-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Su9i7W1Qg4w0sDm+udOmPcvVQiie8cmsBQOGTI+G4n4B29Rlf2ZG3su5xKgXJKC5 XxKcMRdVXL8a0keel73GWg== 0001072613-05-002127.txt : 20050906 0001072613-05-002127.hdr.sgml : 20050905 20050906113809 ACCESSION NUMBER: 0001072613-05-002127 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050906 DATE AS OF CHANGE: 20050906 EFFECTIVENESS DATE: 20050906 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MASSMUTUAL CORPORATE INVESTORS CENTRAL INDEX KEY: 0000275694 IRS NUMBER: 042483041 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02183 FILM NUMBER: 051069476 BUSINESS ADDRESS: STREET 1: 1500 MAIN STREET STREET 2: SUITE 600 CITY: SPRINGFIELD STATE: MA ZIP: 01115 BUSINESS PHONE: 4132261000 MAIL ADDRESS: STREET 1: 1500 MAIN STREET STREET 2: SUITE 600 CITY: SPRINGFIELD STATE: MA ZIP: 01115 N-CSRS 1 formn-csr_13778.txt N-CSRS FOR PERIOD ENDED JUNE 30, 2005 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-2183 --------------------------------------------- MassMutual Corporate Investors - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 1500 Main Street, Suite 600, Springfield, MA 01115 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Stephen L. Kuhn, Vice President and Secretary 1500 Main Street, Suite 2800, Springfield, MA 01115 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 413-226-1000 ---------------------------- Date of fiscal year end: 12/31 ------------------ Date of reporting period: 6/30/05 ------------------ Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORT TO STOCKHOLDERS. Attached hereto is the semi-annual shareholder report transmitted to shareholders pursuant to Rule 30e-1 of the Investment Company Act of 1940, as amended. MassMutual CORPORATE INVESTORS REPORT for the SIX MONTHS ENDED 6/30/05 MASSMUTUAL CORPORATE INVESTORS c/o Babson Capital Management LLC 1500 Main Street, Suite 600 Springfield, Massachusetts 01115 (413) 226-1516 ADVISER Babson Capital Management LLC 1500 Main Street Springfield, Massachusetts 01115 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG LLP Boston, Massachusetts 02110 COUNSEL TO THE TRUST Ropes & Gray LLP Boston, Massachusetts 02110 CUSTODIAN Citibank, N.A. New York, New York 10043 TRANSFER AGENT & REGISTRAR Shareholder Financial Services, Inc. P.O. Box 173673 Denver, Colorado 80217-3673 1-800-647-7374 Internet website: www.babsoncapital.com/mci 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 the New York Stock Exchange listings. The Trust's investment objective is to maintain a portfolio of securities providing a fixed yield while providing an opportunity for capital gains. The Trust's principal investments are privately placed, below-investment grade, long-term corporate debt obligations with equity features such as warrants, conversion rights, or other equity features and, occasionally, preferred stocks. The Trust typically purchases these investments, which are not publicly tradable, directly from their issuers, which tend to be smaller companies. In addition, the Trust may temporarily invest, subject to certain limitations, in marketable investment grade debt securities, other marketable debt securities (including high yield securities) and marketable common stocks. Babson Capital Management LLC 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 MassMutual Corporate Investors files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. This information is available (i) on the U.S. Securities and Exchange Commission's website at http://www.sec.gov; and (ii) at the U.S. Securities and Exchange Commission'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 MassMutual Corporate Investors have delegated proxy voting responsibilities relating to the voting of securities held by the Trust to Babson Capital Management LLC. A description of Babson Capital's proxy voting policies and procedures is available (1) without charge, upon request, by calling, tollfree 866-399-1516; (2) on MassMutual Corporate Investors' website: http://www.babsoncapital.com/mci; and (3) on the U.S. Securities and Exchange Commission ("SEC") website at http://www.sec.gov. Information regarding how the Trust voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (1) on MassMutual Corporate Investors' website: http://www.babsoncapital.com/mci; and (2) on the SEC's website at http://www.sec.gov. TO OUR SHAREHOLDERS August 9, 2005 We are pleased to present the June 30, 2005 Semi-Annual Report of MassMutual Corporate Investors (the "Trust"). At the Trust's Quarterly Board of Trustees Meeting, which was held on July 15, 2005, the Trustees announced that Stuart H. Reese had stepped down as Trustee and Chairman of the Board of Trustees as a result of his new position as President and CEO of Massachusetts Mutual Life Insurance Company ("MassMutual"). Subsequently, Roger W. Crandall, former President of the Trust, was appointed as a Trustee and elected to succeed Mr. Reese as Chairman of the Board of Trustees. Mr. Crandall currently serves as Chairman of Babson Capital Management LLC ("Babson"), the Trust's investment advisor, and Executive Vice President and Chief Investment Officer of MassMutual, Babson's parent company. In addition, the Trustees appointed Michael H. Brown as a Trustee, thereby increasing the size of the Board from seven to eight. Mr. Brown recently retired from Morgan Stanley, where he held the role of Managing Director in the Fixed Income Division. Mr. Brown has 24 years of investment experience. The Board of Trustees elected me, Clifford M. Noreen, to succeed Mr. Crandall as President of the Trust at their July 15, 2005 meeting. I was previously a Vice President of the Trust, and am currently the head of the Corporate Securities Group at Babson, where I oversee all corporate credit related investments, including public and private bonds, mezzanine, and private equity investments, as well as structured credit products. Prior to this role, I was responsible for all public corporate bond investments for Babson. I look forward to serving as President of the Trust. The Trust's Board of Trustees declared a quarterly dividend of 46 cents per share, payable on August 12, 2005 to shareholders of record on July 29, 2005. A dividend of 46 cents per share was paid in the previous quarter. U.S. equity markets, as measured by several broad market indices, posted mixed returns. During the quarter ended June 30, 2005, large stocks, as approximated by the Dow Jones Industrial Average, decreased 1.63%, while smaller stocks, as approximated by the Russell 2000 Index, increased 4.32%. For the six months ended June 30, 2005, returns were -3.65% and -1.25%, respectively. U.S. fixed income markets, as measured by selected indices, increased during the quarter. The Lehman Brothers Government/Credit Index and the Lehman Brothers U.S. Corporate High Yield Index increased 3.44% and 2.76%, respectively, for the quarter. For the six months ended June 30, 2005, returns were 2.75% and 1.11%, respectively. For the quarter ended June 30, 2005, the Trust earned 47 cents per share. The Trust earned 46 cents per share in the previous quarter. The Trust's net assets as of June 30, 2005 totaled $233,074,253 or $25.82 per share compared to $224,686,048 or $24.94 per share on March 31, 2005. This translated into a portfolio return of 5.47% for the quarter, and 8.07% for the six months ended June 30, 2005, based on the change in the Trust's net assets assuming the reinvestment of all dividends. Long term, the Trust's portfolio had average annualized returns of 21.79%, 11.18%, 14.97%, and 15.30% for the 1-, 5-, 10- and 25- year time periods ended June 30, 2005, respectively, based on change in net assets with the reinvestment of all dividends. During the quarter, the Trust made private placement investments in three new issuers and closed one "follow on" investment, totaling approximately $6.9 million. The follow on investment purchased by the Trust was in Tomah Holdings, Inc. The three new issuers the Trust invested in were AmerCable, Inc., Arrow Tru-Line Holdings, Inc., and Consolidated Foundries Holdings. The weighted average coupon of these investments was 12.00%. (A brief description of these investments can be found in the Schedule of Investments.) Thank you for your continued interest in and support of MassMutual Corporate Investors. Sincerely, /s/ Clifford M. Noreen Clifford M. Noreen President PORTFOLIO COMPOSITION AS OF 06/30/05* [PIE CHART APPEARS HERE] Public High Yield Debt 31% Public Equity 4% Private/Restricted Equity 15% Private Investment Grade Debt 3% Private High Yield Debt 39% Cash & Short Term Investments 8% *Based on market value of total investments CONSOLIDATED STATEMENT OF MASSMUTUAL CORPORATE INVESTORS ASSETS AND LIABILITIES June 30, 2005 (Unaudited) ASSETS: Investments (See Consolidated Schedule of Investments) Corporate restricted securities at fair value (Cost - $162,564,816) $ 161,345,878 Corporate public securities at market value (Cost - $72,041,181) 75,877,534 Short-term securities at cost plus earned discount which approximates market value 16,646,292 ------------- 253,869,704 Cash 3,056,767 Interest receivable 4,926,162 Receivable for investments sold 3,113,140 Other assets 12,805 ------------- TOTAL ASSETS $ 264,978,578 ============= LIABILITIES: Payable for investments purchased $ 937,844 Management fee payable 853,382 Note payable 20,000,000 Revolving Credit Agreement 9,000,000 Interest payable 215,183 Accrued expenses 119,402 Accounts payable 40,788 Accrued taxes payable (See Footnote 2.D) 737,726 ------------- TOTAL LIABILITIES 31,904,325 ============= NET ASSETS: Common shares, par value $1.00 per share; an unlimited number authorized 9,028,531 Additional paid-in capital 105,546,598 Retained net realized gain on investments, prior years 100,547,585 Undistributed net investment income 5,559,944 Undistributed net realized gain on investments 10,510,549 Net unrealized appreciation of investments 1,881,046 TOTAL NET ASSETS 233,074,253 ------------- TOTAL LIABILITIES AND NET ASSETS $ 264,978,578 ============= COMMON SHARES ISSUED AND OUTSTANDING 9,028,531 ============= NET ASSET VALUE PER SHARE $ 25.82 ============= See Notes to Consolidated Financial Statements. - -------------------------------------------------------------------------------- 2 CONSOLIDATED STATEMENT OF OPERATIONS MASSMUTUAL CORPORATE INVESTORS For the six months ended June 30, 2005 (Unaudited) INVESTMENT INCOME: Interest $ 11,079,490 Dividends 246,209 ------------- TOTAL INVESTMENT INCOME 11,325,699 ------------- EXPENSES: Management fees 1,582,418 Interest 909,469 Trustees' fees and expenses 90,000 Transfer agent/registrar's expenses 24,000 Reports to shareholders 60,000 Professional fees 175,200 Other 51,067 ------------- TOTAL EXPENSES 2,892,154 ------------- NET INVESTMENT INCOME ($0.93 PER SHARE) 8,433,545 ------------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments 8,120,138 Net change in unrealized appreciation of investments before taxes 1,739,449 Provision for taxes (929,143) ------------- NET GAIN ON INVESTMENTS 8,930,444 ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 17,363,989 ============= See Notes to Consolidated Financial Statements. - -------------------------------------------------------------------------------- 3 CONSOLIDATED STATEMENT OF CASH FLOWS MASSMUTUAL CORPORATE INVESTORS For the six months ended June 30, 2005 (Unaudited) NET DECREASE IN CASH: Cash flows from operating activities: Interest and dividends received $ 9,533,199 Interest expense paid (904,598) Operating expenses paid (1,809,819) Income taxes paid (2,403,067) ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 4,415,715 ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases/Proceeds/Maturities from short-term portfolio securities, net (14,261,773) Purchase of portfolio securities (42,832,447) Proceeds from disposition of portfolio securities 60,587,075 ------------- NET CASH PROVIDED BY INVESTING ACTIVITIES 3,492,855 ------------- NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES 7,908,570 ------------- Cash flows from financing activities: Cash dividends paid from net investment income (10,788,334) Receipts for shares issued on reinvestment of dividends 1,349,414 ------------- NET CASH USED FOR FINANCING ACTIVITIES (9,438,920) ------------- NET DECREASE IN CASH (1,530,350) Cash - beginning of year 4,587,117 ------------- CASH - END OF PERIOD $ 3,056,767 ============= Reconciliation of net increase in net assets to net cash provided by operating and investing activities: NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 17,363,989 ------------- Increase in investments (6,643,466) Increase in interest and dividends receivable (1,213,301) Increase in receivable for investments sold (1,117,505) Increase in other assets (12,805) Increase in payable for investments purchased 827,844 Increase in management fee payable 227,307 Increase in interest payable 4,871 Decrease in accrued expenses (95,228) Increase in accounts payable 40,788 Decrease in accrued taxes payable (1,473,924) ------------- TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (9,455,419) ------------- NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES $ 7,908,570 ============= See Notes to Consolidated Financial Statements. - -------------------------------------------------------------------------------- 4 CONSOLIDATED STATEMENTS OF MASSMUTUAL CORPORATE INVESTORS CHANGES IN NET ASSETS For the six months ended June 30, 2005 and the year ended December 31, 2004 For the six months ended For the 06/30/2005 year ended (Unaudited) 12/31/2004 ------------- ------------- INCREASE IN NET ASSETS: OPERATIONS: Net investment income $ 8,433,545 $ 17,949,347 Net realized gain on investments before taxes 8,120,138 7,032,428 Net change in unrealized appreciation of investments before taxes 1,739,449 19,012,223 Provision for taxes (929,143) (2,377,709) ------------- ------------- Net increase in net assets resulting from operations 17,363,989 41,616,289 Receipts for shares issued on reinvestment of dividends 1,349,414 2,432,514 Common shares issued (2005 - 50,104; 2004 - 105,634) Dividends to shareholders from: Net investment income (2005 - $0.46 per share; 2004 - $2.16 per share) (4,144,298) (19,329,769) ------------- ------------- TOTAL INCREASE IN NET ASSETS 14,569,105 24,719,034 NET ASSETS, BEGINNING OF YEAR 218,505,148 193,786,114 ------------- ------------- NET ASSETS, END OF PERIOD / YEAR $ 233,074,253 $ 218,505,148 ============= ============= See Notes to Consolidated Financial Statements. - -------------------------------------------------------------------------------- 5 CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS MASSMUTUAL CORPORATE INVESTORS Selected data for each common share outstanding:
