-----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, AXGVk1geFaJhwejEHrzVQMDYRY6nUpIpwzbjw/YTvdl2lBNbfEgAC8Avqwm61Xxo HzDZEz2TtHu4GcMAGIr1dg== 0001072613-08-000646.txt : 20080307 0001072613-08-000646.hdr.sgml : 20080307 20080307095113 ACCESSION NUMBER: 0001072613-08-000646 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20071231 FILED AS OF DATE: 20080307 DATE AS OF CHANGE: 20080307 EFFECTIVENESS DATE: 20080307 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-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-02183 FILM NUMBER: 08672854 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-CSR 1 form-ncsr_15753.txt 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, P.O. Box 15189, Springfield, MA 01115-5189 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Rodney J. Dillman, Vice President and Secretary 1500 Main Street, Suite 2800, P.O. Box 15189, Springfield, MA 01115-5189 - -------------------------------------------------------------------------------- (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: 12/31/07 ------------------ Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORT TO STOCKHOLDERS. Attached hereto is the annual shareholder report transmitted to shareholders pursuant to Rule 30e-1 of the Investment Company Act of 1940, as amended. [LOGO] MASSMUTUAL CORPORATE INVESTORS 2007 ANNUAL REPORT MassMutual Corporate Investors MassMutual Corporate Investors c/o Babson Capital Management LLC 1500 Main Street Suite 600, P.O. Box 15189 Springfield, Massachusetts 01115-5189 (413) 226-1516 http://www.BabsonCapital.com/mci ADVISER Babson Capital Management LLC 1500 Main Street, P.O. Box 15189 Springfield, Massachusetts 01115-5189 INDEPENDENT REGISTERED PUBIC ACCOUNTING FIRM KPMG LLP Boston, Massachusetts 02110 COUNSEL TO THE TRUST Ropes & Gray LLP Boston, Massachusetts 02110 CUSTODIAN Citibank, N.A. New York, New York 10043 TRANSFER AGENT & REGISTRAR Shareholder Financial Services, Inc. P.O. Box 173673 Denver, Colorado 80217-3673 1-800-647-7374 MCI Listed NYSE PROXY VOTING POLICIES & PROCEDURES; PROXY VOTING RECORD The Trustees of MassMutual Corporate Investors (the "Trust") have delegated proxy voting responsibilities relating to the voting of securities held by the Trust to Babson Capital Management LLC ("Babson Capital"). A description of Babson Capital's proxy voting policies and procedures is available (1) without charge, upon request, by calling, tollfree 1-866-399-1516; (2) on the Trust's website at http:// www.BabsonCapital.com/mci; and (3) on the U.S. Securities and Exchange Commission's ("SEC") website at http://www. sec.gov. Information regarding how the Trust voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, 2007 is available (1) on the Trust's web-site at http://www.BabsonCapital.com/mci; and (2) on the SEC's website at http://www.sec.gov. FORM N-Q The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This information is available (i) on the SEC's website at http://www.sec.gov; and (ii) at the SEC's Public Reference Room in Washington, DC (which information on their operation may be obtained by calling 1-800-SEC-0330). A complete schedule of portfolio holdings as of each quarter-end is available on the Trust's website at http://www.BabsonCapital.com/mci or upon request by calling, toll-free, 1-866-399-1516. MASSMUTUAL CORPORATE INVESTORS MassMutual Corporation Investors is a closed-end investment company, first offered to the public over 35 years ago, whose shares are traded on the New York Stock Exchange. - -------------------------------------------------------------------------------- MassMutual Corporate Investors INVESTMENT OBJECTIVE & POLICY MassMutual Corporate Investors (the "Trust") is a closed-end investment company, first offered to the public in 1971, whose shares are traded on the New York Stock Exchange under the trading symbol "MCI". The Trust's share price can be found in the financial section of most newspapers as "MassCp" or "MassMuInv" under either the New York Stock Exchange listings or Closed-End Fund Listings. The Trust's investment objective is to maintain a portfolio of securities providing a fixed yield and at the same time offering an opportunity for capital gains. The Trust's principal investments are privately placed, below-investment grade, long-term debt obligations with equity features such as warrants, conversion rights, or other equity features and, occasionally, preferred stocks. The Trust typically purchases these investments, which are not publicly tradable, directly from their issuers in private placement transactions. These investments are typically mezzanine debt instruments with accompanying private equity securities made to small or middle market companies. In addition, the Trust may temporarily invest, subject to certain limitations, in marketable investment grade debt securities, other marketable debt securities (including high yield securities) and marketable common stocks. Below investment grade or high yield securities have predominantly speculative characteristics with respect to the capacity of the issuer to pay interest and repay principal. Babson Capital Management LLC ("Babson Capital") manages the Trust on a total return basis. The Trust distributes substantially all of its net income to shareholders each year. Accordingly, the Trust pays dividends to shareholders quarterly in January, May, August, and November. The Trust pays dividends to its shareholders in cash, unless the shareholder elects to participate in the Dividend Reinvestment and Share Purchase Plan. In this report you will find a complete listing of the Trust's holdings. We encourage you to read this section carefully for a better understanding of the Trust. We cordially invite all shareholders to attend the Trust's Annual Meeting of Shareholders, which will be held on April 25, 2008 at 2:00 P.M. in Springfield, Massachusetts. - -------------------------------------------------------------------------------- 1 MassMutual Corporate Investors TOTAL ANNUAL PORTFOLIO RETURN (AS OF 12/31 EACH YEAR)* [BAR CHART APPEARS HERE]
17.12 7.53 7.28 5.91 4.80 22.61 22.76 20.04 18.09 8.58 MASSMUTUAL CORPORATE INVESTORS (BASED ON CHANGE IN THE NET ASSET VALUE WITH REINVESTED DIVIDENDS) -2.56 21.26 -3.03 2.49 -20.48 47.25 18.33 4.55 18.37 -1.57 RUSSELL 2000 INDEX 1.87 2.39 -5.86 5.28 -1.41 28.97 11.13 2.74 11.85 1.87 LEHMAN BROTHERS U.S. CORPORATE HIGH YIELD INDEX) 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
* Data for MassMutual Corporate Investors (the "Trust") represents portfolio returns based on change in the Trust's net asset value assuming the reinvestment of all dividends and distributions which differs from the total investment return based on market value of the Trust's shares due to the difference between the Trust's net asset value and the market value of its shares outstanding (see page 12 for total investment return based on market value); past performance is no guarantee of future results. PORTFOLIO COMPOSITION AS OF 12/31/07* [PIE CHART APPEARS HERE] Private / 144A Cash & Short Term High Yield Debt Invesments 52.0% 7.1% Private Investment Public High Grade Debt Yield Debt 1.3% 22.4% Private / Restricted Public Equity Equity 2.7% 14.5% *Based on value of total investments (including cash) - -------------------------------------------------------------------------------- 2 MassMutual Corporate Investors TO OUR SHAREHOLDERS I am pleased to share with you the Trust's Annual Report for the year ended December 31, 2007. THE TRUST'S 2007 PORTFOLIO PERFORMANCE The Trust's net total portfolio rate of return for 2007 was 8.58%, as measured by the change in net asset value, assuming the reinvestment of all dividends and distributions. The Trust's total net assets were $251,163,022, or $27.19 per share, as of December 31, 2007 compared to $251,689,646, or $27.51 per share, as of December 31, 2006. The Trust paid a quarterly dividend of 52 cents per share for the first quarter of 2007 and then 54 cents per share for the next three quarters, with the fourth quarter dividend paid in January 2008. In addition, the Trust declared a special year-end dividend of 43 cents per share, paid in January 2008 to shareholders of record on December 31, 2007, bringing total dividends for the year to $2.57 per share. We are very pleased with the Trust's 2007 portfolio performance. The table below lists the average annual net returns of the Trust's portfolio, based on the change in net assets, assuming the reinvestment of all dividends and distributions, compared to the average annual returns of the Lehman Brothers U.S. Corporate High Yield Index and the Russell 2000 Index for the 1, 3, 5 and 10 years ended December 31, 2007. Lehman Brothers U.S. Russell The Trust Corporate High Yield Index 2000 Index - -------------------------------------------------------------------------------- 1 Year 8.58% 1.87% -1.57% - -------------------------------------------------------------------------------- 3 Year 15.46% 5.39% 6.80% - -------------------------------------------------------------------------------- 5 Year 18.30% 10.90% 16.24% - -------------------------------------------------------------------------------- 10 Year 13.26% 5.51% 7.08% - -------------------------------------------------------------------------------- Past performance is no guarantee of future results. [PHOTO OF PRESIDENT AND CHAIRMAN] Left to right: Clifford M. Noreen PRESIDENT Roger W. Crandall CHAIRMAN - -------------------------------------------------------------------------------- 3 MassMutual Corporate Investors The U.S. economy and investment markets started the year strong but 2007 will long be remembered for the major mortgage- and credit-market crisis that wreaked havoc in the second half of the year and into 2008. The issues began in the residential sub-prime mortgage market, where underwriting standards that began loosening in 2005 allowed many homeowners to borrow debt that could only be supported by continuously rising home prices. As housing prices softened, mortgage defaults and foreclosures rose dramatically and mortgage-related collateralized debt obligation (CDO) products also suffered. General investor confidence began to tumble, and the major stock market indexes experienced declines and volatility not seen in some time, eventually closing the year with modest gains but concerns among many analysts of what could be next. Overall, the US economy finished 2007 on an uncertain note. The unemployment rate was 5 percent in December, up from 4.5 percent the previous year, according to the US Department of Labor. Also, core inflation was 2.3 percent at year's end, not quite as bad as the 2.6 percent increase during 2006. The value of the dollar versus several other currencies, however, dropped precipitously in 2007. The corporate credit market continued a remarkable run, as corporate credit defaults around the globe continued their downward trend for the fifth consecutive year, according to Moody's Investors Service. Moody's global issuer-weighted speculativegrade default rate finished the year at 0.9 percent, down from 1.7 percent in 2006 and its lowest level since 1981. Moody's expects the default rate to climb in 2008 to 4.8 percent and reach its historical average of 5 percent in 2009. Corporate bond spreads widened significantly in the second half of 2007 and the trend continued at the beginning of 2008. PORTFOLIO ACTIVITY Overall, the Trust closed 20 new private placement transactions during 2007 and added to five existing private placement investments. Total direct placement purchases were $44,507,493. - -------------------------------------------------------------------------------- 4 MassMutual Corporate Investors New private placement transactions invested in during the year were: Advanced Technologies Holdings, Inc.; AHC Holding Company Inc.; Aero Holdings, Inc.; Connecticut Electric, Inc.; Electra Bicycle Company LLC; Golden Country Foods Holding, Inc.; NetShape Technologies, Inc.; K H O F Holdings, Inc.; K W P I Holdings Corporation; K-Tek Holding Corporation; Mail Communications Group, Inc.; Nesco Holdings Corporation; Pacific Consolidated Holdings LLC; Smart Source Holdings LLC; Torrent Group Holdings, Inc.; Total Equipment & Service, Inc.; Transpac Holding Company; Visioneering, Inc.; Waggin' Train Holdings LLC; and Workplace Media Holding Co. In addition, the Trust added to existing private placement investments in HM Holding Company; Moss, Inc.; NABCO, Inc.; Savage Sports Holding, Inc.; and Transtar Holding Company. The Trust also had 14 realizations in 2007. [PHOTO OF OFFICERS] Left to right: James M. Roy VICE PRESIDENT & CHIEF FINANCIAL OFFICER Rodney J. Dillman VICE PRESIDENT, SECRETARY & CHIEF LEGAL OFFICER Jill A. Fields VICE PRESIDENT Michael P. Hermsen VICE PRESIDENT Michael L. Klofas VICE PRESIDENT Richard E. Spencer, II VICE PRESIDENT - -------------------------------------------------------------------------------- 5 MassMutual Corporate Investors OUTLOOK FOR 2008 The year 2008 opened with worldwide financial markets under pressure. The credit crisis continues to find new victims and with each new report, investor confidence wanes further. Consumer confidence showed cracks in late 2007, and the housing market may take some time to hit bottom. Oil prices rose to new heights in the latter half of 2007 and approached $100 per barrel. Early Fed action in 2008 indicates that it is targeting lower interest rates to help the residential real estate market and weakening economy. As always, no one can predict the future with any degree of certainty. Despite all this, merger and acquisition activity continued at a record pace in 2007, although activity is expected to be lower in 2008. Last year saw $4.5 trillion in announced deals worldwide, up 24 percent from 2006, according to Thomson Financial, and included the three largest leveraged buyouts in history. Private equity firms had been a significant part of the activity in the first six months of 2007 (reportedly more than 30 percent of total volume), but nearly disappeared in the second half of the year and are expected to be very quiet at the start of 2008. Corporate buyers are expected to be more active players, as they are flush with cash. Regardless of the economic environment, however, the Trust continues to repeatedly employ the investment philosophy that has served it well since its inception: investing in companies which we believe have a strong business model, solid cash flow and experienced, ethical management. This philosophy, combined with Babson Capital's seasoned investment-management team and the Trust's financial position, contribute to the Trust being well positioned for future investment opportunities that meet its investment objectives and policies. As always, I would like to thank you for your continued interest in and support of MassMutual Corporate Investors. Sincerely, /s/ Clifford M. Noreen Clifford M. Noreen, President Cautionary Notice: Certain statements contained in this report may be "forward looking" statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date in which they are made and which reflect management's current estimates, projections, expectations or beliefs, and which are subject to risks and uncertainties that may cause actual results to differ materially. These statements are subject to change at any time based upon economic, market or other conditions and may not be relied upon as investment advice or an indication of the Trust's trading intent. References to specific securities are not recommendations of such securities, and may not be representative of the Trust's current or future investments. We undertake no obligation to publicly update forward looking statements, whether as a result of new information, future events, or otherwise. - -------------------------------------------------------------------------------- 2007 Record Net Investment Short-Term Tax Long-Term Dividends Date Income Gains Effect Gains - -------------------------------------------------------------------------------- Regular 05/07/07 $0.5200 -- -- 07/27/07 0.5400 -- -- 10/29/07 0.5400 -- -- 12/31/07 0.5400 -- -- Special 12/31/07 0.4300 -- -- - -------------------------------------------------------------------------------- $2.5700 $ -- $2.5700 $ -- ================================================================================ The following table summarizes the tax effects of the retention of capital gains for 2007: Amount Per Share Form 2439 - -------------------------------------------------------------------------------- 2007 Gains Retained 0.2820 Line 1a Long-Term Gains Retained 0.2820 Taxes Paid 0.0987 Line 2* Basis Adjustment 0.1833 ** * IF YOU ARE NOT SUBJECT TO FEDERAL CAPITAL GAINS TAX (E.G., CHARITABLE ORGANIZATIONS, IRAS AND KEOGH PLANS), YOU MAY BE ABLE TO CLAIM A REFUND BY FILING FORM 990-T. ** FOR FEDERAL INCOME TAX PURPOSES, YOU MAY INCREASE THE ADJUSTED COST BASIS OF YOUR SHARES BY THIS AMOUNT (THE EXCESS OF LINE 1A OVER LINE 2).
