MassMutual
Corporate Investors
Report for the
Nine Months Ended September 30, 2008
[LOGO]
ADVISER
Babson Capital Management LLC
1500 Main Street, P.O. 15189
Springfield, Massachusetts 01115-5189
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
Boston, Massachusetts 02110
COUNSEL TO THE TRUST
Ropes & Gray LLP
Boston, Massachusetts 02110
CUSTODIAN
Citibank, N.A.
New York, New York 10043
TRANSFER AGENT & REGISTRAR
Shareholder Financial Services, Inc.
P.O. Box 173673
Denver, Colorado 80217-3673
1-800-647-7374
INTERNET WEBSITE
www.babsoncapital.com/mci
MassMutual Corporate Investors
c/o Babson Capital Management LLC
[LOGO] 1500 Main Street, Suite 600
Springfield, Massachusetts 01115
(413) 226-1516
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INVESTMENT OBJECTIVE AND POLICY
MassMutual Corporate Investors (the "Trust") is a closed end management
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 common stock,
warrants, conversion rights, or other equity features and, occasionally,
preferred stocks. The Trust typically purchases these investments, which are not
publicly tradable, directly from their issuers in private placement
transactions. These investments are typically mezzanine debt instruments with
accompanying private equity securities made to small or middle market companies.
In addition, the Trust may temporarily invest, subject to certain limitations,
in marketable investment grade debt securities, other marketable debt securities
(including high yield securities) and marketable common stocks. Below-investment
grade or high yield securities have predominantly speculative characteristics
with respect to the capacity of the issuer to pay interest and repay 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.
FORM N-Q
The Trust files its complete schedule of portfolio holdings with the U.S.
Securities and Exchange Commission ("SEC") for the first and third quarters of
each fiscal year on Form N-Q. This information is available (i) on the SEC's
website at http://www.sec.gov; and (ii) at the SEC's Public Reference Room in
Washington, DC (which information on their operation may be obtained by calling
1-800-SEC-0330). A complete schedule of portfolio holdings as of each quarter
end is available upon request by calling, toll-free, 866-399-1516.
PROXY VOTING POLICIES & PROCEDURES; PROXY VOTING RECORD
The Trustees of the Trust have delegated proxy voting responsibilities relating
to the voting of securities held by the Trust to Babson Capital. A description
of Babson Capital's proxy voting policies and procedures is available (1)
without charge, upon request, by calling, toll-free 866-399-1516; (2) on the
Trust's website: http://www.babsoncapital.com/mci; and (3) on the SEC's website
at http://www.sec.gov. Information regarding how the Trust voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is available (1) on the Trust's website:
http://www.babsoncapital.com/mci; and (2) on the SEC's website at
http://www.sec.gov.
MCI
Listed
NYSE
MassMutual Corporate Investors
TO OUR SHAREHOLDERS
October 31, 2008
We are pleased to present the September 30, 2008 Quarterly Report of MassMutual
Corporate Investors (the "Trust").
The Board of Trustees declared a quarterly dividend of 54 cents per share,
payable on November 14, 2008 to shareholders of record on October 31, 2008. The
Trust had previously paid a 54 cent per share dividend for the preceding
quarter.
During the quarter ended September 30, 2008, net assets of the Trust decreased
to $236,877,544 or $25.48 per share compared to $246,924,644 or $26.57 per share
on June 30, 2008, which translates into a -2.12% total return for the quarter,
based on the change in the Trust's net assets assuming the reinvestment of all
dividends. Longer term, the Trust returned -1.61%, 13.90%, 11.96%, and 14.40%
for the 1-, 5-, 10-, and 25-year time periods, respectively, based on the change
in the Trust's net assets assuming the reinvestment of all dividends. The Trust
earned 70 cents per share of net investment income for the quarter, of which 11
cents per share was from nonrecurring items. The Trust earned 49 cents per share
in the previous quarter.
The mezzanine and private equity markets in which the Trust participates were
very active during most of the third quarter. Deal flow was very strong as
evidenced by the number of new investments the Trust made during the quarter.
The leverage and pricing of these new investments was favorable from the Trust's
perspective. Leverage levels continued their downward trend while pricing on
mezzanine and private equity investments continued to increase throughout the
quarter. As the quarter ended however, the turmoil in the financial markets
began to impact middle market buyout activity. Senior debt financing became
significantly more expensive and increasingly scarce as a number of senior debt
providers withdrew from the market. This has resulted in a slowdown in new deal
activity which is likely to continue throughout the rest of 2008.
During the quarter, the Trust made private placement investments in eleven new
issuers, totaling approximately $23.4 million. The eleven new issuers were All
Current Holding Company, C D N T, Inc., Crane Rental Corporation, Hospitality
Mints Holding Company, K P I Holdings, Inc., M V I Holding, Inc., MedSystems
Holdings LLC, MEGTEC Holdings, Inc., Milwaukee Gear Company, Synteract Holdings
Corporation and Xaloy Superior Holdings, Inc. The weighted average coupon of
these investments was 12.97%. (A brief description of these investments can be
found in the Consolidated Schedule of Investments.)
U.S. equity markets, as approximated by the Russell 2000 Index, decreased 1.11%
for the quarter. U.S. fixed income markets, as approximated by the Lehman
Brothers U.S. Corporate High Yield Index decreased 8.89% for the quarter.
During the quarter ended September 30, 2008, the market price of the Trust
decreased 11.3% from $28.18 per share to $25.00 per share. The Trust's market
price of $25.00 per share equated to a 1.9% discount to the September 30, 2008
net asset value per share. The Trust's average quarter-end premium for the 3-,
5- and 10-year periods was 13.0%, 11.1% and 6.2%, respectively.
Thank you for your continued interest in and support of MassMutual Corporate
Investors.
Sincerely,
/s/ Clifford M. Noreen
Clifford M. Noreen
President
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PORTFOLIO COMPOSITION AS OF 9/30/08 *
[PIE CHART APPEARS HERE]
Private / 144A High Yield Debt Public High Yield Debt
60.2% 22.4%
Private / Restricted Equity Public Equity
13.6% 1.6%
Cash & Short Term Investments
2.2%
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* Based on market value of total investments (including cash)
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 on 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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1
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2008
(UNAUDITED)
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost - $208,764,088) $ 192,851,398
Corporate public securities at market value
(Cost - $74,957,907) 62,681,090
Short-term securities at amortized cost 5,305,565
-------------
260,838,053
Cash 547,196
Interest and dividends receivable 6,409,547
Receivable for investments sold 987,898
Other assets 6,455
-------------
TOTAL ASSETS 268,789,149
-------------
LIABILITIES:
Payable for investments purchased 808,362
Investment advisory fee payable 740,242
Note payable 30,000,000
Interest payable 202,105
Accrued expenses 160,896
-------------
TOTAL LIABILITIES 31,911,605
-------------
TOTAL NET ASSETS $ 236,877,544
=============
NET ASSETS:
Common shares, par value $1.00 per share; an unlimited
number authorized $ 9,294,784
Additional paid-in capital 112,380,831
Retained net realized gain on investments, prior years 127,537,449
Undistributed net investment income 7,997,073
Accumulated net realized gain on investments 7,856,914
Net unrealized depreciation of investments (28,189,507)
-------------
TOTAL NET ASSETS $ 236,877,544
=============
COMMON SHARES ISSUED AND OUTSTANDING 9,294,784
=============
NET ASSET VALUE PER SHARE $ 25.48
=============
See Notes to Consolidated Financial Statements
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2
CONSOLIDATED STATEMENT OF OPERATIONS MassMutual Corporate Investors
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008
(UNAUDITED)
INVESTMENT INCOME:
Interest $ 18,843,726
Dividends 1,282,782
Other 86,827
-------------
TOTAL INVESTMENT INCOME 20,213,335
-------------
EXPENSES:
Investment advisory fees 2,293,183
Interest 1,203,574
Trustees' fees and expenses 163,800
Professional fees 123,900
Reports to shareholders 102,500
Custodian fees 23,000
Transfer agent/registrar's expenses 22,500
Other 21,874
-------------
TOTAL EXPENSES 3,954,331
-------------
INVESTMENT INCOME - NET 16,259,004
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments before taxes 7,215,734
Income tax expense (230,858)
-------------
Net realized gain on investments 6,984,876
Net change in unrealized appreciation of investments (29,126,088)
-------------
NET LOSS ON INVESTMENTS (22,141,212)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (5,882,208)
=============
See Notes to Consolidated Financial Statements
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3
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008
(UNAUDITED)
NET DECREASE IN CASH:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term portfolio
securities, net $ 14,715,487
Purchase of portfolio securities (74,751,046)
Proceeds from disposition of portfolio securities 63,494,525
Interest, dividends, and other received 19,146,163
Interest expense paid (1,213,026)
Operating expenses paid (2,791,147)
Income taxes paid (1,358,459)
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 17,242,497
-------------
Cash flows from financing activities:
Cash dividends paid from net investment income (18,987,640)
Receipts for shares issued on reinvestment of dividends 1,623,880
-------------
NET CASH USED FOR FINANCING ACTIVITIES (17,363,760)
-------------
NET DECREASE IN CASH (121,263)
Cash - beginning of year 668,459
-------------
CASH - END OF PERIOD $ 547,196
=============
RECONCILIATION OF NET DECREASE IN NET ASSETS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (5,882,208)
-------------
Decrease in investments 23,313,180
Increase in interest and dividends receivable (354,372)
Decrease in receivable for investments sold 547,887
Increase in other assets (6,455)
Increase in payable for investments purchased 808,362
Decrease in investment advisory fee payable (44,642)
Decrease in interest payable (9,452)
Increase in accrued expenses 5,028
Decrease in accrued taxes payable (1,133,101)
Decrease in other payables (1,730)
-------------
TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS 23,124,705
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 17,242,497
=============
See Notes to Consolidated Financial Statements
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4
CONSOLIDATED STATEMENTS MassMutual Corporate Investors
OF CHANGES IN NET ASSETS
For the nine
months ended For the
09/30/08 year ended
(Unaudited) 12/31/07
------------- -------------
DECREASE IN NET ASSETS:
Operations:
Investment income - net $ 16,259,004 $ 23,586,915
Net realized gain on investments 6,984,876 1,411,465
Net change in unrealized appreciation of investments (29,126,088) (4,596,952)
------------- -------------
Net (decrease) increase in net assets resulting from operations (5,882,208) 20,401,428
Increase from common shares issued on reinvestment of dividends
Common shares issued (2008 - 57,165; 2007 - 87,700) 1,623,880 2,751,359
Dividends to shareholders from:
Net investment income (2008 - $1.08 per share; 2007 - $2.57 per share) (10,027,150) (23,679,411)
------------- -------------
TOTAL DECREASE IN NET ASSETS (14,285,478) (526,624)
NET ASSETS, BEGINNING OF YEAR 251,163,022 251,689,646
------------- -------------
NET ASSETS, END OF PERIOD/YEAR (including undistributed net investment
income of $7,997,073 and $1,765,219, respectively) $ 236,877,544 $ 251,163,022
============= =============
See Notes to Consolidated Financial Statements
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5
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF BENEFICIAL INTEREST OUTSTANDING:
For the
nine months
ended For the years ended December 31,
09/30/2008 -----------------------------------------------------------------
(Unaudited) 2007 2006 2005 2004 2003
--------- --------- --------- --------- --------- ---------
Net asset value:
Beginning of year $ 27.19 $ 27.51 $ 26.06 $ 24.34 $ 21.84 $ 19.40
--------- --------- --------- --------- --------- ---------
Net investment income (a) 1.75 2.56 2.27 2.03 2.00 1.44
Net realized and unrealized
gain (loss) on investments (2.39) (0.35) 1.62 1.96(b) 2.64 2.83
--------- --------- --------- --------- --------- ---------
Total from investment operations (0.64) 2.21 3.89 3.99 4.64 4.27
--------- --------- --------- --------- --------- ---------
Dividends from net investment
income to common shareholders (1.08) (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 0.01 0.04 0.04 0.02 0.02 0.01
--------- --------- --------- --------- --------- ---------
Total dividends (1.07) (2.53) (2.44) (2.27) (2.14) (1.83)
--------- --------- --------- --------- --------- ---------
Net asset value: End of period/year $ 25.48 $ 27.19 $ 27.51 $ 26.06 $ 24.34 $ 21.84
--------- --------- --------- --------- --------- ---------
Per share market value:
End of period/year $ 25.00 $ 30.20 $ 34.89 $ 30.05 $ 28.50 $ 22.90
========= ========= ========= ========= ========= =========
Total investment return:
Net asset value (c) (2.42%) 8.58% 18.09% 20.04% 22.76% 22.61%
Market value (15.55%) (8.78%) 29.04% 16.95% 36.10% 27.53%
Net assets (in millions):
End of period/year $ 236.88 $ 251.16 $ 251.69 $ 236.28 $ 218.51 $ 193.79
Ratio of operating expenses
to average net assets 1.49%(d) 1.55% 1.43% 1.78% 1.93% 2.04%
Ratio of interest expense
to average net assets 0.65%(d) 0.59% 0.60% 0.73% 0.77% 0.82%
Ratio of income tax expense
to average net assets (e) 0.13%(d) 0.35% 2.46% 2.84% 0.69% --
Ratio of total expenses before custodian fee
reduction to average net assets (e) 2.27%(d) 2.49% 4.53% 5.36% 3.39% 2.86%
Ratio of net expenses after custodian fee
reduction to average net assets (e) 2.27%(d) 2.49% 4.49% 5.35% 3.39% 2.86%
Ratio of net investment income
to average net assets 5.29%(d) 9.17% 8.19% 7.98% 8.68% 6.95%
Portfolio turnover 25% 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) Annualized.
