UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-2183
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MassMutual Corporate Investors
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(Exact name of registrant as specified in charter)
1500 Main Street, Suite 600, P.O. Box 15189, Springfield, MA 01115-5189
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(Address of principal executive offices) (Zip code)
Rodney J. Dillman, Vice President and Secretary
1500 Main Street, Suite 2800, P.O. Box 15189, Springfield, MA 01115-5189
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(Name and address of agent for service)
Registrant's telephone number, including area code: 413-226-1000
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Date of fiscal year end: 12/31
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Date of reporting period: 12/31/06
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORT TO STOCKHOLDERS.
Attached hereto is the annual shareholder report transmitted to
shareholders pursuant to Rule 30e-1 of the Investment Company Act of
1940, as amended.
[PHOTO]
[LOGO] MASSMUTUAL CORPORATE INVESTORS
2006 ANNUAL REPORT
MassMutual Corporate Investors
MASSMUTUAL
CORPORATE INVESTORS
c/o Babson Capital Management LLC
1500 Main Street, Suite 600
Springfield, Massachusetts 01115
(413) 226-1516
http://www.babsoncapital.com/mci
ADVISER
Babson Capital Management LLC
1500 Main Street
Springfield, Massachusetts 01115
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
KPMG LLP
Boston, Massachusetts 02110
COUNSEL TO THE TRUST
Ropes & Gray LLP
Boston, Massachusetts 02110
CUSTODIAN
Citibank, N.A.
New York, New York 10043
TRANSFER AGENT & REGISTRAR
Shareholder Financial Services, Inc.
P.O. Box 173673
Denver, Colorado 80217-3673
1-800-647-7374
MCI
LISTED
NYSE
[BACKGROUND PHOTO]
MassMutual Corporate Investors
MassMutual Corporate Investors is a closed-end investment company, first offered
to the public over 35 years ago, whose shares are traded on the New York Stock
Exchange.
PROXY VOTING POLICIES & PROCEDURES; PROXY VOTING RECORD
The Trustees of MassMutual Corporate Investors have delegated proxy voting
responsibilities relating to the voting of securities held by the Trust to
Babson Capital Management LLC. A description of Babson Capital's proxy voting
policies and procedures is available (1) without charge, upon request, by
calling, toll-free 866-399-1516; (2) on MassMutual Corporate Investors' website:
http://www. babsoncapital.com/mci; and (3) on the U.S. Securities and Exchange
Commission ("SEC") website at http://www.sec.gov. Information regarding how the
Trust voted proxies relating to portfolio securities during the most recent
12-month period ended June 30 is available (1) on MassMutual Corporate
Investors' website: http://www.babsoncapital.com/mci; and (2) on the SEC's
website at http://www.sec.gov.
FORM N-Q
MassMutual Corporate Investors files its complete schedule of portfolio holdings
with the SEC for the first and third quarters of each fiscal year on Form N-Q.
This information is available (i) on the SEC's website at http://www.sec.gov;
and (ii) at the SEC's Public Reference Room in Washington, DC (which information
on their operation may be obtained by calling 1-800-SEC-0330). A complete
schedule of portfolio holdings as of each quarter-end is available upon request
by calling, toll-free, 866-399-1516. Or visiting
http://www.babsoncapital.com/mci.
MassMutual Corporate Investors
[BACKGROUND PHOTO]
INVESTMENT OBJECTIVE & POLICY
MassMutual Corporate Investors (the "Trust") is a closed-end investment company,
first offered to the public in 1971, whose shares are traded on the New York
Stock Exchange under the trading symbol "MCI". The Trust's share price can be
found in the financial section of most newspapers as "MassCp" or "MassMuInv"
under either the New York Stock Exchange listings or Closed-End Fund Listings.
The Trust's investment objective is to maintain a portfolio of securities
providing a fixed yield and at the same time offering an opportunity for capital
gains. The Trust's principal investments are privately placed, below-investment
grade, long-term corporate debt obligations with equity features such as
warrants, conversion rights, or other equity features and, occasionally,
preferred stocks. The Trust typically purchases these investments, which are not
publicly tradable, directly from their issuers, which tend to be smaller
companies. In addition, the Trust may temporarily invest, subject to certain
limitations, in marketable investment grade debt securities, other marketable
debt securities (including high yield securities) and marketable common stocks.
Babson Capital Management LLC ("Babson Capital") manages the Trust on a total
return basis. The Trust distributes substantially all of its net income to
shareholders each year. Accordingly, the Trust pays dividends to shareholders
quarterly in January, May, August, and November. The Trust pays dividends to its
shareholders in cash, unless the shareholder elects to participate in the
Dividend Reinvestment and Share Purchase Plan.
In this report you will find a complete listing of the Trust's holdings. We
encourage you to read this section carefully for a better understanding of the
Trust. We cordially invite all shareholders to attend the Trust's Annual Meeting
of Shareholders, which will be held on April 27, 2007 at 2:00 P.M. in
Springfield, Massachusetts.
PORTFOLIO COMPOSITION AS OF 12/31/06*
[PIE CHART APPEARS HERE]
Public Equity 1.4%
Private High
Yield Debt 45.7%
Private Investment
Grade Debt 5.4%
Private/Restricted
Equity 15.3%
Cash & Short Term
Investments 4.4%
Public High
Yield Debt 27.8%
*BASED ON VALUE OF TOTAL INVESTMENTS (INCLUDING CASH)
1
MassMutual Corporate Investors
[BACKGROUND PHOTO]
TO OUR SHAREHOLDERS
I am pleased to share with you the Trust's Annual Report for the year ended
December 31, 2006.
THE TRUST'S 2006 PORTFOLIO PERFORMANCE
The Trust's net total portfolio rate of return for 2006 was 18.09%, as measured
by the change in net asset value, assuming the reinvestment of all dividends and
distributions. The Trust's total net assets were $251,689,646, or $27.51 per
share, as of December 31, 2006 compared to $236,275,418, or $26.06 per share, as
of December 31, 2005. The Trust paid a quarterly dividend of 48 cents per share
for the first quarter of 2006 and then 50 cents per share for the next three
quarters, with the fourth quarter dividend paid in January 2007. In addition,
the Trust declared a special year-end dividend of 50 cents per share, paid in
January 2007 to shareholders of record on December 29, 2006, bringing total
dividends for the year to $2.48. All in all, we are very pleased with the
Trust's 2006 portfolio performance.
[PHOTO OF OFFICERS]
LEFT TO RIGHT:
Clifford M. Noreen
PRESIDENT
Roger W. Crandall
CHAIRMAN
2
MassMutual Corporate Investors
TOTAL ANNUAL PORTFOLIO RETURN (AS OF 12/31 EACH YEAR)*
[BAR CHART APPEARS HERE]
27.14 17.12 7.53 7.28 5.91 4.80 22.61 22.76 20.04 18.09 MASSMUTUAL CORPORATE
INVESTORS (BASED ON CHANGE
IN THE NET ASSET VALUE WITH
REINVESTED DIVIDENDS)
31.04 33.77 25.89 -16.26 -11.67 -23.51 28.34 10.20 3.98 14.79 STANDARD & POOR'S
INDUSTRIALS COMPOSITE
(FORMERLY CALLED THE STANDARD
& POOR'S INDUSTRIAL PRICE INDEX)
8.36 8.29 0.16 9.46 9.77 10.14 6.91 4.08 1.42 4.49 LEHMAN BROTHERS
INTERMEDIATE
U.S. CREDIT INDEX
(FORMERLY CALLED THE LEHMAN
BROTHERS INTERMEDIATE
CORPORATE BOND INDEX)
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
*DATA FOR MASSMUTUAL CORPORATE INVESTORS (THE "TRUST") REPRESENTS PORTFOLIO
RETURNS BASED ON CHANGE IN THE TRUST'S NET ASSET VALUE ASSUMING THE REINVESTMENT
OF ALL DIVIDENDS AND DISTRIBUTIONS WHICH DIFFERS FROM THE TOTAL INVESTMENT
RETURN BASED ON MARKET VALUE DUE TO THE DIFFERENCE BETWEEN THE TRUST'S NET ASSET
VALUE AND THE MARKET VALUE OF ITS SHARES OUTSTANDING (SEE PAGE 12 FOR TOTAL
INVESTMENT RETURN BASED ON MARKET VALUE); PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
[PHOTO OF OFFICERS]
LEFT TO RIGHT:
James M. Roy
VICE PRESIDENT &
CHIEF FINANCIAL OFFICER
Rodney J. Dillman
VICE PRESIDENT, SECRETARY &
CHIEF LEGAL OFFICER
3
MassMutual Corporate Investors
The table shown below lists the average annual returns of the Trust's portfolio,
based on the change in net assets, assuming the reinvestment of all dividends
and distributions, compared to the average annual returns of selected equity and
fixed income market indices for the 1, 3, 5 and 10 years ended December 31,
2006.
The U.S. economy and investment markets started the year slowly amid lukewarm
expectations due to concerns over inflation and the housing market, yet 2006
concluded with some very strong performance, especially in the equity markets. A
key date was June 29th, when the Federal Reserve Board completed its fourth and
final quarter-point interest rate increase for the year (and 17th since
mid-2004).
LEHMAN LEHMAN STANDARD
BROTHERS BROTHERS & POOR'S
THE U.S. CORPORATE INTERMEDIATE INDUSTRIALS RUSSELL
TRUST HIGH YIELD INDEX U.S. CREDIT INDEX* COMPOSITE** 2000 INDEX
1 Year 18.09% 11.85% 4.49% 14.79% 18.37%
3 Year 20.28% 8.49% 3.32% 9.57% 13.56%
5 Year 17.46% 10.18% 5.37% 5.25% 11.39%
10 Year 15.06% 6.59% 6.25% 7.72% 9.44%
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
*FORMERLY CALLED THE LEHMAN BROTHERS INTERMEDIATE CORPORATE BOND INDEX.
****FORMERLY CALLED THE STANDARD & POOR'S INDUSTRIAL PRICE INDEX.
LEFT TO RIGHT:
Jill A. Fields
VICE PRESIDENT
Michael P. Hermsen
VICE PRESIDENT
Michael L. Klofas
VICE PRESIDENT
Richard E. Spencer, II
VICE PRESIDENT
[PHOTO OF OFFICERS]
4
MassMutual Corporate Investors
Eventually, commodity prices tumbled, relieving some inflation fears, and
economic growth was sustained even as the housing market declined. The market
focused on continued solid earnings growth, reasonable inflation and stable
interest rates.
Overall, the US economy remains in good shape, but not without question marks.
The unemployment rate in 2006 dropped to 4.5 percent from 5 percent the previous
year, according to the US Department of Labor. However, core inflation was up to
2.6 percent from 2.2 percent in both 2005 and 2004, and the value of the dollar
versus several other currencies dropped in 2006 and is expected to continue to
drop in 2007.
Investors continued to witness an ever stronger corporate-credit market in 2006.
Corporate credit defaults around the globe continued their downward trend for
the fifth consecutive year, as reported by Moody's Investors Service. Moody's
global issuer-weighted speculative-grade default rate finished the year at 1.7
percent, down from 1.9 percent in 2005 and its lowest level since 1996. Moody's
expects the default rate to climb in 2007 but remain well below its historical
average of 5 percent.
[BACKGROUND PHOTO]
Overall, the Trust closed 24 new private placement transactions during 2006 - a
record number - and added to eight existing private placement investments. Total
direct placement volume of $56,483,647 is also a record for the Trust.
New private placement transactions invested in during the year were: Momentum
Holding Co.; NABCO, Inc.; Duncan Systems, Inc.; Flutes Inc.; OakRiver
Technology, Inc.; Overton's Holding Company; Magnatech International Inc.;
Wellborn Forest Holding Co.; Bravo Sports Holding Corporation; Davis- Standard
LLC; F H S Holdings LLC; Fowler Holding, Inc.; Fuel Systems Holding Corporation;
H M Holding Company; K N B Holdings Corporation; Monessen Holding Corporation;
Morton Industrial Group, Inc.; Ontario Drive & Gear Ltd.; PA S Holdco LLC; P I I
Holding Corporation; Postle Aluminum Company LLC; R AJ Manufacturing Holdings
LLC; Radiac Abrasives, Inc.; and Stanton Carpet Holding Co.
In addition, the Trust added to existing private placement investments in
Augusta Sportswear Holding Co.; A T I Acquisition Company; American Hospice
Management Holding LLC; River Ranch Fresh Foods LLC; Consolidated Foundries
Holdings; Eagle Pack Pet Foods, Inc.; Micro-Group, Inc.; and Terra Renewal
Services, Inc.
5
MassMutual Corporate Investors
THE OUTLOOK FOR 2007
Optimism abounds at the beginning of 2007 based on events in the fourth quarter
of 2006, but history reminds us that there are no assurances a year will finish
as it starts. Consumer confidence remains strong, and there are indications that
the housing market may be through the worst of the downturn that started in
2006. Oil prices fell precipitously at the end of 2006 after significant
increases in 2004 and 2005. The Fed indicates that it is on hold with interest
rates for the time being, and the corporate debt market appears in good shape.
However, Treasury bond activity is sending mixed signals, the dollar continues
to drop, and instability and conflict in the Middle East could create new
problems at any time. As always, no one can predict the future with any degree
of certainty.
Regarding mergers and acquisitions (M&A), there are strong indications that the
record M&Aactivity of 2006 around the globe could continue into 2007. Last year
was the world's most active M&A environment ever, with $3.79 trillion in
announced deals worldwide, up 38 percent from 2005, according to Thomson
Financial. Private equity firms had a larger than ever role last year, taking
part in 20 percent of these deals, and it is estimated that these firms still
have some $750 billion in capital ready to go to work. Buyout firms also appear
more willing than most corporations to use debt financing, and the current good
health of credit markets may allow buyout firms to push the M&A boom further.
Regardless of the economic environment, however, the Trust continues to
repeatedly employ the investment philosophy that has served it well since its
inception: investing in companies which we believe have a strong business
proposition, solid cash flow and experienced, ethical management. This
philosophy, combined with Babson Capital's seasoned investment-management team
and the Trust's financial position, contribute to the Trust being well
positioned for future investment opportunities that meet its investment
objectives and policies. As always, I would like to thank you for your continued
interest in and support of MassMutual Corporate Investors.
Sincerely,
/S/ Clifford M. Noreen,
--------------------------
Clifford M. Noreen,
PRESIDENT
CAUTIONARY NOTICE: CERTAIN STATEMENTS CONTAINED IN THIS REPORT TO SHAREHOLDERS
MAY BE "FORWARD LOOKING" STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION ACT OF 1995. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE
PERFORMANCE AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE FORECASTED.
--------------------------------------------------------------------------------
2006 Record Net Investment Short-Term Tax Long-Term
Dividends Date Income Gains Effect Gains
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Regular 05/02/06 $0.4800 -- $0.0000
07/28/06 0.5000 -- --
10/30/06 0.5000 -- --
12/29/06 0.5000 -- --
Special 12/29/06 0.4860 $0.0140 --
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$2.4660 $0.0140 $2.4800 $0.0000
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The following table summarizes the tax effects of the retention of capital gains
for 2006:
Amount Per Share Form 2439
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2006 Gains Retained 1.9399 Line 1a
Long-Term Gains Retained 1.9399
Taxes Paid 0.6790 Line 2*
Basis Adjustment 1.2609 **
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*IF YOU ARE NOT SUBJECT TO FEDERAL CAPITAL GAINS TAX (E.G., CHARITABLE
ORGANIZATIONS, IRAS AND KEOGH PLANS), YOU MAY BE ABLE TO CLAIM A REFUND BY
FILING FORM 990-T.
**FOR FEDERAL INCOME TAX PURPOSES, YOU MAY INCREASE THE ADJUSTED COST BASIS OF
YOUR SHARES BY THIS AMOUNT (THE EXCESS OF LINE 1A OVER LINE 2).
