UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-2183
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MassMutual Corporate Investors
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(Exact name of registrant as specified in charter)
1500 Main Street, P.O. Box 15189, Springfield, MA 01115-5189
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(Address of principal executive offices) (Zip code)
Patricia J. Walsh, Vice President, Secretary and Chief Legal Officer
1500 Main Street, Suite 2800, P.O. Box 15189, Springfield, MA 01115-5189
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(Name and address of agent for service)
Registrant's telephone number, including area code: 413-226-1000
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Date of fiscal year end: 12/31
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Date of reporting period: 06/30/10
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORT TO STOCKHOLDERS.
Attached hereto is the semi-annual shareholder report transmitted to
shareholders pursuant to Rule 30e-1 of the Investment Company Act of
1940, as amended.
MASSMUTUAL
CORPORATE INVESTORS
REPORT FOR THE
SIX MONTHS ENDED JUNE 30, 2010
[LOGO]
ADVISER
Babson Capital Management LLC *
1500 Main Street, P.O. Box 15189
Springfield, Massachusetts 01115-5189
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
Boston, Massachusetts 02110
COUNSEL TO THE TRUST
Ropes & Gray LLP
Boston, Massachusetts 02110
CUSTODIAN
Citibank, N.A.
New York, New York 10043
TRANSFER AGENT & REGISTRAR
Shareholder Financial Services, Inc. *
P.O. Box 173673
Denver, Colorado 80217-3673
1-800-647-7374
INTERNET WEBSITE
www.babsoncapital.com/mci
MassMutual Corporate Investors
c/o Babson Capital Management LLC
[LOGO] 1500 Main Street, Suite 2200
Springfield, Massachusetts 01115
(413) 226-1516
*Member of the MassMutual Financial Group
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INVESTMENT OBJECTIVE AND POLICY
MassMutual Corporate Investors (the "Trust") is a closed-end management
investment company, first offered to the public in 1971, whose shares are traded
on the New York Stock Exchange under the trading symbol "MCI". The Trust's share
price can be found in the financial section of most newspapers as "MassCp" or
"MassMuInv" under either the New York Stock Exchange listings or Closed-End Fund
Listings.
The Trust's investment objective is to maintain a portfolio of securities
providing a fixed yield and at the same time offering an opportunity for capital
gains. The Trust's principal investments are privately placed, below-investment
grade, long-term debt obligations with equity features such as common stock,
warrants, conversion rights, or other equity features and, occasionally,
preferred stocks. The Trust typically purchases these investments, which are not
publicly tradable, directly from their issuers in private placement
transactions. These investments are typically mezzanine debt instruments with
accompanying private equity securities made to small or middle market companies.
In addition, the Trust may temporarily invest, subject to certain limitations,
in marketable investment grade debt securities, other marketable debt securities
(including high yield securities) and marketable common stocks. Below-investment
grade or high yield securities have predominantly speculative characteristics
with respect to the capacity of the issuer to pay interest and repay principal.
Babson Capital Management LLC ("Babson Capital") manages the Trust on a total
return basis. The Trust distributes substantially all of its net income to
shareholders each year. Accordingly, the Trust pays dividends to shareholders in
January, May, August, and November. The Trust pays dividends to its shareholders
in cash, unless the shareholder elects to participate in the Dividend
Reinvestment and Share Purchase Plan.
FORM N-Q The Trust files its complete schedule of portfolio holdings with the
U.S. Securities and Exchange Commission ("SEC") for the first and third quarters
of each fiscal year on Form N-Q. This information is available (i) on the SEC's
website at http://www.sec.gov; and (ii) at the SEC's Public Reference Room in
Washington, DC (which information on their operation may be obtained by calling
1-800-SEC-0330). A complete schedule of portfolio holdings as of each
quarter-end is available upon request by calling, toll-free, 866-399-1516.
PROXY VOTING POLICIES & PROCEDURES; PROXY VOTING RECORD
The Trustees of the Trust have delegated proxy voting responsibilities relating
to the voting of securities held by the Trust to Babson Capital. A description
of Babson Capital's proxy voting policies and procedures is available (1)
without charge, upon request, by calling, toll-free 866-399-1516; (2) on the
Trust's website: http://www.babsoncapital.com/mci; and (3) on the SEC's website
at http://www.sec.gov. Information regarding how the Trust voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is available (1) on the Trust's website: http://www.babsoncapital.
com/mci; and (2) on the SEC's website at http://www.sec.gov.
MCI
Listed
NYSE
MassMutual Corporate Investors
TO OUR SHAREHOLDERS
July 31, 2010
We are pleased to present the June 30, 2010 Quarterly Report of MassMutual
Corporate Investors (the "Trust").
The Board of Trustees declared a quarterly dividend of 54 cents per share,
payable on August 13, 2010 to shareholders of record on August 2, 2010. The
Trust paid a 54 cent per share dividend for the preceding quarter. The Trust
earned 54 cents per share of net investment income for the second quarter of
2010, compared to 52 cents per share in the previous quarter.
During the second quarter, the net assets of the Trust increased to $226,229,994
or $24.03 per share compared to $220,735,765 or $23.50 per share on March 31,
2010. This translates into a 4.6% total return for the quarter, based on the
change in the Trust's net assets assuming the reinvestment of all dividends.
Longer term, the Trust returned 15.8%, 4.2%, 9.1%, 10.1%, and 13.8% for the 1-,
3-, 5-, 10-, and 25-year time periods, respectively, based on the change in the
Trust's net assets assuming the reinvestment of all dividends.
The Trust's market price decreased 0.2% during the quarter, from $26.85 per
share as of March 31, 2010 to $26.23 per share as of June 30, 2010. The Trust's
market price of $26.23 per share equates to a 9.2% premium over the June 30,
2010 net asset value per share of $24.03. The Trust's average quarter-end
premium for the 3-, 5-, and 10-year periods was 4.1%, 9.3% and 7.6%,
respectively. U.S. equity markets, as approximated by the Russell 2000 Index,
decreased 9.9% for the quarter. U.S. fixed income markets, as approximated by
the Barclays Capital U.S. Corporate High Yield Index, decreased 0.1% for the
quarter.
The Trust closed two new private placement investments during the second
quarter. The two new investments were in O E C Holdings Corporation and Wheaton
Holding Corporation. A brief description of these investments can be found in
the Consolidated Schedule of Investments. The total amount invested by the Trust
in these two transactions was $4,500,000.
The amount of debt and equity capital available to finance middle market buyout
transactions continued to increase during the second quarter. As a result, we
saw an improving level of deal flow as the quarter progressed. Our contacts in
the private equity and investment banking community indicate they currently are
very busy processing a large number of potential transactions, so we expect deal
flow during the remainder of 2010 to be very robust. Hopefully, this higher
level of deal flow translates into a number of new investments for the Trust in
the second half of the year. Leverage multiples continued to expand during the
quarter as capital providers aggressively pursued deal opportunities. We expect
leverage multiples to continue to increase during the rest of the year. The
downward pressure on pricing and return expectations moderated during the
quarter and we expect a relatively stable pricing environment for the rest of
the year. As I have stated in prior quarters, despite constantly changing market
conditions, our approach to investing will not change. We will continue to
maintain the same discipline and investment philosophy that has served our
shareholders well for so many years.
As the economy continued to rebound during the second quarter, the overall
condition of our portfolio continued to improve as well. It was particularly
refreshing to see many of our under performing companies start to report
increased sales and earnings. In several situations where we had been deferring
interest on our subordinated notes, performance improved to the point where the
portfolio company was able to resume paying cash interest on our notes.
Realization activity, which generally correlates highly with improved
performance, also increased as the quarter progressed. We had two companies,
Diversco, Inc. and K-Tek Holding Corporation, successfully sold in early July.
There continues to be a significant number of portfolio companies that are in
various stages of a sale process and we are hopeful that many of these will turn
into successful realizations in the upcoming quarters.
Thank you for your continued interest in and support of MassMutual Corporate
Investors.
Sincerely,
/s/ Michael L. Klofas
Michael L. Klofas
President
[PIE CHART APPEARS HERE]
Portfolio Composition as of 6/30/10 *
Private / 144A High Public High Yield
Yield Debt Debt
69.9% 15.0%
Private / Restricted Public Equity
Equity 0.8%
12.1%
Cash & Short Term
Investments
2.2%
* Based on market value of total investments (including cash)
Cautionary Notice: Certain statements contained in this report may be "forward
looking" statements. Investors are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on which they are
made and which reflect management's current estimates, projections, expectations
or beliefs, and which are subject to risks and uncertainties that may cause
actual results to differ materially. These statements are subject to change at
any time based upon economic, market or other conditions and may not be relied
upon as investment advice or an indication of the Trust's trading intent.
References to specific securities are not recommendations of such securities,
and may not be representative of the Trust's current or future investments. We
undertake no obligation to publicly update forward looking statements, whether
as a result of new information, future events, or otherwise.
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1
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2010
(UNAUDITED)
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost - $219,892,503) $191,058,029
Corporate restricted securities at market value
(Cost - $ 15,478,665) 15,040,974
Corporate public securities at market value
(Cost - $ 42,995,158) 39,610,801
Short-term securities at amortized cost 4,249,817
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249,959,621
Cash 1,208,586
Interest and dividends receivable 5,962,930
Receivable for investments sold 329,500
Other assets 12,571
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TOTAL ASSETS 257,473,208
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LIABILITIES:
Investment advisory fee payable 706,969
Note payable 30,000,000
Interest payable 202,105
Accrued expenses 127,881
Accrued taxes payable 145,855
Other payables 60,404
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TOTAL LIABILITIES 31,243,214
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TOTAL NET ASSETS $226,229,994
============
NET ASSETS:
Common shares, par value $1.00 per share; an unlimited number authorized $ 9,415,079
Additional paid-in capital 114,965,361
Retained net realized gain on investments, prior years 127,688,004
Undistributed net investment income 7,175,870
Accumulated net realized loss on investments (211,943)
Net unrealized depreciation of investments (32,802,377)
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TOTAL NET ASSETS $226,229,994
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COMMON SHARES ISSUED AND OUTSTANDING 9,415,079
============
NET ASSET VALUE PER SHARE $ 24.03
============
See Notes to Consolidated Financial Statements
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2
MassMutual Corporate Investors
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2010
(UNAUDITED)
INVESTMENT INCOME:
Interest $12,300,629
Dividends 72,307
Other 43,840
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TOTAL INVESTMENT INCOME 12,416,776
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EXPENSES:
Investment advisory fees 1,396,768
Interest 792,000
Trustees' fees and expenses 115,300
Professional fees 74,400
Reports to shareholders 60,000
Custodian fees 12,000
Transfer agent/registrar's expenses 9,000
Other 14,928
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TOTAL EXPENSES 2,474,396
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INVESTMENT INCOME - NET 9,942,380
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments before taxes 658,890
Income tax expense (1,308)
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Net realized gain on investments after taxes 657,582
Net change in unrealized depreciation of investments before taxes 5,096,199
Net change in deferred income tax expense 19,435
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Net change in unrealized depreciation of investments after taxes 5,115,634
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NET GAIN ON INVESTMENTS 5,773,216
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $15,715,596
============
See Notes to Consolidated Financial Statements
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3
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2010
(UNAUDITED)
NET DECREASE IN CASH:
Cash flows from operating activities:
Purchases/Proceeds/Maturities from short-term portfolio securities, net $ (4,244,786)
Purchases of portfolio securities (36,370,382)
Proceeds from disposition of portfolio securities 27,132,380
Interest, dividends and other income received 8,939,748
Interest expense paid (792,000)
Operating expenses paid (1,634,776)
Income taxes paid (57,308)
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NET CASH USED FOR OPERATING ACTIVITIES (7,027,124)
------------
Cash flows from financing activities:
Cash dividends paid from net investment income (10,130,074)
Receipts for shares issued on reinvestment of dividends 1,149,005
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NET CASH USED FOR FINANCING ACTIVITIES (8,981,069)
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NET DECREASE IN CASH (16,008,193)
Cash - beginning of year 17,216,779
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CASH - END OF PERIOD $ 1,208,586
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RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET
CASH USED FOR OPERATING ACTIVITIES:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,715,596
------------
Increase in investments (19,399,973)
Increase in interest and dividends receivable (2,806,862)
Increase in receivable for investments sold (282,198)
Increase in other assets (12,571)
Increase in investment advisory fee payable 36,854
Decrease in accrued expenses (37,066)
Decrease in accrued taxes payable (75,435)
Decrease in other payables (165,469)
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TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (22,742,720)
------------
NET CASH USED FOR OPERATING ACTIVITIES $ (7,027,124)
============
See Notes to Consolidated Financial Statements
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4
MassMutual Corporate Investors
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the six
months ended For the
06/30/10 year ended
(Unaudited) 12/31/09
----------- -----------
INCREASE IN NET ASSETS:
Operations:
Investment income - net $ 9,942,380 $ 19,170,412
Net realized gain on investments 657,582 868,412
Net change in unrealized depreciation of investments 5,115,634 5,285,777
----------- -----------
Net increase in net assets resulting from operations 15,715,596 25,324,601
Increase from common shares issued on reinvestment of dividends
Common shares issued (2010 - 47,463; 2009 - 48,107) 1,149,005 1,137,714
Dividends to shareholders from:
Net investment income (2010 - $0.54 per share; 2009 - $2.16 per share) (5,071,561) (20,168,880)
----------- -----------
TOTAL INCREASE IN NET ASSETS 11,793,040 6,293,435
NET ASSETS, BEGINNING OF YEAR 214,436,954 208,143,519
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NET ASSETS, END OF PERIOD/YEAR (including undistributed net investment
income of $7,175,870 and $2,305,051, respectively) $226,229,994 $214,436,954
============ ============
See Notes to Consolidated Financial Statements
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5
CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF BENEFICIAL INTEREST OUTSTANDING:
For the six months For the years ended December 31,
ended 06/30/2010 -----------------------------------------------
(Unaudited) 2009 2008 2007 2006 2005
--------- -------- -------- -------- -------- --------
Net asset value:
Beginning of year $ 22.89 $ 22.33 $ 27.19 $ 27.51 $ 26.06 $ 24.34
-------- -------- -------- -------- -------- --------
Net investment income (a) 1.06 2.05 2.31 2.56 2.27 2.03
Net realized and unrealized
gain (loss) on investments 0.61 0.66 (5.02) (0.35) 1.62 1.96(b)
-------- -------- -------- -------- -------- --------
Total from investment operations 1.67 2.71 (2.71) 2.21 3.89 3.99
-------- -------- -------- -------- -------- --------
Dividends from net investment
income to common shareholders (0.54) (2.16) (2.16) (2.57) (2.47) (2.11)
Dividends from net realized gain
on investments to common shareholders -- -- -- -- (0.01) (0.18)
Increase from dividends reinvested 0.01 0.01 0.01 0.04 0.04 0.02
-------- -------- -------- -------- -------- --------
Total dividends (0.53) (2.15) (2.15) (2.53) (2.44) (2.27)
-------- -------- -------- -------- -------- --------
Net asset value: End of period/year $ 24.03 $ 22.89 $ 22.33 $ 27.19 $ 27.51 $ 26.06
-------- -------- -------- -------- -------- --------
Per share market value:
End of period/year $ 26.23 $ 25.10 $ 19.25 $ 30.20 $ 34.89 $ 30.05
======== ======== ======== ======== ======== ========
Total investment return
Net asset value (c) 7.41% 12.64% (10.34%) 8.72% 18.06% 20.04%
Market value 6.80% 39.89% (30.44%) (8.78%) 29.04% 16.95%
Net assets (in millions):
End of period/year $226.23 $214.44 $208.14 $251.16 $251.69 $236.28
Ratio of operating expenses
to average net assets 1.55%(d) 1.58% 1.49% 1.55% 1.43% 1.78%
Ratio of interest expense
to average net assets 0.73%(d) 0.75% 0.67% 0.59% 0.60% 0.73%
Ratio of income tax expense
to average net assets (e) 0.00%(d) 0.00% 0.00% 0.35% 2.46% 2.84%
Ratio of total expenses before custodian fee
reduction to average net assets (e) 2.28%(d) 2.33% 2.16% 2.49% 4.53% 5.36%
Ratio of net expenses after custodian fee
reduction to average net assets (e) 2.28%(d) 2.33% 2.16% 2.49% 4.49% 5.35%
Ratio of net investment income
to average net assets 9.14%(d) 9.06% 9.01% 9.17% 8.19% 7.98%
Portfolio turnover 11% 23% 32% 44% 35% 35%
(a) Calculated using average shares.
