MassMutual
CORPORATE
INVESTORS
[LOGO]
REPORT for the SIX
MONTHS ENDED 6/30/02
MassMutual Corporate Investors Adviser
c/o David L. Babson & Company Inc. David L. Babson & Company Inc.
1500 Main Street, Suite 1100
Springfield, Massachusetts 01115 Auditor
(413) 226-1516 Deloitte & Touche, LLP
www.massmutual.com/mci New York, New York 10281
Custodian
Citibank, N.A.
Transfer Agent & Registrar
Shareholder Financial Services, Inc.
P.O. Box 173673
Denver, Colorado 80217-3673
1-800-647-7374
[LOGOS]
Internet website: www.massmutual.com/mci
Investment Objective and Policy
MassMutual Corporate Investors, a closed-end investment company, was offered to
the public in September 1971 and its shares are listed on the New York Stock
Exchange. The share price of Corporate Investors can be found in the financial
section of most newspapers as "MassCp" or "MassMuInv" under the New York Stock
Exchange listings. The trading symbol is "MCI".
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 principal investments are long-term corporate debt obligations and
occasionally preferred stocks purchased directly from issuers. These provide a
fixed yield and potential capital gains through warrants, conversion rights, or
other equity features which are a prerequisite to every private placement
purchased.
The Trust holds investments in a number of companies that are not publicly
traded at this time. Capital gains may be realized on holdings of private
companies through various methods, including directly negotiated sales, put
options and initial public offerings of stock.
The Trust pays quarterly dividends and intends to distribute substantially all
of its net income to shareholders each year. All distributions are paid in cash
unless the shareholder elects to participate in the Dividend Reinvestment and
Share Purchase Plan.
Dividends are distributed in January, May, August, and November.
TO OUR SHAREHOLDERS
JULY 31, 2002
We are pleased to present the June 30, 2002 Quarterly Report of MassMutual
Corporate Investors. The Board of Trustees declared a quarterly dividend of 43
cents per share, payable on August 14, 2002 to shareholders of record on August
1, 2002. A dividend of 47 cents per share was paid in the previous quarter.
The markets continued to be extremely volatile in the second quarter with
accounting irregularities shocking the market. For the quarter, the S&P 500
Index was down 13.39%, the Russell 2000 Index declined 8.35%, and the Dow Jones
Industrial Average declined 10.72%, it's worst second quarter performance since
1970. Fixed income results for the second quarter were mixed. The Merrill Lynch
High Yield Master II Index posted a negative return of 6.98%. However, the
investment grade bond markets were up for the quarter. The Lehman Intermediate
Government/Credit Bond Index and the Lehman Government/Credit Bond Index both
posted solid returns of 3.56% and 3.75%, respectively, for the quarter.
For the quarter ended June 30, 2002, the Trust earned 43 cents per share
compared to 41 cents per share in the previous quarter. Net assets of the Trust
as of June 30th were $179,984,179 or $20.51 per share compared to $181,860,083
or $20.78 per share on March 31, 2002. This translated into a 0.97% return for
the quarter, based on change in net assets with reinvestment of dividends. Long
term, the Trust returned 10.69%, 15.08%, and 14.61% for the 5-, 10- and 25-year
periods ended June 30, 2002, respectively, based on change in net assets with
reinvestment of dividends.
Private placement activity picked up during the second quarter. Four new private
securities and one add-on investment, totaling approximately $9.1 million, were
added to the Trust's portfolio. The Trust purchased securities of Beacon Medical
Products, Inc.; Eagle Window & Door; Moss, Inc.; Sabex 2002, Inc. and Selig
Acquisition Corporation. The weighted average coupon of these investments was
11.0%. (A brief description of these investments can be found in the Schedule of
Investments.)
As noted in past press releases, quarterly earnings of the Trust have remained
below the $.47 per-share dividend level paid in prior quarters. The 47-cent
dividend level had been maintained by the distribution of short-term gains,
which cannot necessarily be counted upon to sustain future distributions. The
decline in earnings has generally been attributable to a decline in interest
rates and to the economic environment that has adversely impacted the ability of
some borrowers to pay their obligations. As a result, the Trustees voted to
reduce the Trust's dividend to 43 cents per share, which is modestly higher than
the current earnings level of the Trust.
Thank you for your continued interest in and support of MassMutual Corporate
Investors.
Sincerely,
/s/ Robert E. Joyal
---------------------------
Robert E. Joyal
President
--------------------------------------------------------------------------------
1
CONSOLIDATED STATEMENTS OF MASSMUTUAL CORPORATE INVESTORS
ASSETS AND LIABILITIES
June 30, 2002 and 2001
(Unaudited)
2002 2001
------------- -------------
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost 2002 -- $205,064,087; 2001 -- $200,768,667) $ 172,514,756 $ 168,613,735
Corporate public securities at market value
(Cost 2002 -- $20,266,996; 2001 -- $29,872,884) 15,385,854 20,376,467
Short-term securities at cost plus earned discount which
approximates market value 8,071,928 964,887
------------- -------------
195,972,538 189,955,089
Cash 193,747 455,475
Interest and dividends receivable, net 4,694,887 4,357,314
Receivable for investments sold 153,986 10,604,292
Other assets 13,243 628,073
------------- -------------
TOTAL ASSETS $ 201,028,401 $ 206,000,243
============= =============
LIABILITIES:
Payable for investments purchased $ -- $ 581,576
Management fee payable 677,481 694,313
Note payable 20,000,000 20,000,000
Interest payable 187,711 187,711
Accrued expenses 75,174 80,774
Accounts payable 103,856 --
------------- -------------
TOTAL LIABILITIES 21,044,222 21,544,374
------------- -------------
NET ASSETS:
Common shares, par value $1.00 per share; an unlimited number authorized 8,774,545 8,680,878
Additional paid-in capital 99,972,570 98,028,145
Retained net realized gain on investments, prior years 100,353,354 100,353,354
Undistributed net investment income 5,017,472 4,929,740
Undistributed net realized gain on investments 3,296,711 14,115,101
Net unrealized depreciation of investments (37,430,473) (41,651,349)
------------- -------------
TOTAL NET ASSETS 179,984,179 184,455,869
------------- -------------
TOTAL LIABILITIES AND NET ASSETS $ 201,028,401 $ 206,000,243
COMMON SHARES ISSUED AND OUTSTANDING 8,774,545 8,680,878
------------- -------------
NET ASSET VALUE PER SHARE $ 20.51 $ 21.25
============= =============
See Notes to Financial Statements.