For the six months ended For the years ended December 31, 06/30/2005 ----------------------------------------------------------------------- (Unaudited) 2004 2003 2002 2001 2000 ----------- ----------- ----------- ----------- ----------- ----------- Net asset value: Beginning of year $ 24.34 $ 21.84 $ 19.40 $ 20.07 $ 20.74 $ 22.00 Net investment income 0.93 2.00 1.44 1.53 1.70 1.96 Net realized and unrealized gain (loss) on investments 0.99 2.64 2.83 (0.59) (0.53) (0.46) ----------- ----------- ----------- ----------- ----------- ----------- Total from investment operations 1.92 4.64 4.27 0.94 1.17 1.50 ----------- ----------- ----------- ----------- ----------- ----------- Dividends from net investment income to common shareholders (0.46) (2.16) (1.84) (1.44) (1.79) (1.96) Distributions from net realized gain on investments to common shareholders 0.00 0.00 0.00 (0.18) (0.09) (0.80) Change from issuance of shares 0.02 0.02 0.01 0.01 0.04 0.00 ----------- ----------- ----------- ----------- ----------- ----------- Total distributions (0.44) (2.14) (1.83) (1.61) (1.84) (2.76) ----------- ----------- ----------- ----------- ----------- ----------- Net asset value: End of period/year $ 25.82 $ 24.34 $ 21.84 $ 19.40 $ 20.07 $ 20.74 ----------- ----------- ----------- ----------- ----------- ----------- Per share market value: End of period/year $ 29.99 $ 28.50 $ 22.90 $ 19.49 $ 20.70 $ 22.00 =========== =========== =========== =========== =========== =========== Total investment return Market value 7.05%* 36.10% 27.53% 1.35% 1.88% 17.55% Net asset value** 8.07%* 22.76% 22.61% 4.80% 5.91% 7.28% Net assets (in millions): End of period/year $ 233.07 $ 218.51 $ 193.79 $ 171.03 $ 175.11 $ 178.13 Ratio of operating expenses to average net assets 0.88%* 1.93% 2.04% 1.82% 1.72% 1.47% Ratio of interest expense to average net assets 0.41%* 0.77% 0.82% 0.86% 0.84% 0.58% Ratio of total expenses to average net assets 1.29%* 2.70% 2.86% 2.68% 2.56% 2.05% Ratio of net investment income to average net assets 3.75%* 8.68% 6.95% 7.65% 8.20% 8.56% Portfolio turnover 18.23%* 53.45% 56.10% 34.02% 24.48% 59.75%
* Percentages represent results for the period and are not annualized. ** 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 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. See Notes to Consolidated Financial Statements. - -------------------------------------------------------------------------------- 6 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities - 69.23%: (A) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- Private Placement Investments - 62.68% 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 $ 2,007,245 Warrant, exercisable until 2012, to purchase common stock at $.02 per share (B) 2,323 shs. 04/08/04 -- 23 ------------- ------------- 2,125,000 2,007,268 ------------- ------------- A W C HOLDING COMPANY A manufacturer and distributor of aluminum and vinyl windows and doors in the Southwest and Southeast regions of the U.S. 12% Senior Subordinated Note due 2012 $ 2,125,000 05/18/04 1,929,934 2,035,324 Limited Partnership interest of AWC Investments, LLC (B) 250 uts. 05/18/04 212,500 191,251 ------------- ------------- 2,142,434 2,226,575 ------------- ------------- ADORN, INC. A manufacturer of wall panels, cabinets, moldings and countertops for houses and recreational vehicles. 12.5% Subordinated Note due 2010 $ 2,125,000 02/29/00 1,949,590 2,125,000 Warrant, exercisable until 2010, to purchase common stock at $.02 per share (B) 364 shs. 02/29/00 307,759 343,901 ------------- ------------- 2,257,349 2,468,901 ------------- ------------- AMERCABLE, INC. A manufacturer of electric power, instrumentation and control cables, primarily for the mining and oil and gas industries. 12% Senior Subordinated Note due 2013 $ 2,046,296 04/08/05 1,925,768 2,045,262 Limited Partnership Interest (B) 79 uts. 04/07/05 78,704 70,830 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 125 shs. 04/08/05 122,463 1 ------------- ------------- 2,126,935 2,116,093 ------------- ------------- AMERICA'S BODY COMPANY, INC./LCP HOLDING CO. A designer and manufacturer of commercial work vehicles. 12% Preferred Stock Series C (B) 395 shs. 12/16/03 1,750,000 3,500,001 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 80 shs. * 513,334 1 ------------- ------------- 2,263,334 3,500,002 ------------- ------------- AMERICAN HOSPICE MANAGEMENT HOLDING LLC A for-profit hospice care provider in the United States. 12% Senior Subordinated Note due 2010 $ 2,125,000 01/22/04 1,904,408 2,188,750 Preferred Class A Unit (B) 2,525 uts. 01/22/04 252,500 227,250 Common Class B Unit (B) 3,042 uts. 01/22/04 -- 239,422 ------------- ------------- 2,156,908 2,655,422 ------------- -------------
*11/02/98 and 12/16/03. - -------------------------------------------------------------------------------- 7 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- 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 $ 1,516,661 $ 1,629,931 Common Stock (B) 497 shs. 05/18/05 497,340 447,606 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 130 shs. 05/18/05 112,128 1 ------------- ------------- 2,126,129 2,077,538 ------------- ------------- AUGUSTA SPORTSWEAR HOLDING CO. A manufacturer and distributor of athletic apparel, activewear and team uniforms. 12% Senior Subordinated Note due 2012 $ 1,686,800 12/31/04 1,571,674 1,707,079 Common Stock (B) 493 shs. * 492,975 443,682 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 137 shs. 12/31/04 119,482 1 ------------- ------------- 2,184,131 2,150,762 ------------- ------------- BEACON MEDICAL PRODUCTS, INC. A designer, manufacturer and marketer of medical air and gas distribution systems. Senior Secured Floating Rate Revolving Credit Facility due 2007 $ 230,636 04/09/02 230,636 231,025 Senior Secured Tranche A Floating Rate Note due 2008 $ 721,813 04/09/02 721,813 721,813 12% Senior Secured Note due 2010 $ 721,196 04/09/02 627,395 750,044 Limited Partnership Interest of Riverside Capital Appreciation Fund IV, L.P. (B) 11.16% int. 04/09/02 152,329 141,209 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 1,390 shs. 04/09/02 127,497 128,861 ------------- ------------- 1,859,670 1,972,952 ------------- ------------- BETA BRANDS LTD A manufacturer of hard candy and chocolate-coated products sold primarily to the Canadian market. 5% Promissory Note due 2009 (B) $ 195,498 03/31/04 195,498 -- Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 4,895 shs. 03/31/04 1 -- ------------- ------------- 195,499 -- ------------- ------------- BETTER MINERALS & AGGREGATES A producer of high grade industrial and specialty silica sands. 14% Redeemable Preferred Stock (B) 997 shs. 09/30/99 545,858 108,991 Convertible Preferred Stock Series A and B, convertible into common stock at $9.26 per share (B) 126,003 shs. 12/19/96 1,166,700 -- Common Stock (B) 20,027 shs. 09/30/99 799,068 -- Warrants, exercisable until 2005 and 2010, to purchase common stock at $.01 per share (B) 11,399 shs. ** 128,502 -- ------------- ------------- 2,640,128 108,991 ------------- -------------
*12/31/04 and 03/31/05. **12/19/96 and 09/30/99. - -------------------------------------------------------------------------------- 8 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- BRAMPTON FASTENER CO. LTD A value-added national distributor of maintenance, repair and operating supplies such as fasteners, electrical components and tools. Limited Partnership Interest of Brafasco Investors LLC (B) 82,500 uts. 12/31/04 $ 82,500 $ 74,250 ------------- ------------- C & M CONVEYOR, INC. A manufacturer and supplier of material handling systems to the corrugated sheet and container industry. 9.5% Senior Secured Term Note due 2007 $ 996,235 09/13/02 996,235 1,010,056 11% Senior Subordinated Note due 2010 $ 838,102 09/13/02 800,508 861,633 Common Stock (B) 316,265 shs. 09/13/02 316,265 253,012 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 137,175 shs. 09/13/02 60,250 1,372 ------------- ------------- 2,173,258 2,126,073 ------------- ------------- CAINS FOODS, L.P. A producer of mayonnaise and sauce products for both the retail and food service markets. Limited Partnership Interest (B) 117 uts. 09/29/95 158,369 599,276 ------------- ------------- CAPESUCCESS LLC A provider of diversified staffing services. Preferred Membership Interests (B) 1,882 uts. 04/29/00 8,396 420 Common Membership Interests (B) 24,318 uts. 04/29/00 108,983 5,442 ------------- ------------- 117,379 5,862 ------------- ------------- CAPITAL SPECIALTY PLASTICS, INC. A producer of desiccant strips used for packaging pharmaceuticals products. Common Stock (B) 109 shs. * 503 2,156 ------------- ------------- CHEMED CORPORATION An operator in the residential and commercial repair-andmaintenance service industry through two wholly owned subsidiaries, Roto-Rooter and Service America. Common Stock 38,000 shs. 02/24/04 950,000 1,553,440 ------------- ------------- COEUR, INC. A producer of proprietary, disposable power injection syringes. Senior Secured Floating Rate Revolving Credit Facility due 2010 $ 63,406 02/02/05 63,406 62,501 8.75% Senior Secured Term Note due 2010 $ 570,652 04/30/03 570,652 590,485 11.5% Senior Subordinated Note due 2011 $ 424,819 04/30/03 391,194 440,026 Common Stock (B) 126,812 shs. 04/30/03 126,812 114,131 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 87,672 shs. 04/30/03 40,804 877 ------------- ------------- 1,192,868 1,208,020 ------------- -------------
*12/30/97 and 05/29/99. - -------------------------------------------------------------------------------- 9 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- COINING CORPORATION OF AMERICA LLC A manufacturer of close tolerance parts and metal stampings. Senior Secured Floating Rate Revolving Credit Facility due 2006 $ 140,432 01/07/02 $ 140,432 $ 136,954 Senior Secured Floating Rate Tranche A Note due 2007 $ 889,517 06/26/01 889,517 833,655 13% Senior Secured Tranche B Note due 2006 $ 648,148 06/26/01 648,148 634,061 Limited Partnership Interest (B) 6.38% int. 06/26/01 324,074 259,259 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 107,036 shs. 06/26/01 79,398 1,070 ------------- ------------- 2,081,569 1,864,999 ------------- ------------- COLIBRI HOLDINGS CORPORATION A manufacturer and distributor of wild bird feeders and accessories. 12.5% Senior Subordinated Note due 2008 $ 1,593,750 09/22/00 1,445,592 1,593,750 28% Preferred Stock (B) 71 shs. 11/02/01 70,833 169,337 20% Preferred Stock (B) 66 shs. 03/09/04 66,406 79,687 Common Stock (B) 1,429 shs. 09/22/00 531,250 101,794 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 843 shs. 09/22/00 265,625 60,065 ------------- ------------- 2,379,706 2,004,633 ------------- ------------- CONNOR SPORT COURT INTERNATIONAL, INC. A designer and manufacturer of outdoor and indoor synthetic sports flooring and other temporary flooring products. 12% Senior Subordinated Note due 2012 $ 2,001,121 * 1,846,067 1,983,032 Limited Partnership Interest (B) 189,585 uts. ** 189,586 170,627 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 174 shs. * 160,233 2 ------------- ------------- 2,195,886 2,153,661 ------------- ------------- CONSOLIDATED FOUNDRIES HOLDINGS A manufacturer of engineered cast metal components for the global aerospace and defense industries. 12% Senior Subordinated Note due 2013 $ 2,185,714 06/15/05 2,085,228 2,174,708 Common Stock (B) 364 shs. 06/15/05 364,286 327,861 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 103 shs. 06/15/05 100,668 1 ------------- ------------- 2,550,182 2,502,570 ------------- ------------- CORVEST GROUP, INC. A manufacturer and distributor of promotional products. 12% Senior Subordinated Note due 2007 $ 3,863,636 *** 3,773,581 3,477,272 Common Stock (B) 56 shs. *** 96,591 24,145 Limited Partnership Interest (B) 19.32% int. *** 297,203 71,692 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 324 shs. *** 284,869 139,251 ------------- ------------- 4,452,244 3,712,360 ------------- -------------
*08/12/04 and 01/18/05. **08/12/04 and 01/14/05. ***03/05/99 and 03/24/99. - -------------------------------------------------------------------------------- 10 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- DELSTAR HOLDING CORPORATION A manufacturer of plastic netting for a wide variety of industries. Convertible Preferred Stock, convertible into common stock at $10 per share (B) 3,514 shs. 10/05/01 $ 427,153 $ 395,243 Convertible Preferred Stock, convertible into common stock at $11.84 per share (B) 412 shs. 09/16/04 48,793 46,353 ------------- ------------- 475,946 441,596 ------------- ------------- DEXTER MAGNETICS TECHNOLOGIES, INC. A designer, fabricator, assembler and distributor of industrial magnets and subassemblies in North America and Europe. Common Stock (B) 585 shs. 07/19/01 585,145 694,854 Warrant, exercisable until 2006, to purchase common stock at $.01 per share (B) 297 shs. 07/19/01 250,611 352,183 ------------- ------------- 835,756 1,047,037 ------------- ------------- DIRECTED ELECTRONICS, INC. A designer and distributor of brand name automotive security systems, audio products and installation accessories. Class B Common Stock (B) 36,633 shs. 12/22/99 -- 560,480 Limited Partnership Interest (B) 8.70% int. 12/22/99 1 839,839 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 48,569 shs. 12/22/99 -- 743,106 ------------- ------------- 1 2,143,425 ------------- ------------- 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) 27.19% int. 08/27/98 734,090 -- Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 2,088,103 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 2,088,103 ------------- ------------- DWYER GROUP, INC. A franchiser of a variety of home repair services. 14% Senior Subordinated Note due 2011 $ 1,859,375 10/30/03 1,694,715 1,915,156 Common Stock (B) 6,906 shs. ** 690,600 506,928 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 149,255 ------------- ------------- 2,571,784 2,571,339 ------------- ------------- 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 -- ------------- -------------
