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: 12/31/07
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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.
[LOGO] MASSMUTUAL CORPORATE INVESTORS
2007 ANNUAL REPORT
MassMutual Corporate Investors
MassMutual Corporate Investors
c/o Babson Capital Management LLC
1500 Main Street
Suite 600, P.O. Box 15189
Springfield, Massachusetts 01115-5189
(413) 226-1516
http://www.BabsonCapital.com/mci
ADVISER
Babson Capital Management LLC
1500 Main Street, P.O. Box 15189
Springfield, Massachusetts 01115-5189
INDEPENDENT REGISTERED PUBIC ACCOUNTING FIRM
KPMG LLP
Boston, Massachusetts 02110
COUNSEL TO THE TRUST
Ropes & Gray LLP
Boston, Massachusetts 02110
CUSTODIAN
Citibank, N.A.
New York, New York 10043
TRANSFER AGENT & REGISTRAR
Shareholder Financial Services, Inc.
P.O. Box 173673
Denver, Colorado 80217-3673
1-800-647-7374
MCI
Listed
NYSE
PROXY VOTING POLICIES & PROCEDURES;
PROXY VOTING RECORD
The Trustees of MassMutual Corporate Investors (the "Trust") have delegated
proxy voting responsibilities relating to the voting of securities held by the
Trust to Babson Capital Management LLC ("Babson Capital"). A description of
Babson Capital's proxy voting policies and procedures is available (1) without
charge, upon request, by calling, tollfree 1-866-399-1516; (2) on the Trust's
website at http:// www.BabsonCapital.com/mci; and (3) on the U.S. Securities and
Exchange Commission's ("SEC") website at http://www. sec.gov. Information
regarding how the Trust voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30, 2007 is available (1) on the
Trust's web-site at http://www.BabsonCapital.com/mci; and (2) on the SEC's
website at http://www.sec.gov.
FORM N-Q
The Trust files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. This information is
available (i) on the SEC's website at http://www.sec.gov; and (ii) at the SEC's
Public Reference Room in Washington, DC (which information on their operation
may be obtained by calling 1-800-SEC-0330). A complete schedule of portfolio
holdings as of each quarter-end is available on the Trust's website at
http://www.BabsonCapital.com/mci or upon request by calling, toll-free,
1-866-399-1516.
MASSMUTUAL CORPORATE INVESTORS
MassMutual Corporation Investors is a closed-end investment company, first
offered to the public over 35 years ago, whose shares are traded on the New York
Stock Exchange.
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MassMutual Corporate Investors
INVESTMENT OBJECTIVE & POLICY
MassMutual Corporate Investors (the "Trust") is a closed-end investment company,
first offered to the public in 1971, whose shares are traded on the New York
Stock Exchange under the trading symbol "MCI". The Trust's share price can be
found in the financial section of most newspapers as "MassCp" or "MassMuInv"
under either the New York Stock Exchange listings or Closed-End Fund Listings.
The Trust's investment objective is to maintain a portfolio of securities
providing a fixed yield and at the same time offering an opportunity for capital
gains. The Trust's principal investments are privately placed, below-investment
grade, long-term debt obligations with equity features such as warrants,
conversion rights, or other equity features and, occasionally, preferred stocks.
The Trust typically purchases these investments, which are not publicly
tradable, directly from their issuers in private placement transactions. These
investments are typically mezzanine debt instruments with accompanying private
equity securities made to small or middle market companies. In addition, the
Trust may temporarily invest, subject to certain limitations, in marketable
investment grade debt securities, other marketable debt securities (including
high yield securities) and marketable common stocks. Below investment grade or
high yield securities have predominantly speculative characteristics with
respect to the capacity of the issuer to pay interest and repay principal.
Babson Capital Management LLC ("Babson Capital") manages the Trust on a total
return basis. The Trust distributes substantially all of its net income to
shareholders each year. Accordingly, the Trust pays dividends to shareholders
quarterly in January, May, August, and November. The Trust pays dividends to its
shareholders in cash, unless the shareholder elects to participate in the
Dividend Reinvestment and Share Purchase Plan.
In this report you will find a complete listing of the Trust's holdings. We
encourage you to read this section carefully for a better understanding of the
Trust. We cordially invite all shareholders to attend the Trust's Annual Meeting
of Shareholders, which will be held on April 25, 2008 at 2:00 P.M. in
Springfield, Massachusetts.
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1
MassMutual Corporate Investors
TOTAL ANNUAL PORTFOLIO RETURN (AS OF 12/31 EACH YEAR)*
[BAR CHART APPEARS HERE]
17.12 7.53 7.28 5.91 4.80 22.61 22.76 20.04 18.09 8.58 MASSMUTUAL CORPORATE
INVESTORS (BASED ON CHANGE
IN THE NET ASSET VALUE WITH
REINVESTED DIVIDENDS)
-2.56 21.26 -3.03 2.49 -20.48 47.25 18.33 4.55 18.37 -1.57 RUSSELL 2000 INDEX
1.87 2.39 -5.86 5.28 -1.41 28.97 11.13 2.74 11.85 1.87 LEHMAN BROTHERS U.S.
CORPORATE HIGH YIELD INDEX)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
* 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 of the Trust's shares due to the difference between
the Trust's net asset value and the market value of its shares outstanding (see
page 12 for total investment return based on market value); past performance is
no guarantee of future results.
PORTFOLIO COMPOSITION AS OF 12/31/07*
[PIE CHART APPEARS HERE]
Private / 144A Cash & Short Term
High Yield Debt Invesments
52.0% 7.1%
Private Investment Public High
Grade Debt Yield Debt
1.3% 22.4%
Private / Restricted Public Equity
Equity 2.7%
14.5%
*Based on value of total investments (including cash)
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2
MassMutual Corporate Investors
TO OUR SHAREHOLDERS
I am pleased to share with you the Trust's Annual Report for the year ended
December 31, 2007.
THE TRUST'S 2007 PORTFOLIO PERFORMANCE
The Trust's net total portfolio rate of return for 2007 was 8.58%, as measured
by the change in net asset value, assuming the reinvestment of all dividends and
distributions. The Trust's total net assets were $251,163,022, or $27.19 per
share, as of December 31, 2007 compared to $251,689,646, or $27.51 per share, as
of December 31, 2006. The Trust paid a quarterly dividend of 52 cents per share
for the first quarter of 2007 and then 54 cents per share for the next three
quarters, with the fourth quarter dividend paid in January 2008. In addition,
the Trust declared a special year-end dividend of 43 cents per share, paid in
January 2008 to shareholders of record on December 31, 2007, bringing total
dividends for the year to $2.57 per share. We are very pleased with the Trust's
2007 portfolio performance.
The table below lists the average annual net 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 the Lehman Brothers
U.S. Corporate High Yield Index and the Russell 2000 Index for the 1, 3, 5 and
10 years ended December 31, 2007.
Lehman Brothers U.S. Russell
The Trust Corporate High Yield Index 2000 Index
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1 Year 8.58% 1.87% -1.57%
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3 Year 15.46% 5.39% 6.80%
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5 Year 18.30% 10.90% 16.24%
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10 Year 13.26% 5.51% 7.08%
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Past performance is no guarantee of future results.
[PHOTO OF PRESIDENT AND CHAIRMAN]
Left to right:
Clifford M. Noreen
PRESIDENT
Roger W. Crandall
CHAIRMAN
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3
MassMutual Corporate Investors
The U.S. economy and investment markets started the year strong but 2007 will
long be remembered for the major mortgage- and credit-market crisis that wreaked
havoc in the second half of the year and into 2008. The issues began in the
residential sub-prime mortgage market, where underwriting standards that began
loosening in 2005 allowed many homeowners to borrow debt that could only be
supported by continuously rising home prices. As housing prices softened,
mortgage defaults and foreclosures rose dramatically and mortgage-related
collateralized debt obligation (CDO) products also suffered. General investor
confidence began to tumble, and the major stock market indexes experienced
declines and volatility not seen in some time, eventually closing the year with
modest gains but concerns among many analysts of what could be next.
Overall, the US economy finished 2007 on an uncertain note. The unemployment
rate was 5 percent in December, up from 4.5 percent the previous year, according
to the US Department of Labor. Also, core inflation was 2.3 percent at year's
end, not quite as bad as the 2.6 percent increase during 2006. The value of the
dollar versus several other currencies, however, dropped precipitously in 2007.
The corporate credit market continued a remarkable run, as corporate credit
defaults around the globe continued their downward trend for the fifth
consecutive year, according to Moody's Investors Service. Moody's global
issuer-weighted speculativegrade default rate finished the year at 0.9 percent,
down from 1.7 percent in 2006 and its lowest level since 1981. Moody's expects
the default rate to climb in 2008 to 4.8 percent and reach its historical
average of 5 percent in 2009. Corporate bond spreads widened significantly in
the second half of 2007 and the trend continued at the beginning of 2008.
PORTFOLIO ACTIVITY
Overall, the Trust closed 20 new private placement transactions during 2007 and
added to five existing private placement investments. Total direct placement
purchases were $44,507,493.
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4
MassMutual Corporate Investors
New private placement transactions invested in during the year were: Advanced
Technologies Holdings, Inc.; AHC Holding Company Inc.; Aero Holdings, Inc.;
Connecticut Electric, Inc.; Electra Bicycle Company LLC; Golden Country Foods
Holding, Inc.; NetShape Technologies, Inc.; K H O F Holdings, Inc.; K W P I
Holdings Corporation; K-Tek Holding Corporation; Mail Communications Group,
Inc.; Nesco Holdings Corporation; Pacific Consolidated Holdings LLC; Smart
Source Holdings LLC; Torrent Group Holdings, Inc.; Total Equipment & Service,
Inc.; Transpac Holding Company; Visioneering, Inc.; Waggin' Train Holdings LLC;
and Workplace Media Holding Co.
In addition, the Trust added to existing private placement investments in HM
Holding Company; Moss, Inc.; NABCO, Inc.; Savage Sports Holding, Inc.; and
Transtar Holding Company.
The Trust also had 14 realizations in 2007.
[PHOTO OF OFFICERS]
Left to right:
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
Michael L. Klofas
VICE PRESIDENT
Richard E. Spencer, II
VICE PRESIDENT
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5
MassMutual Corporate Investors
OUTLOOK FOR 2008
The year 2008 opened with worldwide financial markets under pressure. The credit
crisis continues to find new victims and with each new report, investor
confidence wanes further. Consumer confidence showed cracks in late 2007, and
the housing market may take some time to hit bottom. Oil prices rose to new
heights in the latter half of 2007 and approached $100 per barrel. Early Fed
action in 2008 indicates that it is targeting lower interest rates to help the
residential real estate market and weakening economy. As always, no one can
predict the future with any degree of certainty.
Despite all this, merger and acquisition activity continued at a record pace in
2007, although activity is expected to be lower in 2008. Last year saw $4.5
trillion in announced deals worldwide, up 24 percent from 2006, according to
Thomson Financial, and included the three largest leveraged buyouts in history.
Private equity firms had been a significant part of the activity in the first
six months of 2007 (reportedly more than 30 percent of total volume), but nearly
disappeared in the second half of the year and are expected to be very quiet at
the start of 2008. Corporate buyers are expected to be more active players, as
they are flush with cash.
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 model,
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 may be "forward
looking" statements. Investors are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date in which they are
made and which reflect management's current estimates, projections, expectations
or beliefs, and which are subject to risks and uncertainties that may cause
actual results to differ materially. These statements are subject to change at
any time based upon economic, market or other conditions and may not be relied
upon as investment advice or an indication of the Trust's trading intent.
References to specific securities are not recommendations of such securities,
and may not be representative of the Trust's current or future investments. We
undertake no obligation to publicly update forward looking statements, whether
as a result of new information, future events, or otherwise.