(b) Amount includes $0.19 per share in litigation proceeds.
(c) Net asset value return represents portfolio returns based on change in the Trust's net asset value assuming the reinvestment of
all dividends and distributions which differs from the total investment return based on the Trust's market value due to the
difference between the Trust's net asset value and the market value of its shares outstanding; past performance is no guarantee
of future results.
(d) Annualized
(e) As additional information, this ratio is included to reflect the taxes paid on retained long-term gains. These taxes paid are
netted against realized capital gains in the Statement of Operations. The taxes paid are treated as deemed distributions and a
credit for the taxes paid is passed on to the shareholders.
Senior borrowings:
Total principal amount (in millions) $ 30 $ 30 $ 30 $ 30 $ 20 $ 20
Asset coverage per $1,000
of indebtedness $8,541 $8,148 $7,938 $9,372 $13,584 $12,814
See Notes to Consolidated Financial Statements
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6
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES - 91.10%:(A)D PERCENTAGE DATE COST FAIR VALUE
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Private Placement Investments - 84.45%
A E COMPANY, INC.
A designer and manufacturer of machined parts and assembly structures for the commercial and military aerospace industries.
11% Senior Secured Note due 2015 $ 1,413,462 * $ 1,385,193 $ 1,427,861
13% Senior Subordinated Note due 2016 $ 1,413,461 11/10/09 1,265,201 1,431,785
Common Stock (B) 323,077 shs. 11/10/09 323,077 306,923
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 161,538 shs. 11/10/09 119,991 1,615
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* 11/10/09 and 11/18/09. 3,093,462 3,168,184
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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 $ 2,516,449 11/21/07 2,465,140 2,541,613
Limited Partnership Interest (B) 23.16% int. 11/21/07 224,795 329,347
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2,689,935 2,870,960
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A S A P INDUSTRIES LLC
A designer and manufacturer of components used on oil and natural gas wells.
12.5% Senior Subordinated Note due 2015 $ 850,946 12/31/08 739,153 867,964
Limited Liability Company Unit Class A-2 (B) 1,276 uts. 12/31/08 140,406 174,193
Limited Liability Company Unit Class A-3 (B) 1,149 uts. 12/31/08 126,365 156,774
------------- -------------
1,005,924 1,198,931
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A S C GROUP, INC.
A designer and manufacturer of high reliability encryption equipment, communications products, computing systems and electronic
components primarily for the military and aerospace sectors.
12.75% Senior Subordinated Note due 2016 $ 2,318,182 10/09/09 1,986,875 2,370,960
Limited Liability Company Unit Class A (B) 2,359 uts. 10/09/09 231,818 220,215
Limited Liability Company Unit Class B (B) 2,782 uts. 10/09/09 273,352 28
------------- -------------
2,492,045 2,591,203
------------- -------------
A W X HOLDINGS CORPORATION
A provider of aerial equipment rental, sales and repair services to non-residential construction and maintenance contractors
operating in the State of Indiana.
10.5% Senior Secured Term Note due 2014 $ 735,000 05/15/08 720,300 684,308
13% Senior Subordinated Note due 2015 $ 735,000 05/15/08 671,403 655,731
Common Stock (B) 105,000 shs. 05/15/08 105,000 --
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 36,923 shs. 05/15/08 62,395 --
------------- -------------
1,559,098 1,340,039
------------- -------------
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7
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
ADVANCED TECHNOLOGIES HOLDINGS
A provider of factory maintenance services to industrial companies.
15% Senior Subordinated Note due 2013 $ 2,198,996 12/27/07 $ 2,156,427 $ 2,204,252
Preferred Stock (B) 1,031 shs. 12/27/07 510,000 423,889
------------- -------------
2,666,427 2,628,141
------------- -------------
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 1,649,515
14% Senior Subordinated Note due 2015 $ 1,260,000 03/09/07 1,157,982 1,260,000
Common Stock (B) 262,500 shs. 03/09/07 262,500 14,956
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 66,116 shs. 03/09/07 111,527 3,767
------------- -------------
3,135,097 2,928,238
------------- -------------
ALL CURRENT HOLDING COMPANY
A specialty re-seller of essential electrical parts and components primarily serving wholesale distributors.
12% Senior Subordinated Note due 2015 $ 1,140,317 09/26/08 1,050,599 1,127,381
Common Stock (B) 1,347 shs. 09/26/08 134,683 78,409
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 958 shs. 09/26/08 87,993 55,765
------------- -------------
1,273,275 1,261,555
------------- -------------
AMERICAN HOSPICE MANAGEMENT HOLDING LLC
A for-profit hospice care provider in the United States.
12% Senior Subordinated Note due 2013 $ 3,187,495 * 3,033,665 3,187,495
Preferred Class A Unit (B) 3,223 uts. ** 322,300 529,914
Preferred Class B Unit (B) 1,526 uts. 06/09/08 152,626 208,946
Common Class B Unit (B) 30,420 uts. 01/22/04 1 93,594
Common Class D Unit (B) 6,980 uts. 09/12/06 1 21,475
------------- -------------
* 01/22/04 and 06/09/08. ** 01/22/04 and 09/12/06. 3,508,593 4,041,424
------------- -------------
APEX ANALYTIX HOLDING CORPORATION
A provider of audit recovery and fraud detection services and software to commercial and retail businesses in the U.S. and Europe.
12.5% Senior Subordinated Note due 2016 $ 1,912,500 04/28/09 1,615,156 1,950,750
Preferred Stock Series B (B) 3,065 shs. 04/28/09 306,507 353,438
Common Stock (B) 1,366 shs. 04/28/09 1,366 157,524
------------- -------------
1,923,029 2,461,712
------------- -------------
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8
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
ARROW TRU-LINE HOLDINGS, INC.
A manufacturer of hardware for residential and commercial overhead garage doors in North America.
12% Senior Subordinated Note due 2012 $ 1,859,060 05/18/05 $ 1,667,348 $ 1,580,201
Preferred Stock (B) 63 shs. 10/16/09 62,756 31,380
Common Stock (B) 497 shs. 05/18/05 497,340 --
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 130 shs. 05/18/05 112,128 --
------------- -------------
2,339,572 1,611,581
------------- -------------
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 2,177,821 2,281,593
Preferred Stock Class A (B) 879 shs. 06/30/06 268,121 156,437
Common Stock (B) 1 sh. 06/30/06 286 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 309 shs. 06/30/06 92,102 54,979
------------- -------------
2,538,330 2,493,009
------------- -------------
C D N T, INC.
A value-added converter and distributor of specialty pressure sensitive adhesives, foams, films, and foils.
10.5% Senior Secured Term Note due 2014 $ 750,872 08/07/08 735,855 704,821
12.5% Senior Subordinated Note due 2015 $ 750,872 08/07/08 690,426 670,761
Common Stock (B) 73,256 shs. 08/07/08 73,256 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 57,600 shs. 08/07/08 57,689 --
------------- -------------
1,557,226 1,375,582
------------- -------------
CAPITAL SPECIALTY PLASTICS, INC.
A producer of desiccant strips used for packaging pharmaceutical products.
Common Stock (B) 109 shs. * 503 1,126,577
*12/30/97 and 05/29/99. ------------- -------------
CLOUGH, HARBOUR AND ASSOCIATES
An engineering service firm that is located in Albany, NY.
12.25% Senior Subordinated Note due 2015 $ 2,400,000 12/02/08 2,225,100 2,448,000
Preferred Stock (B) 277 shs. 12/02/08 276,900 337,320
------------- -------------
2,502,000 2,785,320
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
9
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
COEUR, INC.
A producer of proprietary, disposable power injection syringes.
12% Senior Subordinated Note due 2016 $ 1,214,286 10/10/08 $ 1,098,929 $ 1,238,572
Common Stock (B) 607 shs. 10/10/08 60,714 39,098
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 934 shs. 10/10/08 91,071 60,151
------------- -------------
1,250,714 1,337,821
------------- -------------
CONNECTICUT ELECTRIC, INC.
A supplier and distributor of electrical products sold into the retail and wholesale markets.
10% Senior Subordinated Note due 2014 (D) $ 1,456,429 01/12/07 1,358,631 873,857
Limited Liability Company Unit Class A (B) 156,046 uts. 01/12/07 156,046 --
Limited Liability Company Unit Class C (B) 112,873 uts. 01/12/07 112,873 --
Limited Liability Company Unit Class D (B) 1,268,437 uts. 05/03/10 -- --
Limited Liability Company Unit Class E (B) 2,081 uts. 05/03/10 -- --
------------- -------------
1,627,550 873,857
------------- -------------
CONNOR SPORT COURT INTERNATIONAL, INC.
A designer and manufacturer of outdoor and indoor synthetic sports flooring and other temporary flooring products.
Preferred Stock Series B-2 (B) 17,152 shs. 07/05/07 700,392 1,715,247
Preferred Stock Series C (B) 8,986 shs. 07/05/07 300,168 898,560
Common Stock (B) 718 shs. 07/05/07 7 251
Limited Partnership Interest (B) 12.64% int. * 189,586 --
------------- -------------
*08/12/04 and 01/14/05. 1,190,153 2,614,058
------------- -------------
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 2,473,370 2,550,000
Warrant, exercisable until 2013, to purchase
common stock at $.001 per share (B) 20 shs. 08/04/05 137,166 187,630
------------- -------------
2,610,536 2,737,630
------------- -------------
CRANE RENTAL CORPORATION
A crane rental company.
13% Senior Subordinated Note due 2015 $ 2,295,000 08/21/08 2,090,661 2,336,927
Common Stock (B) 255,000 shs. 08/21/08 255,000 11,005
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 136,070 shs. 08/21/08 194,826 5,872
------------- -------------
2,540,487 2,353,804
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
10
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
CUSTOM ENGINEERED WHEELS, INC.
A manufacturer of custom engineered, non-pneumatic plastic wheels and plastic tread cap tires used primarily for lawn and garden
products and wheelchairs.
12.5% Senior Subordinated Note due 2016 $ 2,182,212 10/27/09 $ 1,892,808 $ 2,227,721
Preferred Stock PIK (B) 296 shs. 10/27/09 295,550 280,773
Preferred Stock Series A (B) 216 shs. 10/27/09 197,152 2
Common Stock (B) 72 shs. 10/27/09 72,238 68,628
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 53 shs. 10/27/09 48,608 1
------------- -------------
2,506,356 2,577,125
------------- -------------
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 1,758,010 1,797,413
Limited Partnership Interest (B) 1.82% int. 10/30/06 702,174 489,115
Warrant, exercisable until 2014, to purchase
preferred stock at $.01 per share (B) 50 shs. 10/30/06 49,830 61,449
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 34 shs. 10/30/06 34,000 --
------------- -------------
2,544,014 2,347,977
------------- -------------
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) 2,586 shs. 12/14/01 2,186,976 2,588,420
Warrants, exercisable until 2011, to purchase common
stock of DHI Holdings, Inc. at $.01 per share (B) 13,352 shs. * 403,427 382,209
------------- -------------
*10/24/96 and 08/28/98. 3,324,493 2,970,629
------------- -------------
DUNCAN SYSTEMS, INC.
A distributor of windshields and side glass for the recreational vehicle market.
10% Senior Secured Term Note due 2013 $ 405,000 11/01/06 398,925 413,020
13% Senior Subordinated Note due 2014 $ 855,000 11/01/06 786,802 855,000
Common Stock (B) 180,000 shs. 11/01/06 180,000 159,193
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 56,514 shs. 11/01/06 78,160 49,981
------------- -------------
1,443,887 1,477,194
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
11
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
DWYER GROUP, INC.
A franchiser of a variety of home repair services.
Common Stock (B) 6,906 shs. * $ 690,600 $ 1,197,276
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 352,558
------------- -------------
*10/30/03 and 01/02/04. 877,069 1,549,834
------------- -------------
E S P HOLDCO, INC.
A manufacturer of power protection technology for commercial office equipment, primarily supplying the office equipment dealer
network.
14% Senior Subordinated Note due 2015 $ 2,332,768 01/08/08 2,288,865 2,252,390
Common Stock (B) 660 shs. 01/08/08 329,990 74,013
------------- -------------
2,618,855 2,326,403
------------- -------------
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 61,082
------------- -------------
EATEM HOLDING COMPANY
A developer and manufacturer of savory flavor systems for soups, sauces, gravies, and other products produced by food manufacturers
for retail and foodservice end products.