*10/24/96 and 08/28/98. **10/30/03 and 01/02/04. - -------------------------------------------------------------------------------- 11 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- EAGLE PACK PET FOODS, INC. A manufacturer of premium pet food sold through independent pet stores. 14% Senior Subordinated Note due 2011 $ 1,062,500 09/24/04 $ 1,025,647 $ 1,092,331 Warrant, exercisable until 2011, to purchase common stock at $.02 per share (B) 4,085 shs. 09/24/04 39,464 41 ------------- ------------- 1,065,111 1,092,372 ------------- ------------- EAST RIVER VENTURES I, L.P. An acquirer of controlling or substantial interests in other entities. Limited Partnership Interest (B) 0.14% int. 01/01/01 28,718 22,685 ------------- ------------- ENZYMATIC THERAPY, INC. A manufacturer and distributor of branded natural medicines and nutritional supplements. 13% Senior Subordinated Note due 2006 (B) $ 1,593,750 09/17/02 1,349,781 1,434,375 Limited Partnership Interest (B) 1.32% int. 03/30/00 531,250 5,313 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 478 shs. 03/30/00 255,000 5 ------------- ------------- 2,136,031 1,439,693 ------------- ------------- EURO-PRO CORPORATION A designer, marketer and distributor of floor care, steam cleaning and small kitchen products and appliances. 13.25% Senior Subordinated Note due 2011 $ 2,125,000 09/09/03 2,094,361 1,700,000 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 43,878 shs. 09/09/03 35,641 439 ------------- ------------- 2,130,002 1,700,439 ------------- ------------- EVANS CONSOLES, INC. A designer and manufacturer of consoles and control center systems. Limited Partnership Interest of CM Equity Partners (B) 2.24% int. 02/11/98 128,464 -- Common Stock (B) 90,000 shs. 05/06/04 6 -- ------------- ------------- 128,470 -- ------------- ------------- HIGHGATE CAPITAL LLC An acquirer of controlling or substantial interests in manufacturing and marketing entities. Series A Preferred Units (B) 1.19% int. 7/21/94 385,258 2,723 ------------- ------------- 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 * 1,855,165 2,116,061 Common Stock (B) 63 shs. * 62,742 56,466 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 200 shs. * 199,501 2 ------------- ------------- 2,117,408 2,172,529 ------------- -------------
*06/30/04 and 08/19/04. - -------------------------------------------------------------------------------- 12 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- HUSSEY SEATING CORPORATION A manufacturer of spectator seating products. Senior Secured Floating Rate Revolving Note due 2006 $ 1,544,856 06/12/96 $ 1,544,846 $ 772,430 Senior Secured Floating Rate Note due 2006 $ 433,125 * 433,125 216,563 12% Senior Subordinated Note due 2006 $ 1,350,000 03/31/03 1,350,000 13,500 Common Stock (B) 4,771 shs. 03/12/04 225,000 -- ------------- ------------- 3,552,971 1,002,493 ------------- ------------- INTEGRATION TECHNOLOGY SYSTEMS, INC. A manufacturer of steel protective computer and network systems for the industrial and office environments. 16.5% Senior Secured Note due 2006 $ 1,548,607 03/01/04 1,594,505 1,197,573 Common Stock (B) 228 shs. 06/01/00 262,200 -- ------------- ------------- 1,856,705 1,197,573 ------------- ------------- JASON, INC. A diversified manufacturing company serving various industrial markets. 13% Senior Subordinated Note due 2008 $ 963,687 08/04/00 899,326 983,738 14% Cumulative Redeemable Preferred Stock Series A (B) 289 shs. 08/04/00 289,224 290,630 Limited Partnership Interests of Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,361 664,880 Warrants, exercisable until 2008 and 2009, to purchase common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 46,927 ------------- ------------- 2,190,323 1,986,175 ------------- ------------- 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 1,497,247 1,595,232 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 11 ------------- ------------- 1,598,356 1,595,243 ------------- ------------- KEEPSAKE QUILTING, INC. A seller of quilting fabrics, books, patterns, kits and notions to consumers. Senior Secured Floating Rate Revolving Note due 2005 $ 36,693 06/16/00 36,693 36,700 Senior Secured Floating Rate Tranche A Note due 2007 $ 550,392 06/16/00 550,392 551,659 12% Senior Secured Tranche B Note due 2008 $ 550,392 06/16/00 527,711 561,400 Limited Partnership Interest of Riverside XVI Holding Company, L.P. (B) 5.29% int. 06/12/00 333,490 346,731 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 1,108 shs. 06/12/00 45,866 116,231 ------------- ------------- 1,494,152 1,612,721 ------------- ------------- KELE AND ASSOCIATES, INC. A distributor of building automation control products. 12% Senior Subordinated Note due 2012 $ 1,831,548 02/27/04 1,672,484 1,844,567 Common Stock (B) 35 shs. 02/27/04 462,035 415,776 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 11 shs. 02/27/04 7,793 -- ------------- ------------- 2,142,312 2,260,343 ------------- -------------
*06/12/96 and 08/03/01. - -------------------------------------------------------------------------------- 13 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- KENAN-ADVANTAGE TRANSPORT COMPANY A transporter of light petroleum, petrochemicals, lubricants and residual fuels. 12.5% Senior Subordinated Note due 2009 $ 1,817,435 04/30/01 $ 1,817,435 $ 1,835,609 Preferred Stock (B) 307 shs. 04/30/01 307,000 614,000 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 269 shs. 04/30/01 14 3 ------------- ------------- 2,124,449 2,449,612 ------------- ------------- KEYSTONE NORTH AMERICA, INC. An operator of funeral homes in North America. Common Stock (B) 49,216 shs. 02/08/05 236,709 387,822 ------------- ------------- Lancaster Laboratories, Inc. A laboratory testing operation in the United States. Common Stock (B) 860,842 shs. 09/25/00 589,813 1,530,147 ------------- ------------- LIH INVESTORS, L.P. A manufacturer and marketer of a broad line of external accessories for new and used sport utility vehicles, trucks and vans. 12.5% Senior Subordinated Note due 2008 $ 3,845,000 * 3,507,704 3,845,000 Common Stock (B) 5,800 shs. * 406,003 284,200 Warrant, exercisable until 2006, to purchase common stock at $.11 per share (B) 15,572 shs. * 602,127 763,028 ------------- ------------- 4,515,834 4,892,228 ------------- ------------- MAVERICK ACQUISITION COMPANY A manufacturer of capsules that cover the cork and neck of wine bottles. Senior Secured Floating Rate Tranche A Note due 2010 $ 783,582 09/03/04 783,582 774,777 12% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 276,715 322,489 Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 52,892 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 4 ------------- ------------- 1,158,539 1,150,162 ------------- ------------- MAXON CORPORATION A manufacturer of industrial combustion equipment and related shut-off valves and control valves. 12% Senior Subordinated Note due 2012 $ 962,215 09/30/04 876,479 960,758 8.75% Senior Subordinated Note due 2012 $ 1,281,112 09/30/04 1,281,112 1,294,269 Common Stock (B) 381,672 shs. 09/30/04 381,672 343,505 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 153,572 shs. 09/30/04 90,897 1,536 ------------- ------------- 2,630,160 2,600,068 ------------- -------------
*12/23/98 and 01/28/99. - -------------------------------------------------------------------------------- 14 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- MEDASSIST, INC. A provider of patient eligibility and accounts receivable management services to hospitals and physician practices. 12% Senior Subordinated Note due 2011 $ 2,125,000 05/01/03 $ 2,091,841 $ 2,146,250 8% Preferred Stock (B) 84 shs. 10/28/04 83,658 84,203 Common Stock (B) 26,185 shs. 10/02/04 35,088 36,030 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 83,214 shs. 05/01/03 40,675 113,836 ------------- ------------- 2,251,262 2,380,319 ------------- ------------- MOSS, INC. A manufacturer and distributor of large display and exhibit structures. Senior Secured Floating Rate Revolving Note due 2005 $ 100,860 03/24/05 100,860 100,860 Senior Secured Floating Rate Tranche A Note due 2007 $ 791,906 09/21/00 791,906 791,906 12% Senior Secured Tranche B Note due 2008 $ 336,200 09/21/00 318,813 336,200 Limited Partnership Interest of Riverside Capital Appreciation Fund I, L.P. (B) 37.37% int. * 311,481 389,333 Warrant, exercisable until 2008, to purchase common stock at $100 per share (B) 463 shs. 09/21/00 40,344 19,235 ------------- ------------- 1,563,404 1,637,534 ------------- ------------- MUSTANG VENTURES COMPANY A natural gas gathering and processing operation located in Oklahoma and Texas. Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 16,535 shs. 12/11/02 493,501 694,833 ------------- ------------- NEFF MOTIVATION, INC. A manufacturer and distributor of customized awards and sportswear to schools. 12.5% Senior Subordinated Note due 2011 $ 1,062,500 01/31/03 913,508 1,094,375 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 212 shs. 01/31/03 180,625 86,937 ------------- ------------- 1,094,133 1,181,312 ------------- ------------- NONNI'S FOOD COMPANY A producer and distributor of premium biscotti and bagel chips in North America. 12.25% Senior Subordinated Note due 2012 $ 1,863,462 03/29/04 1,856,139 1,938,000 10% Preferred Stock (B) 255 shs. 03/29/04 255,083 265,568 Common Stock (B) 6,455 shs. 03/29/04 6,455 48,025 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 8,622 shs. 03/29/04 7,323 64,080 ------------- ------------- 2,125,000 2,315,673 ------------- -------------
*09/20/00 and 05/23/02. - -------------------------------------------------------------------------------- 15 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount 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 $ 881,134 11.5% Senior Subordinated Note due 2012 $ 1,500,000 01/28/02 1,374,970 1,629,246 Common Stock (B) 312,500 shs. 01/28/02 312,500 213,750 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 243,223 shs. 01/28/02 162,045 164,176 ------------- ------------- 2,662,015 2,888,306 ------------- ------------- OLYMPIC SALES, INC. A boat retailer in Washington state, Oregon, California and British Columbia. 12% Senior Subordinated Note due 2006 $ 2,774,000 08/07/98 2,774,000 2,682,018 12% Senior Subordinated Note due 2008 $ 307,071 02/09/00 291,495 286,170 Limited Partnership Interest of Riverside VIII, VIII-A and VIII-B Holding Company, L.P. (B) 1,531,250 uts. * 1,555,820 1,106,616 Warrants, exercisable until 2007 and 2008, to purchase common stock at $.01 per share (B) 28,648 shs. ** 389,188 88,695 ------------- ------------- 5,010,503 4,163,499 ------------- ------------- PARADIGM PACKAGING, INC. A manufacturer of plastic bottles and closures for the nutritional, pharmaceutical, personal care and food packaging markets. 12% Senior Subordinated Note due 2008 $ 2,125,000 12/19/00 1,972,280 2,125,000 Membership Interests of MM/Lincap PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 478,125 ------------- ------------- 2,237,905 2,603,125 ------------- ------------- PRECISION DYNAMICS, INC. A manufacturer of custom-designed solenoid valves and controls. Senior Secured Floating Rate Revolving Credit Facility due 2005 $ 619,400 07/22/96 619,400 619,400 Senior Secured Floating Rate Term Note due 2005 $ 8,150 07/22/96 8,150 8,150 12% Senior Secured Term Note due 2005 $ 326,000 07/22/96 323,815 326,000 8% Preferred Stock (B) 456 shs. 07/22/96 232,046 232,046 Common Stock (B) 599 shs. 07/22/96 28,978 28,978 Warrant, exercisable until 2005, to purchase common stock at $.01 per share (B) 322 shs. 07/22/96 97,800 3 ------------- ------------- 1,310,189 1,214,577 ------------- -------------
*08/07/98, 02/23/99, 12/22/99 and 02/25/03. **08/07/98 and 02/09/00. - -------------------------------------------------------------------------------- 16 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- PROCESS CHEMICALS LLC A specialty chemical company that manufactures processed chemicals for the fertilizer, asphalt and concrete industries, Common Membership Interests 2 uts. * $ 4 $ 288,000 ------------- ------------- 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 -- ------------- ------------- QUALIS AUTOMOTIVE LLC A distributor of aftermarket automotive brake and chassis products 12% Senior Subordinated Note due 2012 $ 1,770,834 05/28/04 1,426,659 1,842,536 Common Stock (B) 354,166 shs. 05/28/04 354,166 318,749 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 377,719 shs. 05/28/04 377,719 3,777 ------------- ------------- 2,158,544 2,165,062 ------------- ------------- QUALSERV CORPORATION A provider of foodservice equipment and supplies, to major restaurant chains and their franchisees. 14% Senior Subordinated Note due 2012 $ 1,893,563 07/09/04 1,847,454 1,704,207 Limited Partnership Interest (B) 9.26% int. 07/09/04 259,146 181,402 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 528 shs. 07/09/04 49,061 5 ------------- ------------- 2,155,661 1,885,614 ------------- ------------- RIVER RANCH FRESH FOODS LLC A supplier of fresh produce to the retail and foodservice channels. 13% Senior Subordinated Note due 2011 $ 1,841,667 09/29/04 1,693,918 1,831,810 Limited Partnership Interest (B) 40,610 uts. 09/29/04 283,333 255,000 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 23,715 shs. 09/29/04 157,903 236 ------------- ------------- 2,135,154 2,087,046 ------------- ------------- ROYAL BATHS MANUFACTURING COMPANY A manufacturer and distributor of acrylic and cultured marble bathroom products. 12.5% Senior Subordinated Notes due 2011 $ 1,062,500 11/14/03 954,548 1,047,344 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 1 ------------- ------------- 1,077,494 1,047,345 ------------- -------------