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2007 Record Net Investment Short-Term Tax Long-Term
Dividends Date Income Gains Effect Gains
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Regular 05/07/07 $0.5200 -- --
07/27/07 0.5400 -- --
10/29/07 0.5400 -- --
12/31/07 0.5400 -- --
Special 12/31/07 0.4300 -- --
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$2.5700 $ -- $2.5700 $ --
================================================================================
The following table summarizes the tax effects of the retention of capital gains
for 2007:
Amount Per Share Form 2439
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2007 Gains Retained 0.2820 Line 1a
Long-Term Gains Retained 0.2820
Taxes Paid 0.0987 Line 2*
Basis Adjustment 0.1833 **
* 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
---------------------------------------------------------------------------------------------------------
$2.57 14.9098% 0.3822 15.8036% 0.4051 0% 0.0000
=========================================================================================================
*** Not available to individual shareholders
**** Qualified dividends are reported in Box 1b on IRS Form 1099-Div for 2007
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6
MassMutual Corporate Investors
FINANCIAL REPORT
Consolidated Statement of Assets and Liabilities.......................... 8
Consolidated Statement of Operations...................................... 9
Consolidated Statement of Cash Flows...................................... 10
Consolidated Statements of Changes in Net Assets.......................... 11
Consolidated Selected Financial Highlights................................ 12
Consolidated Schedule of Investments...................................... 13-34
Notes to Consolidated Financial Statements................................ 35-40
Report of Independent Registered Public Accounting Firm................... 41
Interested Trustees....................................................... 42-43
Independent Trustees...................................................... 44-46
Officers of the Trust..................................................... 47
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7
MassMutual Corporate Investors
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
December 31, 2007
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost - $191,421,477) $ 193,140,254
Corporate public securities at market value
(Cost - $72,192,575) 71,410,379
Short-term securities at amortized cost 19,600,600
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284,151,233
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Cash 668,459
Interest and dividends receivable 6,055,175
Receivable for investments sold 1,535,785
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TOTAL ASSETS 292,410,652
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LIABILITIES:
Dividend payable 8,960,490
Investment advisory fee payable 784,884
Note payable 30,000,000
Interest payable 211,557
Accrued expenses 155,868
Accrued taxes payable 1,133,101
Other payables 1,730
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TOTAL LIABILITIES 41,247,630
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TOTAL NET ASSETS $ 251,163,022
=============
NET ASSETS:
Common shares, par value $1.00 per share; an
unlimited number authorized $ 9,237,619
Additional paid-in capital 110,814,116
Retained net realized gain on investments, prior years 126,854,715
Undistributed net investment income 1,765,219
Accumulated net realized gain on investments 1,554,772
Net unrealized appreciation of investments 936,581
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TOTAL NET ASSETS $ 251,163,022
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COMMON SHARES ISSUED AND OUTSTANDING 9,237,619
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NET ASSET VALUE PER SHARE $ 27.19
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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8
MassMutual Corporate Investors
CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 2007
INVESTMENT INCOME:
Interest $ 25,451,911
Dividends 3,530,552
Other 119,074
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TOTAL INVESTMENT INCOME 29,101,537
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EXPENSES:
Investment advisory fees 3,222,565
Interest 1,528,750
Trustees' fees and expenses 205,500
Professional fees 184,000
Reports to shareholders 148,000
Transfer agent/registrar's expenses 36,000
Custodian fees 28,000
Other 161,807
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TOTAL EXPENSES 5,514,622
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INVESTMENT INCOME - NET 23,586,915
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments before taxes 2,461,275
Income tax expense (1,049,810)
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NET REALIZED GAIN ON INVESTMENTS 1,411,465
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Net change in unrealized appreciation of investments
before taxes (5,247,969)
Net change in deferred income tax expense 651,017
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NET CHANGE IN UNREALIZED APPRECIATION OF INVESTMENTS (4,596,952)
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NET LOSS ON INVESTMENTS (3,185,487)
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 20,401,428
=============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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9
MassMutual Corporate Investors
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended December 31, 2007
NET DECREASE IN CASH:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term portfolio
securities, net $ (12,012,550)
Purchase of portfolio securities (119,755,220)
Proceeds from disposition of portfolio securities 122,311,555
Interest, dividends, and other received 28,014,076
Interest expense paid (1,506,049)
Operating expenses paid (3,997,628)
Income taxes paid (6,452,712)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 6,601,472
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Cash flows from financing activities:
Proceeds from issuance of Notes 30,000,000
Repayment of Notes (20,000,000)
Cash dividends paid from net investment income (23,743,349)
Cash dividends paid from net realized gain on investments (125,491)
Receipts for shares issued on reinvestment of dividends 2,751,359
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NET CASH USED FOR FINANCING ACTIVITIES (11,117,481)
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NET DECREASE IN CASH (4,516,009)
Cash - beginning of year 5,184,468
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CASH - END OF YEAR $ 668,459
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RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 20,401,428
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Increase in investments (6,803,281)
Decrease in interest and dividends receivable 79,490
Increase in receivable for investments sold (1,034,922)
Decrease in investment advisory fee payable (1,646)
Increase in interest payable 22,701
Decrease in accrued expenses (10,109)
Decrease in accrued taxes payable (6,053,919)
Increase in other payables 1,730
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TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (13,799,956)
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NET CASH PROVIDED BY OPERATING ACTIVITIES $ 6,601,472
=============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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10
MassMutual Corporate Investors
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 2007 and 2006
2007 2006
-------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income - net $ 23,586,915 $ 20,681,143
Net realized gain on investments 1,411,465 12,301,691
Net change in unrealized appreciation of
investments (4,596,952) 2,456,052
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 20,401,428 35,438,886
------------ ------------
Increase from common shares issued on reinvestment
of dividends Common shares issued (2007 - 87,700;
2006 - 84,966) 2,751,359 2,619,000
Dividends to shareholders from:
Net investment income (2007 - $2.57 per share;
2006 - $2.47 per share) (23,679,411) (22,518,167)
Net realized gains on investments (2006 - $0.01
per share) -- (125,491)
------------ ------------
TOTAL (DECREASE) INCREASE IN NET ASSETS (526,624) 15,414,228
------------ ------------
NET ASSETS, BEGINNING OF YEAR 251,689,646 236,275,418
------------ ------------
NET ASSETS, END OF YEAR (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF $1,765,219 AND $1,798,902,
RESPECTIVELY) $251,163,022 $251,689,646
============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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11
MassMutual Corporate Investors
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding:
For the years ended December 31,
2007 2006 2005 2004 2003
-----------------------------------------------------------------------------------------------------
NET ASSET VALUE: BEGINNING OF YEAR $ 27.51 $ 26.06 $ 24.34 $ 21.84 $ 19.40
---------- ---------- ---------- ---------- ----------
Net investment income (a) 2.56 2.27 2.03 2.00 1.44
Net realized and unrealized
gain (loss) on investments (0.35) 1.62 1.96(b) 2.64 2.83
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 2.21 3.89 3.99 4.64 4.27
---------- ---------- ---------- ---------- ----------
Dividends from net investment
income to common shareholders (2.57) (2.47) (2.11) (2.16) (1.84)
Dividends from net realized gain
on investments to common shareholders -- (0.01) (0.18) -- --
Increase from dividends reinvested 0.04 0.04 0.02 0.02 0.01
---------- ---------- ---------- ---------- ----------
TOTAL DIVIDENDS (2.53) (2.44) (2.27) (2.14) (1.83)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE: END OF YEAR $ 27.19 $ 27.51 $ 26.06 $ 24.34 $ 21.84
---------- ---------- ---------- ---------- ----------
PER SHARE MARKET VALUE: END OF YEAR $ 30.20 $ 34.89 $ 30.05 $ 28.50 $ 22.90
========== ========== ========== ========== ==========
Total investment return
Market value (8.78)% 29.04% 16.95% 36.10% 27.53%
Net asset value (c) 8.58% 18.09% 20.04% 22.76% 22.61%
Net assets (in millions): End of year $ 251.16 $ 251.69 $ 236.28 $ 218.51 $ 193.79
Ratio of operating expenses to average
net assets 1.55% 1.43% 1.78% 1.93% 2.04%
Ratio of interest expense to average net
assets 0.59% 0.60% 0.73% 0.77% 0.82%
Ratio of income tax expense to average net
assets (d) 0.35% 2.46% 2.84% 0.69% --
Ratio of total expenses before custodian
reduction to average net assets (d) 2.49% 4.53% 5.36% 3.39% 2.86%
Ratio of net expenses after custodian
reduction to average net assets (d) 2.49% 4.49% 5.35% 3.39% 2.86%
Ratio of net investment income to average
net assets 9.17% 8.19% 7.98% 8.68% 6.95%
Portfolio turnover 44% 35% 35% 53% 56%
(a) Calculated using average shares.
(b) Amount includes $0.19 per share in litigation proceeds.
(c) Net asset value return represents portfolio returns based on change in the Trust's net asset value
assuming the reinvestment of all dividends and distributions which differs from the total
investment return based on the Trust's market value due to the difference between the Trust's net
asset value and the market value of its shares outstanding; past performance is no guarantee of
future results.
(d) As additional information, this ratio is included to reflect the taxes paid on retained long-term
gains. These taxes paid are netted against realized capital gains in the Statement of Operations.
The taxes paid are treated as deemed distributions and a credit for the taxes paid is passed on to
the shareholders.
Senior securities:
Total principal amount (in millions) $ 30 $ 20 $ 20 $ 29 $ 20
Asset coverage per $1,000 of
indebtedness $ 9,372 $ 13,584 $ 12,814 $ 8,535 $ 10,689
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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12
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES - 76.90%:(A) PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
PRIVATE PLACEMENT INVESTMENTS - 70.18%
A H C HOLDING COMPANY, INC.
A DESIGNER AND MANUFACTURER OF BOILERS AND WATER HEATERS FOR THE COMMERCIAL SECTOR.
15% Senior Subordinated Note due 2015 $ 2,325,205 11/21/07 $ 2,278,701 $ 2,310,495
Limited Partnership Interest (B) 14.99% int. 11/21/07 224,795 213,560
------------- -------------
2,503,496 2,524,055
------------- -------------
A T I ACQUISITION COMPANY
A FOR-PROFIT POST-SECONDARY SCHOOL SERVING STUDENTS IN TEXAS, FLORIDA AND ARIZONA.
12% Senior Subordinated Note due 2012 $ 2,125,000 04/08/04 2,125,000 2,125,000
Warrant, exercisable until 2012, to purchase
preferred stock at $.01 per share (B) 13 shs. 11/16/07 -- 16,630
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 2,323 shs. 04/08/04 -- 20,490
------------- -------------
2,125,000 2,162,120
------------- -------------
ADVANCED TECHNOLOGIES HOLDINGS
A PROVIDER OF FACTORY MAINTENANCE SERVICES TO INDUSTRIAL COMPANIES.
15% Senior Subordinated Note due 2013 $ 2,040,000 12/27/07 1,999,200 2,040,790
Preferred Stock (B) 1,031 shs. 12/27/07 510,000 484,499
------------- -------------
2,509,200 2,525,289
------------- -------------
AERO HOLDINGS, INC.
A PROVIDER OF GEOSPATIAL SERVICES TO CORPORATE AND GOVERNMENT CLIENTS.
10.5% Senior Secured Term Note due 2014 $ 1,627,500 03/09/07 1,603,088 1,619,833
14% Senior Subordinated Note due 2015 $ 1,260,000 03/09/07 1,130,356 1,253,586
Common Stock (B) 262,500 shs. 03/09/07 262,500 249,375
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 66,116 shs. 03/09/07 111,527 661
------------- -------------
3,107,471 3,123,455
------------- -------------
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 1,976,800 2,043,245
Preferred Class A Unit (B) 3,223 uts. * 322,300 112,805
Common Class B Unit (B) 30,420 uts. 01/22/04 1 304
Common Class D Unit (B) 6,980 uts. 09/12/06 1 70
------------- -------------
*01/22/04 and 09/12/06. 2,299,102 2,156,424
------------- -------------
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 1,545,929 1,556,410
Common Stock (B) 497 shs. 05/18/05 497,340 90,079
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 130 shs. 05/18/05 112,128 23,615
------------- -------------
2,155,397 1,670,104
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
13
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
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 $ 1,598,122 $ 1,686,800
Common Stock (B) 520 shs. * 519,622 1,962,746
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 137 shs. 12/31/04 119,482 519,327
------------- -------------
*12/31/04, 03/31/05, and 05/02/06. 2,237,226 4,168,873
------------- -------------
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 2,154,600 2,309,717
Preferred Stock Class A (B) 879 shs. 06/30/06 268,121 248,980
Common Stock (B) 1 sh. 06/30/06 286 48,950
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 309 shs. 06/30/06 92,102 87,503
------------- -------------
2,515,109 2,695,150
------------- -------------
CAPESUCCESS LLC
A PROVIDER OF DIVERSIFIED STAFFING SERVICES.
Preferred Membership Interests (B) 1,882 uts. 04/29/00 8,395 420
Common Membership Interests (B) 24,318 uts. 04/29/00 108,983 5,442
------------- -------------
117,378 5,862
------------- -------------
CAPITAL SPECIALTY PLASTICS, INC.
A PRODUCER OF DESICCANT STRIPS USED FOR PACKAGING PHARMACEUTICAL PRODUCTS.
Common Stock (B) 109 shs. * 503 558,932
------------- -------------
*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 $ 355,072 04/30/03 355,072 358,742
11.5% Senior Subordinated Note due 2011 $ 424,818 04/30/03 402,504 426,202
Common Stock (B) 126,812 shs. 04/30/03 126,812 365,028
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 87,672 shs. 04/30/03 40,804 252,364
------------- -------------
925,192 1,402,336
------------- -------------
CONNECTICUT ELECTRIC, INC.
A SUPPLIER AND DISTRIBUTOR OF ELECTRICAL PRODUCTS SOLD INTO THE RETAIL AND WHOLESALE MARKETS.
12% Senior Subordinated Note due 2014 $ 2,393,954 01/12/07 2,233,202 2,295,428
Limited Liability Company Unit Class A (B) 156,046 uts. 01/12/07 156,046 148,244
Limited Liability Company Unit Class C (B) 112,873 uts. 01/12/07 112,873 107,230
------------- -------------
2,502,121 2,550,902
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
14
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
CONNOR SPORT COURT INTERNATIONAL, INC.
A DESIGNER AND MANUFACTURER OF OUTDOOR AND INDOOR SYNTHETIC SPORTS FLOORING AND OTHER TEMPORARY FLOORING PRODUCTS.
Preferred Stock Series B-2 (B) 17,152 shs. 07/05/07 $ 700,392 $ 761,779
Preferred Stock Series C 7,148 shs. 07/05/07 300,168 238,774
Common Stock (B) 718 shs. 07/05/07 34,634 7
Limited Partnership Interest (B) 7.74% int. * 189,586 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 174 shs. ** 160,233 --
------------- -------------
*08/12/04 and 01/14/05. **08/12/04 and 01/18/05. 1,385,013 1,000,560
------------- -------------
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 2,106,838 2,207,571
Common Stock (B) 509 shs. * 526,096 1,440,424
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 103 shs. 06/15/05 100,668 291,335
------------- -------------
*06/15/05 and 05/22/06. 2,733,602 3,939,330
------------- -------------
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 2,437,862 2,562,750
Warrant, exercisable until 2013, to purchase
common stock at $.001 per share (B) 20 shs. 08/04/05 137,166 109,340
------------- -------------
2,575,028 2,672,090
------------- -------------
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 1,735,239 1,921,739
Limited Partnership Interest (B) 1.82% int. 10/30/06 702,174 1,598,441
Warrant, exercisable until 2014, to purchase
preferred stock at $.01 per share (B) 50 shs. 10/30/06 49,830 54,813
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 34 shs. 10/30/06 34,000 174,602
------------- -------------
2,521,243 3,749,595
------------- -------------
DIRECTED ELECTRONICS, INC.
A DESIGNER AND DISTRIBUTOR OF BRAND NAME AUTOMOTIVE SECURITY SYSTEMS, AUDIO PRODUCTS AND INSTALLATION ACCESSORIES.
Common Stock (B) 368,560 shs. * 1,856,534 611,810
------------- -------------
*12/19/05 and 06/17/06.
DIVERSCO, INC./DHI HOLDINGS, INC.
A CONTRACT PROVIDER OF JANITORIAL AND EQUIPMENT MAINTENANCE SERVICES AND TEMPORARY PRODUCTION LABOR TO INDUSTRIAL CUSTOMERS.
Membership Interests of MM/Lincap
Diversco Investments Ltd. LLC (B) 27.20% int. 08/27/98 734,090 --
Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 --
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 --
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
15
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE 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 $ 537,397
13% Senior Subordinated Note due 2014 $ 855,000 11/01/06 766,515 849,955
Common Stock (B) 180,000 shs. 11/01/06 180,000 271,028
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 56,514 shs. 11/01/06 78,160 85,094
------------- -------------
1,556,575 1,743,474
------------- -------------
DWYER GROUP, INC.
A FRANCHISER OF A VARIETY OF HOME REPAIR SERVICES.
Common Stock (B) 6,906 shs. * 690,600 1,059,428
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 311,967
------------- -------------
*10/30/03 and 01/02/04. 877,069 1,371,395
------------- -------------
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 77,208 184,972
------------- -------------
ELECTRA BICYCLE COMPANY LLC
A DESIGNER AND MARKETER OF BRANDED LEISURE BICYCLES.
10.5% Senior Secured Term Note A due 2009 $ 127,531 04/12/07 124,980 126,902
10.5% Senior Secured Term Note B due 2012 $ 707,793 04/12/07 695,658 701,380
12% Senior Secured Term Note C due 2012 $ 510,121 04/12/07 474,967 501,356
Limited Liability Company Unit Series F 64,597 uts. 04/12/07 64,597 61,367
Limited Liability Company Unit Series G (B) 4,990 uts. 04/12/07 4,990 4,741
------------- -------------
1,365,192 1,395,746
------------- -------------
ENZYMATIC THERAPY, INC.
A MANUFACTURER AND DISTRIBUTOR OF BRANDED NATURAL MEDICINES AND NUTRITIONAL SUPPLEMENTS.
Limited Partnership Interest (B) 1.32% int. 03/30/00 531,250 136,132
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 29,117 shs. 03/30/00 255,000 85,441
------------- -------------
786,250 221,573
------------- -------------
EVANS CONSOLES, INC.
A DESIGNER AND MANUFACTURER OF CONSOLES AND CONTROL CENTER SYSTEMS.
Common Stock 90,000 shs. 05/06/04 6 1,068,390
------------- -------------
F H S HOLDINGS LLC
A NATIONAL PROVIDER OF CUSTOMIZED DISEASE MANAGEMENT SERVICES TO LARGE SELF-INSURED EMPLOYERS.