12.5% Senior Subordinated Note due 2018 $ 2,850,000 02/01/10 2,471,700 2,872,049
Common Stock (B) 150 shs. 02/01/10 150,000 142,500
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 358 shs. 02/01/10 321,300 4
------------- -------------
2,943,000 3,014,553
------------- -------------
F C X HOLDINGS CORPORATION
A distributor of specialty/technical valves, actuators, accessories, and process instrumentation supplying a number of industrial,
high purity, and energy end markets in North America.
15% Senior Subordinated Note due 2015 $ 2,225,389 10/06/08 2,181,700 2,267,049
Preferred Stock (B) 4,341 shs. 10/06/08 434,074 201,819
Common Stock (B) 3,069 shs. 10/06/08 3,069 --
------------- -------------
2,618,843 2,468,868
------------- -------------
F H S HOLDINGS LLC
A national provider of customized disease management services to large self-insured employers.
12% Senior Subordinated Note due 2014 (D) $ 2,390,625 06/01/06 2,220,452 --
Limited Liability Company Units of Linden/FHS Holdings LLC (B) 159 uts. 06/01/06 159,362 --
Common Unit Class B (B) 1,386 uts. 06/01/06 122,361 --
------------- -------------
2,502,175 --
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
12
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
FLUTES, INC.
An independent manufacturer of micro fluted corrugated sheet material for the food and consumer products packaging industries.
10% Senior Secured Term Note due 2013 (D) $ 918,385 04/13/06 $ 904,609 $ 229,596
14% Senior Subordinated Note due 2014 (D) $ 555,059 04/13/06 495,635 --
------------- -------------
1,400,244 229,596
------------- -------------
GOLDEN COUNTY FOODS HOLDING, INC.
A manufacturer of frozen appetizers and snacks.
16% Senior Subordinated Note due 2015 $ 1,912,500 11/01/07 1,727,592 1,816,875
16% PIK Note due 2015 $ 436,141 12/31/08 421,603 414,334
8% Series A Convertible Preferred Stock, convertible into
fully dilluted common shares (B) 146,658 shs. 11/01/07 146,658 52,917
------------- -------------
2,295,853 2,284,126
------------- -------------
H M HOLDING COMPANY
A designer, manufacturer, and importer of promotional and wood furniture.
7.5% Senior Subordinated Note due 2013 (D) $ 685,100 10/15/09 512,231 513,825
Preferred Stock (B) 40 shs. * 40,476 --
Preferred Stock Series B (B) 2,055 shs. 10/15/09 1,536,694
Common Stock (B) 340 shs. 02/10/06 340,000 --
Common Stock Class C (B) 560 shs. 10/15/09 -- --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 126 shs. 02/10/06 116,875 --
------------- -------------
* 09/18/07 and 06/27/08. 2,546,276 513,825
------------- -------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in manufacturing and marketing entities.
Series A Preferred Units (B) 1.19% int. 07/21/94 367,440 --
------------- -------------
HOME DECOR HOLDING COMPANY
A designer, manufacturer and marketer of framed art and wall decor products.
12.5% Senior Subordinated Note due 2012 $ 2,043,269 * 1,921,994 2,043,269
Common Stock (B) 63 shs. * 62,742 88,147
Warrant, exercisable until 2012, to purchase
common stock at $.02 per share (B) 200 shs. * 199,501 280,290
------------- -------------
* 06/30/04 and 08/19/04. 2,184,237 2,411,706
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
13
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
HOSPITALITY MINTS HOLDING COMPANY
A manufacturer of individually-wrapped imprinted promotional mints.
12% Senior Subordinated Note due 2016 $ 2,075,581 08/19/08 $ 1,920,297 $ 1,971,802
Common Stock (B) 474 shs. 08/19/08 474,419 83,423
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 123 shs. 08/19/08 113,773 21,562
------------- -------------
2,508,489 2,076,787
------------- -------------
INSURANCE CLAIMS MANAGEMENT, INC.
A third party administrator providing auto and property claim administration services for insurance companies.
Common Stock (B) 69 shs. 02/27/07 2,077 221,827
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 20 shs. 02/27/07 612 65,334
------------- -------------
2,689 287,161
------------- -------------
INTERNATIONAL OFFSHORE SERVICES LLC
A leading provider of marine transportation services, platform decomissioning, and salvage services to oil and gas producers in the
shallow waters of the Gulf of Mexico.
14.25% Senior Subordinated Secured Note due 2017 $ 2,550,000 07/07/09 2,299,566 2,581,309
Limited Liability Company Unit (B) 3,112 uts. 07/07/09 186,684 31
------------- -------------
2,486,250 2,581,340
------------- -------------
JASON, INC.
A diversified manufacturing company serving various industrial markets.
13% Senior Subordinated Note due 2010 (D) $ 963,687 08/04/00 848,275 48,184
Limited Partnership Interest of
Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,470 --
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 --
------------- -------------
1,850,157 48,184
------------- -------------
JUSTRITE MANUFACTURING ACQUISITION CO.
A manufacturer of safety products such as storage cabinets and containers.
12% Senior Subordinated Note due 2011 $ 1,593,750 12/15/04 1,559,825 1,593,750
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 202,175
------------- -------------
1,660,934 1,795,925
------------- -------------
K H O F HOLDINGS, INC.
A manufacturer of premium disposable tableware products serving both the foodservice and consumer channels.
Common Stock (B) 220,673 shs. 10/15/07 135,084 270,607
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
14
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
K N B HOLDINGS CORPORATION
A designer, manufacturer and marketer of products for the custom framing market.
15.5% Senior Subordinated Note due 2013 (D) $ 3,012,887 05/25/06 $ 2,641,395 $ 2,259,666
Common Stock (B) 134,210 shs. 05/25/06 134,210 --
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 82,357 shs. 05/25/06 71,534 --
------------- -------------
2,847,139 2,259,666
------------- -------------
K P I HOLDINGS, INC.
Pace Industries is the largest player in the U.S. non-automotive, non-ferrous die casting segment.
13% Senior Subordinated Note due 2014 (D) $ 2,106,522 07/16/08 1,968,368 1,790,544
Convertible Preferred Stock Series C (B) 55 shs. 06/30/09 55,435 --
Convertible Preferred Stock Series D (B) 24 shs. 09/17/09 24,476 --
Common Stock (B) 443 shs. 07/15/08 443,478 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 734 shs. * 96,024 --
------------- -------------
* 07/16/08 and 09/17/09. 2,587,781 1,790,544
------------- -------------
K W P I HOLDINGS CORPORATION
A manufacturer and distributor of vinyl windows and patio doors throughout the northwestern United States.
18% Senior Subordinated Note due 2014 $ 2,938,407 03/14/07 2,667,363 2,350,726
Common Stock (B) 232 shs. 03/13/07 232,000 --
Warrant, exercisable until 2019, to purchase
preferred stock at $.01 per share (B) 134 shs. 07/07/09 -- --
Warrant, exercisable until 2017, to purchase
common stock at $.01 per share (B) 167 shs. 03/14/07 162,260 --
------------- -------------
3,061,623 2,350,726
------------- -------------
K-TEK HOLDING CORPORATION
A manufacturer of instrumentation for liquid and bulk solids level detection for process and storage tanks.
14% Senior Subordinated Note due 2015 $ 2,287,451 12/20/07 2,246,086 2,310,326
Preferred Stock (B) 363,260 shs. 12/20/07 363,260 443,811
Common Stock (B) 102,616 shs. 12/20/07 1,026 300,124
------------- -------------
2,610,372 3,054,261
------------- -------------
L H D EUROPE HOLDING, INC.
A non-carbonated beverage dispensing company focused on the foodservice industry.
Common Stock (B) 85 shs. 12/28/09 7,916 24,225
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
15
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
M V I HOLDING, INC.
A manufacturer of large precision machined metal components used in equipment which services a variety of industries, including
the oil and gas, mining, and defense markets.
13% Senior Subordinated Note due 2016 $ 1,236,312 09/12/08 $ 1,146,005 $ 1,175,484
Common Stock (B) 61 shs. 09/12/08 60,714 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 66 shs. 09/12/08 65,571 --
------------- -------------
1,272,290 1,175,484
------------- -------------
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 05/04/07 912,469 975,000
Limited Liability Company Unit (B) 24,109 uts. * 314,464 332,804
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3,375 shs. 05/04/07 43,031 46,589
------------- -------------
* 05/04/07 and 01/02/08. 1,269,964 1,354,393
------------- -------------
MANHATTAN BEACHWEAR HOLDING COMPANY
A designer and distributor of women's swimwear.
12.5% Senior Subordinated Note due 2018 $ 2,647,059 01/15/10 2,320,245 2,682,925
Common Stock (B) 353 shs. 01/15/10 352,941 335,293
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 312 shs. 01/15/10 283,738 3
------------- -------------
2,956,924 3,018,221
------------- -------------
MAVERICK ACQUISITION COMPANY
A manufacturer of capsules that cover the cork and neck of wine bottles.
7.03% Senior Secured Tranche A Note due 2010 (C) $ 193,178 09/03/04 193,178 192,365
12.5% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 303,187 306,684
6.79% Senior Secured Revolver due 2011 (C) $ 50,933 09/03/04 50,932 50,232
Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 16,940
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 12,239
------------- -------------
645,539 578,460
------------- -------------
MEDSYSTEMS HOLDINGS LLC
A manufacturer of enteral feeding products, such as feeding tubes and other products related to assisted feeding.
13% Senior Subordinated Note due 2015 $ 1,169,464 08/29/08 1,046,168 1,192,854
Preferred Unit (B) 126 uts. 08/29/08 125,519 142,332
Common Unit Class A (B) 1,268 uts. 08/29/08 1,268 25,095
Common Unit Class B (B) 472 uts. 08/29/08 120,064 9,337
------------- -------------
1,293,019 1,369,618
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
16
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
MEGTEC HOLDINGS, INC.
A supplier of industrial and environmental products and services to a broad array of industries.
12% Senior Subordinated Note due 2016 $ 2,161,017 09/24/08 $ 1,981,274 $ 2,052,966
Preferred Stock (B) 107 shs. 09/24/08 103,255 --
Limited Partnership Interest (B) 1.40% int. 09/16/08 388,983 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 35 shs. 09/24/08 33,268 --
------------- -------------
2,506,780 2,052,966
------------- -------------
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 (D) $ 2,685,614 * 2,588,904 2,282,772
Common Stock (B) 450 shs. * 450,000 --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 164 shs. * 162,974 --
------------- -------------
* 08/12/05 and 09/11/06. 3,201,878 2,282,772
------------- -------------
MILWAUKEE GEAR COMPANY
A manufacturer of high-precision custom gears and gear drives used by original equipment manufacturers operating in a number of
industries.
13% Senior Subordinated Note due 2014 $ 2,353,846 07/21/08 2,233,224 2,118,461
Preferred Stock (B) 263 shs. 07/21/08 261,830 --
Common Stock (B) 18 shs. 07/21/08 20,000 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 10 shs. 07/21/08 11,285 --
------------- -------------
2,526,339 2,118,461
------------- -------------
MOMENTUM HOLDING CO.
A designer and supplier of upholstery fabric to commercial furniture manufacturers and architectural and design firms.
Limited Partnership Interest (B) 21.23% int. 08/04/06 106,153 243,812
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 1,107 shs. 08/04/06 107,109 254,146
------------- -------------
213,262 497,958
------------- -------------
MONESSEN HOLDING CORPORATION
A designer and manufacturer of a broad line of gas, wood, and electric hearth products and accessories.
14% Senior Subordinated Note due 2014 (D) $ 2,550,000 07/25/08 2,412,564 1,275,000
14% PIK Note due 2014 (D) $ 792,791 07/25/08 646,821 396,395
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 152 shs. 03/31/06 138,125 --
------------- -------------
3,197,510 1,671,395
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
17
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
NABCO, INC.
A producer of explosive containment vessels in the United States.
14% Senior Subordinated Note due 2014 (D) $ 625,000 02/24/06 $ 575,313 $ 312,500
Limited Liability Company Unit (B) 825 uts. * 825,410 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 129 shs. 02/24/06 37,188 --
------------- -------------
* 02/24/06 and 06/22/07. 1,437,911 312,500
------------- -------------
NAVIS GLOBAL
A designer, manufacturer, seller and servicer of finishing machinery for the knit and woven segments of the global textile industry.
10.75% Senior Secured Note due 2011 (D) $ 609,206 05/28/04 607,397 578,746
14% Senior Subordinated Note due 2014 (D) $ 1,338,613 05/28/04 1,155,793 --
------------- -------------
1,763,190 578,746
------------- -------------
NESCO HOLDINGS CORPORATION
A sales and leasing company that provides equipment to the electric utility, telecommunications, and various other industries.
12% Senior Secured Subordinated Note due 2015 $ 2,125,000 08/02/07 1,888,243 2,146,250
Common Stock (B) 425,000 shs. 08/02/07 425,000 487,724
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 119,360 shs. 08/02/07 194,257 136,976
------------- -------------
2,507,500 2,770,950
------------- -------------
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 1,159,194
Limited Partnership Interest of
Saw Mill PCG Partners LLC (B) 2.73% int. 02/01/07 1,019,980 --
Limited Liability Company Unit Class D of
Saw Mill PCG Partners LLC (B) 15 uts. * 15,389 7,695
Limited Liability Company Unit Class D-1 of
Saw Mill PCG Partners LLC (B) 95 uts. 09/30/09 95,405 47,713
Preferred Stock Class A (B) 1 sh. 12/18/08 1,370 686
Preferred Stock Class A-1 (B) 7 shs. 09/30/09 8,278 4,140
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 91 shs. 02/02/07 90,830 --
------------- -------------
* 12/18/08 and 09/30/09. 2,639,822 1,219,428
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
18
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
NORTHWEST MAILING SERVICES, INC.
A producer of promotional materials for companies that use direct mail as part of their customer retention and loyalty programs.
12% Senior Subordinated Note due 2016 $ 2,281,579 07/09/09 $ 1,915,080 $ 2,350,026
Limited Partnership Interest (B) 2,684 uts. 07/09/09 268,421 255,000
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 3,498 shs. 07/09/09 349,753 35
------------- -------------
2,533,254 2,605,061
------------- -------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the automotive industry.
10% Senior Secured Note due 2012 $ 812,500 01/28/02 812,500 771,875
15% Senior Subordinated Note due 2012 (D) $ 500,000 01/28/02 473,642 250,000
Convertible Preferred Stock A (B) 1,000 shs. 01/28/02 961,637 --
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 --
------------- -------------
2,722,324 1,021,875
------------- -------------
O E C HOLDINGS CORPORATION
Headquartered in Dover Plains, New York, Oracle Elevator Company provides elevator maintenance, repair and modernization services.