Qualified for Dividend Interest Earned on
Annual Dividend Received Deduction*** Qualified Dividends**** U.S. Gov't. Obligations
Amount Per Share Percent Amount Per Share Percent Amount Per Share Percent Amount Per Share
---------------------------------------------------------------------------------------------------------
$2.48 14.9716% 0.3713 14.9703% 0.3713 0.0000% 0.0000
---------------------------------------------------------------------------------------------------------
***NOT AVAILABLE TO INDIVIDUAL SHAREHOLDERS
****QUALIFIED DIVIDENDS ARE REPORTED IN BOX 1B ON IRS FORM 1099-DIV FOR 2006
6
MassMutual Corporate Investors
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Consolidated Statement of Assets and Liabilities . . . . . . . . . . . . . 8
Consolidated Statement of Operations . . . . . . . . . . . . . . . . . . . 9
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . 10
Consolidated Statements of Changes in Net Assets . . . . . . . . . . . . . 11
Consolidated Selected Financial Highlights . . . . . . . . . . . . . . . . 12
Consolidated Schedule of Investments . . . . . . . . . . . . . . . . . . . 13-33
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . 34-37
Report of Independent Registered Public Accounting Firm. . . . . . . . . . 38
Interested Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39-40
Independent Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . 41-43
Officers of the Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
MassMutual Corporate Investors
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CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2006
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost - $184,641,225) $ 187,640,308
Corporate public securities at market value
(Cost - $ 79,333,836) 82,519,303
Short-term securities at amortized cost 7,188,341
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277,347,952
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Cash 5,184,468
Interest and dividends receivable 6,134,665
Receivable for investments sold 500,863
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TOTAL ASSETS $ 289,167,948
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LIABILITIES:
Dividend payable $ 9,149,919
Investment advisory fee payable 786,530
Note payable 20,000,000
Interest payable 188,856
Accrued expenses 165,977
Accrued taxes payable 7,187,020
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TOTAL LIABILITIES 37,478,302
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TOTAL NET ASSETS 251,689,646
=============
NET ASSETS:
Common shares, par value $1.00 per share; an unlimited
number authorized 9,149,919
Additional paid-in capital 108,209,270
Retained net realized gain on investments, prior years 115,317,244
Undistributed net investment income 1,798,902
Accumulated net realized gain on investments 11,680,778
Net unrealized appreciation of investments 5,533,533
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TOTAL NET ASSETS 251,689,646
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COMMON SHARES ISSUED AND OUTSTANDING 9,149,919
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NET ASSET VALUE PER SHARE $ 27.51
=============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
8
MassMutual Corporate Investors
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CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2006
INVESTMENT INCOME:
Interest $ 23,856,919
Dividends 1,589,829
Other 366,518
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TOTAL INVESTMENT INCOME 25,813,266
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EXPENSES:
Investment advisory fees 3,192,645
Interest 1,516,645
Professional fees 120,500
Trustees' fees and expenses 160,500
Reports to shareholders 111,000
Custodian fees 34,000
Transfer agent/registrar's expenses 32,000
Other 67,288
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TOTAL EXPENSES 5,234,578
-------------
Fees paid indirectly (see Footnote 2.F) (102,455)
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NET EXPENSES 5,132,123
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INVESTMENT INCOME - NET 20,681,143
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments before taxes 18,942,246
Income tax expense (6,640,555)
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Net realized gain on investments 12,301,691
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Net change in unrealized appreciation of investments 2,831,497
Net change in deferred income tax expense (375,445)
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Net change in unrealized appreciation of investments 2,456,052
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NET GAIN ON INVESTMENTS 14,757,743
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 35,438,886
=============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
9
MassMutual Corporate Investors
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2006
NET DECREASE IN CASH:
Cash flows from operating activities:
Interest, dividends, and other received $ 23,341,010
Interest expense paid (1,515,500)
Operating expenses paid (3,526,384)
Income taxes paid (7,401,446)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 10,897,680
-------------
Cash flows from investing activities:
Purchases/Proceeds/Maturities from short-term portfolio
securities, net 17,471,640
Purchases of portfolio securities (98,552,036)
Proceeds from disposition of portfolio securities 89,029,580
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NET CASH PROVIDED BY INVESTING ACTIVITIES 7,949,184
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NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES 18,846,864
=============
Cash flows from financing activities:
Cash dividends paid from net investment income (20,296,206)
Cash dividends paid from net realized gain on investments (1,446,640)
Receipts for shares issued on reinvestment of dividends 2,619,000
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NET CASH USED FOR FINANCING ACTIVITIES (19,123,846)
-------------
NET DECREASE IN CASH (276,982)
Cash - beginning of year 5,461,450
-------------
CASH - END OF YEAR $ 5,184,468
=============
RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET CASH
PROVIDED BY OPERATING AND INVESTING ACTIVITIES:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 35,438,886
-------------
Increase in investments (15,601,109)
Increase in interest and dividends receivable (1,111,949)
Decrease in receivable for investments sold 416,242
Decrease in other assets 49,175
Increase in investment advisory fee payable 48,169
Increase in interest payable 1,145
Decrease in accrued expenses (8,249)
Decrease in accrued taxes payable (385,446)
-------------
TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (16,592,022)
-------------
NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES $ 18,846,864
=============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
10
MassMutual Corporate Investors
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
2006 2005
-------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
Operations:
Investment income - net $ 20,681,143 $ 18,371,097
Net realized gain on investments 12,301,691 15,531,627
Net change in unrealized appreciation of
investments 2,456,052 2,199,515
------------ ------------
Net increase in net assets resulting from
operations 35,438,886 36,102,239
------------ ------------
Increase from common shares issued on reinvestment
of dividends Common shares issued
(2006 - 84,966; 2005 - 86,526) 2,619,000 2,375,977
Dividends to shareholders from:
Net investment income (2006 - $2.47 per share;
2005 - $2.11 per share) (22,518,167) (19,033,162)
Net realized gains on investments (2006 - $0.01;
2005 - $0.18 per share) (125,491) (1,674,784)
------------ ------------
TOTAL INCREASE IN NET ASSETS 15,414,228 17,770,270
------------ ------------
NET ASSETS, BEGINNING OF YEAR 236,275,418 218,505,148
------------ ------------
NET ASSETS, END OF YEAR (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF $1,798,902 AND $1,848,444,
RESPECTIVELY) $251,689,646 $236,275,418
============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
11
MassMutual Corporate Investors
--------------------------------------------------------------------------------
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding:
For the years ended December 31, 2006 2005 2004 2003 2002
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE: BEGINNING OF YEAR $ 26.06 $ 24.34 $ 21.84 $ 19.40 $ 20.07
---------- ---------- ---------- ---------- ----------
Net investment income(a) 2.27 2.03 2.00 1.44 1.53
Net realized and unrealized
gain (loss) on investments 1.62 1.96(b) 2.64 2.83 (0.59)
Total from investment operations 3.89 3.99 4.64 4.27 0.94
---------- ---------- ---------- ---------- ----------
Dividends from net investment
income to common shareholders (2.47) (2.11) (2.16) (1.84) (1.44)
Dividends from net realized gain
on investments to common shareholders (0.01) (0.18) -- -- (0.18)
Increase from dividends reinvested 0.04 0.02 0.02 0.01 0.01
Total dividends (2.44) (2.27) (2.14) (1.83) (1.61)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE: END OF YEAR $ 27.51 $ 26.06 $ 24.34 $ 21.84 $ 19.40
---------- ---------- ---------- ---------- ----------
PER SHARE MARKET VALUE: END OF YEAR $ 34.89 $ 30.05 $ 28.50 $ 22.90 $ 19.49
========== ========== ========== ========== ==========
Total investment return
Market value 29.04% 16.95% 36.10% 27.53% 1.35%
Net asset value(c) 18.09% 20.04% 22.76% 22.61% 4.80%
Net assets (in millions):
End of year $ 251.69 $ 236.28 $ 218.51 $ 193.79 $ 171.03
Ratio of operating expenses
to average net assets 1.43% 1.78% 1.93% 2.04% 1.82%
Ratio of interest expense
to average net assets 0.60% 0.73% 0.77% 0.82% 0.86%
Ratio of total expenses before custodian
reduction to average net assets 2.07% 2.52% 2.70% 2.86% 2.68%
Ratio of net expenses after custodian
reduction to average net assets 2.03% 2.51% 2.70% 2.86% 2.68%
Ratio of net investment income
to average net assets 8.19% 7.98% 8.68% 6.95% 7.65%
Portfolio turnover 34.70% 35.22% 53.45% 56.10% 34.02%
(a) CALCULATED USING AVERAGE SHARES.
(b) AMOUNT INCLUDES $0.19 PER SHARE IN LITIGATION PROCEEDS.
(c) NET ASSET VALUE RETURN REPRESENTS PORTFOLIO RETURNS BASED ON CHANGE IN THE TRUST'S NET ASSET VALUE
ASSUMING THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS WHICH DIFFERS FROM THE TOTAL INVESTMENT
RETURN BASED ON THE TRUST'S MARKET VALUE DUE TO THE DIFFERENCE BETWEEN THE TRUST'S NET ASSET VALUE
AND THE MARKET VALUE OF ITS SHARES OUTSTANDING; PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
Senior securities:
Total principal amount (in millions) $ 20 $ 20 $ 29 $ 20 $ 20
Asset coverage per $1,000 of indebtedness $ 13,584 $ 12,814 $ 8,535 $ 10,689 $ 9,551
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
12
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities - 74.55%:(A) Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
Private Placement Investments - 69.30%
A T I ACQUISITION COMPANY
A for-profit post-secondary school serving students in Texas, Florida and Arizona.
12% Senior Subordinated Note due 2012 $ 2,125,000 04/08/04 $ 2,125,000 $ 2,000,160
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 2,323 shs. 04/08/04 -- 23
Warrant, exercisable until 2012, to purchase
preferred stock at $.01 per share (B) 63,287 shs. 03/23/06 63,958 633
------------- -------------
2,188,958 2,000,816
------------- -------------
ADORN, INC.
A manufacturer of wall panels, cabinets, moldings and countertops for houses and recreational vehicles.
12.5% Subordinated Note due 2012 $ 1,465,517 02/29/00 1,386,570 1,465,517
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share 364 shs. 02/29/00 307,759 613,305
------------- -------------
1,694,329 2,078,822
------------- -------------
AMERCABLE, INC.
A manufacturer of electric power, instrumentation and control cables, primarily for the mining and oil and gas industries.
12% Senior Subordinated Note due 2013 $ 1,101,852 04/08/05 1,044,896 1,123,889
Limited Partnership Interest (B) 0.36% int. 04/07/05 78,704 165,270
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 125 shs. 04/08/05 122,463 262,206
------------- -------------
1,246,063 1,551,365
------------- -------------
AMERICAN HOSPICE MANAGEMENT HOLDING LLC
A for-profit hospice care provider in the United States.
12% Senior Subordinated Note due 2010 $ 2,125,000 01/22/04 1,944,555 2,163,099
Preferred Class AUnit (B) 3,223 uts. * 322,300 322,300
Common Class B Unit 30,420 uts. 01/22/04 1 34,606
Common Class D Unit (B) 6,980 uts. 09/12/06 1 7,940
------------- -------------
*01/22/04 AND 09/12/06. 2,266,857 2,527,945
------------- -------------
ARROW TRU-LINE HOLDINGS, INC.
A manufacturer of hardware for residential and commercial overhead garage doors in North America.
12% Senior Subordinated Note due 2012 $ 1,627,660 05/18/05 1,532,974 1,648,065
Common Stock (B) 497 shs. 05/18/05 497,340 507,003
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 130 shs. 05/18/05 112,128 132,913
------------- -------------
2,142,442 2,287,981
------------- -------------
AUGUSTA SPORTSWEAR HOLDING CO.
A manufacturer and distributor of athletic apparel, activewear and team uniforms.
12% Senior Subordinated Note due 2012 $ 1,686,800 12/31/04 1,586,441 1,742,912
Common Stock (B) 520 shs. ** 519,622 934,866
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 137 shs. 12/31/04 119,482 247,358
------------- -------------
**12/31/04, 03/31/05 AND 05/02/06. 2,225,545 2,925,136
------------- -------------
BETA BRANDS LTD.
A manufacturer of hard candy and chocolate-coated products sold primarily to the Canadian market.
5% Promissory Note due 2009 (B) $ 195,498 03/31/04 195,498 --
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 4,895 shs. 03/31/04 1 --
------------- -------------
195,499 --
------------- -------------
13
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
BRAVO SPORTS HOLDING CORPORATION
A designer and marketer of niche branded consumer products including canopies, trampolines, in-line skates,
skateboards, and urethane wheels.
12.5% Senior Subordinated Note due 2014 $ 2,281,593 06/30/06 $ 2,147,176 $ 2,222,666
Preferred Stock Class A(B) 879 shs. 06/30/06 268,121 254,713
Common Stock (B) 1 shs. 06/30/06 286 272
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 309 shs. 06/30/06 92,102 3
------------- -------------
2,507,685 2,477,654
------------- -------------
CAINS FOODS, L.P.
A producer of mayonnaise and sauce products for both the retail and food service markets.
Limited Partnership Interest 3.69% int. 09/29/95 45,046 127,333
------------- -------------
CAPESUCCESS LLC
A provider of diversified staffing services.
Preferred Membership Interests (B) 1,882 uts. 04/29/00 8,396 420
Common Membership Interests (B) 24,318 uts. 04/29/00 108,983 5,442
------------- -------------
117,379 5,862
------------- -------------
CAPITAL SPECIALTY PLASTICS, INC.
A producer of desiccant strips used for packaging pharmaceutical products.
Common Stock (B) 109 shs. * 503 55,408
------------- -------------
*12/30/97 AND 05/29/99
COEUR, INC.
A producer of proprietary, disposable power injection syringes.
8.75% Senior Secured Term Note due 2010 $ 462,862 04/30/03 462,862 470,645
11.5% Senior Subordinated Note due 2011 $ 424,819 04/30/03 397,498 428,961
Common Stock (B) 126,812 shs. 04/30/03 126,812 249,946
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 87,672 shs. 04/30/03 40,804 172,802
------------- -------------
1,027,976 1,322,354
------------- -------------
COINING CORPORATION OF AMERICA LLC
A manufacturer of close tolerance parts and metal stampings.
10.62% Senior Secured Revolving Credit Facility due 2007 (C) $ 43,210 01/07/02 43,210 43,037
10.62% Senior Secured Tranche ANote due 2007 (C) $ 708,875 06/26/01 705,875 700,749
13% Senior Secured Tranche B Note due 2008 $ 648,148 06/26/01 648,148 653,605
Limited Partnership Interest (B) 6.38% int. 06/26/01 324,074 1,647,916
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 107,036 shs. 06/26/01 79,398 544,277
------------- -------------
1,800,705 3,589,584
------------- -------------
CONNOR SPORT COURT INTERNATIONAL, INC.
A designer and manufacturer of outdoor and indoor synthetic sports flooring and other temporary flooring products.
12% Senior Subordinated Note due 2012 (D) $ 2,001,121 ** 1,840,888 1,801,009
Limited Partnership Interest (B) 7.74% int. *** 189,586 1,896
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 174 shs. ** 160,233 2
------------- -------------
**08/12/04 AND 01/18/05. ***08/12/04 AND 01/14/05. 2,190,707 1,802,907
------------- -------------
14
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED FOUNDRIES HOLDINGS
A manufacturer of engineered cast metal components for the global aerospace and defense industries.
12% Senior Subordinated Note due 2013 $ 2,185,714 06/15/05 $ 2,097,458 $ 2,204,129
Common Stock (B) 509 shs. * 526,096 457,839
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 103 shs. 06/15/05 100,668 1
------------- -------------
*06/15/05 AND 05/22/06. 2,724,222 2,661,969
------------- -------------
COREPHARMA LLC
A manufacturer of oral dose generic pharmaceuticals targeted at niche applications.
12% Senior Subordinated Note due 2013 $ 2,550,000 08/04/05 2,426,483 2,575,500
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 20 shs. 08/04/05 137,166 67,691
------------- -------------
2,563,649 2,643,191
------------- -------------
DAVIS-STANDARD LLC
A manufacturer, assembler, and installer of a broad range of capital equipment that is used in the extrusion, conversion, and
processing of plastic materials.
12% Senior Subordinated Note due 2014 $ 1,847,826 10/30/06 1,727,952 1,819,535
Limited Partnership Interest (B) 702,174 uts. 10/30/06 702,174 667,065
Warrant, exercisable until 2014, to purchase
preferred stock at $.01 per share (B) 50 shs. 10/30/06 49,830 1
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 34 shs. 10/30/06 34,000 --
------------- -------------
2,513,956 2,486,601
------------- -------------
DEXTER MAGNETICS TECHNOLOGIES, INC.
A designer, fabricator, assembler and distributor of industrial magnets and subassemblies in North America and Europe.
Common Stock 585 shs. 07/19/01 351,088 805,529
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share 297 shs. 07/19/01 131,981 408,278
------------- -------------
483,069 1,213,807
------------- -------------
DIRECTED ELECTRONICS, INC.
A designer and distributor of brand name automotive security systems, audio products and installation accessories.
Common Stock (B) 368,560 shs. ** 1,856,534 3,945,729
Limited Partnership Interest (B) 8.70% int. *** -- 355,422
------------- -------------
**12/19/05 AND 06/14/06. ***12/22/99 AND 09/14/05. 1,856,534 4,301,151
------------- -------------
DIVERSCO, INC./DHI HOLDINGS, INC.
Acontract provider of janitorial and equipment maintenance services and temporary production labor to industrial customers.
Membership Interests of MM/Lincap
Diversco Investments Ltd. LLC (B) 27.19% int. 08/27/98 734,090 --
Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 1,392,069
Warrants, exercisable until 2011, to purchase common
stock of DHI Holdings, Inc. at $.01 per share (B) 13,352 shs. **** 403,427 --
------------- -------------
****10/24/96 AND 8/28/98. 3,921,650 1,392,069
------------- -------------
15
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
DUNCAN SYSTEMS, INC.
A distributor of windshields and side glass for the recreational vehicle market.
10% Senior Secured Term Note due 2013 $ 540,000 11/01/06 $ 531,900 $ 529,813
13% Senior Subordinated Note due 2014 $ 855,000 11/01/06 760,793 836,624
Common Stock (B) 180,000 shs. 11/01/06 180,000 171,000
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 56,514 shs. 11/01/06 78,160 565
------------- -------------
1,550,853 1,538,002
------------- -------------
DWYER GROUP, INC.
A franchiser of a variety of home repair services.
Common Stock (B) 6,906 shs. * 690,600 718,224
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 211,493
------------- -------------
*10/30/03 AND 01/02/04. 877,069 929,717
------------- -------------
E X C ACQUISITION CORPORATION
A manufacturer of pre-filled syringes and pump systems used for intravenous drug delivery.
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 22 shs. 06/28/04 77,208 137,269
------------- -------------
EAGLE PACK PET FOODS, INC.
A manufacturer of premium pet food sold through independent pet stores
12% Senior Subordinated Note due 2011 $ 1,517,857 ** 1,479,282 1,533,036
Warrant, exercisable until 2011, to purchase
common stock at $.02 per share (B) 4,085 shs. 09/24/04 39,464 85,501
------------- -------------
**09/24/04 AND 04/20/06. 1,518,746 1,618,537
------------- -------------
ENZYMATIC THERAPY, INC.
A manufacturer and distributor of branded natural medicines and nutritional supplements.
Limited Partnership Interest (B) 1.32% int. 03/30/00 531,250 63,750
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 29,117 shs. 03/30/00 255,000 42,500
------------- -------------
786,250 106,250
------------- -------------
EVANS CONSOLES, INC
Adesigner and manufacturer of consoles and control center systems
Common Stock (B) 90,000 shs. 05/06/04 6 --
------------- -------------
F H S HOLDINGS LLC
Anational provider of customized disease management services to large self-insured employers.
12% Senior Subordinated Note due 2014 $ 2,390,625 06/01/06 2,225,916 2,427,406
Preferred Unit (B) 158 uts. 06/01/06 157,780 142,002
Common Unit (B) 1,594 uts. 06/01/06 1,594 1,434
Common Unit Class B (B) 1,386 uts. 06/01/06 122,361 110,125
------------- -------------
2,507,651 2,680,967
------------- -------------
FLUTES, INC.
An independent manufacturer of micro fluted corrugated sheet material for the food and consumer products packaging industries.
10% Senior Secured Term Note due 2013 $ 918,385 04/13/06 904,609 924,733
14% Senior Subordinated Note due 2014 $ 552,298 04/13/06 495,198 556,776
Common Stock (B) 109,436 shs. 04/13/06 109,436 98,492
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 30,940 shs. 04/13/06 48,433 309
------------- -------------
1,557,676 1,580,310
------------- -------------
16
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
FOWLER HOLDING, INC.
A provider of site development services to residential homebuilders and developers in the
Raleigh/Durham region of North Carolina.
12% Senior Subordinated Note due 2013 $ 2,365,217 02/03/06 $ 2,137,986 $ 2,334,405
Common Stock (B) 185 shs. 02/03/06 184,783 166,302
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 254 shs. 02/03/06 208,435 3
------------- -------------
2,531,204 2,500,710
------------- -------------
FUEL SYSTEMS HOLDING CORPORATION
An independent North American supplier of fuel tanks for a wide variety of commercial vehicles.
12% Senior Subordinated Note due 2014 $ 2,337,500 01/31/06 2,179,453 2,376,266
Common Stock (B) 212,500 shs. 01/31/06 212,500 191,250
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 138,408 shs. 01/31/06 119,213 1,384
------------- -------------
2,511,166 2,568,900
------------- -------------
H M HOLDING COMPANY
A designer, manufacturer, and importer of promotional and wood furniture.
12% Senior Subordinated Note due 2013 $ 2,210,000 02/10/06 2,055,940 2,141,553
Common Stock (B) 340 shs. 02/10/06 340,000 272,000
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 126 shs. 02/10/06 116,875 1
------------- -------------
2,512,815 2,413,554
------------- -------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in manufacturing and marketing entities.