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2
CONSOLIDATED STATEMENTS OF OPERATIONS MASSMUTUAL CORPORATE INVESTORS
For the six months ended June 30, 2002 and 2001
(Unaudited)
2002 2001
------------ ------------
INVESTMENT INCOME:
Interest $ 9,328,106 $ 9,611,022
Dividends 348,382 342,002
------------ ------------
TOTAL INCOME 9,676,488 9,953,024
------------ ------------
EXPENSES:
Management fees 1,362,023 1,378,244
Trustees' fees and expenses 72,788 74,663
Transfer Agent/Registrar's expenses 24,000 34,000
Interest 757,493 757,596
Reports to shareholders 50,400 57,000
Audit and legal 32,700 26,250
Other 23,066 51,208
------------ ------------
TOTAL EXPENSES 2,322,470 2,378,961
------------ ------------
NET INVESTMENT INCOME (2002 -- $.84 PER SHARE; 2001 -- $.87 PER SHARE) 7,354,018 7,574,063
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain on investments 2,758,962 14,115,101
Net change in unrealized depreciation of investments (2,158,376) (13,351,918)
------------ ------------
NET GAIN ON INVESTMENTS 600,586 763,183
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,954,604 $ 8,337,246
============ ============
See Notes to Financial Statements.
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3
CONSOLIDATED STATEMENTS OF CASH FLOWS MASSMUTUAL CORPORATE INVESTORS
For the six months ended June 30, 2002 and 2001
(Unaudited)
2002 2001
------------ ------------
NET DECREASE IN CASH:
Cash flows from operating activities:
Interest and dividends received $ 8,544,337 $ 8,835,520
Interest expense paid (757,493) (757,596)
Operating expenses paid (1,539,647) (1,910,026)
Federal income tax paid -- (1,160,120)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 6,247,197 5,007,778
------------ ------------
Cash flows from investing activities:
Increase from short-term portfolio securities, net 2,560,249 6,157,422
Purchase of portfolio securities (40,478,077) (24,221,887)
Proceeds from disposition of portfolio securities 36,768,304 26,211,205
------------ ------------
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES (1,149,524) 8,146,740
------------ ------------
NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES 5,097,673 13,154,518
------------ ------------
Cash flows from financing activities:
Increase in receipts for shares issued on reinvestment of dividends 1,030,008 2,057,307
Cash dividends paid from net investment income (8,213,844) (8,954,607)
Cash dividends paid from net realized gain on investments -- (6,879,442)
------------ ------------
NET CASH USED FOR FINANCING ACTIVITIES (7,183,836) (13,776,742)
------------ ------------
NET DECREASE IN CASH (2,086,163) (622,224)
Cash -- beginning of year 2,279,910 1,077,699
------------ ------------
CASH -- END OF PERIOD $ 193,747 $ 455,475
RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET CASH FROM
OPERATING AND INVESTING ACTIVITIES:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,954,604 $ 8,337,246
------------ ------------
(Increase) decrease in investments (2,511,925) 16,157,174
(Increase) decrease in interest and dividends receivable, net (497,405) 244,049
Decrease (increase) in receivable for investments sold 79,328 (9,362,884)
Increase in other assets (13,243) (628,073)
Decrease in payable for investments purchased -- (144,213)
Increase in management fee payable 19,062 97,208
Increase (decrease) in accounts payable 93,373 (353,515)
Decrease in accrued expenses (26,121) (32,354)
Decrease in accrued taxes -- (1,160,120)
------------ ------------
TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (2,856,931) 4,817,272
------------ ------------
NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES $ 5,097,673 $ 13,154,518
============ ============
See Notes to Financial Statements.
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4
CONSOLIDATED STATEMENTS OF MASSMUTUAL CORPORATE INVESTORS
CHANGES IN NET ASSETS
For the six months ended June 30, 2002 and 2001
(Unaudited)
2002 2001
------------- -------------
Increase in net assets:
Operations:
Net investment income $ 7,354,018 $ 7,574,063
Net realized gain on investments 2,758,962 14,115,101
Net change in unrealized depreciation of investments (2,158,376) (13,351,918)
------------- -------------
Net increase in net assets resulting from operations 7,954,604 8,337,246
Net increase in shares of beneficial interest transactions 1,030,008 2,057,307
Dividends to shareholders from:
Net investment income (2002 -- $.29 per share; 2001 -- $.47 per share) (2,570,754) (4,069,181)
Net realized gains on investments (2002 -- $.18 per share; 2001 -- $.00 per share) (1,542,226) --
------------- -------------
Total increase in net assets 4,871,632 6,325,372
Net Assets, beginning of year 175,112,547 178,130,497
------------- -------------
Net Assets, end of period (including undistributed net investment
income in 2002 -- $5,017,472; 2001 -- $4,929,740) $ 179,984,179 $ 184,455,869
============= =============
See Notes to Financial Statements.