*07/31/97 and 01/04/99. **11/14/01 and 08/12/94. - -------------------------------------------------------------------------------- 17 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- SAFETY SPEED CUT MANUFACTURING COMPANY, INC. A manufacturer of vertical panel saws and routers for the wood working industry. Senior Secured Floating Rate Tranche A Note due 2007 $ 1,036,431 06/02/99 $ 1,036,431 $ 1,036,431 12% Senior Secured Tranche B Note Due 2007 $ 1,130,652 06/02/99 1,130,652 1,130,652 Class B Common Stock (B) 1,480 shs. 06/02/99 256,212 508,125 ------------- ------------- 2,423,295 2,675,208 ------------- ------------- SAVAGE SPORTS HOLDING, INC. A manufacturer of sporting firearms. 12% Senior Subordinated Note due 2012 $ 1,538,793 09/10/04 1,431,271 1,571,126 Common Stock (B) 586 shs. 09/10/04 586,207 527,589 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 1 ------------- ------------- 2,131,056 2,098,716 ------------- ------------- SHELTER ACQUISITION, INC. A distributor of roofing supplies and products throughout the Midwest. 12.5% Senior Subordinated Note due 2008 $ 1,517,857 08/01/02 1,382,207 1,517,857 Common Stock (B) 901,775 shs. * 901,775 1,352,663 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 263,444 shs. 08/01/02 216,446 395,165 ------------- ------------- 2,500,428 3,265,685 ------------- ------------- SNYDER INDUSTRIES, INC. A manufacturer of proprietary rotationally molded polyethylene containers. 12.25% Senior Subordinated Note due 2008 $ 3,125,000 12/06/99 2,889,408 3,125,000 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 513 shs. 12/06/99 426,136 277,020 ------------- ------------- 3,315,544 3,402,020 ------------- ------------- SPECIALTY FOODS GROUP, INC. A manufacturer and distributor of branded meat products. Limited Partnership Interest of MHD Holdings LLC (B) 1.43% int. 08/29/00 579,736 140,156 ------------- ------------- STRATEGIC EQUIPMENT & SUPPLY CORPORATION, INC. A provider of kitchen and restaurant design, equipment fabrication and installation services. Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 106,539 shs. 01/14/00 658,751 -- ------------- ------------- SYNVENTIVE EQUITY LLC A manufacturer of hot runner systems used in the plastic injection molding process. 12% Senior Subordinated Note due 2007 $ 1,841,667 08/21/03 1,786,975 1,878,500 Limited Partnership Interest (B) 1.99% int. 08/20/03 283,333 1,405,332 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 86,780 shs. 08/21/03 85,000 430,429 ------------- ------------- 2,155,308 3,714,261 ------------- -------------
*08/01/02, 01/17/03 and 12/31/04. - -------------------------------------------------------------------------------- 18 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- TERRA RENEWAL SERVICES, INC. A provider of wastewater residual management and required environmental reporting, permitting, nutrient management planning and record keeping to companies involved in poultry and food processing. Senior Secured Floating Rate Term A Note due 2010 $ 298,730 03/01/05 $ 298,730 $ 297,978 Senior Secured Floating Rate Term B Note due 2012 $ 368,262 03/01/05 368,262 367,062 12% Senior Subordinated Note due 2013 $ 1,025,391 03/01/05 970,770 1,020,228 Limited Partnership Interest of Saw Mill Capital Fund V, L.P. (B) 412 uts. 03/01/05 412,207 370,989 Warrant, exercisable until 2015, to purchase common stock at $.01 per share (B) 65 shs. 03/01/05 56,171 1 ------------- ------------- 2,106,140 2,056,258 ------------- ------------- THE TRANZONIC COMPANIES A producer of commercial and industrial supplies, such as safety products, janitorial supplies, work apparel, washroom and restroom supplies and sanitary care products. 13% Senior Subordinated Note due 2009 $ 2,712,000 02/05/98 2,509,431 2,712,000 Common Stock (B) 630 shs. 02/04/98 630,000 348,705 Warrant, exercisable until 2006, to purchase common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 245,754 ------------- ------------- 3,508,263 3,306,459 ------------- ------------- TIDEWATER HOLDINGS, INC. An operator of a barge transportation line on the Columbia/Snake River system. 17% Preferred Stock (B) 560 shs. 12/23/02 560,000 756,000 Convertible Preferred Stock, convertible into common stock at $1,000 per share (B) 1,120 shs. 07/25/96 1,120,000 1,512,000 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 474 shs. 07/25/96 48,216 639,576 ------------- ------------- 1,728,216 2,907,576 ------------- ------------- TOMAH HOLDINGS, INC. A manufacturer of specialty chemicals. 16% Senior Subordinated Note due 2011 $ 1,461,764 12/08/03 1,414,728 1,520,235 16% Preferred Stock Series A (B) 37 shs. 12/08/03 631,630 660,890 Common Stock (B) 15,806 shs. 12/08/03 131,471 204,989 ------------- ------------- 2,177,829 2,386,114 ------------- ------------- TRONAIR, INC. A designer, engineer and manufacturer of ground support equipment for the business, commuter and commercial aviation markets. 10.5% Senior Secured Term Note due 2008 $ 1,184,565 01/20/00 1,184,565 1,195,309 12% Senior Subordinated Note due 2010 $ 1,326,500 01/20/00 1,269,707 1,350,481 Common Stock (B) 227,400 shs. 01/20/00 227,400 181,920 Warrant, exercisable until 2010, to purchase common stock at $1 per share (B) 260,563 shs. 01/20/00 98,540 2,606 ------------- ------------- 2,780,212 2,730,316 ------------- -------------
- -------------------------------------------------------------------------------- 19 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- TRUSTILE DOORS, INC. A manufacturer and distributor of interior doors. 12.5% Senior Subordinated Note due 2010 $ 1,062,500 04/11/03 $ 987,743 $ 1,060,557 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 5,781 shs. 04/11/03 95,625 58 ------------- ------------- 1,083,368 1,060,615 ------------- ------------- TUBULAR TEXTILE MACHINERY A designer, manufacturer, seller and servicer of finishing machinery for the knit and woven segments of the global textile industry. 12% Senior Subordinated Note due 2014 $ 1,234,551 05/28/04 1,112,536 1,201,900 8.75% Senior Secured Note due 2011 $ 716,292 05/28/04 716,292 704,241 Common Stock (B) 674,157 shs 05/28/04 674,157 505,618 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 203,912 shs. 05/28/04 130,789 2,039 ------------- ------------- 2,633,774 2,413,798 ------------- ------------- TVI, INC. A retailer of used clothing in the United States, Canada and Australia. Common Stock (B) 354,167 shs. 05/02/00 354,167 382,500 ------------- ------------- U S M HOLDINGS CORPORATION A provider of facility maintenance services to retail and corporate clients with multiple locations. 12% Senior Subordinated Note due 2011 $ 894,737 08/06/03 766,724 918,242 Preferred Stock (B) 2,571 shs. 08/06/03 257,096 257,096 Common Stock (B) 1,032 shs. 08/06/03 1,032 1,032 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 949 shs. 08/06/03 298,198 949 ------------- ------------- 1,323,050 1,177,319 ------------- ------------- U-LINE CORPORATION A manufacturer of high-end, built-in, undercounter icemaking, wine storage and refrigeration appliances. 12.5% Senior Subordinated Note due 2012 $ 1,882,100 04/30/04 1,687,244 1,975,856 10% Junior Subordinated Note due 2012 $ 66,922 04/30/04 66,967 69,411 Common Stock (B) 182 shs 04/30/04 182,200 163,980 Warrant, exercisable until 2012, to purchase common stock at $1 per share (B) 230 shs. 04/30/04 211,736 2 ------------- ------------- 2,148,147 2,209,249 ------------- ------------- VICTORY VENTURES LLC An acquirer of controlling or substantial interests in other entities. Series A Preferred Units (B) 0.13% int. 12/02/96 1 2 ------------- -------------
- -------------------------------------------------------------------------------- 20 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares, Units, Warrants, Ownership or Acquisition Corporate Restricted Securities (A) (Continued) Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- 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 $ 1,712,762 $ 1,922,767 Common Stock (B) 23,771 shs. 09/24/04 237,710 213,939 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 23,787 shs. 09/24/04 186,883 238 ------------- ------------- 2,137,355 2,136,944 ------------- ------------- VITEX PACKAGING GROUP, INC. A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags and medical and food products. 12.5% Senior Subordinated Note due 2012 $ 1,700,000 07/19/04 1,483,065 1,718,718 Limited Partnership Interest Class A (B) 414,375 uts. 07/19/04 414,375 372,938 Limited Partnership Interest Class B (B) 182,935 uts. 07/19/04 182,935 164,642 ------------- ------------- 2,080,375 2,256,298 ------------- ------------- WALLS INDUSTRIES, INC. A provider of branded workwear and sporting goods apparel. 10% Senior Subordinated Lien Note due 2009 $ 1,006,579 07/12/04 1,006,579 1,009,304 14% Senior Subordinated Note due 2012 $ 1,064,098 07/12/04 1,061,294 1,070,153 Limited Partnership Interest (B) 0.40% int. 07/12/04 37,281 33,553 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 4,029 shs. 07/12/04 2,833 40 ------------- ------------- 2,107,987 2,113,050 ------------- ------------- WEASLER HOLDINGS LLC A manufacturer of mechanical power transmission components for the agricultural, lawn and turf industries. Limited Partnership Interest (B) 1.55% int. 02/03/03 101,190 176,374 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 256 shs. 02/04/03 209,829 446,661 ------------- ------------- 311,019 623,035 ------------- ------------- Total Private Placement Investments 147,121,653 146,086,156 ------------- -------------
- -------------------------------------------------------------------------------- 21 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares or Interest Due Principal CORPORATE RESTRICTED SECURITIES:(A) continued Rate Date Amount Cost Fair Value - --------------------------------------------------------------------------------------------------------------------------------- RULE 144A SECURITIES - 6.55%: BONDS - 6.20% A E P Industries, Inc. 7.875% 03/15/13 $ 175,000 $ 175,000 $ 175,388 A E S Corporation 9.000 05/15/15 200,000 200,000 224,500 Activant Solutions, Inc. 9.090 04/01/10 825,000 825,000 853,875 Affinia Group, Inc. 9.000 11/30/14 460,000 460,000 386,400 Blockbuster, Inc. 9.000 09/01/12 475,000 477,096 444,125 Bombardier, Inc. 6.300 05/01/14 1,000,000 890,000 905,000 C C O Holdings LLC 7.135 12/15/10 500,000 500,000 486,250 Calpine Corporation 8.750 07/15/13 500,000 465,000 370,000 Charter Communications Op LLC 8.000 04/30/12 250,000 249,375 248,750 Compression Polymers Holding 10.460 07/01/12 130,000 129,350 129,350 Douglas Dynamics, LLC 7.750 01/15/12 630,000 634,028 617,400 IAAI Finance Corporation 11.000 04/01/13 800,000 799,438 823,701 Intelsat Bermuda Ltd. 7.805 01/15/12 450,000 450,000 457,875 Intelsat Bermuda Ltd. 8.250 01/15/13 500,000 500,000 516,250 Interactive Health LLC 7.250 04/01/11 900,000 746,425 801,000 Lazard LLC 7.125 05/15/15 750,000 749,408 756,553 Magnachip Semiconductor 8.000 12/15/14 100,000 100,000 96,000 Markwest Energy 6.875 11/01/14 475,000 475,000 472,625 Metaldyne Corporation 10.000 11/01/13 510,000 513,884 418,200 N R G Energy, Inc. 8.000 12/15/13 548,000 548,000 578,140 P Q Corporation 7.500 02/15/13 1,100,000 1,088,750 1,080,750 Service Corporation International 7.000 06/15/17 1,000,000 990,030 1,027,500 Siebe PLC 6.500 01/15/10 650,000 572,000 560,625 Tekni-Plex, Inc. 10.875 08/15/12 250,000 250,000 270,000 Tekni-Plex, Inc. 8.750 11/15/13 650,000 656,370 576,875 Tenaska Alabama Partners LP 7.000 06/30/21 360,000 360,000 364,500 Texas Genco LLC 6.875 12/15/14 705,000 705,000 742,013 Texas Industries, Inc. 7.250 07/15/13 70,000 70,000 71,750 ------------ ------------ ------------ TOTAL BONDS $ 14,963,000 14,579,154 14,455,395 ============ ------------ ------------ COMMON STOCK - 0.00% Jordan Telecom Products (B) 70 $ 14,000 -- ------------ ------------ TOTAL COMMON STOCK 14,000 -- ------------ ------------ CONVERTIBLE BONDS - 0.35% Cymer, Inc. 3.500% 02/15/09 850,000 $ 850,000 $ 804,313 ------------ ------------ ------------ TOTAL CONVERTIBLE BONDS $ 850,000 850,000 804,313 ============ ------------ ------------ WARRANTS - 0.00% Winsloew Furniture, Inc. (B) 900 $ 9 $ 14 ------------ ------------ TOTAL WARRANTS 9 14 ------------ ------------ TOTAL RULE 144A SECURITIES 15,443,163 15,259,722 ------------ ------------ TOTAL CORPORATE RESTRICTED SECURITIES $162,564,816 $161,345,878 ------------ ------------
- -------------------------------------------------------------------------------- 22 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Interest Due Principal CORPORATE PUBLIC SECURITIES -- 32.55%:(A) Rate Date Amount Cost Market Value - --------------------------------------------------------------------------------------------------------------------------------- RULE 144A SECURITIES - 6.55%: (A) BONDS -- 27.91% Abitibi-Consolidated, Inc. 7.750% 06/15/11 $ 1,000,000 $ 1,034,388 $ 1,005,000 Activant Solutions, Inc. 10.500 06/15/11 585,000 584,886 634,725 Aearo Company 8.250 04/15/12 450,000 450,000 450,000 Alamosa Delaware, Inc. 11.000 07/31/10 325,000 329,945 364,406 Alamosa Delaware, Inc. 8.500 01/31/12 400,000 400,000 419,500 Alh Fin LLC/ALH Fin Corporation 8.500 01/15/13 475,000 472,625 435,219 Allied Waste NA 7.875 04/15/13 1,000,000 1,026,096 1,022,500 American Media Operation, Inc. 8.875 01/15/11 900,000 901,571 852,750 Appleton Papers, Inc. 8.125 06/15/11 300,000 300,000 292,500 Argo Tech Corporation 9.250 06/01/11 850,000 850,000 922,250 Bally Total Fitness Hldng Corporation 9.875 10/15/07 135,000 128,925 117,787 BCP Crystal US Holdings Corporation 9.625 06/15/14 485,000 485,000 543,200 C S C Holdings, Inc. 7.625 04/01/11 500,000 502,036 493,750 Cablevision Systems Corporation 7.890 04/01/09 1,000,000 1,000,000 1,002,500 Cadmus Communications Corporation 8.375 06/15/14 750,000 750,000 771,562 Cenveo Corporation 7.875 12/01/13 1,100,000 1,100,000 1,045,000 Charter Comm Holdings LLC 10.000 04/01/09 1,000,000 815,000 772,500 Chemed Corporation 8.750 02/24/11 1,125,000 1,125,000 1,217,812 Chesapeake Energy Corporation 7.000 08/15/14 1,075,000 1,116,181 1,139,500 Cincinnati Bell, Inc. 8.375 01/15/14 1,100,000 1,007,500 1,127,500 Collins & Aikman Products Co. (B) 10.750 12/31/11 1,000,000 1,026,201 225,000 Del Monte Corporation 8.625 12/15/12 225,000 225,000 247,500 Dollar Financial Group 9.750 11/15/11 600,000 600,000 618,750 Dominos, Inc. 8.250 07/01/11 292,000 289,892 310,980 Dynegy Holdings, Inc. 6.875 04/01/11 500,000 422,500 493,750 El Paso Corporation 7.875 06/15/12 1,050,000 1,063,806 1,081,500 Esterline Technologies 7.750 06/15/13 200,000 200,000 212,000 Flextronics Intl Ltd 6.500 05/15/13 400,000 400,000 414,000 Ford Motor Credit Company 7.375 10/28/09 1,000,000 997,500 977,187 G F S I, Inc. 9.625 03/01/07 750,000 678,734 682,500 Gencorp, Inc. 9.500 08/15/13 259,000 259,000 279,720 General Motors Accept Corporation 7.750 01/19/10 1,000,000 1,061,392 977,544 Goodyear Tire & Rubber Company 7.857 08/15/11 1,400,000 1,342,750 1,361,500 Great Lakes Dredge & Dock Corporation 7.750 12/15/13 750,000 679,250 568,125 GulfMark Offshore, Inc. 7.750 07/15/14 565,000 562,599 594,662 Houghton Mifflin Company 9.875 02/01/13 1,000,000 1,053,094 1,067,500 Huntsman LLC 11.625 10/15/10 324,000 320,160 379,485 Interpool, Inc. 7.350 08/01/07 750,000 763,238 766,875 Jostens I H Corporation 7.625 10/01/12 750,000 750,000 740,625 Koppers Inc. 9.875 10/15/13 700,000 700,000 756,000 Land O'Lakes, Inc. 9.000 12/15/10 750,000 750,000 808,125 Leucadia National Corporation 7.000 08/15/13 650,000 662,923 650,000 Liberty Media Corporation 5.700 05/15/13 1,000,000 951,610 930,103 Lodgenet Entertainment Corporation 9.500 06/15/13 425,000 425,000 463,250 Lyondell Chemical Company 9.500 12/15/08 900,000 916,752 957,375 M C I, Inc. 8.735 05/01/14 500,000 452,500 560,625 M G M Mirage, Inc. 6.000 10/01/09 375,000 379,881 376,875 M S X International, Inc. 11.000 10/15/07 350,000 347,004 344,750 Majestic Star Casino LLC 9.500 10/15/10 500,000 500,000 515,000 Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 209,000 Mediacom LLC/Mediacom Capital 9.500 01/15/13 1,000,000 1,003,470 997,500 Merrill Corporation 12.000 05/01/09 1,500,000 1,581,832 1,597,500