Series APreferred Units (B) 1.19% int. 07/21/94 367,440 --
HOME DECOR HOLDING COMPANY
A designer, manufacturer and marketer of framed art and wall decor products.
12.5% Senior Subordinated Note due 2012 $ 2,043,269 * 1,877,016 2,087,674
Common Stock (B) 63 shs. * 62,742 83,796
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 200 shs. * 199,501 266,452
------------- -------------
*06/30/04 AND 08/19/04. 2,139,259 2,437,922
------------- -------------
INTEGRATION TECHNOLOGY SYSTEMS, INC.
A manufacturer of steel protective computer and network systems for the industrial and office environments.
12% Senior Secured Note due 2007 $ 1,644,444 03/01/04 1,646,101 1,248,333
Common Stock (B) 228 shs. 06/01/00 262,200 --
------------- -------------
1,908,301 1,248,333
------------- -------------
ITC^DELTACOM, INC
A provider of integrated communications services in the southeastern United States.
13.88% Senior Secured Note due 2009 (C) $ 2,237,971 07/26/05 2,193,583 2,243,315
17.38% Senior Secured Note due 2009 (C) $ 363,203 07/26/05 320,146 363,045
Warrant, exercisable until 2009, to purchase
convertible preferred stock at $.01 per share (B) 102,884 shs. 07/26/05 34,295 261,325
------------- -------------
2,548,024 2,867,685
------------- -------------
17
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
JASON, INC.
A diversified manufacturing company serving various industrial markets.
13% Senior Subordinated Note due 2008 $ 963,687 08/04/00 $ 924,180 $ 954,050
14% Cumulative Redeemable Preferred Stock Series A(B) 289 shs. 08/04/00 289,224 280,542
Limited Partnership Interest of
Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,352 709,205
Warrants, exercisable until 2008 and 2009, to purchase
common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 40,694
------------- -------------
2,215,168 1,984,491
------------- -------------
JUSTRITE MANUFACTURING AQUISITION CO.
A manufacturer of safety products such as storage cabinets and containers.
12% Senior Subordinated Note due 2011 $ 1,593,750 12/15/04 1,511,856 1,609,688
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 78,644
------------- -------------
1,612,965 1,688,332
------------- -------------
K N B HOLDINGS CORPORATION
A designer, manufacturer and marketer of products for the custom framing market.
13.5% Senior Subordinated Note due 2013 $ 2,428,486 05/25/06 2,312,312 2,422,376
Common Stock (B) 134,210 shs. 05/25/06 134,210 120,789
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 82,357 shs. 05/25/06 71,534 824
------------- -------------
2,518,056 2,543,989
------------- -------------
KEEPSAKE QUILTING, INC.
A seller of quilting fabrics, books, patterns, kits and notions to consumers.
8.87% Senior Secured Revolving Note due 2007 (C) $ 110,078 06/16/00 110,078 110,538
8.87% Senior Secured Tranche ANote due 2007 (C) $ 137,598 07/19/00 137,598 136,988
12% Senior Secured Tranche B Note due 2008 $ 550,392 06/16/00 538,262 553,917
Limited Partnership Interest of
Riverside XVI Holding Company, L.P. (B) 5.29% int. 06/12/00 333,490 323,193
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 1,108 shs. 06/12/00 45,866 108,344
------------- -------------
1,165,294 1,232,980
------------- -------------
KELE AND ASSOCIATES, INC.
A distributor of building automation control products.
12% Senior Subordinated Note due 2012 $ 1,831,548 02/27/04 1,696,059 1,886,494
Preferred Stock (B) 23 shs. 11/24/04 449,164 456,950
Common Stock (B) 12 shs. 02/27/04 12,871 236,719
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 11 shs. 02/27/04 7,793 216,668
------------- -------------
2,165,887 2,796,831
------------- -------------
KEYSTONE NORTH AMERICA, INC.
An operator of funeral homes in North America.
Common Stock 49,216 shs. 02/08/05 236,709 251,592
------------- -------------
18
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
LIH INVESTORS, L.P.
A manufacturer and marketer of a broad line of external accessories for new and used sport utility vehicles, trucks and vans.
12.5% Senior Subordinated Note due 2008 $ 3,845,000 * $ 3,613,269 $ 3,268,250
Common Stock (B) 5,800 shs. * 406,003 6,380
Warrant, exercisable until 2008, to purchase
common stock at $.11 per share (B) 15,572 shs. * 602,127 --
------------- -------------
*12/23/98 AND 01/28/99. 4,621,399 3,274,630
------------- -------------
MAGNATECH INTERNATIONAL, INC.
A supplier of process equipment and related parts used in the manufacturing of medium and high-pressure reinforced hoses.
12% Senior Subordinated Note due 2014 $ 1,275,000 04/05/06 1,187,208 1,286,593
13% Preferred Stock (B) 565 shs. 04/05/06 565,335 537,064
Common Stock (B) 125 shs. 04/05/06 125,048 118,798
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 13 shs. 04/05/06 12,905 --
------------- -------------
1,890,496 1,942,455
------------- -------------
MAVERICK ACQUISITION COMPANY
A manufacturer of capsules that cover the cork and neck of wine bottles.
9.87% Senior Secured Tranche ANote due 2010 (C) $ 667,169 09/03/04 667,169 670,380
12% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 282,702 315,106
Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 53,764
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 38,846
------------- -------------
1,048,113 1,078,096
------------- -------------
MAXON CORPORATION
A manufacturer of industrial combustion equipment and related shut-off valves and control valves.
12% Senior Subordinated Note due 2012 $ 962,215 09/30/04 888,798 990,656
8.75% Senior Subordinated Note due 2012 $ 1,155,562 09/30/04 1,155,562 1,191,468
Common Stock (B) 381,672 shs. 09/30/04 381,672 841,587
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 153,572 shs. 09/30/04 90,897 338,625
------------- -------------
2,516,929 3,362,336
------------- -------------
MEDASSIST, INC.
A provider of patient eligibility and accounts receivable management services to hospitals and physician practices.
8% Preferred Stock (B) 84 shs. 10/28/04 83,658 84,333
Common Stock (B) 26,185 shs. 10/28/04 35,088 82,039
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 88,948 shs. 05/01/03 40,675 278,681
------------- -------------
159,421 445,053
------------- -------------
MICROGROUP, INC.
A manufacturer of precision parts and assemblies, and a value-added supplier of metal tubing and bars.
12% Senior Subordinated Note due 2013 $ 2,685,614 ** 2,526,500 2,734,970
Common Stock (B) 450 shs. ** 450,000 823,752
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 164 shs. ** 162,974 300,175
------------- -------------
**08/12/05 AND 09/11/06. 3,139,474 3,858,897
------------- -------------
19
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
MOMENTUM HOLDING CO.
A designer and supplier of upholstery fabric to commercial furniture manufacturers and architectural and design firms.
12% Senior Subordinated Note due 2014 $ 1,168,847 08/04/06 $ 1,041,236 $ 1,183,845
Limited Partnership Interest (B) 106,153 uts. 08/04/06 106,153 95,538
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 1,107 shs. 08/04/06 107,109 11
------------- -------------
1,254,498 1,279,394
------------- -------------
MONESSEN HOLDING CORPORATION
A designer and manufacturer of a broad line of gas, wood, and electric hearth products and accessories.
12% Senior Subordinated Note due 2014 $ 2,550,000 03/31/06 2,368,020 2,425,560
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 152 shs. 03/31/06 138,125 2
------------- -------------
2,506,145 2,425,562
------------- -------------
MORTON INDUSTRIAL GROUP, INC.
A manufacturer of highly engineered metal fabricated components
12% Senior Subordinated Note due 2014 $ 2,440,909 08/25/06 2,245,474 2,481,293
Common Stock (B) 109,091 shs. 08/25/06 109,091 98,182
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 173,633 shs. 08/25/06 149,940 1,736
------------- -------------
2,504,505 2,581,211
------------- -------------
MOSS, INC.
A manufacturer and distributor of large display and exhibit structures.
9.37% Senior Secured Revolving Note due 2010 (C) $ 926,471 07/03/06 917,206 931,379
9.37% Senior Secured Tranche ANote due 2010 (C) $ 164,706 12/21/05 164,706 166,116
12% Senior Secured Tranche B Note due 2010 $ 350,000 12/21/05 309,853 354,499
Limited Partnership Interest of
Riverside Capital Appreciation Fund I, L.P. (B) 33.59% int. * 49 120,296
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 214 shs. 12/21/05 36,647 20,918
------------- -------------
*09/20/00 AND 05/23/02. 1,428,461 1,593,208
------------- -------------
NABCO, INC.
A producer of explosive containment vessels in the United States.
12% Senior Subordinated Note due 2014 $ 625,000 02/24/06 577,566 611,356
Limited Partnership Interest (B) 650 uts. 02/24/06 650,000 617,500
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 48 shs. 02/24/06 37,188 --
------------- -------------
1,264,754 1,228,856
------------- -------------
NEFF MOTIVATION, INC
A manufacturer and distributor of customized awards and sportswear to schools.
12.5% Senior Subordinated Note due 2011 $ 1,062,500 01/31/03 940,500 1,083,750
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 212 shs. 01/31/03 180,625 301,952
------------- -------------
1,121,125 1,385,702
------------- -------------
20
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
NONNI'S FOOD COMPANY
A producer and distributor of premium biscotti and bagel chips in North America.
12.25% Senior Subordinated Note due 2012 $ 1,863,462 03/29/04 $ 1,856,139 $ 1,875,738
10% Preferred Stock (B) 255 shs. 03/29/04 255,083 256,310
Common Stock (B) 6,455 shs. 03/29/04 6,455 71,864
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 8,622 shs. 03/29/04 7,323 95,990
------------- -------------
2,125,000 2,299,902
------------- -------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the automotive industry.
9% Senior Secured Note due 2009 $ 812,500 01/28/02 812,500 771,875
11.5% Senior Subordinated Note due 2012 $ 1,500,000 01/28/02 1,397,375 750,000
Common Stock (B) 312,500 shs. 01/28/02 312,500 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 243,223 shs. 01/28/02 162,045 --
2,684,420 1,521,875
O R S NASCO HOLDING, INC.
A wholesale distributor of industrial supplies in North America.
13% Senior Subordinated Note due 2013 $ 2,372,732 12/20/05 2,233,455 2,420,187
Common Stock (B) 177,268 shs. 12/20/05 177,268 159,541
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 99,771 shs. 12/20/05 98,773 998
------------- -------------
2,509,496 2,580,726
------------- -------------
OAKRIVER TECHNOLOGY, INC.
Designs, engineers and assembles high precision automated process equipment for the medical device industry,
with a focus on defibrillators and stents.
10% Senior Secured Note due 2012 $ 565,452 01/03/06 556,970 562,843
13% Senior Subordinated Note due 2013 $ 687,241 01/03/06 615,444 684,292
Common Stock (B) 322,307 shs. 01/03/06 322,307 290,076
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 72,185 shs. 01/03/06 62,824 754
------------- -------------
1,557,545 1,537,965
------------- -------------
OLYMPIC SALES, INC.
A boat retailer in Washington state, Oregon, California and British Columbia.
12% Senior Subordinated Note due 2008 $ 1,606,000 08/07/98 1,606,000 1,553,112
12% Senior Subordinated Note due 2008 $ 307,071 02/09/00 301,800 302,988
Limited Partnership Interest of Riverside VIII,
VIII-A and VIII-B Holding Company, L.P. 20.57% int. * 1,555,992 1,555,626
Warrants, exercisable until 2007 and 2008, to purchase
common stock at $.01 per share (B) 28,648 shs. ** 389,188 385,720
------------- -------------
*08/07/98, 02/23/99, 12/22/99 AND 02/25/03. **08/07/98 AND 02/09/00. 3,852,980 3,797,446
------------- -------------
ONTARIO DRIVE & GEAR LTD.
Amanufacturer of all-wheel drive, off-road amphibious vehicles and related accessories.
13% Senior Subordinated Note due 2013 $ 1,977,885 01/17/06 1,783,889 1,987,098
Limited Partnership Interest (B) 3,667 uts. 01/17/06 572,115 514,903
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 619 shs. 01/17/06 170,801 6
------------- -------------
2,526,805 2,502,007
------------- -------------
21
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
OVERTON'S HOLDING COMPANY
A marketer of marine and water sports accessories in the United States.
12% Senior Subordinated Note due 2014 $ 1,817,308 04/28/06 $ 1,701,543 $ 1,823,373
Common Stock (B) 95 shs. 04/28/06 95,000 85,500
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 94 shs. 04/28/06 83,720 1
------------- -------------
1,880,263 1,908,874
------------- -------------
P A S HOLDCO LLC
An independent provider of maintenance, repair and overhaul services to the aerospace gas turbine engine and airframe markets.
14% Senior Subordinated Note due 2014 $ 2,178,325 07/03/06 2,068,313 2,176,341
Preferred Unit (B) 382 uts. 07/03/06 382,150 363,043
Preferred Unit (B) 69 uts. 07/03/06 68,790 65,351
Common Unit Class I (B) 148 uts. 07/03/06 -- 1
Common Unit Class L (B) 31 uts. 07/03/06 -- --
------------- -------------
2,519,253 2,604,736
------------- -------------
P I I HOLDING CORPORATION
A manufacturer of plastic film and bags for the general industrial, medical, and food industries.
12% Senior Subordinated Note due 2013 $ 2,295,000 03/31/06 2,145,829 2,296,982
Preferred Stock (B) 36 shs. 03/31/06 329,596 313,116
Common Stock (B) 23 shs. 03/31/06 25,500 22,950
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 13 shs. 03/31/06 11,122 --
------------- -------------
2,512,047 2,633,048
------------- -------------
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 2,028,432 2,108,091
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 280,043
------------- -------------
2,294,057 2,388,134
------------- -------------
POSTLE ALUMINUM COMPANY LLC
A manufacturer and distributor of aluminum extruded products.
12% Senior Subordinated Note due 2014 $ 2,040,000 10/02/06 1,886,907 2,029,919
Limited Partnership Interest (B) 1384 uts. 10/02/06 510,000 484,501
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 344 shs. 10/02/06 124,644 3
------------- -------------
2,521,551 2,514,423
------------- -------------
PROTEIN GENETICS, INC.
A producer of bovine artificial insemination products, related breeding and healthcare products and specialty genetics
sold to the dairy and beef industries.
9.8% Redeemable Exchangeable Preferred Stock (B) 1,004 shs. 08/12/94 100,350 --
Common Stock (B) 2,600 shs. * 126,866 --
------------- -------------
*11/14/01 AND 08/12/94 227,216 --
------------- -------------
QUALIS AUTOMOTIVE LLC
A distributor of aftermarket automotive brake and chassis products.
12% Senior Subordinated Note due 2012 $ 1,770,833 05/28/04 1,483,249 1,790,258
Common Stock 354,167 shs. 05/28/04 354,166 408,000
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share 377,719 shs. 05/28/04 377,719 435,132
------------- -------------
2,215,134 2,633,390
------------- -------------
22
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
QUALSERV CORPORATION
A provider of foodservice equipment and supplies to major restaurant chains and their franchisees.
14% Senior Subordinated Note due 2012 (D) $ 1,893,563 07/09/04 $ 1,844,035 $ --
Limited Partnership Interest (B) 9.26% int. 07/09/04 259,146 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 528 shs. 07/09/04 49,061 --
------------- -------------
2,152,242 --
------------- -------------
R A J MANUFACTURING HOLDINGS LLC
A designer and manufacturer of women's swimwear sold under a variety of licensed brand names.
12.5% Senior Subordinated Note due 2014 $ 2,267,190 12/15/06 2,090,363 2,220,661
Limited Partnership Interest (B) 2,828 uts. 12/15/06 282,810 268,670
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3 shs. 12/15/06 131,483 --
------------- -------------
2,504,656 2,489,331
------------- -------------
RADIAC ABRASIVES, INC.
A manufacturer of bonded abrasive and super abrasive grinding wheels in the United States.
12% Senior Subordinated Note due 2014 $ 2,260,638 02/10/06 2,104,998 2,302,552
Common Stock (B) 289,362 shs 02/10/06 289,362 260,426
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 131,555 shs. 02/10/06 119,796 1,316
------------- -------------
2,514,156 2,564,294
------------- -------------
RIVER RANCH FRESH FOODS LLC
A supplier of fresh produce to the retail and foodservice channels.
13% Senior Subordinated Note due 2011 (D) $ 1,841,667 09/29/04 1,683,764 1,473,334
Limited Partnership Interest (B) 40,610 uts. 09/29/04 283,333 --
18% Prefered Stock (B) 141,667 shs. 11/16/06 141,667 141,667
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 23,575 shs. 09/29/04 157,903 --
------------- -------------
2,266,667 1,615,001
------------- -------------
ROYAL BATHS MANUFACTURING COMPANY
A manufacturer and distributor of acrylic and cultured marble bathroom products.
12.5% Senior Subordinated Notes due 2011 $ 1,062,500 11/14/03 972,277 1,083,750
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 175,389
------------- -------------
1,095,223 1,259,139
------------- -------------
SAFETY SPEED CUT MANUFACTURING COMPANY, INC
A manufacturer of vertical panel saws and routers for the wood working industry.
8.87% Senior Secured Tranche ANote due 2007 (C) $ 282,663 06/02/99 282,663 282,663
12% Senior Secured Tranche B Note Due 2007 $ 1,130,652 06/02/99 1,130,652 1,130,652
Class B Common Stock (B) 1,480 shs. 06/02/99 256,212 1,054,544
------------- -------------
1,669,527 2,467,859
------------- -------------
SAVAGE SPORTS HOLDING, INC.
A manufacturer of sporting firearms
12% Senior Subordinated Note due 2012 $ 1,538,793 09/10/04 1,445,281 1,551,306
Common Stock (B) 586 shs. 09/10/04 586,207 469,094
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 106,925
------------- -------------
2,145,066 2,127,325
------------- -------------
23
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
SPECIALTY FOODS GROUP, INC.
A manufacturer and distributor of branded meat products.
Limited Partnership Interest of MHD Holdings LLC 1.43% int. 08/29/00 $ 684,724 $ --
------------- -------------
STANTON CARPET HOLDING CO.
A designer and marketer of high and mid-priced decorative carpets and rugs.
12.13% Senior Subordinated Note due 2014 $ 2,239,024 08/01/06 2,103,216 2,247,169
Common Stock (B) 311 shs. 08/01/06 310,976 279,882
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 104 shs. 08/01/06 93,293 1
------------- -------------
2,507,485 2,527,052
------------- -------------
STRATEGIC EQUIPMENT & SUPPLY CORPORATION, INC.
A provider of kitchen and restaurant design, equipment fabrication and installation services.
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 106,539 shs. 01/14/00 658,751 --
------------- -------------
SYNVENTIVE EQUITY LLC
A manufacturer of hot runner systems used in the plastic injection molding process.