Qualified for Dividend Interest Earned on Annual Dividend Received Deduction*** Qualified Dividends**** U.S. Gov't. Obligations Amount Per Share Percent Amount Per Share Percent Amount Per Share Percent Amount Per Share - --------------------------------------------------------------------------------------------------------- $2.57 14.9098% 0.3822 15.8036% 0.4051 0% 0.0000 =========================================================================================================
*** Not available to individual shareholders **** Qualified dividends are reported in Box 1b on IRS Form 1099-Div for 2007 - -------------------------------------------------------------------------------- 6 MassMutual Corporate Investors FINANCIAL REPORT Consolidated Statement of Assets and Liabilities.......................... 8 Consolidated Statement of Operations...................................... 9 Consolidated Statement of Cash Flows...................................... 10 Consolidated Statements of Changes in Net Assets.......................... 11 Consolidated Selected Financial Highlights................................ 12 Consolidated Schedule of Investments...................................... 13-34 Notes to Consolidated Financial Statements................................ 35-40 Report of Independent Registered Public Accounting Firm................... 41 Interested Trustees....................................................... 42-43 Independent Trustees...................................................... 44-46 Officers of the Trust..................................................... 47 - -------------------------------------------------------------------------------- 7 MassMutual Corporate Investors CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES December 31, 2007 ASSETS: Investments (See Consolidated Schedule of Investments) Corporate restricted securities at fair value (Cost - $191,421,477) $ 193,140,254 Corporate public securities at market value (Cost - $72,192,575) 71,410,379 Short-term securities at amortized cost 19,600,600 ------------- 284,151,233 ------------- Cash 668,459 Interest and dividends receivable 6,055,175 Receivable for investments sold 1,535,785 ------------- TOTAL ASSETS 292,410,652 ------------- LIABILITIES: Dividend payable 8,960,490 Investment advisory fee payable 784,884 Note payable 30,000,000 Interest payable 211,557 Accrued expenses 155,868 Accrued taxes payable 1,133,101 Other payables 1,730 ------------- TOTAL LIABILITIES 41,247,630 ------------- TOTAL NET ASSETS $ 251,163,022 ============= NET ASSETS: Common shares, par value $1.00 per share; an unlimited number authorized $ 9,237,619 Additional paid-in capital 110,814,116 Retained net realized gain on investments, prior years 126,854,715 Undistributed net investment income 1,765,219 Accumulated net realized gain on investments 1,554,772 Net unrealized appreciation of investments 936,581 ------------- TOTAL NET ASSETS $ 251,163,022 ============= COMMON SHARES ISSUED AND OUTSTANDING 9,237,619 ------------- NET ASSET VALUE PER SHARE $ 27.19 ============= SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 8 MassMutual Corporate Investors CONSOLIDATED STATEMENT OF OPERATIONS For the year ended December 31, 2007 INVESTMENT INCOME: Interest $ 25,451,911 Dividends 3,530,552 Other 119,074 ------------- TOTAL INVESTMENT INCOME 29,101,537 ------------- EXPENSES: Investment advisory fees 3,222,565 Interest 1,528,750 Trustees' fees and expenses 205,500 Professional fees 184,000 Reports to shareholders 148,000 Transfer agent/registrar's expenses 36,000 Custodian fees 28,000 Other 161,807 ------------- TOTAL EXPENSES 5,514,622 ------------- INVESTMENT INCOME - NET 23,586,915 ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investments before taxes 2,461,275 Income tax expense (1,049,810) ------------- NET REALIZED GAIN ON INVESTMENTS 1,411,465 ------------- Net change in unrealized appreciation of investments before taxes (5,247,969) Net change in deferred income tax expense 651,017 ------------- NET CHANGE IN UNREALIZED APPRECIATION OF INVESTMENTS (4,596,952) ------------- NET LOSS ON INVESTMENTS (3,185,487) ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 20,401,428 ============= SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 9 MassMutual Corporate Investors CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended December 31, 2007 NET DECREASE IN CASH: Cash flows from operating activities: Purchases/Proceeds/Maturities from short-term portfolio securities, net $ (12,012,550) Purchase of portfolio securities (119,755,220) Proceeds from disposition of portfolio securities 122,311,555 Interest, dividends, and other received 28,014,076 Interest expense paid (1,506,049) Operating expenses paid (3,997,628) Income taxes paid (6,452,712) ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 6,601,472 ------------- Cash flows from financing activities: Proceeds from issuance of Notes 30,000,000 Repayment of Notes (20,000,000) Cash dividends paid from net investment income (23,743,349) Cash dividends paid from net realized gain on investments (125,491) Receipts for shares issued on reinvestment of dividends 2,751,359 ------------- NET CASH USED FOR FINANCING ACTIVITIES (11,117,481) ------------- NET DECREASE IN CASH (4,516,009) Cash - beginning of year 5,184,468 ------------- CASH - END OF YEAR $ 668,459 ------------- RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 20,401,428 ------------- Increase in investments (6,803,281) Decrease in interest and dividends receivable 79,490 Increase in receivable for investments sold (1,034,922) Decrease in investment advisory fee payable (1,646) Increase in interest payable 22,701 Decrease in accrued expenses (10,109) Decrease in accrued taxes payable (6,053,919) Increase in other payables 1,730 ------------- TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (13,799,956) ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 6,601,472 ============= SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 10 MassMutual Corporate Investors CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS For the years ended December 31, 2007 and 2006 2007 2006 - ------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Investment income - net $ 23,586,915 $ 20,681,143 Net realized gain on investments 1,411,465 12,301,691 Net change in unrealized appreciation of investments (4,596,952) 2,456,052 ------------ ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 20,401,428 35,438,886 ------------ ------------ Increase from common shares issued on reinvestment of dividends Common shares issued (2007 - 87,700; 2006 - 84,966) 2,751,359 2,619,000 Dividends to shareholders from: Net investment income (2007 - $2.57 per share; 2006 - $2.47 per share) (23,679,411) (22,518,167) Net realized gains on investments (2006 - $0.01 per share) -- (125,491) ------------ ------------ TOTAL (DECREASE) INCREASE IN NET ASSETS (526,624) 15,414,228 ------------ ------------ NET ASSETS, BEGINNING OF YEAR 251,689,646 236,275,418 ------------ ------------ NET ASSETS, END OF YEAR (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $1,765,219 AND $1,798,902, RESPECTIVELY) $251,163,022 $251,689,646 ============ ============ SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 11 MassMutual Corporate Investors CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding: For the years ended December 31, 2007 2006 2005 2004 2003 - ----------------------------------------------------------------------------------------------------- NET ASSET VALUE: BEGINNING OF YEAR $ 27.51 $ 26.06 $ 24.34 $ 21.84 $ 19.40 ---------- ---------- ---------- ---------- ---------- Net investment income (a) 2.56 2.27 2.03 2.00 1.44 Net realized and unrealized gain (loss) on investments (0.35) 1.62 1.96(b) 2.64 2.83 ---------- ---------- ---------- ---------- ---------- TOTAL FROM INVESTMENT OPERATIONS 2.21 3.89 3.99 4.64 4.27 ---------- ---------- ---------- ---------- ---------- Dividends from net investment income to common shareholders (2.57) (2.47) (2.11) (2.16) (1.84) Dividends from net realized gain on investments to common shareholders -- (0.01) (0.18) -- -- Increase from dividends reinvested 0.04 0.04 0.02 0.02 0.01 ---------- ---------- ---------- ---------- ---------- TOTAL DIVIDENDS (2.53) (2.44) (2.27) (2.14) (1.83) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE: END OF YEAR $ 27.19 $ 27.51 $ 26.06 $ 24.34 $ 21.84 ---------- ---------- ---------- ---------- ---------- PER SHARE MARKET VALUE: END OF YEAR $ 30.20 $ 34.89 $ 30.05 $ 28.50 $ 22.90 ========== ========== ========== ========== ========== Total investment return Market value (8.78)% 29.04% 16.95% 36.10% 27.53% Net asset value (c) 8.58% 18.09% 20.04% 22.76% 22.61% Net assets (in millions): End of year $ 251.16 $ 251.69 $ 236.28 $ 218.51 $ 193.79 Ratio of operating expenses to average net assets 1.55% 1.43% 1.78% 1.93% 2.04% Ratio of interest expense to average net assets 0.59% 0.60% 0.73% 0.77% 0.82% Ratio of income tax expense to average net assets (d) 0.35% 2.46% 2.84% 0.69% -- Ratio of total expenses before custodian reduction to average net assets (d) 2.49% 4.53% 5.36% 3.39% 2.86% Ratio of net expenses after custodian reduction to average net assets (d) 2.49% 4.49% 5.35% 3.39% 2.86% Ratio of net investment income to average net assets 9.17% 8.19% 7.98% 8.68% 6.95% Portfolio turnover 44% 35% 35% 53% 56% (a) Calculated using average shares. (b) Amount includes $0.19 per share in litigation proceeds. (c) Net asset value return represents portfolio returns based on change in the Trust's net asset value assuming the reinvestment of all dividends and distributions which differs from the total investment return based on the Trust's market value due to the difference between the Trust's net asset value and the market value of its shares outstanding; past performance is no guarantee of future results. (d) As additional information, this ratio is included to reflect the taxes paid on retained long-term gains. These taxes paid are netted against realized capital gains in the Statement of Operations. The taxes paid are treated as deemed distributions and a credit for the taxes paid is passed on to the shareholders. Senior securities: Total principal amount (in millions) $ 30 $ 20 $ 20 $ 29 $ 20 Asset coverage per $1,000 of indebtedness $ 9,372 $ 13,584 $ 12,814 $ 8,535 $ 10,689
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 12 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES - 76.90%:(A) PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- PRIVATE PLACEMENT INVESTMENTS - 70.18% A H C HOLDING COMPANY, INC. A DESIGNER AND MANUFACTURER OF BOILERS AND WATER HEATERS FOR THE COMMERCIAL SECTOR. 15% Senior Subordinated Note due 2015 $ 2,325,205 11/21/07 $ 2,278,701 $ 2,310,495 Limited Partnership Interest (B) 14.99% int. 11/21/07 224,795 213,560 ------------- ------------- 2,503,496 2,524,055 ------------- ------------- A T I ACQUISITION COMPANY A FOR-PROFIT POST-SECONDARY SCHOOL SERVING STUDENTS IN TEXAS, FLORIDA AND ARIZONA. 12% Senior Subordinated Note due 2012 $ 2,125,000 04/08/04 2,125,000 2,125,000 Warrant, exercisable until 2012, to purchase preferred stock at $.01 per share (B) 13 shs. 11/16/07 -- 16,630 Warrant, exercisable until 2012, to purchase common stock at $.02 per share (B) 2,323 shs. 04/08/04 -- 20,490 ------------- ------------- 2,125,000 2,162,120 ------------- ------------- ADVANCED TECHNOLOGIES HOLDINGS A PROVIDER OF FACTORY MAINTENANCE SERVICES TO INDUSTRIAL COMPANIES. 15% Senior Subordinated Note due 2013 $ 2,040,000 12/27/07 1,999,200 2,040,790 Preferred Stock (B) 1,031 shs. 12/27/07 510,000 484,499 ------------- ------------- 2,509,200 2,525,289 ------------- ------------- AERO HOLDINGS, INC. A PROVIDER OF GEOSPATIAL SERVICES TO CORPORATE AND GOVERNMENT CLIENTS. 10.5% Senior Secured Term Note due 2014 $ 1,627,500 03/09/07 1,603,088 1,619,833 14% Senior Subordinated Note due 2015 $ 1,260,000 03/09/07 1,130,356 1,253,586 Common Stock (B) 262,500 shs. 03/09/07 262,500 249,375 Warrant, exercisable until 2015, to purchase common stock at $.01 per share (B) 66,116 shs. 03/09/07 111,527 661 ------------- ------------- 3,107,471 3,123,455 ------------- ------------- AMERICAN HOSPICE MANAGEMENT HOLDING LLC A FOR-PROFIT HOSPICE CARE PROVIDER IN THE UNITED STATES. 12% Senior Subordinated Note due 2010 $ 2,125,000 01/22/04 1,976,800 2,043,245 Preferred Class A Unit (B) 3,223 uts. * 322,300 112,805 Common Class B Unit (B) 30,420 uts. 01/22/04 1 304 Common Class D Unit (B) 6,980 uts. 09/12/06 1 70 ------------- ------------- *01/22/04 and 09/12/06. 2,299,102 2,156,424 ------------- ------------- ARROW TRU-LINE HOLDINGS, INC. A MANUFACTURER OF HARDWARE FOR RESIDENTIAL AND COMMERCIAL OVERHEAD GARAGE DOORS IN NORTH AMERICA. 12% Senior Subordinated Note due 2012 $ 1,627,660 05/18/05 1,545,929 1,556,410 Common Stock (B) 497 shs. 05/18/05 497,340 90,079 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 130 shs. 05/18/05 112,128 23,615 ------------- ------------- 2,155,397 1,670,104 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 13
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- AUGUSTA SPORTSWEAR HOLDING CO. A MANUFACTURER AND DISTRIBUTOR OF ATHLETIC APPAREL, ACTIVEWEAR AND TEAM UNIFORMS. 12% Senior Subordinated Note due 2012 $ 1,686,800 12/31/04 $ 1,598,122 $ 1,686,800 Common Stock (B) 520 shs. * 519,622 1,962,746 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 137 shs. 12/31/04 119,482 519,327 ------------- ------------- *12/31/04, 03/31/05, and 05/02/06. 2,237,226 4,168,873 ------------- ------------- BRAVO SPORTS HOLDING CORPORATION A DESIGNER AND MARKETER OF NICHE BRANDED CONSUMER PRODUCTS INCLUDING CANOPIES, TRAMPOLINES, IN-LINE SKATES, SKATEBOARDS, AND URETHANE WHEELS. 12.5% Senior Subordinated Note due 2014 $ 2,281,593 06/30/06 2,154,600 2,309,717 Preferred Stock Class A (B) 879 shs. 06/30/06 268,121 248,980 Common Stock (B) 1 sh. 06/30/06 286 48,950 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 309 shs. 06/30/06 92,102 87,503 ------------- ------------- 2,515,109 2,695,150 ------------- ------------- CAPESUCCESS LLC A PROVIDER OF DIVERSIFIED STAFFING SERVICES. Preferred Membership Interests (B) 1,882 uts. 04/29/00 8,395 420 Common Membership Interests (B) 24,318 uts. 04/29/00 108,983 5,442 ------------- ------------- 117,378 5,862 ------------- ------------- CAPITAL SPECIALTY PLASTICS, INC. A PRODUCER OF DESICCANT STRIPS USED FOR PACKAGING PHARMACEUTICAL PRODUCTS. Common Stock (B) 109 shs. * 503 558,932 ------------- ------------- *12/30/97 and 05/29/99. ------------- ------------- COEUR, INC. A PRODUCER OF PROPRIETARY, DISPOSABLE POWER INJECTION SYRINGES. 8.75% Senior Secured Term Note due 2010 $ 355,072 04/30/03 355,072 358,742 11.5% Senior Subordinated Note due 2011 $ 424,818 04/30/03 402,504 426,202 Common Stock (B) 126,812 shs. 04/30/03 126,812 365,028 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 87,672 shs. 04/30/03 40,804 252,364 ------------- ------------- 925,192 1,402,336 ------------- ------------- CONNECTICUT ELECTRIC, INC. A SUPPLIER AND DISTRIBUTOR OF ELECTRICAL PRODUCTS SOLD INTO THE RETAIL AND WHOLESALE MARKETS. 12% Senior Subordinated Note due 2014 $ 2,393,954 01/12/07 2,233,202 2,295,428 Limited Liability Company Unit Class A (B) 156,046 uts. 01/12/07 156,046 148,244 Limited Liability Company Unit Class C (B) 112,873 uts. 01/12/07 112,873 107,230 ------------- ------------- 2,502,121 2,550,902 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 14
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- CONNOR SPORT COURT INTERNATIONAL, INC. A DESIGNER AND MANUFACTURER OF OUTDOOR AND INDOOR SYNTHETIC SPORTS FLOORING AND OTHER TEMPORARY FLOORING PRODUCTS. Preferred Stock Series B-2 (B) 17,152 shs. 07/05/07 $ 700,392 $ 761,779 Preferred Stock Series C 7,148 shs. 07/05/07 300,168 238,774 Common Stock (B) 718 shs. 07/05/07 34,634 7 Limited Partnership Interest (B) 7.74% int. * 189,586 -- Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 174 shs. ** 160,233 -- ------------- ------------- *08/12/04 and 01/14/05. **08/12/04 and 01/18/05. 1,385,013 1,000,560 ------------- ------------- CONSOLIDATED FOUNDRIES HOLDINGS A MANUFACTURER OF ENGINEERED CAST METAL COMPONENTS FOR THE GLOBAL AEROSPACE AND DEFENSE INDUSTRIES. 12% Senior Subordinated Note due 2013 $ 2,185,714 06/15/05 2,106,838 2,207,571 Common Stock (B) 509 shs. * 526,096 1,440,424 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 103 shs. 06/15/05 100,668 291,335 ------------- ------------- *06/15/05 and 05/22/06. 2,733,602 3,939,330 ------------- ------------- COREPHARMA LLC A MANUFACTURER OF ORAL DOSE GENERIC PHARMACEUTICALS TARGETED AT NICHE APPLICATIONS. 12% Senior Subordinated Note due 2013 $ 2,550,000 08/04/05 2,437,862 2,562,750 Warrant, exercisable until 2013, to purchase common stock at $.001 per share (B) 20 shs. 08/04/05 137,166 109,340 ------------- ------------- 2,575,028 2,672,090 ------------- ------------- DAVIS-STANDARD LLC A MANUFACTURER, ASSEMBLER, AND INSTALLER OF A BROAD RANGE OF CAPITAL EQUIPMENT THAT IS USED IN THE EXTRUSION, CONVERSION, AND PROCESSING OF PLASTIC MATERIALS. 12% Senior Subordinated Note due 2014 $ 1,847,826 10/30/06 1,735,239 1,921,739 Limited Partnership Interest (B) 1.82% int. 10/30/06 702,174 1,598,441 Warrant, exercisable until 2014, to purchase preferred stock at $.01 per share (B) 50 shs. 10/30/06 49,830 54,813 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 34 shs. 10/30/06 34,000 174,602 ------------- ------------- 2,521,243 3,749,595 ------------- ------------- DIRECTED ELECTRONICS, INC. A DESIGNER AND DISTRIBUTOR OF BRAND NAME AUTOMOTIVE SECURITY SYSTEMS, AUDIO PRODUCTS AND INSTALLATION ACCESSORIES. Common Stock (B) 368,560 shs. * 1,856,534 611,810 ------------- ------------- *12/19/05 and 06/17/06. DIVERSCO, INC./DHI HOLDINGS, INC. A CONTRACT PROVIDER OF JANITORIAL AND EQUIPMENT MAINTENANCE SERVICES AND TEMPORARY PRODUCTION LABOR TO INDUSTRIAL CUSTOMERS. Membership Interests of MM/Lincap Diversco Investments Ltd. LLC (B) 27.20% int. 08/27/98 734,090 -- Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 -- Warrants, exercisable until 2011, to purchase common stock of DHI Holdings, Inc. at $.01 per share (B) 13,352 shs. * 403,427 -- ------------- ------------- *10/24/96 and 8/28/98. 3,921,650 -- ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 15
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- DUNCAN SYSTEMS, INC. A DISTRIBUTOR OF WINDSHIELDS AND SIDE GLASS FOR THE RECREATIONAL VEHICLE MARKET. 10% Senior Secured Term Note due 2013 $ 540,000 11/01/06 $ 531,900 $ 537,397 13% Senior Subordinated Note due 2014 $ 855,000 11/01/06 766,515 849,955 Common Stock (B) 180,000 shs. 11/01/06 180,000 271,028 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 56,514 shs. 11/01/06 78,160 85,094 ------------- ------------- 1,556,575 1,743,474 ------------- ------------- DWYER GROUP, INC. A FRANCHISER OF A VARIETY OF HOME REPAIR SERVICES. Common Stock (B) 6,906 shs. * 690,600 1,059,428 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 311,967 ------------- ------------- *10/30/03 and 01/02/04. 877,069 1,371,395 ------------- ------------- E X C ACQUISITION CORPORATION A MANUFACTURER OF PRE-FILLED SYRINGES AND PUMP SYSTEMS USED FOR INTRAVENOUS DRUG DELIVERY. Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 22 shs. 06/28/04 77,208 184,972 ------------- ------------- ELECTRA BICYCLE COMPANY LLC A DESIGNER AND MARKETER OF BRANDED LEISURE BICYCLES. 10.5% Senior Secured Term Note A due 2009 $ 127,531 04/12/07 124,980 126,902 10.5% Senior Secured Term Note B due 2012 $ 707,793 04/12/07 695,658 701,380 12% Senior Secured Term Note C due 2012 $ 510,121 04/12/07 474,967 501,356 Limited Liability Company Unit Series F 64,597 uts. 04/12/07 64,597 61,367 Limited Liability Company Unit Series G (B) 4,990 uts. 04/12/07 4,990 4,741 ------------- ------------- 1,365,192 1,395,746 ------------- ------------- ENZYMATIC THERAPY, INC. A MANUFACTURER AND DISTRIBUTOR OF BRANDED NATURAL MEDICINES AND NUTRITIONAL SUPPLEMENTS. Limited Partnership Interest (B) 1.32% int. 03/30/00 531,250 136,132 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 29,117 shs. 03/30/00 255,000 85,441 ------------- ------------- 786,250 221,573 ------------- ------------- EVANS CONSOLES, INC. A DESIGNER AND MANUFACTURER OF CONSOLES AND CONTROL CENTER SYSTEMS. Common Stock 90,000 shs. 05/06/04 6 1,068,390 ------------- ------------- F H S HOLDINGS LLC A NATIONAL PROVIDER OF CUSTOMIZED DISEASE MANAGEMENT SERVICES TO LARGE SELF-INSURED EMPLOYERS. 12% Senior Subordinated Note due 2014 $ 2,390,625 06/01/06 2,236,886 2,406,589 Preferred Unit (B) 158 uts. 06/01/06 157,768 157,780 Common Unit (B) 1,594 uts. 06/01/06 1,594 138,072 Common Unit Class B (B) 1,386 uts. 06/01/06 122,361 120,037 ------------- ------------- 2,518,609 2,822,478 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 16