13% Senior Subordinated Note due 2017 $ 1,333,333 06/04/10 1,213,349 1,338,470
Preferred Stock Series A (B) 1,661 shs. 06/04/10 166,062 157,759
Preferred Stock Series B (B) 934 shs. 06/04/10 93,376 9
Common Stock (B) 1,032 shs. 06/04/10 1,032 981
------------- -------------
1,473,819 1,497,219
------------- -------------
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 $ 145,713 01/03/06 143,527 145,713
13% Senior Subordinated Note due 2013 $ 687,241 01/03/06 639,325 687,241
Common Stock (B) 322,307 shs. 01/03/06 322,307 230,626
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 75,378 shs. 01/03/06 62,824 53,937
------------- -------------
1,167,983 1,117,517
------------- -------------
OLYMPIC SALES, INC.
A boat retailer in Washington state, Oregon, California and British Columbia.
12% Senior Subordinated Note due 2010 (D) $ 1,022,000 08/07/98 1,022,000 153,300
12% Senior Subordinated Note due 2010 (D) $ 307,071 02/09/00 268,283 46,061
------------- -------------
1,290,283 199,361
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
19
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
ONTARIO DRIVE & GEAR LTD.
A manufacturer of all-wheel drive, off-road amphibious vehicles and related accessories.
Limited Liability Company Unit (B) 3,667 uts. 01/17/06 $ 572,115 $ 521,311
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 619 shs. 01/17/06 170,801 88,016
------------- -------------
742,916 609,327
------------- -------------
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 $ 2,335,864 07/03/06 2,257,789 2,371,019
Preferred Unit (B) 382 uts. 07/03/06 382,150 581,167
Preferred Unit (B) 69 uts. 07/03/06 68,790 104,615
Common Unit Class I (B) 148 uts. 07/03/06 -- 616,819
Common Unit Class L (B) 31 uts. 07/03/06 -- 130,350
------------- -------------
2,708,729 3,803,970
------------- -------------
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 2,195,027 2,295,000
Preferred Stock (B) 36 shs. 03/31/06 329,596 457,549
Common Stock (B) 23 shs. 03/31/06 25,500 197,647
Warrant, exercisable until 2013, to purchase
common stock at $.01 per share (B) 13 shs. 03/31/06 11,122 114,971
------------- -------------
2,561,245 3,065,167
------------- -------------
PACIFIC CONSOLIDATED HOLDINGS LLC
A manufacturer of rugged, mobile liquid and gaseous oxygen and nitrogen generating systems used in the global defense, oil and gas,
and medical sectors.
14% Senior Subordinated Note due 2012 $ 1,351,424 04/27/07 1,279,381 1,237,206
Limited Liability Company Unit (B) 1,754,707 uts. 04/27/07 63,233 --
------------- -------------
1,342,614 1,237,206
------------- -------------
PARADIGM PACKAGING, INC.
A manufacturer of plastic bottles and closures for the nutritional, pharmaceutical, personal care, and food packaging markets.
12% Senior Subordinated Note due 2011 $ 2,125,000 12/19/00 2,071,563 2,123,795
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 274,694
------------- -------------
2,337,188 2,398,489
------------- -------------
PEARLMAN ENTERPRISES, INC.
A developer and distributor of tools, equipment, and supplies to the natural and engineered stone industry.
Preferred Stock Series A (B) 2,334 shs. 05/22/09 111,508 --
Preferred Stock Series B (B) 13,334 shs. 05/22/09 547,872 --
Common Stock (B) 40,540 shs. 05/22/09 1,877,208 --
------------- -------------
2,536,588 --
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
20
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
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.
15% Senior Subordinated Note due 2013 $ 1,530,000 06/03/10 $ 1,499,400 $ 1,533,596
3% Senior Subordinated PIK Note due 2014 (D) $ 2,198,100 10/02/06 2,014,226 --
Limited Liability Company Unit Class A (B) 1,384 uts. 10/02/06 510,000 --
Limited Liability Company Unit (B) 143 uts. 05/22/09 72,042 67,828
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 8,595 shs. 10/02/06 124,644 --
------------- -------------
4,220,312 1,601,424
------------- -------------
POWER SERVICES HOLDING COMPANY
A provider of industrial motor repair services, predictive and preventative maintenance, and performance improvement consulting
serving the petrochemical, mining, power generation, metals, and paper industries.
12% Senior Subordinated Note due 2016 $ 2,372,093 02/11/08 2,189,265 2,274,165
Limited Partnership Interest (B) 23.70% int. 02/11/08 177,729 21,606
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 1,322 shs. 02/11/08 167,588 42,581
------------- -------------
2,534,582 2,338,352
------------- -------------
PRECISION WIRE HOLDING COMPANY
A manufacturer of specialty medical wires that are used in non-elective minimally invasive surgical procedures.
14.25% Senior Subordinated Note due 2016 $ 2,564,895 11/12/09 2,313,217 2,604,281
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 206 shs. 11/12/09 203,944 2
------------- -------------
2,517,161 2,604,283
------------- -------------
QUALIS AUTOMOTIVE LLC
A distributor of aftermarket automotive brake and chassis products.
13% Senior Subordinated Note due 2013 $ 1,742,711 05/28/04 1,598,853 1,820,047
Common Stock (B) 354,167 shs. 05/28/04 354,166 515,941
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 377,719 shs. 05/28/04 377,719 550,250
------------- -------------
2,330,738 2,886,238
------------- -------------
R A J MANUFACTURING HOLDINGS LLC
A designer and manufacturer of women's swimwear sold under a variety of licensed brand names.
14.5% Senior Subordinated Note due 2014 $ 2,434,074 12/15/06 2,244,702 2,312,370
Limited Liability Company Unit (B) 2,828 uts. 12/15/06 282,810 88,662
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 3 shs. 12/15/06 131,483 41,812
------------- -------------
2,658,995 2,442,844
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
21
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
R E I DELAWARE HOLDING, INC.
An engineer and manufacturer of highly complex, close tolerance components, assemblies, tooling and custom automation equipment
primarily for aerospace, medical and defense/radar markets.
12% Senior Subordinated Note due 2016 $ 2,550,000 01/18/08 $ 2,467,911 $ 2,551,017
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 6 shs. 01/18/08 31,089 468
------------- -------------
2,499,000 2,551,485
------------- -------------
ROYAL BATHS MANUFACTURING COMPANY
A manufacturer and distributor of acrylic and cultured marble bathroom products.
12.5% Senior Subordinated Note due 2011 $ 1,062,500 11/14/03 1,032,510 1,052,506
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 120,828
------------- -------------
1,155,456 1,173,334
------------- -------------
SAFETY SPEED CUT MANUFACTURING COMPANY, INC.
A manufacturer of vertical panel saws and routers for the woodworking industry.
Class B Common Stock (B) 1,480 shs. 06/02/99 256,212 274,395
------------- -------------
SAVAGE SPORTS HOLDING, INC.
A manufacturer of sporting firearms.
12% Senior Subordinated Note due 2012 $ 1,538,793 09/10/04 1,487,423 1,538,793
Preferred Stock Series A (B) 66,185 shs. 05/28/10 66,185 62,876
Common Stock (B) 612 shs. * 642,937 1,045,385
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 228,242
------------- -------------
* 09/10/04 and 10/05/07. 2,310,123 2,875,296
------------- -------------
SENCORE HOLDING COMPANY
A designer, manufacturer, and marketer of decoders, receivers and modulators sold to broadcasters, satellite, cable and telecom
operators for encoding/decoding analog and digital transmission video signals.
12.5% Senior Subordinated Note due 2014 $ 1,765,385 01/15/09 1,564,156 1,500,577
Common Stock (B) 131 shs. 01/15/09 130,769 9,657
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 282 shs. 01/15/09 281,604 20,801
------------- -------------
1,976,529 1,531,035
------------- -------------
SMART SOURCE HOLDINGS LLC
A short-term computer rental company.
12% Senior Subordinated Note due 2015 $ 2,223,076 * 2,051,189 2,160,501
Limited Liability Company Unit (B) 619 uts. * 631,592 329,829
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 157 shs. * 164,769 83,557
------------- -------------
* 08/31/07 and 03/06/08. 2,847,550 2,573,887
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
22
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
SPARTAN FOODS HOLDING COMPANY
A manufacturer of branded pizza crusts and pancakes.
12.25% Senior Subordinated Note due 2017 $ 1,912,500 12/15/09 $ 1,655,527 $ 1,940,317
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 257 shs. 12/15/09 227,109 3
------------- -------------
1,882,636 1,940,320
------------- -------------
SPECIALTY COMMODITIES, INC.
A distributor of specialty food ingredients.
13.25% Senior Subordinated Note due 2016 $ 2,297,852 10/23/08 2,163,806 2,343,809
Common Stock (B) 30,000 shs. 10/23/08 300,000 271,492
Warrant, excercisable until 2018, to purchase
common stock at $.01 per share (B) 11,054 shs. 10/23/08 100,650 100,036
------------- -------------
2,564,456 2,715,337
------------- -------------
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 2,134,093 2,120,721
Common Stock (B) 311 shs. 08/01/06 310,976 52,810
Warrant, exercisable until 2014, to purchase
common stock at $.02 per share (B) 104 shs. 08/01/06 93,293 17,588
------------- -------------
2,538,362 2,191,119
------------- -------------
SUNDANCE INVESTCO LLC
A provider of post-production services to producers of movies and television shows.
Limited Liability Company Unit Class A (B) 6,429 shs. 03/31/10 -- --
------------- -------------
SYNTERACT HOLDINGS CORPORATION
A provider of outsourced clinical trial management services to pharmaceutical and biotechnology companies.
14.5% Senior Subordinated Note due 2016 $ 2,600,830 09/02/08 2,441,188 2,609,152
Redeemable Preferred Stock Series A (B) 1,280 shs. 09/02/08 12,523 9,027
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 12,803 shs. 09/02/08 112,693 --
------------- -------------
2,566,404 2,618,179
------------- -------------
T H I ACQUISITION, INC.
A machine servicing company providing value-added steel services to long steel products.
12% Senior Subordinated Note due 2016 $ 2,550,000 01/14/08 2,410,946 2,040,000
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 9 shs. 01/14/08 88,054 --
------------- -------------
2,499,000 2,040,000
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
23
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
TELECORPS HOLDINGS, INC.
A provider of equipment and services to producers of television shows and motion pictures.
12.75% Senior Subordinated Note due 2016 $ 3,176,506 * $ 2,785,539 $ 3,017,681
Common Stock (B) 270 shs. 09/02/09 10,994 --
Warrant, exercisable until 2019, to purchase
common stock at $.01 per share (B) 7,906 shs. * 327,437 --
------------- -------------
* 05/20/09 and 09/02/09. 3,123,970 3,017,681
------------- -------------
TERRA RENEWAL LLC
A provider of wastewater residual management and required environmental reporting, permitting, nutrient management planning and
record keeping to companies involved in poultry and food processing.
12% Senior Subordinated Note due 2014 $ 1,162,110 * 1,118,762 928,061
6.79% Term Note due 2012 (C) $ 1,366,155 * 1,361,705 1,269,425
8.75% Term Note due 2012 (C) $ 1,449 * 1,449 1,347
Limited Partnership Interest of
Saw Mill Capital Fund V, LLC (B) 3.97% int. ** 149,176 --
Warrant, exercisable until 2016, to purchase
common stock at $.01 per share (B) 72 shs. 04/28/06 59,041 --
------------- -------------
* 04/28/06 and 09/13/06. ** 03/01/05 and 10/10/08. 2,690,133 2,198,833
------------- -------------
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.
14.5% Senior Subordinated Note due 2013 (D) $ 2,455,561 10/26/07 2,102,363 --
Series A Preferred Stock (B) 414 shs. 10/26/07 414,051 --
------------- -------------
2,516,414 --
------------- -------------
TOTAL E & S, INC.
A manufacturer of a wide variety of equipment used in the oil and gas industry.
10.5% Senior Secured Term Note due 2013 $ 851,351 03/02/07 838,581 808,783
13% Senior Subordinated Note due 2014 (D) $ 598,450 03/02/07 490,608 299,225
------------- -------------
1,329,189 1,108,008
------------- -------------
TRANSPAC HOLDING COMPANY
A designer, importer and wholesaler of home decor and seasonal gift products.
14% Senior Subordinated Note due 2015 (D) $ 1,773,006 10/31/07 1,649,939 1,684,356
Common Stock (B) 209 shs. 10/31/07 208,589 --
Warrant, exercisable until 2015, to purchase
common stock at $.01 per share (B) 94 shs. 10/31/07 87,607 --
------------- -------------
1,946,135 1,684,356
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
24
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
TRANSTAR HOLDING COMPANY
A distributor of aftermarket automotive transmission parts.
12% Senior Subordinated Note due 2014 $ 1,734,000 08/31/05 $ 1,686,481 $ 1,751,340
Common Stock (B) 1,078 shs. * 1,078,450 1,516,446
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 86 shs. 08/31/05 77,485 120,843
------------- -------------
* 08/31/05 and 04/30/07. 2,842,416 3,388,629
------------- -------------
TRANZONIC COMPANIES (THE)
A producer of commercial and industrial supplies, such as safety products, janitorial supplies, work apparel, washroom and restroom
supplies and sanitary care products.
13% Senior Subordinated Note due 2010 $ 2,712,000 02/05/98 2,681,582 2,712,000
Common Stock (B) 630 shs. 02/04/98 630,000 746,449
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 526,068
------------- -------------
3,680,414 3,984,517
------------- -------------
TRUCK BODIES & EQUIPMENT INTERNATIONAL
A designer and manufacturer of accessories for heavy and medium duty trucks, primarily dump bodies, hoists, various forms of flatbed
bodies, landscape bodies and other accessories.
8% Senior Subordinated Note due 2011 (D) $ 2,309,541 * 2,141,949 1,385,725
Preferred Stock Series B (B) 241 shs. 10/20/08 241,172 --
Common Stock (B) 742 shs. * 800,860 --
Warrant, exercisable until 2013, to purchase
common stock at $.02 per share (B) 153 shs. * 159,894 --
Warrant, exercisable until 2018, to purchase
common stock at $.01 per share (B) 1,054 shs. 10/20/08 -- --
------------- -------------
* 07/19/05 and 12/22/05. 3,343,875 1,385,725
------------- -------------
TRUSTILE DOORS, INC.
A manufacturer and distributor of interior doors.
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 5,781 shs. 04/11/03 68,059 51,863
------------- -------------
U M A ENTERPRISES, INC.