Limited Partnership Interest (B) 1.99% int. 08/20/03 63,206 14,100
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 86,780 shs. 08/21/03 19,359 19,359
------------- -------------
82,565 33,459
------------- -------------
TANGENT RAIL CORPORATION
A manufacturer of rail ties and provides specialty services to the North American railroad industry.
13% Senior Subordinated Note due 2013 $ 2,217,385 10/14/05 1,905,672 2,261,733
Preferred Stock 1,324 shs. 10/14/05 132,370 136,480
Common Stock (B) 2,203 shs. 10/14/05 2,203 1,983
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 1,167 shs. 10/14/05 294,403 12
------------- -------------
2,334,648 2,400,208
------------- -------------
TERRA RENEWAL SERVICES, INC.
A provider of wastewater residual management and required environmental reporting, permitting, nutrient management planning and
record keeping to companies involved in poultry and food processing.
8.64% Senior Secured Tranche B Note due 2012 (C) $ 1,597,149 04/28/06 1,592,000 1,580,858
12% Senior Subordinated Note due 2014 $ 1,162,110 * 1,106,179 1,166,511
Limited Partnership Interest of
Saw Mill Capital Fund V, L.P. 2.30% int. 03/01/05 215,742 194,173
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 72 shs. 04/28/06 60,597 1
------------- -------------
*04/28/06 AND 09/13/06. 2,974,518 2,941,543
------------- -------------
THE TRANZONIC COMPANIES
Aproducer of commercial and industrial supplies, such as safety products, janitorial supplies, work apparel, washroom and restroom
supplies and sanitary care products.
13% Senior Subordinated Note due 2009 $ 2,712,000 02/05/98 2,570,733 2,712,000
Common Stock (B) 630 shs. 02/04/98 630,000 442,260
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 311,688
------------- -------------
3,569,565 3,465,948
------------- -------------
24
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
TRANSTAR HOLDING COMPANY
A distributor of aftermarket automotive transmission parts.
12% Senior Subordinated Note due 2013 $ 1,734,000 08/31/05 $ 1,663,468 $ 1,784,082
Common Stock (B) 816 shs. 08/31/05 816,000 775,200
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 86 shs. 08/31/05 77,485 1
------------- -------------
2,556,953 2,559,283
------------- -------------
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 $ 789,836 01/20/00 789,836 793,040
12% Senior Subordinated Note due 2010 $ 1,326,500 01/20/00 1,287,457 1,352,788
Common Stock (B) 227,400 shs. 01/20/00 227,400 577,141
Warrant, exercisable until 2010, to purchase
common stock at $1 per share (B) 260,563 shs. 01/20/00 98,540 661,309
------------- -------------
2,403,233 3,384,278
------------- -------------
TRUCK BODIES & EQUIPMENT INTERNATIONAL
A designer and manufacturer of accessories for heavy and medium duty trucks, primarily dump bodies, hoists, various forms
of flat-bed bodies, landscape bodies and other accessories.
12% Senior Subordinated Note due 2013 $ 2,309,541 * 2,156,900 2,392,246
Common Stock (B) 742 shs. * 800,860 1,825,935
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 153 shs. * 159,894 377,121
------------- -------------
*07/19/05 AND 12/22/05. 3,117,654 4,595,302
------------- -------------
TRUSTILE DOORS, INC.
A manufacturer and distributor of interior doors.
12.5% Senior Subordinated Note due 2010 $ 1,062,500 04/11/03 1,006,070 1,083,569
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 5,781 shs. 04/11/03 95,625 197,707
------------- -------------
1,101,695 1,281,276
------------- -------------
TUBULAR TEXTILE MACHINERY
A designer, manufacturer, seller and servicer of finishing machinery for the knit and woven segments of the global textile industry.
12% Senior Subordinated Note due 2014 $ 1,234,551 05/28/04 1,126,620 1,224,761
8.75% Senior Secured Note due 2011 $ 716,292 05/28/04 716,292 715,660
Common Stock (B) 674,157 shs. 05/28/04 674,157 573,033
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 203,912 shs. 05/28/04 130,789 2,039
------------- -------------
2,647,858 2,515,493
------------- -------------
U S S HOLDINGS, INC.
A producer of high grade industrial and specialty silica sands.
14% Redeemable Preferred Stock (B) 997 shs. 09/30/99 545,858 933,236
Convertible Preferred Stock Series Aand B, convertible
into common stock at $8.02 per share (B) 145,446 shs. 12/19/96 1,166,829 --
Common Stock (B) 20,027 shs. 09/30/99 799,068 --
Warrants, exercisable until 2010 to
purchase common stock at $.01 per share (B) 4,918 shs. ** 128,372 --
------------- -------------
**12/19/96 AND 9/30/99. 2,640,127 933,236
------------- -------------
25
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares, Units,
Warrants,
Ownership or Acquisition
Corporate Restricted Securities:(A) continued Principal Amount Date Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
U-LINE CORPORATION
A manufacturer of high-end, built-in, undercounter ice making, wine storage and refrigeration appliances.
12.5% Senior Subordinated Note due 2012 $ 1,882,100 04/30/04 $ 1,714,264 $ 1,882,100
Common Stock (B) 182 shs. 04/30/04 182,200 273,847
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 230 shs. 04/30/04 211,736 346,321
------------- -------------
2,108,200 2,502,268
------------- -------------
VICTORY VENTURES LLC
An acquirer of controlling or substantial interests in other entities
Series APreferred Units (B) 0.15% int. 12/02/96 1 --
VITALITY FOODSERVICE, INC.
A non-carbonated beverage dispensing company focused on the foodservice industry.
13% Senior Subordinated Note due 2011 $ 1,887,288 09/24/04 1,740,960 1,698,559
Common Stock (B) 26,456 shs. * 264,558 211,648
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 23,787 shs. 09/24/04 186,883 190,296
------------- -------------
*09/24/04 AND 12/22/06. 2,192,401 2,100,503
------------- -------------
VITEX PACKAGING GROUP, INC
A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags.
12.5% Senior Subordinated Note due 2012 $ 1,700,000 07/19/04 1,483,065 1,559,750
Limited Partnership Interest Class A(B) 1.75% int. 07/19/04 414,375 352,219
Limited Partnership Interest Class B (B) 0.77% int. 07/19/04 182,935 155,495
------------- -------------
2,080,375 2,067,464
------------- -------------
WALLS INDUSTRIES, INC.
A provider of branded workwear and sporting goods apparel.
12.36% Senior Subordinated Lien Note due 2009 (C) $ 838,816 07/12/04 838,815 839,990
14% Senior Subordinated Note due 2012 $ 1,085,380 07/12/04 1,082,866 1,107,088
Limited Partnership Interest (B) 0.40% int. 07/12/04 37,281 737,469
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 4,029 shs. 07/12/04 2,833 79,696
------------- -------------
1,961,795 2,764,243
------------- -------------
WELLBORN FOREST HOLDING CO.
A manufacturer of semi-custom kitchen and bath cabinetry.
12.13% Senior Subordinated Note due 2014 $ 1,721,250 11/30/06 1,600,400 1,684,415
Common Stock (B) 191 shs. 11/30/06 191,250 181,688
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 95 shs. 11/30/06 86,493 1
------------- -------------
1,878,143 1,866,104
------------- -------------
TOTAL PRIVATE PLACEMENT INVESTMENTS $ 171,749,836 $ 174,416,861
------------- -------------
26
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares or
Interest Due Principal
Corporate Restricted Securities:(A) (Continued) Rate Date Amount Cost Fair Value
---------------------------------------------------------------------------------------------------------------------------------
Rule 144A Securities - 5.25%: (A)
BONDS - 5.25%
A E S Corporation 9.000% 05/15/15 $ 200,000 $ 200,000 $ 215,000
Activant Solutions, Inc. (C) 9.500 05/01/16 150,000 150,000 139,500
American Tire Distributor (C) 11.622 04/01/12 1,000,000 950,000 955,000
Bombardier, Inc. 6.300 05/01/14 1,000,000 890,000 940,000
Calpine Corporation 8.750 07/15/13 500,000 465,000 536,250
Charter Communications Op LLC 8.000 04/30/12 250,000 249,375 259,688
Douglas Dynamics LLC 7.750 01/15/12 630,000 633,274 592,200
G F S I, Inc. (C) 11.500 06/01/11 750,000 682,541 735,000
H C A, Inc. 9.250 11/15/16 975,000 992,364 1,044,469
Idearc, Inc. 8.000 11/15/16 600,000 600,000 609,000
Opti Canada, Inc. 8.250 12/15/14 400,000 400,000 411,000
Packaging Dynamics Corporation of America 10.000 05/01/16 1,250,000 1,256,813 1,250,000
Pregis Corporation 12.375 10/15/13 1,000,000 981,490 1,082,500
Rental Service Corporation 9.500 12/01/14 1,000,000 1,014,374 1,032,500
Stewart & Stevenson LLC 10.000 07/15/14 1,200,000 1,225,170 1,260,000
Tekni-Plex, Inc. (C) 9.750 11/15/13 650,000 655,756 628,875
Tenaska Alabama Partners LP 7.000 06/30/21 348,916 348,916 346,527
Titan International, Inc. 8.000 01/15/12 150,000 150,000 150,938
Tunica-Biloxi Gaming Authority 9.000 11/15/15 1,000,000 1,032,307 1,035,000
------------ ------------
TOTAL BONDS 12,877,380 13,223,447
------------ ------------
COMMON STOCK - 0.00%
Jordan Telecom Products (B) 70 $ 14,000 $ --
------------ ------------
TOTAL COMMON STOCK 14,000 --
------------ ------------
WARRANTS - 0.00%
Winsloew Furniture, Inc. (B) 900 $ 9 $ --
------------ ------------
TOTAL WARRANTS 9 --
------------ ------------
TOTAL RULE 144A SECURITIES 12,891,389 13,223,447
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $184,641,225 $187,640,308
------------ ------------
27
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Interest Due Principal
Corporate Public Securities -- 32.78%:(A) Rate Date Amount Cost Market Value
---------------------------------------------------------------------------------------------------------------------------------
BONDS - 30.00%
A M C Entertainment, Inc. 11.000% 02/01/16 $ 815,000 $ 817,373 $ 914,838
Affinia Group, Inc. 9.000 11/30/14 910,000 834,625 891,800
Alamosa Delaware, Inc. 11.000 07/31/10 325,000 328,748 351,190
Alamosa Delaware, Inc. 8.500 01/31/12 400,000 400,000 423,940
ALH Fin LLC/ALH Fin Corporation 8.500 01/15/13 950,000 918,812 933,375
Allied Waste NA 7.875 04/15/13 1,000,000 1,022,155 1,031,250
Appleton Papers, Inc. 8.125 06/15/11 300,000 300,000 306,000
Argo Tech Corporation 9.250 06/01/11 850,000 850,000 918,000
Atlas Pipeline Partners 8.125 12/15/15 200,000 200,000 205,500
Bally Total Fitness Holdings Corporation 9.875 10/15/07 135,000 128,925 125,550
Basic Energy Services 7.125 04/15/16 225,000 225,000 221,625
BCP Crystal US Holdings Corporation 9.625 06/15/14 485,000 485,000 535,925
Blockbuster, Inc. (C) 9.000 09/01/12 475,000 475,955 459,563
Brigham Exploration Co. 9.625 05/01/14 700,000 690,403 701,750
CCH I Holdings LLC 11.000 10/01/15 1,000,000 890,000 1,026,250
CCH I Holdings LLC 11.125 01/15/14 1,000,000 640,438 880,000
Cablevision Systems Corporation 8.000 04/15/12 1,000,000 1,013,604 982,500
Cadmus Communications Corporation 8.375 06/15/14 1,000,000 995,625 995,000
Cenveo Corporation 7.875 12/01/13 1,100,000 1,100,000 1,056,000
Chemed Corporation 8.750 02/24/11 1,125,000 1,125,000 1,164,375
Chesapeake Energy Corporation 7.000 08/15/14 1,075,000 1,110,957 1,092,469
Cincinnati Bell, Inc. 8.375 01/15/14 1,100,000 1,007,500 1,130,250
Clayton Williams Energy, Inc. 7.750 08/01/13 800,000 800,000 738,000
Consolidated Container Corporation (E) 0.000 06/15/09 750,000 729,949 759,375
Dave and Buster's, Inc. 11.250 03/15/14 600,000 607,500 609,000
Del Monte Corporation 8.625 12/15/12 225,000 225,000 237,375
Dominos Pizza, Inc. 8.250 07/01/11 292,000 289,892 302,585
Dynegy Holdings, Inc. 6.875 04/01/11 500,000 422,500 500,000
Dynegy Holdings, Inc. 8.375 05/01/16 330,000 330,000 346,500
Edison Mission Energy 7.750 06/15/16 500,000 500,000 530,000
El Paso Corporation 7.875 06/15/12 1,050,000 1,061,420 1,126,125
Esterline Technologies 7.750 06/15/13 200,000 200,000 204,000
Flextronics International Ltd. 6.500 05/15/13 400,000 400,000 395,000
Ford Motor Credit Co. 7.375 10/28/09 1,250,000 1,246,875 1,252,663
Ford Motor Credit Co. 8.000 12/15/16 300,000 294,965 297,555
Gencorp, Inc. 9.500 08/15/13 259,000 259,000 274,540
General Mortors Acceptance Corporation 7.750 01/19/10 1,250,000 1,293,309 1,308,330
General Motors Corporation 8.250 07/15/23 1,000,000 920,000 930,000
Geo Sub Corporation 11.000 05/15/12 1,000,000 1,008,194 965,000
Goodyear Tire & Rubber Co. 7.857 08/15/11 1,400,000 1,342,750 1,407,000
Great Lakes Dredge & Dock Corporation 7.750 12/15/13 1,015,000 926,319 989,625
GulfMark Offshore, Inc. 7.750 07/15/14 565,000 562,599 576,300
Harrah's Operating Co. 6.500 06/01/16 950,000 842,338 850,583
Hawaiian Telecom Communications 12.500 05/01/15 700,000 764,659 733,250
Inergy LP 8.250 03/01/16 150,000 150,000 157,500
Insurance Auto Auctions, Inc. 11.000 04/01/13 1,000,000 1,009,019 1,130,000
Intelsat Subsidiary Holding Company Ltd. (C) 10.484 01/15/12 1,000,000 1,009,570 1,008,750
Interline Brands, Inc. 8.125 06/15/14 325,000 322,670 333,938
Iron Mountain, Inc. 8.750 07/15/18 1,065,000 1,100,011 1,128,900
Koppers, Inc. 9.875 10/15/13 477,000 477,000 518,738
Land O'Lakes, Inc. 9.000 12/15/10 750,000 750,000 795,938
Lazard LLC 7.125 05/15/15 750,000 749,408 776,863
Leucadia National Corporation 7.000 08/15/13 650,000 661,029 659,750
Liberty Media Corporation 5.700 05/15/13 1,000,000 951,610 942,137
Lodgenet Entertainment Corporation 9.500 06/15/13 425,000 425,000 457,938
M G M Mirage, Inc. 6.000 10/01/09 375,000 378,290 374,062
28
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Interest Due Principal
Corporate Public Securities: (A) continued Rate Date Amount Cost Market Value
---------------------------------------------------------------------------------------------------------------------------------
BONDS, CONTINUED
Mac-Gray Corporation 7.625% 08/15/15 $ 600,000 $ 600,000 $ 609,000
Majestic Star Casino LLC 9.500 10/15/10 500,000 500,000 525,000
Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 202,000
Markwest Energy Operating Co. 6.875 11/01/14 775,000 763,000 747,875
Mediacom LLC 9.500 01/15/13 1,000,000 1,001,843 1,030,000
Metaldyne Corporation 11.000 06/15/12 750,000 601,250 768,750
Metaldyne Corporation (C) 10.000 11/01/13 510,000 513,495 545,700
N R G Energy, Inc. 7.375 02/01/16 175,000 175,000 175,875
Nalco Co. 7.750 11/15/11 500,000 500,000 511,250
National Wine & Spirits, Inc. 10.125 01/15/09 1,260,000 1,251,730 1,260,000
Neiman Marcus Group, Inc. 10.375 10/15/15 1,250,000 1,250,000 1,390,625
Newark Group, Inc. 9.750 03/15/14 850,000 796,863 852,125
North American Energy Partners 8.750 12/01/11 400,000 400,000 402,000
Nova Chemicals Corporation (C) 8.502 11/15/13 475,000 475,000 475,000
NTL Cable PLC 9.125 08/15/16 980,000 1,002,996 1,035,125
O E D Corp/Diamond Jo Company Guarantee 8.750 04/15/12 1,000,000 985,960 990,000
Offshore Logistics, Inc. 6.125 06/15/13 450,000 450,000 425,250
P Q Corporation 7.500 02/15/13 1,100,000 1,088,750 1,083,500
Pacific Energy Partners 7.125 06/15/14 500,000 503,720 513,105
Pacific Energy Partners 6.250 09/15/15 150,000 149,316 146,645
Petrohawk Energy Corporation 9.125 07/15/13 1,000,000 997,984 1,050,000
Pinnacle Foods Group 8.250 12/01/13 450,000 450,000 460,688
Pliant Corporation (C) 11.850 06/15/09 882,912 888,897 963,476
Primedia, Inc. 8.000 05/15/13 1,000,000 1,022,668 967,500
Quality Distribution LLC 9.000 11/15/10 300,000 288,000 292,500
Quality Distribution LLC (C) 9.874 01/15/12 325,000 323,375 329,875
Quicksilver Resources, Inc 7.125 04/01/16 500,000 500,000 488,750
Rent-A-Center, Inc. 7.500 05/01/10 400,000 400,000 401,000
Rock-Tenn Co. 8.200 08/15/11 1,000,000 1,006,509 1,055,000
Rogers Wireless, Inc. 7.500 03/15/15 870,000 927,832 943,950
Sbarro, Inc. 11.000 09/15/09 1,000,000 1,012,179 1,015,000
Service Corporation International (C) 7.000 06/15/17 1,000,000 990,030 1,012,500
Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 390,000
Sierra Pacific Resources 6.750 08/15/17 635,000 638,154 622,814
Stanadyne Corporation 10.000 08/15/14 1,500,000 1,500,000 1,541,250
Tekni-Plex, Inc. 12.750 06/15/10 1,000,000 960,125 912,500
Tenet Healthcare Corporation 9.875 07/01/14 500,000 488,370 508,750
Tenneco, Inc. 8.625 11/15/14 1,000,000 1,002,500 1,020,000
Tennessee Gas Pipeline Co. 7.000 03/15/27 500,000 523,738 526,957
Texas Industries, Inc. 7.250 07/15/13 70,000 70,000 71,050
Trimas Corporation 9.875 06/15/12 625,000 566,250 604,688
Triton PCS, Inc. 8.500 06/01/13 550,000 550,000 526,625
Unisys Corporation 8.000 10/15/12 190,000 190,000 187,863
United Components, Inc. 9.375 06/15/13 1,080,000 1,081,608 1,117,800
United Rentals, Inc. 7.750 11/15/13 625,000 625,000 627,344
United Rentals, Inc. 7.000 02/15/14 500,000 500,000 490,625
Universal City Florida (C) 8.375 05/01/10 200,000 200,000 205,000
Universal City Florida (C) 10.121 05/01/10 200,000 200,000 206,500
Vertis, Inc. 10.875 06/15/09 280,000 275,400 281,400
Vought Aircraft Industries 8.000 07/15/11 1,000,000 999,727 962,500
Warner Music Group 7.375 04/15/14 275,000 275,000 272,250
Waste Services, Inc. 9.500 04/15/14 1,100,000 1,124,230 1,146,750
Wornick Co. 10.875 07/15/11 750,000 750,000 671,250
------------ ------------
TOTAL BONDS $ 73,477,496 75,527,450
------------ ------------
29
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Shares or
Interest Due Principal
Corporate Public Securities: (A) continued Rate Date Amount Cost Market Value
---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - 1.57%
Allegiant Travel Co. (B) 13,900 $250,200 $ 390,034
Bally Total Fitness Holdings Corporation (B) 600 5,520 1,470
Heelys, Inc. (B) 9,900 207,900 317,889
Isilon Systems, Inc. (B) 1,000 13,000 27,600
Melco PBL Entertainment (B) 8,000 152,000 170,080
Nymex Holdings, Inc. (B) 3,000 177,000 372,030
PepsiAmericas, Inc. 92,145 2,006,365 1,933,202
Supreme Industries, Inc. 115,721 267,323 738,300
Triana Solar, Ltd. (B) 400 7,400 7,560
------------ ------------
TOTAL COMMON STOCK 3,086,708 3,958,165
------------ ------------
CONVERTIBLE BONDS - 1.21%
Citadel Broadcasting Corporation 1.875% 02/15/11 $ 700,000 $ 543,375 $ 567,875
Graftech International 1.625 01/15/24 1,500,000 1,083,750 1,168,125
ICOS Corporation 2.000 07/01/23 750,000 596,250 735,938
Q L T, INC 3.000 09/15/23 600,000 546,257 561,750
TOTAL CONVERTIBLE BONDS 2,769,632 3,033,688
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 79,333,836 $ 82,519,303
------------ ------------
Interest Due Principal
Short-Term Securities: Rate/Yield Date Amount Cost Market Value
COMMERCIAL PAPER - 2.86%
Caterpillar Financial Services Corporation 5.233% 01/02/07 $ 2,936,000 $ 2,933,867 $ 2,933,867
Detroit Edison Co. 5.405 01/03/07 1,129,000 1,128,323 1,128,323
Kraft Foods, Inc. 5.323 01/03/07 3,128,000 3,126,151 3,126,151
TOTAL SHORT-TERM SECURITIES $ 7,188,341 $ 7,188,341
------------ ------------
TOTAL INVESTMENTS 110.19% $271,163,402 $277,347,952
------ ============ ------------
Other Assets 4.70 11,819,996
Liabilities (14.89) (37,478,302)
------ ------------
TOTAL NET ASSETS 100.00% $251,689,646
====== ============
(A)IN EACH OF THE CONVERTIBLE NOTE, WARRANT, CONVERTIBLE PREFERRED AND COMMON STOCK INVESTMENTS, THE ISSUER HAS AGREED TO PROVIDE
CERTAIN REGISTRATION RIGHTS.