12% Senior Subordinated Note due 2014 $ 2,390,625 06/01/06 2,236,886 2,406,589
Preferred Unit (B) 158 uts. 06/01/06 157,768 157,780
Common Unit (B) 1,594 uts. 06/01/06 1,594 138,072
Common Unit Class B (B) 1,386 uts. 06/01/06 122,361 120,037
------------- -------------
2,518,609 2,822,478
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
16
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
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 $ 917,645
14% Senior Subordinated Note due 2014 $ 555,059 04/13/06 501,736 555,287
Common Stock (B) 109,436 shs. 04/13/06 109,436 50,794
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 30,940 shs. 04/13/06 48,433 14,360
------------- -------------
1,564,214 1,538,086
------------- -------------
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 2,160,156 2,280,705
Common Stock (B) 185 shs. 02/03/06 184,783 107,272
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 254 shs. 02/03/06 208,435 147,561
------------- -------------
2,553,374 2,535,538
------------- -------------
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 2,189,605 2,166,085
Common Stock (B) 212,500 shs. 01/31/06 212,500 42,500
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 138,408 shs. 01/31/06 119,213 27,682
------------- -------------
2,521,318 2,236,267
------------- -------------
GOLDEN COUNTRY FOODS HOLDING, INC.
A MANUFACTURER OF FROZEN APPETIZERS AND SNACKS.
12% Senior Subordinated Note due 2015 $ 1,912,500 11/01/07 1,727,592 1,899,197
8% Series A Convertible, cumulative Preferred Stock,
convertible into 4.25% of the fully diluted common shares 146,658 shs. 11/01/07 146,658 139,325
------------- -------------
1,874,250 2,038,522
------------- -------------
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 2,048,925 1,105,000
Preferred Stock (B) 20 shs. 09/18/07 20,238 --
Common Stock (B) 340 shs. 02/10/06 340,000 --
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 126 shs. 02/10/06 116,875 --
------------- -------------
2,526,038 1,105,000
------------- -------------
HIGHGATE CAPITAL LLC
AN ACQUIRER OF CONTROLLING OR SUBSTANTIAL INTERESTS IN MANUFACTURING AND MARKETING ENTITIES.
Series A Preferred Units (B) 1.19% int. 7/21/94 367,440 --
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
17
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
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 * $ 1,894,387 $ 2,052,239
Common Stock (B) 63 shs. * 62,742 75,239
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 200 shs. * 199,501 239,243
------------- -------------
*06/30/04 and 08/19/04. 2,156,630 2,366,721
------------- -------------
INSURANCE CLAIMS MANAGEMENT, INC.
A THIRD PARTY ADMINISTRATOR PROVIDING AUTO AND PROPERTY CLAIM ADMINISTRATION SERVICES FOR INSURANCE COMPANIES.
Common Stock 69 shs. 02/27/07 2,077 --
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share 20 shs. 02/27/07 612 --
------------- -------------
2,689 --
------------- -------------
INTEGRATION TECHNOLOGY SYSTEMS, INC.
A MANUFACTURER OF STEEL PROTECTIVE COMPUTER AND NETWORK SYSTEMS FOR THE INDUSTRIAL AND OFFICE ENVIRONMENTS.
12% Senior Secured Note due 2008 (D) $ 43,943 03/01/04 1 --
Common Stock (B) 228 shs. 06/01/00 262,200 --
------------- -------------
262,201 --
------------- -------------
JASON, INC.
A DIVERSIFIED MANUFACTURING COMPANY SERVING VARIOUS INDUSTRIAL MARKETS.
13% Senior Subordinated Note due 2010 $ 963,687 08/04/00 912,699 947,364
Limited Partnership Interest of
Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,352 802,563
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 161,176
------------- -------------
1,914,463 1,911,103
------------- -------------
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 1,523,421 1,609,688
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 249,109
------------- -------------
1,624,530 1,858,797
------------- -------------
K H O F HOLDINGS, INC.
A MANUFACTURER OF PREMIUM DISPOSABLE TABLEWARE PRODUCTS SERVING BOTH THE FOODSERVICE AND CONSUMER CHANNELS.
14% Senior Subordinated Note due 2014 $ 2,329,327 10/15/07 2,282,740 2,331,236
Common Stock (B) 220,673 shs. 10/15/07 220,673 209,639
------------- -------------
2,503,413 2,540,875
------------- -------------
K N B HOLDINGS CORPORATION
A DESIGNER, MANUFACTURER AND MARKETER OF PRODUCTS FOR THE CUSTOM FRAMING MARKET.
13.5% Senior Subordinated Note due 2013 $ 2,465,119 05/25/06 2,355,983 2,490,266
Common Stock (B) 134,210 shs. 05/25/06 134,210 127,606
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 82,357 shs. 05/25/06 71,534 78,304
------------- -------------
2,561,727 2,696,176
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
18
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
K W P I HOLDINGS CORPORATION
A MANUFACTURER AND DISTRIBUTOR OF VINYL WINDOWS AND PATIO DOORS THROUGHOUT THE NORTHWESTERN UNITED STATES.
12% Senior Subordinated Note due 2014 $ 2,318,000 03/14/07 $ 2,121,600 $ 2,274,757
Common Stock (B) 232 shs. 03/13/07 232,000 220,400
Warrant, exercisable until 2017, to purchase
common stock at $.01 per share (B) 167 shs. 03/14/07 162,260 2
------------- -------------
2,515,860 2,495,159
------------- -------------
K-TEK HOLDING CORPORATION
A MANUFACTURER OF INSTRUMENTATION FOR LIQUID AND BULK SOLIDS LEVEL DETECTION FOR PROCESS AND STORAGE TANKS.
14% Senior Secured Tranche B Note due 2015 $ 2,185,714 12/20/07 2,146,371 2,170,296
Preferred Stock (B) 363,260 shs. 12/20/07 363,260 345,097
Common Stock (B) 102,616 shs. 12/20/07 1,026 1,026
------------- -------------
2,510,657 2,516,419
------------- -------------
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 $ 1,168,750 04/05/06 1,093,229 1,182,471
13% Preferred Stock (B) 565 shs. 04/05/06 565,335 638,823
Common Stock (B) 125 shs. 04/05/06 125,048 410,087
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 13 shs. 04/05/06 12,905 42,304
------------- -------------
1,796,517 2,273,685
------------- -------------
MAIL COMMUNICATIONS GROUP, INC.
A PROVIDER OF MAIL PROCESSING AND HANDLING SERVICES, LETTERSHOP SERVICES, AND COMMERCIAL PRINTING SERVICES.
12.5% Senior Subordinated Note due 2014 $ 975,000 05/04/07 912,469 970,407
Limited Liability Company Unit (B) 23,000 uts. 05/04/07 300,000 285,000
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3,375 shs. 05/04/07 43,031 34
------------- -------------
1,255,500 1,255,441
------------- -------------
MAVERICK ACQUISITION COMPANY
A MANUFACTURER OF CAPSULES THAT COVER THE CORK AND NECK OF WINE BOTTLES.
9.73% Senior Secured Tranche A Note due 2010 (C) $ 492,691 09/03/04 492,691 491,130
12% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 287,539 308,665
Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 40,180
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 29,031
------------- -------------
878,472 869,006
------------- -------------
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 * 2,541,589 2,684,554
Common Stock (B) 450 shs. * 450,000 300,683
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 164 shs. * 162,974 109,569
------------- -------------
*08/12/05 and 09/11/06. 3,154,563 3,094,806
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
19
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
MOMENTUM HOLDING CO.
A DESIGNER AND SUPPLIER OF UPHOLSTERY FABRIC TO COMMERCIAL FURNITURE MANUFACTURERS AND ARCHITECTURAL AND DESIGN FIRMS.
12% Senior Subordinated Note due 2014 $ 1,168,847 08/04/06 $ 1,049,472 $ 1,192,224
Limited Partnership Interest (B) 21.23% int. 08/04/06 106,153 165,796
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 1,107 shs. 08/04/06 107,109 172,823
------------- -------------
1,262,734 1,530,843
------------- -------------
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 2,378,749 2,419,264
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 152 shs. 03/31/06 138,125 2
------------- -------------
2,516,874 2,419,266
------------- -------------
MORTON INDUSTRIAL GROUP, INC.
A MANUFACTURER OF HIGHLY ENGINEERED METAL FABRICATED COMPONENTS.
12% Senior Subordinated Note due 2014 $ 2,440,909 08/25/06 2,256,960 2,247,801
Common Stock (B) 109,091 shs. 08/25/06 109,091 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 173,633 shs. 08/25/06 149,940 --
------------- -------------
2,515,991 2,247,801
------------- -------------
MOSS, INC.
A MANUFACTURER AND DISTRIBUTOR OF LARGE DISPLAY AND EXHIBIT STRUCTURES.
Limited Partnership Interest of
Riverside Capital Appreciation Fund I, L.P. (B) 37.37% int. * 348,620 602,528
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 214 shs. 12/21/05 36,647 36,991
------------- -------------
*09/20/00, 05/23/02 and 02/21/07. 385,267 639,519
------------- -------------
NABCO, INC.
A PRODUCER OF EXPLOSIVE CONTAINMENT VESSELS IN THE UNITED STATES.
14% Senior Subordinated Note due 2014 $ 665,625 02/24/06 616,527 332,813
Limited Liability Company Unit (B) 825 uts. * 825,410 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 48 shs. 02/24/06 37,188 --
------------- -------------
*02/24/06 and 06/22/07. 1,479,125 332,813
------------- -------------
NAVIS GLOBAL
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 1,137,616 1,217,651
8.75% Senior Secured Note due 2011 $ 573,025 05/28/04 573,025 570,860
Common Stock (B) 674,157 shs. 05/28/04 674,157 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 203,912 shs. 05/28/04 130,789 --
------------- -------------
2,515,587 1,788,511
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
20
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
NESCO HOLDINGS CORPORATION
A SALES AND LEASING COMPANY THAT PROVIDES EQUIPMENT TO THE ELECTRIC UTILITY, TELECOMMUNICATIONS, AND VARIOUS OTHER INDUSTRIES.
12% Senior Subordinated Note due 2015 $ 2,125,000 08/02/07 $ 1,888,243 $ 2,110,507
Common Stock (B) 425,000 shs. 08/02/07 425,000 403,750
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 119,360 shs. 08/02/07 194,257 1,194
------------- -------------
2,507,500 2,515,451
------------- -------------
NETSHAPE TECHNOLOGIES, INC.
A MANUFACTURER OF POWDER METAL AND METAL INJECTION MOLDED PRECISION COMPONENTS USED IN INDUSTRIAL, CONSUMER, AND OTHER APPLICATIONS.
12% Senior Subordinated Note due 2014 $ 1,530,000 02/02/07 1,408,570 1,425,399
Limited Partnership Interest of
Saw Mill PCG Partners LLC (B) 1,020 uts. 02/01/07 1,020,000 918,000
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 91 shs. 02/02/07 90,830 1
------------- -------------
2,519,400 2,343,400
------------- -------------
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 1,894,149
10% Preferred Stock (B) 255 shs. 03/29/04 255,083 259,014
Common Stock (B) 6,455 shs. 03/29/04 6,455 266,821
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 8,622 shs. 03/29/04 7,323 356,401
------------- -------------
2,125,000 2,776,385
------------- -------------
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 1,415,094 1,125,000
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 --
------------- -------------
2,702,139 1,896,875
------------- -------------
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 01/03/06 556,970 564,633
13% Senior Subordinated Note due 2013 $ 687,241 01/03/06 620,929 686,712
Common Stock (B) 322,307 shs. 01/03/06 322,307 205,812
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 75,378 shs. 01/03/06 62,824 48,133
------------- -------------
1,563,030 1,505,290
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
21
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
OLYMPIC SALES, INC.
A BOAT RETAILER IN WASHINGTON STATE, OREGON, CALIFORNIA AND BRITISH COLUMBIA.
12% Senior Subordinated Note due 2008 $ 1,022,000 08/07/98 $ 1,022,000 $ 1,008,874
12% Senior Subordinated Note due 2008 $ 307,071 02/09/00 305,584 306,175
Limited Partnership Interest of Riverside VIII,
VIII-A and VIII-B Holding Company, L.P. 20.58% int. * 1,555,992 --
Warrants, exercisable until 2008, to purchase
common stock at $.01 per share (B) 28,648 shs. ** 389,188 --
------------- -------------
*08/07/98, 02/23/99, 12/22/99 and 02/25/03. **08/07/98 and 02/09/00. 3,272,764 1,315,049
------------- -------------
ONTARIO DRIVE & GEAR LTD.
A MANUFACTURER OF ALL-WHEEL DRIVE, OFF-ROAD AMPHIBIOUS VEHICLES AND RELATED ACCESSORIES.
13% Senior Subordinated Note due 2013 $ 1,977,885 01/17/06 1,804,187 1,977,885
Limited Liability Company Unit (B) 3,667 uts. 01/17/06 572,115 1,273,913
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 619 shs. 01/17/06 170,801 215,082
------------- -------------
2,547,103 3,466,880
------------- -------------
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 $ 2,222,219 07/03/06 2,117,761 2,266,664
Preferred Unit (B) 382 uts. 07/03/06 382,150 428,008
Preferred Unit (B) 69 uts. 07/03/06 68,790 77,045
Common Unit Class I (B) 148 uts. 07/03/06 -- 173,768
Common Unit Class L (B) 31 uts. 07/03/06 -- 36,722
------------- -------------
2,568,701 2,982,207
------------- -------------
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 2,157,753 2,340,900
Preferred Stock (B) 36 shs. 03/31/06 329,596 380,176
Common Stock (B) 23 shs. 03/31/06 25,500 48,237
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 13 shs. 03/31/06 11,122 28,059
------------- -------------
2,523,971 2,797,372
------------- -------------
PACIFIC CONSOLIDATED HOLDINGS LLC
A MANUFACTURER OF RUGGED, MOBILE LIQUID AND GASEOUS OXYGEN AND NITROGEN GENERATING SYSTEMS USED IN THE GLOBAL DEFENSE, OIL & GAS,
AND MEDICAL SECTORS.
12% Senior Subordinated Note due 2012 $ 1,304,624 04/27/07 1,195,199 1,270,730
Limited Liability Company Unit (B) 1,754,707 uts. 04/27/07 63,233 60,011
------------- -------------
1,258,432 1,330,741
------------- -------------
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 2,073,492 2,122,450
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 293,228
------------- -------------
2,339,117 2,415,678
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
22
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
POSTLE ALUMINUM COMPANY LLC
A MANUFACTURER AND DISTRIBUTOR OF ALUMINUM EXTRUDED PRODUCTS.
12% Senior Subordinated Note due 2014 $ 2,040,000 10/02/06 $ 1,896,554 $ 2,085,115
Limited Liability Company Unit (B) 1,384 uts. 10/02/06 510,000 511,930
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 344 shs. 10/02/06 124,644 127,326
------------- -------------
2,531,198 2,724,371
------------- -------------
PROTEIN GENETICS, INC.
A PRODUCER OF BOVINE ARTIFICIAL INSEMINATION PRODUCTS, RELATED BREEDING AND HEALTHCARE PRODUCTS AND SPECIALTY GENETICS SOLD TO THE
DAIRY AND BEEF INDUSTRIES.
9.8% Redeemable Exchangeable Preferred Stock (B) 1,004 shs. 08/12/94 100,350 --
Common Stock (B) 2,600 shs. * 126,866 --
------------- -------------
*08/12/94 and 11/14/01. 227,216 --
------------- -------------
QUALIS AUTOMOTIVE LLC
A DISTRIBUTOR OF AFTERMARKET AUTOMOTIVE BRAKE AND CHASSIS PRODUCTS.
