500% $ 450,769
A. Note Payable:
On November 5, 1993, the Trust sold to MassMutual at par a $20,000,000 Senior
Fixed Rate Convertible Note due November 15, 2000 (the "Note") which accrues
at 5.33% per annum. The Note holder, 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.
In agreement with MassMutual, the Note's maturity has been extended for an
additional seven years from November 15, 2000. The Note is due November 15,
2007 and will accrue at 7.39% per annum. For each of the years ended December
31, 2001 and 2000, the Trust incurred total interest expense on the Note of
$1,478,000 and $1,117,500, respectively.
B. Revolving Credit Agreement:
The Trust entered into a Revolving Credit Agreement with Fleet National Bank
as of June 29, 2000, in the principal amount of $25,000,000, maturing on May
31, 2005. The interest rate on the outstanding revolving loan is determined
for periods of one, three or six months (as selected by the Trust) and is set
at an annual rate equal to LIBOR (London Interbank Offered Rate) plus 0.37%.
The Trust also agreed to pay an up-front fee equal to 0.10% on the total
commitment. The facility fee is 0.15% per annum of the total commitment.
As of December 31, 2001 and 2001, there were no outstanding loans drawn
against the revolving credit facility. For the period ended December 31, 2001
and 2000, the Trust incurred $37,397 and $19,007 in expense related to the
undrawn portion.
34
MassMutual Corporate Investors
Notes to Consolidated Financial Statements
DECEMBER 31, 2001 AND 2000
5. PURCHASES AND SALES OF INVESTMENTS
For the Year For the Year
Ended 12/31/2001 Ended 12/31/2000
--------------------------------------------------------------------------------
Cost of Investments Acquired
--------------------------------------------------------------------------------
Corporate restricted securities $ 29,582,911 $ 88,296,838
Corporate public securities 16,987,578 37,405,876
Short-term securities 579,764,573 607,186,552
--------------------------------------------------------------------------------
Proceeds from Sales or Maturities
--------------------------------------------------------------------------------
Corporate restricted securities $ 40,001,873 $ 84,582,425
Corporate public securities 19,329,657 51,516,754
Short-term securities 576,507,503 614,777,319
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of December 31, 2001. The net unrealized
depreciation of investments for financial reporting and federal tax purposes as
of December 31, 2001 is $35,272,097 and consists of $13,236,957 appreciation and
$48,509,054 depreciation.
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of December 31, 2000. The net unrealized
depreciation of investments for financial reporting and federal tax purposes as
of December 31, 2000 is $28,299,431 and consists of $21,201,697 appreciation and
$49,501,128 depreciation.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED)
Amount Per Share Amount Per Share
--------------------------------------------------------------------------------
March 31, 2001 March 31, 2000
--------------------------------------------------------------------------------
Investment income $ 4,901,147 $ 4,958,909
Net investment income 3,729,498 $ 0.43 4,063,971 $ 0.47
Net realized and unrealized
(loss) gain on investments (1,686,474) (0.19) 11,553,274 1.35
--------------------------------------------------------------------------------
June 30, 2001 June 30, 2000
--------------------------------------------------------------------------------
Investment income 5,051,877 5,365,267
Net investment income 3,844,565 0.44 4,211,896 0.49
Net realized and unrealized
gain on investments 2,449,657 0.28 6,468,569 0.76
--------------------------------------------------------------------------------
September 30, 2001 September 30, 2000
--------------------------------------------------------------------------------
Investment income 4,875,161 5,271,922
Net investment income 3,737,511 0.43 4,260,988 0.50
Net realized and unrealized
loss on investments (7,180,355) (0.83) (9,996,453) (1.17)
--------------------------------------------------------------------------------
December 31, 2001 December 31, 2000
--------------------------------------------------------------------------------
Investment income 4,661,551 5,315,898
Net investment income 3,545,560 0.40 4,331,989 0.50
Net realized and unrealized
gain (loss) on investments 1,785,165 0.21 (12,023,011) (1.40)
35
MassMutual Corporate Investors
Interested Trustees
Name (Age), Address, Principal Occupation Term Began/
Position with the Trust During the Past Five Years/Other Directorships Held Term Ends
------------------------------------------------------------------------------------------------------------------------------
STUART H. REESE* (46) Executive Vice President and Chief Investment Officer (since 1999) 1974/2003
MassMutual Life Ins. Co. of MassMutual Director and CEO (since 2000), and President
1295 State Street (2000-2001) of Babson Chief Executive Director (1997-1999), Senior
Springfield, MA 01111 Vice President (1993-1997) of MassMutual President (1993-1999),
Chairman and Trustee (1999), MML Series Investment Fund Director
Trustee (since 1995), MassMutual Corporate Value Partners President
Chairman (since 1999) (1994-1999), Chairman and Trustee (1999), MassMutual Institutional
President (1993-1999) Funds Director (since 1993), MML Baystate Life Insurance Company
Advisory Board Member (since 1995), Kirtland Capital Partners
Director (since 1996), MassMutual High Yield Partners II Director
(since 1996), CM Assurance Company Director (since 1996), CM Benefit
Insurance Company Director (since 1996), CM Life Insurance Company
Director (since 1996), CM International, Inc Director (since 1996),
Antares Capital Corporation Director (since 1996), Charter Oak
Capital Management, Inc. Director (since 1996), State House I
Corporation President (since 1998), MassMutual/Darby CBO LLC
Director (since 1999), MLDP Holdings Chairman (since 2000),
Cornerstone Real Estate Advisers Inc. Trustee, Chairman (since 1999)
and President (1993-1999) MassMutual Participation Investors
(closed-end investment company advised by Babson).