(B) NON-INCOME PRODUCING SECURITY.
(C)VARIABLE RATE SECURITY; RATE INDICATED IS AS OF 12/31/06.
(D)DEFAULTED SECURITY; INTEREST NOT ACCRUED.
(E) STEP BOND: COUPON RATE IS ZERO OR BELOW MARKET FOR AN INITIAL PERIOD AND THEN INCREASES TO A HIGHER COUPON RATE AT A SPECIFIED
DATE.
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
30
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Fair Value/ Fair Value/
Industry Classification: Market Value Industry Classification: continued Market Value
------------------------------------------------------------ ------------------------------------------------------------
AEROSPACE - 3.03% BUILDINGS & REAL ESTATE - 1.36%
Argo Tech Corporation $ 918,000 Adorn, Inc. $ 2,078,822
Consolidated Foundries Holdings 2,661,969 Texas Industries, Inc. 71,050
Esterline Technologies 204,000 TruStile Doors, Inc. 1,281,276
Gencorp, Inc. 274,540 ------------
PAS Holdco LLC 2,604,736 3,431,148
Vought Aircraft Industries 962,500 ------------
------------ CHEMICAL, PLASTICS & RUBBER - 1.26%
7,625,745 BCP Crystal US Holdings Corporation 535,925
------------ Capital Specialty Plastics, Inc. 55,408
AUTOMOBILE - 10.65% Koppers, Inc. 518,738
American Tire Distributor 955,000 Nalco Co. 511,250
Ford Motor Credit Co. 1,550,218 Nova Chemicals Corporation 475,000
Fuel Systems Holding Corporation 2,568,900 P Q Corporation 1,083,500
General Motors Acceptance Corporation 1,308,330 ------------
General Motors Corporation 930,000 3,179,821
Goodyear Tire & Rubber Co. 1,407,000 ------------
Jason, Inc. 1,984,491 CONSUMER PRODUCTS - 8.84%
LIH Investors, L.P. 3,274,630 ALH Fin LLC/ALH Fin Corporation 933,375
Metaldyne Corporation 1,314,450 Augusta Sportswear Holding Co. 2,925,136
Nyloncraft, Inc. 1,521,875 Bravo Sports Holding Corporation 2,477,654
Ontario Drive & Gear Ltd. 2,502,007 G F S I, Inc. 735,000
Qualis Automotive LLC 2,633,390 K N B Holdings Corporation 2,543,989
Tenneco, Inc. 1,020,000 Momentum Holding Co. 1,279,394
Titan International, Inc. 150,938 Neff Motivation, Inc. 1,385,702
Transtar Holding Company 2,559,283 R AJ Manufacturing Holdings LLC 2,489,331
United Components, Inc. 1,117,800 Royal Baths Manufacturing Company 1,259,139
------------ The Tranzonic Companies 3,465,948
26,798,312 Walls Industries, Inc. 2,764,243
------------ Winsloew Furniture, Inc. --
BEVERAGE, DRUG & FOOD - 5.98% ------------
Beta Brands Ltd. -- 22,258,911
Cains Foods, L.P. 127,333 ------------
Dave and Buster's, Inc. 609,000 CONTAINERS, PACKAGING & GLASS - 6.10%
Del Monte Corporation 237,375 Consolidated Container Corporation 759,375
Dominos Pizza, Inc. 302,585 Flutes, Inc. 1,580,310
Eagle Pack Pet Foods, Inc. 1,618,537 Maverick Acquisition Company 1,078,096
Land O'Lakes, Inc. 795,938 P I I Holding Corporation 2,633,048
National Wine & Spirits, Inc. 1,260,000 Packaging Dynamics Corporation of America 1,250,000
Nonni's Food Company 2,299,902 Paradigm Packaging, Inc. 2,388,134
PepsiAmericas, Inc. 1,933,202 Pliant Corporation 963,476
Pinnacle Foods Group 460,688 Pregis Corporation 1,082,500
River Ranch Fresh Foods LLC 1,615,001 Tekni-Plex, Inc. 1,541,375
Sbarro, Inc. 1,015,000 Vitex Packaging, Inc. 2,067,464
Specialty Foods Group, Inc. -- ------------
Vitality Foodservice, Inc. 2,100,503 15,343,778
Wornick Co. 671,250 ------------
------------ DISTRIBUTION - 3.87%
15,046,314 Affina Group, Inc. 891,800
------------ Duncan Systems, Inc. 1,538,002
BROADCASTING & ENTERTAINMENT - 2.86% Kele and Associates, Inc. 2,796,831
CCH I Holdings LLC 1,906,250 Magnatech International, Inc. 1,942,455
Cablevision Systems Corporation 982,500 O R S Nasco Holding, Inc. 2,580,726
Cenveo Corporation 1,056,000 QualServ Corporation --
Citadel Broadcasting Corporation 567,875 Strategic Equipment & Supply Corporation, Inc. --
Charter Communications Op LLC 259,688 ------------
Liberty Media Corporation 942,137 9,749,814
Lodgenet Entertainment Corporation 457,938 ------------
Mediacom LLC 1,030,000
------------
7,202,388
------------
31
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Fair Value/ Fair Value/
Industry Classification: continued Market Value Industry Classification: continued Market Value
------------------------------------------------------------ ------------------------------------------------------------
DIVERSIFIED/CONGLOMERATE, HEALTHCARE, EDUCATION & CHILDCARE - 4.17%
MANUFACTURING - 9.42% AT I Acquisition Company $ 2,000,816
Activant Solutions, Inc. $ 139,500 American Hospice Management Holding LLC 2,527,945
AmerCable, Inc. 1,551,365 F H S Holding LLC 2,680,967
Arrow Tru-Line Holdings, Inc. 2,287,981 H C A, Inc. 1,044,469
Bombardier, Inc. 940,000 ICOS Corporation 735,938
Coining Corporation of America LLC 3,589,584 MedAssist, Inc. 445,053
Dexter Magnetics Technologies, Inc. 1,213,807 Q L T, Inc. 561,750
Douglas Dynamics LLC 592,200 Tenet Healthcare Corporation 508,750
Evans Consoles, Inc. -- ------------
Geo Sub Corporation 965,000 10,505,688
Graftech International 1,168,125 ------------
Great Lakes Dredge & Dock Corporation 989,625 HOME & OFFICE FURNISHINGS, HOUSEWARES,
Postle Aluminum Company LLC 2,514,423 AND DURABLE CONSUMER PRODUCTS - 7.02%
Radiac Abrasives, Inc. 2,564,294 Connor Sport Court International, Inc. 1,802,907
Trimas Corporation 604,688 H M Holding Company 2,413,554
Truck Bodies & Equipment International 4,595,302 Home Decor Holding Company 2,437,922
------------ Justrite Manufacturing Acquisition Co. 1,688,332
23,715,894 Monessen Holding Corporation 2,425,562
------------ Stanton Carpet Holding Co. 2,527,052
DIVERSIFIED/CONGLOMERATE, SERVICE - 4.75% U-Line Corporation 2,502,268
Allied Waste NA 1,031,250 Wellborn Foprest Holding Co. 1,866,104
CapeSuccess LLC 5,862 ------------
Chemed Corporation 1,164,375 17,663,701
Diversco, Inc./DHI Holdings, Inc. 1,392,069 ------------
Dwyer Group, Inc. 929,717 LEISURE, AMUSEMENT, ENTERTAINMENT - 4.35%
Fowler Holding, Inc. 2,500,710 AM C Entertainment, Inc. 914,838
Interline Brands, Inc. 333,938 Bally Total Fitness Holding Corporation 127,020
Iron Mountain, Inc. 1,128,900 Harrah's Operating Company 850,583
Keystone North America, Inc. 251,592 Keepsake Quilting, Inc. 1,232,980
Mac-Gray Corporation 609,000 M G M Mirage, Inc. 374,062
Moss, Inc. 1,593,208 Majestic Star Casino LLC 525,000
Service Corporation International 1,012,500 Melco PBL Entertainment 170,080
------------ O E D Corp/Diamond Jo Company Guarantee 990,000
11,953,121 Overton's Holding Company 1,908,874
------------ Savage Sports Holding, Inc. 2,127,325
ELECTRONICS - 2.17% Tunica-Biloxi Gaming Authority 1,035,000
AE S Corporation 215,000 Universal City Florida 411,500
Calpine Corporation 536,250 Warner Music Group 272,250
Directed Electronics, Inc. 4,301,151 ------------
Flextronics International Ltd. 395,000 10,939,512
------------ ------------
5,447,401 MACHINERY - 8.67%
------------ Davis-Standard LLC 2,486,601
FARMING & AGRICULTURE - 0.00% Integration Technology Systems, Inc. 1,248,333
Protein Genetics, Inc. -- Manitowoc Company, Inc. 202,000
------------ Maxon Corporation 3,362,336
FINANCIAL SERVICES - 0.72% Morton Industrial Group, Inc. 2,581,211
Highgate Capital LLC -- Safety Speed Cut Manufacturing Company, Inc. 2,467,859
Lazard LLC 776,863 Stanadyne Corporation 1,541,250
Leucadia National Corporation 659,750 Stewart & Stevenson LLC 1,260,000
Nymex Holdings, Inc. 372,030 Supreme Industries, Inc. 738,300
Victory Ventures LLC -- Synventive Equity LLC 33,459
------------ Tronair, Inc. 3,384,278
1,808,643 Tubular Textile Machinery 2,515,493
------------ ------------
21,821,120
32
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2006
Fair Value/ Fair Value/
Industry Classification: continued Market Value Industry Classification: continued Market Value
------------------------------------------------------------ ------------------------------------------------------------
MEDICAL DEVICES/BIOTECH - 2.72% TECHNOLOGY - 0.08%
Coeur, Inc. $ 1,322,354 Triana Solar, Ltd. $ 7,560
E X C Acquisition Corporation 137,269 Unisys Corporation 187,863
MicroGroup, Inc. 3,858,897 ------------
OakRiver Technology, Inc. 1,537,965 195,423
------------ ------------
6,856,485 TELECOMMUNICATIONS - 3.60%
------------ Alamosa Deleware, Inc. 775,130
MINING, STEEL, IRON & Cincinnati Bell, Inc. 1,130,250
NON PRECIOUS METALS - 0.37% Hawaiian Telecom Communications 733,250
U S S Holdings, Inc. 933,236 Insilion Systems, Inc. 27,600
NATURAL RESOURCES - 0.54% Intelsat Subsidiary Holding Company Ltd. 1,008,750
Appleton Papers, Inc. 306,000 ITC^DeltaCom, Inc. 2,867,685
Rock-Tenn Co. 1,055,000 Jordan Telecom Products --
------------ NTL Cable PLC 1,035,125
1,361,000 Rogers Wireless, Inc. 943,950
------------ Triton P C S, Inc. 526,625
OIL AND GAS - 2.75% ------------
Atlas Pipeline Partners 205,500 9,048,365
Basic Energy Services 221,625 ------------
Brigham Exploration Co. 701,750 TRANSPORTATION - 1.85%
Chesapeake Energy Corporation 1,092,469 Allegiant Travel Co. 390,034
Clayton Williams Energy, Inc. 738,000 NABCO, Inc. 1,228,856
El Paso Corporation 1,126,125 Quality Distribution LLC 622,375
GulfMark Offshore, Inc. 576,300 Tangent Rail Corporation 2,400,208
North American Energy Partners 402,000 ------------
Offshore Logistics, Inc. 425,250 4,641,473
Opti Canada, Inc. 411,000 ------------
Quicksilver Resources, Inc. 488,750 UTILITIES - 2.04%
Tennessee Gas Pipeline Co. 526,957 Dynegy Holdings, Inc. 846,500
------------ Edison Mission Energy 530,000
6,915,726 Inergy LP 157,500
------------ Markwest Energy Operating Co. 747,875
PHARMACEUTICALS - 1.09% N R G Energy, Inc. 175,875
CorePharma LLC 2,643,191 Pacific Energy Partners 659,750
Enzymatic Therapy, Inc. 106,250 Petrohawk Energy Corporation 1,050,000
------------ Sierra Pacific Resources 622,814
2,749,441 Tenaska Alabama Partners LP 346,527
------------ ------------
PUBLISHING/PRINTING - 1.63% 5,136,841
Cadmus Communications Corporation 995,000 ------------
Idearc, Inc. 609,000 WASTE MANAGEMENT/POLLUTION - 1.62%
Newark Group, Inc. 852,125 Terra Renewal Services, Inc. 2,941,543
Primedia, Inc. 967,500 Waste Services, Inc. 1,146,750
Sheridan Acquisition Corporation 390,000 ------------
Vertis, Inc. 281,400 4,088,293
------------ ------------
4,095,025 TOTAL CORPORATE RESTRICTED
------------ AND PUBLIC SECURITIES - 107.34% $270,159,611
RETAIL STORES - 3.83% ============
Blockbuster, Inc. 459,563
Heelys, Inc. 317,889 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Insurance Auto Auctions, Inc. 1,130,000
Neiman Marcus Group, Inc. 1,390,625
Olympic Sales, Inc. 3,797,446
Rent-A-Center, Inc. 401,000
Rental Service Corporation 1,032,500
United Rentals, Inc. 1,117,969
------------
9,646,992
------------
33
MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006
1. HISTORY
MassMutual Corporate Investors (the "Trust") commenced operations in 1971 as a
Delaware corporation. Pursuant to an Agreement and Plan of Reorganization dated
November 14, 1985, approved by shareholders, the Trust was reorganized as a
Massachusetts business trust under the laws of the Commonwealth of
Massachusetts, effective November 28, 1985.
The Trust is a diversified closed-end management investment company. Babson
Capital Management LLC ("Babson Capital"), a wholly-owned indirect subsidiary of
Massachusetts Mutual Life Insurance Company ("MassMutual"), acts as its
investment adviser. The Trust's investment objective is to maintain a portfolio
of securities providing a fixed yield while providing an opportunity for capital
gains by investing primarily in a portfolio of privately placed, below
investment grade, long term corporate debt obligations with equity features,
such as warrants, conversions rights, or other equity features and,
occasionally, preferred stocks, purchased directly from their issuers.
On January 27,1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary ("MMCI Subsidiary Trust") for the purpose of holding
certain investments. The results of MMCI Subsidiary Trust have been included in
the accompanying consolidated financial statements. Footnote 2.D below discusses
the Federal tax consequences of the MMCI Subsidiary Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of the consolidated financial
statements in conformity with accounting principles generally accepted in the
United States of America.
A. VALUATION OF INVESTMENTS:
Valuation of a security in the Trust's portfolio is made on the basis of
market price whenever market quotations are readily available and all
securities of the same class held by the Trust can be readily sold in such
market.
Nearly all securities which are acquired by the Trust directly from the
issuers and shares into which such securities may be converted or which may
be purchased on the exercise of warrants attached to such securities will be
subject to legal or contractual delays in, or restrictions on, resale and
will therefore be "restricted securities." Generally speaking, as contrasted
with open-market sales of unrestricted securities which may be effected
immediately if the market is adequate, absent an exemption from registration,
restricted securities can be sold only in a public offering for which a
registration statement is in effect under the Securities Act of 1933, as
amended (the "1933 Act").
The value of restricted securities, including warrants, and of any other
assets for which there are no reliable market quotations, is the fair value
as determined in good faith by the Trust's Board of Trustees (the
"Trustees"). Each restricted security is valued by the Trustees at the time
of the acquisition thereof and at least quarterly thereafter. The Trustees
have established guidelines to aid in the valuation of each security.