(e) 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 borrowings:
Total principal amount (in millions) $ 30 $ 30 $ 20 $ 20 $ 29 $ 20
Asset coverage per $1,000 of indebtedness $ 8,896 $ 9,372 $ 13,584 $ 12,814 $ 8,535 $ 10,689
See Notes to Consolidated Financial Statements
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6
CONSOLIDATED SCHEDULE OF INVESTMENTS MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES - 81.41%:(A) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
PRIVATE PLACEMENT INVESTMENTS -77.14%
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 $ 2,368,473 11/21/07 $ 2,321,004 $ 2,225,316
Limited Partnership Interest (B) 14.99% int. 11/21/07 224,795 213,560
------------ ------------
2,545,799 2,438,876
------------ ------------
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 -- 17,649
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 2,323 shs. 04/08/04 -- 599,438
------------ ------------
2,125,000 2,742,087
------------ ------------
A W X HOLDINGS CORPORATION
A provider of aerial equipment rental, sales and repair services to non-residential construction and maintenance contractors
operating in the State of Indiana.
10.5% Senior Secured Term Note due 2014 $ 735,000 05/15/08 720,300 713,227
13% Senior Subordinated Note due 2015 $ 735,000 05/15/08 659,902 706,275
Common Stock (B) 105,000 shs. 05/15/08 105,000 99,750
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 36,923 shs. 05/15/08 62,395 369
------------ ------------
1,547,597 1,519,621
------------ ------------
ADVANCED TECHNOLOGIES HOLDINGS
A provider of factory maintence services to industrial companies.
15% Senior Subordinated Note due 2013 $ 2,071,400 12/27/07 2,030,090 2,012,267
Preferred Stock (B) 1,031 shs. 12/27/07 510,000 484,499
------------ ------------
2,540,090 2,496,766
------------ ------------
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 1,579,009
14% Senior Subordinated Note due 2015 $ 1,260,000 03/09/07 1,137,524 1,213,915
Common Stock (B) 262,500 shs. 03/09/07 262,500 326,898
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 66,116 shs. 03/09/07 111,527 82,336
------------ ------------
3,114,639 3,202,158
------------ ------------
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7
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
ALL CURRENT HOLDING COMPANY
A specialty re-seller of essential electrical parts and components primarily serving wholesale distributors.
12% Senior Subordinated Note due 2015 $ 1,140,317 09/26/08 $ 1,035,420 $ 1,103,536
Common Stock (B) 1,347 shs. 09/26/08 134,683 127,965
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 957 shs. 09/26/08 87,993 10
------------ ------------
1,258,096 1,231,511
------------ ------------
AMERICAN HOSPICE MANAGEMENT HOLDING LLC
A for-profit hospice care provider in the United States.
12% Senior Subordinated Note due 2013 $ 3,187,495 * 3,033,665 3,135,734
Preferred Class A Unit (B) 3,223 uts. ** 322,300 161,150
Preferred Class B Unit (B) 1,526 uts. 06/09/08 152,626 152,626
Common Class B Unit (B) 30,420 uts. 01/22/04 1 --
Common Class D Unit (B) 6,980 uts. 09/12/06 1 --
------------ ------------
3,508,593 3,449,510
------------ ------------
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 1,556,788 1,507,943
Common Stock (B) 497 shs. 05/18/05 497,340 45,733
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 130 shs. 05/18/05 112,128 11,989
------------ ------------
2,166,256 1,565,665
------------ ------------
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 2,160,796 2,231,897
Preferred Stock Class A (B) 879 shs. 06/30/06 268,121 182,490
Common Stock (B) 1 sh. 06/30/06 286 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 309 shs. 06/30/06 92,102 64,136
------------ ------------
2,521,305 2,478,523
------------ ------------
C D N T, INC.
A value-added converter and distributor of specialty pressure sensitive adhesives, foams, films, and foils.
10.5% Senior Secured Term Note due 2014 $ 750,872 08/07/08 735,855 733,949
12.5% Senior Subordinated Note due 2015 $ 750,872 08/07/08 678,919 726,599
Common Stock (B) 73,256 shs. 08/07/08 73,256 69,593
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 57,600 shs. 08/07/08 57,689 576
------------ ------------
1,545,719 1,530,717
------------ ------------
* 01/22/04 and 06/09/08.
** 01/22/04 and 09/12/06.
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8
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
CAPESUCCESS LLC
A provider of diversified staffing services.
Preferred Membership Interests (B) 1,881 uts. 04/29/00 $ 8,395 $ --
Common Membership Interests (B) 24,318 uts. 04/29/00 108,983 --
------------ ------------
117,378 --
------------ ------------
CAPITAL SPECIALTY PLASTICS, INC.
A producer of desiccant strips used for packaging pharmaceutical products.
Common Stock (B) 109 shs. * 503 558,932
------------ ------------
COEUR, INC.
A producer of proprietary, disposable power injection syringes.
8.75% Senior Secured Term Note due 2010 $ 247,283 04/30/03 247,283 247,283
11.5% Senior Subordinated Note due 2011 $ 424,818 04/30/03 406,701 424,818
Common Stock (B) 126,812 shs. 04/30/03 126,812 234,919
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 87,672 shs. 04/30/03 40,804 162,412
------------ ------------
821,600 1,069,432
------------ ------------
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 2,004,107
Limited Liability Company Unit Class A (B) 156,046 uts. 01/12/07 156,046 13,949
Limited Liability Company Unit Class C (B) 112,873 uts. 01/12/07 112,873 10,090
------------ ------------
2,502,121 2,028,146
------------ ------------
CONNOR SPORT COURT INTERNATIONAL, INC.
A designer and manufacturer of outdoor and indoor synthetic sports flooring and other temporary flooring products.
Preferred Stock Series B-2 (B) 17,152 shs. 07/05/07 700,392 1,400,785
Preferred Stock Series C (B) 8,986 shs. 07/05/07 300,168 459,297
Common Stock (B) 718 shs. 07/05/07 7 7
Limited Partnership Interest (B) 7.74% int. ** 189,586 --
------------ ------------
1,190,153 1,860,089
------------ ------------
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 2,447,364 2,447,551
Warrant, exercisable until 2013, to purchase
common stock at $.001 per share (B) 20 shs. 08/04/05 137,166 102,013
------------ ------------
2,584,530 2,549,564
------------ ------------
* 12/30/97 and 05/29/99.
** 08/12/04 and 01/14/05.
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9
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
CRANE RENTAL CORPORATION
A crane rental company.
13% Senior Subordinated Note due 2015 $ 2,295,000 08/21/08 $ 2,055,832 $ 2,230,808
Common Stock (B) 255,000 shs. 08/21/08 255,000 242,250
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 136,070 shs. 08/21/08 194,826 1,361
------------ ------------
2,505,658 2,474,419
------------ ------------
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 1,741,322 1,847,826
Limited Partnership Interest (B) 1.82% int. 10/30/06 702,174 1,331,400
Warrant, exercisable until 2014, to purchase
preferred stock at $.01 per share (B) 50 shs. 10/30/06 49,830 59,028
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 34 shs. 10/30/06 34,000 134,089
------------ ------------
2,527,326 3,372,343
------------ ------------
DIVERSCO, INC./DHI HOLDINGS, INC.
A contract provider of janitorial and equipment maintenance services and temporary production labor to industrial customers.
Membership Interests of MM/Lincap
Diversco Investments Ltd. LLC (B) 27.20% int. 08/27/98 734,090 --
Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 1,266,653
Warrants, exercisable until 2011, to purchase common
stock of DHI Holdings, Inc. at $.01 per share (B) 13,352 shs. * 403,427 --
------------ ------------
3,921,650 1,266,653
------------ ------------
DUNCAN SYSTEMS, INC.
A distributor of windshields and side glass for the recreational vehicle market.
10% Senior Secured Term Note due 2013 $ 540,000 11/01/06 531,900 509,683
13% Senior Subordinated Note due 2014 $ 855,000 11/01/06 771,831 792,697
Common Stock (B) 180,000 shs. 11/01/06 180,000 158,669
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 56,514 shs. 11/01/06 78,160 49,817
------------ ------------
1,561,891 1,510,866
------------ ------------
DWYER GROUP, INC.
A franchiser of a variety of home repair services.
Common Stock (B) 6,906 shs. ** 690,600 1,123,327
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 330,783
------------ ------------
877,069 1,454,110
------------ ------------
* 10/24/96 and 08/28/98.
** 10/30/03 and 01/02/04.
--------------------------------------------------------------------------------------------------------------------------------
10
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
E S P HOLDCO, INC.
A manufacturer of power protection technology for commercial office equipment, primarily supplying the office equipment dealer
network.
14% Senior Subordinated Note due 2015 $ 2,241,522 01/08/08 $ 2,202,437 $ 2,111,798
Common Stock (B) 660 shs. 01/08/08 329,990 313,500
------------ ------------
2,532,427 2,425,298
------------ ------------
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 77,208 198,794
------------ ------------
ELECTRA BICYCLE COMPANY LLC
A designer and marketer of branded leisure bicycles.
15.5% Senior Secured Term Note A due 2009 $ 63,765 04/12/07 62,490 63,765
10.5% Senior Secured Term Note B due 2012 $ 631,275 04/12/07 622,283 631,275
12% Senior Secured Term Note C due 2012 $ 510,121 04/12/07 474,967 520,323
Limited Liability Company Unit Series F 64,597 uts. 04/12/07 64,597 157,135
Limited Liability Company Unit Series G 4,990 uts. 04/12/07 4,990 12,138
------------ ------------
1,229,327 1,384,636
------------ ------------
ENZYMATIC THERAPY, INC.