An importer and wholesaler of home decor products.
15% Senior Subordinated Note due 2015 $ 1,773,283 02/08/08 1,747,696 1,762,462
Convertible Preferred Stock (B) 887 shs. 02/08/08 886,956 420,405
------------- -------------
2,634,652 2,182,867
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
25
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
U-LINE CORPORATION
A manufacturer of high-end, built-in, undercounter ice making, wine storage and refrigeration appliances.
14.5% Senior Subordinated Note due 2012 $ 1,882,100 04/30/04 $ 1,805,456 $ 1,787,995
14.5% PIK Note due 2012 $ 272,292 10/06/09 232,400 258,677
Common Stock (B) 182 shs. 04/30/04 182,200 13,260
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 230 shs. 04/30/04 211,736 16,770
------------- -------------
2,431,792 2,076,702
------------- -------------
VISIONEERING, INC.
A designer and manufacturer of tooling and fixtures for the aerospace industry.
10.5% Senior Secured Term Loan due 2013 $ 802,941 05/17/07 790,897 793,868
13% Senior Subordinated Note due 2014 $ 648,530 05/17/07 595,643 637,587
18% PIK Convertible Preferred Stock (B) 37,381 shs. 03/13/09 72,519 58,015
Common Stock (B) 123,529 shs. 05/17/07 123,529 --
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 35,006 shs. 05/17/07 55,055 --
------------- -------------
1,637,643 1,489,470
------------- -------------
VITEX PACKAGING GROUP, INC.
A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags.
10% Senior Subordinated PIK Note due 2011 $ 165,165 10/29/09 150,904 156,907
5% Senior Subordinated PIK Note due 2011 (D) $ 850,000 06/30/07 741,532 807,500
Class B Unit (B) 767,881 uts. 10/29/09 348,058 --
Class C Unit (B) 850,000 uts. 10/29/09 780,572 196,578
Limited Liability Company Unit Class A (B) 723,465 uts. * 433,222 --
Limited Liability Company Unit Class B (B) 182,935 uts. 07/19/04 182,935 --
------------- -------------
* 07/19/04 and 10/29/09. 2,637,223 1,160,985
------------- -------------
WAGGIN' TRAIN HOLDINGS LLC
A producer of premium quality meat dog treats.
14% Senior Subordinated Note due 2014 $ 2,241,855 11/15/07 2,196,409 2,264,274
Limited Liability Company Unit Class B (B) 423 uts. 11/15/07 422,652 510,171
Limited Liability Company Unit Class C (B) 423 uts. 11/15/07 -- 415,292
------------- -------------
2,619,061 3,189,737
------------- -------------
WALLS INDUSTRIES, INC.
A provider of branded workwear and sporting goods apparel.
Limited Partnership Interest (B) 0.40% int. 07/12/04 3,728 --
Common Stock (B) 4,028 shs. 12/21/07 -- --
------------- -------------
3,728 --
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
26
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
PRINCIPAL AMOUNT,
SHARES, UNITS,
OR OWNERSHIP ACQUISITION
CORPORATE RESTRICTED SECURITIES:(A) CONTINUED PERCENTAGE DATE COST FAIR VALUE
---------------------------------------------------------------------------------------------------------------------------------
WELLBORN FOREST HOLDING CO.
A manufacturer of semi-custom kitchen and bath cabinetry.
14.13% Senior Subordinated Note due 2014 $ 1,721,250 11/30/06 $ 1,621,114 $ 1,635,188
Common Stock (B) 191 shs. 11/30/06 191,250 29,705
Warrant, exercisable until 2014, to purchase
common stock at $.01 per share (B) 95 shs. 11/30/06 86,493 14,830
------------- -------------
1,898,857 1,679,723
------------- -------------
WHEATON HOLDING CORPORATION
A distrtibutor and manufacturer of laboratory supply products and packaging.
13% Senior Subordinated Note due 2017 $ 3,000,000 06/08/10 2,728,931 3,000,000
Preferred Stock Series B (B) 2,109 shs. 06/08/10 210,924 21
Common Stock (B) 1,058 shs. 06/08/10 1,058 11
------------- -------------
2,940,913 3,000,032
------------- -------------
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 1,073,816 811,437
Limited Partnership Interest (B) 23.16% int. 05/14/07 115,804 --
Warrant, exercisable until 2015, to purchase
common stock at $.02 per share (B) 88 shs. 05/14/07 83,462 --
------------- -------------
1,273,082 811,437
------------- -------------
XALOY SUPERIOR HOLDINGS, INC.
A provider of melt processing components and ancillary equipment for both plastic injection molding and extrusion applications.
15.5% Senior Subordinated Note due 2015 (D) $ 2,322,844 09/08/08 2,272,887 1,161,422
Common Stock (B) 283 shs. 09/08/08 283,333 --
------------- -------------
2,556,220 1,161,422
------------- -------------
TOTAL PRIVATE PLACEMENT INVESTMENTS (E) 219,892,503 191,058,029
------------- -------------
---------------------------------------------------------------------------------------------------------------------------------
27
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
INTEREST DUE PRINCIPAL MARKET
CORPORATE RESTRICTED SECURITIES:(A) (CONTINUED) RATE DATE AMOUNT COST VALUE
---------------------------------------------------------------------------------------------------------------------------------
RULE 144A SECURITIES - 6.65%:
BONDS - 6.60%
Advanced Micro Devices, Inc. 8.125% 12/15/17 $ 750,000 $ 715,598 $ 744,375
Appleton Papers, Inc. 11.250 12/15/15 303,000 300,000 249,975
Avis Budget Car Rental LLC 9.625 03/15/18 85,000 83,839 85,213
Cemex Finance LLC 9.500 12/14/16 375,000 392,275 361,828
Cenveo Corporation 10.500 08/15/16 100,000 100,000 101,750
Clear Channel Worldwide Holdings, Inc. 9.250 12/15/17 750,000 750,000 753,750
Coffeyville Resources LLC 9.000 04/01/15 140,000 139,315 138,600
Compucom Systems, Inc. 12.500 10/01/15 1,330,000 1,294,993 1,401,488
Cricket Communications, Inc. 9.375 11/01/14 750,000 754,730 761,250
Dae Aviation Holdings, Inc. 11.250 08/01/15 200,000 195,078 198,000
Eastman Kodak Co. 9.750 03/01/18 750,000 735,152 740,625
Easton-Bell Sports, Inc. 9.750 12/01/16 320,000 328,000 331,200
Energy Future Holdings 10.000 01/15/20 100,000 100,000 99,750
G F S I, Inc. (C) 10.500 06/01/11 715,000 685,658 532,675
Gannett Company, Inc. 9.375 11/15/17 125,000 123,228 132,188
Geoeye, Inc. 9.625 10/01/15 750,000 776,768 765,000
Georgia Gulf Corporation 9.000 01/15/17 190,000 195,106 192,850
Gray Television, Inc. 10.500 06/29/15 500,000 475,179 490,000
Great Atlantic & Pacific Tea Co. 11.375 08/01/15 35,000 34,185 29,138
International Lease Finance Corporation 8.625 09/15/15 140,000 137,859 132,650
JohnsonDiversey, Inc. 8.250 11/15/19 100,000 99,170 102,750
Lamar Media Corporation 8.000 11/01/17 195,000 195,000 200,850
Landry's Restaurants, Inc. 7.875 04/15/18 125,000 125,000 125,781
L B I Escrow Corporation 11.625 12/01/15 125,000 134,219 130,313
Level 3 Financing, Inc. 10.000 02/01/18 750,000 745,641 663,750
Libbey Glass, Inc. 10.000 02/15/15 125,000 131,126 130,000
LIN Television Corporation 8.375 04/15/18 190,000 192,572 190,000
Magnachip Semiconductor 10.500 04/15/18 180,000 180,655 181,350
McClatchy Co. 11.500 02/15/17 275,000 271,766 279,125
Michael Foods, Inc. 9.750 07/15/18 75,000 75,000 77,063
Nexstar Broadcasting Group, Inc. 8.875 04/15/17 175,000 173,887 176,750
Packaging Dynamics Corporation of America 10.000 05/01/16 1,200,000 1,194,751 1,002,000
Pinnacle Foods Finance LLC 9.250 04/01/15 75,000 75,000 76,500
Reddy Ice Corporation 13.250 11/01/15 150,000 153,946 144,750
SandRidge Energy, Inc. 8.000 06/01/18 360,000 363,882 341,100
---------------------------------------------------------------------------------------------------------------------------------
28
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
SHARES OR
INTEREST DUE PRINCIPAL MARKET
CORPORATE RESTRICTED SECURITIES:(A) (CONTINUED) RATE DATE AMOUNT COST VALUE
---------------------------------------------------------------------------------------------------------------------------------
SandRidge Energy, Inc. 8.750% 01/15/20 $ 750,000 $ 744,973 $ 712,500
Sinclair Television Group, Inc. 9.250 11/01/17 425,000 414,051 429,250
Spectrum Brands, Inc. 9.500 06/15/18 125,000 123,290 129,686
Trimas Corporation 9.750 12/15/17 75,000 73,553 75,750
Tunica-Biloxi Gaming Authority 9.000 11/15/15 1,075,000 1,097,853 962,125
Univision Comunications, Inc. 12.000 07/01/14 200,000 214,020 214,500
ViaSystems, Inc. 12.000 01/15/15 175,000 169,126 189,000
West Corporation 11.000 10/15/16 150,000 159,111 152,625
------------ ------------
TOTAL BONDS 15,424,555 14,929,823
------------ ------------
CONVERTIBLE PREFERRED STOCK - 0.00%
ETEX Corporation (B) 777 716 --
------------ ------------
TOTAL CONVERTIBLE PREFERRED STOCK 716 --
------------ ------------
PREFERRED STOCK - 0.05%
General Motors Acceptance Corporation, Inc. 143 45,009 111,151
TherOX, Inc. (B) 103 4,131 --
------------ ------------
TOTAL PREFERRED STOCK 49,140 111,151
------------ ------------
COMMON STOCK - 0.00%
Touchstone Health Partnership (B) 1,168 4,254 --
------------ ------------
TOTAL COMMON STOCK 4,254 --
------------ ------------
Total Rule 144A Securities 15,478,665 15,040,974
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $235,371,168 $206,099,003
------------ ------------
---------------------------------------------------------------------------------------------------------------------------------
29
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
INTEREST DUE PRINCIPAL MARKET
CORPORATE PUBLIC SECURITIES - 17.51%: (A) RATE DATE AMOUNT COST VALUE
---------------------------------------------------------------------------------------------------------------------------------
BONDS - 16.64%
A M C Entertainment, Inc. 11.000% 02/01/16 $ 1,000,000 $ 1,003,291 $ 1,050,000
ACCO Brands Corporation 10.625 03/15/15 100,000 98,662 108,500
Affinia Group, Inc. 9.000 11/30/14 50,000 48,500 50,250
American Axle & Manufacturing Holding, Inc. 7.875 03/01/17 750,000 608,625 650,625
American General Finance Corporation 6.500 09/15/17 375,000 322,500 292,500
Atlas Pipeline Partners 8.125 12/15/15 750,000 663,750 690,000
Berry Plastics Corporation 8.875 09/15/14 750,000 705,000 721,875
Berry Plastics Corporation (C) 5.053 02/15/15 500,000 478,686 473,750
Boyd Gaming Corporation 7.125 02/01/16 700,000 630,500 575,750
Boyd Gaming Corporation 6.750 04/15/14 150,000 137,250 131,250
Brigham Exploration Co. 9.625 05/01/14 1,000,000 970,645 1,005,000
C I T Group, Inc. 7.000 05/01/15 415,000 386,988 382,838
Cenveo Corporation 7.875 12/01/13 1,300,000 1,192,500 1,248,000
Chaparral Energy, Inc. 8.875 02/01/17 1,000,000 991,780 920,000
Crosstex Energy L.P. 8.875 02/15/18 225,000 220,445 224,719
Dynegy Holdings, Inc. 7.750 06/01/19 830,000 564,400 573,738
Exide Corporation 10.500 03/15/13 430,000 432,158 434,300
Ford Motor Credit Co. 8.000 06/01/14 125,000 106,282 129,375
Ford Motor Credit Co. 7.450 07/16/31 500,000 441,500 451,250
Gencorp, Inc. 9.500 08/15/13 259,000 259,000 261,914
Goodyear Tire & Rubber Co. 10.500 05/15/16 100,000 96,326 108,750
Great Lakes Dredge & Dock Corporation 7.750 12/15/13 1,000,000 948,750 990,000
Harrah's Operating Co. 11.250 06/01/17 325,000 313,760 342,063
Hawker Beechcraft Acquisition Co. 9.750 04/01/17 1,000,000 1,006,785 617,500
Headwaters, Inc. 11.375 11/01/14 500,000 518,431 505,000
Hertz Corporation 10.500 01/01/16 750,000 775,208 778,125
Hexion Finance Escrow LLC 8.875 02/01/18 375,000 358,725 338,438
Intelsat Bermuda Ltd. 9.250 06/15/16 1,365,000 1,405,402 1,354,763
Interline Brands, Inc. 8.125 06/15/14 1,000,000 992,541 1,001,250
International Coal Group, Inc. 9.125 04/01/18 125,000 124,123 125,000
International Lease Finance Corporation 5.875 05/01/13 750,000 672,250 691,875
Kar Holdings, Inc. 8.750 05/01/14 50,000 50,000 50,250
Landry's Restaurants, Inc. 11.625 12/01/15 40,000 42,760 41,400
Liberty Media Corporation 5.700 05/15/13 1,000,000 951,610 1,022,500
Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 193,000
Markwest Energy Operating Co. 8.750 04/15/18 125,000 123,979 126,250
Markwest Energy Operating Co. 6.875 11/01/14 70,000 55,578 67,200
National Mentor Holdings, Inc. 11.250 07/01/14 375,000 374,531 374,063
Nebraska Book Company, Inc. 8.625 03/15/12 750,000 676,875 695,625
---------------------------------------------------------------------------------------------------------------------------------
30
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
SHARES OR
INTEREST DUE PRINCIPAL MARKET
CORPORATE PUBLIC SECURITIES:(A) (CONTINUED) RATE DATE AMOUNT COST VALUE
---------------------------------------------------------------------------------------------------------------------------------
Newark Group, Inc. 9.750% 03/15/14 $ 850,000 $ 796,863 $ 571,625
Nortek, Inc. 11.000 12/01/13 175,778 173,174 183,249
NXP Funding LLC 9.500 10/15/15 750,000 738,750 628,125
Omnicare, Inc. 7.750 06/01/20 75,000 75,000 76,500
Owens Corning, Inc. 9.000 06/15/19 55,000 54,112 63,663
Polypore, Inc. 8.750 05/15/12 1,000,000 965,000 1,002,500
Pregis Corporation 12.375 10/15/13 1,000,000 981,490 988,750
Quebecor Media, Inc. 7.750 03/15/16 1,050,000 978,235 1,029,000
Quiksilver, Inc. 6.875 04/15/15 315,000 290,463 286,256
RailAmerica, Inc. 9.250 07/01/17 240,000 230,589 251,400
Rental Service Corporation 9.500 12/01/14 750,000 728,567 745,313
Rite Aid Corporation 10.250 10/15/19 175,000 190,344 174,344
Sabre Holdings Corporation 8.350 03/15/16 500,000 455,000 477,500
Sanmina-SCI Corporation 8.125 03/01/16 375,000 374,063 369,375
Seneca Gaming Corporation 7.250 05/01/12 500,000 477,500 488,750
Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 370,781
Sprint Capital Corporation 6.900 05/01/19 625,000 575,531 565,625
Stanadyne Corporation 10.000 08/15/14 1,000,000 1,000,000 910,000
Stewart & Stevenson LLC 10.000 07/15/14 1,465,000 1,490,208 1,333,150
Teck Resources Ltd. 10.750 05/15/19 65,000 61,926 79,645
Tekni-Plex, Inc. 8.750 11/15/13 650,000 653,359 509,438
Tenneco, Inc. 8.125 11/15/15 1,100,000 540,000 1,105,500
Texas Industries, Inc. 7.250 07/15/13 70,000 70,000 67,725
Thermadyne Holdings Corporation 11.500 02/01/14 115,000 115,869 116,438
Ticketmaster Entertainment, Inc. 10.750 07/28/16 500,000 500,000 538,750
Titan International, Inc. 8.000 01/15/12 1,070,000 1,062,100 1,112,800
Tube City IMS Corporation 9.750 02/01/15 1,000,000 966,118 967,500
United Components, Inc. 9.375 06/15/13 1,080,000 1,079,726 1,085,400
United Rentals, Inc. 10.875 06/15/16 125,000 121,478 134,063
Verso Paper Holdings LLC 11.375 08/01/16 175,000 170,250 149,180
Verso Paper Holdings LLC 9.125 08/01/14 350,000 340,375 334,250
Waste Services, Inc. 9.500 04/15/14 1,100,000 1,114,521 1,127,500
------------ ------------
TOTAL BONDS 37,690,708 37,642,781
------------ ------------
---------------------------------------------------------------------------------------------------------------------------------
31
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
MARKET
CORPORATE PUBLIC SECURITIES:(A) (CONTINUED) SHARES COST VALUE
---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - 0.87%
Bally Total Fitness Holding Corporation (B) 29 $ 2 $ --
Chase Packaging Corporation (B) 9,541 -- 477
CKX, Inc. (B) 97,500 784,875 486,525
Directed Electronics, Inc. (B) 368,560 1,856,534 195,337
El Paso Corporation (B) 65,000 808,362 722,150
Intrepid Potash, Inc. (B) 365 11,680 7,143
ITC^DeltaCom, Inc. (B) 178,666 1,563,327 259,066
Nortek, Inc. (B) 175 1 7,350
Rue21, Inc. (B) 650 12,350 19,721
Supreme Industries, Inc. 125,116 267,319 270,251
------------ ------------
TOTAL COMMON STOCK 5,304,450 1,968,020
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 42,995,158 $ 39,610,801
------------ ------------
INTEREST DUE PRINCIPAL MARKET
SHORT-TERM SECURITIES: RATE/YIELD DATE AMOUNT COST VALUE
---------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 1.88%
Citigroup Funding, Inc. 0.250% 07/09/10 $ 2,500,000 $ 2,499,861 $ 2,499,861
Wisconsin Electric Power Co. 0.180 07/06/10 1,750,000 1,749,956 1,749,956
------------ ------------
TOTAL SHORT-TERM SECURITIES $ 4,249,817 $ 4,249,817
------------ ------------
TOTAL INVESTMENTS 110.49% $282,616,143 $249,959,621
============ ------------
Other Assets 3.32 7,513,587
Liabilities (13.81) (31,243,214)
------ ------------
TOTAL NET ASSETS 100.00% $226,229,994
====== ============
(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 06/30/10.