Generally, restricted securities are initially valued at cost or less at the
time of acquisition by the Trust. Values greater or less than cost are used
thereafter for restricted securities in appropriate circumstances. Among the
factors ordinarily considered are the existence of restrictions upon the sale
of the security by the Trust; an estimate of the existence and extent of a
market for the security; the extent of any discount at which the security was
acquired; the estimated period of time during which the security will not be
freely marketable; the estimated expenses of registering or otherwise
qualifying the security for public sale; estimated underwriting commissions
if underwriting would be required to effect a sale; in the case of a
convertible security, whether or not it would trade on the basis of its stock
equivalent; in the case of a debt obligation which would trade independently
of any equity equivalent, the current yields on comparable securities; the
estimated amount of the floating supply of such securities available for
purchase; the proportion of the issue held by the Trust; changes in the
financial condition and prospects of the issuer; the existence of merger
proposals or tender offers affecting the issuer; and any other factors
affecting fair value, all in accordance with the Investment Company Act of
1940, as amended (the "1940 Act"). In making valuations, opinions of counsel
may be relied upon as to whether or not securities are restricted securities
and as to the legal requirements for public sale.
When market quotations are readily available for unrestricted securities of
an issuer, restricted securities of the same class are generally valued at a
discount from the market price of such unrestricted securities. The Trustees,
however, consider all factors in fixing any discount, including the filing of
a registration statement for such securities under the 1933 Act and any other
developments which are likely to increase the probability that the securities
may be publicly sold by the Trust without restriction.
The Trustees meet at least once each quarter to approve the value of the
Trust's portfolio securities as of the close of business on the last business
day of the preceding quarter. This valuation requires the approval of a
majority of the Trustees of the Trust, including a majority of the Trustees
who are not interested persons of the Trust or of Babson Capital. In making
valuations, the Trustees will consider reports by Babson Capital analyzing
each portfolio security in accordance with the relevant factors referred to
above. Babson Capital has agreed to provide such reports to the Trust at
least quarterly.
The consolidated financial statements include private placement restricted
securities valued at $174,416,861 (69.30% of net assets) as of December 31,
2006 whose values have been estimated by the Trustees in the absence of
readily ascertainable market values. Due to the inherent uncertainty of
valuation, those estimated values may differ significantly from the values
that would have been used had a ready market for the securities existed, and
the differences could be material.
The values for Rule 144A restricted securities and corporate public
securities are stated at the last reported sales price or at prices based
upon quotations obtained from brokers and dealers as of December 31, 2006,
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.
34
MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006
B. ACCOUNTING FOR INVESTMENTS:
Investment transactions are accounted for on the trade date. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis, including the amortization of premiums and accretion of
discounts on bonds held using the yield-to-maturity method. The Trust does
not accrue income when payment is delinquent and when management believes
payment is questionable.
Realized gains and losses on investment transactions and unrealized
appreciation and depreciation of investments are reported for financial
statement and federal income tax purposes on the identified cost method.
C. USE OF ESTIMATES:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
D. FEDERAL INCOME TAXES:
The Trust has elected to be taxed as a "regulated investment company" under
the Internal Revenue Code and intends to maintain this qualification and to
distribute substantially all of its net taxable income to its shareholders.
In any year when net long-term capital gains are realized by the Trust,
management, after evaluating the prevailing economic conditions, will
recommend to the Trustees either to designate the net realized long-term
gains as undistributed and pay the federal capital gains taxes thereon or to
distribute all or a portion of such net gains. For the year ended December
31, 2006, the Trust had a net realized long-term taxable capital gain balance
of $17,749,957, which the Trustees voted to retain and pay the federal
capital gain tax thereon. The Trust has accrued income tax expense of
$6,212,485 on the Statement of Operations related to the retained realized
capital gains.
In 2006, the Trust re-classified a total of $1,787,482 to undistributed net
investment income. $1,748,482 was re-classified from accumulated net realized
gain on investments and $39,000 was re-classified from additional paid in
capital to more accurately display the Trust's capital financial position on
a tax-basis in accordance with accounting principles generally accepted in
the United States of America. These re-classifications had no impact on net
asset value.
The Trust is taxed as a regulated investment company and is therefore limited
as to the amount of non-qualified income that it may receive as the result of
operating a trade or business, e.g. the Trust's PRO RATA share of income
allocable to the Trust by a partnership operating company. The Trust's
violation of this limitation could result in the loss of its status as a
regulated investment company, thereby subjecting all of its net income and
capital gains to corporate taxes prior to distribution to its shareholders.
The Trust, from time-to-time, identifies investment opportunities in the
securities of entities that could cause such trade or business income to be
allocable to the Trust. The MMCI Subsidiary Trust (described in Footnote 1,
above) was formed in order to allow investment in such securities without
adversely affecting the Trust's status as a regulated investment company.
The MMCI Subsidiary Trust is not taxed as a regulated investment company.
Accordingly, prior to the Trust receiving any distributions from the MMCI
Subsidiary Trust, all of the MMCI Subsidiary Trust's taxable income and
realized gains, including non-qualified income and realized gains, is subject
to taxation at prevailing corporate tax rates. For the year ended December
31, 2006, the MMCI Subsidiary Trust has accrued income tax expense on net
realized gains of $428,070 and increased deferred income tax expense on net
unrealized gains by $375,445.
E. DISTRIBUTIONS TO SHAREHOLDERS:
The Trust records distributions to shareholders from net investment income
and net realized gains, if any, on the ex-dividend date. The Trust's net
investment income dividend is declared four times per year, in April, July,
October, and December. The Trust's net realized capital gain distribution, if
any, is declared in December.
The tax character of distributions declared during the years ended December
31, 2006 and 2005 was as follows:
DISTRIBUTIONS PAID FROM: 2006 2005
-----------------------------
Ordinary Income $ 22,643,658 $ 20,499,802
Long-term Capital Gains $ -- $ 208,144
As of December 31, 2006, the components of distributable earnings on a tax
basis included $1,841,989 of undistributed ordinary income. Such
distributions and distributable earnings on a tax basis are determined in
conformity with income tax regulations, which may differ from accounting
principles generally accepted in the United States.
Net investment income of the Trust as presented under accounting principles
generally accepted in the United States of America differs from distributable
earnings due to earnings from the MMCI Subsidiary Trust as well as timing
differences in the recognition of income on certain investments.
F. EXPENSE REDUCTION
Citibank, N.A. ("Citibank") serves as custodian to the Trust. Pursuant to the
custodian agreements, Citibank receives a fee reduced by credits on cash
balances the Trust maintains with Citibank. All credit balances, if any, used
to reduce the Trust's custodian fees are reported as fees paid indirectly on
the Statement of Operations.
3. INVESTMENT SERVICES CONTRACT
A. NEW INVESTMENT SERVICES CONTRACT:
An Investment Services Contract between the Trust and Babson Capital,
effective October 1, 2005 (the "New Contract"), provides for a quarterly
investment advisory fee of 0.3125% of the net asset value of the Trust each
quarter, which is approximately equal to 1.25% annually, with no performance
adjustment. The New Contract provides that for its first eighteen months, the
investment advisory fee cannot exceed the amount that Babson Capital would
have been paid under the prior Investment Services Contract with the Trust
dated July 1, 1988 (the "Prior Contract").
35
MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006
B. SERVICES:
Under the New Contract with the Trust, Babson Capital agrees to use its best
efforts to present to the Trust a continuing and suitable investment program
consistent with the investment objectives and policies of the Trust. Babson
Capital represents the Trust in any negotiations with issuers, investment
banking firms, securities brokers or dealers and other institutions or
investors relating to the Trust's investments. Under the New Contract, Babson
Capital also provides administration of the day-to-day operations of the
Trust and provides the Trust with office space and office equipment,
accounting and bookkeeping services, and necessary executive, clerical and
secretarial personnel for the performance of the foregoing services.
C. PRIOR INVESTMENT SERVICES CONTRACT ADVISORY FEE:
Under the Prior Contract, the Trust paid Babson Capital a quarterly base rate
(the "Base Fee Rate") of 5/16 of 1% of the value of the Trust's net assets as
of the end of each fiscal quarter, approximately equivalent to 1.25% of the
net asset value of the Trust on an annual basis, plus or minus a quarterly
performance adjustment (the "Performance Adjustment") of up to 1/16 of 1% of
net asset value, approximately equivalent to plus or minus 0.25% on an annual
basis.
The Performance Adjustment was based on the Trust's performance as compared
to a benchmark rate of return (the "Target Rate") equal to 5.0 percentage
points plus an unweighted, arithmetic average of the rates of return of the
Standard & Poor's Industrials Composite (formerly called the Standard &
Poor's Industrial Price Index) and the Lehman Brothers Intermediate U.S.
Credit Index (formerly called the Lehman Brothers Corporate Bond Index) over
a rolling threeyear period (the "Measurement Period") comprising the twelve
quarters ending on the last day of each quarter (the "Valuation Date"). The
Standard & Poor's Industrials Composite is not readily available to the
public. Babson Capital obtained the information for this index from Factset
Research Systems. The three-year annualized return for the Standard & Poor's
Industrials Composite for the period ended December 31, 2006 was 9.57%. Under
the prior contract, the Performance Adjustment was 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 exceeded the
Target Rate, the Base Fee Rate was increased by an amount equal to the
Performance Adjustment; if the Trust's actual rate of return was less than
the Target Rate, the Base Fee Rate was reduced by the Performance Adjustment.
Under the Prior Contract, the investment advisory fee payable by the Trust
was 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.
Additionally, Babson Capital agreed to waive, for each quarter beginning July
1, 2004, the amount, if any, by which the investment advisory fee calculated
in the manner described in the Prior Contract exceeded the sum of (i) 5/16 of
1% times the ending net asset value for that quarter plus or minus (ii) the
Performance Adjustment applied against the average quarter end net assets for
the Trust for the twelvequarter period ending on such quarter.
4. SENIOR SECURED INDEBTEDNESS
A. NOTE PAYABLE:
MassMutual holds the Trust's $20,000,000 Senior Fixed Rate Convertible Note
(the "Note") issued by the Trust in 1995. The Note, as amended, is due
November 15, 2007 and accrues at 7.39% per annum. MassMutual, at its option,
can convert the principal amount of the Note into common shares. The dollar
amount of principal would be converted into an equivalent dollar amount of
common shares based upon the average price of the common shares for ten
business days prior to the notice of conversion. For the year ended December
31, 2006, the Trust incurred total interest expense on the Note of
$1,479,145. The Trust may redeem the Note, in whole or in part, at the
principal amount proposed to be redeemed together with the accrued and unpaid
interest thereon through the redemption date plus the Make Whole Premium. The
Make Whole Premium equals the excess of (i) the present value of the
scheduled payments of principal and interest which the Trust would have paid
but for the proposed redemption, discounted at the rate of interest of U.S.
Treasury obligations whose maturity approximates that of the Note plus 0.50%
over (ii) the principal of the Note proposed to be redeemed.
B. REVOLVING CREDIT AGREEMENT:
The Trust entered into a Revolving Credit Agreement (the "Revolver") with The
Royal Bank of Scotland PLC as of May 31, 2005 (the "Agent Bank"), in the
principal amount of $25,000,000, maturing May 31, 2008. The Revolver bears
interest payable in arrears at a per annum rate that varies depending upon
whether the Trust requests a Base Rate Loan or LIBOR Rate Loan. Interest on
Base Rate Loans equals the higher of: (i) the annual "Base Rate" as set
periodically by the Agent Bank and (ii) the most recent Federal Funds
Effective Rate plus .50% per annum. Per annum interest on LIBOR Rate Loans
equals .37% plus the London Inter Bank Offered Rate ("LIBOR") rate, divided
by 1 minus the LIBOR Reserve Rate. The Trust also incurs expense on the
undrawn portion of the total Revolver at a rate of .15% per annum.
As of December 31, 2006, there was no outstanding amount against the
Revolver. For the year ended December 31, 2006, the Trust incurred total
expense on the Revolver of $37,500 related to the undrawn portion.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE YEAR COST OF INVESTMENTS
ENDED 12/31/2006 ACQUIRED
---------------------------------------------------------------------------
Corporate restricted securities $ 74,805,191
Corporate public securities 23,746,845
PROCEEDS FROM
SALES OR MATURITIES
---------------------------------------------------------------------------
Corporate restricted securities $ 49,762,773
Corporate public securities 38,850,564
The aggregate cost of investments is substantially the same for financial
reporting and federal income tax purposes as of December 31, 2006. The net
unrealized appreciation of investments for financial reporting and federal tax
purposes as of
36
MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006
December 31, 2006 is $6,184,550 and consists of $26,139,808 appreciation and
$19,955,258 depreciation.
Net unrealized appreciation of investments on the Statement of Assets and
Liabilities reflects the balance net of a deferred tax accrual of $651,017 on
net unrealized gains in the MMCI Subsidiary Trust.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED)
AMOUNT PER SHARE
---------------------------------------------------------------------
MARCH 31, 2006
---------------------------------------------------------------------
Investment income $6,350,324
Net investment income 5,061,431 $ 0.56
Net realized and unrealized
gain on investments (net of taxes) 7,598,686 0.84
---------------------------------------------------------------------
JUNE 30, 2006
---------------------------------------------------------------------
Investment income 6,202,668
Net investment income 4,891,333 0.53
Net realized and unrealized
gain on investments (net of taxes) 6,204,073 0.68
---------------------------------------------------------------------
SEPTEMBER 30, 2006
---------------------------------------------------------------------
Investment income 6,242,239
Net investment income 4,942,357 0.55
Net realized and unrealized
loss on investments (net of taxes) 4,648,575 0.51
---------------------------------------------------------------------
DECEMBER 31, 2006
---------------------------------------------------------------------
Investment income 7,018,035
Net investment income 5,786,022 0.63
Net realized and unrealized
loss on investments (net of taxes) (3,693,591) (0.41)
7. AGGREGATE REMUNERATION PAID TO OFFICERS, TRUSTEES AND THEIR AFFILIATED
PERSONS
For the year ended December 31, 2006, the Trust paid its Trustees aggregate
remuneration of $175,875. During the year the Trust did not pay any compensation
to any of its Trustees who are "interested persons" (as defined by the 1940 Act)
of the Trust. The Trust classifies Messrs. Crandall and Joyal as "interested
persons" of the Trust.
All of the Trust's officers are employees of Babson Capital or MassMutual.
Pursuant to the New Contract, the Trust does not compensate its officers who are
employees of Babson Capital or MassMutual (except for the Chief Compliance
Officer of the Trust unless assumed by Babson Capital). For the year ended
December 31, 2006 Babson Capital paid the compensation of the Chief Compliance
Officer of the Trust.
Mr. Crandall, one of the Trust's Trustees, is an "affiliated person" (as defined
by the 1940 Act) of MassMutual and Babson Capital. The Trust did not make any
payments to Babson Capital during 2006, other than amounts payable to Babson
Capital pursuant to the New Contract. During 2006, the Trust paid the following
amounts to MassMutual, exclusive of interest expense on the Note explained in
Footnote 4.A:
Preparation of the Trust's Quarterly
and Annual Reports to Shareholders $12,818
Preparation of Certain of the
Trust's Shareholder Communications 657
Preparation of the Trust's
Annual Proxy Statements 588
-------
$14,063
=======
8. NEW ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES -- AN
INTERPRETATION OF FASB STATEMENT 109 ("FIN 48"). FIN 48 supplements FASB 109 by
prescribing a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. The adoption of FIN 48 will require financial statements
to be adjusted to reflect only those tax positions that are more likely than not
to be sustained as of the adoption date. Management of the Trust is currently
evaluating the impact that the adoption of FIN 48 will have on the financial
statements. FIN 48 will become effective for fiscal years beginning after
December 15, 2006.
In September 2006, FASB issued Statement of Financial Accounting Standards No.
157, FAIR VALUE MEASUREMENTS ("FAS 157"). FAS 157 establishes a single
authoritative definition of fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements. FAS 157
applies to fair value measurements already required or permitted by existing
standards. The change to current generally accepted accounting principles from
the application of FAS 157 relates to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. Management of the Trust does not believe the adoption of FAS 157
will materially impact the financial statement amounts, however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements on changes in net assets for the
period. FAS 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
9. CERTIFICATIONS (UNAUDITED)
As required under New York Stock Exchange ("NYSE") Corporate Governance Rules,
the Trust's principal executive officer has certified to the NYSE that he was
not aware, as of the certification date, of any violation by the Trust of the
NYSE's Corporate Governance listing standards. In addition, as required by
Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Trust's
principal executive and principal financial officers have made quarterly
certifications, included in filings with the Securities and Exchange Commission
on Forms N-CSR and N-Q, relating to, among other things, the Trust's disclosure
controls and procedures and internal control over financial reporting, as
applicable.
37
MassMutual Corporate Investors
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Shareholders and Board of Trustees of MassMutual Corporate Investors
We have audited the accompanying statement of assets and liabilities of
MassMutual Corporate Investors (the Trust), including the schedule of
investments, as of December 31, 2006, and the related statements of operations
and cash flows for the year then ended and the statements of changes in net
assets for each of the years in the two-year period then ended and the financial
highlights for each of the years in the three-year period 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 and financial highlights based on our audits. The financial
highlights for each of the years in the two-year period ended December 31, 2003
were audited by other independent registered public accountants whose report,
dated February 6, 2004, expressed an unqualified opinion on those financial
highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 2006 by counting of securities at the
custodian and confirmation of securities owned, by correspondence with the
custodian and brokers, or by other appropriate auditing procedures where replies
from brokers were not received. 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 financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
MassMutual Corporate Investors as of December 31, 2006, and the results of its
operations, its cash flows, the changes in its net assets, and the financial
highlights for the years described above in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
Boston, Massachusetts
February 9, 2007
38
MassMutual Corporate Investors
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
ROGER W. CRANDALL* (42) Trustee 3 years/ Executive Vice President 2 Trustee, Chairman (since 2005),
Massachusetts Mutual (since 2005) 1 year, and Chief Investment President (2003-2005), and Vice
Life Insurance Company 7 months Officer (since 2005) of President (2002-2003) of the
1295 State Street Chairman MassMutual; and Trust; Director (since 2004),
Springfield, MA 01111 (since 2005) 1 year/ Chairman (since 2005), Babson Capital Europe Limited
7 months President and Chief (an institutional debtfund
Executive Officer (since manager); Director (since
2006), Vice Chairman 2005), Babson Capital Japan KK
(2005), Member of the (a Japanese registered
Board of Managers (since investment adviser);
2004), Member of the Non-Executive Director (since
Board of Directors (2003- 2005), Baring Asset Management
2004), and Managing Limited (an investment
Director of Babson Capital manager/adviser); Chairman
(2000-2005). (since 2005), Cornerstone Real
Estate Advisers LLC (an
investment adviser); Director
(since 2003), MassMutual
Corporate Value Partners
Limited (investment company);
Director (since 2003),
MassMutual Corporate Value
Limited (investment company);
Director (since 2005),
MassMutual Holdings (Bermuda)
Ltd. (holding company);
Director (since 2005),
MassMutual Holding MSC, Inc.