A manufacturer and distributor of branded natural medicines and nutritional supplements.
Limited Partnership Interest (B) 1.32% int. 03/30/00 531,250 357,053
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 29,117 shs. 03/30/00 255,000 224,098
------------ ------------
786,250 581,151
------------ ------------
EVANS CONSOLES, INC.
A designer and manufacturer of consoles and control center systems.
Common Stock (B) 90,000 shs. 05/06/04 6 1,082,834
------------ ------------
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 2,246,068 2,151,563
Preferred Unit (B) 159 uts. 06/01/06 159,362 130,539
Common Unit Class B (B) 1,386 uts. 06/01/06 122,361 --
------------ ------------
2,527,791 2,282,102
------------ ------------
--------------------------------------------------------------------------------------------------------------------------------
11
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
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 $ 830,433
14% Senior Subordinated Note due 2014 $ 555,059 04/13/06 504,948 500,042
Common Stock (B) 109,436 shs. 04/13/06 109,436 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 30,940 shs. 04/13/06 48,433 --
------------ ------------
1,567,426 1,330,475
------------ ------------
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 2,178,816 1,773,913
Common Stock (B) 185 shs. 02/03/06 184,783 --
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 254 shs. 02/03/06 208,435 --
------------ ------------
2,572,034 1,773,913
------------ ------------
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 2,198,076 1,168,750
Preferred Stock (B) 31,718 shs. 06/12/08 31,718 --
Common Stock (B) 212,500 shs. 01/31/06 212,500 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 138,408 shs. 01/31/06 119,213 --
------------ ------------
2,561,507 1,168,750
------------ ------------
GOLDEN COUNTY 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 1,721,250
8% Series A Convertible Preferred Stock, convertible into
4.25% of the fully diluted common shares (B) 146,658 shs. 11/01/07 146,658 1,467
------------ ------------
1,874,250 1,722,717
------------ ------------
GQ HOLDINGS LLC
A developer and distributor of tools, equipment, and supplies to the natural and engineered stone industry.
15% Senior Subordinated Note due 2015 $ 2,299,077 06/27/08 2,253,095 2,182,993
Common Stock (B) 7,304 shs. 06/27/08 250,923 225,832
------------ ------------
2,504,018 2,408,825
------------ ------------
--------------------------------------------------------------------------------------------------------------------------------
12
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
H M HOLDING COMPANY
A designer, manufacturer, and importer of promotional and wood furniture.
12% Senior Subordinated Note due 2013 (D) $ 2,210,000 02/10/06 $ 2,048,925 $ --
Preferred Stock (B) 40 shs. * 40,476 --
Common Stock (B) 340 shs. 02/10/06 340,000 --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 126 shs. 02/10/06 116,875 --
------------ ------------
2,546,276 --
------------ ------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in manufacturing and marketing entities.
Series A Preferred Units (B) 1.19% int. 7/21/94 367,440 --
------------ ------------
HOME DECOR HOLDING COMPANY
A designer, manufacturer and marketer of framed art and wall decor products.
12.5% Senior Subordinated Note due 2012 $ 2,043,269 ** 1,908,906 1,944,836
Common Stock (B) 63 shs. ** 62,742 57,678
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 200 shs. ** 199,501 183,403
------------ ------------
2,171,149 2,185,917
------------ ------------
HOSPITALITY MINTS HOLDING COMPANY
A manufacturer of individually-wrapped imprinted promotional mints.
12% Senior Subordinated Note due 2016 $ 2,075,581 08/19/08 1,920,297 2,003,496
Common Stock (B) 474 shs. 08/19/08 474,419 450,699
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 123 shs. 08/19/08 113,773 1
------------ ------------
2,508,489 2,454,196
------------ ------------
INSURANCE CLAIMS MANAGEMENT, INC.
A third party administrator providing auto and property claim administration services for insurance companies.
Common Stock (B) 69 shs. 02/27/07 2,077 110,496
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 20 shs. 02/27/07 612 32,544
------------ ------------
2,689 143,040
------------ ------------
INTEGRATION TECHNOLOGY SYSTEMS, INC.
A manufacturer of steel protective computer and network systems for the industrial and office environments.
12% Senior Secured Note due on demand $ 43,943 03/01/04 1 --
Common Stock (B) 228 shs. 06/01/00 262,200 --
------------ ------------
262,201 --
------------ ------------
* 09/18/07 and 06/27/08.
** 06/30/04 and 08/19/04.
--------------------------------------------------------------------------------------------------------------------------------
13
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
JASON, INC.
A diversified manufacturing company serving various industrial markets.
13% Senior Subordinated Note due 2010 $ 963,687 08/04/00 $ 924,157 $ 937,253
Limited Partnership Interest of
Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,352 411,359
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 82,612
------------ ------------
1,925,921 1,431,224
------------ ------------
JUSTRITE MANUFACTURING ACQUISITION CO.
A manufacturer of safety products such as storage cabinets and containers.
12% Senior Subordinated Note due 2011 $ 1,593,750 12/15/04 1,533,119 1,565,149
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 253,454
------------ ------------
1,634,228 1,818,603
------------ ------------
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 $ 2,362,612 10/15/07 2,315,749 2,270,663
Common Stock (B) 220,673 shs. 10/15/07 220,673 209,639
------------ ------------
2,536,422 2,480,302
------------ ------------
K N B HOLDINGS CORPORATION
A designer, manufacturer and marketer of products for the custom framing market.
13.5% Senior Subordinated Note due 2013 $ 2,492,956 05/25/06 2,389,884 2,405,803
Common Stock (B) 134,210 shs. 05/25/06 134,210 106,079
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 82,357 shs. 05/25/06 71,534 65,094
------------ ------------
2,595,628 2,576,976
------------ ------------
K P I HOLDINGS, INC.
Pace Industries, a subsidiary of Leggett & Platt, is the largest player in the U.S. non-automotive, non-ferrous die casting segment.
13% Senior Subordinated Note due 2014 $ 2,106,522 07/16/08 1,968,368 2,029,437
Common Stock (B) 443 shs. 07/15/08 443,478 421,306
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 96 shs. 07/16/08 96,024 1
------------ ------------
2,507,870 2,450,744
------------ ------------
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 2,133,877 2,043,940
Common Stock (B) 232 shs. 03/13/07 232,000 105,245
Warrant, exercisable until 2017, to purchase
common stock at $.01 per share (B) 167 shs. 03/14/07 162,260 75,758
------------ ------------
2,528,137 2,224,943
------------ ------------
--------------------------------------------------------------------------------------------------------------------------------
14
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
K-TEK HOLDING CORPORATION
A manufacturer of instrumentation for liquid and bulk solids level detection for process and storage tanks.
14% Senior Secured Note due 2015 $ 2,208,968 12/20/07 $ 2,168,944 $ 2,092,070
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
------------ ------------
2,533,230 2,438,193
------------ ------------
M V I HOLDING, INC.
A manufacturer of large precision machined metal components used in equipment which services a variety of industries, including
the oil & gas, mining, and defense markets.
13% Senior Subordinated Note due 2016 $ 1,214,286 09/12/08 1,124,429 1,163,780
Common Stock (B) 61 shs. 09/12/08 60,714 57,675
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 66 shs. 09/12/08 65,571 1
------------ ------------
1,250,714 1,221,456
------------ ------------
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 05/04/07 912,469 948,948
Limited Liability Company Unit (B) 24,109 uts. * 314,464 419,455
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3,375 shs. 05/04/07 43,031 58,719
------------ ------------
1,269,964 1,427,122
------------ ------------
MAVERICK ACQUISITION COMPANY
A manufacturer of capsules that cover the cork and neck of wine bottles.
7.19% Senior Secured Tranche A Note due 2010 (C) $ 368,773 09/03/04 368,773 364,458
12% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 291,644 292,405
Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 33,152
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 23,954
------------ ------------
758,659 713,969
------------ ------------
MEDSYSTEMS HOLDINGS LLC
A manufacturer of enteral feeding products,such as feeding tubes and other products related to assisted feeding.
13% Senior Subordinated Note due 2015 $ 1,148,213 08/29/08 1,005,992 1,114,485
Preferred Units (B) 126 uts. 08/29/08 125,519 119,244
Common Unit Class A (B) 1,268 uts. 08/29/08 1,268 1,205
Common Unit Class B (B) 472 uts. 08/29/08 120,064 5
------------ ------------
1,252,843 1,234,939
------------ ------------
* 05/04/07 and 01/02/08.
--------------------------------------------------------------------------------------------------------------------------------
15
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
MEGTEC HOLDINGS, INC.
A supplier of industrial and environmental products and services to a broad array of industries, including the printing, coating,
converting, pharmaceutical, electronic, chemical, wood processing, and coal mining industries.
12% Senior Subordinated Note due 2016 $ 2,161,017 09/24/08 $ 1,981,274 $ 2,082,307
Preferred Stock (B) 107 shs. 09/24/08 103,255 1
Limited Partnership Interest (B) 388,983 int. 09/16/08 388,983 369,534
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 35 shs. 09/24/08 33,268 --
------------ ------------
2,506,780 2,451,842
------------ ------------
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 * 2,554,203 2,607,169
Common Stock (B) 450 shs. * 450,000 717,708
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 164 shs. * 162,974 261,533
------------ ------------
3,167,177 3,586,410
------------ ------------
MILWAUKEE GEAR COMPANY
A manufacturer of high-precision custom gears and gear drives used by original equipment manufacturers operating in a number of
industries.
13% Senior Subordinated Note due 2014 $ 2,353,846 07/21/08 2,212,655 2,281,128
Preferred Stock (B) 263 shs. 07/21/08 261,830 248,732
Common Stock (B) 18 shs. 07/21/08 20,000 19,000
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 10 shs. 07/21/08 11,285 --
------------ ------------
2,505,770 2,548,860
------------ ------------
MOMENTUM HOLDING CO.
A designer and supplier of upholstery fabric to commercial furniture manufacturers and architectural and design firms.
Limited Partnership Interest (B) 21.23% int. 08/04/06 106,153 231,006
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 1,107 shs. 08/04/06 107,109 240,797
------------ ------------
213,262 471,803
------------ ------------
MONESSEN HOLDING CORPORATION
A designer and manufacturer of a broad line of gas, wood, and electric hearth products and accessories.
14% Senior Subordinated Note due 2014 $ 2,719,363 07/25/08 2,540,277 2,447,426
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 152 shs. 03/31/06 138,125 --
------------ ------------
2,678,402 2,447,426
------------ ------------
* 08/12/05 and 09/11/06.
--------------------------------------------------------------------------------------------------------------------------------
16
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
MORTON INDUSTRIAL GROUP, INC.
A manufacturer of highly engineered metal fabricated components.
12% Senior Subordinated Note due 2014 (D) $ 2,440,909 08/25/06 $ 2,242,151 $ 2,196,818
30% Series A Preferred Stock (B) 77,993 shs. 07/28/08 37,227 70,194
Common Stock (B) 1 sh. 08/25/06 1 --
------------ ------------
2,279,379 2,267,012
------------ ------------
NABCO, INC.
A producer of explosive containment vessels in the United States.