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- FLUTES, INC. AN INDEPENDENT MANUFACTURER OF MICRO FLUTED CORRUGATED SHEET MATERIAL FOR THE FOOD AND CONSUMER PRODUCTS PACKAGING INDUSTRIES. 10% Senior Secured Term Note due 2013 $ 918,385 04/13/06 $ 904,609 $ 917,645 14% Senior Subordinated Note due 2014 $ 555,059 04/13/06 501,736 555,287 Common Stock (B) 109,436 shs. 04/13/06 109,436 50,794 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 30,940 shs. 04/13/06 48,433 14,360 ------------- ------------- 1,564,214 1,538,086 ------------- ------------- FOWLER HOLDING, INC. A PROVIDER OF SITE DEVELOPMENT SERVICES TO RESIDENTIAL HOMEBUILDERS AND DEVELOPERS IN THE RALEIGH/DURHAM REGION OF NORTH CAROLINA. 12% Senior Subordinated Note due 2013 $ 2,365,217 02/03/06 2,160,156 2,280,705 Common Stock (B) 185 shs. 02/03/06 184,783 107,272 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 254 shs. 02/03/06 208,435 147,561 ------------- ------------- 2,553,374 2,535,538 ------------- ------------- FUEL SYSTEMS HOLDING CORPORATION AN INDEPENDENT NORTH AMERICAN SUPPLIER OF FUEL TANKS FOR A WIDE VARIETY OF COMMERCIAL VEHICLES. 12% Senior Subordinated Note due 2014 $ 2,337,500 01/31/06 2,189,605 2,166,085 Common Stock (B) 212,500 shs. 01/31/06 212,500 42,500 Warrant, exercisable until 2016, to purchase common stock at $.01 per share (B) 138,408 shs. 01/31/06 119,213 27,682 ------------- ------------- 2,521,318 2,236,267 ------------- ------------- GOLDEN COUNTRY FOODS HOLDING, INC. A MANUFACTURER OF FROZEN APPETIZERS AND SNACKS. 12% Senior Subordinated Note due 2015 $ 1,912,500 11/01/07 1,727,592 1,899,197 8% Series A Convertible, cumulative Preferred Stock, convertible into 4.25% of the fully diluted common shares 146,658 shs. 11/01/07 146,658 139,325 ------------- ------------- 1,874,250 2,038,522 ------------- ------------- H M HOLDING COMPANY A DESIGNER, MANUFACTURER, AND IMPORTER OF PROMOTIONAL AND WOOD FURNITURE. 12% Senior Subordinated Note due 2013 $ 2,210,000 02/10/06 2,048,925 1,105,000 Preferred Stock (B) 20 shs. 09/18/07 20,238 -- Common Stock (B) 340 shs. 02/10/06 340,000 -- Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 126 shs. 02/10/06 116,875 -- ------------- ------------- 2,526,038 1,105,000 ------------- ------------- HIGHGATE CAPITAL LLC AN ACQUIRER OF CONTROLLING OR SUBSTANTIAL INTERESTS IN MANUFACTURING AND MARKETING ENTITIES. Series A Preferred Units (B) 1.19% int. 7/21/94 367,440 -- ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 17
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- HOME DECOR HOLDING COMPANY A DESIGNER, MANUFACTURER AND MARKETER OF FRAMED ART AND WALL DECOR PRODUCTS. 12.5% Senior Subordinated Note due 2012 $ 2,043,269 * $ 1,894,387 $ 2,052,239 Common Stock (B) 63 shs. * 62,742 75,239 Warrant, exercisable until 2012, to purchase common stock at $.02 per share (B) 200 shs. * 199,501 239,243 ------------- ------------- *06/30/04 and 08/19/04. 2,156,630 2,366,721 ------------- ------------- INSURANCE CLAIMS MANAGEMENT, INC. A THIRD PARTY ADMINISTRATOR PROVIDING AUTO AND PROPERTY CLAIM ADMINISTRATION SERVICES FOR INSURANCE COMPANIES. Common Stock 69 shs. 02/27/07 2,077 -- Warrant, exercisable until 2011, to purchase common stock at $.01 per share 20 shs. 02/27/07 612 -- ------------- ------------- 2,689 -- ------------- ------------- INTEGRATION TECHNOLOGY SYSTEMS, INC. A MANUFACTURER OF STEEL PROTECTIVE COMPUTER AND NETWORK SYSTEMS FOR THE INDUSTRIAL AND OFFICE ENVIRONMENTS. 12% Senior Secured Note due 2008 (D) $ 43,943 03/01/04 1 -- Common Stock (B) 228 shs. 06/01/00 262,200 -- ------------- ------------- 262,201 -- ------------- ------------- JASON, INC. A DIVERSIFIED MANUFACTURING COMPANY SERVING VARIOUS INDUSTRIAL MARKETS. 13% Senior Subordinated Note due 2010 $ 963,687 08/04/00 912,699 947,364 Limited Partnership Interest of Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,352 802,563 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 161,176 ------------- ------------- 1,914,463 1,911,103 ------------- ------------- JUSTRITE MANUFACTURING AQUISITION CO. A MANUFACTURER OF SAFETY PRODUCTS SUCH AS STORAGE CABINETS AND CONTAINERS. 12% Senior Subordinated Note due 2011 $ 1,593,750 12/15/04 1,523,421 1,609,688 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 249,109 ------------- ------------- 1,624,530 1,858,797 ------------- ------------- K H O F HOLDINGS, INC. A MANUFACTURER OF PREMIUM DISPOSABLE TABLEWARE PRODUCTS SERVING BOTH THE FOODSERVICE AND CONSUMER CHANNELS. 14% Senior Subordinated Note due 2014 $ 2,329,327 10/15/07 2,282,740 2,331,236 Common Stock (B) 220,673 shs. 10/15/07 220,673 209,639 ------------- ------------- 2,503,413 2,540,875 ------------- ------------- K N B HOLDINGS CORPORATION A DESIGNER, MANUFACTURER AND MARKETER OF PRODUCTS FOR THE CUSTOM FRAMING MARKET. 13.5% Senior Subordinated Note due 2013 $ 2,465,119 05/25/06 2,355,983 2,490,266 Common Stock (B) 134,210 shs. 05/25/06 134,210 127,606 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 82,357 shs. 05/25/06 71,534 78,304 ------------- ------------- 2,561,727 2,696,176 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 18
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- K W P I HOLDINGS CORPORATION A MANUFACTURER AND DISTRIBUTOR OF VINYL WINDOWS AND PATIO DOORS THROUGHOUT THE NORTHWESTERN UNITED STATES. 12% Senior Subordinated Note due 2014 $ 2,318,000 03/14/07 $ 2,121,600 $ 2,274,757 Common Stock (B) 232 shs. 03/13/07 232,000 220,400 Warrant, exercisable until 2017, to purchase common stock at $.01 per share (B) 167 shs. 03/14/07 162,260 2 ------------- ------------- 2,515,860 2,495,159 ------------- ------------- K-TEK HOLDING CORPORATION A MANUFACTURER OF INSTRUMENTATION FOR LIQUID AND BULK SOLIDS LEVEL DETECTION FOR PROCESS AND STORAGE TANKS. 14% Senior Secured Tranche B Note due 2015 $ 2,185,714 12/20/07 2,146,371 2,170,296 Preferred Stock (B) 363,260 shs. 12/20/07 363,260 345,097 Common Stock (B) 102,616 shs. 12/20/07 1,026 1,026 ------------- ------------- 2,510,657 2,516,419 ------------- ------------- MAGNATECH INTERNATIONAL, INC. A SUPPLIER OF PROCESS EQUIPMENT AND RELATED PARTS USED IN THE MANUFACTURING OF MEDIUM AND HIGH-PRESSURE REINFORCED HOSES. 12% Senior Subordinated Note due 2014 $ 1,168,750 04/05/06 1,093,229 1,182,471 13% Preferred Stock (B) 565 shs. 04/05/06 565,335 638,823 Common Stock (B) 125 shs. 04/05/06 125,048 410,087 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 13 shs. 04/05/06 12,905 42,304 ------------- ------------- 1,796,517 2,273,685 ------------- ------------- MAIL COMMUNICATIONS GROUP, INC. A PROVIDER OF MAIL PROCESSING AND HANDLING SERVICES, LETTERSHOP SERVICES, AND COMMERCIAL PRINTING SERVICES. 12.5% Senior Subordinated Note due 2014 $ 975,000 05/04/07 912,469 970,407 Limited Liability Company Unit (B) 23,000 uts. 05/04/07 300,000 285,000 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 3,375 shs. 05/04/07 43,031 34 ------------- ------------- 1,255,500 1,255,441 ------------- ------------- MAVERICK ACQUISITION COMPANY A MANUFACTURER OF CAPSULES THAT COVER THE CORK AND NECK OF WINE BOTTLES. 9.73% Senior Secured Tranche A Note due 2010 (C) $ 492,691 09/03/04 492,691 491,130 12% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 287,539 308,665 Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 40,180 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 29,031 ------------- ------------- 878,472 869,006 ------------- ------------- MICROGROUP, INC. A MANUFACTURER OF PRECISION PARTS AND ASSEMBLIES, AND A VALUE-ADDED SUPPLIER OF METAL TUBING AND BARS. 12% Senior Subordinated Note due 2013 $ 2,685,614 * 2,541,589 2,684,554 Common Stock (B) 450 shs. * 450,000 300,683 Warrant, exercisable until 2013, to purchase common stock at $.02 per share (B) 164 shs. * 162,974 109,569 ------------- ------------- *08/12/05 and 09/11/06. 3,154,563 3,094,806 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 19
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- MOMENTUM HOLDING CO. A DESIGNER AND SUPPLIER OF UPHOLSTERY FABRIC TO COMMERCIAL FURNITURE MANUFACTURERS AND ARCHITECTURAL AND DESIGN FIRMS. 12% Senior Subordinated Note due 2014 $ 1,168,847 08/04/06 $ 1,049,472 $ 1,192,224 Limited Partnership Interest (B) 21.23% int. 08/04/06 106,153 165,796 Warrant, exercisable until 2014, to purchase common stock at $.02 per share (B) 1,107 shs. 08/04/06 107,109 172,823 ------------- ------------- 1,262,734 1,530,843 ------------- ------------- MONESSEN HOLDING CORPORATION A DESIGNER AND MANUFACTURER OF A BROAD LINE OF GAS, WOOD, AND ELECTRIC HEARTH PRODUCTS AND ACCESSORIES. 12% Senior Subordinated Note due 2014 $ 2,550,000 03/31/06 2,378,749 2,419,264 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 152 shs. 03/31/06 138,125 2 ------------- ------------- 2,516,874 2,419,266 ------------- ------------- MORTON INDUSTRIAL GROUP, INC. A MANUFACTURER OF HIGHLY ENGINEERED METAL FABRICATED COMPONENTS. 12% Senior Subordinated Note due 2014 $ 2,440,909 08/25/06 2,256,960 2,247,801 Common Stock (B) 109,091 shs. 08/25/06 109,091 -- Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 173,633 shs. 08/25/06 149,940 -- ------------- ------------- 2,515,991 2,247,801 ------------- ------------- MOSS, INC. A MANUFACTURER AND DISTRIBUTOR OF LARGE DISPLAY AND EXHIBIT STRUCTURES. Limited Partnership Interest of Riverside Capital Appreciation Fund I, L.P. (B) 37.37% int. * 348,620 602,528 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 214 shs. 12/21/05 36,647 36,991 ------------- ------------- *09/20/00, 05/23/02 and 02/21/07. 385,267 639,519 ------------- ------------- NABCO, INC. A PRODUCER OF EXPLOSIVE CONTAINMENT VESSELS IN THE UNITED STATES. 14% Senior Subordinated Note due 2014 $ 665,625 02/24/06 616,527 332,813 Limited Liability Company Unit (B) 825 uts. * 825,410 -- Warrant, exercisable until 2016, to purchase common stock at $.01 per share (B) 48 shs. 02/24/06 37,188 -- ------------- ------------- *02/24/06 and 06/22/07. 1,479,125 332,813 ------------- ------------- NAVIS GLOBAL A DESIGNER, MANUFACTURER, SELLER AND SERVICER OF FINISHING MACHINERY FOR THE KNIT AND WOVEN SEGMENTS OF THE GLOBAL TEXTILE INDUSTRY. 12% Senior Subordinated Note due 2014 $ 1,234,551 05/28/04 1,137,616 1,217,651 8.75% Senior Secured Note due 2011 $ 573,025 05/28/04 573,025 570,860 Common Stock (B) 674,157 shs. 05/28/04 674,157 -- Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 203,912 shs. 05/28/04 130,789 -- ------------- ------------- 2,515,587 1,788,511 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 20
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- NESCO HOLDINGS CORPORATION A SALES AND LEASING COMPANY THAT PROVIDES EQUIPMENT TO THE ELECTRIC UTILITY, TELECOMMUNICATIONS, AND VARIOUS OTHER INDUSTRIES. 12% Senior Subordinated Note due 2015 $ 2,125,000 08/02/07 $ 1,888,243 $ 2,110,507 Common Stock (B) 425,000 shs. 08/02/07 425,000 403,750 Warrant, exercisable until 2015, to purchase common stock at $.01 per share (B) 119,360 shs. 08/02/07 194,257 1,194 ------------- ------------- 2,507,500 2,515,451 ------------- ------------- NETSHAPE TECHNOLOGIES, INC. A MANUFACTURER OF POWDER METAL AND METAL INJECTION MOLDED PRECISION COMPONENTS USED IN INDUSTRIAL, CONSUMER, AND OTHER APPLICATIONS. 12% Senior Subordinated Note due 2014 $ 1,530,000 02/02/07 1,408,570 1,425,399 Limited Partnership Interest of Saw Mill PCG Partners LLC (B) 1,020 uts. 02/01/07 1,020,000 918,000 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 91 shs. 02/02/07 90,830 1 ------------- ------------- 2,519,400 2,343,400 ------------- ------------- NONNI'S FOOD COMPANY A PRODUCER AND DISTRIBUTOR OF PREMIUM BISCOTTI AND BAGEL CHIPS IN NORTH AMERICA. 12.25% Senior Subordinated Note due 2012 $ 1,863,462 03/29/04 1,856,139 1,894,149 10% Preferred Stock (B) 255 shs. 03/29/04 255,083 259,014 Common Stock (B) 6,455 shs. 03/29/04 6,455 266,821 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 8,622 shs. 03/29/04 7,323 356,401 ------------- ------------- 2,125,000 2,776,385 ------------- ------------- NYLONCRAFT, INC. A SUPPLIER OF ENGINEERED PLASTIC COMPONENTS FOR THE AUTOMOTIVE INDUSTRY. 9% Senior Secured Note due 2009 $ 812,500 01/28/02 812,500 771,875 11.5% Senior Subordinated Note due 2012 $ 1,500,000 01/28/02 1,415,094 1,125,000 Common Stock (B) 312,500 shs. 01/28/02 312,500 -- Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 243,223 shs. 01/28/02 162,045 -- ------------- ------------- 2,702,139 1,896,875 ------------- ------------- OAKRIVER TECHNOLOGY, INC. DESIGNS, ENGINEERS AND ASSEMBLES HIGH PRECISION AUTOMATED PROCESS EQUIPMENT FOR THE MEDICAL DEVICE INDUSTRY, WITH A FOCUS ON DEFIBRILLATORS AND STENTS. 10% Senior Secured Note due 2012 $ 565,452 01/03/06 556,970 564,633 13% Senior Subordinated Note due 2013 $ 687,241 01/03/06 620,929 686,712 Common Stock (B) 322,307 shs. 01/03/06 322,307 205,812 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 75,378 shs. 01/03/06 62,824 48,133 ------------- ------------- 1,563,030 1,505,290 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 21
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- OLYMPIC SALES, INC. A BOAT RETAILER IN WASHINGTON STATE, OREGON, CALIFORNIA AND BRITISH COLUMBIA. 12% Senior Subordinated Note due 2008 $ 1,022,000 08/07/98 $ 1,022,000 $ 1,008,874 12% Senior Subordinated Note due 2008 $ 307,071 02/09/00 305,584 306,175 Limited Partnership Interest of Riverside VIII, VIII-A and VIII-B Holding Company, L.P. 20.58% int. * 1,555,992 -- Warrants, exercisable until 2008, to purchase common stock at $.01 per share (B) 28,648 shs. ** 389,188 -- ------------- ------------- *08/07/98, 02/23/99, 12/22/99 and 02/25/03. **08/07/98 and 02/09/00. 3,272,764 1,315,049 ------------- ------------- ONTARIO DRIVE & GEAR LTD. A MANUFACTURER OF ALL-WHEEL DRIVE, OFF-ROAD AMPHIBIOUS VEHICLES AND RELATED ACCESSORIES. 13% Senior Subordinated Note due 2013 $ 1,977,885 01/17/06 1,804,187 1,977,885 Limited Liability Company Unit (B) 3,667 uts. 01/17/06 572,115 1,273,913 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 619 shs. 01/17/06 170,801 215,082 ------------- ------------- 2,547,103 3,466,880 ------------- ------------- P A S HOLDCO LLC AN INDEPENDENT PROVIDER OF MAINTENANCE, REPAIR AND OVERHAUL SERVICES TO THE AEROSPACE GAS TURBINE ENGINE AND AIRFRAME MARKETS. 14% Senior Subordinated Note due 2014 $ 2,222,219 07/03/06 2,117,761 2,266,664 Preferred Unit (B) 382 uts. 07/03/06 382,150 428,008 Preferred Unit (B) 69 uts. 07/03/06 68,790 77,045 Common Unit Class I (B) 148 uts. 07/03/06 -- 173,768 Common Unit Class L (B) 31 uts. 07/03/06 -- 36,722 ------------- ------------- 2,568,701 2,982,207 ------------- ------------- P I I HOLDING CORPORATION A MANUFACTURER OF PLASTIC FILM AND BAGS FOR THE GENERAL INDUSTRIAL, MEDICAL, AND FOOD INDUSTRIES. 12% Senior Subordinated Note due 2013 $ 2,295,000 03/31/06 2,157,753 2,340,900 Preferred Stock (B) 36 shs. 03/31/06 329,596 380,176 Common Stock (B) 23 shs. 03/31/06 25,500 48,237 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 13 shs. 03/31/06 11,122 28,059 ------------- ------------- 2,523,971 2,797,372 ------------- ------------- PACIFIC CONSOLIDATED HOLDINGS LLC A MANUFACTURER OF RUGGED, MOBILE LIQUID AND GASEOUS OXYGEN AND NITROGEN GENERATING SYSTEMS USED IN THE GLOBAL DEFENSE, OIL & GAS, AND MEDICAL SECTORS. 12% Senior Subordinated Note due 2012 $ 1,304,624 04/27/07 1,195,199 1,270,730 Limited Liability Company Unit (B) 1,754,707 uts. 04/27/07 63,233 60,011 ------------- ------------- 1,258,432 1,330,741 ------------- ------------- PARADIGM PACKAGING, INC. A MANUFACTURER OF PLASTIC BOTTLES AND CLOSURES FOR THE NUTRITIONAL, PHARMACEUTICAL, PERSONAL CARE AND FOOD PACKAGING MARKETS. 12% Senior Subordinated Note due 2008 $ 2,125,000 12/19/00 2,073,492 2,122,450 Membership Interests of MM/Lincap PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 293,228 ------------- ------------- 2,339,117 2,415,678 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 22
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- POSTLE ALUMINUM COMPANY LLC A MANUFACTURER AND DISTRIBUTOR OF ALUMINUM EXTRUDED PRODUCTS. 12% Senior Subordinated Note due 2014 $ 2,040,000 10/02/06 $ 1,896,554 $ 2,085,115 Limited Liability Company Unit (B) 1,384 uts. 10/02/06 510,000 511,930 Warrant, exercisable until 2016, to purchase common stock at $.01 per share (B) 344 shs. 10/02/06 124,644 127,326 ------------- ------------- 2,531,198 2,724,371 ------------- ------------- PROTEIN GENETICS, INC. A PRODUCER OF BOVINE ARTIFICIAL INSEMINATION PRODUCTS, RELATED BREEDING AND HEALTHCARE PRODUCTS AND SPECIALTY GENETICS SOLD TO THE DAIRY AND BEEF INDUSTRIES. 9.8% Redeemable Exchangeable Preferred Stock (B) 1,004 shs. 08/12/94 100,350 -- Common Stock (B) 2,600 shs. * 126,866 -- ------------- ------------- *08/12/94 and 11/14/01. 227,216 -- ------------- ------------- QUALIS AUTOMOTIVE LLC A DISTRIBUTOR OF AFTERMARKET AUTOMOTIVE BRAKE AND CHASSIS PRODUCTS. 12% Senior Subordinated Note due 2012 $ 1,770,833 05/28/04 1,529,659 1,741,423 Common Stock 354,166 shs. 05/28/04 354,166 128,652 Warrant, exercisable until 2012, to purchase common stock at $.01 per share 377,719 shs. 05/28/04 377,719 137,207 ------------- ------------- 2,261,544 2,007,282 ------------- ------------- QUALSERV CORPORATION A PROVIDER OF FOODSERVICE EQUIPMENT AND SUPPLIES TO MAJOR RESTAURANT CHAINS AND THEIR FRANCHISEES. Limited Partnership Interest (B) 9.26% int. 07/09/04 1 -- ------------- ------------- R A J MANUFACTURING HOLDINGS LLC A DESIGNER AND MANUFACTURER OF WOMEN'S SWIMWEAR SOLD UNDER A VARIETY OF LICENSED BRAND NAMES. 12.5% Senior Subordinated Note due 2014 $ 2,267,190 12/15/06 2,090,362 2,312,534 Limited Liability Company Unit (B) 2,828 uts. 12/15/06 282,810 305,127 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 3 shs. 12/15/06 131,483 143,892 ------------- ------------- 2,504,655 2,761,553 ------------- ------------- RADIAC ABRASIVES, INC. A MANUFACTURER OF BONDED ABRASIVE AND SUPER ABRASIVE GRINDING WHEELS IN THE UNITED STATES. 12% Senior Subordinated Note due 2014 $ 2,260,638 02/10/06 2,113,974 2,328,457 Common Stock (B) 289,362 shs. 02/10/06 289,362 353,615 Warrant, exercisable until 2016, to purchase common stock at $.01 per share (B) 131,555 shs. 02/10/06 119,796 160,767 ------------- ------------- 2,523,132 2,842,839 ------------- ------------- ROYAL BATHS MANUFACTURING COMPANY A MANUFACTURER AND DISTRIBUTOR OF ACRYLIC AND CULTURED MARBLE BATHROOM PRODUCTS. 12.5% Senior Subordinated Notes due 2011 $ 1,062,500 11/14/03 986,524 1,072,824 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 160,030 ------------- ------------- 1,109,470 1,232,854 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 23