(holding company); Director
(since 1996), MMHC Investment
LLC (investment company);
Director (since 2004), MML
Assurance, Inc. (a New York
Insurance Company); Director
(since 2005), Oppenheimer
Acquisition Corp. (holding
company); Director (since
2004), Jefferies Finance LLC (a
joint venture between Jefferies
Group Inc. and Babson Capital);
Director (since 2004), Great
Lakes LLC (investment company);
Director (since 1999), SAAR
Holdings CDO Ltd. (investment
company); Chairman and Chief
Executive Officer (since 2006),
MassMutual Capital Partners
(investment company); Director
(since 2006), Invicta Advisers
LLC (derivative trading
company); Director (since
2006), Invicta Capital LLC
(derivative trading company);
Director (since 2006), Invicta
Credit LLC (derivative trading
company); Director (since
2006), Invicta Holdings LLC
(derivative trading company);
Trustee (since 2003), President
(2003-2005), and Chairman
(since 2005), MMCI Subsidiary
Trust and MMPI Subsidiary
Trust; and Trustee (since
2005), Chairman (since 2005),
President (2003-2005), and Vice
President (2002-2003) of
MassMutual Participation
Investors (closed-end
investment company advised by
Babson Capital).
*MR. CRANDALL IS CLASSIFIED AS AN "INTERESTED PERSON" OF THE TRUST AND BABSON
CAPITAL (AS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED) BECAUSE
OF HIS POSITION AS AN OFFICER OF THE TRUST; AND CHAIRMAN, PRESIDENT, CHIEF
EXECUTIVE OFFICER, AND MEMBER OF THE BOARD OF MANAGERS OF BABSON CAPITAL.
39
MassMutual Corporate Investors
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
ROBERT E. JOYAL* (62) Trustee 3 years/ President (2001-2003) 51 President (1999-2003) and
MassMutual (since 2003) 2 years, of Babson Capital. Trustee (since 2003) of the
Corporate Investors 10 months Trust; Director (since 2006),
1500 Main Street Jefferies Group, Inc.
Suite 600 (financial services); Director
P.O. Box 15189 (since 2003), Pemco Aviation
Springfield, MA 01115-5189 Group, Inc. (aircraft
maintenance and overhaul);
Trustee (since 2003),
MassMutual Select Funds,
formerly MassMutual
Institutional Funds, (an
openend investment company
advised by MassMutual); Trustee
(since 2003), MML Series
Investment Fund (an open-end
investment company advised by
MassMutual); Trustee
(1998-2003), Senior Vice
President (1998-2001), and
President (2001-2003), MMCI
Subsidiary Trust and MMPI
Subsidiary Trust; and President
(1999-2003), Trustee (since
2003), MassMutual Participation
Investors (closed-end
investment company advised by
Babson Capital).
*MR. JOYAL RETIRED AS PRESIDENT OF BABSON CAPITAL IN JUNE 2003. IN ADDITION AND
AS NOTED ABOVE, MR. JOYAL IS A DIRECTOR OF JEFFERIES GROUP, INC., WHICH HAS A
WHOLLY OWNED BROKER-DEALER SUBSIDIARY THAT MAY EXECUTE PORTFOLIO TRANSACTIONS
AND/OR ENGAGE IN PRINCIPAL TRANSACTIONS WITH THE TRUST, OTHER INVESTMENT
COMPANIES ADVISED BY BABSON CAPITAL OR ANY OTHER ADVISORY ACCOUNTS OVER WHICH
BABSON CAPITAL HAS BROKERAGE PLACEMENT DISCRETION. ACCORDINGLY, THE TRUST HAS
DETERMINED TO CLASSIFY MR. JOYAL AS AN "INTERESTED PERSON" OF THE TRUST AND
BABSON CAPITAL (AS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
40
MassMutual Corporate Investors
INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
WILLIAM J. BARRETT (67) Trustee 3 years/ President (since 2002), 2 Trustee (since 2006), MassMutual
MassMutual (since 2006) 10 months* Barrett-Gardner Associates, Participation Investors (a
Corporate Investors Inc. (investments); and closed-end Investment company
1500 Main Street Senior Vice President advised by Babson Capital).
Suite 600 (1976-2002), Janney
P.O. Box 15189 Montgomery Scott LLC
Springfield, MA 01115-5189 (investments).
------------------------------------------------------------------------------------------------------------------------------------
DONALD E. BENSON (76) Trustee 3 years/ Executive Vice President 2 Director (since 1997), MAIR
MassMutual (since 1986) 2 years, and Director (since 1992), Holdings, Inc. (commuter airline
Corporate Investors 10 months Marquette Financial holding company); Director (since
1500 Main Street Companies (financial 1997), National Mercantile
Suite 600 services); Partner (since Bancorp (bank holding company);
P.O. Box 15189 1996), Benson Family and Trustee (since 1988),
Springfield, MA 01115-5189 Limited Partnership No. 1 MassMutual Participation
and Benson Family Limited Investors (closed-end investment
Partnership No. 2 company advised by Babson
(investment partnerships); Capital).
and Partner (1987-2004),
Benson, Pinckney, Oates
Partnership (building
partnership).
*MR. BARRETT WAS ELECTED BY THE BOARD OF TRUSTEES TO FILL A NEWLY CREATED BOARD
SEAT ON JULY 18, 2006.
41
MassMutual Corporate Investors
INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
MICHAEL H. BROWN (50) Trustee 3 years/ Private Investor; 2 Trustee (since 2005), MassMutual
MassMutual (since 2005) 1 year, and Managing Director Participation Investors (a
Corporate Investors 7 months (1994-2005), closed-end investment company
1500 Main Street Morgan Stanley. advised by Babson Capital);
Suite 600 Independent Director (since
P.O. Box 15189 2006), Invicta Holdings LLC
Springfield, MA 01115-5189 (derivitive trading company).
------------------------------------------------------------------------------------------------------------------------------------
DONALD GLICKMAN (73) Trustee 3 years/ Chairman (since 1992), 2 Director (since 1984), Monro
MassMutual (since 1992) 2 years, Donald Glickman and Muffler Brake, Inc. (automobile
Corporate Investors 10 months Company, Inc. (private repair service); Director (since
1500 Main Street investments); and Partner 1998), MSC Software Corp.
Suite 600 (since 1992), J.F. Lehman & (simulation software); and
P.O. Box 15189 Co. (private investments). Trustee (since 1992), MassMutual
Springfield, MA 01115-5189 Participation Investors
(closed-end investment company
advised by Babson Capital).
42
MassMutual Corporate Investors
INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
MARTIN T. HART (71) Trustee 3 years/ Private Investor; 2 Director (since 2004), Texas
MassMutual (since 1991) 10 months and President and Roadhouse, Inc. (operates
Corporate Investors Director (since 1983), restaurant chain); Director
1500 Main Street H Investment Company (since 1999), ValueClick Inc.
Suite 600 LLC (family partnership). (internet advertising company);
P.O. Box 15189 Director (since 2002),
Springfield, MA 01115-5189 Spectranetics Corp. (medical
device company); and Trustee
(since 1991), MassMutual
Participation Investors
(closed-end investment company
advised by Babson Capital).
------------------------------------------------------------------------------------------------------------------------------------
CORINNE T. NORGAARD (69) Trustee 3 years/ President, (2004-2005), 33 Trustee (since 2005), MML
MassMutual (since 1998) 1 year, Thompson Enterprises Series Investment Fund II (an
Corporate Investors 10 months Real Estate Investment; open-end investment company
1500 Main Street and Dean (1996-2004), advised by MassMutual); Trustee
Suite 600 Barney School of Business, (since 2004), MassMutual
P.O. Box 15189 University of Hartford. Premier Funds, formerly The DLB
Springfield, MA 01115-5189 Fund Group (an openend
investment company advised by
MassMutual); Trustee (since
1993), ING Series Fund
(investment company); Director
(since 1992), ING Variable
Series Fund; and Trustee (since
1998), MassMutual Participation
Investors (a closed-end
investment company advised by
Babson Capital).
43
MassMutual Corporate Investors
OFFICERS OF THE TRUST
PRINCIPAL
POSITION OCCUPATION(S)
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST
ADDRESS THE TRUST OF TIME SERVED 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
CLIFFORD M. NOREEN (49) President 1 year/ President (since 2005), Vice President (1993-2005) of the Trust;
MassMutual 7 months Member of the Board of Managers (since 2006), and Managing
Corporate Investors Director (since 2000) of Babson Capital; Trustee (since 2005),
1500 Main Street o Suite 600 and President (since 2005), MMCI Subsidiary Trust and MMPI
P.O. Box 15189 Subsidiary Trust; and President (since 2005), Vice President
Springfield, MA 01115-5189 (1993-2005), MassMutual Participation Investors.
------------------------------------------------------------------------------------------------------------------------------------
RODNEY J. DILLMAN (54) Vice 1 year/ Vice President, Secretary, and Chief Legal Officer (since 2006)
MassMutual President, 7 months of the Trust; Vice President and Associate General Counsel (since
Corporate Investors Secretary, 2000) of MassMutual; General Counsel and Secretary (since 2006)
1500 Main Street o Suite 600 and Chief of Babson Capital; Vice President and Secretary (since 2006),
P.O. Box 15189 Legal MMCI Subsidiary Trust and MMPI Subsidiary Trust; and Vice
Springfield, MA 01115-5189 Officer President, Secretary, and Chief Legal Officer (since 2006),
MassMutual Participation Investors.
------------------------------------------------------------------------------------------------------------------------------------
JAMES M. ROY (44) Vice 1 year/ Vice President and Chief Financial Officer (since 2005),
MassMutual President 7 months Treasurer (2003-2005), and Associate Treasurer (1999-2003) of the
Corporate Investors and Chief Trust; Managing Director (since 2005), and Director (2000-2005)
1500 Main Street o Suite 600 Financial of Babson Capital; Trustee (since 2005), Treasurer (since 2005),
P.O. Box 15189 Officer and Controller (2003-2005), MMCI Subsidiary Trust and MMPI
Springfield, MA 01115-5189 Subsidiary Trust; and Vice President and Chief Financial Officer
(since 2005), Treasurer (2003-2005), and Associate Treasurer
(1999-2003), MassMutual Participation Investors.
------------------------------------------------------------------------------------------------------------------------------------
JOHN T. DAVITT, JR. (39) Comptroller 1 year/ Comptroller (since 2001) of the Trust; Director (since 2000) of
MassMutual 7 months Babson Capital; Controller (since 2005), MMCI Subsidiary Trust
Corporate Investors and MMPI Subsidiary Trust; and Comptroller (since 2001),
1500 Main Street o Suite 600 MassMutual Participation Investors.
P.O. Box 15189
Springfield, MA 01115-5189
------------------------------------------------------------------------------------------------------------------------------------
MELISSA M. LAGRANT (33) Chief 1 year/ Chief Compliance Officer (since 2006) of the Trust; Managing
MassMutual Compliance 7 months Director (since 2005) of Babson Capital; Vice President and
Corporate Investors Officer Senior Compliance Trading Manager (2003-2005), Loomis, Sayles &
1500 Main Street o Suite 600 Company, L.P.; Assistant Vice President-Business Risk Management
P.O. Box 15189 Group (2002-2003), and Assistant Vice President-Investment
Springfield, MA 01115-5189 Compliance (2001-2002), Zurich Scudder Investments/Deutsche Asset
Management; and Chief Compliance Officer (since 2006), MassMutual
Participation Investors.
------------------------------------------------------------------------------------------------------------------------------------
RONALD S. TALAIA (38) Treasurer 1 year/ Treasurer (since 2006) of the Trust; Director (since 2001) of
MassMutual 7 months Babson Capital; and Treasurer (since 2006), MassMutual
Corporate Investors Participation Investors.
1500 Main Street o Suite 600
P.O. Box 15189
Springfield, MA 01115-5189
44
MassMutual Corporate Investors
[PHOTO]
Members of the Board of Trustees
Left to right:
Donald Glickman
CHAIRMAN, DONALD GLICKMAN
& COMPANY, INC.
Robert E. Joyal
RETIRED PRESIDENT OF
BABSON CAPITAL MANAGEMENT LLC
William J. Barrett
PRESIDENT, BARRETT-GARDNER
ASSOCIATES, INC.
Michael H. Brown
PRIVATE INVESTOR
Donald E. Benson*
EXECUTIVE VICE PRESIDENT
AND DIRECTOR,
MARQUETTE FINANCIAL COMPANIES
Corine T. Norgaard*
PRESIDENT, THOMPSON ENTERPRISES
REAL ESTATE INVESTMENT
Roger W. Crandall
EXECUTIVE VICE PRESIDENT AND
CHIEF INVESTMENT OFFICER,
MASSACHUSETTS MUTUAL
LIFE INSURANCE COMPANY
Martin T. Hart*
PRIVATE INVESTOR
*MEMBER OF THE AUDIT COMMITTEE
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN MEMBERS OF THE BOARD OF TRUSTEES
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. Ashareholder may join the Plan by filling out and mailing an
authorization card to Shareholder Financial Services, Inc., the Transfer Agent.
Participating shareholders will continue to participate until they notify the
Transfer Agent, in writing, of their desire to terminate participation. Unless a
shareholder elects to participate in the Plan, he or she will, in effect, have
elected to receive dividends and distributions in cash.
Participating shareholders may also make additional contributions to the Plan
from their own funds. Such contributions may be made by personal check or other
means in an amount not less than $10 nor more than $5,000 per quarter.
Whenever the Trust declares a dividend payable in cash or shares, the Transfer
Agent, acting on behalf of each participating shareholder, will take the
dividend in shares only if the net asset value is lower than the market price
plus an estimated brokerage commission as of the close of business on the
valuation day. The valuation day is the last day preceding the day of dividend
payment.
When the dividend is to be taken in shares, the number of shares to be received
is determined by dividing the cash dividend by the net asset value as of the
close of business on the valuation date or, if greater than net asset value, 95%
of the closing share price. If the net asset value of the shares is higher than
the market value plus an estimated commission, the Transfer Agent, consistent
with obtaining the best price and execution, will buy shares on the open market
at current prices promptly after the dividend payment date.
The reinvestment of dividends does not, in any way, relieve participating
shareholders of any federal, state or local tax. For federal income tax
purposes, the amount reportable in respect of a dividend received in
newly-issued shares of the Trust will be the fair market value of the shares
received, which will be reportable as ordinary income and/or capital gains.
As compensation for its services, the Transfer Agent receives a fee of 5% of any
dividend and cash contribution (in no event in excess of $2.50 per distribution
per shareholder.)
Any questions regarding the Plan should be addressed to Shareholder Financial
Services, Inc., Agent for MassMutual Corporate Investors' Dividend Reinvestment
and Share Purchase Plan, P.O. Box 173673, Denver, CO 80217-3673.
OFFICERS
Roger W. Crandall
CHAIRMAN
Clifford M. Noreen
PRESIDENT
James M. Roy
VICE PRESIDENT &
CHIEF FINANCIAL OFFICER
Rodney J. Dillman
VICE PRESIDENT, SECRETARY &
CHIEF LEGAL OFFICER
Jill A. Fields
VICE PRESIDENT
Michael P. Hermsen
VICE PRESIDENT
Mary Wilson Kibbe
VICE PRESIDENT
Michael L. Klofas
VICE PRESIDENT
Richard E. Spencer, II
VICE PRESIDENT
Ronald S. Talaia
TREASURER
John T. Davitt, Jr.
COMPTROLLER
Melissa M. LaGrant
CHIEF COMPLIANCE OFFICER
[LOGO] MassMutual Corporate Investors DB1035 207
ITEM 2. CODE OF ETHICS.
The Registrant adopted a Code of Ethics for Senior Financial Officers
(the "Code") on October 17, 2003, which is available on the
Registrant's website at www.babsoncapital.com/mci. During the period
covered by this Form N-CSR, there were no amendments to, or waivers
from, the Code.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant's Board of Trustees has determined that Mr. Donald E.
Benson, a Trustee of the Registrant and a member of its Audit
Committee, is an audit committee financial expert. Mr. Benson is
"independent" for purposes of this Item 3 as required by applicable
regulation.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
FEES BILLED TO THE REGISTRANT
KPMG LLP KPMG LLP
Year Ended Year Ended
December 31, December 31,
2006 2005
---------- ----------
Audit Fees $ 40,500 $ 34,200
Audit-Related Fees 5,400 5,000
Tax Fees 34,500 25,900
All Other Fees 0 0
---------- ----------
Total Fees $ 80,400 $ 65,100
========== ==========
NON-AUDIT FEES BILLED TO BABSON CAPITAL AND MASSMUTUAL
KPMG LLP KPMG LLP
Year Ended Year Ended
December 31, December 31,
2006 2005
---------- ----------
Audit-Related Fees $ 988,727 $1,229,916
Tax Fees 18,000 0
All Other Fees 0 0
---------- ----------
Total Fees $1,006,727 $1,229,916
========== ==========
The category "Audit Related Fees" reflects fees billed by KPMG for
various non-audit and non-tax services rendered to the Registrant,
Babson Capital Management LLC ("Babson Capital") and Massachusetts
Mutual Life Insurance Company ("MassMutual"), such as SAS 70 review,
agreed upon procedures reports. Preparation of Federal, state and local
income tax and compliance work are representative of the fees billed in
the "Tax Fees" category. The category "All Other Fees" represents fees
billed by KPMG for tax consulting rendered to Babson Capital and
MassMutual. The Sarbanes-Oxley Act of 2002 and its implementing
regulations allows the Registrant's Audit Committee to establish a
pre-approval policy for certain services rendered by the Registrant's
independent accountants. During 2006, the Registrant's Audit Committee
approved all of the services rendered to the Registrant by KPMG and did
not rely on such a pre-approval policy for any such services.
The Audit Committee reviewed the aggregate fees billed for professional
services rendered by KPMG for the Registrant and for the non-audit
services provided to Babson Capital, and Babson Capital's parent,
MassMutual. As part of this review, the Audit Committee considered
whether the provision of such non-audit services were compatible with
maintaining the principal accountant's independence.
The 2005 fees billed represent final 2005 amounts, which may differ
from the preliminary figures available as of the filing date of the
Trust's 2006 Annual Form N-CSR and includes, among other things, fees
for services that may not have been billed as of the filing date of the
Trust's 2006 Annual Form N-CSR, but are now properly included in the
2005 fees billed to the Trust, Babson Capital, and MassMutual.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The Registrant maintains an Audit Committee composed exclusively of
Trustees of the Registrant who qualify as "independent" Trustees under
the current listing standards of the New York Stock Exchange and the
rules of U.S. Securities and Exchange Commission. The Committee
operates pursuant to a written Audit Committee Charter, which is
available (1) on the Registrant's website, www.babsoncapital.com/mci;
and (2) without charge, upon request, by calling, toll-free
866-399-1516. The current members of the Audit Committee are Donald E.
Benson, Martin T. Hart, and Corine T. Norgaard.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable for this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END
MANAGEMENT INVESTMENT COMPANIES.