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5
CONSOLIDATED SELECTED PER SHARE DATA MASSMUTUAL CORPORATE INVESTORS
Selected data for each share of beneficial interest outstanding for the periods ended:
For the six
months ended For the
6/30/2002 year ended
(Unaudited) 12/31/2001
---------- ----------
Net asset value:
Beginning of year $ 20.07 $ 20.74
---------- ----------
Net investment income 0.84 1.70
Net realized and unrealized gain (loss) on investments 0.07 (0.53)
---------- ----------
Total from investment operations 0.91 1.17
---------- ----------
Dividends from net investment income to common shareholders (0.29) (1.79)
Distributions from net realized gain on investments to common shareholders (0.18) (0.09)
Change from issuance of shares -- 0.04
---------- ----------
Total distributions (0.47) (1.84)
---------- ----------
Net asset value:
End of period $ 20.51 $ 20.07
========== ==========
Per share market value:
End of period $ 21.58 $ 20.70
========== ==========
Total investment return:
Market value 6.42%* 1.88%
Net asset value 4.54%* 5.91%
Net assets (in millions):
End of period $ 179.98 $ 175.11
Ratio of operating expenses to average net assets 0.91%* 1.72%
Ratio of interest expenses to average net assets 0.42%* 0.84%
Ratio of total expenses to average net assets 1.33%* 2.56%
Ratio of net investment income to average net assets 4.11%* 8.20%
Portfolio turnover 19.66%* 24.48%
* Percentages represent results for the period and are not annualized.
See Notes to Financial Statements.
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6
CONSOLIDATED SCHEDULE OF INVESTMENTS MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES -- 95.85% (A)
PRIVATE PLACEMENT INVESTMENTS -- 93.60%
ADORN, INC
A manufacturer of wall panels, cabinets, moldings and
countertops for houses and recreational vehicles
12.5% Subordinated Note due 2010 $ 2,125,000 2/29/00 $ 1,861,835 $ 2,149,650
Warrant, exercisable until 2010, to purchase
common stock at $.02 per share (B) 364 shs. 2/29/00 307,759 31,275
------------ ------------
2,169,594 2,180,925
------------ ------------
ADVENTURE ENTERTAINMENT CORPORATION
An owner and operator of themed family entertainment
centers
19% Senior Subordinated Note due 2004 (B) $ 207,048 12/9/99 207,048 20,705
7% Redeemable Preferred Stock (B) 2,188 shs. 10/31/97 2,009,220 --
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 6,447 shs. 10/31/97 25,005 --
------------ ------------
2,241,273 20,705
------------ ------------
ALPHA SHIRT COMPANY
A domestic distributor of imprintable apparel and other
related items
12% Senior Subordinated Note due 2007 $ 3,181,500 4/30/99 2,854,748 3,245,130
Common Stock (B) 1,060 shs. 4/30/99 1,059,950 1,001,786
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 576 shs. 4/30/99 445,410 544,756
------------ ------------
4,360,108 4,791,672
------------ ------------
AMERICA'S BODY CO., INC./LCP HOLDING CO
A designer and manufacturer of commercial work vehicles
12% Senior Subordinated note Due 2007 $ 3,500,000 11/2/98 3,133,281 3,245,900
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 58 shs. 11/2/98 513,333 1
------------ ------------
3,646,614 3,245,901
------------ ------------
AMES TRUE TEMPER, INC
A leading manufacturer and distributor of non-powered
lawn and garden tools and accessories in North America
13% Senior Subordinated Note due 2010 $ 1,888,889 1/14/02 1,883,871 1,843,178
10% Preferred Stock 153 shs. 2/28/02 153,334 140,999
Class A Common Stock 2,105 shs. 2/28/02 2,105 1,684
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 5,018 shs. 1/14/02 5,018 50
------------ ------------
2,044,328 1,985,911
------------ ------------
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7
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
BEACON MEDICAL PRODUCTS, INC
A designer, manufacturer and marketer of medical air and
gas distribution systems
Senior Secured Floating Rate Revolving Credit
Facility due 2007 $ 165,875 4/9/02 $ 165,875 $ 164,249
Senior Secured Tranche A Floating Rate Note due 2008 $ 1,133,307 4/9/02 1,133,307 1,124,694
12% Senior Secured Note due 2010 $ 721,196 4/9/02 595,528 703,238
Limited Partnership Interest (B) 152,329 int 4/9/02 152,329 121,863
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 1,390 shs. 4/9/02 127,497 14
------------ ------------
2,174,536 2,114,058
------------ ------------
BETA BRANDS, INC. -- T.S.E
A manufacturer of hard candy and chocolate-coated
products sold primarily to the Canadian market
Senior Secured Tranche A Floating Rate
Note due 2004 $ 2,154,345 12/23/97 2,154,344 1,077,173
17.75% Senior Secured Tranche B Note
due 2005 $ 790,830 12/23/97 790,829 395,415
Preference Shares (B) 360,018 shs. 2/14/02 2 --
Limited Partnership Interests of