14% Senior Subordinated Note due 2014 $ 762,074 02/24/06 667,938 381,037
Limited Liability Company Unit (B) 825 uts. * 825,410 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 129 shs. 02/24/06 37,188 --
------------ ------------
1,530,536 381,037
------------ ------------
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 (D) $ 1,234,551 05/28/04 1,103,763 617,276
8.75% Senior Secured Note due 2011 (D) $ 573,028 05/28/04 573,028 544,376
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 --
------------ ------------
2,481,737 1,161,652
------------ ------------
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 2,056,452
Common Stock (B) 425,000 shs. 08/02/07 425,000 444,502
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 119,360 shs. 08/02/07 194,257 124,837
------------ ------------
2,507,500 2,625,791
------------ ------------
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 1,403,169
Limited Partnership Interest of
Saw Mill PCG Partners LLC (B) 2.61% int. 02/01/07 1,020,000 382,803
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 91 shs. 02/02/07 90,830 34,088
------------ ------------
2,519,400 1,820,060
------------ ------------
* 02/24/06 and 06/22/07.
--------------------------------------------------------------------------------------------------------------------------------
17
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the automotive industry.
9% Senior Secured Note due 2009 $ 812,500 01/28/02 $ 812,500 $ 771,875
11.5% Senior Subordinated Note due 2012 $ 1,500,000 01/28/02 1,429,978 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 --
------------ ------------
2,717,023 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 $ 521,956 01/03/06 514,126 493,680
13% Senior Subordinated Note due 2013 $ 687,241 01/03/06 625,750 634,102
Common Stock (B) 322,307 shs. 01/03/06 322,307 --
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 75,378 shs. 01/03/06 62,824 --
------------ ------------
1,525,007 1,127,782
------------ ------------
OLYMPIC SALES, INC.
A boat retailer in Washington state, Oregon, California and British Columbia.
12% Senior Subordinated Note due 2008 (D) $ 1,022,000 08/07/98 1,022,000 204,400
12% Senior Subordinated Note due 2008 (D) $ 307,071 02/09/00 268,283 61,414
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 --
------------ ------------
3,235,463 265,814
------------ ------------
ONTARIO DRIVE & GEAR LTD.
A manufacturer of all-wheel drive, off-road amphibious vehicles and related accessories.
Limited Liability Company Unit (B) 3,667 uts. 01/17/06 572,115 1,127,160
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 619 shs. 01/17/06 170,801 190,304
------------ ------------
742,916 1,317,464
------------ ------------
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 $ 2,255,720 07/03/06 2,155,565 2,148,577
Preferred Unit (B) 382 uts. 07/03/06 382,150 339,731
Preferred Unit (B) 69 uts. 07/03/06 68,790 61,154
Common Unit Class I (B) 148 uts. 07/03/06 -- --
Common Unit Class L (B) 31 uts. 07/03/06 -- --
------------ ------------
2,606,505 2,549,462
------------ ------------
* 08/07/98, 02/23/99, 12/22/99 and 02/25/03.
** 08/07/98 and 02/09/00.
--------------------------------------------------------------------------------------------------------------------------------
18
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
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 $ 2,167,718 $ 2,280,996
Preferred Stock (B) 36 shs. 03/31/06 329,596 391,635
Common Stock (B) 23 shs. 03/31/06 25,500 79,488
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 13 shs. 03/31/06 11,122 46,238
------------ ------------
2,533,936 2,798,357
------------ ------------
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 1,206,218 1,194,896
Limited Liability Company Unit (B) 1,754,707 uts. 04/27/07 63,233 --
------------ ------------
1,269,451 1,194,896
------------ ------------
PARADIGM PACKAGING, INC.
A manufacturer of plastic bottles and closures for the nutritional, pharmaceutical, personal care, and food packaging markets.
12% Senior Subordinated Note due 2011 $ 2,125,000 12/19/00 2,009,561 2,025,407
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 --
------------ ------------
2,275,186 2,025,407
------------ ------------
POSTLE ALUMINUM COMPANY LLC
A manufacturer and distributor of aluminum extruded products.
12% Senior Subordinated Note due 2014 $ 2,040,000 10/02/06 1,904,617 1,870,320
Limited Liability Company Unit 1,384 uts. 10/02/06 510,000 270,485
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 344 shs. 10/02/06 124,644 67,274
------------ ------------
2,539,261 2,208,079
------------ ------------
POWER SERVICES HOLDING COMPANY
A provider of industrial motor repair services, predictive and preventative maintenance, and performance improvement consulting,
serving the petrochemical, mining, power generation, metals, and paper industries.
12% Senior Subordinated Note due 2016 $ 2,372,093 02/11/08 2,164,512 2,264,982
Limited Partnership Interest (B) 177,729 int. 02/11/08 177,729 168,843
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 1,322 shs. 02/11/08 167,588 13
------------ ------------
2,509,829 2,433,838
------------ ------------
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 --
------------ ------------
227,216 --
------------ ------------
* 08/12/94 and 11/14/01.
--------------------------------------------------------------------------------------------------------------------------------
19
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
QUALIS AUTOMOTIVE LLC
A distributor of aftermarket automotive brake and chassis products.
12% Senior Subordinated Note due 2012 $ 1,770,833 05/28/04 $ 1,569,999 $ 1,723,862
Common Stock 354,167 shs. 05/28/04 354,166 101,955
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share 377,719 shs. 05/28/04 377,719 108,735
------------ ------------
2,301,884 1,934,552
------------ ------------
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 2,090,363 2,181,108
Limited Liability Company Unit (B) 2,828 uts. 12/15/06 282,810 192,949
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3 shs. 12/15/06 131,483 90,991
------------ ------------
2,504,656 2,465,048
------------ ------------
R E I DELAWARE HOLDING, INC.
An engineer and manufacturer of highly complex, close tolerance components, assemblies, tooling and custom automation equipment
primarily for aerospace, medical and defense/radar markets.
12% Senior Subordinated Note due 2016 $ 2,550,000 01/18/08 2,467,911 2,414,574
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 6 shs. 01/18/08 31,089 --
------------ ------------
2,499,000 2,414,574
------------ ------------
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 2,122,045 2,295,123
Common Stock (B) 289,362 shs. 02/10/06 289,362 427,083
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 131,555 shs. 02/10/06 119,796 194,168
------------ ------------
2,531,203 2,916,374
------------ ------------
ROYAL BATHS MANUFACTURING COMPANY
A manufacturer and distributor of acrylic and cultured marble bathroom products.
12.5% Senior Subordinated Note due 2011 $ 1,062,500 11/14/03 998,519 994,187
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 51,648
------------ ------------
1,121,465 1,045,835
------------ ------------
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. 06/02/99 256,212 893,226
------------ ------------
--------------------------------------------------------------------------------------------------------------------------------
20
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
SAVAGE SPORTS HOLDING, INC.
A manufacturer of sporting firearms.
12% Senior Subordinated Note due 2012 $ 1,538,793 09/10/04 $ 1,465,695 $ 1,467,680
Common Stock (B) 612 shs. * 642,937 569,143
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 124,263
------------ ------------
2,222,210 2,161,086
------------ ------------
SMART SOURCE HOLDINGS LLC
A short-term computer rental company.
12% Senior Subordinated Note due 2015 $ 2,223,076 ** 2,026,344 2,155,745
Limited Liability Company Unit (B) 619 uts. ** 638,061 671,271
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 157 shs. ** 164,769 170,055
------------ ------------
2,829,174 2,997,071
------------ ------------
SPECIALTY FOODS GROUP, INC.
A manufacturer and distributor of branded meat products.
Limited Partnership Interest of MHD Holdings LLC (B) 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 2,117,002 2,135,522
Common Stock (B) 311 shs. 08/01/06 310,976 421,316
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 104 shs. 08/01/06 93,293 140,317
------------ ------------
2,521,271 2,697,155
------------ ------------
SYNTERACT HOLDINGS CORPORATION
A provider of outsourced clinical trial management services to pharmaceutical and biotechnology companies.
14% Senior Subordinated Note due 2016 $ 2,550,000 09/02/08 2,374,091 2,481,814
Warrant, exercisable until 2018, to purchase
preferred stock at $.01 per share (B) 1,280 shs. 09/02/08 12,521 13
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 12,803 shs. 09/02/08 112,693 128
------------ ------------
2,499,305 2,481,955
------------ ------------
T H I ACQUISITION, INC.
A machine servicing company providing value-added steel services to long steel products.
12% Senior Subordinated Note due 2016 $ 2,550,000 01/14/08 2,410,946 2,412,842
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 9 shs. 01/14/08 88,054 --
------------ ------------
2,499,000 2,412,842
------------ ------------
* 09/10/04 and 10/05/07.
** 08/31/07 and 03/06/08.
--------------------------------------------------------------------------------------------------------------------------------
21
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
TANGENT RAIL CORPORATION
A manufacturer of rail ties and provider of specialty services to the North American railroad industry.
13% Senior Subordinated Note due 2015 $ 2,217,385 10/14/05 $ 1,952,116 $ 2,188,061
Common Stock 2,203 shs. 10/14/05 2,203 1,064,504
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share 1,192 shs. 09/30/08 568,009 575,982
------------ ------------
2,522,328 3,828,547
------------ ------------
TERRA RENEWAL LLC
A provider of wastewater residual management and required environmental reporting, permitting, nutrient management planning and
record keeping to companies involved in poultry and food processing.
6.74% Senior Secured Tranche B Note due 2012 (C) $ 25,967 * 25,837 25,528
7.05% Senior Secured Tranche B Note due 2012 (C) $ 1,490,220 * 1,485,215 1,465,019
8.25% Senior Secured Tranche B Note due 2012 (C) $ 1,443 09/30/08 1,435 1,418
12% Senior Subordinated Note due 2014 $ 1,162,110 ** 1,111,798 1,132,225
Limited Partnership Interest of
Saw Mill Capital Fund V, L.P. (B) 3.97% int. 03/01/05 116,285 799,282
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 72 shs. 04/28/06 59,041 138,969
------------ ------------
2,799,611 3,562,441
------------ ------------
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 2,136,802
Series A Preferred Stock (B) 414 shs. 10/26/07 414,051 295,427
------------ ------------
2,516,414 2,432,229
------------ ------------
TOTAL E & S, INC.
A manufacturer of a wide variety of equipment used in the oil and gas industry.
10.5% Senior Secured Term Note due 2013 $ 851,351 03/02/07 838,581 832,940
13% Senior Subordinated Note due 2014 $ 598,450 03/02/07 490,608 579,692
Common Stock (B) 125,199 shs. 03/02/07 125,199 125,044
Warrant, exercisable until 2014 to purchase
common stock at $.01 per share (B) 34,533 shs. 03/02/07 95,873 34,490
------------ ------------
1,550,261 1,572,166
------------ ------------
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 1,655,593 1,645,741
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
------------ ------------
1,951,789 1,843,903
------------ ------------
* 04/28/06 and 12/21/06.
** 04/28/06 and 09/13/06.
--------------------------------------------------------------------------------------------------------------------------------
22
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
TRANSTAR HOLDING COMPANY
A distributor of aftermarket automotive transmission parts.
12% Senior Subordinated Note due 2014 $ 1,734,000 08/31/05 $ 1,673,248 $ 1,676,425
Common Stock (B) 1,078 shs. * 1,078,450 1,197,840
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 86 shs. 08/31/05 77,485 95,454
------------ ------------
2,829,183 2,969,719
------------ ------------
TRANZONIC COMPANIES (THE)
A producer of commercial and industrial supplies, such as safety products, janitorial supplies, work apparel, washroom and restroom
supplies and sanitary care products.
13% Senior Subordinated Note due 2010 $ 2,712,000 02/05/98 2,602,697 2,712,000
Common Stock (B) 630 shs. 02/04/98 630,000 869,519
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 612,804
------------ ------------
3,601,529 4,194,323
------------ ------------
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 (D) $ 2,309,541 ** 2,141,949 1,154,771
Common Stock (B) 742 shs. ** 800,860 --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 153 shs. ** 159,894 --
------------ ------------
3,102,703 1,154,771
------------ ------------
TRUSTILE DOORS, INC.