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- SAFETY SPEED CUT MANUFACTURING COMPANY, INC. A MANUFACTURER OF VERTICAL PANEL SAWS AND ROUTERS FOR THE WOOD WORKING INDUSTRY. Class B Common Stock (B) 1,480 shs. 06/02/99 $ 256,212 $ 1,288,038 ------------- ------------- SAVAGE SPORTS HOLDING, INC. A MANUFACTURER OF SPORTING FIREARMS. 12% Senior Subordinated Note due 2012 $ 1,538,793 09/10/04 1,456,391 1,569,569 Common Stock (B) 612 shs. * 642,937 1,177,144 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 257,010 ------------- ------------- *09/10/04 and 10/05/07. 2,212,906 3,003,723 ------------- ------------- SMART SOURCE HOLDINGS LLC A SHORT-TERM COMPUTER RENTAL COMPANY. 12% Senior Subordinated Note due 2015 $ 1,961,538 08/31/07 1,782,194 1,952,867 Limited Liability Company Unit (B) 588 uts. 08/31/07 588,462 559,037 Warrant, exercisable until 2015, to purchase common stock at $.01 per share (B) 144 shs. 08/31/07 143,846 1 ------------- ------------- 2,514,502 2,511,905 ------------- ------------- SPECIALTY FOODS GROUP, INC. A MANUFACTURER AND DISTRIBUTOR OF BRANDED MEAT PRODUCTS. Limited Partnership Interest of MHD Holdings LLC 1.43% int. 08/29/00 684,724 -- ------------- ------------- STANTON CARPET HOLDING CO. A DESIGNER AND MARKETER OF HIGH AND MID-PRICED DECORATIVE CARPETS AND RUGS. 12.13% Senior Subordinated Note due 2014 $ 2,239,024 08/01/06 2,110,719 2,254,408 Common Stock (B) 311 shs. 08/01/06 310,976 373,298 Warrant, exercisable until 2014, to purchase common stock at $.02 per share (B) 104 shs. 08/01/06 93,293 124,325 ------------- ------------- 2,514,988 2,752,031 ------------- ------------- STRATEGIC EQUIPMENT & SUPPLY CORPORATION, INC. A PROVIDER OF KITCHEN AND RESTAURANT DESIGN, EQUIPMENT FABRICATION AND INSTALLATION SERVICES. Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 106,539 shs. 01/14/00 658,751 -- ------------- ------------- SYNVENTIVE EQUITY LLC A MANUFACTURER OF HOT RUNNER SYSTEMS USED IN THE PLASTIC INJECTION MOLDING PROCESS. Limited Liability Company Unit (B) 283,333 uts. 08/20/03 63,207 14,101 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 86,780 shs. 08/21/03 19,359 19,359 ------------- ------------- 82,566 33,460 ------------- ------------- TANGENT RAIL CORPORATION A MANUFACTURER OF RAIL TIES AND PROVIDES SPECIALTY SERVICES TO THE NORTH AMERICAN RAILROAD INDUSTRY. 13% Senior Subordinated Note due 2013 $ 2,217,385 10/14/05 1,932,497 2,217,385 Common Stock (B) 2,203 shs. 10/14/05 2,203 949,435 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 1,167 shs. 10/14/05 294,403 502,946 ------------- ------------- 2,229,103 3,669,766 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 24
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- TERRA RENEWAL SERVICES, INC. A PROVIDER OF WASTEWATER RESIDUAL MANAGEMENT AND REQUIRED ENVIRONMENTAL REPORTING, PERMITTING, NUTRIENT MANAGEMENT PLANNING AND RECORD KEEPING TO COMPANIES INVOLVED IN POULTRY AND FOOD PROCESSING. 9.25% Senior Secured Tranche B Note due 2012 (C) $ 1,520,515 * $ 1,515,366 $ 1,521,700 12% Senior Subordinated Note due 2014 $ 1,162,110 ** 1,109,247 1,170,096 Limited Partnership Interest of Saw Mill Capital Fund V, L.P. 2.30% int. 03/01/05 116,285 399,921 Warrant, exercisable until 2016, to purchase common stock at $.01 per share (B) 72 shs. 04/28/06 60,597 69,731 ------------- ------------- *4/28/06 and 12/21/06. ** 04/28/06 and 09/13/06. 2,801,495 3,161,448 ------------- ------------- TORRENT GROUP HOLDINGS, INC. A CONTRACTOR SPECIALIZING IN THE SALES AND INSTALLATION OF ENGINEERED DRYWELLS FOR THE RETENTION AND FILTRATION OF STORMWATER AND NUISANCE WATER FLOW. 12.5% Senior Subordinated Note due 2013 $ 2,239,024 10/26/07 2,102,363 2,243,568 8% Convertible Preferred Stock 414 shs. 10/26/07 414,051 393,348 ------------- ------------- 2,516,414 2,636,916 ------------- ------------- TOTAL EQUIPMENT & SERVICE, INC. A MANUFACTURER OF A WIDE VARIETY OF EQUIPMENT USED IN THE OIL AND GAS INDUSTRY. 10.5% Senior Secured Term Note due 2013 $ 851,351 03/02/07 838,581 849,827 13% Senior Subordinated Note due 2014 $ 598,450 03/02/07 490,608 596,807 Common Stock (B) 125,199 shs. 03/02/07 125,199 118,939 Warrant, exercisable until 2014 to purchase common stock at $.01 per share (B) 34,533 shs. 03/02/07 95,873 345 ------------- ------------- 1,550,261 1,565,918 ------------- ------------- THE TRANZONIC COMPANIES A PRODUCER OF COMMERCIAL AND INDUSTRIAL SUPPLIES, SUCH AS SAFETY PRODUCTS, JANITORIAL SUPPLIES, WORK APPAREL, WASHROOM AND RESTROOM SUPPLIES AND SANITARY CARE PRODUCTS. 13% Senior Subordinated Note due 2009 $ 2,712,000 02/05/98 2,619,848 2,712,000 Common Stock (B) 630 shs. 02/04/98 630,000 323,537 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 228,016 ------------- ------------- 3,618,680 3,263,553 ------------- ------------- TRANSPAC HOLDING COMPANY A DESIGNER, IMPORTER, AND WHOLESALER OF HOME DECOR AND SEASONAL GIFT PRODUCTS. 12% Senior Subordinated Note due 2015 $ 1,773,006 10/31/07 1,650,327 1,770,354 Common Stock (B) 209 shs. 10/31/07 208,589 198,161 Warrant, exercisable until 2015, to purchase common stock at $.01 per share (B) 94 shs. 10/31/07 87,607 1 ------------- ------------- 1,946,523 1,968,516 ------------- ------------- TRANSTAR HOLDING COMPANY A DISTRIBUTOR OF AFTERMARKET AUTOMOTIVE TRANSMISSION PARTS. 12% Senior Subordinated Note due 2013 $ 1,734,000 08/31/05 1,670,145 1,786,020 Common Stock (B) 1,078 shs. * 1,078,450 1,260,862 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 86 shs. 08/31/05 77,485 100,476 ------------- ------------- *08/31/05 and 04/30/07. 2,826,080 3,147,358 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 25
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- TRONAIR, INC. A DESIGNER, ENGINEER AND MANUFACTURER OF GROUND SUPPORT EQUIPMENT FOR THE BUSINESS, COMMUTER AND COMMERCIAL AVIATION MARKETS. 10.5% Senior Secured Term Note due 2008 $ 395,108 01/20/00 $ 395,108 $ 395,119 12% Senior Subordinated Note due 2010 $ 1,326,500 01/20/00 1,301,454 1,327,420 Common Stock (B) 227,400 shs. 01/20/00 227,400 1,273,794 Warrant, exercisable until 2010, to purchase common stock at $1 per share (B) 260,563 shs. 01/20/00 98,540 1,459,558 ------------- ------------- 2,022,502 4,455,891 ------------- ------------- TRUCK BODIES & EQUIPMENT INTERNATIONAL A DESIGNER AND MANUFACTURER OF ACCESSORIES FOR HEAVY AND MEDIUM DUTY TRUCKS, PRIMARILY DUMP BODIES, HOISTS, VARIOUS FORMS OF FLAT-BED BODIES, LANDSCAPE BODIES AND OTHER ACCESSORIES. 12% Senior Subordinated Note due 2013 $ 2,309,541 * 2,169,810 2,253,037 Common Stock (B) 742 shs. * 800,860 523,452 Warrant, exercisable until 2013, to purchase common stock at $.02 per share (B) 153 shs. * 159,894 108,112 ------------- ------------- *07/19/05 and 12/22/05. 3,130,564 2,884,601 ------------- ------------- TRUSTILE DOORS, INC. A MANUFACTURER AND DISTRIBUTOR OF INTERIOR DOORS. 12.5% Senior Subordinated Note due 2010 $ 850,000 04/11/03 816,640 858,500 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 5,781 shs. 04/11/03 83,927 219,335 ------------- ------------- 900,567 1,077,835 ------------- ------------- U-LINE CORPORATION A MANUFACTURER OF HIGH-END, BUILT-IN, UNDERCOUNTER ICE MAKING, WINE STORAGE AND REFRIGERATION APPLIANCES. 12.5% Senior Subordinated Note due 2012 $ 1,882,100 04/30/04 1,735,911 1,872,752 Common Stock (B) 182 shs. 04/30/04 182,200 143,305 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 230 shs. 04/30/04 211,736 181,231 ------------- ------------- 2,129,847 2,197,288 ------------- ------------- VICTORY VENTURES LLC AN ACQUIRER OF CONTROLLING OR SUBSTANTIAL INTERESTS IN OTHER ENTITIES. Series A Preferred Units 1 ut. 12/2/96 937 -- ------------- ------------- VISIONEERING, INC. A DESIGNER AND MANUFACTURER OF TOOLING AND FIXTURES FOR THE AEROSPACE INDUSTRY. 10.5% Senior Secured Term Loan due 2013 $ 802,941 05/17/07 790,897 805,222 13% Senior Subordinated Note due 2014 $ 648,530 05/17/07 583,333 657,186 Common Stock (B) 123,529 shs. 05/17/07 123,529 117,353 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 35,006 shs. 05/17/07 55,055 350 ------------- ------------- 1,552,814 1,580,111 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 26
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
PRINCIPAL AMOUNT, SHARES, UNITS, OR OWNERSHIP ACQUISITION CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- VITALITY FOODSERVICE, INC. A NON-CARBONATED BEVERAGE DISPENSING COMPANY FOCUSED ON THE FOODSERVICE INDUSTRY. 15% Senior Subordinated Note due 2011 $ 2,186,706 09/24/04 $ 2,033,313 $ 1,968,036 Common Stock (B) 26,456 shs. * 264,558 159,866 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 23,787 shs. 09/24/04 186,883 143,738 ------------- ------------- *09/24/04 and 12/22/06. 2,484,754 2,271,640 ------------- ------------- VITEX PACKAGING GROUP, INC. A MANUFACTURER OF SPECIALTY PACKAGING, PRIMARILY ENVELOPES AND TAGS USED ON TEA BAGS. 12.5% Senior Subordinated Note due 2012 $ 1,700,000 07/19/04 1,483,065 1,530,000 14.50% PIK Note due 2010 $ 106,250 06/30/07 97,092 95,625 Limited Liability Company Unit Class A (B) 414,375 uts. 07/19/04 414,375 -- Limited Liability Company Unit Class B (B) 182,935 uts. 07/19/04 182,935 -- ------------- ------------- 2,177,467 1,625,625 ------------- ------------- WAGGIN' TRAIN HOLDINGS LLC A PRODUCER OF PREMIUM QUALITY MEAT DOG TREATS. 14% Senior Subordinated Note due 2014 $ 2,127,348 11/15/07 2,084,801 2,111,776 Limited Liability Company Unit Class B (B) 423 uts. 11/15/07 422,652 401,518 Limited Liability Company Unit Class C (B) 423 uts. 11/15/07 -- 4 ------------- ------------- 2,507,453 2,513,298 ------------- ------------- WALLS INDUSTRIES, INC. A PROVIDER OF BRANDED WORKWEAR AND SPORTING GOODS APPAREL. Limited Partnership Interest 0.40% int. 07/12/04 3,728 21,684 Common Stock (B) 4,028 shs. 12/21/07 -- 23,428 ------------- ------------- 3,728 45,112 ------------- ------------- WELLBORN FOREST HOLDING CO. A MANUFACTURER OF SEMI-CUSTOM KITCHEN AND BATH CABINETRY. 12.13% Senior Subordinated Note due 2014 $ 1,721,250 11/30/06 1,607,166 1,655,345 Common Stock (B) 191 shs. 11/30/06 191,250 172,125 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 95 shs. 11/30/06 86,493 1 ------------- ------------- 1,884,909 1,827,471 ------------- ------------- WORKPLACE MEDIA HOLDING CO. A DIRECT MARKETER SPECIALIZING IN PROVIDING ADVERTISERS WITH ACCESS TO CONSUMERS IN THE WORKPLACE. 13% Senior Subordinated Note due 2015 $ 1,159,196 05/14/07 1,055,990 1,147,400 Limited Partnership Interests (B) 23.16% int. 05/14/07 115,800 110,014 Warrant, exercisable until 2015, to purchase common stock at $.01 per share (B) 88 shs. 05/14/07 83,462 1 ------------- ------------- 1,255,252 1,257,415 ------------- ------------- TOTAL PRIVATE PLACEMENT INVESTMENTS (E) 173,938,980 176,268,415 ------------- ------------- - --------------------------------------------------------------------------------------------------------------------------------- 27
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
SHARES OR INTEREST DUE PRINCIPAL CORPORATE RESTRICTED SECURITIES:(A) (CONTINUED) RATE DATE AMOUNT COST FAIR VALUE - --------------------------------------------------------------------------------------------------------------------------------- RULE 144A SECURITIES - 6.72%: (A) BONDS - 6.72% American Tire Distributor (C) 11.481% 04/01/12 $ 1,000,000 $ 950,000 $ 970,000 Bristow Group, Inc. 7.500 09/15/17 150,000 150,000 150,750 Calpine Corporation 8.750 07/15/13 500,000 465,000 537,500 Chaparral Energy, Inc. 8.875 02/01/17 1,500,000 1,491,780 1,353,750 Charter Communications Op LLC 8.000 04/30/12 250,000 249,375 241,250 Compucom Systems, Inc. 12.500 10/01/15 1,330,000 1,285,118 1,300,075 Douglas Dynamics LLC 7.750 01/15/12 630,000 632,715 544,950 G F S I, Inc. (C) 10.500 06/01/11 750,000 682,541 712,500 Hawker Beechcraft Acquisition Co. 9.750 04/01/17 1,275,000 1,287,050 1,268,625 Intergen NV 9.000 06/30/17 750,000 743,918 789,375 Kar Holdings, Inc. 10.000 05/01/15 1,000,000 924,375 892,500 Kar Holdings, Inc. 8.750 05/01/14 50,000 50,000 46,000 Packaging Dynamics Corporation of America 10.000 05/01/16 1,500,000 1,498,861 1,320,000 Penhall International 12.000 08/01/14 650,000 666,157 604,500 Pinnacle Foods Finance LLC 10.625 04/01/17 2,000,000 1,807,500 1,720,000 Quebecor Media, Inc. 7.750 03/15/16 175,000 164,312 168,438 Rite Aid Corporation 9.500 06/15/17 1,600,000 1,456,496 1,324,000 Ryerson, Inc. 12.000 11/01/15 65,000 65,000 64,188 Snoqualmie Entertainment Authority 9.125 02/01/15 500,000 487,956 481,250 Steel Dynamics, Inc. 6.750 04/01/15 200,000 200,000 194,000 Tenneco, Inc. 8.125 11/15/15 100,000 100,000 99,000 Tunica-Biloxi Gaming Authority 9.000 11/15/15 1,075,000 1,105,468 1,099,188 TXU Energy Company LLC 10.250 11/01/15 1,000,000 1,004,875 990,000 ------------ ------------ TOTAL BONDS 17,468,497 16,871,839 ------------ ------------ COMMON STOCK - 0.00% Jordan Telecom Products (B) 70 14,000 -- ------------ ------------ TOTAL COMMON STOCK 14,000 -- ------------ ------------ TOTAL RULE 144A SECURITIES 17,482,497 16,871,839 ------------ ------------ TOTAL CORPORATE RESTRICTED SECURITIES $191,421,477 $193,140,254 ------------ ------------ - --------------------------------------------------------------------------------------------------------------------------------- 28
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
INTEREST DUE PRINCIPAL CORPORATE PUBLIC SECURITIES - 28.43%:(A) RATE DATE AMOUNT COST MARKET VALUE - --------------------------------------------------------------------------------------------------------------------------------- BONDS - 25.20% A M C Entertainment, Inc. 11.000% 02/01/16 $ 815,000 $ 817,266 $ 857,785 Activant Solutions, Inc. 9.500 05/01/16 150,000 150,000 129,750 Affinia Group, Inc. 9.000 11/30/14 1,010,000 936,036 909,000 ALH Fin LLC / ALH Fin Corporation 8.500 01/15/13 1,550,000 1,519,505 1,488,000 Appleton Papers, Inc. 8.125 06/15/11 300,000 300,000 294,375 Aramark Corporation (C) 8.411 02/01/15 200,000 200,000 195,000 Aramark Corporation 8.500 02/01/15 200,000 200,000 202,500 Atlas Pipeline Partners 8.125 12/15/15 200,000 200,000 198,000 Bally Total Fitness Holdings Corporation 14.000 10/01/13 90,000 73,350 74,700 Basic Energy Services 7.125 04/15/16 225,000 225,000 211,500 Blockbuster, Inc. (C) 9.000 09/01/12 475,000 475,733 406,125 Brigham Exploration Co. 9.625 05/01/14 1,200,000 1,167,903 1,113,000 CCH I Holdings LLC 11.125 01/15/14 2,000,000 1,558,188 1,212,500 Cablevision Systems Corporation 8.000 04/15/12 1,000,000 1,011,420 970,000 Cenveo Corporation 7.875 12/01/13 1,100,000 1,100,000 980,375 Cincinnati Bell, Inc. 8.375 01/15/14 1,100,000 1,007,500 1,072,500 Clayton Williams Energy, Inc. 7.750 08/01/13 1,200,000 1,179,000 1,050,000 Community Health Systems, Inc. 8.875 07/15/15 1,200,000 1,169,415 1,222,500 Delta Petroleum Corporation 7.000 04/01/15 750,000 661,875 641,250 Dynegy Holdings, Inc. 6.875 04/01/11 500,000 422,500 482,500 Dynegy Holdings, Inc. 7.500 06/01/15 500,000 445,000 467,500 Dynegy Holdings, Inc. 8.375 05/01/16 330,000 330,000 322,575 Edison Mission Energy 7.750 06/15/16 55,000 55,000 56,650 Esterline Technologies 7.750 06/15/13 200,000 200,000 205,000 Ford Motor Credit Co. 7.375 10/28/09 1,250,000 1,246,875 1,176,558 Ford Motor Credit Co. 8.000 12/15/16 710,000 678,050 606,113 Gencorp, Inc. 9.500 08/15/13 259,000 259,000 261,590 General Motors Acceptance Corporation 7.750 01/19/10 1,250,000 1,279,930 1,166,025 General Motors Corporation 8.375 07/15/33 1,400,000 1,246,000 1,127,000 Goodyear Tire & Rubber Co. 7.857 08/15/11 1,400,000 1,342,750 1,417,500 Graham Packaging Corporation 9.875 10/15/14 1,000,000 902,500 920,000 Great Lakes Dredge & Dock Corporation 7.750 12/15/13 500,000 481,250 467,500 H C A, Inc. 9.250 11/15/16 975,000 991,234 1,023,750 Hughes Network Systems 9.500 04/15/14 1,050,000 1,071,748 1,063,125 Idearc, Inc. 8.000 11/15/16 1,000,000 1,001,990 917,500 Inergy LP 8.250 03/01/16 150,000 150,000 155,250 Innophos, Inc. 8.875 08/15/14 75,000 74,250 74,625 Intelsat Bermuda Ltd. 9.250 06/15/16 1,365,000 1,417,167 1,371,825 - --------------------------------------------------------------------------------------------------------------------------------- 29
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
INTEREST DUE PRINCIPAL CORPORATE PUBLIC SECURITIES:(A) CONTINUED RATE DATE AMOUNT COST MARKET VALUE - --------------------------------------------------------------------------------------------------------------------------------- BONDS, CONTINUED Interline Brands, Inc. 8.125% 06/15/14 $ 1,300,000 $ 1,291,107 $ 1,287,000 Koppers, Inc. 9.875 10/15/13 477,000 477,000 502,043 Lear Corporation 8.750 12/01/16 1,940,000 1,844,050 1,765,400 Leucadia National Corporation 7.000 08/15/13 650,000 659,649 622,375 Liberty Media Corporation 5.700 05/15/13 1,000,000 951,610 926,412 Majestic Star Casino LLC 9.500 10/15/10 500,000 500,000 472,500 Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 198,000 Mariner Energy, Inc. 8.000 05/15/17 800,000 805,284 761,000 Markwest Energy Operating Co. 6.875 11/01/14 775,000 763,000 738,188 Mediacom Broadband LLC 8.500 10/15/15 1,500,000 1,518,006 1,329,375 Metaldyne Corporation 11.000 06/15/12 750,000 601,250 483,750 Metaldyne Corporation (C) 10.000 11/01/13 510,000 513,113 420,750 N R G Energy, Inc. 7.375 02/01/16 175,000 175,000 170,625 N T L Cable PLC 9.125 08/15/16 1,380,000 1,417,172 1,366,200 Newark Group, Inc. 9.750 03/15/14 850,000 796,863 811,750 North American Energy Partners 8.750 12/01/11 1,165,000 1,175,971 1,150,438 O E D Corp./Diamond Jo Company Guarantee 8.750 04/15/12 1,000,000 985,960 1,000,000 Petrohawk Energy Corporation 9.125 07/15/13 1,500,000 1,523,949 1,578,750 Pliant Corporation 11.125 09/01/09 550,000 539,000 453,750 Pliant Corporation (C) 11.850 06/15/09 990,634 1,000,995 1,010,447 Polypore, Inc. 8.750 05/15/12 1,960,000 1,893,800 1,915,900 Pregis Corporation 12.375 10/15/13 1,000,000 981,490 1,060,000 Quality Distribution, Inc. 9.000 11/15/10 1,030,000 1,001,575 875,500 Quality Distribution, Inc. (C) 9.743 01/15/12 545,000 547,298 490,500 RBS Global & Rexnord Corporation 11.750 08/01/16 275,000 284,646 268,813 Rental Service Corporation 9.500 12/01/14 1,500,000 1,489,735 1,342,500 Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 375,000 Stanadyne Corporation 10.000 08/15/14 1,500,000 1,500,000 1,447,500 Stewart & Stevenson LLC 10.000 07/15/14 1,500,000 1,537,510 1,507,500 Stratos Global 9.875 02/15/13 575,000 578,292 606,625 Tekni-Plex, Inc. 8.750 11/15/13 650,000 655,303 614,250 Tenneco, Inc. 8.625 11/15/14 1,000,000 1,002,383 982,500 Texas Industries, Inc. 7.250 07/15/13 70,000 70,000 68,600 Titan International, Inc. 8.000 01/15/12 150,000 150,000 144,750 Trimas Corporation 9.875 06/15/12 823,000 764,250 802,425 Triton PCS, Inc. 8.500 06/01/13 550,000 550,000 569,250 Tube City IMS Corporation 9.750 02/01/15 1,000,000 1,010,205 900,000 United Components, Inc. 9.375 06/15/13 1,080,000 1,081,127 1,066,500 - --------------------------------------------------------------------------------------------------------------------------------- 30
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
SHARES OR INTEREST DUE PRINCIPAL CORPORATE PUBLIC SECURITIES:(A) CONTINUED RATE DATE AMOUNT COST MARKET VALUE - --------------------------------------------------------------------------------------------------------------------------------- BONDS, CONTINUED United Rentals, Inc. 7.750% 11/15/13 $ 625,000 $ 625,000 $ 543,750 United Rentals, Inc. 7.000 02/15/14 500,000 500,000 418,750 Valassis Communications, Inc. 8.250 03/01/15 165,000 161,019 147,056 Vought Aircraft Industries 8.000 07/15/11 1,000,000 998,989 947,500 Warner Music Group Corporation 7.375 04/15/14 275,000 275,000 211,750 Waste Services, Inc. 9.500 04/15/14 1,100,000 1,121,747 1,072,500 Yankee Acquisition Corporation 9.750 02/15/17 1,500,000 1,473,750 1,372,500 ------------ ------------ TOTAL BONDS 65,909,534 63,312,118 ------------ ------------ COMMON STOCK - 3.0% Bally Total Fitness Holdings Corporation (B) 600 5,520 96 Comcast Corporation (B) 33,200 613,868 606,232 EnerNOC, Inc. (B) 46,500 1,283,262 2,283,150 ITC^DeltaCom, Inc. (B) 178,666 1,563,328 893,330 PepsiAmericas, Inc. 92,145 2,006,365 3,070,271 Supreme Industries, Inc. 115,721 267,323 671,182 ------------ ------------ TOTAL COMMON STOCK 5,739,666 7,524,261 ------------ ------------ CONVERTIBLE BONDS - 0.23% Citadel Broadcasting Corporation 1.875% 02/15/11 $ 700,000 543,375 574,000 TOTAL CONVERTIBLE BONDS 543,375 574,000 ------------ ------------ TOTAL CORPORATE PUBLIC SECURITIES $ 72,192,575 $ 71,410,379 ------------ ------------ INTEREST DUE PRINCIPAL SHORT-TERM SECURITIES: RATE/YIELD DATE AMOUNT COST MARKET VALUE - --------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL PAPER - 7.80% Abbey National North America LLC 4.454% 01/03/08 $ 2,249,000 $ 2,248,444 $ 2,248,444 Duke Energy Carolinas LLC 4.501 01/02/08 1,942,000 1,941,757 1,941,757 International Lease Finance Corporation 4.387 01/04/08 2,700,000 2,699,015 2,699,015 N S T A R Electric Company 4.305 01/07/08 3,632,000 3,629,397 3,629,397 P P G Industries, Inc. 5.613 01/11/08 2,464,000 2,460,167 2,460,167 Textron Financial Corporation 5.706 01/02/08 5,150,000 5,149,185 5,149,185 Wisconsin Gas Company 4.453 01/03/08 1,473,000 1,472,635 1,472,635 ------------ ------------ TOTAL SHORT-TERM SECURITIES $ 19,600,600 $ 19,600,600 ------------ ------------ TOTAL INVESTMENTS 113.13% $283,214,652 $284,151,233 ------ ============ ------------ Other Assets 3.29 8,259,419 Liabilities (16.42) (41,247,630) ------ ------------ TOTAL NET ASSETS 100.00% $251,163,022 ====== ============ (A) In each of the convertible note, warrant, convertible preferred and common stock investments, the issuer has agreed to provide certain registration rights. (B) Non-income producing security. (C) Variable rate security; rate indicated is as of 12/31/07. (D) Defaulted security; interest not accrued. (E) Illiquid securities. At December 31, 2007, the value of these securities amounted to $176,268,415 or 70.18% of net assets. * Effective yield at purchase PIK - Payment-in-kind - --------------------------------------------------------------------------------------------------------------------------------- 31