12% Senior Subordinated Note due 2012 $ 1,770,833 05/28/04 1,529,659 1,741,423
Common Stock 354,166 shs. 05/28/04 354,166 128,652
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share 377,719 shs. 05/28/04 377,719 137,207
------------- -------------
2,261,544 2,007,282
------------- -------------
QUALSERV CORPORATION
A PROVIDER OF FOODSERVICE EQUIPMENT AND SUPPLIES TO MAJOR RESTAURANT CHAINS AND THEIR FRANCHISEES.
Limited Partnership Interest (B) 9.26% int. 07/09/04 1 --
------------- -------------
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 2,090,362 2,312,534
Limited Liability Company Unit (B) 2,828 uts. 12/15/06 282,810 305,127
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3 shs. 12/15/06 131,483 143,892
------------- -------------
2,504,655 2,761,553
------------- -------------
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 2,113,974 2,328,457
Common Stock (B) 289,362 shs. 02/10/06 289,362 353,615
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 131,555 shs. 02/10/06 119,796 160,767
------------- -------------
2,523,132 2,842,839
------------- -------------
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 11/14/03 986,524 1,072,824
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 160,030
------------- -------------
1,109,470 1,232,854
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
23
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
SAFETY SPEED CUT MANUFACTURING COMPANY, INC.
A MANUFACTURER OF VERTICAL PANEL SAWS AND ROUTERS FOR THE WOOD WORKING INDUSTRY.
Class B Common Stock (B) 1,480 shs. 06/02/99 $ 256,212 $ 1,288,038
------------- -------------
SAVAGE SPORTS HOLDING, INC.
A MANUFACTURER OF SPORTING FIREARMS.
12% Senior Subordinated Note due 2012 $ 1,538,793 09/10/04 1,456,391 1,569,569
Common Stock (B) 612 shs. * 642,937 1,177,144
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 257,010
------------- -------------
*09/10/04 and 10/05/07. 2,212,906 3,003,723
------------- -------------
SMART SOURCE HOLDINGS LLC
A SHORT-TERM COMPUTER RENTAL COMPANY.
12% Senior Subordinated Note due 2015 $ 1,961,538 08/31/07 1,782,194 1,952,867
Limited Liability Company Unit (B) 588 uts. 08/31/07 588,462 559,037
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 144 shs. 08/31/07 143,846 1
------------- -------------
2,514,502 2,511,905
------------- -------------
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 2,110,719 2,254,408
Common Stock (B) 311 shs. 08/01/06 310,976 373,298
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 104 shs. 08/01/06 93,293 124,325
------------- -------------
2,514,988 2,752,031
------------- -------------
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 Liability Company Unit (B) 283,333 uts. 08/20/03 63,207 14,101
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 86,780 shs. 08/21/03 19,359 19,359
------------- -------------
82,566 33,460
------------- -------------
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 1,932,497 2,217,385
Common Stock (B) 2,203 shs. 10/14/05 2,203 949,435
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 1,167 shs. 10/14/05 294,403 502,946
------------- -------------
2,229,103 3,669,766
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
24
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
TERRA RENEWAL SERVICES, INC.
A PROVIDER OF WASTEWATER RESIDUAL MANAGEMENT AND REQUIRED ENVIRONMENTAL REPORTING, PERMITTING, NUTRIENT MANAGEMENT PLANNING AND
RECORD KEEPING TO COMPANIES INVOLVED IN POULTRY AND FOOD PROCESSING.
9.25% Senior Secured Tranche B Note due 2012 (C) $ 1,520,515 * $ 1,515,366 $ 1,521,700
12% Senior Subordinated Note due 2014 $ 1,162,110 ** 1,109,247 1,170,096
Limited Partnership Interest of
Saw Mill Capital Fund V, L.P. 2.30% int. 03/01/05 116,285 399,921
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 72 shs. 04/28/06 60,597 69,731
------------- -------------
*4/28/06 and 12/21/06. ** 04/28/06 and 09/13/06. 2,801,495 3,161,448
------------- -------------
TORRENT GROUP HOLDINGS, INC.
A CONTRACTOR SPECIALIZING IN THE SALES AND INSTALLATION OF ENGINEERED DRYWELLS FOR THE RETENTION AND FILTRATION OF STORMWATER AND
NUISANCE WATER FLOW.
12.5% Senior Subordinated Note due 2013 $ 2,239,024 10/26/07 2,102,363 2,243,568
8% Convertible Preferred Stock 414 shs. 10/26/07 414,051 393,348
------------- -------------
2,516,414 2,636,916
------------- -------------
TOTAL EQUIPMENT & SERVICE, INC.
A MANUFACTURER OF A WIDE VARIETY OF EQUIPMENT USED IN THE OIL AND GAS INDUSTRY.
10.5% Senior Secured Term Note due 2013 $ 851,351 03/02/07 838,581 849,827
13% Senior Subordinated Note due 2014 $ 598,450 03/02/07 490,608 596,807
Common Stock (B) 125,199 shs. 03/02/07 125,199 118,939
Warrant, exercisable until 2014 to purchase
common stock at $.01 per share (B) 34,533 shs. 03/02/07 95,873 345
------------- -------------
1,550,261 1,565,918
------------- -------------
THE TRANZONIC COMPANIES
A PRODUCER OF COMMERCIAL AND INDUSTRIAL SUPPLIES, SUCH AS SAFETY PRODUCTS, JANITORIAL SUPPLIES, WORK APPAREL, WASHROOM AND RESTROOM
SUPPLIES AND SANITARY CARE PRODUCTS.
13% Senior Subordinated Note due 2009 $ 2,712,000 02/05/98 2,619,848 2,712,000
Common Stock (B) 630 shs. 02/04/98 630,000 323,537
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 228,016
------------- -------------
3,618,680 3,263,553
------------- -------------
TRANSPAC HOLDING COMPANY
A DESIGNER, IMPORTER, AND WHOLESALER OF HOME DECOR AND SEASONAL GIFT PRODUCTS.
12% Senior Subordinated Note due 2015 $ 1,773,006 10/31/07 1,650,327 1,770,354
Common Stock (B) 209 shs. 10/31/07 208,589 198,161
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 94 shs. 10/31/07 87,607 1
------------- -------------
1,946,523 1,968,516
------------- -------------
TRANSTAR HOLDING COMPANY
A DISTRIBUTOR OF AFTERMARKET AUTOMOTIVE TRANSMISSION PARTS.
12% Senior Subordinated Note due 2013 $ 1,734,000 08/31/05 1,670,145 1,786,020
Common Stock (B) 1,078 shs. * 1,078,450 1,260,862
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 86 shs. 08/31/05 77,485 100,476
------------- -------------
*08/31/05 and 04/30/07. 2,826,080 3,147,358
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
25
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
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 $ 395,108 01/20/00 $ 395,108 $ 395,119
12% Senior Subordinated Note due 2010 $ 1,326,500 01/20/00 1,301,454 1,327,420
Common Stock (B) 227,400 shs. 01/20/00 227,400 1,273,794
Warrant, exercisable until 2010, to purchase
common stock at $1 per share (B) 260,563 shs. 01/20/00 98,540 1,459,558
------------- -------------
2,022,502 4,455,891
------------- -------------
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 * 2,169,810 2,253,037
Common Stock (B) 742 shs. * 800,860 523,452
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 153 shs. * 159,894 108,112
------------- -------------
*07/19/05 and 12/22/05. 3,130,564 2,884,601
------------- -------------
TRUSTILE DOORS, INC.
A MANUFACTURER AND DISTRIBUTOR OF INTERIOR DOORS.
12.5% Senior Subordinated Note due 2010 $ 850,000 04/11/03 816,640 858,500
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 5,781 shs. 04/11/03 83,927 219,335
------------- -------------
900,567 1,077,835
------------- -------------
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 1,735,911 1,872,752
Common Stock (B) 182 shs. 04/30/04 182,200 143,305
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 230 shs. 04/30/04 211,736 181,231
------------- -------------
2,129,847 2,197,288
------------- -------------
VICTORY VENTURES LLC
AN ACQUIRER OF CONTROLLING OR SUBSTANTIAL INTERESTS IN OTHER ENTITIES.
Series A Preferred Units 1 ut. 12/2/96 937 --
------------- -------------
VISIONEERING, INC.
A DESIGNER AND MANUFACTURER OF TOOLING AND FIXTURES FOR THE AEROSPACE INDUSTRY.
10.5% Senior Secured Term Loan due 2013 $ 802,941 05/17/07 790,897 805,222
13% Senior Subordinated Note due 2014 $ 648,530 05/17/07 583,333 657,186
Common Stock (B) 123,529 shs. 05/17/07 123,529 117,353
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 35,006 shs. 05/17/07 55,055 350
------------- -------------
1,552,814 1,580,111
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
26
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
VITALITY FOODSERVICE, INC.
A NON-CARBONATED BEVERAGE DISPENSING COMPANY FOCUSED ON THE FOODSERVICE INDUSTRY.
15% Senior Subordinated Note due 2011 $ 2,186,706 09/24/04 $ 2,033,313 $ 1,968,036
Common Stock (B) 26,456 shs. * 264,558 159,866
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 23,787 shs. 09/24/04 186,883 143,738
------------- -------------
*09/24/04 and 12/22/06. 2,484,754 2,271,640
------------- -------------
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 1,530,000
14.50% PIK Note due 2010 $ 106,250 06/30/07 97,092 95,625
Limited Liability Company Unit Class A (B) 414,375 uts. 07/19/04 414,375 --
Limited Liability Company Unit Class B (B) 182,935 uts. 07/19/04 182,935 --
------------- -------------
2,177,467 1,625,625
------------- -------------
WAGGIN' TRAIN HOLDINGS LLC
A PRODUCER OF PREMIUM QUALITY MEAT DOG TREATS.
14% Senior Subordinated Note due 2014 $ 2,127,348 11/15/07 2,084,801 2,111,776
Limited Liability Company Unit Class B (B) 423 uts. 11/15/07 422,652 401,518
Limited Liability Company Unit Class C (B) 423 uts. 11/15/07 -- 4
------------- -------------
2,507,453 2,513,298
------------- -------------
WALLS INDUSTRIES, INC.
A PROVIDER OF BRANDED WORKWEAR AND SPORTING GOODS APPAREL.
Limited Partnership Interest 0.40% int. 07/12/04 3,728 21,684
Common Stock (B) 4,028 shs. 12/21/07 -- 23,428
------------- -------------
3,728 45,112
------------- -------------
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 1,607,166 1,655,345
Common Stock (B) 191 shs. 11/30/06 191,250 172,125
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 95 shs. 11/30/06 86,493 1
------------- -------------
1,884,909 1,827,471
------------- -------------
WORKPLACE MEDIA HOLDING CO.
A DIRECT MARKETER SPECIALIZING IN PROVIDING ADVERTISERS WITH ACCESS TO CONSUMERS IN THE WORKPLACE.