CM Equity Partners (B) 6.27% int. 12/22/97 832,197 8,337
Warrant, exercisable until 2005, to purchase
common stock at $.81 per share (B) 214,419 shs. 12/23/97 -- 2,144
------------ ------------
3,777,372 1,483,069
------------ ------------
BETTER MINERALS & AGGREGATES
A producer of high grade industrial and specialty silica
sands
14% Redeemable Preferred Stock 931 shs. 9/30/99 531,735 511,100
Convertible Preferred Stock Series A and B, convertible
into common stock at $9.26 per share (B) 126,003 shs. 12/19/96 1,166,700 991,694
Common Stock (B) 20,027 shs. 9/30/99 799,068 679,208
Warrants, exercisable until 2005 and 2010, to
purchase common stock at $.01 per share (B) 11,399 shs. * 128,502 114
------------ ------------
2,626,005 2,182,116
------------ ------------
C & K MANUFACTURING AND SALES COMPANY
A manufacturer and distributor of branded packaging and
supply products
Senior Secured Floating Rate Revolving Credit
Facility due 2002 (B) $ 652,244 8/29/96 652,244 130,449
Senior Secured Series A Floating Rate
Term Note due 2002 (B) $ 2,141,158 8/29/96 2,141,158 428,232
12% Series B Term Note due 2004 $ 522,900 8/29/96 513,993 104,580
Membership Interests (B) 5.63% int. 8/29/96 125,750 --
Warrant, exercisable until 2004, to purchase
membership interests at $.01 per interest (B) 36 int. 8/29/96 26,650 --
------------ ------------
3,459,795 663,261
------------ ------------
*12/19/96 and 9/30/99.
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8
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
CAINS FOODS, L.P.
A producer of mayonnaise and sauce products for both the
retail and food service markets.
8% Junior Subordinated Convertible
Note due 2004, convertible into partnership
points at $1,388.89 per point $ 108,108 9/29/95 $ 108,108 $ 111,416
Warrant, exercisable until 2006, to purchase
partnership points at $.01 per point (B) 39 pts. 9/29/95 50,261 --
------------ ------------
158,369 111,416
------------ ------------
CAPESUCCESS LLC
A provider of diversified staffing services.
Common Stock (B) 6,855 shs. 4/29/00 37,702 33,932
Preferred Membership Interests (B) 1,882 int. 4/29/00 8,396 7,557
Common Membership Interests (B) 24,318 int. 4/29/00 108,828 97,949
------------ ------------
154,926 139,438
------------ ------------
CAPITOL SPECIALTY PLASTICS, INC.
A producer of desiccant strips used for packaging
pharmaceuticals products.
Common Stock (B) 109 shs. * 503 403
------------ ------------
CHAPARRAL RESOURCES, INC. -- O.T.C.
An international oil and gas exploration and production
company.
Common Stock (B) 164 shs. 12/3/97 6,395 295
------------ ------------
COINING CORPORATION OF AMERICA
A manufacturer of close tolerance parts and metal
stampings.
Senior Secured Floating Rate Revolving Credit
Facility due 2006 $ 21,605 1/7/02 21,605 21,063
Senior Secured Floating Rate Tranche A Note
due 2008 $ 1,382,716 6/26/01 1,382,716 1,355,477
12% Senior Secured Tranche B Note due 2008 $ 648,148 6/26/01 575,875 639,528
Limited Partnership Interest (B) 324 shs. 6/26/01 324,074 259,259
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 107,036 shs. 6/26/01 79,398 1,070
------------ ------------
2,383,668 2,276,397
------------ ------------
COLIBRI HOLDINGS CORPORATION
A manufacturer and distributor of wild bird feeders and
accessories.
12.5% Senior Subordinated Note due 2008 $ 1,593,750 9/22/00 1,361,800 1,493,344
28% Preferred Stock 71 shs. 11/2/01 70,833 68,613
Common Stock (B) 1,429 shs. 9/22/00 531,250 478,120
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 843 shs. 9/22/00 265,625 8
------------ ------------
2,229,508 2,040,085
------------ ------------
*12/30/97 and 5/29/99.
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9
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
Consumer Product Enterprises, Inc.
A manufacturer of colored acrylic felt for consumer use.
Senior Secured Floating Rate Revolving Credit
Note due 2003 $ 749,775 12/8/95 $ 749,775 $ 299,910
10.75% Senior Secured Term Note due 2003 $ 613,774 12/8/95 613,774 245,510
12% Senior Subordinated Note due 2005 $ 800,575 12/8/95 778,871 160,115
Common Stock (B) 184,560 shs. 12/8/95 184,560 --
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 138,420 shs. 12/8/95 50,853 --
------------ ------------
2,377,833 705,535
------------ ------------
CORVEST GROUP, INC.
A manufacturer and distributor of promotional products.
12% Senior Subordinated Note due 2007 $ 3,863,636 * 3,651,041 3,477,272
Common Stock (B) 56 shs. * 96,591 72,436
Limited Partnership Interest (B) 19.32% int. * 286,772 215,070
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 183 shs. * 297,203 236,684
------------ ------------
4,331,607 4,001,462
------------ ------------
DELSTAR HOLDINGS CORP.
A manufacturer of plastic netting for a wide variety of industries.