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
Fair Value/ Fair Value/ Industry Classification Market Value Industry Classification Market Value - ------------------------------------------------------------ ------------------------------------------------------------ AEROSPACE - 4.37% Workplace Media Holding Co. $ 1,257,415 Consolidated Foundries Holdings $ 3,939,330 ------------ Esterline Technologies 205,000 8,097,559 Gencorp, Inc. 261,590 ------------ Hughes Network Systems 1,063,125 BUILDINGS & REAL ESTATE - 1.45% P A S Holdco LLC 2,982,207 K W P I Holdings Corporation 2,495,159 Visioneering, Inc. 1,580,111 Texas Industries, Inc. 68,600 Vought Aircraft Industries 947,500 TruStile Doors, Inc. 1,077,835 ------------ ------------ 10,978,863 3,641,594 ------------ ------------ AUTOMOBILE - 10.39% CHEMICAL, PLASTICS & RUBBER - 0.45% American Tire Distributor 970,000 Capital Specialty Plastics, Inc. 558,932 Ford Motor Credit Co. 1,782,671 Innophos, Inc. 74,625 Fuel Systems Holding Corporation 2,236,267 Koppers, Inc. 502,043 General Motors Acceptance Corporation 1,166,025 ------------ General Motors Corporation 1,127,000 1,135,600 Goodyear Tire & Rubber Co. 1,417,500 ------------ Jason, Inc. 1,911,103 CONSUMER PRODUCTS - 9.82% Lear Corporation 1,765,400 Aero Holdings, Inc. 3,123,455 Metaldyne Corporation 904,500 ALH Fin LLC/ALH Fin Corporation 1,488,000 Nyloncraft, Inc. 1,896,875 Augusta Sportswear Holding Co. 4,168,873 Ontario Drive & Gear Ltd. 3,466,880 Bravo Sports Holding Corporation 2,695,150 Qualis Automotive LLC 2,007,282 G F S I, Inc. 712,500 Tenneco, Inc. 1,081,500 K N B Holdings Corporation 2,696,176 Titan International, Inc. 144,750 Kar Holdings, Inc. 938,500 Transtar Holding Company 3,147,358 Momentum Holding Co. 1,530,843 United Components, Inc. 1,066,500 R A J Manufacturing Holdings LLC 2,761,553 ------------ Royal Baths Manufacturing Company 1,232,854 26,091,611 The Tranzonic Companies 3,263,553 ------------ Walls Industries, Inc. 45,112 BEVERAGE, DRUG & FOOD - 4.73% ------------ Aramark Corporation 397,500 24,656,569 Golden Country Foods Holding, Inc. 2,038,522 ------------ Nonni's Food Company 2,776,385 CONTAINERS, PACKAGING & GLASS - 5.82% PepsiAmericas, Inc. 3,070,271 Flutes, Inc. 1,538,086 Rite Aid Corporation 1,324,000 Graham Packaging Corporation 920,000 Specialty Foods Group, Inc. -- Maverick Acquisition Company 869,006 Vitality Foodservice, Inc. 2,271,640 P I I Holding Corporation 2,797,372 ------------ Packaging Dynamics Corporation of America 1,320,000 11,878,318 Paradigm Packaging, Inc. 2,415,678 ------------ Pliant Corporation 1,464,197 BROADCASTING & ENTERTAINMENT - 3.22% Pregis Corporation 1,060,000 CCH I Holdings LLC 1,212,500 Tekni-Plex, Inc. 614,250 Cablevision Systems Corporation 970,000 Vitex Packaging Group, Inc. 1,625,625 Cenveo Corporation 980,375 ------------ Charter Communications Op LLC 241,250 14,624,214 Citadel Broadcasting Corporation 574,000 ------------ Comcast Corporation 606,232 DISTRIBUTION - 1.96% Liberty Media Corporation 926,412 Affinia Group, Inc. 909,000 Mediacom Broadband LLC 1,329,375 Duncan Systems, Inc. 1,743,474 Magnatech International, Inc. 2,273,685 QualServ Corporation -- Strategic Equipment & Supply Corporation, Inc. -- ------------ 4,926,159 ------------ - ---------------------------------------------------------------------------------------------------------------------------------- 32
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
Fair Value/ Fair Value/ Industry Classification Market Value Industry Classification Market Value - ------------------------------------------------------------ ------------------------------------------------------------ DIVERSIFIED/CONGLOMERATE, MANUFACTURING - 7.10% HEALTHCARE, EDUCATION & CHILDCARE - 3.74% A H C Holdings Company, Inc. $ 2,524,055 A T I Acquisition Company $ 2,162,120 Activant Solutions, Inc. 129,750 American Hospice Management Holding LLC 2,156,424 Arrow Tru-Line Holdings, Inc. 1,670,104 Community Health Systems, Inc. 1,222,500 Douglas Dynamics LLC 544,950 F H S Holdings LLC 2,822,478 Evans Consoles, Inc. 1,068,390 H C A, Inc. 1,023,750 Great Lakes Dredge & Dock Corporation 467,500 ------------ Polypore, Inc. 1,915,900 9,387,272 Postle Aluminum Company LLC 2,724,371 ------------ Radiac Abrasives, Inc. 2,842,839 HOME & OFFICE FURNISHINGS, HOUSEWARES, AND DURABLE RBS Global & Rexnord Corporation 268,813 CONSUMER PRODUCTS - 7.98% Trimas Corporation 802,425 Connor Sport Court International, Inc. 1,000,560 Truck Bodies & Equipment International 2,884,601 H M Holding Company 1,105,000 ------------ Home Decor Holding Company 2,366,721 17,843,698 Justrite Manufacturing Acquisition Co. 1,858,797 ------------ K H O F Holdings, Inc. 2,540,875 DIVERSIFIED/CONGLOMERATE, SERVICE - 3.83% Monessen Holding Corporation 2,419,266 Advanced Technologies Holdings 2,525,289 Stanton Carpet Holding Co. 2,752,031 CapeSuccess LLC 5,862 Transpac Holdings Company 1,968,516 Diversco, Inc./DHI Holdings, Inc. -- U-Line Corporation 2,197,288 Dwyer Group, Inc. 1,371,395 Wellborn Forest Holding Co. 1,827,471 Fowler Holding, Inc. 2,535,538 ------------ Insurance Claims Management, Inc. -- 20,036,525 Interline Brands, Inc. 1,287,000 ------------ Mail Communications Group, Inc. 1,255,441 LEISURE, AMUSEMENT, ENTERTAINMENT - 3.42% Moss, Inc. 639,519 A M C Entertainment, Inc. 857,785 ------------ Bally Total Fitness Holding Corporation 74,796 9,620,044 Electra Bicycle Company LLC 1,395,746 ------------ Majestic Star Casino LLC 472,500 ELECTRONICS - 1.47% O E D Corp/Diamond Jo Company Guarantee 1,000,000 Calpine Corporation 537,500 Savage Sports Holding, Inc. 3,003,723 Connecticut Electric, Inc. 2,550,902 Snoqualmie Entertainment Authority 481,250 Directed Electronics, Inc. 611,810 Tunica-Biloxi Gaming Authority 1,099,188 ------------ Warner Music Group Corporation 211,750 3,700,212 ------------ ------------ 8,596,738 FARMING & AGRICULTURE - 1.00% ------------ Protein Genetics, Inc. -- MACHINERY - 9.39% Waggin' Train Holdings LLC 2,513,298 Davis-Standard LLC 3,749,595 ------------ Integration Technology Systems, Inc. -- 2,513,298 K-Tek Holdings Corporation 2,516,419 ------------ Manitowoc Company, Inc. 198,000 FINANCIAL SERVICES - 3.23% Morton Industrial Group, Inc. 2,247,801 Hawker Beechcraft Acquisition Co. 1,268,625 Navis Global 1,788,511 Highgate Capital LLC -- NetShape Technologies, Inc. 2,343,400 Leucadia National Corporation 622,375 Pacific Consolidated Holdings LLC 1,330,741 Nesco Holdings Corp. 2,515,451 Safety Speed Cut Manufacturing Company, Inc. 1,288,038 Penhall International 604,500 Stanadyne Corporation 1,447,500 Pinnacle Foods Finance LLC 1,720,000 Stewart & Stevenson LLC 1,507,500 Victory Ventures LLC -- Supreme Industries, Inc. 671,182 Yankee Acquisition Corporation 1,372,500 ------------ 8,103,451 ------------ - ---------------------------------------------------------------------------------------------------------------------------------- 33
MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2007
Fair Value/ Fair Value/ Industry Classification Market Value Industry Classification Market Value - ------------------------------------------------------------ ------------------------------------------------------------ Synventive Equity LLC $ 33,460 RETAIL STORES - 1.60% Tronair, Inc. 4,455,891 Blockbuster, Inc. $ 406,125 ------------ Olympic Sales, Inc. 1,315,049 23,578,038 Rental Service Corporation 1,342,500 ------------ United Rentals, Inc. 962,500 MEDICAL DEVICES/BIOTECH - 2.46% ------------ Coeur, Inc. 1,402,336 4,026,174 E X C Acquisition Corporation 184,972 ------------ MicroGroup, Inc. 3,094,806 TECHNOLOGY - 2.43% OakRiver Technology, Inc. 1,505,290 Compucom Systems, Inc. 1,300,075 ------------ EnerNOC, Inc. 2,283,150 6,187,404 Smart Source Holdings LLC 2,511,905 ------------ ------------ MINING, STEEL, IRON & NON PRECIOUS METALS - 0.46% 6,095,130 Ryerson, Inc. 64,188 ------------ Steel Dynamics, Inc. 194,000 TELECOMMUNICATIONS - 2.34% Tube City IMS Corporation 900,000 Cincinnati Bell, Inc. 1,072,500 ------------ Intelsat Bermuda Ltd. 1,371,825 1,158,188 ITC^DeltaCom, Inc. 893,330 ------------ Jordan Telecom Products -- NATURAL RESOURCES - 0.12% N T L Cable PLC 1,366,200 Appleton Papers, Inc. 294,375 Stratos Global 606,625 ------------ Triton P C S, Inc. 569,250 294,375 ------------ ------------ 5,879,730 OIL & GAS - 3.26% ------------ Atlas Pipeline Partners 198,000 TRANSPORTATION - 2.14% Basic Energy Services 211,500 NABCO, Inc. 332,813 Brigham Exploration Co. 1,113,000 Quality Distribution, Inc. 1,366,000 Bristow Group, Inc. 150,750 Tangent Rail Corporation 3,669,766 Chaparral Energy, Inc. 1,353,750 ------------ Clayton Williams Energy, Inc. 1,050,000 5,368,579 Delta Petroleum Corporation 641,250 ------------ Mariner Energy, Inc. 761,000 UTILITIES - 2.29% North American Energy Partners 1,150,438 Dynegy Holdings, Inc. 1,272,575 Total Equipment & Service, Inc. 1,565,918 Edison Mission Energy 56,650 ------------ Inergy LP 155,250 8,195,606 Intergen NV 789,375 ------------ Markwest Energy Operating Co. 738,188 PHARMACEUTICALS - 1.15% N R G Energy, Inc. 170,625 CorePharma LLC 2,672,090 Petrohawk Energy Corporation 1,578,750 Enzymatic Therapy, Inc. 221,573 TXU Energy Company LLC 990,000 ------------ ------------ 2,893,663 5,751,413 ------------ ------------ PUBLISHING/PRINTING - 0.96% WASTE MANAGEMENT / POLLUTION - 2.75% Idearc, Inc. 917,500 Terra Renewal Services, Inc. 3,161,448 Newark Group, Inc. 811,750 Torrent Group Holdings, Inc. 2,636,916 Quebecor Media, Inc. 168,438 Waste Services, Inc. 1,072,500 Sheridan Acquisition Corporation 375,000 ------------ Valassis Communications, Inc. 147,056 6,870,864 ------------ ------------ 2,419,744 TOTAL CORPORATE RESTRICTED AND PUBLIC ------------ SECURITIES - 105.33% $264,550,633 ============ - ---------------------------------------------------------------------------------------------------------------------------------- 34
MassMutual Corporate Investors - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 1. HISTORY MassMutual Corporate Investors (the "Trust") commenced operations in 1971 as a Delaware corporation. Pursuant to an Agreement and Plan of Reorganization dated November 14, 1985, approved by shareholders, the Trust was reorganized as a Massachusetts business trust under the laws of the Commonwealth of Massachusetts, effective November 28, 1985. The Trust is a diversified closed-end management investment company. Babson Capital Management LLC ("Babson Capital"), a wholly-owned indirect subsidiary of Massachusetts Mutual Life Insurance Company ("MassMutual"), acts as its investment adviser. The Trust's investment objective is to maintain a portfolio of securities providing a fixed yield and at the same time offering an opportunity for capital gains. The Trust's principal investments are privately placed, below-investment grade, long-term debt obligations with equity features such as warrants, conversion rights, or other equity features and, occasionally, preferred stocks. The Trust typically purchases these investments, which are not publicly tradable, directly from their issuers in private placement transactions. These investments are typically mezzanine debt instruments with accompanying private equity securities made to small or middle market companies. In addition, the Trust may temporarily invest, subject to certain limitations, in marketable investment grade debt securities, other marketable debt securities (including high yield securities) and marketable common stocks. Below investment grade or high yield securities have predominantly speculative characteristics with respect to the capacity of the issuer to pay interest and repay principal. On January 27,1998, the Board of Trustees authorized the formation of a wholly-owned subsidiary of the Trust ("MMCI Subsidiary Trust") for the purpose of holding certain investments. The results of MMCI Subsidiary Trust have been included in the accompanying financial statements. Footnote 2.D below discusses the federal tax consequences of the MMCI Subsidiary Trust. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed consistently by the Trust in the preparation of its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. A. VALUATION OF INVESTMENTS: Valuation of a security in the Trust's portfolio is made on the basis of market price whenever market quotations are readily available and all securities of the same class held by the Trust can be readily sold in such market. Nearly all securities which are acquired by the Trust directly from the issuers and shares into which such securities may be converted or which may be purchased on the exercise of warrants attached to such securities will be subject to legal or contractual delays in, or restrictions on, resale and will therefore be "restricted securities." Generally speaking, as contrasted with open-market sales of unrestricted securities which may be effected immediately if the market is adequate, restricted securities can be sold only in a public offering for which a registration statement is in effect under the Securities Act of 1933, as amended (the "1933 Act"), or pursuant to a transaction that is exempt from registration under the 1933 Act. The value of restricted securities, and of any other assets for which there are no reliable market quotations, is the fair value as determined in good faith by the Trust's Board of Trustees (the "Trustees"). Each restricted security is valued by the Trustees at the time of its acquisition and at least quarterly thereafter. The Trustees have established guidelines to aid in the valuation of each security. Generally, restricted securities are initially valued at cost or less at the time of acquisition by the Trust. Values greater or less than cost are used thereafter for restricted securities in appropriate circumstances. Among the factors ordinarily considered are the existence of restrictions upon the sale of a security held by the Trust; an estimate of the existence and extent of a market for the security; the extent of any discount at which the security was acquired; the estimated period of time during which the security will not be freely marketable; the estimated expenses of registering or otherwise qualifying the security for public sale; estimated underwriting commissions if underwriting would be required to effect a sale; in the case of a convertible security, whether or not it would trade on the basis of its stock equivalent; in the case of a debt obligation which would trade independently of any equity equivalent, the current yields on comparable securities; the estimated amount of the floating supply of such securities available for purchase; the proportion of the issue held by the Trust; changes in the financial condition and prospects of the issuer; the existence of merger proposals or tender - -------------------------------------------------------------------------------- 35 MassMutual Corporate Investors - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 offers affecting the issuer; and any other factors affecting fair value, all in accordance with the Investment Company Act of 1940, as amended (the "1940 Act"). In making valuations, opinions of counsel may be relied upon as to whether or not securities are restricted securities and as to the legal requirements for public sale. When market quotations are readily available for unrestricted securities of an issuer, restricted securities of the same class are generally valued at a discount from the market price of such unrestricted securities. The Trustees, however, consider all factors in fixing any discount, including the filing of a registration statement for such securities under the 1933 Act and any other developments which are likely to increase the probability that the securities may be publicly sold by the Trust without restriction. The Trustees meet at least once each quarter to approve the value of the Trust's portfolio securities as of the close of business on the last business day of the preceding quarter. This valuation requires the approval of a majority of the Trustees of the Trust, including a majority of the Trustees who are not interested persons of the Trust or of Babson Capital. In making valuations, the Trustees will consider reports by Babson Capital analyzing each portfolio security in accordance with the relevant factors referred to above. Babson Capital has agreed to provide such reports to the Trust at least quarterly. The consolidated financial statements include private placement restricted securities valued at $176,268,415 (70.18% of net assets) as of December 31, 2007 whose values have been estimated by the Trustees in the absence of readily ascertainable market values. Due to the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material. The values for Rule 144A restricted securities and corporate public securities are stated at the last reported sales price or at prices based upon quotations obtained from brokers and dealers as of December 31, 2007, subject to discount where appropriate, and are approved by the Trustees. Short-term securities with more than sixty days to maturity are valued at fair value and short-term securities having a maturity of sixty days or less are valued at amortized cost, which approximates market value. B. ACCOUNTING FOR INVESTMENTS: Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis, including the amortization of premiums and accretion of discounts on bonds held using the yield-to-maturity method. The Trust does not accrue income when payment is delinquent and when management believes payment is questionable. Realized gains and losses on investment transactions and unrealized appreciation and depreciation of investments are reported for financial statement and federal income tax purposes on the identified cost method. C. USE OF ESTIMATES: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. D. FEDERAL INCOME TAXES: The Trust has elected to be taxed as a "regulated investment company" under the Internal Revenue Code, and intends to maintain this qualification and to distribute substantially all of its net taxable income to its shareholders. In any year when net long-term capital gains are realized by the Trust, management, after evaluating the prevailing economic conditions, will recommend that the Trustees either designate the net realized long-term gains as undistributed and pay the federal capital gains taxes thereon or distribute all or a portion of such net gains. For the year ended December 31, 2007, the Trust had a net realized taxable long-term capital gain balance of $2,604,766, which the Trustees voted to retain and pay the federal capital gain tax thereon. The Trust has accrued income tax expense of $911,668 on the Statement of Operations related to the retained realized capital gains. The Trust is taxed as a regulated investment company and is therefore limited as to the amount of non-qualified income that it may receive as the result of operating a trade or business, e.g. the Trust's PRO RATA share of income allocable to the Trust by a partnership operating - -------------------------------------------------------------------------------- 36 MassMutual Corporate Investors - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 company. The Trust's violation of this limitation could result in the loss of its status as a regulated investment company, thereby subjecting all of its net income and capital gains to corporate taxes prior to distribution to its shareholders. The Trust, from time-to-time, identifies investment opportunities in the securities of entities that could cause such trade or business income to be allocable to the Trust. The MMCI Subsidiary Trust (described in Footnote 1, above) was formed in order to allow investment in such securities without adversely affecting the Trust's status as a regulated investment company. The MMCI Subsidiary Trust is not taxed as a regulated investment company. Accordingly, prior to the Trust receiving any distributions from the MMCI Subsidiary Trust, all of the MMCI Subsidiary Trust's taxable income and realized gains, including non-qualified income and realized gains, is subject to taxation at prevailing corporate tax rates. For the year ended December 31, 2007, the MMCI Subsidiary Trust has accrued income tax expense of $138,142. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of the existing assets and liabilities and their respective tax basis. As of December 31, 2007, the MMCI Subsidiary Trust has a deferred tax asset of $216,497 for which a full valuation reserve has been recorded. No future tax benefit is expected to be realized from this asset as of December 31, 2007. The MMCI Subsidiary Trust has recorded a deferred income tax benefit in the current year in the amount of $651,017 resulting from the decrease to zero of the deferred tax liability at December 31, 2006. In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES -- AN INTERPRETATION OF FASB STATEMENT NO. 109 ("FIN 48"). Management has analyzed the Trust's tax positions taken on federal income tax returns for all open tax years and has concluded that as of December 31, 2007, no provision for income tax would be required in the Trust's financial statements. The Trust's federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue. E. DISTRIBUTIONS TO SHAREHOLDERS: The Trust records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. The Trust's net investment income dividend is declared four times per year, in April, July, October, and December. The Trust's net realized capital gain distribution, if any, is declared in December. As of December 31, 2007, the components of distributable earnings on a tax basis included $1,857,259 of undistributed ordinary income. Such distributions and distributable earnings on a tax basis are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Net investment income and net realized gains or losses of the Trust as presented under accounting principles generally accepted in the United States of America may differ from distributable earnings due to earnings from the MMCI Subsidiary Trust as well as certain permanent and temporary differences in the recognition of income and net realized gains or losses on certain investments. Permanent differences will result in reclassifications to the capital accounts. In 2007, the Trust increased undistributed net investment income and decreased additional paid in capital by a total of $58,813 to more accurately display the Trust's capital financial position on a tax-basis in accordance with accounting principles generally accepted in the United States of America. These re-classifications had no impact on net asset value. The tax character of distributions declared during the years ended December 31, 2007 and 2006 was as follows: DISTRIBUTIONS PAID FROM: 2007 2006 ----------------------------- Ordinary Income $ 23,679,411 $ 22,643,658 Long-term Capital gains $ -- $ -- F. EXPENSE REDUCTION: Citibank, N.A. ("Citibank") serves as custodian to the Trust. Pursuant to the custodian agreement, Citibank receives a fee reduced by credits on cash balances the Trust maintains with Citibank. All credit balances, if any, used to reduce the Trust's custodian fees are reported as fees paid indirectly on the Statement of Operations. For the year ended December 31, 2007, there were no credit balances used to reduce custodian fees. - -------------------------------------------------------------------------------- 37 MassMutual Corporate Investors - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 3. INVESTMENT SERVICES CONTRACT A. NEW INVESTMENT SERVICES CONTRACT: An Investment Services Contract between the Trust and Babson Capital, effective October 1, 2005 (the "New Contract"), provides for a quarterly investment advisory fee of 0.3125% of the net asset value of the Trust as of the last business day of each fiscal quarter, which is approximately equal to 1.25% annually, with no performance adjustment. The New Contract provides that for its first eighteen months, the investment advisory fee cannot exceed the amount that Babson Capital would have been paid under the prior Investment Services Contract with the Trust dated July 1, 1988 (the "Prior Contract"). The eighteen month transition period ended on March 31, 2007. B. SERVICES: Under the New Contract with the Trust, Babson Capital agrees to use its best efforts to present to the Trust a continuing and suitable investment program consistent with the investment objectives and policies of the Trust. Babson Capital represents the Trust in any negotiations with issuers, investment banking firms, securities brokers or dealers and other institutions or investors relating to the Trust's investments. Under the New Contract, Babson Capital provides administration of the dayto- day operations of the Trust and provides the Trust with office space and office equipment, accounting and bookkeeping services, and necessary executive, clerical and secretarial personnel for the performance of the foregoing services. C. PRIOR INVESTMENT SERVICES CONTRACT ADVISORY FEE: Under the Prior Contract, the Trust paid Babson Capital a quarterly base rate (the "Base Fee Rate") of 5/16 of 1% of the value of the Trust's net assets as of the end of each fiscal quarter, approximately equivalent to 1.25% of the net asset value of the Trust on an annual basis, plus or minus a quarterly performance adjustment (the "Performance Adjustment") of up to 1/16 of 1% of net asset value, approximately equivalent to plus or minus 0.25% on an annual basis. The Performance Adjustment was based on the Trust's performance as compared to a benchmark rate of return (the "Target Rate") equal to 5.0 percentage points plus an unweighted, arithmetic average of the rates of return of the Standard & Poor's Industrials Composite (formerly called the Standard & Poor's Industrial Price Index) and the Lehman Brothers Intermediate U.S. Credit Index (formerly called the Lehman Brothers Corporate Bond Index) over a rolling three-year period (the "Measurement Period") comprising the twelve quarters ending on the last day of each quarter (the "Valuation Date"). The Standard & Poor's Industrials Composite is not readily available to the public. Babson Capital obtained the information for this index from Factset Research Systems. The three-year annualized return for the Standard & Poor's Industrials Composite for the period ended December 31, 2007 was 10.32%. Under the Prior Contract, the Performance Adjustment was equal to 5% of the difference between the Trust's actual rate of return over the Measurement Period and the Target Rate. If the Trust's actual rate of return exceeded the Target Rate, the Base Fee Rate increased by an amount equal to the Performance Adjustment; if the Trust's actual rate of return was less than the Target Rate, the Base Fee Rate was reduced by the Performance Adjustment. Under the Prior Contract, the investment advisory fee payable by the Trust was equal to the Base Fee Rate (as adjusted by the Performance Adjustment) multiplied by the net asset value of the Trust as of the Valuation Date. Additionally, Babson Capital agreed to waive, for each quarter beginning July 1, 2004, the amount, if any, by which the investment advisory fee calculated in the manner described in the Prior Contract exceeded the sum of (i) 5/16 of 1% times the ending net asset value for that quarter plus or minus (ii) the Performance Adjustment applied against the average quarter end net assets for the Trust for the twelve-quarter period ending on such quarter. 4. SENIOR SECURED INDEBTEDNESS A. NOTE PAYABLE: MassMutual holds the Trust's $30,000,000 Senior Fixed Rate Convertible Note (the "Note") issued by the Trust on November 15, 2007. The Note is due November 15, 2017 and accrues interest at 5.28% per annum. MassMutual, at its option, can convert the principal amount of the Note into common shares. The dollar amount of principal would be converted into an equivalent dollar amount of common shares based upon the average price of the common shares for ten business days prior to the notice of conversion. For the period November 15 through December 31, 2007, - -------------------------------------------------------------------------------- 38 MassMutual Corporate Investors - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 the Trust incurred total interest expense on the Note of $198,000. The Trust may redeem the Note, in whole or in part, at the principal amount proposed to be redeemed together with the accrued and unpaid interest thereon through the redemption date plus the Make Whole Premium. The Make Whole Premium equals the excess of (i) the present value of the scheduled payments of principal and interest which the Trust would have paid but for the proposed redemption, discounted at the rate of interest of U.S. Treasury obligations whose maturity approximates that of the Note plus 0.50% over (ii) the principal of the Note proposed to be redeemed. Prior to the issuance of the Note, MassMutual held the Trust's $20,000,000 Senior Fixed Rate Convertible Note (the "Prior Note") issued by the Trust in 1995. The Prior Note matured on November 15, 2007 and accrued at 7.39% per annum. Upon maturity, all principal was returned to MassMutual (including accrued interest). For the period January 1 through November 15, 2007, the Trust incurred total interest expense on the Prior Note of $1,293,250. B. REVOLVING CREDIT AGREEMENT: The Trust entered into a Revolving Credit Agreement (the "Revolver") with The Royal Bank of Scotland PLC (the "Agent Bank") as of May 31, 2005, in the principal amount of $25,000,000, maturing May 31, 2008. The Revolver bears interest payable in arrears at a per annum rate that varies depending upon whether the Trust requests a Base Rate Loan or a London Inter Bank Offered Rate ("LIBOR") Loan. Interest on Base Rate Loans equals the higher of: (i) the annual "Base Rate" as set periodically by the Agent Bank and (ii) the most recent Federal Funds Effective Rate plus .50% per annum. Per annum interest on LIBOR Rate Loans equals .37% plus the LIBOR rate, divided by 1 minus the LIBOR Reserve Rate. The Trust also incurs expense on the undrawn portion of the total Revolver at a rate of .15% per annum. As of December 31, 2007, there was no outstanding amount against the Revolver. For the year ended December 31, 2007, the Trust incurred total expense on the Revolver of $37,500 related to the undrawn portion. 5. PURCHASES AND SALES OF INVESTMENTS FOR THE YEAR ENDED COST OF INVESTMENTS 12/31/2007 ACQUIRED ----------------------------------------------------------------------------- Corporate restricted securities $ 70,920,867 Corporate public securities 48,836,083 ----------------------------------------------------------------------------- PROCEEDS FROM SALES OR MATURITIES ----------------------------------------------------------------------------- Corporate restricted securities $ 58,453,242 Corporate public securities 64,893,234 ----------------------------------------------------------------------------- The aggregate cost of investments is substantially the same for financial reporting and federal income tax purposes as of December 31, 2007. The net unrealized appreciation of investments for financial reporting and federal tax purposes as of December 31, 2007 is $936,581 and consists of $26,497,644 appreciation and $25,561,063 depreciation. 6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED) AMOUNT PER SHARE ----------------------------------------------------------------------------- MARCH 31, 2007 ----------------------------------------------------------------------------- Investment income $ 6,228,449 Net investment income 4,828,999 $ 0.53 Net realized and unrealized gain on investments (net of taxes) 426,925 0.05 ----------------------------------------------------------------------------- JUNE 30, 2007 ----------------------------------------------------------------------------- Investment income $ 7,265,754 Net investment income 5,957,211 $ 0.64 Net realized and unrealized loss on investments (net of taxes) (598,756) (0.07) ----------------------------------------------------------------------------- SEPTEMBER 30, 2007 ----------------------------------------------------------------------------- Investment income $ 8,663,301 Net investment income 7,309,734 $ 0.80 Net realized and unrealized gain on investments (net of taxes) 871,815 0.10 ----------------------------------------------------------------------------- DECEMBER 31, 2007 ----------------------------------------------------------------------------- Investment income $ 6,944,033 Net investment income 5,490,971 $ 0.59 Net realized and unrealized loss on investments (net of taxes) (3,885,471) (0.43) 7. AGGREGATE REMUNERATION PAID TO OFFICERS, TRUSTEES AND THEIR AFFILIATED PERSONS For the year ended December 31, 2007, the Trust paid its Trustees aggregate remuneration of $188,000. During the - -------------------------------------------------------------------------------- 39 MASSMUTUAL CORPORATE INVESTORS - -------------------------------------------------------------------------------- year the Trust did not pay any compensation to any of its Trustees who are "interested persons" (as defined by the 1940 Act) of the Trust. The Trust classifies Messrs. Crandall and Joyal as "interested persons" of the Trust. All of the Trust's officers are employees of Babson Capital or MassMutual. Pursuant to the New Contract, the Trust does not compensate its officers who are employees of Babson Capital or MassMutual (except for the Chief Compliance Officer of the Trust unless assumed by Babson Capital). For the year ended December 31, 2007, Babson Capital paid the compensation of the Chief Compliance Officer of the Trust. Mr. Crandall, one of the Trust's Trustees, is an "affiliated person" (as defined by the 1940 Act) of MassMutual and Babson Capital. The Trust did not make any payments to Babson Capital for the year ended December 31, 2007, other than amounts payable to Babson Capital pursuant to the New Contract. For the year ended December 31, 2007, the Trust paid the following amounts to MassMutual, exclusive of interest expense on the Note explained in Footnote 4.A: Preparation of the Trust's Quarterly and Annual Reports to Shareholders $ 11,478 Preparation of the Certain of the Trust's Shareholder communications 1,832 Preparation of the Trust's Annual Proxy Statements 1,642 -------- $ 14,952 ======== 8. NEW ACCOUNTING PRONOUNCEMENTS In September 2006, FASB issued Statement of Financial Accounting Standards No. 157, FAIR VALUE MEASUREMENTS ("FAS 157"). FAS 157 establishes a single authoritative definition of fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FAS 157 applies to fair value measurements already required or permitted by existing standards. The change to current generally accepted accounting principles from the application of FAS 157 relates to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. Management of the Trust does not believe the adoption of FAS 157 will materially impact the financial statement amounts, however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. 9. CERTIFICATIONS (UNAUDITED) As required under New York Stock Exchange ("NYSE") Corporate Governance Rules, the Trust's principal executive officer has certified to the NYSE that he was not aware, as of the certification date, of any violation by the Trust of the NYSE's Corporate Governance listing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Trust's principal executive and principal financial officers have made quarterly certifications, included in filings with the Securities and Exchange Commission on Forms N-CSR and N-Q, relating to, among other things, the Trust's disclosure controls and procedures and internal control over financial reporting, as applicable. - -------------------------------------------------------------------------------- 40 MassMutual Corporate Investors - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Shareholders and Board of Trustees of MassMutual Corporate Investors We have audited the accompanying statement of assets and liabilities of MassMutual Corporate Investors (the Trust), including the schedule of investments, as of December 31, 2007, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the four-year period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for the year ended December 31, 2003 was audited by other independent registered public accountants whose report, dated February 6, 2004, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2007 by correspondence with the custodian, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of MassMutual Corporate Investors as of December 31, 2007, and the results of its operations, its cash flows, the changes in its net assets, and the financial highlights for the years described above, in conformity with accounting principles generally accepted in the United States of America. KPMG LLP Boston, Massachusetts February 11, 2008 - -------------------------------------------------------------------------------- 41 MassMutual Corporate Investors - -------------------------------------------------------------------------------- INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ ROGER W. CRANDALL* (43) Trustee 3 years/ Executive Vice President and 2 Trustee, Chairman (since 2005), (since 2005) 1 year, Chief Investment Officer President (2003-2005), and Vice Massachusetts Mutual Life 10 months (since 2005) and Co-Chief President (2002-2003), of the Insurance Company Operating Officer (since Trust; Director (since 2004), 1295 State Street Chairman 1 year/ 2007) of MassMutual; and Babson Capital Europe Limited Springfield, MA 01111 (since 2005) 7 months Chairman (since 2005), (an institutional debt-fund President (2006-2007) and manager); Director (since Chief Executive Officer 2004), Babson Capital Guernsey (since 2006), Vice Chairman Limited (an investment (2005), Member of the Board management company); of Managers (since 2004), Non-Executive Director (since Member of the Board of 2005), Baring Asset Management Directors (2003-2004), and Limited (an investment manager/ Managing Director of Babson adviser); Chairman (since Capital (2000-2005). 2005), Cornerstone Real Estate Advisers LLC (an investment adviser); Director (since 2003), MassMutual Corporate Value Partners Limited (investment company); Director (since 2003), MassMutual Corporate Value Limited (investment company); Director (since 2005), MassMutual Holdings (Bermuda) Ltd. (holding company); Director (since 2004), MML Assurance, Inc. (a New York insurance company); Director (since 2005), Oppenheimer Acquisition Corp. (holding company); Director (since 2004), Jefferies Finance LLC (a finance company); Director (since 2004), Great Lakes LLC (investment company); Director (since 1999), SAAR Holdings CDO Ltd. (investment company); Chairman, Director, and Chief Executive Officer (since 2006), MassMutual Capital Partners (investment company); Director (since 2006), Invicta Advisers LLC (derivative trading company); Director (since 2006), Invicta Capital LLC (derivative trading company); Director (since 2006), Invicta Credit LLC (derivative trading company); Director (since 2006), Invicta Holdings LLC (derivative trading company); Director (since 2006), MassMutual International LLC (holding company); Trustee (since 2003), President (2003-2005), and Chairman (since 2005), MMCI Subsidiary Trust and MMPI Subsidiary Trust; and Trustee (since 2005), Chairman (since 2005), President (2003-2005), and Vice President (2002-2003), of MassMutual Participation Investors (closed-end investment company advised by Babson Capital). * Mr. Crandall is classified as an "interested person" of the Trust and Babson Capital (as defined in the Investment Company Act of 1940, as amended) because of his position as an Officer of the Trust; and Chairman, Chief Executive Officer, and Member of the Board of Managers of Babson Capital.