(D) Defaulted security; interest not accrued.
(E) Illiquid securities. As of June 30, 2010, the value of these securities amounted to $191,058,029 or 84.45% of net assets.
^ Effective yield at purchase
PIK - Payment-in-kind
---------------------------------------------------------------------------------------------------------------------------------
32
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
AEROSPACE - 3.94% BROADCASTING & ENTERTAINMENT - 2.45%
A E Company, Inc. $ 3,168,184 CKX, Inc. $ 486,525
Dae Aviation Holdings, Inc. 198,000 Clear Channel Worldwide Holdings, Inc. 753,750
Gencorp, Inc. 261,914 Geoeye, Inc. 765,000
P A S Holdco LLC 3,803,970 Gray Television, Inc. 490,000
Visioneering, Inc. 1,489,470 Lamar Media Corporation 200,850
------------ Liberty Media Corporation 1,022,500
8,921,538 LIN Television Corporation 190,000
------------ Nexstar Broadcasting Group, Inc. 176,750
AUTOMOBILE - 5.50% Sinclair Television Group, Inc. 429,250
American Axle & Manufacturing Holding, Inc. 650,625 Univision Communications, Inc. 214,500
Exide Corporation 434,300 Workplace Media Holding Co. 811,437
Goodyear Tire & Rubber Co. 108,750 ------------
Jason, Inc. 48,184 5,540,562
Nyloncraft, Inc. 1,021,875 ------------
Ontario Drive & Gear Ltd. 609,327 BUILDINGS & REAL ESTATE - 1.12%
Qualis Automotive LLC 2,886,238 K W P I Holdings Corporation 2,350,726
Tenneco, Inc. 1,105,500 Owens Corning, Inc. 63,663
Titan International, Inc. 1,112,800 Texas Industries, Inc. 67,725
Transtar Holding Company 3,388,629 TruStile Doors, Inc. 51,863
United Components, Inc. 1,085,400 ------------
------------ 2,533,977
12,451,628 ------------
------------ CHEMICAL, PLASTICS & RUBBER - 0.65%
BEVERAGE, DRUG & FOOD - 6.85% Capital Specialty Plastics, Inc. 1,126,577
Eatem Holding Company 3,014,553 Hexion Finance Escrow LLC 338,438
Golden County Foods Holding, Inc. 2,284,126 ------------
Hospitality Mints Holding Company 2,076,787 1,465,015
Landry's Restaurants, Inc. 167,181 ------------
L H D Europe Holding, Inc. 24,225
Michael Foods, Inc. 77,063
Spartan Foods Holding Company 1,940,320
Specialty Commodities, Inc. 2,715,337
Waggin' Train Holdings LLC 3,189,737
------------
15,489,329
------------
----------------------------------------------------------------------------------------------------------------------------------
33
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
CONSUMER PRODUCTS - 10.29% DIVERSIFIED/CONGLOMERATE, MANUFACTURING - 8.99%
Aero Holdings, Inc. $ 2,928,238 A H C Holding Company, Inc. $ 2,870,960
Bravo Sports Holding Corporation 2,493,009 Arrow Tru-Line Holdings, Inc. 1,611,581
Custom Engineered Wheels, Inc. 2,577,125 C D N T, Inc. 1,375,582
Eastman Kodak Co. 740,625 Great Lakes Dredge & Dock Corporation 990,000
Easton-Bell Sports, Inc. 331,200 Headwaters, Inc. 505,000
G F S I, Inc. 532,675 K P I Holdings, Inc. 1,790,544
JohnsonDiversey, Inc. 102,750 MEGTEC Holdings, Inc. 2,052,966
K N B Holdings Corporation 2,259,666 Milwaukee Gear Company 2,118,461
Kar Holdings, Inc. 50,250 Nortek, Inc. 190,599
Manhattan Beachwear Holding Company 3,018,221 Polypore, Inc. 1,002,500
Momentum Holding Co. 497,958 O E C Holdings Corporation 1,497,219
R A J Manufacturing Holdings LLC 2,442,844 Postle Aluminum Company LLC 1,601,424
Reddy Ice Corporation 144,750 Thermadyne Holdings Corporation 116,438
Royal Baths Manufacturing Company 1,173,334 Trimas Corporation 75,750
The Tranzonic Companies 3,984,517 Truck Bodies & Equipment International 1,385,725
Walls Industries, Inc. -- Xaloy Superior Holdings, Inc. 1,161,422
------------ ------------
23,277,162 20,346,171
------------ ------------
CONTAINERS, PACKAGING & GLASS - 4.92% DIVERSIFIED/CONGLOMERATE, SERVICE - 12.08%
Berry Plastics Corporation 1,195,625 A S C Group, Inc. 2,591,203
Chase Packaging Corporation 477 A W X Holdings Corporation 1,340,039
Flutes, Inc. 229,596 ACCO Brands Corporation 108,500
Maverick Acquisition Company 578,460 Advanced Technologies Holdings 2,628,141
P I I Holding Corporation 3,065,167 Affinia Group, Inc. 50,250
Packaging Dynamics Corporation of America 1,002,000 Apex Analytix Holding Corporation 2,461,712
Paradigm Packaging, Inc. 2,398,489 Clough, Harbour, and Associates 2,785,320
Pregis Corporation 988,750 Crane Rental Corporation 2,353,804
Tekni-Plex, Inc. 509,438 Diversco, Inc./DHI Holdings, Inc. 2,970,629
Vitex Packaging Group, Inc. 1,160,985 Dwyer Group, Inc. 1,549,834
------------ Insurance Claims Management, Inc. 287,161
11,128,987 Interline Brands, Inc. 1,001,250
------------ Mail Communications Group, Inc. 1,354,393
DISTRIBUTION - 1.74% Nesco Holdings Corporation 2,770,950
Duncan Systems, Inc. 1,477,194 Northwest Mailing Services, Inc. 2,605,061
F C X Holdings Corporation 2,468,868 Pearlman Enterprises, Inc. --
------------ Sabre Holdings Corporation 477,500
3,946,062 ------------
------------ 27,335,747
------------
----------------------------------------------------------------------------------------------------------------------------------
34
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
ELECTRONICS - 0.64% HOME & OFFICE FURNISHINGS, HOUSEWARES &
Connecticut Electric, Inc. $ 873,857 DURABLE CONSUMER PRODUCTS - 8.68%
Directed Electronics, Inc. 195,337 Connor Sport Court International, Inc. $ 2,614,058
Sanmina-SCI Corporation 369,375 H M Holding Company 513,825
------------ Home Decor Holding Company 2,411,706
1,438,569 Justrite Manufacturing Acquisition Co. 1,795,925
------------ K H O F Holdings, Inc. 270,607
FINANCIAL SERVICES - 2.56% Libbey Glass, Inc. 130,000
American General Finance Corporation 292,500 Monessen Holding Corporation 1,671,395
C I T Group, Inc. 382,838 Quiksilver, Inc. 286,256
Cemex Finance LLC 361,828 Spectrum Brands, Inc. 129,686
Citigroup Funding, Inc. 2,499,861 Stanton Carpet Holding Co. 2,191,119
Ford Motor Credit Co. 580,625 Transpac Holding Company 1,684,356
General Motors Acceptance Corporation, Inc. 111,151 U M A Enterprises, Inc. 2,182,867
Hawker Beechcraft Acquisition Co. 617,500 U-Line Corporation 2,076,702
Highgate Capital LLC -- Wellborn Forest Holding Co. 1,679,723
International Lease Finance Corporation 824,525 ------------
L B I Escrow Corporation 130,313 19,638,225
------------ ------------
5,801,141 LEISURE, AMUSEMENT & ENTERTAINMENT - 3.08%
------------ A M C Entertainment, Inc. 1,050,000
HEALTHCARE, EDUCATION & CHILDCARE - 4.44% Bally Total Fitness Holding Corporation --
American Hospice Management Boyd Gaming Corporation 707,000
Holding LLC 4,041,424 Harrah's Operating Escrow LLC 342,063
F H S Holdings LLC -- Savage Sports Holding, Inc. 2,875,296
National Mentor Holdings, Inc. 374,063 Seneca Gaming Corporation 488,750
Synteract Holdings Corporation 2,618,179 Ticketmaster Entertainment, Inc. 538,750
Touchstone Health Partnership -- Tunica-Biloxi Gaming Authority 962,125
Wheaton Holding Corporation 3,000,032 ------------
------------ 6,963,984
10,033,698 ------------
------------
----------------------------------------------------------------------------------------------------------------------------------
35
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
MACHINERY - 9.29% NATURAL RESOURCES - 1.53%
A S A P Industries LLC $ 1,198,931 Appleton Papers, Inc. $ 249,975
Davis-Standard LLC 2,347,977 Cenveo Corporation 1,349,750
E S P Holdco, Inc. 2,326,403 Georgia Culf Corporation 192,850
K-Tek Holdings Corporation 3,054,261 International Coal Group, Inc. 125,000
M V I Holding, Inc. 1,175,484 Intrepid Potash, Inc. 7,143
Manitowoc Company, Inc. 193,000 SandRidge Energy, Inc. 1,053,600
Navis Global 578,746 Verso Paper Holdings LLC 483,430
NetShape Technologies, Inc. 1,219,428 ------------
Pacific Consolidated Holdings LLC 1,237,206 3,461,748
Power Services Holding Company 2,338,352 ------------
R E I Delaware Holding, Inc. 2,551,485 OIL & GAS - 2.85%
Safety Speed Cut Manufacturing Company, Inc. 274,395 Atlas Pipeline Partners 690,000
Stanadyne Corporation 910,000 Brigham Exploration Co. 1,005,000
Stewart & Stevenson LLC 1,333,150 Coffeyville Resources LLC 138,600
Supreme Industries, Inc. 270,251 Chaparral Energy, Inc. 920,000
------------ International Offshore Services LLC 2,581,340
21,009,069 Total E & S, Inc. 1,108,008
------------ ------------
MEDICAL DEVICES/BIOTECH - 3.91% 6,442,948
Coeur, Inc. 1,337,821 ------------
E X C Acquisition Corporation 61,082 PHARMACEUTICALS - 1.21%
ETEX Corporation -- CorePharma LLC 2,737,630
MedSystems Holdings LLC 1,369,618 ------------
MicroGroup, Inc. 2,282,772 PUBLISHING/PRINTING - 1.05%
OakRiver Technology, Inc. 1,117,517 Gannett Company, Inc. 132,188
Omnicare, Inc. 76,500 McClatchy Co. 279,125
Precision Wire Holding Company 2,604,283 Newark Group, Inc. 571,625
TherOX, Inc. -- Quebecor Media, Inc. 1,029,000
------------ Sheridan Acquisition Corporation 370,781
8,849,593 ------------
------------ 2,382,719
MINING, STEEL, IRON & NON-PRECIOUS ------------
METALS - 1.36% RETAIL STORES - 0.92%
T H I Acquisition, Inc. 2,040,000 Bon-Ton Stores, Inc.