Convertible Preferred Stock, convertible into common
stock at $12.16 per share 3,514 shs. 10/5/01 427,153 351
------------ ------------
DEXTER MAGNETICS TECHNOLOGIES, INC.
A designer, fabricator, assembler, and distributor of
industrial magnets and subassemblies in North America
and Europe.
12% Senior Subordinated Note due 2006 $ 1,408,016 7/19/01 1,186,650 1,365,212
Common Stock (B) 585 shs. 7/19/01 585,145 526,635
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 297 shs. 7/19/01 250,611 3
------------ ------------
2,022,406 1,891,850
------------ ------------
DHD HEALTHCARE, INC.
A designer, manufacturer and distributor of plastic, noninvasive
medical devices used for respiratory care.
Senior Secured Floating Rate Tranche A Note
due 2008 $ 1,357,616 2/8/01 1,357,616 1,360,874
12% Senior Secured Tranche B Note due 2009 $ 574,220 2/8/01 492,190 575,483
Limited Partnership Interests of Riverside
Capital Appreciation Fund III, L.P. (B) 2.81% int. 2/8/01 163,896 131,117
Warrants, exercisable until 2008, to purchase
common stock at $.01 per share (B) 927 shs. 2/8/01 82,030 9
------------ ------------
2,095,732 2,067,483
------------ ------------
*3/5/99 and 3/24/99.
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10
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
DIRECTED ELECTRONICS, INC.
A designer and distributor of brand name automotive
security systems, audio products and installation
accessories.
12% Senior Subordinated Note due 2007 $ 3,355,267 12/22/99 $ 3,026,801 $ 3,448,208
8% Convertible Class B Subordinated
Promissory Note due 2008 $ 89,442 12/22/99 89,061 89,603
Class B Common Stock (B) 26,097 shs. 12/22/99 260,965 234,869
Limited Partnership Interests 8.70% int. 12/22/99 539,268 485,343
Warrants, exercisable until 2007, to purchase
common stock at $.01 per share (B) 45,255 shs. 12/22/99 413,816 453
------------ ------------
4,329,911 4,258,476
------------ ------------
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) 3.48% int. 8/27/98 734,090 --
Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 696,034
Common Stock (B) 9,725 shs. 12/14/01 -- --
Warrants, exercisable until 2003 &
2011, to purchase common stock of
DHI Holdings, Inc. at $.01 per share (B) 3,627 shs. * 403,427 --
------------ ------------
3,921,650 696,034
------------ ------------
DT INDUSTRIES, INC.
A designer and manufacturer of automated production
systems used to assemble, test or package industrial and
consumer products.
7.16% Convertible Preferred Stock, convertible into
common stock at $14 per share (B) 20,000 shs. 6/12/97 1,000,000 450,000
Common Stock (B) 178,876 shs. 6/21/02 1,168,093 500,853
------------ ------------
2,168,093 950,853
------------ ------------
EAGLE WINDOW & DOOR HOLDINGS CO.
A manufacturer of wood and aluminum-clad wood
windows and doors.
12% Senior Subordinated Note due 2010 $ 1,900,000 5/6/02 1,617,729 1,895,250
Common Stock (B) 225 shs. 5/6/02 225,000 202,500
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 441 shs. 5/6/02 285,000 4
------------ ------------
2,127,729 2,097,754
------------ ------------
EAST RIVER VENTURES I, L.P.
An acquirer of controlling or substantial interests in other
entities.
Limited Partnership Interest 32,191 int. 1/1/01 31,000 27,481
------------ ------------
*10/24/96 and 8/28/98.
--------------------------------------------------------------------------------
11
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
ENZYMATIC THERAPY, INC.
A manufacturer and distributor of branded natural
medicines and nutritional supplements.
12% Senior Subordinated Note due 2009 $ 1,593,750 3/30/00 $ 1,354,052 $ 1,115,625
Limited Partnership Interest (B) 1.43% int. 3/30/00 531,250 265,625
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 478 shs. 3/30/00 255,000 5
------------ ------------
2,140,302 1,381,255
------------ ------------
EVANS CONSOLES, INC.
A designer and manufacturer of consoles and control
center systems.
Senior Secured Tranche A Floating Rate Note
due 2005 $ 1,025,300 3/2/98 1,025,300 985,006
8.85% Senior Secured Tranche A Note due 2005 $ 1,025,300 3/2/98 1,025,300 959,886
11.75% Senior Secured Tranche B Note due 2006 $ 700,000 3/2/98 634,369 667,800
Senior Secured Floating Rate Revolving Credit
Facility due 2005 $ 840,000 3/2/98 840,000 794,388
Common Stock (B) 26,906 shs. 2/11/98 94,880 75,905
Limited Partnership Interests of CM
Equity Partners (B) 126,445 int. 2/11/98 126,648 101,321
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 34,783 shs. 3/2/98 112,000 348
------------ ------------
3,858,497 3,584,654
------------ ------------
EVOLVE SOFTWARE, INC.
A provider of software for automating professional
services organizations.
Common Stock (B) 175 shs. 4/20/01 735 20
------------ ------------
EXAMINATION MANAGEMENT SERVICES, INC.
A national full-service evidence provider to the insurance
industry and a provider of occupational health testing.
12% Senior Subordinated Note due 2007 $ 2,109,637 3/16/99 1,984,146 1,927,364
Limited Partnership Interest (B) 5.27% int. 3/2/99 2,140,363 1,712,290
Warrants, exercisable until 2007, to purchase
common stock at $.01 per share (B) 77,233 shs. 3/16/99 175,803 772
------------ ------------
4,300,312 3,640,426
------------ ------------
FAIRMARKET, INC.