- -------------------------------------------------------------------------------- 42 MassMutual Corporate Investors - -------------------------------------------------------------------------------- INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ ROBERT E. JOYAL* (63) Trustee 3 years/ President (2001-2003) of 57 President (1999-2003) and (since 2003) 10 months Babson Capital. Trustee (since 2003), of the MassMutual Trust; Director (since 2006), Participation Investors Jefferies Group, Inc. 1500 Main Street (financial services); Director Suite 600, P.O. Box 15189 (since 2003), Pemco Aviation Springfield, MA 01115-5189 Group, Inc. (aircraft maintenance and overhaul); Director (since 2007), Scottish Re Group Ltd. (global life reinsurance specialist); Trustee (since 2003), MassMutual Select Funds, formerly MassMutual Institutional Funds, (an openend investment company advised by MassMutual); Trustee (since 2003), MML Series Investment Fund (an open-end investment company advised by MassMutual); Trustee (1998-2003), Senior Vice President (1998-2001) and President (2001-2003), MMCI Subsidiary Trust and MMPI Subsidiary Trust; and President (1999-2003), Trustee (since 2003), MassMutual Participation Investors (closedend investment company advised by Babson Capital). * Mr. Joyal retired as President of Babson Capital in June 2003. In addition and as noted above, Mr. Joyal is a director of Jefferies Group, Inc., which has a wholly owned broker-dealer subsidiary that may execute portfolio transactions and/or engage in principal transactions with the Trust, other investment companies advised by Babson Capital or any other advisory accounts over which Babson Capital has brokerage placement discretion. Accordingly, the Trust has determined to classify Mr. Joyal as an "interested person" of the Trust and Babson Capital (as defined in the Investment Company Act of 1940, as amended).
- -------------------------------------------------------------------------------- 43 MassMutual Corporate Investors - -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ WILLIAM J. BARRETT (68) Trustee 2 years/ President (since 2002), 2 Trustee (since 2006), MassMutual (since 2006) 10 months Barrett-Gardner Associates, MassMutual Participation Corporate Investors Inc. (investments); and Senior Investors (a closed-end 1500 Main Street Vice President (1976-2002), investment company advised by Suite 600, P.O. Box 15189 Janney Montgomery Scott Babson Capital). Springfield, MA 01115-5189 LLC (investments). DONALD E. BENSON (77) Trustee 3 years/ Executive Vice President 2 Director (since 1997), MAIR MassMutual (since 1986) 2 years, and Director (since 1992), Holdings, Inc. (commuter Corporate Investors 10 months Marquette Financial airline holding company); 1500 Main Street Companies (financial services); Director (since 1997), First Suite 600, P.O. Box 15189 Partner (since 1996), Benson California First California Springfield, MA 01115-5189 Family Limited Partnership Financial Group Inc. (bank No. 1 and Benson Family holding company); and Trustee Limited Partnership No. 2 (since 1988), MassMutual (investment partnerships); and Participation Investors Partner (1987-2004), Benson, (closed-end investment company Pinckney, Oates Partnership advised by Babson Capital). (building partnership)
- -------------------------------------------------------------------------------- 44 MASSMUTUAL CORPORATE INVESTORS - -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ MICHAEL H. BROWN (51) Trustee 1 year/ Private Investor; and 2 Trustee (since 2005), MassMutual (since 2005) 10 months Managing Director (1994- MassMutual Participation Corporate Investors 2005), Morgan Stanley. Investors (a closed-end 1500 Main Street investment company advised by Suite 600, P.O. Box 15189 Babson Capital); Independent Springfield, MA 01115-5189 Director (since 2006), Invicta Holdings LLC (a derivative trading company). DONALD GLICKMAN (74) Trustee 3 years/ Chairman (since 1992), Donald 2 Director (since 1984), Monro MassMutual (since 1992) 10 months Glickman and Company, Muffler Brake, Inc. (automobile Corporate Investors Inc. (private investments); repair service); Director 1500 Main Street and Partner (since 1992), (since 1998), MSC Software, Suite 600, P.O. Box 15189 J.F. Lehman & Co. (private Corp. (simulation software); Springfield, MA 01115-5189 investments). and Trustee (since 1992), MassMutual Participation Investors (closed-end investment company advised by Babson Capital).
- -------------------------------------------------------------------------------- 45 MASSMUTUAL CORPORATE INVESTORS - -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ MARTIN T. HART (72) Trustee 3 years/ Private Investor; and President 2 Director (since 2004), Texas MassMutual (since 1991) 1 year, and Director (since 1983), H Roadhouse, Inc. (operates Corporate Investors 10 months Investment Company LLC restaurant chain); Director 1500 Main Street (family partnership). (since 1999), ValueClick Inc. Suite 600, P.O. Box 15189 (internet advertising company); Springfield, MA 01115-5189 Director (since 2002), Spectranetics Corp. (medical device company); and Trustee (since 1991), MassMutual Participation Investors (closed-end investment company advised by Babson Capital). CORINE T. NORGAARD (70) Trustee 3 years/ President, (2004-2005), 34 Trustee (since 2005), MML MassMutual (since 1998) 2 years, Thompson Enterprises Real Series Investment Fund II (an Corporate Investors 10 months Estate Investment; and Dean open-end investment company 1500 Main Street (1996-2004), Barney School advised by MassMutual); Trustee Suite 600, P.O. Box 15189 of Business, University of (since 2004), MassMutual Springfield, MA 01115-5189 Hartford. Premier Funds, formerly The DLB Fund Group (an open-end investment company advised by MassMutual); Trustee (since 1993), ING Series Fund (investment company); Director (since 1992), ING Variable Series Fund; and Trustee (since 1998), MassMutual Participation Investors (a closed-end investment company advised by Babson Capital). MALEYNE M. SYRACUSE (51) Trustee 6 months/ Managing Director (2000- 2 Trustee (since 2007), MassMutual (since 2007) 4 months* 2007), JP Morgan Securities, MassMutual Participation Corporate Investors Inc. Investors (a closed-end 1500 Main Street investment company advised by Suite 600, P.O. Box 15189 Babson Capital). Springfield, MA 01115-5189 * Ms. Syracuse was appointed by the Board of Trustees to fill a newly created board seat on October 19, 2007.
- -------------------------------------------------------------------------------- 46 MASSMUTUAL CORPORATE INVESTORS - -------------------------------------------------------------------------------- OFFICERS OF THE TRUST
PRINCIPAL POSITION OCCUPATION(S) NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST ADDRESS THE TRUST OF TIME SERVED 5 YEARS - ------------------------------------------------------------------------------------------------------------------------------------ CLIFFORD M. NOREEN (50) President 1 year/ President (since 2005), Vice President (1993-2005) of the Trust; MassMutual 7 months Vice Chairman (since 2007), Member of the Board of Managers Corporate Investors (since 2006), and Managing Director (since 2000) of Babson 1500 Main Street Capital; Trustee (since 2005), and President (since 2005) MMCI Suite 600, P.O. Box 15189 Subsidiary Trust and MMPI Subsidiary Trust; and President (since Springfield, MA 01115-5189 2005), Vice President (1993-2005), MassMutual Participation Investors. RODNEY J. DILLMAN (55) Vice 1 year/ Vice President, Secretary, and Chief Legal Officer (since 2006) MassMutual President, 7 months of the Trust; Vice President and Associate General Counsel Corporate Investors Secretary, (since 2000) of MassMutual; General Counsel and Secretary (since 1500 Main Street and Chief 2006) of Babson Capital; Secretary (since 2006), MMCI Subsidiary Suite 600, P.O. Box 15189 Legal Officer Trust and MMPI Subsidiary Trust; and Vice President, Secretary, Springfield, MA 01115-5189 and Chief Legal Officer (since 2006), MassMutual Participation Investors. JAMES M. ROY (45) Vice President 1 year/ Vice President and Chief Financial (since 2005), Treasurer MassMutual and Chief 7 months (2003-2005), and Associate Treasurer (1999-2003) of the Trust; Corporate Investors Financial Officer Managing Director (since 2005), and Director (2000-2005) of 1500 Main Street Officer Babson Capital; Trustee (since 2005), Treasurer (since 2005), Suite 600, P.O. Box 15189 and Controller (2003-2005), MMCI Subsidiary Trust and MMPI Springfield, MA 01115-5189 Subsidiary Trust; and Vice President and Chief Financial Officer (since 2005), Treasurer (2003-2005) and Associate Treasurer (1999-2003), MassMutual Participation Investors. JOHN T. DAVITT, JR. (40) Comptroller 1 year/ Comptroller (since 2001) of the Trust; Director (since 2000) of MassMutual 7 months Babson Capital; Controller (since 2005), MMCI Subsidiary Trust Corporate Investors and MMPI Subsidiary Trust; and Comptroller (since 2001), 1500 Main Street MassMutual Participation Investors. Suite 600, P.O. Box 15189 Springfield, MA 01115-5189 MELISSA M. LAGRANT (34) Chief 1 year/ Chief Compliance Officer (since 2006) of the Trust; Managing MassMutual Compliance 7 months Director (since 2005) of Babson Capital; Vice President and Corporate Investors Officer Senior Compliance Trading Manager (2003-2005), Loomis, Sayles & 1500 Main Street Company, L.P.; Assistant Vice President-Business Risk Management Suite 600, P.O. Box 15189 Group (2002-2003), and Assistant Vice President-Investment Springfield, MA 01115-5189 Compliance (2001-2002), Zurich Scudder Investments/Deutsche Asset Management; and Chief Compliance Officer (since 2006), MassMutual Participation Investors. RONALD S. TALAIA (39) Treasurer 1 year/ Treasurer (since 2006) of the Trust; Director (since 2001) of MassMutual 7 months Babson Capital; and Treasurer (since 2006), MassMutual Corporate Investors Participation Investors. 1500 Main Street Suite 600, P.O. Box 15189 Springfield, MA 01115-5189
- -------------------------------------------------------------------------------- 47 This page intentionally left blank. MASSMUTUAL CORPORATE INVESTORS - -------------------------------------------------------------------------------- MEMBERS OF THE BOARD OF [PHOTO OF BOARD OF TRUSTEES] TRUSTEES LEFT TO RIGHT: Donald Glickman Chairman, Donald Glickman & Company, Inc. DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN Robert E. Joyal Retired President, MassMutual Corporate Investors offers a Babson Capital Management LLC Dividend Reinvestment and Share Purchase Plan. The Plan provides a simple way for William J. Barrett shareholders to add to their holdings in President, the Trust through the receipt of Barrett-Gardner Associates, Inc. dividend shares issued by the Trust or through there investment of cash Michael H. Brown dividends in Trust shares purchased in Private Investor the open market. A shareholder may join the Plan by filling out and mailing an Donald E. Benson* authorization card to Shareholder Executive Vice President Financial Services, Inc., the Transfer and Director, Agent. Marquette Financial Companies Participating shareholders will continue Dr. Corine T. Norgaard* to participate until they notify the Retired Dean, Transfer Agent, in writing, of their Barney School of Business desire to terminate participation. University of Hartford Unless a shareholder elects to participate in the Plan, he or she will, Roger W. Crandall in effect, have elected to receive Executive Vice President, dividends and distributions in cash. Chief Investment Officer and Participating shareholders may also make Co-Chief Operating Officer additional contributions to the Plan Massachusetts Mutual Life from their own funds. Such contributions Insurance Company may be made by personal check or other means in an amount not less than $10 nor Martin T. Hart* more than $5,000 per quarter. Cash Private Investor contributions must be received by the Transfer Agent at least fi ve days (but Maleyne M. Syracuse no more then 30 days) before the payment Private Investor date of a dividend or distributions. Cash contributions must be received by *Member of the Audit Committee the Transfer Agent at least fi ve days (but no more then 30 days) before the OFFICERS payment date of a dividend or Roger W. Crandall distributions. Chairman Whenever the Trust declares a dividend Clifford M. Noreen payable in cash or shares, the Transfer President Agent, acting on behalf of each participating shareholder, will take the James M. Roy dividend in shares only if the net asset Vice President & Chief value is lower than the market price Financial Officer plus an estimated brokerage commission as of the close of business on the Rodney J. Dillman valuation day. The valuation day is the Vice President, Secretary last day preceding the day of dividend & Chief Legal Officer payment. When the dividend is to be taken in shares, the number of shares to Jill A. Fields be received is determined by dividing Vice President the cash dividend by the net asset value as of the close of business on the Michael P. Hermsen valuation date or, if greater than net Vice President asset value, 95% of the closing share price. If the net asset value of the Mary Wilson Kibbe shares is higher than the market value Vice President plus an estimated commission, the Transfer Agent, consistent with Michael L. Klofas obtaining the best price and execution, Vice President will buy shares on the open market at current prices promptly after the Richard E. Spencer, II dividend payment date. Vice President The reinvestment of dividends does not, Ronald S. Talaia in anyway, relieve participating Treasurer shareholders of any federal, state or local tax. For federal income tax John T. Davitt, Jr. purposes, the amount reportable in Comptroller respect of a dividend received in newly-issued shares of the Trust will be Melissa M. LaGrant the fair market value of the shares Chief Compliance Officer received, which will be reportable as ordinary income and/or capital gains. As compensation for its services, the Transfer Agent receives a fee of 5% of any dividend and cash contribution (in no event in excess of $2.50 per distribution per shareholder.) Any questions regarding the Plan should be addressed to Shareholder Financial Services, Inc., Agent for MassMutual Corporate Investors' Dividend Reinvestment and Share Purchase Plan, P.O. Box 173673, Denver, CO 80217-3673. - -------------------------------------------------------------------------------- [LOGO] MASSMUTUAL CORPORATE INVESTORS CI2910 ITEM 2. CODE OF ETHICS. The Registrant adopted a Code of Ethics for Senior Financial Officers (the "Code") on October 17, 2003, which is available on the Registrant's website at www.babsoncapital.com/mci. During the period covered by this Form N-CSR, there were no amendments to, or waivers from, the Code. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Registrant's Board of Trustees has determined that Mr. Donald E. Benson, a Trustee of the Registrant and a member of its Audit Committee, is an audit committee financial expert. Mr. Benson is "independent" for purposes of this Item 3 as required by applicable regulation. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. FEES BILLED TO THE REGISTRANT KPMG LLP KPMG LLP Year Ended Year Ended December 31, December 31, 2007 2006 ---------- ---------- Audit Fees $ 42,500 $ 40,500 Audit-Related Fees 5,700 5,400 Tax Fees 37,200 28,500 All Other Fees 0 0 ---------- ---------- Total Fees $ 85,400 $ 74,400 ========== ========== NON-AUDIT FEES BILLED TO BABSON CAPITAL AND MASSMUTUAL KPMG LLP KPMG LLP Year Ended Year Ended December 31, December 31, 2007 2006 ---------- ---------- Audit-Related Fees $1,102,280 $ 912,760 Tax Fees 0 0 All Other Fees 75,000 0 ---------- ---------- Total Fees $1,177,280 $ 912,760 ========== ========== The category "Audit Related Fees" reflects fees billed by KPMG for various non-audit and non-tax services rendered to the Registrant, Babson Capital Management LLC ("Babson Capital") and Massachusetts Mutual Life Insurance Company ("MassMutual"), such as SAS 70 review, agreed upon procedures reports. Preparation of Federal, state and local income tax returns and compliance work are representative of the fees billed in the "Tax Fees" category. The category "All Other Fees" represents fees billed by KPMG for tax consulting rendered to Babson Capital and MassMutual. The Sarbanes-Oxley Act of 2002 and its implementing regulations allows the Registrant's Audit Committee to establish a pre-approval policy for certain services rendered by the Registrant's independent accountants. During 2007, the Registrant's Audit Committee approved all of the services rendered to the Registrant by KPMG and did not rely on such a pre-approval policy for any such services. The Audit Committee reviewed the aggregate fees billed for professional services rendered by KPMG for the Registrant and for the non-audit services provided to Babson Capital, and Babson Capital's parent, MassMutual. As part of this review, the Audit Committee considered whether the provision of such non-audit services were compatible with maintaining the principal accountant's independence. The 2006 fees billed represent final 2006 amounts, which may differ from the preliminary figures available as of the filing date of the Trust's 2007 Annual Form N-CSR and includes, among other things, fees for services that may not have been billed as of the filing date of the Trust's 2007 Annual Form N-CSR, but are now properly included in the 2006 fees billed to the Trust, Babson Capital, and MassMutual. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The Registrant maintains an Audit Committee composed exclusively of Trustees of the Registrant who qualify as "independent" Trustees under the current listing standards of the New York Stock Exchange and the rules of U.S. Securities and Exchange Commission. The Committee operates pursuant to a written Audit Committee Charter, which is available (1) on the Registrant's website, www.babsoncapital.com/mci; and (2) without charge, upon request, by calling, toll-free 866-399-1516. The current members of the Audit Committee are Donald E. Benson, Martin T. Hart, and Corine T. Norgaard. ITEM 6. SCHEDULE OF INVESTMENTS Not applicable for this filing. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END MANAGEMENT INVESTMENT COMPANIES. The Registrant's Board of Trustees has delegated proxy voting responsibilities relating to voting securities held by the Registrant to its investment adviser, Babson Capital Management LLC ("Babson Capital"). A summary of Babson Capital's proxy voting policies and procedures is set forth below. Summary of Babson Capital's Proxy Voting Policy ----------------------------------------------- Babson Capital views the voting of proxies as part of its investment management responsibility and believes, as a general principle, that proxies should be voted solely in the best interests of its clients (i.e. in a manner it believes is most likely to enhance the economic valve of the underlying securities and client accounts). To implement this general principle, it is Babson Capital's policy to generally vote proxies in accordance with the recommendations of Institutional Shareholder Services ("ISS"), a recognized authority on proxy voting and corporate governance, or, in cases where ISS has not made any recommendations with respect to a proxy, in accordance with ISS's proxy voting guidelines. Babson Capital recognizes, however, that there may be times when Babson Capital believes that it will be in the best interests of clients holding the securities to (1) vote against ISS's recommendations or (2) in cases where ISS has not provided Babson Capital with any recommendations with respect to a proxy, vote against ISS's proxy voting guidelines. Babson Capital may vote, in whole or part, against ISS's recommendations or ISS's proxy voting guidelines, as applicable. The procedures set forth in the Policy are designed to ensure that votes against ISS's recommendations or proxy voting guidelines have been made in the best interests of clients and are not the result of any material conflict of interest (a "Material Conflict"). Summary of Babson Capital's Proxy Voting Procedures --------------------------------------------------- Babson Capital has established a Proxy Committee that is responsible for the implementation and governance of the Policy and designated Proxy Administrators who will receive and post proxies for voting with ISS. In accordance with the Policy, Babson Capital will generally vote all client proxies in accordance with ISS's recommendation or proxy voting guidelines, unless a person authorized by the Proxy Committee (each a "Proxy Analyst"), the Proxy Committee or a designated member of the Proxy Committee determines that it is in the clients' best interest to vote against ISS's recommendation or proxy voting guidelines. In these cases, Babson Capital will vote against ISS's recommendation or proxy voting guidelines, so long as no other Proxy Analyst reviewing such proxy disagrees with such recommendation, and no known Material Conflict is identified by the Proxy Analyst(s) or the Proxy Administrator. Otherwise, the proxy is to be submitted to a member of the Proxy Committee, who shall determine how to vote the proxy unless (i) the Proxy Analyst or Proxy Administrator has identified a Babson Capital Material Conflict or (ii) said Proxy Committee member has identified a Material Conflict pertinent to him or herself or a Babson Material Conflict. In such cases, the proxy shall be submitted to the Proxy Committee, which may authorize a vote against ISS's recommendation or proxy voting guidelines only if the Proxy Committee determines that such vote is in the clients' best interests. No employee, officer, director, or a Board of Managers Member of Babson Capital or its affiliates (other than those assigned such responsibilities under the Policy) may influence how Babson Capital votes any client proxy, unless such person has been requested to provide such assistance by a Proxy Analyst or Proxy Committee member and has disclosed any known Material Conflict. Any pre-vote communications prohibited by the Policy shall be reported to the Proxy Committee member prior to voting and to Babson Capital's Chief Compliance Officer or General Counsel. Obtaining a Copy of the Policy ------------------------------ The full text of Babson Capital's Policy is available (1) without charge, upon request, by calling 1-866-399-1516 or (2) on the Registrant's website, www.babsoncapital.com/mci. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. The following disclosure item is made as of the date of this Form N-CSR unless otherwise indicated. PORTFOLIO MANAGER. Clifford M. Noreen serves as the President of the Registrant (since 2005) and as its Portfolio Manager. Mr. Noreen began his service to the Registrant in 1993 as a Vice President. With over 25 years of industry experience, Mr. Noreen is Vice Chairman, a Managing Director and a Member of the Board of Managers of Babson Capital Management LLC ("Babson Capital") and head of Babson Capital's Corporate Securities Group, where he oversees public equities and corporate credit related investments, including public and private bonds, mezzanine, and private equity investments, and structured credit products. Mr. Noreen joined Massachusetts Mutual Life Insurance Company ("MassMutual"), Babson Capital's parent company, in 1985 and began leading its High Yield Team in 1992, where he was responsible for oversight of all public high yield portfolios. In 2004, Mr. Noreen assumed responsibility for Babson Capital's Public Corporate Credit Group, which included the Investment Grade and High Yield Institutional Fixed Income teams. Mr. Noreen also presently serves as President of MassMutual Participation Investors, another closed-end registered investment company advised by Babson Capital. Mr. Noreen holds a B.A. from the University of Massachusetts and an M.B.A from American International College. PORTFOLIO MANAGEMENT TEAM. Mr. Noreen has primary responsibility for overseeing the investment of the Registrant's portfolio, with the day-to-day investment management responsibility of the Registrant's portfolio being shared with the following Babson Capital investment professionals (together with the Portfolio Manager, the "Portfolio Team"). Michael P. Hermsen, Michael L. Klofas, and Richard E. Spencer II are each a Vice President of the Registrant and a Managing Director of Babson Capital. Together they are responsible for managing Babson Capital's Mezzanine Investment and Private Equity Investments Team within the Corporate Securities Group, which is responsible for finding, analyzing, negotiating and servicing mezzanine private placement securities for the Registrant. Mr. Hermsen joined MassMutual in 1990 and has been an officer of the Registrant since 1992. Previously, he worked at Teachers Insurance and Annuity Association where he was a generalist private placement analyst. At MassMutual and then Babson Capital, Mr. Hermsen has analyzed and invested in traditional private placements, high yield public and private bonds, and leveraged bank loans. He has also been responsible for managing a small portfolio of distressed investments. Since 1993, he has focused on originating, analyzing, structuring and documenting mezzanine and private equity investments. He holds a B.A. from Bowdoin College and an M.B.A. from Columbia University. Mr. Klofas joined MassMutual in 1988 and has been an officer of the Registrant since 1989. Prior to joining MassMutual, he spent two years at a small venture capital firm and two years at a national public accounting firm. At MassMutual and then Babson Capital, Mr. Klofas has analyzed and invested in traditional private placements and high yield public bonds. He also spent four years leading Babson Capital's workout and restructuring activities. Since 1993, he has focused on originating, analyzing, structuring and documenting mezzanine and private equity investments. Mr. Klofas holds a B.A. from Brandeis University and an M.B.A. from Babson College as well as a Certified Public Accountant designation. Mr. Spencer joined MassMutual in 1989 after three years as a corporate loan analyst at a major New England bank. He has been an officer of Registrant since 1990. At MassMutual and then Babson Capital, Mr. Spencer has analyzed and invested in traditional private placements, high yield public and private bonds, leveraged bank loans, mezzanine debt and private equity. From 1993 to 1999, he was the lead restructuring professional at Babson Capital. Since 1999, Mr. Spencer has been focused on the origination, analysis, structuring and documentation of mezzanine and private equity investments. He holds a B.A. from Bucknell University and an M.B.A. from the State University of New York at Buffalo. Jill A. Fields is responsible for the day-to-day management of the Registrant's public high yield and investment grade fixed income portfolio. Ms. Fields has been a Vice President of the Registrant since 2006. Ms. Fields is a Managing Director of Babson Capital with over 20 years of industry experience in high yield total return structured credit leveraged loans and private placement investing. Prior to joining Babson Capital in 1997, she was a credit analyst at Shawmut National Bank, and the Director of Corporate Bond Research at Hartford Life Insurance Group. Ms. Fields holds a B.S. from Pennsylvania State University and an M.B.A. from the University of Connecticut. OTHER ACCOUNTS MANAGED BY THE PORTFOLIO TEAM. The members of the Registrant's Portfolio Team also have primary responsibility for the day-to-day management of other Babson Capital advisory accounts, including, among others, closed-end and open-end investment companies, private investment funds, MassMutual-affiliated accounts, as well as separate accounts for institutional clients. These advisory accounts are identified below.
NUMBER OF ACCOUNTS APPROXIMATE TOTAL WITH ASSET SIZE OF NUMBER APPROXIMATE PERFORMANCE- PERFORMANCE- PORTFOLIO ACCOUNT OF TOTAL ASSET BASED BASED ADVISORY TEAM CATEGORY ACCOUNTS SIZE(A) ADVISORY FEE FEE ACCOUNTS(A) - ------------ --------------------- -------- ------------ ------------ -------------- Clifford M. Registered Investment Noreen(B) Companies 1 $126.6 million 0 N/A ----------------------------------------------------------------------------------------- Other Pooled Investment Vehicles 1 $42.2 million 1 $42.2 million ----------------------------------------------------------------------------------------- Other Accounts 0 N/A 0 N/A ----------------------------------------------------------------------------------------- Jill A. Registered Investment Fields Companies 3 $754.5 million 0 N/A ----------------------------------------------------------------------------------------- Other Pooled Investment Vehicles 1 $55.6 million 1 $55.6 million ----------------------------------------------------------------------------------------- Other Accounts 5C $1.8 billion 0 N/A ----------------------------------------------------------------------------------------- Michael P. Registered Investment Hermsen Companies 1 $126.6 million N/A N/A ----------------------------------------------------------------------------------------- Other Pooled Investment Vehicles 5 $403.5 million 5 $403.5 million ----------------------------------------------------------------------------------------- Other Accounts 1D $1.5 billion N/A N/A ----------------------------------------------------------------------------------------- Michael L. Registered Investment Klofas Companies 1 $126.6 million N/A N/A ----------------------------------------------------------------------------------------- Other Pooled Investment Vehicles 5 $403.5 million 5 $403.5 million ----------------------------------------------------------------------------------------- Other Accounts 1D $1.5 billion N/A N/A ----------------------------------------------------------------------------------------- Richard E. Registered Investment Spencer II Companies 1 $126.6 million N/A N/A ----------------------------------------------------------------------------------------- Other Pooled Investment Vehicles 5 $403.5 million 5 $403.5 million ----------------------------------------------------------------------------------------- Other Accounts 1D $1.5 billion N/A N/A
(A) Account asset size has been calculated as of December 31, 2007. (B) Mr. Noreen, as the head of Babson Capital's Corporate Securities Group, has overall responsibility for all corporate credit related investments, including public and private bonds, mezzanine, and private equity investments, as well as structured credit products managed by Babson Capital. Except for the accounts noted in the table above, Mr. Noreen is not primarily responsible for the day-to-day management of the other accounts managed by Babson Capital's Corporate Securities Group. (C) Ms. Fields manages approximately $960 million of the general investment account of Massachusetts Mutual Life Insurance Company. These assets are represented as one account in the table above. (D) The listed account and managed assets represent that portion of the general investment account of Massachusetts Mutual Life Insurance Company and C.M. Life Insurance Company for which an individual Portfolio Team member has primary day-to-day responsibility. As of December 31, 2007, Babson Capital's total general investment account assets under management were $57.7 billion dollars. MATERIAL CONFLICTS OF INTEREST. The potential for material conflicts of interest may exist as the members of the Portfolio Team have responsibilities for the day-to-day management of multiple accounts. These conflicts may be heightened to the extent the individual, Babson Capital and/or an affiliate has an investment in one or much of such accounts or an interest in the performance of such accounts. Babson Capital has identified (and summarized below) areas where material conflicts of interest are most likely to arise, and has adopted policies and procedures that it believes are reasonably designed to address such conflicts. It is possible that an investment opportunity may be suitable for both the Registrant and other accounts managed by a member of the Portfolio Team, but may not be available in sufficient quantities for both the Registrant and the other accounts to participate fully. Similarly, there may be limited opportunity to sell an investment held by the Registrant and another account. A conflict may arise where a member of the Portfolio Team may have an incentive to treat an account preferentially as compared to the Registrant because the account pays Babson Capital a performance-based fee or a member of the Portfolio Team, Babson Capital, or an affiliate has an interest in the account. Babson Capital has adopted an investment allocation policy and trade allocation procedures to address allocation of portfolio transactions and investment opportunities across multiple clients. These policies are designed to achieve fair and equitable treatment of all clients over time, and specifically prohibit allocations based on performance of an account, the amount or structure of the management fee, performance fee or profit sharing allocations, participation or investment by an employee, Babson Capital or an affiliate, whether the account is public, private, proprietary or third party. Additionally, the Registrant, MassMutual, Babson Capital, MassMutual Participation Investors, and any private investment company advised or sub-advised by Babson Capital have obtained a blanket order from the Securities and Exchange Commission pursuant to Section 17(d), and Rule 17(d)-1 thereunder, of the Investment Company Act of 1940, as amended, which sets forth the conditions by which the entities can engage in private placement co-investment activities. Potential material conflicts of interest may also arise related to the knowledge and timing of the Registrant's trades, investment opportunities and broker selection. A member of the Portfolio Team will have information about the size, timing and possible market impact of the Registrant's trades. It is theoretically possible that a member of the Portfolio Team could use this information for his or her personal advantage or the advantage of other accounts he manages or the possible detriment of the Registrant. For example, a member of the Portfolio Team could front run a fund's trade or short sell a security for an account immediately prior to the Registrant's sale of that security. To address these conflicts, Babson Capital has adopted policies and procedures governing employees' personal securities transactions, the use of short sales, and trading between the Registrant and other accounts managed by members of the Portfolio Team or accounts owned by Babson Capital or its affiliates. With respect to securities transactions for the Registrant, Babson Capital determines which broker to use to execute each order, consistent with its duty to seek best execution of the transaction. Babson Capital manages certain other accounts, however, where Babson Capital may be limited by the client with respect to the selection of brokers or directed to trade such client's transactions through a particular broker. In these cases, trades for a fund in a particular security may be placed separately from, rather than aggregated with, such other accounts. Placing separate transaction orders for a security may temporarily affect the market price of the security or otherwise affect the execution of the transaction to the possible detriment of a fund or the other account(s) involved. Babson Capital has policies and procedures that address best execution and directed brokerage. Members of the Portfolio Team may also face other potential conflicts of interest in managing the Registrant, and the above is not a complete description of every conflict of interest that could be deemed to exist in managing both the Registrant and the other accounts listed above. COMPENSATION. The current Babson Capital compensation and incentive program for investment professionals is designed to attract, motivate and retain high-performing individuals. To help Babson Capital make informed decisions, the Company participates in annual compensation surveys of investment management firms using McLagan Partners, in addition to other industry specific resources. The firms selected for periodic peer-group comparisons typically have similar asset size or business mix. Annually, a review is conducted of total compensation versus market, to ensure that individual pay is competitive with the defined overall market. The compensation package for the members of the Portfolio Team is comprised of a market-driven base salary, a performance-driven annual bonus, and discretionary long-term incentives. The performance-driven bonus is based on the performance of the accounts managed by the members of the Portfolio Team relative to appropriate benchmarks, including with respect to the Registrant, to the Russell 2000 Index and Lehman Brothers U.S. Corporate High Yield Index. Performance of the Registrant, like other accounts Portfolio Team members manage, are evaluated on a pre-tax basis, and are reviewed over one and three-year periods, with greater emphasis given to the latter. There are other factors that affect bonus awards to a lesser extent, such as client satisfaction, teamwork, the assets under management, and the overall success of Babson Capital. Such factors are considered as a part of the overall annual bonus evaluation process by the management of Babson Capital. Long-Term incentives are designed to share with participants the longer-term value created in Babson Capital. Long-term incentives may take the form of deferred cash awards (including deferred cash awards that provide a portfolio manager with the economic equivalent of a "shareholder" interest in the firm by linking the value of the award to a formula which ties to the value of the business), and/or, in the case of a portfolio manager who manages a private investment fund with a performance fee, a deferred cash award or a direct profit sharing interest that results in the manager receiving amounts based on the amount of the performance fee paid by such fund. These long-term incentives vest over time and are granted annually, based upon the same criteria used to determine the performance-driven annual bonus detailed above. Because the Portfolio Team members are generally responsible for multiple accounts (including the Registrant), they are compensated on the overall performance of the accounts that they manage, rather than a specific account, except for the portion of compensation relating to any performance fee award. BENEFICIAL OWNERSHIP. As of December 31, 2007, members of the Portfolio Team beneficially owned the following dollar range of equity securities in the Registrant: DOLLAR RANGE OF BENEFICIALLY OWNED* PORTFOLIO TEAM: EQUITY SECURITIES OF THE REGISTRANT --------------- ----------------------------------- Clifford M. Noreen $500,001-$1,000,000 Jill A. Fields $50,001-$100,000 Michael P. Hermsen $100,001-$500,000 Michael L. Klofas $100,001-$500,000 Richard E. Spencer II None * Beneficial ownership has been determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended. (Shares "beneficially owned" include the number of shares of the Registrant represented by the value of a Registrant-related investment option under Babson Capital's non-qualified deferred compensation plan for certain officers of Babson Capital (the "Plan"). The Plan has an investment option that derives its value from the market value of the Registrant's shares. However, neither the Plan nor the participant in the Plan has an actual ownership interest in the Registrant's shares.) ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not Applicable for this filing. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not Applicable for this filing. ITEM 11. CONTROLS AND PROCEDURES. (a) The principal executive officer and principal financial officer of the Registrant evaluated the effectiveness of the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing date of this report and based on that evaluation have concluded that such disclosure controls and procedures are effective to provide reasonable assurance that material information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) during the Registrant's second fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) ANY CODE OF ETHICS, OR AMENDMENTS THERETO, THAT IS THE SUBJECT OF DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT INTENDS TO SATISFY THE ITEM 2 REQUIREMENTS THROUGH THE FILING OF AN EXHIBIT. None. (a)(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF THE REGISTRANT AS REQUIRED BY RULE 30a-2 UNDER THE ACT. Attached hereto as EX-99.31.1 Attached hereto as EX-99.31.2 (a)(3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23c-1 UNDER THE ACT (17 CFR 270.23c-1) SENT OR GIVEN DURING THE PERIOD COVERED BY THE REPORT BY OR ON BEHALF OF THE REGISTRANT TO 10 OR MORE PERSONS. Not Applicable for this filing. (b) CERTIFICATIONS PURSUANT TO RULE 30a-2(b) UNDER THE ACT. Attached hereto as EX-99.32 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant): MassMutual Corporate Investors ---------------------------------- By: /s/ Clifford M. Noreen ---------------------------------- Clifford M. Noreen, President ---------------------------------- Date: March 7, 2008 ---------------------------------- 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: March 7, 2008 ---------------------------------- By: /s/ James M. Roy ---------------------------------- James M. Roy, Vice President, and Chief Financial Officer ---------------------------------- Date: March 7, 2008 ------------------------------ EX-99.31 2 exh99-311_15753.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: March 7 , 2008 /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: March 7 , 2008 /s/ James M. Roy - -------------------------------- James M. Roy Vice President and Chief Financial Officer MassMutual Corporate Investors EX-99.32 3 exh99-32_15753.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 March 7, 2008 -----END PRIVACY-ENHANCED MESSAGE-----