Teck Resources Ltd. 79,645 Great Atlantic & Pacific Tea Co. 29,138
Tube City IMS Corporation 967,500 Nebraska Book Company, Inc. 695,625
------------ Olympic Sales, Inc. 199,361
3,087,145 Pinnacle Foods Finance LLC 76,500
------------ Rental Service Corporation 745,313
Rite Aid Corporation 174,344
Rue21, Inc. 19,721
United Rentals, Inc. 134,063
------------
2,074,065
------------
See Notes to Consolidated Financial Statements
----------------------------------------------------------------------------------------------------------------------------------
36
MassMutual Corporate Investors
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2010
(Unaudited)
Fair Value/ Fair Value/
Industry Classification Market Value Industry Classification Market Value
------------------------------------------------------------ ------------------------------------------------------------
TECHNOLOGY - 3.21% WASTE MANAGEMENT/POLLUTION - 1.47%
Advanced Micro Devices, Inc. $ 744,375 Terra Renewal LLC $ 2,198,833
Compucom Systems, Inc. 1,401,488 Torrent Group Holdings, Inc. --
Magnachip Semiconductor 181,350 Waste Services, Inc. 1,127,500
NXP Funding LLC 628,125 ------------
Sencore Holding Company 1,531,035 3,326,333
Smart Source Holdings LLC 2,573,887 ------------
ViaSystems, Inc. 189,000
------------ Total Investments - 110.49% $249,959,621
7,249,260 ============
------------
TELECOMMUNICATIONS - 3.55%
All Current Holding Company 1,261,555
Cricket Communications, Inc. 761,250
Intelsat Bermuda Ltd. 1,354,763
ITC^DeltaCom, Inc. 259,066
Level 3 Financing, Inc. 663,750
Sprint Capital Corporation 565,625
Sundance Investco LLC --
Telecorps Holdings, Inc. 3,017,681
West Corporation 152,625
------------
8,036,315
------------
TRANSPORTATION - 0.63%
Avis Budget Car Rental LLC 85,213
Hertz Corporation 778,125
NABCO, Inc. 312,500
RailAmerica, Inc. 251,400
------------
1,427,238
------------
UTILITIES - 1.58%
Crosstex Energy, L.P. 224,719
Dynegy Holdings, Inc. 573,738
El Paso Corporation 722,150
Energy Future Holdings 99,750
Markwest Energy Operating Co. 193,450
Wisconsin Electric Power 1,749,956
------------
3,563,763
------------
See Notes to Consolidated Financial Statements
----------------------------------------------------------------------------------------------------------------------------------
37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. HISTORY
MassMutual Corporate Investors (the "Trust") commenced operations in 1971
as a Delaware corporation. Pursuant to an Agreement and Plan of
Reorganization dated November 14, 1985, approved by shareholders, the
Trust was reorganized as a Massachusetts business trust under the laws of
the Commonwealth of Massachusetts, effective November 28, 1985.
The Trust is a diversified closed-end management investment company.
Babson Capital Management LLC ("Babson Capital"), a wholly-owned indirect
subsidiary of Massachusetts Mutual Life Insurance Company ("MassMutual"),
acts as its investment adviser. The Trust's investment objective is to
maintain a portfolio of securities providing a fixed yield and at the same
time offering an opportunity for capital gains. The Trust's principal
investments are privately placed, below-investment grade, long-term debt
obligations with equity features such as common stock, warrants,
conversion rights, or other equity features and, occasionally, preferred
stocks. The Trust typically purchases these investments, which are not
publicly tradable, directly from their issuers in private placement
transactions. These investments are typically mezzanine debt instruments
with accompanying private equity securities made to small or middle market
companies. In addition, the Trust may temporarily invest, subject to
certain limitations, in marketable investment grade debt securities, other
marketable debt securities (including high yield securities) and
marketable common stocks. Below-investment grade or high yield securities
have predominantly speculative characteristics with respect to the
capacity of the issuer to pay interest and repay capital.
On January 27, 1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary of the Trust ("MMCI Subsidiary Trust") for the
purpose of holding certain investments. The results of MMCI Subsidiary
Trust are consolidated in the accompanying financial statements. Footnote
2.D below discusses the Federal tax consequences of the MMCI Subsidiary
Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of its consolidated financial
statements in conformity with accounting principles generally accepted in
the United States of America.
A. VALUATION OF INVESTMENTS:
Valuation of a security in the Trust's portfolio is made on the basis of
market price whenever market quotations are readily available and all
securities of the same class held by the Trust can be readily sold in such
market.
Nearly all securities which are acquired by the Trust directly from the
issuers and shares into which such securities may be converted or which
may be purchased on the exercise of warrants attached to such securities
will be subject to legal or contractual delays in, or restrictions on,
resale and will therefore be "restricted securities." Generally speaking,
as contrasted with open-market sales of unrestricted securities which may
be effected immediately if the market is adequate, restricted securities
can be sold only in a public offering for which a registration statement
is in effect under the Securities Act of 1933, as amended (the "1933
Act"), or pursuant to a transaction that is exempt from registration under
the 1933 Act.
The value of restricted securities, and of any other assets for which
there are no reliable market quotations, is the fair value as determined
in good faith by the Trust's Board of Trustees (the "Trustees"). Each
restricted security is valued by the Trustees at the time of its
acquisition and at least quarterly thereafter. The Trustees have
established guidelines to aid in the valuation of each security.
Generally, restricted securities are initially valued at cost or less at
the time of acquisition by the Trust. Values greater or less than cost are
used thereafter for restricted securities in appropriate circumstances.
Among the factors ordinarily considered are the existence of restrictions
upon the sale of a security held by the Trust; an estimate of the
existence and the extent of a market for the security; the extent of any
discount at which the security was acquired; the estimated period of time
during which the security will not be freely marketable; the estimated
expenses of registering or otherwise qualifying the security for public
sale; estimated underwriting commissions if underwriting would be required
to effect a sale; in the case of a convertible security, whether or not it
would trade on the basis of its stock equivalent; in the case of a debt
obligation which would trade independently of any equity equivalent, the
current yields on comparable securities; the estimated amount of the
floating supply of such securities available for purchase; the proportion
of the issue held by the Trust; changes in the financial condition and
prospects of the issuer; the existence of merger proposals or tender
offers affecting the issuer; and any other factors affecting fair value,
all in accordance with the Investment Company Act of 1940, as amended (the
"1940 Act"). In making valuations, opinions of counsel may be relied upon
as to whether or not securities are restricted securities and as to the
legal requirements for public sale.
When market quotations are readily available for unrestricted securities
of an issuer, restricted securities of the same class are generally valued
at a discount from the market price of such unrestricted securities. The
Trustees, however, consider all factors in fixing any discount, including
the filing of a registration statement for such securities under the 1933
Act and any other developments which are likely to increase the
probability that the securities may be publicly sold by the Trust without
restriction.
The Trustees meet at least once each quarter to approve the value of the
Trust's portfolio securities as of the close of business on the last
business day of the preceding quarter. This valuation requires the
approval of a majority of the Trustees of the Trust, 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
--------------------------------------------------------------------------------
38
MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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 $191,058,029 (84.45% of net assets) as of June 30,
2010 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 June 30, 2010,
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.
In accordance with the authoritative guidance on fair value measurements
and disclosures under accounting principles generally accepted in the
United States of America ("U.S. GAAP"), the Trust discloses the fair value
of its investments in a hierarchy that prioritizes the inputs to valuation
techniques used to measure the fair value. The hierarchy gives the highest
priority to valuations based upon unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the
lowest priority to valuations based upon unobservable inputs that are
significant to the valuation (level 3 measurements). The guidance
establishes three levels of the fair value hierarchy as follows:
Level 1 - quoted prices in active markets for identical securities
Level 2 - other significant observable inputs (including quoted
prices for similar securities, interest rates,
prepayment speeds, credit risk, etc.)
Level 3 - significant unobservable inputs (including the Trust's own
assumptions in determining the fair value of investments)
The inputs and methodology used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Trust's net
assets as of June 30, 2010:
ASSETS: TOTAL LEVEL 1 LEVEL 2 LEVEL 3
-------------------------------------------------------------------------------------------------------------
Restricted Securities
Bonds $175,587,665 $ -- $14,929,823 $160,657,842
Common Stock 14,857,100 -- -- 14,857,100
Preferred Stock 8,765,650 -- 111,151 8,654,499
Partnerships and LLCs 6,888,588 -- -- 6,888,588
Public Securities
Bonds 37,642,781 -- 37,642,781 --
Common Stock 1,968,020 1,960,670 7,350 --
Preferred Stock -- -- -- --
Short-term Securities 4,249,817 -- 4,249,817 --
-------------------------------------------------------------------------------------------------------------
TOTAL $249,959,621 $1,960,670 $56,940,922 $191,058,029
Following is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value:
UNREALIZED
TOTAL GAINS PURCHASES, GAINS & LOSSES
BEGINNING OR LOSSES SALES, ISSUANCES TRANSFERS ENDING IN NET INCOME
BALANCE (REALIZED/ & SETTLEMENTS IN AND/OR BALANCE AT FROM ASSETS
ASSETS: AT 12/31/2009 UNREALIZED) (NET) OUT OF LEVEL 3 06/30/2010 STILL HELD
------------------------------------------------------------------------------------------------------------------------------
Restricted Securities
Bonds $152,772,751 $2,190,029 $5,695,062 $ -- $160,657,842 $ 410,289
Common Stock 14,693,318 761,936 (598,154) -- 14,857,100 378,804
Preferred Stock 6,638,626 1,889,830 126,043 -- 8,654,499 1,475,779
Partnerships and LLCs 6,678,496 169,204 40,888 -- 6,888,588 169,204
Public Securities
Bonds 10 (8) (2) -- -- --
------------------------------------------------------------------------------------------------------------------------------
$180,783,201 $5,010,991 $5,263,837 $ -- $191,058,029 $2,434,076
--------------------------------------------------------------------------------
39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
B. ACCOUNTING FOR INVESTMENTS:
Investment transactions are accounted for on the trade date. Dividend
income is recorded on the ex-dividend date. Interest income is recorded on
the accrual basis, including the amortization of premiums and accretion of
discounts on bonds held using the yield-to-maturity method. The Trust does
not accrue income when payment is delinquent and when management believes
payment is questionable.
Realized gains and losses on investment transactions and unrealized
appreciation and depreciation of investments are reported for financial
statement and Federal income tax purposes on the identified cost method.
C. USE OF ESTIMATES:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
D. FEDERAL INCOME TAXES:
The Trust has elected to be taxed as a "regulated investment company"
under the Internal Revenue Code, and intends to maintain this
qualification and to distribute substantially all of its net taxable
income to its shareholders. In any year when net long-term capital gains
are realized by the Trust, management, after evaluating the prevailing
economic conditions, will recommend that the Trustees either designate the
net realized long-term gains as undistributed and pay the Federal capital
gains taxes thereon or distribute all or a portion of such net gains.
The Trust is taxed as a regulated investment company and is therefore
limited as to the amount of non-qualified income that it may receive as
the result of operating a trade or business, e.g. the Trust's pro rata
share of income allocable to the Trust by a partnership operating company.
The Trust's violation of this limitation could result in the loss of its
status as a regulated investment company, thereby subjecting all of its
net income and capital gains to corporate taxes prior to distribution to
its shareholders. The Trust, from time-to-time, identifies investment
opportunities in the securities of entities that could cause such trade or
business income to be allocable to the Trust. The MMCI Subsidiary Trust
(described in Footnote 1 above) was formed in order to allow investment in
such securities without adversely affecting the Trust's status as a
regulated investment company.
The MMCI Subsidiary Trust is not taxed as a regulated investment company.
Accordingly, prior to the Trust receiving any distributions from the MMCI
Subsidiary Trust, all of the MMCI Subsidiary Trust's taxable income and
realized gains, including non-qualified income and realized gains, is
subject to taxation at prevailing corporate tax rates. For the six months
ended June 30, 2010, the MMCI Subsidiary Trust has accrued income tax
expense of $1,308.
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 June 30, 2010, the MMCI subsidiary Trust has a
deferred tax liability of $145,855.
Beginning with the 2009 annual financial statements, the Trust recognizes
a tax benefit from an uncertain position only if it is more likely than
not that the position is sustainable, based solely on its technical merits
and consideration of the relevant taxing authority's widely understood
administrative practices and precedents. If this threshold is met, the
Trust measures the tax benefit as the largest amount of benefit that is
greater than fifty percent likely of being realized upon ultimate
settlement. The Trust has evaluated and determined that the tax positions
did not have a material effect on the Trust's financial position and
results of operations for the six months ended June 30, 2010.
E. DISTRIBUTIONS TO SHAREHOLDERS:
The Trust records distributions to shareholders from net investment income
and net realized gains, if any, on the exdividend date. The Trust's net
investment income dividend is declared four times per year, in April,
July, October, and December. The Trust's net realized capital gain
distribution, if any, is declared in December.
F. EXPENSE REDUCTION:
Citibank, N.A. ("Citibank") serves as custodian to the Trust. Pursuant to
the custodian agreement, Citibank receives a fee reduced by credits on
cash balances the Trust maintains 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 six months ended June
30, 2010, there were no credit balances used to reduce custodian fees.
3. INVESTMENT SERVICES CONTRACT
A. SERVICES:
Under an Investment Services Contract (the "Contract") with the Trust,
Babson Capital agrees to use its best efforts to present to the Trust a
continuing and suitable investment program consistent with the investment
objectives and policies of the Trust. Babson Capital represents the Trust
in any negotiations with issuers, investment banking firms, securities
brokers or dealers and other institutions or investors relating to the
Trust's investments. Under the Contract, Babson Capital also provides
administration of the day-to-day operations of the Trust and provides the
Trust with office space and office equipment, accounting and bookkeeping
services, and necessary executive, clerical and secretarial personnel for
the performance of the foregoing services.