- -------------------------------------------------------------------------------- 23 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Interest Due Principal CORPORATE PUBLIC SECURITIES (A) (Continued) Rate Date Amount Cost Market Value - --------------------------------------------------------------------------------------------------------------------------------- Metaldyne Corporation 11.000% 06/15/12 $ 750,000 $ 601,250 $ 485,625 Moog, Inc. 6.250 01/15/15 120,000 120,000 119,700 Mrs. Fields Brands/Finance 11.500 03/15/11 750,000 713,710 705,000 Nalco Company 7.750 11/15/11 500,000 500,000 532,500 Natl Wine & Spirits, Inc. 10.125 01/15/09 745,000 733,922 752,450 Neff Corporation 10.250 06/01/08 170,000 168,062 172,904 North Amer Energy Partner 8.750 12/01/11 400,000 400,000 344,000 Numatics, Inc. 9.625 04/01/08 550,000 539,171 551,375 O E D Corp/Diamond Jo Company Guarantee 8.750 04/15/12 1,000,000 985,960 932,500 O M Group, Inc. 9.250 12/15/11 750,000 775,708 750,000 Offshore Logistics, Inc. 6.125 06/15/13 450,000 450,000 434,250 Pacific Energy Partners 7.125 06/15/14 500,000 504,263 520,625 Pinnacle Foods Group 8.250 12/01/13 450,000 450,000 402,750 Pliant Corporation 11.625 06/15/09 744,611 761,148 796,734 Pliant Corporation 13.000 06/01/10 1,000,000 936,875 810,000 Primedia, Inc. 8.000 05/15/13 1,000,000 1,026,609 1,002,500 Quintiles Transnational Corporation 10.000 10/01/13 500,000 500,000 547,500 Rayovac Corporation 8.500 10/01/13 200,000 200,000 209,000 Rent-A-Center, Inc. 7.500 05/01/10 400,000 400,000 400,000 Rent-Way, Inc. 11.875 06/15/10 800,000 842,931 896,000 Rhodia SA 10.250 06/01/10 800,000 827,180 858,000 Rhodia SA 8.875 06/01/11 500,000 499,668 481,250 Rogers Wireless, Inc. 7.250 12/15/12 165,000 165,000 178,200 Rogers Wireless, Inc. 7.500 03/15/15 870,000 935,491 946,125 Rogers Wireless, Inc. 8.000 12/15/12 165,000 165,000 177,788 Samsonite Corporation 8.875 06/01/11 1,000,000 1,046,454 1,062,500 Sea Containers Ltd 10.500 05/15/12 785,000 766,414 802,663 Service Corp International 6.000 12/15/05 41,000 41,090 41,256 Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 389,531 Ship Finance Intl Ltd 8.500 12/15/13 750,000 750,000 713,438 Sports Club Co. 11.375 03/15/06 150,000 145,500 148,500 Stanadyne Corporation 10.000 08/15/14 1,500,000 1,500,000 1,417,500 Tekni-Plex, Inc. 12.750 06/15/10 1,000,000 960,125 685,000 Telex Communications, Inc. 11.500 10/15/08 500,000 500,000 533,750 Telex Communications, Inc. -- 01/15/09 471,915 206,820 283,149 Tenet Healthcare Corporation 6.375 12/01/11 500,000 482,500 476,250 Tenet Healthcare Corporation 9.875 07/01/14 500,000 488,370 536,250 Thermadyne Holdings Corporation 9.250 02/01/14 1,000,000 986,250 925,000 Triton P C S, Inc. 8.500 06/01/13 550,000 550,000 507,375 United Components, Inc. 9.375 06/15/13 500,000 501,875 503,750 United Rentals, Inc. 7.750 11/15/13 625,000 625,000 614,063 United Rentals, Inc. 7.000 02/15/14 500,000 500,000 476,250 Universal City Florida 7.960 05/01/10 200,000 200,000 207,500 Universal City Florida 8.375 05/01/10 200,000 200,000 208,500 Utilicorp United, Inc. 9.950 02/01/11 1,000,000 1,100,181 1,085,000 Vicorp Restaurants Inc 10.500 04/15/11 600,000 592,746 606,000 Vought Aircraft Industries 8.000 07/15/11 1,000,000 1,000,727 990,000 Warner Music Group 7.375 04/15/14 275,000 275,000 277,750 Williams Scotsman, Inc. 9.875 06/01/07 1,000,000 987,500 1,005,000 Wornick Co. 10.875 07/15/11 750,000 750,000 761,250 ------------ ------------ ------------ TOTAL BONDS $ 66,272,526 65,673,742 65,059,268 ============ ------------ ------------
- -------------------------------------------------------------------------------- 24 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS(Cont.) June 30, 2005 (Unaudited)
Shares or Interest Due Principal CORPORATE PUBLIC SECURITIES (A) (Continued) Rate Date Amount Cost Market Value - --------------------------------------------------------------------------------------------------------------------------------- COMMON STOCK - 4.21% D S W, Inc. (B) 200 $ 3,800 $ 4,990 H C I Direct, Inc. (B) 1,000 -- -- Lazard Ltd (B) 39,700 992,500 923,025 NeuStar, Inc. (B) 2,900 63,800 74,240 P W Eagle, Inc. (B) 196,518 1 1,149,630 PepsiAmericas, Inc. 92,145 2,006,365 2,364,441 Rent-Way, Inc. (B) 92,866 916,263 913,802 Supreme Industries, Inc. 115,722 267,325 847,085 Telex Communications, Inc. (B) 489 7 489 Telex Communications, Inc. (B) 17,707 1 17,707 Transmontaigne, Inc. (B) 258,720 798,595 2,716,560 Transmontaigne, Inc. (B) 74,606 310,582 783,363 Volcom, Inc. (B) 200 3,800 5,354 Western Alliance Bancorp (B) 200 4,400 5,080 ------------ ------------ TOTAL COMMON STOCK 5,367,439 9,805,766 ------------ ------------ CONVERTIBLE BONDS - 0.43% Leucadia National Corporation 3.750% 04/15/14 $ 1,000,000 $ 1,000,000 $ 1,012,500 ------------ ------------ ------------ TOTAL CONVERTIBLE BONDS $ 1,000,000 1,000,000 1,012,500 ============ ------------ ------------ TOTAL CORPORATE PUBLIC SECURITIES $ 72,041,181 $ 75,877,534 ------------ ------------ Interest Due Principal SHORT-TERM SECURITIES: Rate/Yield Date Amount Cost Market Value - --------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL PAPER - 7.14% Baxter International, Inc. 3.220% 07/01/05 $ 1,902,000 $ 1,902,000 $ 1,902,000 Centex Corporation 3.300 07/06/05 4,288,000 4,286,035 4,286,035 DaimlerChrysler NA Hldg Corporation 3.290 07/05/05 2,573,000 2,572,059 2,572,059 First Data Corporation 3.130 07/01/05 1,445,000 1,445,000 1,445,000 First Data Corporation 3.280 07/07/05 3,250,000 3,248,223 3,248,223 Verizon Network Funding 3.260 07/08/05 3,195,000 3,192,975 3,192,975 ------------ ------------ ------------ TOTAL SHORT-TERM SECURITIES $ 16,653,000 $ 16,646,292 $ 16,646,292 ============ ------------ ------------ TOTAL INVESTMENTS 108.92% $251,252,289 $253,869,704 ============ ------------ Other Assets 4.77 11,108,874 Liabilities (13.69) (31,904,325) ------ ------------ TOTAL NET ASSETS 100.00% $233,074,253 ====== ============
(A) In each of the convertible note, warrant, convertible preferred and common stock investments, the issuer has agreed to provide certain registration rights. (B) Non-income producing security. See Notes to Consolidated Financial Statements. - -------------------------------------------------------------------------------- 25 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) June 30, 2005 (Unaudited)
Fair Value/ Fair Value/ INDUSTRY CLASSIFICATION: Market Value INDUSTRY CLASSIFICATION: (Cont.) Market Value ------------ ------------ AEROSPACE - 2.37% BUILDINGS & REAL ESTATE - 3.96% Argo Tech Corporation $ 922,250 A W C Holding Company $ 2,226,575 Bombardier Capital, Inc. 905,000 Adorn, Inc. 2,468,901 Consolidated Foundries Holdings 2,502,570 Compression Polymers Holding 129,350 Esterline Technologies 212,000 Shelter Acquisition, Inc. 3,265,685 Vought Aircraft Industries 990,000 Texas Industries, Inc. 71,750 ------------ TruStile Doors, Inc. 1,060,615 5,531,820 ------------ ------------ 9,222,876 AUTOMOBILE - 8.03% ------------ America's Body Company, Inc./LCP Holding Co. 3,500,002 CARGO TRANSPORT - 2.61% Collins & Aikman Products Co. 225,000 Kenan-Advantage Transport Company 2,449,612 Gencorp, Inc. 279,720 Ship Finance International Ltd. 713,438 Goodyear Tire & Rubber Co. 1,361,500 Tidewater Holdings, Inc. 2,907,576 Jason, Inc. 1,986,175 ------------ LIH Investors, L.P. 4,892,228 6,070,626 Metaldyne Corporation 903,825 ------------ Nyloncraft, Inc. 2,888,306 CHEMICAL, PLASTICS & RUBBER - 3.41% Qualis Automotive LLC 2,165,062 Capital Specialty Plastics, Inc. 2,156 United Components, Inc. 503,750 Huntsman LLC 379,485 ------------ Koppers Inc. 756,000 18,705,568 Lyondell Chemical Co. 957,375 ------------ O M Group, Inc. 750,000 BEVERAGE, DRUG & FOOD - 6.28% P Q Corporation 1,080,750 Beta Brands Ltd - Process Chemicals LLC 288,000 Cains Foods, L.P. 599,276 Rhodia SA 1,339,250 Del Monte Corporation 247,500 Tomah Holdings, Inc. 2,386,114 Dominos, Inc. 310,980 ------------ Eagle Pack Pet Foods, Inc. 1,092,372 7,939,130 Land O'Lakes, Inc. 808,125 ------------ National Wine & Spirit Inc. 752,450 CONSUMER PRODUCTS - 7.45% Nonni's Food Company, Inc. 2,315,673 Alh Fin LLC / ALH Fin Corporation 435,219 PepsiAmericas, Inc. 2,364,441 Appleton Papers, Inc. 292,500 Pinnacle Foods Holdings 402,750 Augusta Sportswear Holding Co. 2,150,762 River Ranch Fresh Foods LLC 2,087,046 Colibri Holdings Corporation 2,004,633 Specialty Foods Group, Inc. 140,156 Euro-Pro Corporation 1,700,439 Vicorp Restaurants, Inc. 606,000 G F S I, Inc. 682,500 Vitality Foodservice, Inc. 2,136,944 H C I Direct, Inc. -- Wornick Co. 761,250 Maverick Acquisition Company 1,150,162 ------------ Neff Motivation, Inc. 172,904 14,624,963 Rayovac Corporation 209,000 ------------ Royal Baths Manufacturing Company 1,047,345 BROADCASTING & Savage Sports Holdings, Inc. 2,098,716 ENTERTAINMENT - 2.76% The Tranzonic Companies 3,306,459 C C O Holdings LLC/Cap Corp 486,250 Volcom, Inc. 5,354 C S C Holdings, Inc. 493,750 Walls Industries, Inc. 2,113,050 Cablevision Systems Corporation 1,002,500 Winsloew Furniture, Inc. 14 Cenveo Corporation 1,045,000 ------------ Charter Communications Holdings LLC 248,750 17,369,057 Charter Communications Op LLC 772,500 ------------ Liberty Media Corporation 930,103 CONTAINERS, PACKAGING & GLASS - 5.31% Lodgenet Entertainment Corporation 463,250 A E P Industries, Inc. 175,388 Mediacom Communications Corporation 997,500 Paradigm Packaging, Inc. 2,603,125 ------------ Pliant Corporation 1,606,734 6,439,603 Sea Containers Ltd. 802,663 ------------ Snyder Industries, Inc. 3,402,020 Tekni-Plex, Inc. 1,531,875 Vitex Packaging, Inc. 2,256,298 ------------ 12,378,103 ------------
- -------------------------------------------------------------------------------- 26 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) June 30, 2005 (Unaudited)
Fair Value/ Fair Value/ INDUSTRY CLASSIFICATION:(Cont.) Market Value INDUSTRY CLASSIFICATION: (Cont.) Market Value ------------ ------------ DISTRIBUTION - 3.57% ARMING & AGRICULTURE - 0.00% Affinia Group, Inc. $ 386,400 Protein Genetics, Inc. $ -- Brampton Fastener Co. Ltd 74,250 ------------ Corvest Group, Inc. 3,712,360 FINANCIAL SERVICES - 3.85% Kele and Associates, Inc. 2,260,343 BCP Caylux Holding Lux SCA 543,200 QualServ Corporation 1,885,614 Dollar Financial Group 618,750 Strategic Equipment & Supply Corporation, Inc. -- East River Ventures I, L.P. 22,685 ------------ Ford Motor Credit Co. 977,187 8,318,967 General Motors Acceptance Corporation 977,544 ------------ Highgate Capital LLC 2,723 DIVERSIFIED/CONGLOMERATE, Interpool, Inc. 766,875 MANUFACTURING - 3.99% Lazard LLC 1,679,578 Activant Solutions Inc 1,488,600 Leucadia National Corporation 1,662,500 AmerCable, Inc. 2,116,093 Mrs. Fields Brands / Finance 705,000 Coining of America LLC 1,864,999 Victory Ventures LLC 2 Dexter Magnetics Technologies, Inc. 1,047,037 Western Alliance Bancorp 5,080 Douglas Dynamics LLC 617,400 Williams Scotsman, Inc. 1,005,000 Evans Consoles, Inc. -- ------------ Great Lakes Dredge & Dock Corp 568,125 8,966,124 Justrite Manufacturing Acquisition Co. 1,595,243 ------------ ------------ HEALTHCARE, EDUCATION 9,297,497 & CHILDCARE - 4.03% ------------ A T I Acquisition Company 2,007,268 DIVERSIFIED/CONGLOMERATE, American Hospice Management 2,655,422 SERVICE - 6.88% Interactive Health LLC 801,000 Abitibi-Consolidated, Inc. 1,005,000 MedAssist, Inc. 2,380,319 Allied Waste NA 1,022,500 Quintiles Transnational Corporation 547,500 CapeSuccess LLC 5,862 Tenet Healthcare Corporation 1,012,500 Chemed Corporation 2,771,253 ------------ Diversco, Inc./DHI Holdings, Inc. 2,088,103 9,404,009 Dwyer Group, Inc. 2,571,339 ------------ Keystone North America, Inc. 387,822 HOME & OFFICE FURNISHINGS, Lancaster Laboratories, Inc. 1,530,147 HOUSEWARES, AND DURABLE Moss, Inc. 1,637,534 CONSUMER PRODUCTS - 3.69% M S X International, Inc. 344,750 Connor Sport Court International, Inc. 2,153,661 Service Corporation International 1,068,756 Home Decor Holding Company 2,172,529 U S M Holdings Corp. 1,177,319 Hussey Seating Corporation 1,002,493 Universal City Florida 416,000 Samsonite Corporation 1,062,500 ------------ U-Line Corporation 2,209,249 16,026,385 ------------ ------------ 8,600,432 ELECTRONICS - 3.57% ------------ A E S Corporation 224,500 LEISURE, AMUSEMENT, Arrow Electronics, Inc. 2,077,538 ENTERTAINMENT - 1.64% Calpine Corporation 370,000 Bally Total Fitness Holding Corp 117,787 Directed Electronics, Inc. 2,143,425 Keepsake Quilting, Inc. 1,612,721 Flextronics International Ltd. 414,000 M G M Mirage, Inc. 376,875 N R G Energy, Inc. 578,140 Majestic Star Casino LLC 515,000 Precision Dynamics, Inc. 1,214,577 O E D Corp/Diamond Jo Company Guarantee 932,500 Siebe PLC 560,625 Warner Music Group 277,750 Texas Genco LLC/Financing 742,013 ------------ ------------ 3,832,633 8,324,818 ------------ ------------
- -------------------------------------------------------------------------------- 27 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) June 30, 2005 (Unaudited)