------------------------------------------------------------------------------------------------------------------------------
RICHARD G. DOOLEY**(72) Consultant (since 1993) and former Executive Vice President and 1999/2003
MassMutual Life Ins. Co. Chief Investment Officer of MassMutual Director (since 1992), Kimco
1295 State Street Realty Corp. (shopping center ownership and management) Director
Springfield, MA 01111 (since 1993), Jeffries Group, Inc. (financial services holding
company) Chairman (1999 and 1988-1995), Vice Chairman (1995-1999)
Trustee and Trustee, MML Series Investment Fund (open-end investment company
Vice-Chairman (since 1995) advised by the Insurance Company) Chairman (1999, and 1988-1995),
Chairman (1999, 1982-1995) Vice Chairman (since 1995) and Trustee (since 1988), MassMutual
Participation Investors (closed-end investment company advised by
Babson).
* Mr. Reese is an "interested person" of the Trust (as defined in the
Investment Company Act of 1940, amended) because of his position as an
Officer of the Trust and a Director and CEO of Babson.
** Mr. Dooley is an "interested person" of the Trust (as defined in the
Investment Company Act of 1940, amended) because of his position as an
Officer of the Trust and as a consultant to MassMutual.
36
MassMutual Corporate Investors
Independent Trustees
Name (Age), Address, Principal Occupation Term Began/
Position with the Trust During the Past Five Years/Other Directorships Held Term Ends
------------------------------------------------------------------------------------------------------------------------------
DONALD E. BENSON (71) Executive Vice President and Director (since 1992), Marquette 1986/2004
MassMutual Corporate Bancshares (bank holding company) Partner (since 1996), Benson
Investors Family Limited Partnership No. 1 and Benson Family Limited
1500 Main Street, Suite 1100 Partnership No. 2 (investment partnerships) Partner (since 1987),
Springfield, MA 01115 Benson, Pinckney, Oates Partnership (building partnership) Director
(since 1997), Mercantile Bancorp (bank holding company) and
Trustee Mercantile National Bank Director, Mesaba Holdings, Inc. (commuter
airline) Trustee (since 1988), MassMutual Participation Investors
(closed-end investment company advised by Babson).
------------------------------------------------------------------------------------------------------------------------------
MILTON COOPER (72) Chairman (since 1992), Kimco Realty Corp. (shopping center ownership 1990/2002
MassMutual Corporate and management) Director, Getty Petroleum Corp. (petroleum
Investors marketing) Director, Blue Ridge Real Estate Trustee (since 1990),
1500 Main Street, Suite 1100 MassMutual Participation Investors (closed-end investment company
Springfield, MA 01115 advised by Babson).
Trustee
------------------------------------------------------------------------------------------------------------------------------
DONALD GLICKMAN (68) Chairman (since 1992), Donald Glickman and Company, Inc. (investment 1992/2004
MassMutual Corporate banking) Director (1988-2000), CalTex Industries, Inc. (manufacturer
Investors of windows) Monro Muffler Brake, Inc. Director (since 1998), MSC
1500 Main Street, Suite 1100 Software, Inc., Partner (since 1992), J.F. Lehman & Co. (private
Springfield, MA 01115 investments) Trustee (since 1992), MassMutual Participation
Investors (closed-end investment company advised by Babson).