The Registrant's Board of Trustees has delegated proxy voting
responsibilities relating to voting securities held by the Registrant
to its investment adviser, Babson Capital Management LLC ("Babson
Capital"). A summary of Babson Capital's proxy voting policies and
procedures is set forth below.
Summary of Babson Capital's Proxy Voting Policy
-----------------------------------------------
Babson Capital views the voting of proxies as an integral part of its
investment management responsibility and believes, as a general
principle, that proxies should be voted solely in the best interests of
its clients (i.e. prudently and in a manner believed by Babson Capital
to best protect and enhance an investor's returns). To implement this
general principle, it is Babson Capital's policy to generally vote
proxies in accordance with the recommendations of Institutional
Shareholder Services ("ISS"), a recognized authority on proxy voting
and corporate governance, or, in cases where ISS has not made any
recommendations with respect to a proxy, in accordance with ISS's proxy
voting guidelines.
Babson Capital recognizes, however, that there may be times when Babson
Capital believes that it will be in the best interests of clients
holding the securities to (1) vote against ISS's recommendations or (2)
in cases where ISS has not provided Babson Capital with any
recommendations with respect to a proxy, vote against ISS's proxy
voting guidelines. Babson Capital may vote, in whole or part, against
ISS's recommendations or ISS's proxy voting guidelines, as applicable,
if such vote is authorized by the Policy. The procedures set forth in
the Policy are designed to ensure that votes against ISS's
recommendations or proxy voting guidelines have been made in the best
interests of clients and are not the result of any material conflict of
interest (a "Material Conflict").
Summary of Babson Capital's Proxy Voting Procedures
---------------------------------------------------
Babson Capital has (1) established a Proxy Committee that is
responsible for the implementation and governance of the Policy and (2)
designated Proxy Administrators who will receive and post proxies for
voting with ISS. In accordance with the Policy, Babson Capital will
generally vote all client proxies in accordance with ISS's
recommendation or proxy voting guidelines, unless a person authorized
by the Proxy Committee (each a "Proxy Analyst") determines that it is
in its clients' best interest to vote against ISS's recommendation or
proxy voting guidelines. In these cases, Babson Capital will vote
against ISS's recommendation or proxy voting guidelines, so long as no
other Proxy Analyst reviewing such proxy disagrees with such
recommendation, and no known Material Conflict is identified by the
Proxy Analyst(s) or the Proxy Administrator. Otherwise, the proxy is to
be submitted to a member of the Proxy Committee, who shall determine
how to vote the proxy unless (i) the Proxy Administrator has identified
a Babson Capital Material Conflict or (ii) said Proxy Committee member
has identified a Material Conflict. In such cases, the proxy shall be
submitted to the Proxy Committee, which may authorize a vote against
ISS's recommendation or proxy voting guidelines only if the Proxy
Committee determines that such vote is in the clients' best interests.
No employee, officer or director of Babson Capital or its affiliates
(other than those assigned such responsibilities under the Policy) may
influence how Babson Capital votes any proxy, unless such person has
been requested to provide such assistance by a Portfolio Manager or
Proxy Committee member and has disclosed any known Material Conflict.
Any pre-vote communications prohibited by the Policy shall be reported
to the Proxy Committee member prior to voting and to Babson Capital's
General Counsel.
Obtaining a Copy of the Policy
------------------------------
The full text of Babson Capital's Policy is available (1) without
charge, upon request, by calling 1-866-399-1516 or (2) on the
Registrant's website, www.babsoncapital.com/mci.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The following disclosure item is made as of the date of this Form N-CSR
unless otherwise indicated.
PORTFOLIO MANAGER. Clifford M. Noreen serves as the President of the
Registrant (since 2005) and as its Portfolio Manager. Mr. Noreen began
his service to the Registrant in 1993 as a Vice President. With over 25
years of industry experience, Mr. Noreen is a Managing Director and a
Member of the Board of Managers of Babson Capital Management LLC
("Babson Capital") and head of Babson Capital's Corporate Securities
Group, where he oversees public equities and corporate credit related
investments, including public and private bonds, mezzanine, and private
equity investments, and structured credit products. Mr. Noreen joined
Massachusetts Mutual Life Insurance Company ("MassMutual"), Babson
Capital's parent company, in 1985 and began leading its High Yield Team
in 1992, where he was responsible for oversight of all public high
yield portfolios. In 2004, Mr. Noreen assumed responsibility for Babson
Capital's Public Corporate Credit Group, which included the Investment
Grade and High Yield Institutional Fixed Income teams. Mr. Noreen also
presently serves as President of MassMutual Participation Investors,
another closed-end registered investment company advised by Babson
Capital. Mr. Noreen holds a B.A. from the University of Massachusetts
and an M.B.A from American International College.
PORTFOLIO MANAGEMENT TEAM. Mr. Noreen has primary responsibility for
overseeing the investment of the Registrant's portfolio, with the
day-to-day investment management responsibility of the Registrant's
portfolio being shared with the following Babson Capital investment
professionals (together with the Portfolio Manager, the "Portfolio
Team").
Michael P. Hermsen, Michael L. Klofas, and Richard E. Spencer II are
each a Vice President of the Registrant and a Managing Director of
Babson Capital. Together they are responsible for managing Babson
Capital's Mezzanine Investment and Private Equity Investments Team
within the Corporate Securities Group, which is responsible for
finding, analyzing, negotiating and servicing mezzanine private
placement securities for the Registrant.
Mr. Hermsen joined MassMutual in 1990 and has been an officer of the
Registrant since 1992. Previously, he worked at Teachers Insurance and
Annuity Association where he was a generalist private placement
analyst. At MassMutual and then Babson Capital, Mr. Hermsen has
analyzed and invested in traditional private placements, high yield
public and private bonds, and leveraged bank loans. He has also been
responsible for managing a small portfolio of distressed investments.
Since 1993, he has focused on originating, analyzing, structuring and
documenting mezzanine and private equity investments. He holds a B.A.
from Bowdoin College and an M.B.A. from Columbia University.
Mr. Klofas joined MassMutual in 1988 and has been an officer of the
Registrant since 1989. Prior to joining MassMutual, he spent two years
at a small venture capital firm and two years at a national public
accounting firm. At MassMutual and then Babson Capital, Mr. Klofas has
analyzed and invested in traditional private placements and high yield
public bonds. He also spent four years leading Babson Capital's workout
and restructuring activities. Since 1993, he has focused on
originating, analyzing, structuring and documenting mezzanine and
private equity investments. Mr. Klofas holds a B.A. from Brandeis
University and an M.B.A. from Babson College as well as a Certified
Public Accountant designation.
Mr. Spencer joined MassMutual in 1989 after three years as a corporate
loan analyst at a major New England bank. He has been an officer of
Registrant since 1990. At MassMutual and then Babson Capital, Mr.
Spencer has analyzed and invested in traditional private placements,
high yield public and private bonds, leveraged bank loans, mezzanine
debt and private equity. From 1993 to 1999, he was the lead
restructuring professional at Babson Capital. Since 1999, Mr. Spencer
has been focused on the origination, analysis, structuring and
documentation of mezzanine and private equity investments. He holds a
B.A. from Bucknell University and an M.B.A. from the State University
of New York at Buffalo.
Starting in 2006, Jill A. Fields assumed primary day-to-day
responsibility for managing the Registrant's public high yield and
investment grade fixed income portfolio. Ms. Fields has been a Vice
President of the Registrant since 2006. Ms. Fields is a Managing
Director of Babson Capital with over 20 years of industry experience in
high yield total return structured credit leveraged loans and private
placement investing. Prior to joining Babson Capital in 1997, she was a
credit analyst at Shawmut National Bank, and the Director of Corporate
Bond Research at Hartford Life Insurance Group. Ms. Fields holds a B.S.
from Pennsylvania State University and an M.B.A. from the University of
Connecticut.
OTHER ACCOUNTS MANAGED BY THE PORTFOLIO TEAM. The members of the
Registrant's Portfolio Team also have primary responsibility for the
day-to-day management of other Babson Capital advisory accounts,
including, among others, closed-end and open-end investment companies,
private investment funds, MassMutual-affiliated accounts, as well as
separate accounts for institutional clients. These advisory accounts
are identified below.
NUMBER OF
ACCOUNTS APPROXIMATE
TOTAL WITH ASSET SIZE OF
NUMBER APPROXIMATE PERFORMANCE- PERFORMANCE-
PORTFOLIO ACCOUNT OF TOTAL ASSET BASED BASED ADVISORY
TEAM CATEGORY ACCOUNTS SIZE(A) ADVISORY FEE FEE ACCOUNTS(A)
------------ --------------------- -------- ------------ ------------ --------------
Clifford M. Registered Investment
Noreen(B) Companies 1 $126.5 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 1 $56.5 million 2 $56.5 million
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A 0 N/A
-----------------------------------------------------------------------------------------
Jill A. Registered Investment
Fields Companies 3 $741.9 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 1 $49.7 million 1 $49.7 million
-----------------------------------------------------------------------------------------
Other Accounts 3 $545.6 million 0 N/A
-----------------------------------------------------------------------------------------
Michael P. Registered Investment
Hermsen Companies 1 $126.5 million N/A N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 5 $577.3 million 5 $577.3 million
-----------------------------------------------------------------------------------------
Other Accounts 1C $1.38 billion N/A N/A
-----------------------------------------------------------------------------------------
Michael L. Registered Investment
Klofas Companies 1 $126.5 million N/A N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 5 $577.3 million 5 $577.3 million
-----------------------------------------------------------------------------------------
Other Accounts 1C $1.38 billion N/A N/A
-----------------------------------------------------------------------------------------
Richard E. Registered Investment
Spencer II Companies 1 $126.5 million N/A N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 5 $577.3 million 5 $577.3 million
-----------------------------------------------------------------------------------------
Other Accounts 1C $1.38 billion N/A N/A
(A) Account asset size has been calculated as of December 31, 2006.
(B) Mr. Noreen, as the head of Babson Capital's Corporate Securities
Group, has overall responsibility for all corporate credit related
investments, including public and private bonds, mezzanine, and
private equity investments, as well as structured credit products
managed by Babson Capital. Except for the accounts noted in the table
above, Mr. Noreen is not primarily responsible for the day-to-day
management of the other accounts managed by Babson Capital's Corporate
Securities Group.
(C) The listed account and managed assets represent that portion of the
general investment account of Massachusetts Mutual Life Insurance
Company and C.M. Life Insurance Company for which an individual
Portfolio Team member has primary day-to-day responsibility. As of
December 31, 2006, Babson Capital's total general investment account
assets under management were $58.5 billion dollars.
MATERIAL CONFLICTS OF INTEREST. The potential for material conflicts of
interest may exist as the members of the Portfolio Team have
responsibilities for the day-to-day management of multiple accounts.
These conflicts may be heightened to the extent the individual, Babson
Capital and/or an affiliate has an investment in one or much of such
accounts or an interest in the performance of such accounts. Babson
Capital has identified (and summarized below) areas where material
conflicts of interest are most likely to arise, and has adopted
policies and procedures that it believes are reasonably designed to
address such conflicts.
It is possible that an investment opportunity may be suitable for both
the Registrant and other accounts managed by a member of the Portfolio
Team, but may not be available in sufficient quantities for both the
Registrant and the other accounts to participate fully. Similarly,
there may be limited opportunity to sell an investment held by the
Registrant and another account. A conflict may arise where a member of
the Portfolio Team may have an incentive to treat an account
preferentially as compared to the Registrant because the account pays
Babson Capital a performance-based fee or a member of the Portfolio
Team, Babson Capital, or an affiliate has an interest in the account.
Babson Capital has adopted an investment allocation policy and trade
allocation procedures to address allocation of portfolio transactions
and investment opportunities across multiple clients. These policies
are designed to achieve fair and equitable treatment of all clients
over time, and specifically prohibit allocations based on performance
of an account, the amount or structure of the management fee,
performance fee or profit sharing allocations, participation or
investment by an employee, Babson Capital or an affiliate, whether the
account is public, private, proprietary or third party. Additionally,
the Registrant, MassMutual, Babson Capital, MassMutual Participation
Investors, and any private investment company advised or sub-advised by
Babson Capital have obtained a blanket order from the Securities and
Exchange Commission pursuant to Section 17(d), and Rule 17(d)-1
thereunder, of the Investment Company Act of 1940, as amended, which
sets forth the conditions by which the entities can engage in private
placement co-investment activities.
Potential material conflicts of interest may also arise related to the
knowledge and timing of the Registrant's trades, investment
opportunities and broker selection. A member of the Portfolio Team will
have information about the size, timing and possible market impact of
the Registrant's trades. It is theoretically possible that a member of
the Portfolio Team could use this information for his or her personal
advantage or the advantage of other accounts he manages or the possible
detriment of the Registrant. For example, a member of the Portfolio
Team could front run a fund's trade or short sell a security for an
account immediately prior to the Registrant's sale of that security. To
address these conflicts, Babson Capital has adopted policies and
procedures governing employees' personal securities transactions, the
use of short sales, and trading between the Registrant and other
accounts managed by members of the Portfolio Team or accounts owned by
Babson Capital or its affiliates.
With respect to securities transactions for the Registrant, Babson
Capital determines which broker to use to execute each order,
consistent with its duty to seek best execution of the transaction.
Babson Capital manages certain other accounts, however, where Babson
Capital may be limited by the client with respect to the selection of
brokers or directed to trade such client's transactions through a
particular broker. In these cases, trades for a fund in a particular
security may be placed separately from, rather than aggregated with,
such other accounts. Placing separate transaction orders for a security
may temporarily affect the market price of the security or otherwise
affect the execution of the transaction to the possible detriment of a
fund or the other account(s) involved. Babson Capital has policies and
procedures that address best execution and directed brokerage.
Members of the Portfolio Team may also face other potential conflicts
of interest in managing the Registrant, and the above is not a complete
description of every conflict of interest that could be deemed to exist
in managing both the Registrant and the other accounts listed above.
COMPENSATION. The current Babson Capital compensation and incentive
program for investment professionals is designed to attract, motivate
and retain high-performing individuals.
To help Babson Capital make informed decisions, the Company
participates in annual compensation surveys of investment management
firms using McLagan Partners, in addition to other industry specific
resources. The firms selected for periodic peer-group comparisons
typically have similar asset size or business mix. Annually, a review
is conducted of total compensation versus market, to ensure that
individual pay is competitive with the defined overall market.
The compensation package for the members of the Portfolio Team is
comprised of a market-driven base salary, a performance-driven annual
bonus, and discretionary long-term incentives. The performance-driven
bonus is based on the performance of the accounts managed by the
members of the Portfolio Team relative to appropriate benchmarks,
including with respect to the Registrant, to the Lehman Brothers
Intermediate U.S. Credit and the S & P Industrial Index, in addition to
the Russell 2000 Index and Lehman Brothers U.S. Corporate High Yield
Index. Performance of the Registrant, like other accounts Portfolio
Team members manage, are evaluated on a pre-tax basis, and are reviewed
over one and three-year periods, with greater emphasis given to the
latter. There are other factors that affect bonus awards to a lesser
extent, such as client satisfaction, teamwork, the assets under
management, and the overall success of Babson Capital. Such factors are
considered as a part of the overall annual bonus evaluation process by
the management of Babson Capital.
Long-Term incentives are designed to share with participants the
longer-term value created in Babson Capital. Long-term incentives may
take the form of deferred cash awards (including deferred cash awards
that provide a portfolio manager with the economic equivalent of a
"shareholder" interest in the firm by linking the value of the award to
a formula which ties to the value of the business), and/or, in the case
of a portfolio manager who manages a private investment fund with a
performance fee, a deferred cash award or a direct profit sharing
interest that results in the manager receiving amounts based on the
amount of the performance fee paid by such fund. These long-term
incentives vest over time and are granted annually, based upon the same
criteria used to determine the performance-driven annual bonus detailed
above. Because the Portfolio Team members are generally responsible for
multiple accounts (including the Registrant), they are compensated on
the overall performance of the accounts that they manage, rather than a
specific account, except for the portion of compensation relating to
any performance fee award.
BENEFICIAL OWNERSHIP. As of December 31, 2006, members of the Portfolio
Team beneficially owned the following dollar range of equity securities
in the Registrant:
DOLLAR RANGE OF BENEFICIALLY OWNED*
PORTFOLIO TEAM: EQUITY SECURITIES OF THE REGISTRANT
--------------- -----------------------------------
Clifford M. Noreen $500,001-$1,000,000
Jill A. Fields $50,001-$100,000
Michael P. Hermsen $100,001-$500,000
Michael L. Klofas $100,001-$500,000
Richard E. Spencer II None
* Beneficial ownership has been determined in accordance with Rule 16a-1(a)(2)
under the Securities Exchange Act of 1934, as amended. (Shares "beneficially
owned" include the number of shares of the Registrant represented by the value
of a Registrant-related investment option under Babson Capital's non-qualified
deferred compensation plan for certain officers of Babson Capital (the
"Plan"). The Plan has an investment option that derives its value from the
market value of the Registrant's common shares. However, neither the Plan nor
the participant in the Plan has an actual ownership interest in the
Registrant's common shares.)
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not Applicable for this filing.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable for this filing.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The principal executive officer and principal financial officer
of the Registrant evaluated the effectiveness of the Registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")) as of a
date within 90 days of the filing date of this report and based
on that evaluation have concluded that such disclosure controls
and procedures are effective to provide reasonable assurance that
material information required to be disclosed by the Registrant
on Form N-CSR is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange
Commission's rules and forms.
(b) There were no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act)
during the Registrant's second fiscal half-year that have
materially affected, or are reasonably likely to materially
affect, the Registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a)(1) ANY CODE OF ETHICS, OR AMENDMENTS THERETO, THAT IS THE SUBJECT OF
DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT
INTENDS TO SATISFY THE ITEM 2 REQUIREMENTS THROUGH THE FILING OF
AN EXHIBIT.
None.
(a)(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE OFFICER AND
PRINCIPAL FINANCIAL OFFICER OF THE REGISTRANT AS REQUIRED BY RULE
30a-2 UNDER THE ACT.
Attached hereto as EX-99.31.1
Attached hereto as EX-99.31.2
(a)(3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23c-1
UNDER THE ACT (17 CFR 270.23c-1) SENT OR GIVEN DURING THE PERIOD
COVERED BY THE REPORT BY OR ON BEHALF OF THE REGISTRANT TO 10 OR
MORE PERSONS.
Not Applicable for this filing.
(b) CERTIFICATIONS PURSUANT TO RULE 30a-2(b) UNDER THE ACT.
Attached hereto as EX-99.32
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): MassMutual Corporate Investors
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By: /s/ Clifford M. Noreen
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Clifford M. Noreen, President
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Date: March 6, 2007
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Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /s/ Clifford M. Noreen
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Clifford M. Noreen, President
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Date: March 6, 2007
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By: /s/ James M. Roy
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James M. Roy, Vice President, and
Chief Financial Officer
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Date: March 6, 2007
------------------------------