Fair Value/ Fair Value/ INDUSTRY CLASSIFICATION:(Cont.) Market Value INDUSTRY CLASSIFICATION: (Cont.) Market Value ------------ ------------ MACHINERY - 9.77% RETAIL STORES - 4.48% Aearo Co. $ 450,000 Blockbuster, Inc. $ 444,125 C & M Conveyor, Inc. 2,126,073 D S W, Inc. 4,990 Integration Technology Systems, Inc. 1,197,573 IAAI Finance Corporation 823,701 Manitowoc Company, Inc. 209,000 Neff Corporation 1,181,312 Maxon Corporation 2,600,068 Olympic Sales, Inc. 4,163,499 Numatics, Inc. 551,375 Rent-A-Center, Inc. 400,000 P W Eagle, Inc. 1,149,630 Rent-Way, Inc. 1,809,801 Safety Speed Cut Manufacturing Company, Inc. 2,675,208 Sports Club Company 148,500 Stanadyne Corporation 1,417,500 TVI, Inc. 382,500 Synventive Equity LLC 3,714,261 United Rentals, Inc. 1,090,313 Thermadyne Holdings Corporation 925,000 ------------ Tronair, Inc. 2,730,316 10,448,741 Tubular Textile Machinery 2,413,798 ------------ Weasler Holdings LLC 623,035 TECHNOLOGY - 0.61% ------------ Cymer, Inc. 804,313 22,782,837 Delstar Holding Corp. 441,596 ------------ Magnachip Semiconductor 96,000 MEDICAL DEVICES/BIOTECH - 1.36% NeuStar, Inc. 74,240 Bausch & Lomb, Inc. ------------ Beacon Medical Products, Inc. 1,972,952 1,416,149 Coeur, Inc. 1,208,020 ------------ E X C Acquisition Corporation -- TELECOMMUNICATIONS - 2.61% ------------ Alamosa Delaware, Inc. 783,906 3,180,972 Cincinnati Bell, Inc. 1,127,500 ------------ Intelsat Bermuda, Ltd. 974,125 MINING, STEEL, IRON Jordan Telecom Products -- & NON PRECIOUS METALS - 0.05% MCI, Inc. 560,625 Better Minerals & Aggregates 108,991 Rogers Wireless, Inc. 1,302,113 ------------ Telex Communications, Inc. 835,095 OIL AND GAS - 3.68% Triton P C S, Inc. 507,375 Chesapeake Energy Corporation 1,139,500 ------------ Dynegy Holdings, Inc. 493,750 6,090,739 GulfMark Offshore, Inc. 594,662 ------------ Mustang Ventures Company 694,833 UTILITIES - 1.57% North American Energy Partners 344,000 Bill Barrett Corporation Offshore Logistics, Inc. 434,250 El Paso Corporation 1,081,500 Pacific Energy Partners 520,625 Markwest Energy 472,625 Supreme Industries, Inc. 847,085 Moog, Inc. 119,700 Transmontaigne, Inc. 3,499,923 Nalco Co. 532,500 ------------ Tenaska Alabama Partners LP 364,500 8,568,628 Utilicorp United, Inc. 1,085,000 ------------ ------------ PHARMACEUTICALS - 0.62% 3,655,825 Enzymatic Therapy, Inc. 1,439,693 ------------ ------------ WASTE MANAGEMENT/ PUBLISHING/PRINTING - 2.75% POLLUTION - 0.88% American Media Operation, Inc. 852,750 Terra Renewal Services, Inc. 2,056,258 Cadmus Communications Corporation 771,562 ------------ Houghton Mifflin Co. 1,067,500 Corporate Restricted and Jostens I H Corporation 740,625 Public Securities - 101.78% $237,223,412 Merrill Corporation 1,597,500 ============ Primedia, Inc. 1,002,500 Sheridan Acquisition Corporation 389,531 ------------ 6,421,968 ------------
See Notes to Consolidated Financial Statements - -------------------------------------------------------------------------------- 28 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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 diversified closed-end management investment company. Babson Capital Management LLC, formerly David L. Babson & Company Inc. ("Babson Capital"), a whollyowned indirect subsidiary of Massachusetts Mutual Life Insurance Company, ("MassMutual"), acts as its investment adviser. The Trust's investment objective is to maintain a portfolio of securities providing a fixed yield while providing an opportunity for capital gains, by investing primarily in a portfolio of privately placed below investment grade, long term corporate debt obligations with equity features, such as warrants, conversions rights or other equity features and, occasionally, preferred stocks purchased directly from their issuers. On January 27,1998, the Board of Trustees authorized the formation of a wholly-owned subsidiary ("MMCI Subsidiary Trust") for the purpose of holding certain investments. The results of MMCI Subsidiary Trust have been included in the accompanying consolidated financial statements. Footnote 2-D, below discusses the Federal tax consequences of the MMCI Subsidiary Trust. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed consistently by the Trust in the preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. A. VALUATION OF INVESTMENTS: Valuation of a security in the Trust's portfolio is made on the basis of market price whenever market quotations are readily available and all securities of the same class held by the Trust can be readily sold in such market. Nearly all securities which are acquired by the Trust directly from the issuers and shares into which such securities may be converted or which may be purchased on the exercise of warrants attached to such securities will be subject to legal or contractual delays in, or restrictions on, resale and will therefore be "restricted securities." Generally speaking, as contrasted with open-market sales of unrestricted securities which may be effected immediately if the market is adequate, absent an exemption from registration, restricted securities can be sold only in a public offering for which a registration statement is in effect under the Securities Act of 1933. 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 the acquisition thereof and at least quarterly thereafter. The Trustees have established guidelines to aid in the valuation of each security. Generally, restricted securities are initially valued at cost or less at the time of acquisition by the Trust. Values greater or less than cost are used thereafter for restricted securities in appropriate circumstances. Among the factors ordinarily considered are the existence of restrictions upon the sale of the security by the Trust; an estimate of the existence and extent of a market for the security; the extent of any discount at which the security was acquired; the estimated period of time during which the security will not be freely marketable; the estimated expenses of registering or otherwise qualifying the security for public sale; estimated underwriting commissions if underwriting would be required to effect a sale; in the case of a convertible security, whether or not it would trade on the basis of its stock equivalent; in the case of a debt obligation which would trade independently of any equity equivalent, the current yields on comparable securities; the estimated amount of the floating supply of such securities available for purchase; the proportion of the issue held by the Trust; changes in the financial condition and prospects of the issuer; the existence of merger proposals or tender offers affecting the issuer; and any other factors affecting fair value, all in accordance with the Investment Company Act of 1940. In making valuations, opinions of counsel may be relied upon as to whether or not securities are restricted securities and as to the legal requirements for public sale. When market quotations are readily available for unrestricted securities of an issuer, restricted securities of the same class are generally valued at a discount from the market price of such unrestricted securities. The Trustees, however, consider all factors in fixing any discount, including the filing of a registration statement for such securities under the Securities Act of 1933 and any other developments which are likely to increase the probability that the securities may be publicly sold by the Trust without restriction. The Trust's Board of Trustees meets at least once in each quarter to value the Trust's portfolio securities as of the close of business on the last business day of the preceding quarter. This valuation requires the approval of a majority of the 29 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Trustees of the Trust, including a majority of the Trustees who are not interested persons of the Trust or of Babson Capital, the Trust's investment adviser. 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 $146,086,156 (62.68% of net assets) as of June 30, 2005 whose values have been determined by the Board of Trustees in the absence of readily ascertainable market values. Due to the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material. The values for corporate public securities are stated at the last reported sales price or at prices based upon quotations obtained from brokers and dealers as of June 30, 2005, 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. The Trust does not accrue income when payment is delinquent and when management believes payment is questionable. The Trust has elected to accrue, for financial reporting purposes, certain premiums and discounts which are required to be accrued for federal income tax purposes. 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: No provision for federal taxes on net investment income and short-term capital gains is considered necessary because the Trust has elected to be taxed as a "regulated investment company" under the Internal Revenue Code, and intends to maintain this qualification and to distribute substantially all of its net taxable income to its shareholders. In any year when net long-term capital gains are realized by the Trust, management, after evaluating the prevailing economic conditions, will recommend to the Trustees either to designate the net realized long-term gains as undistributed and to pay the federal capital gains taxes thereon or to distribute all or a portion of such net gains. 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 six months ended June 30, 2005 the MMCI Subsidiary Trust has accrued tax expense on net realized and unrealized gains of $192,774 and $736,369, respectively. E. DISTRIBUTIONS TO SHAREHOLDERS: The Trust records distributions to shareholders from net investment income and net realized gains, if any, on the exdividend date. The Trusts net investment income dividend is declared four times per year, in April, July, October and December. The Trusts net realized capital gain distribution, if any, is declared in December. 30 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 3. INVESTMENT SERVICES CONTRACT A. SERVICES: Under an Investment Services Contract with the Trust dated July 1, 1988 (the "Current Contract"), Babson Capital has agreed 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 has further agreed that it will request each issuer of securities, which MassMutual is prepared to purchase in a negotiated private placement, and which would be consistent with the investment objectives and policies of the Trust, to also offer such securities to the Trust. Babson Capital will use its best efforts to insure that issuers accede to such requests. MassMutual has agreed that, subject to such orders of the Securities and Exchange Commission ("SEC") as may apply, it will invest concurrently with the Trust in any such investment. 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 Current Contract, Babson Capital 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. FEES: Under the Current Contract, the Trust pays Babson Capital a quarterly base rate (the "Base Fee Rate") of 5/16 of 1% of the value of the Trust's net assets as of the end of each fiscal quarter, approximately equivalent to 1.25% of the net asset value of the Trust on an annual basis, plus or minus a quarterly performance adjustment (the "Performance Adjustment") of up to 1/16 of 1% of net asset value, approximately equivalent to plus or minus 0.25% on an annual basis. The Performance Adjustment is based on the Trust's performance as compared to a benchmark rate of return (the "Target Rate") equal to 5.0 percentage points plus an unweighted, arithmetic average of the rates of return of the Standard & Poor's Industrials Composite (formerly called the Standard & Poor's Industrial Price Index) and the Lehman Brothers Intermediate U.S. Credit Index (formerly called the Lehman Brothers Corporate Bond Index) over a rolling three-year period (the "Measurement Period") comprising the twelve quarters ending on the last day of each quarter (the "Valuation Date"). The Standard & Poor's Industrials Composite is not readily available to the general public. Babson Capital obtains the information for this index from Factset Research Systems. The three-year annualized return for the Standard & Poor's Industrials Composite for the period ended June 30, 2005 was 8.24%. The Performance Adjustment is equal to 5% of the difference between the Trust's actual rate of return over the Measurement Period and the Target Rate. If the Trust's actual rate of return exceeds the Target Rate, the Base Fee Rate is increased by an amount equal to the Performance Adjustment; if the Trust's actual rate of return is less than the Target Rate, the Base Fee Rate is reduced by the Performance Adjustment. Under the Current Contract, the advisory fee payable by the Trust is equal to the Base Fee Rate (as adjusted by the Performance Adjustment) times the net asset value of the Trust as of the Valuation Date. In connection with a nationwide sweep examination of investment companies having performance fees conducted by the staff of the Fort Worth, Texas regional office of the SEC, the Trust recently received a letter (the "SEC Letter") stating that the SEC staff interprets Section 205 of the Investment Advisers Act of 1940 (the "Advisers Act") and the rules promulgated thereunder in a way that is inconsistent with the methodology for calculating the Performance Adjustment set forth in the Current Contract. Retroactive adjustment to the calculation methodology for the period since July 1, 1988 (the period during which the Performance Adjustment has been in effect) using the staff's methodology would result in a reduction in aggregate investment advisory fees for that period. As a result, Babson Capital reduced its investment advisory fee for the quarters ended December 31, 2004 and March 31, 2005 by an aggregate amount of $269,788 ($176,223 for the quarter ended December 31, 2004 and $93,565 for the quarter ended March 31, 2005), which represented the excess of the aggregate investment advisory fee calculated total under the Current Contract for the period from July 1, 1988 through March 31, 2005, over the fee calculated using the methodology identified by the SEC staff, together with interest. Babson Capital has also agreed to waive, for each quarter beginning July 1, 2004, the amount, if any, by which (A) the investment advisory fee calculated in the manner described in the Current Contract exceeds (B) the sum of (i) 5/16 of 1% times the ending net asset value for that quarter plus or minus (ii) the Performance Adjustment applied against the average quarter end net assets for the Trust for the twelve-quarter period ending on such quarter, which is consistent with the methodology identified by the SEC staff (the "Fee Waiver"). The Performance Adjustments for the three-month period ended March 31 and June 30, 2005 were: 31 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) PERFORMANCE ADJUSTMENT AMOUNT ----------- ---------- MARCH 31, 2005 