Trustee
------------------------------------------------------------------------------------------------------------------------------
MARTIN T. HART (66) President and Director, (1983-2000) H Corporation Partner 1991/2003
MassMutual Corporate (1986-2000), Consolidated Nursery Properties (wholesale nursery and
Investors garden center) Director (1993-2000), Optical Security Group, Inc.
1500 Main Street, Suite 1100 (product security) Director (since 1992), Schuler Homes, Inc.
Springfield, MA 01115 (housing) Director (1990-1998), PNB Financial Group (bank holding
company) Director (since 1997), T Netiks (communications) Director
Trustee (since 1996), PJ America (pizza restaurant) Director (1993-1998),
PJNC, Inc. (pizza restaurant) Director (1994-1999), Ardent Software,
Inc. (computer company) Director (since 1994), Houston Pizza Venture
(pizza restaurant) Trustee (since 1994), Regis University
(university) Director (since 1999), Value Click (internet marketing
company) Director (since 1998), CoreChange, Inc. (technology portal
company) Director (since 1998), Vail Banks (bank) Director (since
1994) PJ Iowa (pizza restaurant) Director (since 1998) PJ Nor-Cal
(pizza restaurant) Director (since 1999) Stephany's Chocolate (candy
factory) Trustee (since 1991), MassMutual Participation Investors
(closed-end investment company advised by Babson).
------------------------------------------------------------------------------------------------------------------------------
JACK A. LAUGHERY (67) Chairman (1997-1998), President and Partner (since 1996), Laughery's 1996/2002
MassMutual Investments Partner (since 1996) Papa John's New England (food
Corporate Investors service) Consultant (since 1996), Papa John's Iowa (food service)
1500 Main Street, Suite 1100 Director (1997-1998), Maynard Capital Partners (investments)
Springfield, MA 01115 Director (since 1993), Papa John's International (food service
companies) Director (since 1994), Houston Pizza Venture LLC (pizza
Trustee restaurant) Partner (1988-1998), Atlantic Beach Sheraton Partner
(since 1987), Coastal Lodging (hotels) Director (1990-1997), Sprint
Mid-Atlantic (telecommunications) Part Owner (since 1998), Rocky
Mount Harley Davidson Partner (since 1996), Papa John's Iowa Trustee
(since 1996), MassMutual Participation Investors (closed-end
investment company advised by Babson).
------------------------------------------------------------------------------------------------------------------------------
CORINE T. NORGAARD (64) Dean (since 1996), Barney School of Business and Public 1998/2002
MassMutual Administration, University of Hartford Director (since 1997), The
Corporate Investors Advest Bank Trustee (since 1993), Aetna Series Fund (investment
1500 Main Street, Suite 1100 company) Director (since 1992), Aetna Variable Series Fund Trustee
Springfield, MA 01115 (since 1998), MassMutual Participation Investors (a closed-end
investment company advised by Babson).
Trustee
37
Name (Age), Address,
Position with the Trust
Principal Occupation
During the Past Five Years/Other Directorships Held
Term Began/
Term Ends
Members of the
Board of Trustees
Stuart H. Reese
Executive Vice President and
Chief Investment Officer,
Massachusetts Mutual Life
Insurance Company
Richard G. Dooley
Retired Executive Vice
President and Chief
Investment Officer,
Massachusetts Mutual Life
Insurance Company
Donald E. Benson*
Executive Vice President
and Director, Marquette
Bancshares, Inc.
Milton Cooper
Chairman, Kimco
Realty Corp.
Donald Glickman
Chairman, Donald Glickman
& Company, Inc.
Martin T. Hart*
Director,
Schuler Homes, Inc.