13% Senior Subordinated Note due 2015 $ 1,159,196 05/14/07 1,055,990 1,147,400
Limited Partnership Interests (B) 23.16% int. 05/14/07 115,800 110,014
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 88 shs. 05/14/07 83,462 1
------------- -------------
1,255,252 1,257,415
------------- -------------
TOTAL PRIVATE PLACEMENT INVESTMENTS (E) 173,938,980 176,268,415
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
27
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
SHARES OR
INTEREST DUE PRINCIPAL
CORPORATE RESTRICTED SECURITIES:(A) (CONTINUED) RATE DATE AMOUNT COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
RULE 144A SECURITIES - 6.72%: (A)
BONDS - 6.72%
American Tire Distributor (C) 11.481% 04/01/12 $ 1,000,000 $ 950,000 $ 970,000
Bristow Group, Inc. 7.500 09/15/17 150,000 150,000 150,750
Calpine Corporation 8.750 07/15/13 500,000 465,000 537,500
Chaparral Energy, Inc. 8.875 02/01/17 1,500,000 1,491,780 1,353,750
Charter Communications Op LLC 8.000 04/30/12 250,000 249,375 241,250
Compucom Systems, Inc. 12.500 10/01/15 1,330,000 1,285,118 1,300,075
Douglas Dynamics LLC 7.750 01/15/12 630,000 632,715 544,950
G F S I, Inc. (C) 10.500 06/01/11 750,000 682,541 712,500
Hawker Beechcraft Acquisition Co. 9.750 04/01/17 1,275,000 1,287,050 1,268,625
Intergen NV 9.000 06/30/17 750,000 743,918 789,375
Kar Holdings, Inc. 10.000 05/01/15 1,000,000 924,375 892,500
Kar Holdings, Inc. 8.750 05/01/14 50,000 50,000 46,000
Packaging Dynamics Corporation of America 10.000 05/01/16 1,500,000 1,498,861 1,320,000
Penhall International 12.000 08/01/14 650,000 666,157 604,500
Pinnacle Foods Finance LLC 10.625 04/01/17 2,000,000 1,807,500 1,720,000
Quebecor Media, Inc. 7.750 03/15/16 175,000 164,312 168,438
Rite Aid Corporation 9.500 06/15/17 1,600,000 1,456,496 1,324,000
Ryerson, Inc. 12.000 11/01/15 65,000 65,000 64,188
Snoqualmie Entertainment Authority 9.125 02/01/15 500,000 487,956 481,250
Steel Dynamics, Inc. 6.750 04/01/15 200,000 200,000 194,000
Tenneco, Inc. 8.125 11/15/15 100,000 100,000 99,000
Tunica-Biloxi Gaming Authority 9.000 11/15/15 1,075,000 1,105,468 1,099,188
TXU Energy Company LLC 10.250 11/01/15 1,000,000 1,004,875 990,000
------------ ------------
TOTAL BONDS 17,468,497 16,871,839
------------ ------------
COMMON STOCK - 0.00%
Jordan Telecom Products (B) 70 14,000 --
------------ ------------
TOTAL COMMON STOCK 14,000 --
------------ ------------
TOTAL RULE 144A SECURITIES 17,482,497 16,871,839
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $191,421,477 $193,140,254
------------ ------------
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28
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
INTEREST DUE PRINCIPAL
CORPORATE PUBLIC SECURITIES - 28.43%:(A) RATE DATE AMOUNT COST MARKET VALUE
---------------------------------------------------------------------------------------------------------------------------------
BONDS - 25.20%
A M C Entertainment, Inc. 11.000% 02/01/16 $ 815,000 $ 817,266 $ 857,785
Activant Solutions, Inc. 9.500 05/01/16 150,000 150,000 129,750
Affinia Group, Inc. 9.000 11/30/14 1,010,000 936,036 909,000
ALH Fin LLC / ALH Fin Corporation 8.500 01/15/13 1,550,000 1,519,505 1,488,000
Appleton Papers, Inc. 8.125 06/15/11 300,000 300,000 294,375
Aramark Corporation (C) 8.411 02/01/15 200,000 200,000 195,000
Aramark Corporation 8.500 02/01/15 200,000 200,000 202,500
Atlas Pipeline Partners 8.125 12/15/15 200,000 200,000 198,000
Bally Total Fitness Holdings Corporation 14.000 10/01/13 90,000 73,350 74,700
Basic Energy Services 7.125 04/15/16 225,000 225,000 211,500
Blockbuster, Inc. (C) 9.000 09/01/12 475,000 475,733 406,125
Brigham Exploration Co. 9.625 05/01/14 1,200,000 1,167,903 1,113,000
CCH I Holdings LLC 11.125 01/15/14 2,000,000 1,558,188 1,212,500
Cablevision Systems Corporation 8.000 04/15/12 1,000,000 1,011,420 970,000
Cenveo Corporation 7.875 12/01/13 1,100,000 1,100,000 980,375
Cincinnati Bell, Inc. 8.375 01/15/14 1,100,000 1,007,500 1,072,500
Clayton Williams Energy, Inc. 7.750 08/01/13 1,200,000 1,179,000 1,050,000
Community Health Systems, Inc. 8.875 07/15/15 1,200,000 1,169,415 1,222,500
Delta Petroleum Corporation 7.000 04/01/15 750,000 661,875 641,250
Dynegy Holdings, Inc. 6.875 04/01/11 500,000 422,500 482,500
Dynegy Holdings, Inc. 7.500 06/01/15 500,000 445,000 467,500
Dynegy Holdings, Inc. 8.375 05/01/16 330,000 330,000 322,575
Edison Mission Energy 7.750 06/15/16 55,000 55,000 56,650
Esterline Technologies 7.750 06/15/13 200,000 200,000 205,000
Ford Motor Credit Co. 7.375 10/28/09 1,250,000 1,246,875 1,176,558
Ford Motor Credit Co. 8.000 12/15/16 710,000 678,050 606,113
Gencorp, Inc. 9.500 08/15/13 259,000 259,000 261,590
General Motors Acceptance Corporation 7.750 01/19/10 1,250,000 1,279,930 1,166,025
General Motors Corporation 8.375 07/15/33 1,400,000 1,246,000 1,127,000
Goodyear Tire & Rubber Co. 7.857 08/15/11 1,400,000 1,342,750 1,417,500
Graham Packaging Corporation 9.875 10/15/14 1,000,000 902,500 920,000
Great Lakes Dredge & Dock Corporation 7.750 12/15/13 500,000 481,250 467,500
H C A, Inc. 9.250 11/15/16 975,000 991,234 1,023,750
Hughes Network Systems 9.500 04/15/14 1,050,000 1,071,748 1,063,125
Idearc, Inc. 8.000 11/15/16 1,000,000 1,001,990 917,500
Inergy LP 8.250 03/01/16 150,000 150,000 155,250
Innophos, Inc. 8.875 08/15/14 75,000 74,250 74,625
Intelsat Bermuda Ltd. 9.250 06/15/16 1,365,000 1,417,167 1,371,825
---------------------------------------------------------------------------------------------------------------------------------
29
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
INTEREST DUE PRINCIPAL
CORPORATE PUBLIC SECURITIES:(A) CONTINUED RATE DATE AMOUNT COST MARKET VALUE
---------------------------------------------------------------------------------------------------------------------------------
BONDS, CONTINUED
Interline Brands, Inc. 8.125% 06/15/14 $ 1,300,000 $ 1,291,107 $ 1,287,000
Koppers, Inc. 9.875 10/15/13 477,000 477,000 502,043
Lear Corporation 8.750 12/01/16 1,940,000 1,844,050 1,765,400
Leucadia National Corporation 7.000 08/15/13 650,000 659,649 622,375
Liberty Media Corporation 5.700 05/15/13 1,000,000 951,610 926,412
Majestic Star Casino LLC 9.500 10/15/10 500,000 500,000 472,500
Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 198,000
Mariner Energy, Inc. 8.000 05/15/17 800,000 805,284 761,000
Markwest Energy Operating Co. 6.875 11/01/14 775,000 763,000 738,188
Mediacom Broadband LLC 8.500 10/15/15 1,500,000 1,518,006 1,329,375
Metaldyne Corporation 11.000 06/15/12 750,000 601,250 483,750
Metaldyne Corporation (C) 10.000 11/01/13 510,000 513,113 420,750
N R G Energy, Inc. 7.375 02/01/16 175,000 175,000 170,625
N T L Cable PLC 9.125 08/15/16 1,380,000 1,417,172 1,366,200
Newark Group, Inc. 9.750 03/15/14 850,000 796,863 811,750
North American Energy Partners 8.750 12/01/11 1,165,000 1,175,971 1,150,438
O E D Corp./Diamond Jo Company Guarantee 8.750 04/15/12 1,000,000 985,960 1,000,000
Petrohawk Energy Corporation 9.125 07/15/13 1,500,000 1,523,949 1,578,750
Pliant Corporation 11.125 09/01/09 550,000 539,000 453,750
Pliant Corporation (C) 11.850 06/15/09 990,634 1,000,995 1,010,447
Polypore, Inc. 8.750 05/15/12 1,960,000 1,893,800 1,915,900
Pregis Corporation 12.375 10/15/13 1,000,000 981,490 1,060,000
Quality Distribution, Inc. 9.000 11/15/10 1,030,000 1,001,575 875,500
Quality Distribution, Inc. (C) 9.743 01/15/12 545,000 547,298 490,500
RBS Global & Rexnord Corporation 11.750 08/01/16 275,000 284,646 268,813
Rental Service Corporation 9.500 12/01/14 1,500,000 1,489,735 1,342,500
Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 375,000
Stanadyne Corporation 10.000 08/15/14 1,500,000 1,500,000 1,447,500
Stewart & Stevenson LLC 10.000 07/15/14 1,500,000 1,537,510 1,507,500
Stratos Global 9.875 02/15/13 575,000 578,292 606,625
Tekni-Plex, Inc. 8.750 11/15/13 650,000 655,303 614,250
Tenneco, Inc. 8.625 11/15/14 1,000,000 1,002,383 982,500
Texas Industries, Inc. 7.250 07/15/13 70,000 70,000 68,600
Titan International, Inc. 8.000 01/15/12 150,000 150,000 144,750
Trimas Corporation 9.875 06/15/12 823,000 764,250 802,425
Triton PCS, Inc. 8.500 06/01/13 550,000 550,000 569,250
Tube City IMS Corporation 9.750 02/01/15 1,000,000 1,010,205 900,000
United Components, Inc. 9.375 06/15/13 1,080,000 1,081,127 1,066,500
---------------------------------------------------------------------------------------------------------------------------------
30
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
SHARES OR
INTEREST DUE PRINCIPAL
CORPORATE PUBLIC SECURITIES:(A) CONTINUED RATE DATE AMOUNT COST MARKET VALUE
---------------------------------------------------------------------------------------------------------------------------------
BONDS, CONTINUED
United Rentals, Inc. 7.750% 11/15/13 $ 625,000 $ 625,000 $ 543,750
United Rentals, Inc. 7.000 02/15/14 500,000 500,000 418,750
Valassis Communications, Inc. 8.250 03/01/15 165,000 161,019 147,056
Vought Aircraft Industries 8.000 07/15/11 1,000,000 998,989 947,500
Warner Music Group Corporation 7.375 04/15/14 275,000 275,000 211,750
Waste Services, Inc. 9.500 04/15/14 1,100,000 1,121,747 1,072,500
Yankee Acquisition Corporation 9.750 02/15/17 1,500,000 1,473,750 1,372,500
------------ ------------
TOTAL BONDS 65,909,534 63,312,118
------------ ------------
COMMON STOCK - 3.0%
Bally Total Fitness Holdings Corporation (B) 600 5,520 96
Comcast Corporation (B) 33,200 613,868 606,232
EnerNOC, Inc. (B) 46,500 1,283,262 2,283,150
ITC^DeltaCom, Inc. (B) 178,666 1,563,328 893,330
PepsiAmericas, Inc. 92,145 2,006,365 3,070,271
Supreme Industries, Inc. 115,721 267,323 671,182
------------ ------------
TOTAL COMMON STOCK 5,739,666 7,524,261
------------ ------------
CONVERTIBLE BONDS - 0.23%
Citadel Broadcasting Corporation 1.875% 02/15/11 $ 700,000 543,375 574,000
TOTAL CONVERTIBLE BONDS 543,375 574,000
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 72,192,575 $ 71,410,379
------------ ------------
INTEREST DUE PRINCIPAL
SHORT-TERM SECURITIES: RATE/YIELD DATE AMOUNT COST MARKET VALUE
---------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 7.80%
Abbey National North America LLC 4.454% 01/03/08 $ 2,249,000 $ 2,248,444 $ 2,248,444
Duke Energy Carolinas LLC 4.501 01/02/08 1,942,000 1,941,757 1,941,757
International Lease Finance Corporation 4.387 01/04/08 2,700,000 2,699,015 2,699,015
N S T A R Electric Company 4.305 01/07/08 3,632,000 3,629,397 3,629,397
P P G Industries, Inc. 5.613 01/11/08 2,464,000 2,460,167 2,460,167
Textron Financial Corporation 5.706 01/02/08 5,150,000 5,149,185 5,149,185
Wisconsin Gas Company 4.453 01/03/08 1,473,000 1,472,635 1,472,635
------------ ------------
TOTAL SHORT-TERM SECURITIES $ 19,600,600 $ 19,600,600
------------ ------------
TOTAL INVESTMENTS 113.13% $283,214,652 $284,151,233
------ ============ ------------
Other Assets 3.29 8,259,419
Liabilities (16.42) (41,247,630)
------ ------------
TOTAL NET ASSETS 100.00% $251,163,022
====== ============
(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 12/31/07.
(D) Defaulted security; interest not accrued.
(E) Illiquid securities. At December 31, 2007, the value of these securities amounted to $176,268,415 or 70.18% of net assets.
* Effective yield at purchase
PIK - Payment-in-kind
---------------------------------------------------------------------------------------------------------------------------------
31
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
AEROSPACE - 4.37% Workplace Media Holding Co. $ 1,257,415
Consolidated Foundries Holdings $ 3,939,330 ------------
Esterline Technologies 205,000 8,097,559
Gencorp, Inc. 261,590 ------------
Hughes Network Systems 1,063,125 BUILDINGS & REAL ESTATE - 1.45%
P A S Holdco LLC 2,982,207 K W P I Holdings Corporation 2,495,159
Visioneering, Inc. 1,580,111 Texas Industries, Inc. 68,600
Vought Aircraft Industries 947,500 TruStile Doors, Inc. 1,077,835
------------ ------------
10,978,863 3,641,594
------------ ------------
AUTOMOBILE - 10.39% CHEMICAL, PLASTICS & RUBBER - 0.45%
American Tire Distributor 970,000 Capital Specialty Plastics, Inc. 558,932
Ford Motor Credit Co. 1,782,671 Innophos, Inc. 74,625
Fuel Systems Holding Corporation 2,236,267 Koppers, Inc. 502,043
General Motors Acceptance Corporation 1,166,025 ------------
General Motors Corporation 1,127,000 1,135,600
Goodyear Tire & Rubber Co. 1,417,500 ------------
Jason, Inc. 1,911,103 CONSUMER PRODUCTS - 9.82%
Lear Corporation 1,765,400 Aero Holdings, Inc. 3,123,455
Metaldyne Corporation 904,500 ALH Fin LLC/ALH Fin Corporation 1,488,000
Nyloncraft, Inc. 1,896,875 Augusta Sportswear Holding Co. 4,168,873
Ontario Drive & Gear Ltd. 3,466,880 Bravo Sports Holding Corporation 2,695,150
Qualis Automotive LLC 2,007,282 G F S I, Inc. 712,500
Tenneco, Inc. 1,081,500 K N B Holdings Corporation 2,696,176
Titan International, Inc. 144,750 Kar Holdings, Inc. 938,500
Transtar Holding Company 3,147,358 Momentum Holding Co. 1,530,843
United Components, Inc. 1,066,500 R A J Manufacturing Holdings LLC 2,761,553
------------ Royal Baths Manufacturing Company 1,232,854
26,091,611 The Tranzonic Companies 3,263,553
------------ Walls Industries, Inc. 45,112
BEVERAGE, DRUG & FOOD - 4.73% ------------
Aramark Corporation 397,500 24,656,569
Golden Country Foods Holding, Inc. 2,038,522 ------------
Nonni's Food Company 2,776,385 CONTAINERS, PACKAGING & GLASS - 5.82%
PepsiAmericas, Inc. 3,070,271 Flutes, Inc. 1,538,086
Rite Aid Corporation 1,324,000 Graham Packaging Corporation 920,000
Specialty Foods Group, Inc. -- Maverick Acquisition Company 869,006
Vitality Foodservice, Inc. 2,271,640 P I I Holding Corporation 2,797,372
------------ Packaging Dynamics Corporation of America 1,320,000
11,878,318 Paradigm Packaging, Inc. 2,415,678
------------ Pliant Corporation 1,464,197
BROADCASTING & ENTERTAINMENT - 3.22% Pregis Corporation 1,060,000
CCH I Holdings LLC 1,212,500 Tekni-Plex, Inc. 614,250
Cablevision Systems Corporation 970,000 Vitex Packaging Group, Inc. 1,625,625
Cenveo Corporation 980,375 ------------
Charter Communications Op LLC 241,250 14,624,214
Citadel Broadcasting Corporation 574,000 ------------
Comcast Corporation 606,232 DISTRIBUTION - 1.96%
Liberty Media Corporation 926,412 Affinia Group, Inc. 909,000
Mediacom Broadband LLC 1,329,375 Duncan Systems, Inc. 1,743,474
Magnatech International, Inc. 2,273,685
QualServ Corporation --
Strategic Equipment & Supply Corporation, Inc. --
------------
4,926,159
------------
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32
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
DIVERSIFIED/CONGLOMERATE, MANUFACTURING - 7.10% HEALTHCARE, EDUCATION & CHILDCARE - 3.74%
A H C Holdings Company, Inc. $ 2,524,055 A T I Acquisition Company $ 2,162,120
Activant Solutions, Inc. 129,750 American Hospice Management Holding LLC 2,156,424
Arrow Tru-Line Holdings, Inc. 1,670,104 Community Health Systems, Inc. 1,222,500
Douglas Dynamics LLC 544,950 F H S Holdings LLC 2,822,478
Evans Consoles, Inc. 1,068,390 H C A, Inc. 1,023,750
Great Lakes Dredge & Dock Corporation 467,500 ------------
Polypore, Inc. 1,915,900 9,387,272
Postle Aluminum Company LLC 2,724,371 ------------
Radiac Abrasives, Inc. 2,842,839 HOME & OFFICE FURNISHINGS, HOUSEWARES, AND DURABLE
RBS Global & Rexnord Corporation 268,813 CONSUMER PRODUCTS - 7.98%
Trimas Corporation 802,425 Connor Sport Court International, Inc. 1,000,560
Truck Bodies & Equipment International 2,884,601 H M Holding Company 1,105,000
------------ Home Decor Holding Company 2,366,721
17,843,698 Justrite Manufacturing Acquisition Co. 1,858,797
------------ K H O F Holdings, Inc. 2,540,875
DIVERSIFIED/CONGLOMERATE, SERVICE - 3.83% Monessen Holding Corporation 2,419,266
Advanced Technologies Holdings 2,525,289 Stanton Carpet Holding Co. 2,752,031
CapeSuccess LLC 5,862 Transpac Holdings Company 1,968,516
Diversco, Inc./DHI Holdings, Inc. -- U-Line Corporation 2,197,288
Dwyer Group, Inc. 1,371,395 Wellborn Forest Holding Co. 1,827,471
Fowler Holding, Inc. 2,535,538 ------------
Insurance Claims Management, Inc. -- 20,036,525
Interline Brands, Inc. 1,287,000 ------------
Mail Communications Group, Inc. 1,255,441 LEISURE, AMUSEMENT, ENTERTAINMENT - 3.42%
Moss, Inc. 639,519 A M C Entertainment, Inc. 857,785
------------ Bally Total Fitness Holding Corporation 74,796
9,620,044 Electra Bicycle Company LLC 1,395,746
------------ Majestic Star Casino LLC 472,500
ELECTRONICS - 1.47% O E D Corp/Diamond Jo Company Guarantee 1,000,000
Calpine Corporation 537,500 Savage Sports Holding, Inc. 3,003,723
Connecticut Electric, Inc. 2,550,902 Snoqualmie Entertainment Authority 481,250
Directed Electronics, Inc. 611,810 Tunica-Biloxi Gaming Authority 1,099,188
------------ Warner Music Group Corporation 211,750
3,700,212 ------------