0.0625% $122,255* JUNE 30, 2005 0.0625% $125,025** *Net of waiver of $18,048. **Net of waiver of $20,570. C. BASIS FOR BOARD RENEWAL OF CURRENT CONTRACT AND RECOMMENDATION TO APPROVE PROPOSED NEW CONTRACT At a meeting of the Board of Trustees of the Trust held on April 22, 2005, the Board of Trustees (including a majority of the Trustees who are not "interested persons" of the Trust or Babson Capital) unanimously (1) approved, and recommend that the shareholders of the Trust approve, a new investment services contract (the "New Contract" and together with the Current Contract the "Contracts"), and (2) approved the continuance of the Current Contract until such time as the New Contract becomes effective following its approval by the Trust's shareholders. See Footnote 10. The proposed New Contract between the Trust and Babson Capital provides for a quarterly investment advisory fee of 0.3125% of the net asset value of the Trust each quarter, which is approximately equal to 1.25% annually, with no performance adjustment (the "Flat Fee"). The proposed New Contract requires the approval of a majority of the Trust's shareholders at a Special Meeting of Shareholders on August 8, 2005 and, if approved, would go into effect on October 1, 2005 (or the first day of the first quarter following shareholder approval). The New Contract provides that for its first eighteen months, the management fee cannot exceed the amount that Babson Capital is paid under the Trust's existing investment advisory arrangements. Prior to the meeting, the Board of Trustees requested and received from Ropes & Gray LLP ("Ropes & Gray"), counsel to the Trust, a memorandum describing the Board of Trustees' legal responsibilities in connection with its review and approval of the Contracts. The Board of Trustees also requested and received from Babson Capital extensive written and oral information regarding: the principal terms of the Contracts; the reasons why Babson Capital was proposing the New Contract; Babson Capital and its personnel; the Trust's investment performance, including comparative performance information; the nature and quality of the services provided by Babson Capital to the Trust; financial strength of Babson Capital; the fee arrangements, including a comparison of the fees payable under the Current and New Contracts; fee and expense information, including comparative fee and expense information; profitability of the advisory arrangement to Babson Capital; and "fall-out" benefits to Babson Capital resulting from the Contracts. Among other things, the Trustees discussed and considered with management (i) the aforementioned guidance provided by Ropes & Gray and the information provided by Babson Capital prior to the meeting and (ii) the reasons Babson Capital put forth in support of its recommendation that the Trustees approve the New Contract without the Current Contract's Performance Adjustment. These reasons are summarized below. o Performance Fees Have Come Under Increased Regulatory Scrutiny. Babson Capital has addressed the issues raised in the SEC Letter temporarily by means of the Fee Waiver Letter. Switching to the Flat Fee under the proposed New Contract would represent a more permanent solution. o The Fee Structure of the New Contract is Fair to Trust Shareholders. Since 1990, the Trust would have paid Babson Capital and its predecessor, MassMutual, an average annual advisory fee under the Current Contract (calculated in accordance with the Fee Waiver) that was higher than the 1.25% flat fee being proposed under the New Contract. Moreover, for the first eighteen months of the New Contract, shareholders of the Trust are guaranteed that they will not pay an advisory fee greater than what would be due under the Current Contract. o The Fee Structure of the New Contract is Fair to Babson Capital. Even without a performance incentive fee and, potentially, with a lower overall fee under the New Contract, Babson Capital will be fairly compensated and incented to provide high quality investment management services to the Trust since the Trust is required to be offered the opportunity to co-invest in portfolio securities with MassMutual, Babson Capital's corporate parent. o The Fee Structure of the New Contract is Fair in Light of the Services to be Provided. There will be no change in the level of services required to be delivered by Babson Capital under the New Contract. o Changing from a Performance Fee to a Fixed Fee Results in Greater Certainty. Since neither Babson Capital nor the Trust has any control over the make-up or public availability of the two market indices used as the performance measure under the Current Contract, there is no certainty that the indices will always be available measures under Section 205 of the Advisers Act. Switching 32 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) to the Flat Fee under the proposed New Contract would eliminate this uncertainty. In their deliberations, the Trustees considered all factors that they believed relevant. Although, the Trustees did not identify any particular information that was all-important or controlling, and individual Trustees attributed different weight to various factors, the following is a summary of the material factors and conclusions that formed the basis of the Trustees' determination to (1) approve, and recommend that the shareholders of the Trust approve, the proposed New Contract, and (2) approve the continuance of the Current Contract subject to the Fee Waiver until such time as the New Contract becomes effective following its approval by the Trust's shareholders. NATURE, EXTENT, AND QUALITY OF SERVICES TO BE PROVIDED BY BABSON CAPITAL In evaluating the scope and quality of the services provided by Babson Capital, the Trustees considered, among other factors: (i) the scope of services required to be provided by Babson Capital under the Contracts; (ii) Babson Capital's ability to find and negotiate private placement securities having equity features; (iii) the experience and quality of Babson Capital's staff; (iv) the financial strength of Babson Capital's financial condition; (v) the nature of the private placement market compared to public markets (including the fact that finding, analyzing, negotiating and servicing private placement securities is more labor-intensive than buying and selling public securities and the administration of private placement securities is more extensive, expensive, and requires greater time and expertise than a portfolio of only public securities); (vi) the Trust's ability to co-invest in negotiated private placements with MassMutual; and (vii) the expansion of the scope of services provided by Babson Capital as result of regulatory and legislative initiatives that have required increased legal, compliance and business attention and diligence. Based on such considerations, the Board of Trustees concluded that, overall, they are satisfied with the nature, extent and quality of services provided, and expected to be provided in the future, under both the renewed Current Contract and the proposed New Contract. INVESTMENT PERFORMANCE The Board also examined the Trust's short-term, intermediate- term, and long-term performance as compared against appropriate benchmark indices presented at the meeting, which showed that the Trust had outperformed such indices for the 1, 3, 5, and 10-year periods. In addition, the Trustees considered comparisons of the Trust's performance with the performance of (i) selected closed-end investment companies and funds that may invest in private placement securities and/or bank loans; (ii) selected business development companies with comparable types of investments; and (iii) investment companies included in the Lipper closed-end bond universe. It was acknowledged that, while such comparisons are helpful in judging performance, they are not directly comparable in terms of types of investments and due to the fact that the business development companies often reported returns based on market value, which is affected by factors other than the performance of the underlying portfolio investments. Based on these considerations and the detailed performance information provided to the Trustees at the regular Board meetings each quarter, the Trustees concluded that the Trust's absolute and relative performance over time have been sufficient to warrant approval of the Contracts. ADVISORY FEE/COST OF SERVICES PROVIDED AND PROFITABILITY/ MANAGER'S "FALL-OUT" BENEFITS In connection with the Trustees' consideration of the advisory fee paid by the Trust to Babson Capital under the Current Contract and the proposed New Contract, Babson Capital noted that it was unaware of any closed-end investment companies that are directly comparable to the Trust in terms of the types of investments and percentages invested in private placement securities (which require more extensive advisory and administrative services than a portfolio of publicly traded securities, as previously discussed) other than MassMutual Participation Investors ("Participation Investors"), which also is advised by Babson Capital and pays a quarterly advisory fee equal to 0.225% of the fund's NAV (an amount equivalent to 0.90% on an annual basis). In considering the fee rate recommended under the New Contract, the Trustees noted: the Trust's different investment objectives and that the 0.90% annual advisory fee for Participation Investors has been in effect since 1988, whereas the annual advisory fee for Tower Square Capital Partners, L.P., a more recent private mezzanine fund managed by Babson Capital that commenced operations in 2002, is 1.5% of committed capital during the 5 year investment period and 1.25% of net invested capital thereafter plus an incentive allocation of 20% of net realized gains after investors have received a cumulative 8% internal rate of return. With respect to the proposed Flat Fee under the New Contract, the Trustees also took into consideration the following factors: switching to the Flat Fee provides a permanent response to the issues raised in the SEC Letter and the increased regulatory scrutiny surrounding performance fees more generally; the advisory fee proposed under the New Contract is less than the average annual fee that had been paid pursuant to the performance fee formula under the Current Contract; shareholders would be guaranteed not to pay more fees under the New Contract during the Transition Period than would have been paid under the Current Contract; there would be no changes in the services being provided by Babson Capital to the Trust 33 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) under the New Contract; and Babson Capital has sufficient incentives to continue to provide the same high level of services under the New Contract even without the performance fee. With respect to the advisory fee payable under the Current Contract, the Trustees also considered the appropriateness of the two indices that comprised the Trust's performance benchmark and the Fee Waiver agreed to by Babson Capital. At the request of the Trustees, Babson Capital also provided information concerning the profitability of Babson Capital's advisory relationship with the Trust. The Board also considered the noneconomic benefits Babson Capital and its affiliates derived from its relationship with the Trust, including the reputational benefits derived from having the Trust listed on the New York Stock Exchange, and the de minimis amount of commissions resulting from the Trust's portfolio transactions used by Babson Capital for third-party soft dollar arrangements (less than $1,500). The Trustees recognized that Babson Capital should be entitled to earn a reasonable level of profits for services provided to the Trust and, based on their review, concluded that they were satisfied that Babson Capital's level of profitability from its relationship with the Trust was not excessive and that the advisory fee structures under the Current Contract and the New Contract are reasonable. ECONOMIES OF SCALE The Trustees considered the concept of economies of scale and possible advisory fee reductions if the Trust were to grow in assets. Given that the Trust is not continuously offering shares, such growth seemed unlikely. The Trustees also examined the scale down features of selected competitive funds and noted that the minimum starting point for fee reductions in those funds was at least $200 million whereas the Trust had $218,505,148 in net assets as of December 31, 2004. The Trustees further noted that the Trust is a relatively small, closed-end registered investment company that has not grown significantly in the past and is not likely to grow significantly in the future. The Trustees concluded that the absence of breakpoints in the fee schedule under the Current Contract and the proposed New Contract were acceptable given the Trust's size and circumstances. 4. SENIOR SECURED INDEBTEDNESS A. NOTE PAYABLE: MassMutual holds the Trust's $20,000,000 Senior Fixed Rate Convertible Note (the "Note") issued by the Trust in 1995. The Note, as amended, is due November 15, 2007 and accrues at 7.39% per annum. MassMutual, at its option, can convert the principal amount of the Note into common shares. The dollar amount of principal would be converted into an equivalent dollar amount of common shares based upon the average price of the common shares for ten business days prior to the notice of conversion. For the six months ended June 30, 2005, the Trust incurred total interest expense on the Note of $739,000. The Trust may redeem the Note, in whole or in part, at the principal amount proposed to be redeemed together with the accrued and unpaid interest thereon through the redemption date plus the Make Whole Premium. The Make Whole Premium equals the excess of (i) the present value of the scheduled payments of principal and interest which the Trust would have paid but for the proposed redemption, discounted at the rate of interest of U.S. Treasury obligations whose maturity approximates that of the Note plus 0.50% over (ii) the principal of the Notes proposed to be redeemed. B. REVOLVING CREDIT AGREEMENT: The Revolving Credit Agreement with Fleet National Bank, dated June 29, 2000, matured on May 31, 2005. Effective May 31, 2005, the Trust has entered into a Revolving Credit Agreement (the "New Revolver"; collectively, the "Revolvers") with The Royal Bank of Scotland PLC, in the principal amount of $25,000,000, maturing May 31, 2008. The New Revolver bears interest payable in arrears at a per annum rate that varies depending upon whether the Trust requests a Base Rate Loan or LIBOR Rate Loan. Interest on Base Rate Loans equals the higher of: (i) the annual "Base Rate" as set periodically by the Agent Bank and (ii) the most recent Federal Funds Effective Rate plus .50% per annum. Per annum interest on LIBOR Rate Loans equals .37% plus the London Inter Bank Offered Rate ("LIBOR") rate, divided by 1 minus LIBOR Reserve Rate. The Trust also incurs expense on the undrawn portion of the total New Revolver at a rate of .15% per annum. The Trust incurred closing costs on the New Revolver of $25,000. As of June 30, 2005, there was $9,000,000 in outstanding loans against the New Revolver and the average rate of interest for the six months ended June 30, 2005 attributable to the Revolvers was 3.11%. For the six months ended June 30, 2005, the Trust incurred total interest expense on the Revolvers of $152,593, plus $17,876 related to the undrawn portion. 