A developer and deliverer of e-business selling and
marketing solutions for retailer, distributors, and
manufacturers.
Common Stock (B) 217 shs. 4/20/01 371 268
------------ ------------
FASTENERS FOR RETAIL, INC.
A designer and marketer of low-cost fasteners for point of
purchase displays and signage in retail environments.
12.5% Senior Subordinated Note due 2007 $ 3,650,000 12/22/99 3,280,342 3,759,500
Class B common Stock (B) 600 shs. 12/22/99 600,000 470,221
Warrant, exercisable until 2007, to purchase
common stock at $.02 per share (B) 589 shs. 12/22/99 462,927 461,378
------------ ------------
4,343,269 4,691,099
------------ ------------
--------------------------------------------------------------------------------
12
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
G C-SUN HOLDINGS, L.P.
A value-added national distributor of maintenance, repair
and operating supplies such as fasteners, electrical
components and tools.
12% Senior Subordinated Note due 2008 $ 1,725,000 3/2/00 $ 1,438,268 $ 1,380,000
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 880 shs. 3/2/00 347,288 9
------------ ------------
1,785,556 1,380,009
------------ ------------
GRAND EXPEDITIONS, INC.
A luxury travel tour operation provider.
15% Senior Subordinated Note due 2010 (B) $ 2,125,000 6/21/01 1,117,467 850,000
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 10,018 shs. 6/21/01 1,007,533 100
------------ ------------
2,125,000 850,100
------------ ------------
HAMILTON FUNERAL SERVICES CENTERS, INC.
The largest privately held owner and operator of funeral
homes in the United States.
16.5% Senior Subordinated Note due 2007 (B) $ 3,802,712 * 3,697,924 1,901,356
Warrant, exercisable until 2007, to purchase
common stock at $1 per share (B) 338,280 shs. * 48,447 --
------------ ------------
3,746,371 1,901,356
------------ ------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in
manufacturing and marketing entities.
Series A Preferred Units (B) 100,000 uts. 7/21/94 512,009 358,420
------------ ------------
HUSSEY SEATING COMPANY
A manufacturer of spectator seating products.
Senior Secured Floating Rate Revolving
Note due 2006 $ 1,498,500 6/12/96 1,498,500 1,343,855
Senior Secured Floating Rate Note due 2006 $ 1,136,250 ** 1,136,250 1,018,989
Preferred Stock 13,500 shs. 6/12/96 1,223,211 917,406
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 7,744 shs. *** 225,000 48
------------ ------------
4,082,961 3,280,298
------------ ------------
IBEAM BROADCASTING CORPORATION
A provider of an Internet broadcast network that delivers
streaming media with viewing and listening quality.
Common Stock (B) 461 shs. 4/20/01 2,360 --
------------ ------------
INTEGRATION TECHNOLOGY SYSTEMS, INC.
A manufacturer of steel protective computer and network
systems for the industrial and office environments.
11% Senior Secured Note due 2007 $ 1,812,721 6/1/00 1,812,721 1,719,547
Common Stock (B) 228 shs. 6/1/00 262,200 196,650
------------ ------------
2,074,921 1,916,197
------------ ------------
*1/25/99 and 7/16/99.
**6/12/96 and 6/11/99.
***6/12/96 and 1/19/00.
--------------------------------------------------------------------------------
13
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
JACKSON PRODUCTS, INC.
A manufacturer and distributor of a variety of industrial
and highway safety products.
Common Stock (B) 226 shs. 8/16/95 $ 22,634 $ 54,887
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 1,042 shs. 8/16/95 95,627 252,395
------------ ------------
118,261 307,282
------------ ------------
JASON, INC.
A diversified manufacturing company serving various
industrial markets.
13% Senior Subordinated Note due 2008 $ 963,687 8/4/00 863,728 915,310
14% Cumulative Redeemable Preferred Stock Series A 289 shs. 8/4/00 289,224 270,681
Limited Partnership Interests of
Saw Mill Capital Fund II L.P. (B) 2.52% int. 8/3/00 886,506 664,912
Warrants, exercisable until 2008 and 2009, to purchase
common stock at $.01 per share (B) 50,870 shs. 8/4/00 115,412 509
------------ ------------
2,154,870 1,851,412
------------ ------------
KEEPSAKE QUILTING, INC.
A seller of quilting fabrics, books, patterns, kits and
notions to consumers.
Senior Secured Floating Rate Tranche A
Note due 2007 $ 1,155,822 6/16/00 1,155,822 1,152,239
12% Senior Secured Tranche B Note due 2008 $ 550,392 6/16/00 512,049 556,832
Limited Partnership Interests of
Riverside XVI Holding Company L.P. (B) 5.29% int. 6/12/00 330,472 297,425
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 1,108 shs. 6/12/00 45,866 11
------------ ------------
2,044,209 2,006,507
------------ ------------
KENAN-ADVANTAGE TRANSPORT COMPANY
A transporter of light petroleum, petrochemicals,
lubricants, and residual fuels.
12.5% Senior Subordinated Note due 2009 $ 1,817,435 4/30/01 1,817,435 1,816,708
Preferred Stock (B) 307 shs. 4/30/01 307,000 245,600
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 269 shs. 4/30/01 14 3
------------ ------------
2,124,449 2,062,311
------------ ------------
LANCASTER LABORATORIES, INC.