A manufacturer and distributor of interior doors.
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 5,781 shs. 04/11/03 71,438 303,394
------------ ------------
U M A ENTERPRISES, INC.
An importer and wholesaler of home decor products.
15% Senior Subordinated Note due 2015 $ 1,670,389 02/08/08 1,649,473 1,612,164
Convertible Preferred Stock (B) 887 shs. 02/08/08 886,956 842,612
------------ ------------
2,536,429 2,454,776
------------ ------------
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 1,754,097 1,804,158
Common Stock (B) 182 shs. 04/30/04 182,200 102,922
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 230 shs. 04/30/04 211,736 130,160
------------ ------------
2,148,033 2,037,240
------------ ------------
* 08/31/05 and 04/30/07.
** 07/19/05 and 12/22/05.
--------------------------------------------------------------------------------------------------------------------------------
23
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
VICTORY VENTURES LLC
An acquirer of controlling or substantial interests in other entities.
Series A Preferred Units (B) 1 ut. 12/02/96 $ 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 05/17/07 790,897 782,296
13% Senior Subordinated Note due 2014 $ 648,530 05/17/07 587,001 623,224
Common Stock (B) 123,529 shs. 05/17/07 123,529 97,937
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 35,006 shs. 05/17/07 55,055 27,754
------------ ------------
1,556,482 1,531,211
------------ ------------
VITALITY FOODSERVICE, INC.
A non-carbonated beverage dispensing company focused on the foodservice industry.
13% Senior Subordinated Note due 2011 $ 1,887,288 09/24/04 1,783,302 1,738,934
Common Stock (B) 26,456 shs. * 264,558 248,893
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 23,787 shs. 09/24/04 186,883 223,783
------------ ------------
2,234,743 2,211,610
------------ ------------
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 1,483,065 850,000
14.5% PIK Note due 2010 $ 342,418 06/30/07 308,176 171,209
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 --
------------ ------------
2,388,551 1,021,209
------------ ------------
WAGGIN' TRAIN HOLDINGS LLC
A producer of premium quality meat dog treats.
14% Senior Subordinated Note due 2014 $ 2,154,166 11/15/07 2,111,013 1,989,744
Limited Liability Company Unit Class B (B) 423 uts. 11/15/07 422,652 380,385
Limited Liability Company Unit Class C (B) 423 uts. 11/15/07 -- 4
------------ ------------
2,533,665 2,370,133
------------ ------------
WALLS INDUSTRIES, INC.
A provider of branded workwear and sporting goods apparel.
Limited Partnership Interest (B) 0.40% int. 07/12/04 3,728 --
Common Stock (B) 4,028 shs. 12/21/07 -- --
------------ ------------
3,728 --
------------ ------------
* 09/24/04 and 12/22/06.
--------------------------------------------------------------------------------------------------------------------------------
24
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Principal Amount
Shares, Units
or Ownership Acquisition
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Percentage Date Cost Fair Value
------------ -------- ------------ ------------
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 $ 1,612,850 $ 1,603,375
Common Stock (B) 191 shs. 11/30/06 191,250 119,457
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 95 shs. 11/30/06 86,493 59,638
------------ ------------
1,890,593 1,782,470
------------ ------------
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 1,060,692 1,043,276
Limited Partnership Interest (B) 23.16% int. 05/14/07 115,804 --
Warrant, exercisable until 2015, to purchase
common stock at $.02 per share (B) 88 shs. 05/14/07 83,462 --
------------ ------------
1,259,958 1,043,276
------------ ------------
XALOY SUPERIOR HOLDINGS, INC.
A provider of melt processing components and ancillary equipment for both plastic injection molding and extrusion applications.
15% Senior Subordinated Note due 2015 $ 2,266,667 09/08/08 2,221,333 2,192,750
Common Stock (B) 283 shs. 09/08/08 283,331 269,163
------------ ------------
2,504,664 2,461,913
------------ ------------
TOTAL PRIVATE PLACEMENT INVESTMENTS (E) 197,411,957 182,736,023
------------ ------------
--------------------------------------------------------------------------------------------------------------------------------
25
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Shares or
Interest Due Principal
CORPORATE RESTRICTED SECURITIES:(A)(Continued) Rate Date Amount Cost Fair Value
------- -------- ------------ ------------ ------------
RULE 144A SECURITIES - 4.27%:
BONDS - 4.27%
American Tire Distributor (C) 9.041% 04/01/12 $ 1,000,000 $ 950,000 $ 840,000
Cenveo Corporation 10.500 08/15/16 100,000 100,000 93,000
Charter Communications Op LLC 8.000 04/30/12 800,000 767,250 716,000
Compucom Systems, Inc. 12.500 10/01/15 1,330,000 1,287,750 1,193,675
Douglas Dynamics LLC 7.750 01/15/12 1,010,000 955,268 828,200
G F S I, Inc. (C) 10.500 06/01/11 750,000 719,745 675,000
Intergen NV 9.000 06/30/17 750,000 743,918 750,000
Nortek, Inc. 10.000 12/01/13 175,000 173,175 155,750
Packaging Dynamics Corporation of America 10.000 05/01/16 1,200,000 1,195,216 780,000
Rock-Tenn Co. 9.250 03/15/16 1,075,000 1,116,610 1,091,125
Ryerson, Inc. 12.000 11/01/15 65,000 65,000 55,250
SandRidge Energy, Inc. 8.000 06/01/18 360,000 364,458 309,600
Ticketmaster 10.750 08/01/16 500,000 500,000 470,000
Tunica-Biloxi Gaming Authority 9.000 11/15/15 1,075,000 1,103,353 989,000
TXU Energy Company LLC 10.250 11/01/15 1,250,000 1,261,914 1,128,125
Videotron, Ltd. 9.125 04/15/18 40,000 39,373 40,650
------------ ------------
TOTAL BONDS 11,343,030 10,115,375
------------ ------------
CONVERTIBLE PREFERRED STOCK - 0.00%
ETEX Corporation (B) 777 716 --
------------ ------------
TOTAL CONVERTIBLE PREFERRED STOCK 716 --
------------ ------------
PREFERRED STOCK - 0.00%
TherOX, Inc. (B) 103 4,131 --
------------ ------------
TOTAL PREFERRED STOCK 4,131 --
------------ ------------
COMMON STOCK - 0.00%
Touchstone Health Partnership (B) 1,168 4,254 --
------------ ------------
TOTAL COMMON STOCK 4,254 --
------------ ------------
TOTAL RULE 144A SECURITIES 11,352,131 10,115,375
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $208,764,088 $192,851,398
------------ ------------
----------------------------------------------------------------------------------------------------------------
26
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Interest Due Principal Market
CORPORATE PUBLIC SECURITIES - 26.47%: (A) Rate Date Amount Cost Value
------- -------- ------------ ------------ ------------
BONDS - 24.55%
A M C Entertainment, Inc. 11.000% 02/01/16 $ 1,315,000 $ 1,322,080 $ 1,295,275
Activant Solutions, Inc. 9.500 05/01/16 150,000 150,000 111,000
ALH Fin LLC / ALH Fin Corporation 8.500 01/15/13 870,000 839,213 811,275
Appleton Papers, Inc. 8.125 06/15/11 300,000 300,000 263,250
Aramark Corporation (C) 6.301 02/01/15 200,000 200,000 175,000
Aramark Corporation 8.500 02/01/15 500,000 502,452 470,000
Atlas Pipeline Partners 8.125 12/15/15 200,000 200,000 184,000
Bally Total Fitness Holdings Corporation (F) 14.000 10/01/13 90,000 73,350 3,600
Basic Energy Services 7.125 04/15/16 225,000 225,000 200,250
Berry Plastics Corporation (C) 7.463 02/15/15 500,000 472,672 445,000
Boyd Gaming Corporation 7.125 02/01/16 1,300,000 1,066,500 900,250
Brigham Exploration Co. 9.625 05/01/14 1,200,000 1,167,903 1,002,000
CCH I Holdings LLC 11.125 01/15/14 550,000 351,438 191,125
Cablevision Systems Corporation (C) 7.133 04/01/09 300,000 300,000 296,250
Cablevision Systems Corporation 8.000 04/15/12 1,000,000 1,009,684 940,000
Cenveo Corporation 7.875 12/01/13 1,300,000 1,192,500 1,001,000
Chaparral Energy, Inc. 8.875 02/01/17 1,500,000 1,491,780 1,185,000
Cincinnati Bell, Inc. 8.375 01/15/14 1,100,000 1,007,500 957,000
Clayton Williams Energy, Inc. 7.750 08/01/13 750,000 729,000 656,250
Community Health Systems, Inc. (C) 8.875 07/15/15 1,200,000 1,169,415 1,140,000
Delta Petroleum Corporation 7.000 04/01/15 750,000 661,875 521,250
Dynegy Holdings, Inc. 7.500 06/01/15 500,000 446,548 422,500
Dynegy Holdings, Inc. 8.375 05/01/16 330,000 330,000 287,100
Ford Motor Credit Co. 7.375 10/28/09 875,000 872,813 703,470
Gencorp, Inc. 9.500 08/15/13 259,000 259,000 255,115
General Motors Acceptance Corporation 7.750 01/19/10 1,250,000 1,269,385 748,456
Goodyear Tire & Rubber Co. 7.857 08/15/11 1,150,000 1,097,750 1,118,375
Graham Packaging Corporation 8.500 10/15/12 280,000 268,800 259,000
Great Lakes Dredge & Dock Corporation 7.750 12/15/13 1,000,000 948,750 915,000
H C A, Inc. 9.250 11/15/16 1,125,000 1,148,243 1,094,063
Hawker Beechcraft Acquisition Co. 9.750 04/01/17 1,000,000 1,008,902 895,000
Hughes Network Systems 9.500 04/15/14 1,325,000 1,347,587 1,285,250
Inergy LP 8.250 03/01/16 470,000 481,517 432,400
Intelsat Bermuda Ltd. 9.250 06/15/16 1,365,000 1,413,889 1,269,450
Interline Brands, Inc. 8.125 06/15/14 1,300,000 1,291,107 1,287,000
Kar Holdings, Inc. 8.750 05/01/14 50,000 50,000 40,750
Kar Holdings, Inc. 10.000 05/01/15 500,000 462,919 385,000
----------------------------------------------------------------------------------------------------------------
27
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Interest Due Principal Market
CORPORATE PUBLIC SECURITIES:(A)(Continued) Rate Date Amount Cost Value
------- -------- ------------ ------------ ------------
L-3 Communications Holdings, Inc. 6.125% 07/15/13 $ 1,000,000 $ 995,000 $ 930,000
Leucadia National Corporation 7.000 08/15/13 450,000 450,879 424,125
Liberty Media Corporation 5.700 05/15/13 1,000,000 951,610 831,718
Majestic Star Casino LLC 9.500 10/15/10 500,000 500,000 225,000
Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 186,000
Mariner Energy, Inc. 8.000 05/15/17 1,100,000 1,097,487 929,500
Markwest Energy Operating Co. 6.875 11/01/14 950,000 930,563 855,000
Markwest Energy Operating Co. 8.750 04/15/18 125,000 123,979 118,750
Mediacom Broadband LLC 8.500 10/15/15 1,250,000 1,260,570 1,031,250
N R G Energy, Inc. 7.375 02/01/16 175,000 175,000 157,500
Neiman Marcus Group, Inc. 10.375 10/15/15 1,000,000 1,011,405 837,500
Newark Group, Inc. 9.750 03/15/14 850,000 796,863 297,500
North American Energy Partners 8.750 12/01/11 1,165,000 1,174,132 1,071,800
O E D Corp./Diamond Jo Company Guarantee 8.750 04/15/12 1,000,000 985,960 910,000
Petrohawk Energy Corporation 9.125 07/15/13 1,500,000 1,520,512 1,410,000
Pliant Corporation 11.125 09/01/09 550,000 539,000 390,500
Pliant Corporation (C) 11.850 06/15/09 1,049,329 1,056,382 902,423
Polypore, Inc. 8.750 05/15/12 1,460,000 1,410,050 1,343,200