5. PURCHASES AND SALES OF INVESTMENTS FOR THE SIX MONTHS ENDED 6/30/2005 COST OF PROCEEDS FROM INVESTMENTS SALES OR ACQUIRED MATURITIES ------------ ------------ Corporate restricted securities $ 30,884,874 $ 52,082,440 Corporate public securities 12,775,417 9,622,140 Short-term securities 389,394,470 375,132,697 34 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The aggregate cost of investments was substantially the same for financial reporting and federal income tax purposes as of June 30, 2005. The net unrealized appreciation of investments for financial reporting and federal tax purposes as of June 30, 2005 is $1,881,046 and consists of $25,378,697 appreciation and $23,497,651 depreciation. 6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS MARCH 31, 2005 AMOUNT PER SHARE ------ --------- Investment income $5,534,814 Net investment income 4,176,321 $0.46 Net realized and unrealized gain on investments 1,164,599 0.13 JUNE 30, 2005 AMOUNT PER SHARE ------ --------- Investment income $5,790,885 Net investment income 4,257,224 0.47 Net realized and unrealized gain on investments (net of taxes) 7,765,845 0.86 7. AGGREGATE REMUNERATION PAID TO OFFICERS, TRUSTEES AND THEIR AFFILIATED PERSONS For the six months ended June 30, 2005, the Trust paid its Trustees aggregate remuneration of $74,000. The Trust does not pay any compensation to any of its Trustees who are "interested persons" (as defined by the Investment Company Act of 1940, as amended (the "1940 Act")) of the Trust. Messers. Reese and Joyal were each classified as "interested persons" of the Trust. All of the Trust's officers are employees of Babson Capital or MassMutual. Pursuant to the Investment Services Contract, the Trust does not compensate its officers who are employees of Babson Capital or MassMutual. For the six months ended June 30, 2005, Mr. Reese, one of the Trust's Trustees, was an "affiliated person" (as defined by the 1940 Act) of MassMutual and Babson Capital. The Trust did not make any payments to Babson Capital for the six months ended June 30, 2005, other than amounts payable to Babson Capital pursuant to the Investment Services Contract. For the six months ended June 30, 2005, the Trust paid the following amounts to MassMutual, exclusive of interest expense on the Note explained in Footnote 4A: Preparation of the Trust's Quarterly and Annual Reports to Shareholders $11,868 Preparation of Certain of the Trust's Shareholder communications 1,264 Preparation of the Trust's Annual Proxy Statements 1,084 ------- $14,216 ------- 8. CONTINGENCIES The Trust, together with other investors, including MassMutual, is a plaintiff in litigation connected with private placement investments made by the Trust in Sharp International Corporation ("Sharp"). Three managing shareholders of Sharp, which is currently being liquidated in Chapter 11 liquidation proceedings, have pleaded guilty to criminal fraud charges. Initially, two separate civil lawsuits were brought in New York State Court in an attempt to recover damages for lost investment funds from Sharp's working capital lender and auditors. The first lawsuit involving Sharp's working capital lender was dismissed prior to trial. An appeal of this dismissal was unsuccessful. The second lawsuit against Sharp's auditors was settled in the Spring of 2005. Under the terms of the settlement agreement, the Trust recovered all legal fees it incurred to prosecute the lawsuit, as well as additional amounts. A related lawsuit brought by the Trustee of the Sharp bankruptcy estate against Sharp's auditors on behalf of unsecured creditors, including the Trust, was also settled at the same time. Total net proceeds to be distributed to the Trust as a result of the settlement of these two lawsuits against Sharp's auditors are expected to be approximately $1,400,000, of which $866,275 has already been received by the Trust. 9. RESULTS OF SHAREHOLDER MEETING The Annual Meeting of Shareholders was held on Friday, April 22, 2005. Prior to the Annual Meeting, Steve Kandarian resigned from the Board of Trustees effective as of April 11, 2005. Mr. Kandarian also withdrew his agreement to stand for re-election. As a result, the size of the Board of Trustees was reduced from 8 to 7 members and only two Trustees stood for re-election at the Annual Meeting. At the Annual Meeting, the Shareholders were asked to vote to re-elect Jack A. Laughery and Corine T. Norgaard as trustees, each for a three-year term. The Trust's other trustees (Donald E. Benson, Donald Glickman, Martin T. Hart, Robert E. Joyal and Stuart H. Reese) continued to serve their respective terms following the April 22, 2005 Annual Shareholders Meeting. The results of the Shareholders votes are set forth below. 35 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) JACK A. CORINE T. TRUSTEE: LAUGHERY NORGAARD ------------------------------------------------------------------------ SHARES FOR: 7,060,588 7,055,303 WITHHELD 88,100 93,385 TOTAL 7,148,688 7,148,688 % OF SHARES VOTED FOR 98.77% 98.69% 10. SUBSEQUENT EVENTS Prior to the Board of Trustees July 15, 2005 quarterly meeting, Stuart H. Reese stepped down as a Trustee and Chairman of the Board of Trustees as a result of his new position as President and CEO of MassMutual. At the quarterly meeting the Board appointed Roger W. Crandall as Trustee to complete the unexpired term of the Board seat vacated by Mr. Reese. The Board also elected Mr. Crandall to the office of Chairman of the Board. Mr. Crandall is an "interested person" of the Trust as defined in the 1940 Act. In addition, the Board of Trustees voted to expand the Board from seven to eight Trustees and appointed Michael H. Brown as a Trustee to a three-year term of office. At the Special Meeting of Shareholders held on August 8, 2005, shareholders of record of the Trust at the close of business on June 10, 2005 voted to approve the new Investment Services Contract between the Trust and Babson Capital described in Footnote 3.C. 36 TRUSTEES OFFICERS Donald E. Benson* Roger W. Crandall Chairman Michael H. Brown Clifford M. Noreen President Roger W. Crandall James M. Roy Vice President & Donald Glickman Chief Financial Martin T. Hart* Officer Robert E. Joyal Stephen L. Kuhn Vice President & Jack A. Laughery Secretary Corine T. Norgaard* Michael P. Hermsen Vice President Mary Wilson Kibbe Vice President Michael L. Klofas Vice President Richard E. Spencer, II Vice President Laura L. Grant Treasurer John T. Davitt, Jr. Comptroller Mary Ellen Wesneski Chief Compliance Officer *Member of the Audit Committee DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN MassMutual Corporate Investors offers a Dividend Reinvestment and Share Purchase Plan. The Plan provides a simple way for shareholders to add to their holdings in the Trust through the receipt of dividend shares issued by the Trust or through the reinvestment of cash dividends in Trust shares purchased in the open market. A shareholder may join the Plan by filling out and mailing an authorization card to Shareholder Financial Services, Inc., the Transfer Agent. Participating shareholders will continue to participate until they notify the Transfer Agent, in writing, of their desire to terminate participation. Unless a shareholder elects to participate in the Plan, he or she will, in effect, have elected to receive dividends and distributions in cash. Participating shareholders may also make additional contributions to the Plan from their own funds. Such contributions may be made by personal check or other means in an amount not less than $10 nor more than $5,000 per quarter. Whenever the Trust declares a dividend payable in cash or shares, the Transfer Agent, acting on behalf of each participating shareholder, will take the dividend in shares only if the net asset value is lower than the market price plus an estimated brokerage commission as of the close of business on the valuation day. The valuation day is the last day preceding the day of dividend payment. When the dividend is to be taken in shares, the number of shares to be received is determined by dividing the cash dividend by the net asset value as of the close of business on the valuation date or, if greater than net asset value, 95% of the closing share price. If the net asset value of the shares is higher than the market value plus an estimated commission, the Transfer Agent, consistent with obtaining the best price and execution, will buy shares on the open market at current prices promptly after the dividend payment date. The reinvestment of dividends does not, in any way, relieve participating shareholders of any federal, state or local tax. For federal income tax purposes, the amount reportable in respect of a dividend received in newly-issued shares of the Trust will be the fair market value of the shares received, which will be reportable as ordinary income and/or capital gains. As compensation for its services, the Transfer Agent receives a fee of 5% of any dividend and cash contribution (in no event in excess of $2.50 per distribution per shareholder.) Any questions regarding the Plan should be addressed to Shareholder Financial Services, Inc., Agent for MassMutual Corporate Investors' Dividend Reinvestment and Share Purchase Plan, P.O. Box 173673, Denver CO 80217-3673. [LOGO] - -------------------------------------------------------------------------------- D8 1039 805 ITEM 2. CODE OF ETHICS. Not Applicable for this filing. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not Applicable for this filing. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not Applicable for this filing. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not Applicable for this filing. ITEM 6. SCHEDULE OF INVESTMENTS Not applicable for this filing. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END MANAGEMENT INVESTMENT COMPANIES. Not Applicable for this filing. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not Applicable for this filing. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not Applicable for this filing. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not Applicable for this filing. ITEM 11. CONTROLS AND PROCEDURES. (a) The principal executive officer and principal financial officer of the Registrant evaluated the effectiveness of the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing date of this report and based on that evaluation have concluded that such disclosure controls and procedures are effective to provide reasonable assurance that material information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) ANY CODE OF ETHICS, OR AMENDMENTS THERETO, THAT IS THE SUBJECT OF DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT INTENDS TO SATISFY THE ITEM 2 REQUIREMENTS THROUGH THE FILING OF AN EXHIBIT. Not Applicable for this filing. (a)(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF THE REGISTRANT AS REQUIRED BY RULE 30a-2 UNDER THE ACT. Attached hereto as EX-99.31.1 Attached hereto as EX-99.31.2 (a)(3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23c-1 UNDER THE ACT (17 CFR 270.23c-1) SENT OR GIVEN DURING THE PERIOD COVERED BY THE REPORT BY OR ON BEHALF OF THE REGISTRANT TO 10 OR MORE PERSONS. Not Applicable for this filing. (b) CERTIFICATIONS PURSUANT TO RULE 30a-2(b) UNDER THE ACT. Attached hereto as EX-99.32 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant): MassMutual Corporate Investors ---------------------------------- By: /s/ Clifford M. Noreen ---------------------------------- Clifford M. Noreen, President ---------------------------------- Date: September 6, 2005 ---------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: /s/ Clifford M. Noreen ---------------------------------- Clifford M. Noreen, President ---------------------------------- Date: September 6, 2005 ---------------------------------- By: /s/ James M. Roy ---------------------------------- James M. Roy, Vice President, and Chief Financial Officer ---------------------------------- Date: September 6, 2005 ------------------------------ EX-99.31.1 2 exh99-311_13778.txt 302 CERTIFICATIONS EXHIBIT-99.31.1 --------------- CERTIFICATION ------------- ITEM 12(a)(2) PRINCIPAL EXECUTIVE OFFICER CERTIFICATION I, Clifford M. Noreen, certify that: 1. I have reviewed this report on Form N-CSR of MassMutual Corporate Investors; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 6, 2005 /s/: Clifford M. Noreen - -------------------------------- Clifford M. Noreen President MassMutual Corporate Investors EXHIBIT-99.31.2 --------------- CERTIFICATION ------------- ITEM 12(a)(2) PRINCIPAL FINANCIAL OFFICER CERTIFICATION I, James M. Roy, certify that: 1. I have reviewed this report on Form N-CSR of MassMutual Corporate Investors; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 6, 2005 /s/: James M. Roy - -------------------------------- James M. Roy Vice President and Chief Financial Officer MassMutual Corporate Investors EX-99.32 3 exh99-32_13778.txt 906 CERTIFICATIONS EXHIBIT-99.32 ------------- ITEM 12(b) To my knowledge, this periodic report containing the financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer. /s/ Clifford M. Noreen - -------------------------------- Clifford M. Noreen President MassMutual Corporate Investors /s/ James M. Roy - -------------------------------- James M. Roy Vice President and Chief Financial Officer MassMutual Corporate Investors -----END PRIVACY-ENHANCED MESSAGE-----