One of the largest laboratory testing operations in the
United States.
12% Senior Subordinated Note due 2007 $ 1,669,643 9/25/00 1,374,843 1,638,922
Common Stock (B) 455,357 shs. 9/25/00 455,357 409,821
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 405,485 shs. 9/25/00 348,348 4,055
------------ ------------
2,178,548 2,052,798
------------ ------------
--------------------------------------------------------------------------------
14
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
LIH INVESTORS, L.P.
A manufacturer and marketer of a broad line of external
accessories for new and used sport utility vehicles, trucks
and vans.
12.5% Senior Subordinated Note due 2006 $ 3,845,000 * $ 3,393,569 $ 3,696,198
Common Stock (B) 58,001 shs. * 406,003 78,881
Warrant, exercisable until 2006, to purchase
common stock at $.11 per share (B) 108,404 shs. * 602,127 137,890
------------ ------------
4,401,699 3,912,969
------------ ------------
MAXTEC INTERNATIONAL CORP.
A manufacturer and distributor of remote control operating
systems for overhead cranes.
Senior Floating Rate Revolving Credit Facility
due 2002 $ 461,536 6/28/95 461,536 459,829
Common Stock (B) 76,923 shs. 6/28/95 230,769 173,077
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 39,563 shs. 6/28/95 171,429 396
------------ ------------
863,734 633,302
------------ ------------
MERIT INDUSTRIES, INC.
A designer and manufacturer of coin-operated video and
dart games.
12% Senior Subordinated Note due 2006 $ 2,710,280 8/19/98 2,527,410 2,547,229
Limited Partnership Interests of
Riverside X Holding Company L.P. (B) 6.30% int. ** 1,368,054 1,231,290
Warrants, exercisable until 2006, to purchase
limited partnership interests at $.01 per share (B) 1,855 int. 8/19/98 185,411 19
------------ ------------
4,080,875 3,778,538
------------ ------------
MOSS, INC.
A manufacturer and distributor of large display and exhibit
structures.
Senior Secured Floating Rate Revolving
Note due 2005 $ 184,910 9/21/00 184,910 92,456
Senior Secured Tranche A Floating Rate
Note due 2007 $ 1,344,800 9/21/00 1,344,800 672,400
12% Senior Secured Tranche B Note
due 2008 $ 420,250 9/21/00 385,470 210,125
Limited Partnership Interests of
Riverside Capital Appreciation Fund I, L.P. (B) 6.23% int. 9/20/00 311,466 77,858
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 463 shs. 9/21/00 40,344 5
------------ ------------
2,266,990 1,052,844
------------ ------------
**12/23/98 and 1/28/99.
**8/12/98, 8/11/99 and 3/3/00.
--------------------------------------------------------------------------------
15
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
NEXELL THERAPEUTICS, INC.
A provider of cell therapy technology to the medical
community.
3% Cumulative Convertible Preferred Stock
Series B, due 2008, convertible into common
stock at $2.75 per share 3,875 shs. 11/24/99 $ 3,875,000 $ 3,871,900
Warrant, exercisable until 2008, to purchase
common stock at $12 per share (B) 184,525 shs. 11/24/99 -- 1,845
------------ ------------
3,875,000 3,873,745
------------ ------------
NPC, INC.
A manufacturer of flexible connectors and equipment used
in the installation of sewers and storm drain pipelines.
Senior Secured Floating Rate Revolving Note
due 2006 $ 373,728 6/25/99 373,728 358,238
Senior Secured Floating Rate Note due 2006 $ 2,660,593 6/25/99 2,660,593 2,591,418
12% Senior Secured Tranche B Note due 2007 $ 978,814 6/25/99 871,602 933,690
Limited Partnership Interests of Riverside XIII
Holding Company L.P. 4.45% int. 6/11/99 295,250 221,431
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 201 shs. 6/25/99 142,373 2
------------ ------------
4,343,546 4,104,779
------------ ------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the
automotive industry.
9% Senior Secured Note due 2009 $ 812,500 1/28/02 812,500 802,100
11.5% Senior Subordinated Note due 2012 $ 1,500,000 1/28/02 1,341,521 1,459,350
Common Stock (B) 312,500 shs. 1/28/02 312,500 281,250
Warrant, exercisable until 2012, to purchase
common stock at $.01 per share (B) 243,223 shs. 1/28/02 162,045 2,432
------------ ------------
2,628,566 2,545,132
------------ ------------
OLYMPIC BOAT CENTERS, INC.
An operator of boat dealerships in Washington state,
Wisconsin, Minnesota, and British Columbia.
12% Senior Subordinated Note due 2006 $ 2,774,000 8/7/98 2,558,069 2,600,902
12% Senior Subordinated Note due 2008 $ 307,071 2/9/00 276,318 290,551
Limited Partnership Interest of Riverside VIII
Holding Company L.P. (B) 8.31% int. * 1,389,969 1,111,922
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 25,793 shs. ** 389,188 287
------------ ------------
4,613,544 4,003,662
------------ ------------
PARADIGM PACKAGING, INC.
A manufacturer of plastic bottles and closures for the
nutritional, pharmaceutical, personal care and food
packaging markets.