Pregis Corporation 12.375 10/15/13 1,000,000 981,490 650,000
Quality Distribution, Inc. (C) 7.291 01/15/12 545,000 546,676 272,500
Quebecor Media, Inc. 7.750 03/15/16 1,375,000 1,281,423 1,203,125
Range Resources Corporation 7.250 05/01/18 50,000 50,000 47,250
RBS Global & Rexnord Corporation 11.750 08/01/16 275,000 284,124 259,875
Rental Service Corporation 9.500 12/01/14 1,500,000 1,488,659 1,136,250
Scholastic Corporation 5.000 04/15/13 1,500,000 1,278,750 1,266,834
Seneca Gaming Corporation 7.250 05/01/12 500,000 477,500 435,000
Shaw Communications, Inc. 7.250 04/06/11 400,000 412,858 394,000
Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 333,750
Stanadyne Corporation 10.000 08/15/14 1,500,000 1,500,000 1,395,000
Steel Dynamics, Inc. 6.750 04/01/15 700,000 695,000 602,000
Stewart & Stevenson LLC 10.000 07/15/14 1,500,000 1,534,262 1,312,500
Stratos Global 9.875 02/15/13 575,000 577,904 560,625
Tekni-Plex, Inc. 8.750 11/15/13 650,000 654,763 497,250
Tenneco, Inc. 8.125 11/15/15 100,000 100,000 85,500
Tenneco, Inc. 8.625 11/15/14 1,000,000 1,002,185 795,000
Texas Industries, Inc. 7.250 07/15/13 70,000 70,000 60,900
Time Warner Telecom Holdings 9.250 02/15/14 1,000,000 1,009,324 925,000
Titan International, Inc. 8.000 01/15/12 1,070,000 1,062,100 1,037,900
----------------------------------------------------------------------------------------------------------------
28
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Shares or
Interest Due Principal Market
CORPORATE PUBLIC SECURITIES:(A)(Continued) Rate Date Amount Cost Value
------- -------- ------------ ------------ ------------
Transdigm, Inc. 7.750% 07/15/14 $ 500,000 $ 503,614 $ 470,000
Trimas Corporation 9.875 06/15/12 1,073,000 982,375 909,368
Tube City IMS Corporation 9.750 02/01/15 1,500,000 1,485,859 1,335,000
United Components, Inc. 9.375 06/15/13 1,080,000 1,080,739 896,400
United Rentals, Inc. 7.750 11/15/13 625,000 625,000 476,563
United Rentals, Inc. 7.000 02/15/14 500,000 500,000 350,000
Virgin Media Finance PLC 9.125 08/15/16 1,380,000 1,414,919 1,155,750
Vought Aircraft Industries 8.000 07/15/11 1,150,000 1,115,399 1,000,500
Warner Music Group Corporation 7.375 04/15/14 275,000 275,000 204,186
Waste Services, Inc. 9.500 04/15/14 1,100,000 1,119,751 1,078,000
------------ ------------
TOTAL BONDS 66,788,639 58,144,496
------------ ------------
COMMON STOCK - 1.73%
Chase Packaging Corporation (B) 9,541 -- 773
CKX, Inc. (B) 97,500 784,875 600,600
Directed Electronics, Inc. (B) 368,560 1,856,534 368,560
El Paso Corporation (B) 65,000 808,362 829,400
EnerNOC, Inc. (B) 46,500 1,283,262 480,810
ITC^DeltaCom, Inc. (B) 178,666 1,563,328 348,399
Intrepid Potash, Inc. (B) 365 11,680 10,848
PepsiAmericas, Inc. 52,418 1,141,349 1,086,101
Supreme Industries, Inc. 118,035 267,322 360,007
------------ ------------
TOTAL COMMON STOCK 7,716,712 4,085,498
------------ ------------
CONVERTIBLE BONDS - 0.19%
Citadel Broadcasting Corporation 4.000% 02/15/11 583,000 452,556 451,096
------------ ------------
TOTAL CONVERTIBLE BONDS 452,556 451,096
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 74,957,907 $ 62,681,090
------------ ------------
----------------------------------------------------------------------------------------------------------------
29
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2008
(Unaudited)
Interest Due Principal
SHORT-TERM SECURITIES: Rate/Yield* Date Amount Cost Market Value
------- -------- ------------ ------------ ------------
COMMERCIAL PAPER - 2.24%
Kraft Foods, Inc. 6.003% 10/03/08 $ 1,306,000 $ 1,305,565 $ 1,305,565
Wisconsin Gas Co. 4.000 10/01/08 4,000,000 4,000,000 4,000,000
------------ ------------
TOTAL SHORT-TERM SECURITIES $ 5,305,565 $ 5,305,565
------------ ------------
TOTAL INVESTMENTS 110.12% $289,027,560 $260,838,053
============ ------------
Other Assets 3.35 7,951,096
Liabilities (13.47) (31,911,605)
------ ------------
TOTAL NET ASSETS 100.00% $236,877,544
====== ============
(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 09/30/08.
(D) Defaulted security; interest not accrued.
(E) Illiquid securities. At September 30, 2008, the value of these securities amounted to $182,736,023 or 77.14% of net assets.
(F) Security valued at fair value using methods determined in good faith by or under the direction of the Board of Trustees.
* Effective yield at purchase
PIK - Payment-in-kind
----------------------------------------------------------------------------------------------------------------
30
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Fair Value/ Fair Value/
INDUSTRY CLASSIFICATION: Market Value Market Value
-------------- --------------
AEROSPACE - 3.39% BROADCASTING & ENTERTAINMENT - 3.23%
Gencorp, Inc. $ 255,115 CCH I Holdings LLC $ 191,125
Hughes Network Systems 1,285,250 Cablevision Systems Corporation 1,236,250
L-3 Communications Holdings, Inc. 930,000 Charter Communications Op LLC 716,000
P A S Holdco LLC 2,549,462 Citadel Broadcasting Corporation 451,096
Transdigm, Inc. 470,000 CKX, Inc. 600,600
Visioneering, Inc. 1,531,211 Liberty Media Corporation 831,718
Vought Aircraft Industries 1,000,500 Mediacom Broadband LLC 1,031,250
-------------- Shaw Communications, Inc. 394,000
8,021,538 Virgin Media Finance PLC 1,155,750
-------------- Workplace Media Holding Co. 1,043,276
AUTOMOBILE - 6.54% --------------
American Tire Distributor 840,000 7,651,065
Fuel Systems Holding Corporation 1,168,750 --------------
Goodyear Tire & Rubber Co. 1,118,375 BUILDINGS & REAL ESTATE - 1.09%
Jason, Inc. 1,431,224 K W P I Holdings Corporation 2,224,943
Nyloncraft, Inc. 1,896,875 Texas Industries, Inc. 60,900
Ontario Drive & Gear Ltd. 1,317,464 TruStile Doors, Inc. 303,394
Qualis Automotive LLC 1,934,552 --------------
Tenneco, Inc. 880,500 2,589,237
Titan International, Inc. 1,037,900 --------------
Transtar Holding Company 2,969,719 CHEMICAL, PLASTICS & RUBBER - 0.24%
United Components, Inc. 896,400 Capital Specialty Plastics, Inc. 558,932
-------------- --------------
15,491,759 558,932
-------------- --------------
BEVERAGE, DRUG & FOOD - 3.43% CONSUMER PRODUCTS - 7.74%
Aramark Corporation 645,000 Aero Holdings, Inc. 3,202,158
Golden County Foods Holding, Inc. 1,722,717 ALH Fin LLC/ALH Fin Corporation 811,275
Hospitality Mints Holding Company 2,454,196 Bravo Sports Holding Corporation 2,478,523
PepsiAmericas, Inc. 1,086,101 G F S I, Inc. 675,000
Specialty Foods Group, Inc. -- K N B Holdings Corporation 2,576,976
Vitality Foodservice, Inc. 2,211,610 Kar Holdings, Inc. 425,750
-------------- Momentum Holding Co. 471,803
8,119,624 R A J Manufacturing Holdings LLC 2,465,048
-------------- Royal Baths Manufacturing Company 1,045,835
The Tranzonic Companies 4,194,323
Walls Industries, Inc. --
--------------
18,346,691
--------------
------------------------------------------------------------------------------------------------------------------------------------
31
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONTINUED)
September 30, 2008
(Unaudited)
Fair Value/ Fair Value/
INDUSTRY CLASSIFICATION:(Continued) Market Value Market Value
-------------- --------------
CONTAINERS, PACKAGING & GLASS - 4.99% DIVERSIFIED/CONGLOMERATE, SERVICE - 7.99%
Berry Plastics Corporation $ 445,000 A W X Holdings Corporation $ 1,519,621
Chase Packaging Corporation 773 Advanced Technologies Holdings 2,496,766
Flutes, Inc. 1,330,475 CapeSuccess LLC --
Graham Packaging Corporation 259,000 Crane Rental Corporation 2,474,419
Maverick Acquisition Company 713,969 Diversco, Inc./DHI Holdings, Inc. 1,266,653
P I I Holding Corporation 2,798,357 Dwyer Group, Inc. 1,454,110
Packaging Dynamics Corporation of America 780,000 Fowler Holding, Inc. 1,773,913
Paradigm Packaging, Inc. 2,025,407 GQ Holdings LLC 2,408,825
Pliant Corporation 1,292,923 Insurance Claims Management, Inc. 143,040
Pregis Corporation 650,000 Interline Brands, Inc. 1,287,000
Tekni-Plex, Inc. 497,250 Mail Communications Group, Inc. 1,427,122
Vitex Packaging Group, Inc. 1,021,209 Nesco Holdings Corporation 2,625,791
-------------- Videotron, Ltd. 40,650
11,814,363 --------------
-------------- 18,917,910
DISTRIBUTION - 0.64% --------------
Duncan Systems, Inc. 1,510,866 ELECTRONICS - 1.01%
QualServ Corporation -- Connecticut Electric, Inc. 2,028,146
-------------- Directed Electronics, Inc. 368,560
1,510,866 --------------
-------------- 2,396,706
DIVERSIFIED/CONGLOMERATE, --------------
MANUFACTURING - 11.54% FARMING & AGRICULTURE - 1.00%
A H C Holding Company, Inc. 2,438,876 Protein Genetics, Inc. --
Activant Solutions, Inc. 111,000 Waggin' Train Holdings LLC 2,370,133
Arrow Tru-Line Holdings, Inc. 1,565,665 --------------
C D N T, Inc. 1,530,717 2,370,133
Douglas Dynamics LLC 828,200 --------------
Evans Consoles, Inc. 1,082,834 FINANCIAL SERVICES - 1.17%
Great Lakes Dredge & Dock Corporation 915,000 Ford Motor Credit Co. 703,470
K P I Holdings, Inc. 2,450,744 General Motors Acceptance Corporation 748,456
MEGTEC Holdings, Inc. 2,451,842 Hawker Beechcraft Acquisition Co. 895,000
Milwaukee Gear Company 2,548,860 Highgate Capital LLC --
Nortek, Inc. 155,750 Leucadia National Corporation 424,125
Polypore, Inc. 1,343,200 Victory Ventures LLC --
Postle Aluminum Company LLC 2,208,079 --------------
Radiac Abrasives, Inc. 2,916,374 2,771,051
RBS Global & Rexnord Corporation 259,875 --------------
Trimas Corporation 909,368 HEALTHCARE, EDUCATION & CHILDCARE - 5.57%
Truck Bodies & Equipment International 1,154,771 A T I Acquisition Company 2,742,087
Xaloy Superior Holdings, Inc. 2,461,913 American Hospice Management Holding LLC 3,449,510
-------------- Community Health Systems, Inc. 1,140,000
27,333,068 F H S Holdings LLC 2,282,102
-------------- H C A, Inc. 1,094,063
Synteract Holdings Corporation 2,481,955
Touchstone Health Partnership --
--------------
13,189,717
--------------
------------------------------------------------------------------------------------------------------------------------------------
32
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONTINUED) MassMutual Corporate Investors
September 30, 2008
(Unaudited)
Fair Value/ Fair Value/
INDUSTRY CLASSIFICATION:(Continued) Market Value Market Value
-------------- --------------
HOME & OFFICE FURNISHINGS, HOUSEWARES, MACHINERY - 10.51%
AND DURABLE CONSUMER PRODUCTS - 9.12% Davis-Standard LLC $ 3,372,343
Connor Sport Court International, Inc. $ 1,860,089 E S P Holdco, Inc. 2,425,298
H M Holding Company -- Integration Technology Systems, Inc. --
Home Decor Holding Company 2,185,917 K-Tek Holdings Corporation 2,438,193
Justrite Manufacturing Acquisition Co. 1,818,603 M V I Holding, Inc. 1,221,456