Jack A. Laughery
President and Partner,
Laughery Investments
Corine T. Norgaard*
Dean, Barney School
of Business and
Public Administration,
University of Hartford
*Member of Audit Committee
Independent Auditors' Report
To the Shareholders and the Board of Trustees of MassMutual Corporate Investors
We have audited the accompanying consolidated statements of assets and
liabilities of MassMutual Corporate Investors (the "Trust"), including the
consolidated schedule of investments, as of December 31, 2001 and 2000, and the
related consolidated statements of operations, cash flows, changes in net
assets, and the consolidated financial highlights for the years then ended.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements based on our audits. The financial highlights for the year
ended December 31, 1998 and for each of the years in the seven-year period then
ended were audited by other auditors, whose report, dated February 25, 1999
expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 2001 by corre-spondence with the custodians
and brokers. 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 the Trust as of December 31, 2001 and 2000, and the
results of its operations, its cash flows, changes in net assets, and financial
highlights for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Deliotte & Touche LLP
-------------------------------
New York, New York
February 8, 2002
[PHOTO OF STUART H. REESE, CORINE T. NORGAARD & DONALD E. BENSON]
Members of the Board of Trustees (left to right): Stuart H. Reese, Corine T.
Norgaard, Donald E. Benson
MassMutual Corporate Investors
[PHOTO OF MARTIN T. HART, RICHARD G. DOOLEY, JACK A. LAUGHERY, MILTON COOPER &
DONALD GLICKMAN]
Members of the Board of Trustees (left to right): Martin T. Hart, Richard G.
Dooley, Jack A. Laughery, Milton Cooper, Donald Glickman
Dividend Reinvestment and Share Purchase Plan
MassMutual Corporate Investors offers a Dividend Reinvestment and Share Purchase
Plan. The Plan provides a simple way for shareholders to add to their holdings
in the Trust through the receipt of dividend shares issued by the Trust or
through the reinvestment of cash dividends in Trust shares purchased in the open
market. A shareholder may join the Plan by filling out and mailing an
authorization card to Shareholder Financial Services, Inc., the Transfer Agent.
Participating shareholders will continue to participate until they notify the
Transfer Agent, in writing, of their desire to terminate participation. Unless a
shareholder elects to participate in the Plan, he or she will, in effect, have
elected to receive dividends and distributions in cash.
Participating shareholders may also make additional contributions to the Plan
from their own funds. Such contributions may be made by personal check or other
means in an amount not less than $10 nor more than $5,000 per quarter.
Whenever the Trust declares a dividend payable in cash or shares, the Transfer
Agent, acting on behalf of each participating shareholder, will take the
dividend in shares only if the net asset value is lower than the market price
plus an estimated brokerage commission as of the close of business on the
valuation day. The valuation day is the last day preceding the day of dividend
payment. When the dividend is to be taken in shares, the number of shares to be
received is determined by dividing the cash dividend by the net asset value as
of close of business on the valuation date, or if greater than net asset value,
95% of the closing share price. If the net asset value of the shares is higher
than the market value plus an estimated commission, the Transfer Agent,
consistent with obtaining the best price and execution, will buy shares on the
open market at current prices promptly after the dividend payment date.
The reinvestment of dividends does not, in any way, relieve participating
shareholders of any federal, state or local tax. For federal income tax
purposes, the amount reportable in respect of a dividend received in
newly-issued shares of the Trust will be the fair market value of the shares
received, which will be reportable as ordinary income and/or capital gains.
As compensation for its services, the Transfer Agent receives a fee of 5% of any
dividend and cash contribution (in no event in excess of $2.50 per distribution
per shareholder).
Any questions regarding the Plan should be addressed to Shareholder Financial
Services, Inc., Agent for MassMutual Corporate Investors' Dividend Reinvestment
and Share Purchase Plan, P.O. Box 173673, Denver, CO 80217-3673
MassMutual Corporate Investors
1500 Main Street, Suite 1100
Springfield, Massachusetts 01115
(413) 226-1516 o www.massmutual.com/mci
Adviser
David L. Babson & Company Inc.
Auditor
Deloitte & Touche LLP
New York, New York 10281
Custodian
Citibank, N.A.
Transfer Agent & Registrar
Shareholder Financial Services, Inc.
P.O. Box 173673
Denver, Colorado 80217-3673
1-800-647-7374
Officers
Stuart H. Reese
Chairman
Richard G. Dooley
Vice Chairman
Robert E. Joyal
President
Charles C. McCobb, Jr.
Vice President and
Chief Financial Officer
Stephen L. Kuhn
Vice President and Secretary
Michael P. Hermsen
Vice President
Mary Wilson Kibbe
Vice President
Michael L. Klofas
Vice President
Richard C. Morrison
Vice President
Clifford M. Noreen
Vice President
Mark B. Ackerman
Treasurer
John T. Davitt, Jr.
Comptroller
MassMutual Corporate Investors L4287A