------------ 8,596,738
FARMING & AGRICULTURE - 1.00% ------------
Protein Genetics, Inc. -- MACHINERY - 9.39%
Waggin' Train Holdings LLC 2,513,298 Davis-Standard LLC 3,749,595
------------ Integration Technology Systems, Inc. --
2,513,298 K-Tek Holdings Corporation 2,516,419
------------ Manitowoc Company, Inc. 198,000
FINANCIAL SERVICES - 3.23% Morton Industrial Group, Inc. 2,247,801
Hawker Beechcraft Acquisition Co. 1,268,625 Navis Global 1,788,511
Highgate Capital LLC -- NetShape Technologies, Inc. 2,343,400
Leucadia National Corporation 622,375 Pacific Consolidated Holdings LLC 1,330,741
Nesco Holdings Corp. 2,515,451 Safety Speed Cut Manufacturing Company, Inc. 1,288,038
Penhall International 604,500 Stanadyne Corporation 1,447,500
Pinnacle Foods Finance LLC 1,720,000 Stewart & Stevenson LLC 1,507,500
Victory Ventures LLC -- Supreme Industries, Inc. 671,182
Yankee Acquisition Corporation 1,372,500
------------
8,103,451
------------
----------------------------------------------------------------------------------------------------------------------------------
33
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2007
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
Synventive Equity LLC $ 33,460 RETAIL STORES - 1.60%
Tronair, Inc. 4,455,891 Blockbuster, Inc. $ 406,125
------------ Olympic Sales, Inc. 1,315,049
23,578,038 Rental Service Corporation 1,342,500
------------ United Rentals, Inc. 962,500
MEDICAL DEVICES/BIOTECH - 2.46% ------------
Coeur, Inc. 1,402,336 4,026,174
E X C Acquisition Corporation 184,972 ------------
MicroGroup, Inc. 3,094,806 TECHNOLOGY - 2.43%
OakRiver Technology, Inc. 1,505,290 Compucom Systems, Inc. 1,300,075
------------ EnerNOC, Inc. 2,283,150
6,187,404 Smart Source Holdings LLC 2,511,905
------------ ------------
MINING, STEEL, IRON & NON PRECIOUS METALS - 0.46% 6,095,130
Ryerson, Inc. 64,188 ------------
Steel Dynamics, Inc. 194,000 TELECOMMUNICATIONS - 2.34%
Tube City IMS Corporation 900,000 Cincinnati Bell, Inc. 1,072,500
------------ Intelsat Bermuda Ltd. 1,371,825
1,158,188 ITC^DeltaCom, Inc. 893,330
------------ Jordan Telecom Products --
NATURAL RESOURCES - 0.12% N T L Cable PLC 1,366,200
Appleton Papers, Inc. 294,375 Stratos Global 606,625
------------ Triton P C S, Inc. 569,250
294,375 ------------
------------ 5,879,730
OIL & GAS - 3.26% ------------
Atlas Pipeline Partners 198,000 TRANSPORTATION - 2.14%
Basic Energy Services 211,500 NABCO, Inc. 332,813
Brigham Exploration Co. 1,113,000 Quality Distribution, Inc. 1,366,000
Bristow Group, Inc. 150,750 Tangent Rail Corporation 3,669,766
Chaparral Energy, Inc. 1,353,750 ------------
Clayton Williams Energy, Inc. 1,050,000 5,368,579
Delta Petroleum Corporation 641,250 ------------
Mariner Energy, Inc. 761,000 UTILITIES - 2.29%
North American Energy Partners 1,150,438 Dynegy Holdings, Inc. 1,272,575
Total Equipment & Service, Inc. 1,565,918 Edison Mission Energy 56,650
------------ Inergy LP 155,250
8,195,606 Intergen NV 789,375
------------ Markwest Energy Operating Co. 738,188
PHARMACEUTICALS - 1.15% N R G Energy, Inc. 170,625
CorePharma LLC 2,672,090 Petrohawk Energy Corporation 1,578,750
Enzymatic Therapy, Inc. 221,573 TXU Energy Company LLC 990,000
------------ ------------
2,893,663 5,751,413
------------ ------------
PUBLISHING/PRINTING - 0.96% WASTE MANAGEMENT / POLLUTION - 2.75%
Idearc, Inc. 917,500 Terra Renewal Services, Inc. 3,161,448
Newark Group, Inc. 811,750 Torrent Group Holdings, Inc. 2,636,916
Quebecor Media, Inc. 168,438 Waste Services, Inc. 1,072,500
Sheridan Acquisition Corporation 375,000 ------------
Valassis Communications, Inc. 147,056 6,870,864
------------ ------------
2,419,744 TOTAL CORPORATE RESTRICTED AND PUBLIC
------------ SECURITIES - 105.33% $264,550,633
============
----------------------------------------------------------------------------------------------------------------------------------
34
MassMutual Corporate Investors
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007
1. HISTORY
MassMutual Corporate Investors (the "Trust") commenced operations in 1971 as
a Delaware corporation. Pursuant to an Agreement and Plan of Reorganization
dated November 14, 1985, approved by shareholders, the Trust was reorganized
as a Massachusetts business trust under the laws of the Commonwealth of
Massachusetts, effective November 28, 1985.
The Trust is a diversified closed-end management investment company. Babson
Capital Management LLC ("Babson Capital"), a wholly-owned indirect subsidiary
of Massachusetts Mutual Life Insurance Company ("MassMutual"), acts as its
investment adviser. The Trust's investment objective is to maintain a
portfolio of securities providing a fixed yield and at the same time offering
an opportunity for capital gains. The Trust's principal investments are
privately placed, below-investment grade, long-term debt obligations with
equity features such as warrants, conversion rights, or other equity features
and, occasionally, preferred stocks. The Trust typically purchases these
investments, which are not publicly tradable, directly from their issuers in
private placement transactions. These investments are typically mezzanine
debt instruments with accompanying private equity securities made to small or
middle market companies. In addition, the Trust may temporarily invest,
subject to certain limitations, in marketable investment grade debt
securities, other marketable debt securities (including high yield
securities) and marketable common stocks. Below investment grade or high
yield securities have predominantly speculative characteristics with respect
to the capacity of the issuer to pay interest and repay principal.
On January 27,1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary of the Trust ("MMCI Subsidiary Trust") for the
purpose of holding certain investments. The results of MMCI Subsidiary Trust
have been included in the accompanying financial statements. Footnote 2.D
below discusses the federal tax consequences of the MMCI Subsidiary Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of its consolidated financial
statements in conformity with accounting principles generally accepted in the
United States of America.
A. VALUATION OF INVESTMENTS:
Valuation of a security in the Trust's portfolio is made on the basis of
market price whenever market quotations are readily available and all
securities of the same class held by the Trust can be readily sold in such
market.
Nearly all securities which are acquired by the Trust directly from the
issuers and shares into which such securities may be converted or which may
be purchased on the exercise of warrants attached to such securities will be
subject to legal or contractual delays in, or restrictions on, resale and
will therefore be "restricted securities." Generally speaking, as contrasted
with open-market sales of unrestricted securities which may be effected
immediately if the market is adequate, restricted securities can be sold only
in a public offering for which a registration statement is in effect under
the Securities Act of 1933, as amended (the "1933 Act"), or pursuant to a
transaction that is exempt from registration under the 1933 Act.
The value of restricted securities, and of any other assets for which there
are no reliable market quotations, is the fair value as determined in good
faith by the Trust's Board of Trustees (the "Trustees"). Each restricted
security is valued by the Trustees at the time of its acquisition and at
least quarterly thereafter. The Trustees have established guidelines to aid
in the valuation of each security. Generally, restricted securities are
initially valued at cost or less at the time of acquisition by the Trust.
Values greater or less than cost are used thereafter for restricted
securities in appropriate circumstances. Among the factors ordinarily
considered are the existence of restrictions upon the sale of a security held
by the Trust; an estimate of the existence and 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
--------------------------------------------------------------------------------
35
MassMutual Corporate Investors
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007
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 $176,268,415 (70.18% of net assets) as of December 31,
2007 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, 2007,
subject to discount where appropriate, and are approved by the Trustees.
Short-term securities with more than sixty days to maturity are valued at
fair value and short-term securities having a maturity of sixty days or less
are valued at amortized cost, which approximates market value.
B. ACCOUNTING FOR INVESTMENTS:
Investment transactions are accounted for on the trade date. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis, including the amortization of premiums and accretion of
discounts on bonds held using the yield-to-maturity method. The Trust does
not accrue income when payment is delinquent and when management believes
payment is questionable.
Realized gains and losses on investment transactions and unrealized
appreciation and depreciation of investments are reported for financial
statement and federal income tax purposes on the identified cost method.
C. USE OF ESTIMATES:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
D. FEDERAL INCOME TAXES:
The Trust has elected to be taxed as a "regulated investment company" under
the Internal Revenue Code, and intends to maintain this qualification and to
distribute substantially all of its net taxable income to its shareholders.
In any year when net long-term capital gains are realized by the Trust,
management, after evaluating the prevailing economic conditions, will
recommend that the Trustees either designate the net realized long-term gains
as undistributed and pay the federal capital gains taxes thereon or
distribute all or a portion of such net gains. For the year ended December
31, 2007, the Trust had a net realized taxable long-term capital gain balance
of $2,604,766, which the Trustees voted to retain and pay the federal capital
gain tax thereon. The Trust has accrued income tax expense of $911,668 on the
Statement of Operations related to the retained realized capital gains.
The Trust is taxed as a regulated investment company and is therefore limited
as to the amount of non-qualified income that it may receive as the result of
operating a trade or business, e.g. the Trust's PRO RATA share of income
allocable to the Trust by a partnership operating
--------------------------------------------------------------------------------
36
MassMutual Corporate Investors
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007
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, 2007, the MMCI Subsidiary Trust has accrued income tax expense of
$138,142.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of the existing assets and liabilities and their respective
tax basis. As of December 31, 2007, the MMCI Subsidiary Trust has a deferred
tax asset of $216,497 for which a full valuation reserve has been recorded.
No future tax benefit is expected to be realized from this asset as of
December 31, 2007. The MMCI Subsidiary Trust has recorded a deferred income
tax benefit in the current year in the amount of $651,017 resulting from the
decrease to zero of the deferred tax liability at December 31, 2006.
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES -- AN
INTERPRETATION OF FASB STATEMENT NO. 109 ("FIN 48"). Management has analyzed
the Trust's tax positions taken on federal income tax returns for all open
tax years and has concluded that as of December 31, 2007, no provision for
income tax would be required in the Trust's financial statements. The Trust's
federal and state income and federal excise tax returns for tax years for
which the applicable statutes of limitations have not expired are subject to
examination by the Internal Revenue Service and state departments of revenue.
E. DISTRIBUTIONS TO SHAREHOLDERS:
The Trust records distributions to shareholders from net investment income
and net realized gains, if any, on the ex-dividend date. The Trust's net
investment income dividend is declared four times per year, in April, July,
October, and December. The Trust's net realized capital gain distribution, if
any, is declared in December.
As of December 31, 2007, the components of distributable earnings on a tax
basis included $1,857,259 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 of America.
Net investment income and net realized gains or losses of the Trust as
presented under accounting principles generally accepted in the United States
of America may differ from distributable earnings due to earnings from the
MMCI Subsidiary Trust as well as certain permanent and temporary differences
in the recognition of income and net realized gains or losses on certain
investments. Permanent differences will result in reclassifications to the
capital accounts. In 2007, the Trust increased undistributed net investment
income and decreased additional paid in capital by a total of $58,813 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 tax character of distributions declared during the years ended December
31, 2007 and 2006 was as follows:
DISTRIBUTIONS PAID FROM: 2007 2006
-----------------------------
Ordinary Income $ 23,679,411 $ 22,643,658
Long-term Capital gains $ -- $ --
F. EXPENSE REDUCTION:
Citibank, N.A. ("Citibank") serves as custodian to the Trust. Pursuant to the
custodian agreement, Citibank receives a fee reduced by credits on cash
balances the Trust maintains with Citibank. All credit balances, if any, used
to reduce the Trust's custodian fees are reported as fees paid indirectly on
the Statement of Operations. For the year ended December 31, 2007, there were
no credit balances used to reduce custodian fees.
--------------------------------------------------------------------------------
37
MassMutual Corporate Investors
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007
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 as of
the last business day of each fiscal 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"). The eighteen month transition period ended on March 31, 2007.
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 provides administration of the dayto- 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 three-year period (the "Measurement Period") comprising the twelve
quarters ending on the last day of each quarter (the "Valuation Date"). The
Standard & Poor's Industrials Composite is not readily available to the
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, 2007 was 10.32%.
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 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)
multiplied by 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 twelve-quarter period ending on such quarter.
4. SENIOR SECURED INDEBTEDNESS
A. NOTE PAYABLE:
MassMutual holds the Trust's $30,000,000 Senior Fixed Rate Convertible Note
(the "Note") issued by the Trust on November 15, 2007. The Note is due
November 15, 2017 and accrues interest at 5.28% per annum. MassMutual, at its
option, can convert the principal amount of the Note into common shares. The
dollar amount of principal would be converted into an equivalent dollar
amount of common shares based upon the average price of the common shares for
ten business days prior to the notice of conversion. For the period November
15 through December 31, 2007,
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38
MassMutual Corporate Investors
--------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007
the Trust incurred total interest expense on the Note of $198,000.
The Trust may redeem the Note, in whole or in part, at the principal amount
proposed to be redeemed together with the accrued and unpaid interest thereon
through the redemption date plus the Make Whole Premium. The Make Whole
Premium equals the excess of (i) the present value of the scheduled payments
of principal and interest which the Trust would have paid but for the
proposed redemption, discounted at the rate of interest of U.S. Treasury
obligations whose maturity approximates that of the Note plus 0.50% over (ii)
the principal of the Note proposed to be redeemed.
Prior to the issuance of the Note, MassMutual held the Trust's $20,000,000
Senior Fixed Rate Convertible Note (the "Prior Note") issued by the Trust in
1995. The Prior Note matured on November 15, 2007 and accrued at 7.39% per
annum. Upon maturity, all principal was returned to MassMutual (including
accrued interest). For the period January 1 through November 15, 2007, the
Trust incurred total interest expense on the Prior Note of $1,293,250.