K H O F Holdings, Inc. 2,480,302 Manitowoc Company, Inc. 186,000
Monessen Holding Corporation 2,447,426 Morton Industrial Group, Inc. 2,267,012
Stanton Carpet Holding Co. 2,697,155 Navis Global 1,161,652
Transpac Holdings Company 1,843,903 NetShape Technologies, Inc. 1,820,060
U M A Enterprises, Inc. 2,454,776 Pacific Consolidated Holdings LLC 1,194,896
U-Line Corporation 2,037,240 Power Services Holding Company 2,433,838
Wellborn Forest Holding Co. 1,782,470 R E I Delaware Holding, Inc. 2,414,574
-------------- Safety Speed Cut Manufacturing Company, Inc. 893,226
21,607,881 Stanadyne Corporation 1,395,000
-------------- Stewart & Stevenson LLC 1,312,500
LEISURE, AMUSEMENT, ENTERTAINMENT - 3.79% Supreme Industries, Inc. 360,007
A M C Entertainment, Inc. 1,295,275 --------------
Bally Total Fitness Holding Corporation 3,600 24,896,055
Boyd Gaming Corporation 900,250 --------------
Electra Bicycle Company LLC 1,384,636 MEDICAL DEVICES/BIOTECH - 3.05%
Majestic Star Casino LLC 225,000 Coeur, Inc. 1,069,432
O E D Corp/Diamond Jo Company Guarantee 910,000 E X C Acquisition Corporation 198,794
Savage Sports Holding, Inc. 2,161,086 ETEX Corporation --
Seneca Gaming Corporation 435,000 MedSystems Holdings LLC 1,234,939
Ticketmaster 470,000 MicroGroup, Inc. 3,586,410
Tunica-Biloxi Gaming Authority 989,000 OakRiver Technology, Inc. 1,127,782
Warner Music Group Corporation 204,186 TherOX, Inc. --
-------------- --------------
8,978,033 7,217,357
-------------- --------------
MINING, STEEL, IRON & NON PRECIOUS
METALS - 1.86%
Ryerson, Inc. 55,250
Steel Dynamics, Inc. 602,000
T H I Acquisition, Inc. 2,412,842
Tube City IMS Corporation 1,335,000
--------------
4,405,092
--------------
------------------------------------------------------------------------------------------------------------------------------------
33
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONTINUED)
September 30, 2008
(Unaudited)
Fair Value/ Fair Value/
INDUSTRY CLASSIFICATION:(Continued) Market Value Market Value
-------------- --------------
NATURAL RESOURCES - 1.19% TECHNOLOGY - 1.97%
Appleton Papers, Inc. $ 263,250 Compucom Systems, Inc. $ 1,193,675
Cenveo Corporation 1,094,000 EnerNOC, Inc. 480,810
Intrepid Potash, Inc. 10,848 Smart Source Holdings LLC 2,997,071
Range Resources Corporation 47,250 --------------
Rock-Tenn Co. 1,091,125 4,671,556
SandRidge Energy, Inc. 309,600 --------------
-------------- TELECOMMUNICATIONS - 2.23%
2,816,073 All Current Holding Company 1,231,511
-------------- Cincinnati Bell, Inc. 957,000
OIL & GAS - 3.09% Intelsat Bermuda Ltd. 1,269,450
Atlas Pipeline Partners 184,000 ITC^DeltaCom, Inc. 348,399
Basic Energy Services 200,250 Stratos Global 560,625
Brigham Exploration Co. 1,002,000 Time Warner Telecom Holdings 925,000
Chaparral Energy, Inc. 1,185,000 --------------
Clayton Williams Energy, Inc. 656,250 5,291,985
Delta Petroleum Corporation 521,250 --------------
Mariner Energy, Inc. 929,500 TRANSPORTATION - 1.89%
North American Energy Partners 1,071,800 NABCO, Inc. 381,037
Total E & S, Inc. 1,572,166 Quality Distribution, Inc. 272,500
-------------- Tangent Rail Corporation 3,828,547
7,322,216 --------------
-------------- 4,482,084
PHARMACEUTICALS - 1.32% --------------
CorePharma LLC 2,549,564 UTILITIES - 2.70%
Enzymatic Therapy, Inc. 581,151 Dynegy Holdings, Inc. 709,600
-------------- El Paso Corporation 829,400
3,130,715 Inergy LP 432,400
-------------- Intergen NV 750,000
PUBLISHING/PRINTING - 1.31% Markwest Energy Operating Co. 973,750
Newark Group, Inc. 297,500 N R G Energy, Inc. 157,500
Quebecor Media, Inc. 1,203,125 Petrohawk Energy Corporation 1,410,000
Scholastic Corporation 1,266,834 TXU Energy Company LLC 1,128,125
Sheridan Acquisition Corporation 333,750 --------------
-------------- 6,390,775
3,101,209 --------------
-------------- WASTE MANAGEMENT / POLLUTION - 2.99%
RETAIL STORES - 1.29% Terra Renewal LLC 3,562,441
Neiman Marcus Group, Inc. 837,500 Torrent Group Holdings, Inc. 2,432,229
Olympic Sales, Inc. 265,814 Waste Services, Inc. 1,078,000
Rental Service Corporation 1,136,250 --------------
United Rentals, Inc. 826,563 7,072,670
-------------- --------------
3,066,127 TOTAL CORPORATE RESTRICTED AND
-------------- PUBLIC SECURITIES - 107.88% $ 255,532,488
==============
See Notes to Consolidated Financial Statements
------------------------------------------------------------------------------------------------------------------------------------
34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MassMutual Corporate Investors
(Unaudited)
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 closed-end management investment company. Babson Capital
Management LLC ("Babson Capital"), a wholly-owned indirect subsidiary of
Massachusetts Mutual Life Insurance Company ("MassMutual"), acts as its
investment adviser. The Trust's investment objective is to maintain a
portfolio of securities providing a fixed yield and at the same time offering
an opportunity for capital gains. The Trust's principal investments are
privately placed, below-investment grade, long-term debt obligations with
equity features such as common stock, warrants, conversion rights, or other
equity features and, occasionally, preferred stocks. The Trust typically
purchases these investments, which are not publicly tradable, directly from
their issuers in private placement transactions. These investments are
typically mezzanine debt instruments with accompanying private equity
securities made to small or middle market companies. In addition, the Trust
may temporarily invest, subject to certain limitations, in marketable
investment grade debt securities, other marketable debt securities (including
high yield securities) and marketable common stocks. Below-investment grade
or high yield securities have predominantly speculative characteristics with
respect to the capacity of the issuer to pay interest and repay capital.
On January 27,1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary of the Trust ("MMCI Subsidiary Trust") for the
purpose of holding certain investments. The results of MMCI Subsidiary Trust
are consolidated in the accompanying financial statements. Footnote 2.D below
discusses the federal tax consequences of the MMCI Subsidiary Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of its consolidated financial
statements in conformity with accounting principles generally accepted in the
United States of America.
A. VALUATION OF INVESTMENTS:
Valuation of a security in the Trust's portfolio is made on the basis of
market price whenever market quotations are readily available and all
securities of the same class held by the Trust can be readily sold in such
market.
Nearly all securities which are acquired by the Trust directly from the
issuers and shares into which such securities may be converted or which may
be purchased on the exercise of warrants attached to such securities will be
subject to legal or contractual delays in, or restrictions on, resale and
will therefore be "restricted securities." Generally speaking, as contrasted
with open-market sales of unrestricted securities which may be effected
immediately if the market is adequate, restricted securities can be sold only
in a public offering for which a registration statement is in effect under
the Securities Act of 1933, as amended (the "1933 Act"), or pursuant to a
transaction that is exempt from registration under the 1933 Act.
The value of restricted securities, and of any other assets for which there
are no reliable market quotations, is the fair value as determined in good
faith by the Trust's Board of Trustees (the "Trustees"). Each restricted
security is valued by the Trustees at the time of its acquisition and at
least quarterly thereafter. The Trustees have established guidelines to aid
in the valuation of each security. Generally, restricted securities are
initially valued at cost or less at the time of acquisition by the Trust.
Values greater or less than cost are used thereafter for restricted
securities in appropriate circumstances. Among the factors ordinarily
considered are the existence of restrictions upon the sale of a security held
by the Trust; an estimate of the existence and the extent of a market for the
security; the extent of any discount at which the security was acquired; the
estimated period of time during which the security will not be freely
marketable; the estimated expenses of registering or otherwise qualifying the
security for public sale; estimated underwriting commissions if underwriting
would be required to effect a sale; in the case of a convertible security,
whether or not it would trade on the basis of its stock equivalent; in the
case of a debt obligation which would trade independently of any equity
equivalent, the current yields on comparable securities; the estimated amount
of the floating supply of such securities available for purchase; the
proportion of the issue held by the Trust; changes in the financial condition
and prospects of the issuer; the existence of merger proposals or tender
offers affecting the issuer; and any other factors affecting fair value, all
in accordance with the Investment Company Act of 1940, as amended (the "1940
Act"). In making valuations, opinions of counsel may be relied upon as to
whether or not securities are restricted securities and as to the legal
requirements for public sale.
When market quotations are readily available for unrestricted securities of
an issuer, restricted securities of the same class are generally valued at a
discount from the market price of such unrestricted securities. The Trustees,
however, consider all factors in fixing any discount, including the filing of
a registration statement for such securities under the 1933 Act and any other
developments which are likely to increase the probability that the securities
may be publicly sold by the Trust without restriction.
The Trustees meet at least once each quarter to approve the value of the
Trust's portfolio securities as of the close of business on the last business
day of the preceding quarter. This valuation requires the approval of a
majority of the Trustees of the Trust,
--------------------------------------------------------------------------------
35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
including a majority of the Trustees who are not interested persons of the
Trust or of Babson Capital. In making valuations, the Trustees will consider
reports by Babson Capital analyzing each portfolio security in accordance
with the relevant factors referred to above. Babson Capital has agreed to
provide such reports to the Trust at least quarterly.