--------------------------------------------------------------------------------
40
MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
B. FEE:
For its services under the Contract, Babson Capital is paid a quarterly
investment advisory fee of 0.3125% of the net asset value of the Trust as
of the last business day of each fiscal quarter, which is approximately
equal to 1.25% annually. A majority of the Trustees, including a majority
of the Trustees who are not interested persons of the Trust or of Babson
Capital, approve the valuation of the Trust's net assets as of such day.
C. BASIS FOR BOARD RENEWAL OF CONTRACT::
At a meeting of the Board of Trustees held on April 16, 2010, the Trustees
(including a majority of the Trustees who are not "interested persons" of
the Trust or Babson Capital) unanimously approved a one year continuance
of the Contract.
Prior to the meeting, the Trustees requested and received from Ropes &
Gray LLP, counsel to the Trust, a memorandum describing the Trustees'
legal responsibilities in connection with its review and reapproval of the
Contract. The Trustees also requested and received from Babson Capital
extensive written and oral information regarding among other matters: the
principal terms of the Contract; the reasons why Babson Capital was
proposing the continuance of the Contract; Babson Capital and its
personnel; the Trust's investment performance, including comparative
performance information; the nature and quality of the services provided
by Babson Capital to the Trust; financial strength of Babson Capital; the
fee arrangements between Babson Capital and the Trust; fee and expense
information, including comparative fee and expense information;
profitability of the advisory arrangement to Babson Capital; and "fallout"
benefits to Babson Capital resulting from the Contract.
Among other things, the Trustees discussed and considered with management
(i) the aforementioned guidance provided by Ropes & Gray LLP and the
information provided by Babson Capital prior to the meeting, and (ii) the
reasons Babson Capital put forth in support of its recommendation that the
Trustees approve the continuance of the Contract. These considerations are
summarized below.
NATURE, EXTENT AND QUALITY OF SERVICES TO BE PROVIDED BY BABSON CAPITAL TO
THE TRUST
In evaluating the scope and quality of the services provided by Babson
Capital, the Trustees considered, among other factors: (i) the scope of
services required to be provided by Babson Capital under the Contract;
(ii) Babson Capital's ability to find and negotiate private placement
securities having equity features that are consistent with the stated
investment objectives of the Trust; (iii) the experience and quality of
Babson Capital's staff; (iv) the strength of Babson Capital's financial
condition; (v) the nature of the private placement market compared to
public markets (including the fact that finding, analyzing, negotiating
and servicing private placement securities is more labor-intensive than
buying and selling public securities and the administration of private
placement securities is more extensive, expensive, and requires greater
time and expertise than a portfolio of only public securities); (vi) the
potential advantages afforded to the Trust by its ability to co-invest in
negotiated private placements with MassMutual and its affiliates; and
(vii) the expansion of the scope of services provided by Babson Capital as
a result of recent regulatory and legislative initiatives that have
required increased legal, compliance and business attention and diligence.
Based on such considerations, the Trustees concluded that, overall, they
are satisfied with the nature, extent and quality of services provided by
Babson Capital, and expected to be provided in the future, under the
renewed Contract.
INVESTMENT PERFORMANCE
The Trustees also examined the Trust's short-term, intermediate-term, and
long-term performance as compared against various benchmark indices
presented at the meeting, which showed that the Trust had outperformed
such indices for the 1-, 3-, 5-, and 10-year periods. In addition, the
Trustees considered comparisons of the Trust's performance with the
performance of (i) selected closed-end investment companies and funds that
may invest in private placement securities and/or bank loans; (ii)
selected business development companies with comparable types of
investments; and (iii) investment companies included in the Lipper
closed-end bond universe. It was acknowledged that, while such comparisons
are helpful in judging performance, they are not directly comparable in
terms of types of investments due to the fact that business development
companies often report returns based on market value, which is affected by
factors other than the performance of the underlying portfolio
investments. Based on these considerations and the detailed performance
information provided to the Trustees at the regular Board meetings each
quarter, the Trustees concluded that the Trust's absolute and relative
performance over time have been sufficient to warrant renewal of the
Contract.
ADVISORY FEE/COST OF SERVICES PROVIDED AND PROFITABILITY/MANAGER'S
"FALL-OUT" BENEFITS
In connection with the Trustees' consideration of the advisory fee paid by
the Trust to Babson Capital under the Contract, Babson Capital noted that
it was unaware of any registered closed-end investment companies that are
directly comparable to the Trust in terms of the types of investments and
percentages invested in private placement securities (which require more
extensive advisory and administrative services than a portfolio of
publicly traded securities, as previously discussed) other than MassMutual
Participation Investors, which also is advised by Babson Capital. Under
the terms of its Investment Advisory and Administrative Services Contract,
MassMutual Participation Investors is charged a quarterly investment
advisory fee of 0.225% of net asset value as of the end of each quarter,
which is approximately equal to 0.90% annually. In considering the fee
rate provided in the
--------------------------------------------------------------------------------
41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Contract, the Trustees noted the advisory fee charged by Babson Capital to
Tower Square Capital Partners, L.P., Tower Square Capital Partners II,
L.P., and Tower Square Capital Partners III, L.P., each a private
mezzanine debt fund also managed by Babson Capital, and that the fee the
Trust charged compares favorably.
At the request of the Trustees, Babson Capital provided information
concerning the profitability of Babson Capital's advisory relationship
with the Trust. The Trustees also considered the non-economic benefits
Babson Capital and its affiliates derived from its relationship with the
Trust, including the reputational benefits derived from having the Trust
listed on the New York Stock Exchange, and the de minimis amount of
commissions resulting from the Trust's portfolio transactions used by
Babson Capital for third-party soft dollar arrangements. The Trustees
recognized that Babson Capital should be entitled to earn a reasonable
level of profit for services provided to the Trust and, based on their
review, concluded that they were satisfied that Babson Capital's
historical level of profitability from its relationship with the Trust was
not excessive and that the advisory fee structure under the Contract is
reasonable.
ECONOMIES OF SCALE
Finally, the Trustees considered the concept of economies of scale and
possible advisory fee reductions if the Trust were to grow in assets.
Given that the Trust is not continuously offering shares, such growth
comes principally from retained net realized gain on investments and
dividend reinvestment. The Trustees also examined the breakpoint features
of selected competitive funds and noted that the minimum starting point
for fee reductions in those funds was at least $200 million, around the
value of the Trust's current net assets. The Trustees concluded that the
absence of breakpoints in the fee schedule under the Contract was
currently acceptable given the Trust's current size and closed-end fund
structure.
4. SENIOR SECURED INDEBTEDNESS
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 six months ended June 30, 2010, the Trust incurred total interest
expense on the Note of $792,000.
The Trust may redeem the Note, in whole or in part, at the principal
amount proposed to be redeemed together with the accrued and unpaid
interest thereon through the redemption date plus a Make Whole Premium.
The Make Whole Premium equals the excess of (i) the present value of the
scheduled payments of principal and interest which the Trust would have
paid but for the proposed redemption, discounted at the rate of interest
of U.S. Treasury obligations whose maturity approximates that of the Note
plus 0.50% over (ii) the principal of the Note proposed to be redeemed.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE SIX
MONTHS ENDED
06/30/2010
----------
COST PROCEEDS
OF FROM
INVESTMENTS SALES OR
ACQUIRED MATURITIES
----------- -----------
Corporate restricted securities $23,555,310 $15,706,359
Corporate public securities 12,815,071 11,708,219
The aggregate cost of investments is substantially the same for financial
reporting and Federal income tax purposes as of June 30, 2010. The net
unrealized depreciation of investments for financial reporting and Federal
tax purposes as of June 30, 2010 is $32,656,522 and consists of
$19,920,680 appreciation and $52,577,202 depreciation.
Net unrealized depreciation of investments on the Statement of Assets and
Liabilities reflects the balance net of a deferred tax accrual of $145,855
on net unrealized gains on the MMCI Subsidiary Trust.
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS
MARCH 31, 2010
AMOUNT PER SHARE
---------- ---------
Investment income $6,096,825
Net investment income 4,871,657 $0.52
Net realized and unrealized
gain on investments (net of taxes) 850,850 0.09
JUNE 30, 2010
AMOUNT PER SHARE
---------- ---------
Investment income $6,319,951
Net investment income 5,070,723 $0.54
Net realized and unrealized
gain on investments (net of taxes) 4,922,366 0.52
--------------------------------------------------------------------------------
42
MassMutual Corporate Investors
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
7. RESULTS OF SHAREHOLDER MEETING
The Annual Meeting of Shareholders was held on Friday, April 16, 2010. The
Shareholders were asked to vote to re-elect as trustees Donald E. Benson,
Donald Glickman, and Robert E. Joyal for three year terms. The
Shareholders approved the proposals. The Trust's other Trustees, William
J. Barrett, Michael H. Brown, Martin T. Hart, Corine T. Norgaard, Clifford
M. Noreen, and Maleyne M. Syracuse continued to serve their respective
terms following the April 16, 2010 Annual Shareholders Meeting. The
results of the Shareholder voting are set forth below.
% OF SHARES
SHARES FOR WITHHELD TOTAL VOTED FOR
Donald E. Benson
7,556,960 108,989 7,665,949 98.58%
Donald Glickman
7,550,332 115,617 7,665,949 98.49%
Robert E. Joyal
7,575,476 90,473 7,665,949 98.82%
8. BY-LAWS AMENDMENT
On April 16, 2010, the Board of Trustees approved an amendment to the
By-Laws of the Trust to include an advance notice provision that would
require shareholders seeking to nominate Trustee candidates or bring
business before an annual meeting to provide timely notice to the Trust,
consistent with certain specified requirements, of their intent to do so.
--------------------------------------------------------------------------------
43
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MassMutual Corporate Investors
MEMBERS OF THE BOARD
OF TRUSTEES
Donald Glickman
Robert E. Joyal
William J. Barrett
Michael H. Brown*
Donald E. Benson*
Dr. Corine T. Norgaard*
Clifford M. Noreen
Martin T. Hart
Maleyne M. Syracuse
*Member of the Audit committee
OFFICERS
Clifford M. Noreen
Chairman
Michael L. Klofas
President
James M. Roy
Vice President & Chief
Financial Officer
Patricia J. Walsh
Vice President, Secretary
& Chief Legal Officer
Jill A. Fields
Vice President
Michael P. Hermsen
Vice President
Mary Wilson Kibbe
Vice President
Richard E. Spencer, II
Vice President
Daniel J. Florence
Treasurer
John T. Davitt, Jr.
Comptroller
Melissa M. LaGrant
Chief Compliance Officer
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
MassMutual Corporate Investors offers a Dividend Reinvestment and Share Purchase
Plan (the "Plan"). The Plan provides a simple way for shareholders to add to
their holdings in the Trust through the receipt of dividend shares issued by the
Trust or through the investment of cash dividends in Trust shares purchased in
the open market. A shareholder may join the Plan by filling out and mailing an
authorization card to Shareholder Financial Services, Inc., the Transfer Agent.
Participating shareholders will continue to participate until they notify the
Transfer Agent, in writing, of their desire to terminate participation. Unless a
shareholder elects to participate in the Plan, he or she will, in effect, have
elected to receive dividends and distributions in cash.
Participating shareholders may also make additional contributions to the Plan
from their own funds. Such contributions may be made by personal check or other
means in an amount not less than $10 nor more than $5,000 per quarter. Cash
contributions must be received by the Transfer Agent at least five days (but no
more then 30 days) before the payment date of a dividend or distributions.
Whenever the Trust declares a dividend payable in cash or shares, the Transfer
Agent, acting on behalf of each participating shareholder, will take the
dividend in shares only if the net asset value is lower than the market price
plus an estimated brokerage commission as of the close of business on the
valuation day. The valuation day is the last day preceding the day of dividend
payment.
When the dividend is to be taken in shares, the number of shares to be received
is determined by dividing the cash dividend by the net asset value as of the
close of business on the valuation date or, if greater than net asset value, 95%
of the closing share price. If the net asset value of the shares is higher than
the market value plus an estimated commission, the Transfer Agent, consistent
with obtaining the best price and execution, will buy shares on the open market
at current prices promptly after the dividend payment date.
The reinvestment of dividends does not, in anyway, relieve participating
shareholders of any Federal, state or local tax. For Federal income tax
purposes, the amount reportable in respect of a dividend received in
newly-issued shares of the Trust will be the fair market value of the shares
received, which will be reportable as ordinary income and/or capital gains.
As compensation for its services, the Transfer Agent receives a fee of 5% of any
dividend and cash contribution (in no event in excess of $2.50 per distribution
per shareholder.)
Any questions regarding the Plan should be addressed to Shareholder Financial
Services, Inc., Transfer Agent for MassMutual Corporate Investors' Dividend
Reinvestment and Share Purchase Plan, P.O. Box 173673, Denver, CO 80217-3673.
MASSMUTUAL
CORPORATE INVESTORS
CI5233
ITEM 2. CODE OF ETHICS.
Not applicable to this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
A schedule of investments for the Registrant is included as part of
this report to shareholders under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to this filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to this filing. There have been no changes in any of the
Portfolio Managers identified in the Registrant's most recent annual
report on Form N-CSR.
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 quarter that have
materially affected, or are reasonably likely to materially
affect, the Registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a)(1) ANY CODE OF ETHICS, OR AMENDMENTS THERETO, THAT IS THE SUBJECT OF
DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT
INTENDS TO SATISFY THE ITEM 2 REQUIREMENTS THROUGH THE FILING OF
AN EXHIBIT.
None.
(a)(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE OFFICER AND
PRINCIPAL FINANCIAL OFFICER OF THE REGISTRANT AS REQUIRED BY RULE
30a-2 UNDER THE ACT.
Attached hereto as EX-99.31.1
Attached hereto as EX-99.31.2
(a)(3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23c-1
UNDER THE ACT (17 CFR 270.23c-1) SENT OR GIVEN DURING THE PERIOD
COVERED BY THE REPORT BY OR ON BEHALF OF THE REGISTRANT TO 10 OR
MORE PERSONS.
Not applicable for this filing.
(b) CERTIFICATIONS PURSUANT TO RULE 30a-2(b) UNDER THE ACT.
Attached hereto as EX-99.32
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): MassMutual Corporate Investors
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By: /s/ Michael L. Klofas
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Michael L. Klofas, President
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Date: September 8, 2010
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Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /s/ Michael L. Klofas
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Michael L. Klofas, President
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Date: September 8, 2010
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By: /s/ James M. Roy
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James M. Roy, Vice President and
Chief Financial Officer
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Date: September 8, 2010
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