B. REVOLVING CREDIT AGREEMENT:
The Trust entered into a Revolving Credit Agreement (the "Revolver") with The
Royal Bank of Scotland PLC (the "Agent Bank") as of May 31, 2005, 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 a London Inter Bank Offered
Rate ("LIBOR") 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 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, 2007, there was no outstanding amount against the
Revolver. For the year ended December 31, 2007, 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 ENDED COST OF INVESTMENTS
12/31/2007 ACQUIRED
-----------------------------------------------------------------------------
Corporate restricted securities $ 70,920,867
Corporate public securities 48,836,083
-----------------------------------------------------------------------------
PROCEEDS FROM
SALES OR MATURITIES
-----------------------------------------------------------------------------
Corporate restricted securities $ 58,453,242
Corporate public securities 64,893,234
-----------------------------------------------------------------------------
The aggregate cost of investments is substantially the same for financial
reporting and federal income tax purposes as of December 31, 2007. The net
unrealized appreciation of investments for financial reporting and federal
tax purposes as of December 31, 2007 is $936,581 and consists of $26,497,644
appreciation and $25,561,063 depreciation.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED)
AMOUNT PER SHARE
-----------------------------------------------------------------------------
MARCH 31, 2007
-----------------------------------------------------------------------------
Investment income $ 6,228,449
Net investment income 4,828,999 $ 0.53
Net realized and unrealized
gain on investments (net of taxes) 426,925 0.05
-----------------------------------------------------------------------------
JUNE 30, 2007
-----------------------------------------------------------------------------
Investment income $ 7,265,754
Net investment income 5,957,211 $ 0.64
Net realized and unrealized
loss on investments (net of taxes) (598,756) (0.07)
-----------------------------------------------------------------------------
SEPTEMBER 30, 2007
-----------------------------------------------------------------------------
Investment income $ 8,663,301
Net investment income 7,309,734 $ 0.80
Net realized and unrealized
gain on investments (net of taxes) 871,815 0.10
-----------------------------------------------------------------------------
DECEMBER 31, 2007
-----------------------------------------------------------------------------
Investment income $ 6,944,033
Net investment income 5,490,971 $ 0.59
Net realized and unrealized
loss on investments (net of taxes) (3,885,471) (0.43)
7. AGGREGATE REMUNERATION PAID TO OFFICERS, TRUSTEES AND THEIR AFFILIATED
PERSONS
For the year ended December 31, 2007, the Trust paid its Trustees aggregate
remuneration of $188,000. During the
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39
MASSMUTUAL CORPORATE INVESTORS
--------------------------------------------------------------------------------
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, 2007, Babson Capital paid the compensation of the
Chief Compliance Officer of the Trust.
Mr. Crandall, one of the Trust's Trustees, is an "affiliated person" (as
defined by the 1940 Act) of MassMutual and Babson Capital.
The Trust did not make any payments to Babson Capital for the year ended
December 31, 2007, other than amounts payable to Babson Capital pursuant to
the New Contract. For the year ended December 31, 2007, 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 $ 11,478
Preparation of the Certain of the Trust's
Shareholder communications 1,832
Preparation of the Trust's Annual Proxy Statements 1,642
--------
$ 14,952
========
8. NEW ACCOUNTING PRONOUNCEMENTS
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.
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40
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, 2007, and the related statements of operations
and cash flows for the year then ended, 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 four-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 the year ended December 31, 2003 was 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, 2007 by correspondence with the custodian,
or by other appropriate auditing procedures. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the 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, 2007, 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.
KPMG LLP
Boston, Massachusetts
February 11, 2008
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41
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* (43) Trustee 3 years/ Executive Vice President and 2 Trustee, Chairman (since 2005),
(since 2005) 1 year, Chief Investment Officer President (2003-2005), and Vice
Massachusetts Mutual Life 10 months (since 2005) and Co-Chief President (2002-2003), of the
Insurance Company Operating Officer (since Trust; Director (since 2004),
1295 State Street Chairman 1 year/ 2007) of MassMutual; and Babson Capital Europe Limited
Springfield, MA 01111 (since 2005) 7 months Chairman (since 2005), (an institutional debt-fund
President (2006-2007) and manager); Director (since
Chief Executive Officer 2004), Babson Capital Guernsey
(since 2006), Vice Chairman Limited (an investment
(2005), Member of the Board management company);
of Managers (since 2004), Non-Executive Director (since
Member of the Board of 2005), Baring Asset Management
Directors (2003-2004), and Limited (an investment manager/
Managing Director of Babson adviser); Chairman (since
Capital (2000-2005). 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 2004), MML Assurance,
Inc. (a New York insurance
company); Director (since
2005), Oppenheimer Acquisition
Corp. (holding company);
Director (since 2004),
Jefferies Finance LLC (a
finance company); Director
(since 2004), Great Lakes LLC
(investment company); Director
(since 1999), SAAR Holdings CDO
Ltd. (investment company);
Chairman, Director, and Chief
Executive Officer (since 2006),
MassMutual Capital Partners
(investment company); Director
(since 2006), Invicta Advisers
LLC (derivative trading
company); Director (since
2006), Invicta Capital LLC
(derivative trading company);
Director (since 2006), Invicta
Credit LLC (derivative trading
company); Director (since
2006), Invicta Holdings LLC
(derivative trading company);
Director (since 2006),
MassMutual International LLC
(holding company); Trustee
(since 2003), President
(2003-2005), and Chairman
(since 2005), MMCI Subsidiary
Trust and MMPI Subsidiary
Trust; and Trustee (since
2005), Chairman (since 2005),
President (2003-2005), and Vice
President (2002-2003), of
MassMutual Participation
Investors (closed-end
investment company advised by
Babson Capital).
* Mr. Crandall is classified as an "interested person" of the Trust and Babson Capital (as defined in the Investment Company Act of
1940, as amended) because of his position as an Officer of the Trust; and Chairman, Chief Executive Officer, and Member of the
Board of Managers of Babson Capital.
--------------------------------------------------------------------------------
42
MassMutual Corporate Investors
--------------------------------------------------------------------------------
INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS
POSITION OCCUPATION(S) OVERSEEN OTHER
NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS
ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
ROBERT E. JOYAL* (63) Trustee 3 years/ President (2001-2003) of 57 President (1999-2003) and
(since 2003) 10 months Babson Capital. Trustee (since 2003), of the
MassMutual Trust; Director (since 2006),
Participation Investors Jefferies Group, Inc.
1500 Main Street (financial services); Director
Suite 600, P.O. Box 15189 (since 2003), Pemco Aviation
Springfield, MA 01115-5189 Group, Inc. (aircraft
maintenance and overhaul);
Director (since 2007), Scottish
Re Group Ltd. (global life
reinsurance specialist);
Trustee (since 2003),
MassMutual Select Funds,
formerly MassMutual
Institutional Funds, (an
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 (closedend 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).
--------------------------------------------------------------------------------
43
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 (68) Trustee 2 years/ President (since 2002), 2 Trustee (since 2006),
MassMutual (since 2006) 10 months Barrett-Gardner Associates, MassMutual Participation
Corporate Investors Inc. (investments); and Senior Investors (a closed-end
1500 Main Street Vice President (1976-2002), investment company advised by
Suite 600, P.O. Box 15189 Janney Montgomery Scott Babson Capital).
Springfield, MA 01115-5189 LLC (investments).
DONALD E. BENSON (77) Trustee 3 years/ Executive Vice President 2 Director (since 1997), MAIR
MassMutual (since 1986) 2 years, and Director (since 1992), Holdings, Inc. (commuter
Corporate Investors 10 months Marquette Financial airline holding company);
1500 Main Street Companies (financial services); Director (since 1997), First
Suite 600, P.O. Box 15189 Partner (since 1996), Benson California First California
Springfield, MA 01115-5189 Family Limited Partnership Financial Group Inc. (bank
No. 1 and Benson Family holding company); and Trustee
Limited Partnership No. 2 (since 1988), MassMutual
(investment partnerships); and Participation Investors
Partner (1987-2004), Benson, (closed-end investment company
Pinckney, Oates Partnership advised by Babson Capital).
(building partnership)
--------------------------------------------------------------------------------
44
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 (51) Trustee 1 year/ Private Investor; and 2 Trustee (since 2005),
MassMutual (since 2005) 10 months Managing Director (1994- MassMutual Participation
Corporate Investors 2005), Morgan Stanley. Investors (a closed-end
1500 Main Street investment company advised by
Suite 600, P.O. Box 15189 Babson Capital); Independent
Springfield, MA 01115-5189 Director (since 2006), Invicta
Holdings LLC (a derivative
trading company).
DONALD GLICKMAN (74) Trustee 3 years/ Chairman (since 1992), Donald 2 Director (since 1984), Monro
MassMutual (since 1992) 10 months Glickman and Company, Muffler Brake, Inc. (automobile
Corporate Investors Inc. (private investments); repair service); Director
1500 Main Street and Partner (since 1992), (since 1998), MSC Software,
Suite 600, P.O. Box 15189 J.F. Lehman & Co. (private Corp. (simulation software);
Springfield, MA 01115-5189 investments). and Trustee (since 1992),
MassMutual Participation
Investors (closed-end
investment company advised by
Babson Capital).
--------------------------------------------------------------------------------
45
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 (72) Trustee 3 years/ Private Investor; and President 2 Director (since 2004), Texas
MassMutual (since 1991) 1 year, and Director (since 1983), H Roadhouse, Inc. (operates
Corporate Investors 10 months Investment Company LLC restaurant chain); Director
1500 Main Street (family partnership). (since 1999), ValueClick Inc.
Suite 600, P.O. Box 15189 (internet advertising company);
Springfield, MA 01115-5189 Director (since 2002),
Spectranetics Corp. (medical
device company); and Trustee
(since 1991), MassMutual
Participation Investors
(closed-end investment company
advised by Babson Capital).
CORINE T. NORGAARD (70) Trustee 3 years/ President, (2004-2005), 34 Trustee (since 2005), MML
MassMutual (since 1998) 2 years, Thompson Enterprises Real Series Investment Fund II (an
Corporate Investors 10 months Estate Investment; and Dean open-end investment company
1500 Main Street (1996-2004), Barney School advised by MassMutual); Trustee
Suite 600, P.O. Box 15189 of Business, University of (since 2004), MassMutual
Springfield, MA 01115-5189 Hartford. Premier Funds, formerly The DLB
Fund Group (an open-end
investment company advised by
MassMutual); Trustee (since
1993), ING Series Fund
(investment company); Director
(since 1992), ING Variable
Series Fund; and Trustee (since
1998), MassMutual Participation
Investors (a closed-end
investment company advised by
Babson Capital).
MALEYNE M. SYRACUSE (51) Trustee 6 months/ Managing Director (2000- 2 Trustee (since 2007),
MassMutual (since 2007) 4 months* 2007), JP Morgan Securities, MassMutual Participation
Corporate Investors Inc. Investors (a closed-end
1500 Main Street investment company advised by
Suite 600, P.O. Box 15189 Babson Capital).
Springfield, MA 01115-5189
* Ms. Syracuse was appointed by the Board of Trustees to fill a newly created board seat on October 19, 2007.
--------------------------------------------------------------------------------
46
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 (50) President 1 year/ President (since 2005), Vice President (1993-2005) of the Trust;
MassMutual 7 months Vice Chairman (since 2007), Member of the Board of Managers
Corporate Investors (since 2006), and Managing Director (since 2000) of Babson
1500 Main Street Capital; Trustee (since 2005), and President (since 2005) MMCI
Suite 600, P.O. Box 15189 Subsidiary Trust and MMPI Subsidiary Trust; and President (since
Springfield, MA 01115-5189 2005), Vice President (1993-2005), MassMutual Participation
Investors.
RODNEY J. DILLMAN (55) 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
Corporate Investors Secretary, (since 2000) of MassMutual; General Counsel and Secretary (since
1500 Main Street and Chief 2006) of Babson Capital; Secretary (since 2006), MMCI Subsidiary
Suite 600, P.O. Box 15189 Legal Officer Trust and MMPI Subsidiary Trust; and Vice President, Secretary,
Springfield, MA 01115-5189 and Chief Legal Officer (since 2006), MassMutual Participation
Investors.
JAMES M. ROY (45) Vice President 1 year/ Vice President and Chief Financial (since 2005), Treasurer
MassMutual and Chief 7 months (2003-2005), and Associate Treasurer (1999-2003) of the Trust;
Corporate Investors Financial Officer Managing Director (since 2005), and Director (2000-2005) of
1500 Main Street Officer Babson Capital; Trustee (since 2005), Treasurer (since 2005),
Suite 600, P.O. Box 15189 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. (40) 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 MassMutual Participation Investors.
Suite 600, P.O. Box 15189
Springfield, MA 01115-5189
MELISSA M. LAGRANT (34) 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 Company, L.P.; Assistant Vice President-Business Risk Management
Suite 600, 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 (39) 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
Suite 600, P.O. Box 15189
Springfield, MA 01115-5189
--------------------------------------------------------------------------------
47
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MASSMUTUAL CORPORATE INVESTORS
--------------------------------------------------------------------------------
MEMBERS OF THE BOARD OF [PHOTO OF BOARD OF TRUSTEES]
TRUSTEES
LEFT TO RIGHT:
Donald Glickman
Chairman,
Donald Glickman & Company, Inc. DIVIDEND REINVESTMENT AND CASH PURCHASE
PLAN
Robert E. Joyal
Retired President, MassMutual Corporate Investors offers a
Babson Capital Management LLC Dividend Reinvestment and Share Purchase
Plan. The Plan provides a simple way for
William J. Barrett shareholders to add to their holdings in
President, the Trust through the receipt of
Barrett-Gardner Associates, Inc. dividend shares issued by the Trust or
through there investment of cash
Michael H. Brown dividends in Trust shares purchased in
Private Investor the open market. A shareholder may join
the Plan by filling out and mailing an
Donald E. Benson* authorization card to Shareholder
Executive Vice President Financial Services, Inc., the Transfer
and Director, Agent.
Marquette Financial Companies
Participating shareholders will continue
Dr. Corine T. Norgaard* to participate until they notify the
Retired Dean, Transfer Agent, in writing, of their
Barney School of Business desire to terminate participation.
University of Hartford Unless a shareholder elects to
participate in the Plan, he or she will,
Roger W. Crandall in effect, have elected to receive
Executive Vice President, dividends and distributions in cash.
Chief Investment Officer and Participating shareholders may also make
Co-Chief Operating Officer additional contributions to the Plan
Massachusetts Mutual Life from their own funds. Such contributions
Insurance Company may be made by personal check or other
means in an amount not less than $10 nor
Martin T. Hart* more than $5,000 per quarter. Cash
Private Investor contributions must be received by the
Transfer Agent at least fi ve days (but
Maleyne M. Syracuse no more then 30 days) before the payment
Private Investor date of a dividend or distributions.
Cash contributions must be received by
*Member of the Audit Committee the Transfer Agent at least fi ve days
(but no more then 30 days) before the
OFFICERS payment date of a dividend or
Roger W. Crandall distributions.
Chairman
Whenever the Trust declares a dividend
Clifford M. Noreen payable in cash or shares, the Transfer
President Agent, acting on behalf of each
participating shareholder, will take the
James M. Roy dividend in shares only if the net asset
Vice President & Chief value is lower than the market price
Financial Officer plus an estimated brokerage commission
as of the close of business on the
Rodney J. Dillman valuation day. The valuation day is the
Vice President, Secretary last day preceding the day of dividend
& Chief Legal Officer payment. When the dividend is to be
taken in shares, the number of shares to
Jill A. Fields be received is determined by dividing
Vice President the cash dividend by the net asset value
as of the close of business on the
Michael P. Hermsen valuation date or, if greater than net
Vice President asset value, 95% of the closing share
price. If the net asset value of the
Mary Wilson Kibbe shares is higher than the market value
Vice President plus an estimated commission, the
Transfer Agent, consistent with
Michael L. Klofas obtaining the best price and execution,
Vice President will buy shares on the open market at
current prices promptly after the
Richard E. Spencer, II dividend payment date.