The consolidated financial statements include private placement restricted
securities valued at $182,736,023 (77.14% of net assets) as of September 30,
2008 whose values have been estimated by the Trustees in the absence of
readily ascertainable market values. Due to the inherent uncertainty of
valuation, those estimated values may differ significantly from the values
that would have been used had a ready market for the securities existed, and
the differences could be material.
The values for Rule 144A restricted securities and corporate public
securities are stated at the last reported sales price or at prices based
upon quotations obtained from brokers and dealers as of September 30, 2008,
subject to discount where appropriate, and are approved by the Trustees.
Short-term securities with more than sixty days to maturity are valued at
fair value and short-term securities having a maturity of sixty days or less
are valued at amortized cost, which approximates market value.
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.
The Trust is taxed as a regulated investment company and is therefore limited
as to the amount of non-qualified income that it may receive as the result of
operating a trade or business, e.g. the Trust's pro rata share of income
allocable to the Trust by a partnership operating company. The Trust's
violation of this limitation could result in the loss of its status as a
regulated investment company, thereby subjecting all of its net income and
capital gains to corporate taxes prior to distribution to its shareholders.
The Trust, from time-to-time, identifies investment opportunities in the
securities of entities that could cause such trade or business income to be
allocable to the Trust. The MMCI Subsidiary Trust (described in Footnote 1,
above) was formed in order to allow investment in such securities without
adversely affecting the Trust's status as a regulated investment company.
The MMCI Subsidiary Trust is not taxed as a regulated investment company.
Accordingly, prior to the Trust receiving any distributions from the MMCI
Subsidiary Trust, all of the MMCI Subsidiary Trust's taxable income and
realized gains, including non-qualified income and realized gains, is subject
to taxation at prevailing corporate tax rates. For the nine months ended
September 30, 2008, the MMCI Subsidiary Trust has not accrued any income tax
expense.
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 September 30, 2008, no provision for
income tax would be required in the Trust's financial statements. The Trust's
federal and state income and federal excise tax returns for tax years for
which the applicable statutes of limitations have not expired are subject to
examination by the Internal Revenue Service and state departments of revenue.
E. DISTRIBUTIONS TO SHAREHOLDERS:
The Trust records distributions to shareholders from net investment income
and net realized gains, if any, on the ex-dividend date. The Trust's net
investment income dividend is declared four times per year, in April, July,
October, and December. The Trust's net realized capital gain distribution, if
any, is declared in December.
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
--------------------------------------------------------------------------------
36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited) MassMutual Corporate Investors
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 nine months ended September 30, 2008, there were no
credit balances used to reduce custodian fees.
3. INVESTMENT SERVICES CONTRACT
A. SERVICES:
Under an Investment Services Contract (the "Contract") with the Trust, Babson
Capital agrees to use its best efforts to present to the Trust a continuing
and suitable investment program consistent with the investment objectives and
policies of the Trust. Babson Capital represents the Trust in any
negotiations with issuers, investment banking firms, securities brokers or
dealers and other institutions or investors relating to the Trust's
investments. Under the Contract, Babson Capital also provides administration
of the day-to-day operations of the Trust and provides the Trust with office
space and office equipment, accounting and bookkeeping services, and
necessary executive, clerical and secretarial personnel for the performance
of the foregoing services.
B. Fee:
For its services under the Contract, Babson Capital is paid a quarterly
investment advisory fee of 0.3125% of the net asset value of the Trust as of
the last business day of each fiscal quarter, which is approximately equal to
1.25% annually. A majority of the Trustees, including a majority of the
Trustees who are not interested persons of the Trust or of Babson Capital,
approve the valuation of the Trust's net assets as of such day.
4. SENIOR SECURED INDEBTEDNESS
A. NOTE PAYABLE:
MassMutual holds the Trust's $30,000,000 Senior Fixed Rate Convertible Note
(the "Note") issued by the Trust on November 15, 2007. The Note, is due
November 15, 2017 and accrues interest at 5.28% per annum. MassMutual, at its
option, can convert the principal amount of the Note into common shares. The
dollar amount of principal would be converted into an equivalent dollar
amount of common shares based upon the average price of the common shares for
ten business days prior to the notice of conversion. For the nine months
ended September 30, 2008, the Trust incurred total interest expense on the
Note of $1,188,000.
The Trust may redeem the Note, in whole or in part, at the principal amount
proposed to be redeemed together with the accrued and unpaid interest thereon
through the redemption date plus a Make Whole Premium. The Make Whole Premium
equals the excess of (i) the present value of the scheduled payments of
principal and interest which the Trust would have paid but for the proposed
redemption, discounted at the rate of interest of U.S. Treasury obligations
whose maturity approximates that of the Note plus 0.50% over (ii) the
principal of the Note proposed to be redeemed.
B. REVOLVING CREDIT AGREEMENT:
The Trust's $25,000,000 revolving credit agreement (the "Revolver") with The
Royal Bank of Scotland PLC matured on May 31, 2008.
For the nine month period ended September 30, 2008, the Trust incurred total
expense on the Revolver of $15,574. The expense was incurred on the undrawn
portion of the Revolver from January 1, 2008 to the maturity date on May 31,
2008.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE NINE
MONTHS ENDED
9/30/2008
COST OF PROCEEDS FROM
INVESTMENTS SALES OR
ACQUIRED MATURITIES
-------- ----------
Corporate restricted securities $ 49,269,414 $ 41,499,748
Corporate public securities 26,289,994 21,446,889
The aggregate cost of investments is substantially the same for financial
reporting and federal income tax purposes as of September 30, 2008. The net
unrealized depreciation of investments for financial reporting and federal
tax purposes as of September 30, 2008 is $28,189,507 and consists of
$13,948,039 appreciation and $42,137,546 depreciation.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS
March 31, 2008
Amount Per Share
------ ---------
Investment income $ 6,551,682
Net investment income 5,208,711 $ 0.56
Net realized and unrealized
loss on investments (net of taxes) (7,409,784) (0.80)
June 30, 2008
Amount Per Share
------ ---------
Investment income $ 5,878,119
Net investment income 4,557,413 $ 0.49
Net realized and unrealized
loss on investments (net of taxes) (3,210,632) (0.35)
September 30, 2008
Amount Per Share
------ ---------
Investment income $ 7,783,534
Net investment income 6,492,880 $ 0.70
Net realized and unrealized
loss on investments (net of taxes) (11,520,796) (1.24)
--------------------------------------------------------------------------------
37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
7. FAIR VALUE MEASUREMENTS
Effective January 1, 2008, the Trust adopted FASB Statement of Financial
Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157
clarifies the definition of fair value, establishes a framework for measuring
fair values, and requires additional disclosures about the use of fair value
measurements. FAS 157 requires companies to provide expanded information
about the assets and liabilities measured at fair value and the potential
effect of these fair valuations of an entity's financial performance.
Various inputs are used in determining the value of the Trust's investments.
Using the hierarchy established under FAS 157, these inputs are summarized in
the three broad levels listed below:
Level 1: quoted prices in active markets for identical securities
Level 2: other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk,
etc.)
Level 3: significant unobservable inputs (including the Trust's own
assumptions in determining the fair value of investments)
The inputs and methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Trust's net assets
as of September 30, 2008:
ASSETS TOTAL LEVEL 1 LEVEL 2 LEVEL 3
-----------------------------------------------------------------------------
Restricted Securities $192,851,398 $ -- $10,115,375 $182,736,023
Public Securities 62,681,090 4,085,498 58,591,992 3,600
Short-term Securities 5,305,565 -- 5,305,565 --
-----------------------------------------------------------------------------
TOTAL $260,838,053 $4,085,498 $74,012,932 $182,739,623
Following is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value:
RESTRICTED PUBLIC SHORT-TERM
ASSETS SECURITIES SECURITIES SECURITIES TOTAL
-----------------------------------------------------------------------------
Beginning balance
at 12/31/2007 $175,656,605 $ 74,700 $ -- $175,731,305
Total gains or losses
(realized/unrealized)
included in earnings* (8,590,964) (71,100) -- (8,662,064)
Purchases, sales,
issuances &
settlements (net) 15,670,382 -- -- 15,670,382
-----------------------------------------------------------------------------
ENDING BALANCE
at 9/30/08 $182,736,023 $ 3,600 $ -- $182,739,623
* The amount of total gains or losses for the period included in earnings
attributable to the change in unrealized gains or losses relating to Level 3
assets still held at 9/30/08 is $(11,306,746).
--------------------------------------------------------------------------------
38
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MassMutual Corporate Investors
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
MassMutual Corporate Investors offers a Dividend Reinvestment and Share Purchase
Plan. The Plan provides a simple way for shareholders to add to their holdings
in the Trust through the receipt of dividend shares issued by the Trust or
through the investment of cash dividends in Trust shares purchased in the open
market. A shareholder may join the Plan by filling out and mailing an
authorization card to Shareholder Financial Services, Inc., the Transfer Agent.
Participating shareholders will continue to participate until they notify the
Transfer Agent, in writing, of their desire to terminate participation. Unless a
shareholder elects to participate in the Plan, he or she will, in effect, have
elected to receive dividends and distributions in cash. Participating
shareholders may also make additional contributions to the Plan from their own
funds. Such contributions may be made by personal check or other means in an
amount not less than $10 nor more than $5,000 per quarter. Cash contributions
must be received by the Transfer Agent at least five days (but no more then 30
days) before the payment date of a dividend or distributions.
Whenever the Trust declares a dividend payable in cash or shares, the Transfer
Agent, acting on behalf of each participating shareholder, will take the
dividend in shares only if the net asset value is lower than the market price
plus an estimated brokerage commission as of the close of business on the
valuation day. The valuation day is the last day preceding the day of dividend
payment.
When the dividend is to be taken in shares, the number of shares to be received
is determined by dividing the cash dividend by the net asset value as of the
close of business on the valuation date or, if greater than net asset value, 95%
of the closing share price. If the net asset value of the shares is higher than
the market value plus an estimated commission, the Transfer Agent, consistent
with obtaining the best price and execution, will buy shares on the open market
at current prices promptly after the dividend payment date.
The reinvestment of dividends does not, in anyway, relieve participating
shareholders of any federal, state or local tax. For federal income tax
purposes, the amount reportable in respect of a dividend received in
newly-issued shares of the Trust will be the fair market value of the shares
received, which will be reportable as ordinary income and/or capital gains.
As compensation for its services, the Transfer Agent receives a fee of 5% of any
dividend and cash contribution (in no event in excess of $2.50 per distribution
per shareholder.)
Any questions regarding the Plan should be addressed to Shareholder Financial
Services, Inc., Agent for MassMutual Corporate Investors' Dividend Reinvestment
and Share Purchase Plan, P.O. Box 173673, Denver, CO 80217-3673.
MEMBERS OF THE BOARD OF OFFICERS
TRUSTEES
Roger W. Crandall
Donald Glickman Chairman
Robert E. Joyal Clifford M. Noreen
President
William J. Barrett
James M. Roy
Michael H. Brown* Vice President & Chief
Financial Officer
Donald E. Benson*
Patricia J. Walsh
Dr. Corine T. Norgaard* Vice President, Secretary
& Chief Legal Officer
Roger W. Crandall
Jill A. Fields
Martin T. Hart Vice President
Maleyne M. Syracuse Michael P. Hermsen
Vice President
*Member of the Audit Committee
Mary Wilson Kibbe
Vice President
Michael L. Klofas
Vice President
Richard E. Spencer, II
Vice President
Daniel J. Florence
Treasurer
John T. Davitt, Jr.
Comptroller
Melissa M. LaGrant
Chief Compliance Officer
MassMutual
Corporate Investors
CI3554