Vice President
The reinvestment of dividends does not,
Ronald S. Talaia in anyway, relieve participating
Treasurer shareholders of any federal, state or
local tax. For federal income tax
John T. Davitt, Jr. purposes, the amount reportable in
Comptroller respect of a dividend received in
newly-issued shares of the Trust will be
Melissa M. LaGrant the fair market value of the shares
Chief Compliance Officer received, which will be reportable as
ordinary income and/or capital gains.
As compensation for its services, the
Transfer Agent receives a fee of 5% of
any dividend and cash contribution (in
no event in excess of $2.50 per
distribution per shareholder.)
Any questions regarding the Plan should
be addressed to Shareholder Financial
Services, Inc., Agent for MassMutual
Corporate Investors' Dividend
Reinvestment and Share Purchase Plan,
P.O. Box 173673, Denver, CO 80217-3673.
--------------------------------------------------------------------------------
[LOGO]
MASSMUTUAL CORPORATE INVESTORS CI2910
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,
2007 2006
---------- ----------
Audit Fees $ 42,500 $ 40,500
Audit-Related Fees 5,700 5,400
Tax Fees 37,200 28,500
All Other Fees 0 0
---------- ----------
Total Fees $ 85,400 $ 74,400
========== ==========
NON-AUDIT FEES BILLED TO BABSON CAPITAL AND MASSMUTUAL
KPMG LLP KPMG LLP
Year Ended Year Ended
December 31, December 31,
2007 2006
---------- ----------
Audit-Related Fees $1,102,280 $ 912,760
Tax Fees 0 0
All Other Fees 75,000 0
---------- ----------
Total Fees $1,177,280 $ 912,760
========== ==========
The category "Audit Related Fees" reflects fees billed by KPMG for
various non-audit and non-tax services rendered to the Registrant,
Babson Capital Management LLC ("Babson Capital") and Massachusetts
Mutual Life Insurance Company ("MassMutual"), such as SAS 70 review,
agreed upon procedures reports. Preparation of Federal, state and local
income tax returns and compliance work are representative of the fees
billed in the "Tax Fees" category. The category "All Other Fees"
represents fees billed by KPMG for tax consulting rendered to Babson
Capital and MassMutual. The Sarbanes-Oxley Act of 2002 and its
implementing regulations allows the Registrant's Audit Committee to
establish a pre-approval policy for certain services rendered by the
Registrant's independent accountants. During 2007, 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 2006 fees billed represent final 2006 amounts, which may differ
from the preliminary figures available as of the filing date of the
Trust's 2007 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 2007 Annual Form N-CSR, but are now properly included in the
2006 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 part of its investment
management responsibility and believes, as a general principle, that
proxies should be voted solely in the best interests of its clients
(i.e. in a manner it believes is most likely to enhance the economic
valve of the underlying securities and client accounts). To implement
this general principle, it is Babson Capital's policy to generally vote
proxies in accordance with the recommendations of Institutional
Shareholder Services ("ISS"), a recognized authority on proxy voting
and corporate governance, or, in cases where ISS has not made any
recommendations with respect to a proxy, in accordance with ISS's proxy
voting guidelines.
Babson Capital recognizes, however, that there may be times when Babson
Capital believes that it will be in the best interests of clients
holding the securities to (1) vote against ISS's recommendations or (2)
in cases where ISS has not provided Babson Capital with any
recommendations with respect to a proxy, vote against ISS's proxy
voting guidelines. Babson Capital may vote, in whole or part, against
ISS's recommendations or ISS's proxy voting guidelines, as applicable.
The procedures set forth in the Policy are designed to ensure that
votes against ISS's recommendations or proxy voting guidelines have
been made in the best interests of clients and are not the result of
any material conflict of interest (a "Material Conflict").
Summary of Babson Capital's Proxy Voting Procedures
---------------------------------------------------
Babson Capital has established a Proxy Committee that is responsible
for the implementation and governance of the Policy and designated
Proxy Administrators who will receive and post proxies for voting with
ISS. In accordance with the Policy, Babson Capital will generally vote
all client proxies in accordance with ISS's recommendation or proxy
voting guidelines, unless a person authorized by the Proxy Committee
(each a "Proxy Analyst"), the Proxy Committee or a designated member of
the Proxy Committee determines that it is in the clients' best interest
to vote against ISS's recommendation or proxy voting guidelines. In
these cases, Babson Capital will vote against ISS's recommendation or
proxy voting guidelines, so long as no other Proxy Analyst reviewing
such proxy disagrees with such recommendation, and no known Material
Conflict is identified by the Proxy Analyst(s) or the Proxy
Administrator. Otherwise, the proxy is to be submitted to a member of
the Proxy Committee, who shall determine how to vote the proxy unless
(i) the Proxy Analyst or Proxy Administrator has identified a Babson
Capital Material Conflict or (ii) said Proxy Committee member has
identified a Material Conflict pertinent to him or herself or a Babson
Material Conflict. In such cases, the proxy shall be
submitted to the Proxy Committee, which may authorize a vote against
ISS's recommendation or proxy voting guidelines only if the Proxy
Committee determines that such vote is in the clients' best interests.
No employee, officer, director, or a Board of Managers Member of Babson
Capital or its affiliates (other than those assigned such
responsibilities under the Policy) may influence how Babson Capital
votes any client proxy, unless such person has been requested to
provide such assistance by a Proxy Analyst or Proxy Committee member
and has disclosed any known Material Conflict. Any pre-vote
communications prohibited by the Policy shall be reported to the Proxy
Committee member prior to voting and to Babson Capital's Chief
Compliance Officer or General Counsel.
Obtaining a Copy of the Policy
------------------------------
The full text of Babson Capital's Policy is available (1) without
charge, upon request, by calling 1-866-399-1516 or (2) on the
Registrant's website, www.babsoncapital.com/mci.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The following disclosure item is made as of the date of this Form N-CSR
unless otherwise indicated.
PORTFOLIO MANAGER. Clifford M. Noreen serves as the President of the
Registrant (since 2005) and as its Portfolio Manager. Mr. Noreen began
his service to the Registrant in 1993 as a Vice President. With over 25
years of industry experience, Mr. Noreen is Vice Chairman, a Managing
Director and a Member of the Board of Managers of Babson Capital
Management LLC ("Babson Capital") and head of Babson Capital's
Corporate Securities Group, where he oversees public equities and
corporate credit related investments, including public and private
bonds, mezzanine, and private equity investments, and structured credit
products. Mr. Noreen joined Massachusetts Mutual Life Insurance Company
("MassMutual"), Babson Capital's parent company, in 1985 and began
leading its High Yield Team in 1992, where he was responsible for
oversight of all public high yield portfolios. In 2004, Mr. Noreen
assumed responsibility for Babson Capital's Public Corporate Credit
Group, which included the Investment Grade and High Yield Institutional
Fixed Income teams. Mr. Noreen also presently serves as President of
MassMutual Participation Investors, another closed-end registered
investment company advised by Babson Capital. Mr. Noreen holds a B.A.
from the University of Massachusetts and an M.B.A from American
International College.
PORTFOLIO MANAGEMENT TEAM. Mr. Noreen has primary responsibility for
overseeing the investment of the Registrant's portfolio, with the
day-to-day investment management responsibility of the Registrant's
portfolio being shared with the following Babson Capital investment
professionals (together with the Portfolio Manager, the "Portfolio
Team").
Michael P. Hermsen, Michael L. Klofas, and Richard E. Spencer II are
each a Vice President of the Registrant and a Managing Director of
Babson Capital. Together they are responsible for managing Babson
Capital's Mezzanine Investment and Private Equity Investments Team
within the Corporate Securities Group, which is responsible for
finding, analyzing, negotiating and servicing mezzanine private
placement securities for the Registrant.
Mr. Hermsen joined MassMutual in 1990 and has been an officer of the
Registrant since 1992. Previously, he worked at Teachers Insurance and
Annuity Association where he was a generalist private placement
analyst. At MassMutual and then Babson Capital, Mr. Hermsen has
analyzed and invested in traditional private placements, high yield
public and private bonds, and leveraged bank loans. He has also been
responsible for managing a small portfolio of distressed investments.
Since 1993, he has focused on originating, analyzing, structuring and
documenting mezzanine and private equity investments. He holds a B.A.
from Bowdoin College and an M.B.A. from Columbia University.
Mr. Klofas joined MassMutual in 1988 and has been an officer of the
Registrant since 1989. Prior to joining MassMutual, he spent two years
at a small venture capital firm and two years at a national public
accounting firm. At MassMutual and then Babson Capital, Mr. Klofas has
analyzed and invested in traditional private placements and high yield
public bonds. He also spent four years leading Babson Capital's workout
and restructuring activities. Since 1993, he has focused on
originating, analyzing, structuring and documenting mezzanine and
private equity investments. Mr. Klofas holds a B.A. from Brandeis
University and an M.B.A. from Babson College as well as a Certified
Public Accountant designation.
Mr. Spencer joined MassMutual in 1989 after three years as a corporate
loan analyst at a major New England bank. He has been an officer of
Registrant since 1990. At MassMutual and then Babson Capital, Mr.
Spencer has analyzed and invested in traditional private placements,
high yield public and private bonds, leveraged bank loans, mezzanine
debt and private equity. From 1993 to 1999, he was the lead
restructuring professional at Babson Capital. Since 1999, Mr. Spencer
has been focused on the origination, analysis, structuring and
documentation of mezzanine and private equity investments. He holds a
B.A. from Bucknell University and an M.B.A. from the State University
of New York at Buffalo.
Jill A. Fields is responsible for the day-to-day management of the
Registrant's public high yield and investment grade fixed income
portfolio. Ms. Fields has been a Vice President of the Registrant since
2006. Ms. Fields is a Managing Director of Babson Capital with over 20
years of industry experience in high yield total return structured
credit leveraged loans and private placement investing. Prior to
joining Babson Capital in 1997, she was a credit analyst at Shawmut
National Bank, and the Director of Corporate Bond Research at Hartford
Life Insurance Group. Ms. Fields holds a B.S. from Pennsylvania State
University and an M.B.A. from the University of Connecticut.
OTHER ACCOUNTS MANAGED BY THE PORTFOLIO TEAM. The members of the
Registrant's Portfolio Team also have primary responsibility for the
day-to-day management of other Babson Capital advisory accounts,
including, among others, closed-end and open-end investment companies,
private investment funds, MassMutual-affiliated accounts, as well as
separate accounts for institutional clients. These advisory accounts
are identified below.
NUMBER OF
ACCOUNTS APPROXIMATE
TOTAL WITH ASSET SIZE OF
NUMBER APPROXIMATE PERFORMANCE- PERFORMANCE-
PORTFOLIO ACCOUNT OF TOTAL ASSET BASED BASED ADVISORY
TEAM CATEGORY ACCOUNTS SIZE(A) ADVISORY FEE FEE ACCOUNTS(A)
------------ --------------------- -------- ------------ ------------ --------------
Clifford M. Registered Investment
Noreen(B) Companies 1 $126.6 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 1 $42.2 million 1 $42.2 million
-----------------------------------------------------------------------------------------
Other Accounts 0 N/A 0 N/A
-----------------------------------------------------------------------------------------
Jill A. Registered Investment
Fields Companies 3 $754.5 million 0 N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 1 $55.6 million 1 $55.6 million
-----------------------------------------------------------------------------------------
Other Accounts 5C $1.8 billion 0 N/A
-----------------------------------------------------------------------------------------
Michael P. Registered Investment
Hermsen Companies 1 $126.6 million N/A N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 5 $403.5 million 5 $403.5 million
-----------------------------------------------------------------------------------------
Other Accounts 1D $1.5 billion N/A N/A
-----------------------------------------------------------------------------------------
Michael L. Registered Investment
Klofas Companies 1 $126.6 million N/A N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 5 $403.5 million 5 $403.5 million
-----------------------------------------------------------------------------------------
Other Accounts 1D $1.5 billion N/A N/A
-----------------------------------------------------------------------------------------
Richard E. Registered Investment
Spencer II Companies 1 $126.6 million N/A N/A
-----------------------------------------------------------------------------------------
Other Pooled Investment
Vehicles 5 $403.5 million 5 $403.5 million
-----------------------------------------------------------------------------------------
Other Accounts 1D $1.5 billion N/A N/A
(A) Account asset size has been calculated as of December 31, 2007.
(B) Mr. Noreen, as the head of Babson Capital's Corporate Securities
Group, has overall responsibility for all corporate credit related
investments, including public and private bonds, mezzanine, and
private equity investments, as well as structured credit products
managed by Babson Capital. Except for the accounts noted in the table
above, Mr. Noreen is not primarily responsible for the day-to-day
management of the other accounts managed by Babson Capital's Corporate
Securities Group.
(C) Ms. Fields manages approximately $960 million of the general investment
account of Massachusetts Mutual Life Insurance Company. These assets
are represented as one account in the table above.
(D) 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, 2007, Babson Capital's total general investment account
assets under management were $57.7 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 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, 2007, 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 shares.
However, neither the Plan nor the participant in the Plan has an actual
ownership interest in the Registrant's shares.)
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not Applicable for this filing.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable for this filing.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The principal executive officer and principal financial officer
of the Registrant evaluated the effectiveness of the Registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")) as of a
date within 90 days of the filing date of this report and based
on that evaluation have concluded that such disclosure controls
and procedures are effective to provide reasonable assurance that
material information required to be disclosed by the Registrant
on Form N-CSR is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange
Commission's rules and forms.
(b) There were no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act)
during the Registrant's second fiscal half-year that have
materially affected, or are reasonably likely to materially
affect, the Registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a)(1) ANY CODE OF ETHICS, OR AMENDMENTS THERETO, THAT IS THE SUBJECT OF
DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT
INTENDS TO SATISFY THE ITEM 2 REQUIREMENTS THROUGH THE FILING OF
AN EXHIBIT.
None.
(a)(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE OFFICER AND
PRINCIPAL FINANCIAL OFFICER OF THE REGISTRANT AS REQUIRED BY RULE
30a-2 UNDER THE ACT.
Attached hereto as EX-99.31.1
Attached hereto as EX-99.31.2
(a)(3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23c-1
UNDER THE ACT (17 CFR 270.23c-1) SENT OR GIVEN DURING THE PERIOD
COVERED BY THE REPORT BY OR ON BEHALF OF THE REGISTRANT TO 10 OR
MORE PERSONS.
Not Applicable for this filing.
(b) CERTIFICATIONS PURSUANT TO RULE 30a-2(b) UNDER THE ACT.
Attached hereto as EX-99.32
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): MassMutual Corporate Investors
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By: /s/ Clifford M. Noreen
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Clifford M. Noreen, President
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Date: March 7, 2008
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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
----------------------------------
Clifford M. Noreen, President
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Date: March 7, 2008
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By: /s/ James M. Roy
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James M. Roy, Vice President, and
Chief Financial Officer
----------------------------------
Date: March 7, 2008
------------------------------