12% Senior Subordinated Note due 2008 $ 2,125,000 12/19/00 1,890,527 2,098,862
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 265,625 int. 12/21/00 265,625 212,500
------------ ------------
2,156,152 2,311,362
------------ ------------
**8/7/98, 2/23/99 and 12/22/99.
**8/7/98 and 2/9/00.
--------------------------------------------------------------------------------
16
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
PGT INDUSTRIES, INC.
A manufacturer of residential windows and patio doors and
a provider of custom patio rooms and porch enclosures.
12.2% Senior Subordinated Notes due 2009 $ 1,965,000 1/29/01 $ 1,728,190 $ 2,024,736
Common Stock (B) 115 shs. 1/29/01 115,000 62,690
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 325 shs. 1/29/01 264,519 177,153
------------ ------------
2,107,709 2,264,579
------------ ------------
PHARMACEUTICAL BUYERS, INC.
A group purchasing organization which specializes in
arranging and negotiating contracts for the purchase of
pharmaceutical goods and medical equipment.
10.5% Senior Secured Note due 2005 $ 310,982 11/30/95 310,982 315,429
10.5% Senior Secured Convertible Note
due 2005, convertible into common stock
at $50,000 per share $ 195,000 11/30/95 195,000 280,254
Common Stock 6 shs. 11/30/95 337,500 440,948
------------ ------------
843,482 1,036,631
------------ ------------
PLASSEIN PACKAGING, INC.
A manufacturer of flexible packaging products.
13% Senior Subordinated Note due 2007 $ 763,608 8/15/00 670,318 534,526
12% Junior Subordinated Note due 2008 $ 658,905 8/15/00 466,486 329,453
15% Junior Subordinated Note due 2008 $ 73,494 11/14/01 71,969 36,747
Convertible Preferred Stock, convertible into
common stock at $1 per share (B) 288,256 shs. 8/15/00 288,256 86,477
Common Stock (B) 446,960 shs. 8/15/00 289,552 86,868
Warrants, exercisable until 2007 and 2008, to purchase
common stock at $.01 per share (B) 482,594 shs. 8/15/00 95,840 4,826
------------ ------------
1,882,421 1,078,897
------------ ------------
POLYMER TECHNOLOGIES, INC./POLI-TWINE WESTERN, INC.
A leading manufacturer of polypropylene twine for the hay
bailing marketplace.
11% Senior Subordinated Note due 2010 (B) $ 1,806,250 3/1/00 1,702,709 903,125
10% Junior Subordinated Note due 2010 (B) $ 239,062 3/1/00 239,062 59,766
Common Stock (B) 159,375 shs. 3/1/00 79,688 --
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 159,000 shs. 3/1/00 103,541 --
------------ ------------
2,125,000 962,891
------------ ------------
PRECISION DYNAMICS, INC.
A manufacturer of custom-designed solenoid valves and
controls.
Senior Secured Floating Rate Revolving Credit
Facility due 2003 $ 863,900 7/22/96 863,900 844,549
Senior Secured Floating Rate Term Note
due 2003 $ 1,646,300 7/22/96 1,646,300 1,614,691
12% Senior Secured Term Note due 2004 $ 489,000 7/22/96 455,655 476,482
8% Preferred Stock 360 shs. 7/22/96 231,957 196,838
Common Stock (B) 599 shs. 7/22/96 28,978 14,489
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 322 shs. 7/22/96 97,800 3
------------ ------------
3,324,590 3,147,052
------------ ------------
--------------------------------------------------------------------------------
17
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
PREMIUM FOODS GROUP
A manufacturer and distributor of branded meat products.
12% Senior Subordinated Note due 2008 $ 1,821,000 8/29/00 $ 1,524,915 $ 1,832,654
Limited Partnership Interests of MHD
Holdings, LLC (B) 1.79% int. 8/29/00 804,000 723,600
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 7,052 shs. 8/29/00 327,072 71
------------ ------------
2,655,987 2,556,325
------------ ------------
PROCESS CHEMICALS LLC
A specialty chemical company that manufactures
processed chemicals for the fertilizer, asphalt and concrete
industries.
6% Redeemable Preferred Membership Interests 2,525 int. * 2,780,992 2,590,770
Common Membership Interests 9,863 int. * 13,049 38,802
------------ ------------
2,794,041 2,629,572
------------ ------------
PROTEIN GENETICS, INC.
A producer of bovine artificial insemination products,
related breeding and healthcare products and specialty
genetics sold to the dairy and beef industries.
9.8% Redeemable Exchangeable Preferred Stock 1,004 shs. 8/12/94 100,350 50,175
Common Stock (B) 2,046 shs. 8/12/94 126,866 --
------------ ------------
227,216 50,175
------------ ------------
PW EAGLE, INC. -- O.T.C.
An extruder of small and medium diameter plastic pipe
and tubing in the United States.
14% Senior Subordinated Note due 2007 $ 3,486,104 9/16/99 3,483,081 3,190,831
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 197,040 shs. 9/16/99 1 1,124,310
------------ ------------
3,483,082 4,315,141
------------ ------------
RENT-WAY, INC. -- O.T.C.
An operator of rent-to-own stores across the United States.
Warrant, exercisable until 2002, to purchase
common stock at $9.94 per share (B) 32,503 shs. 7/18/95 -- 113,133
------------ ------------
RIVERSIDE '98 GRANTOR TRUST
An acquirer of substantial interests in various
manufacturing and service companies.
Limited Partnership Interest 337,118 int. 1/4/02 337,118 303,406
------------ ------------
RK POLYMERS LLC
A producer of styrenic block copolymers and highly
engineered synthetic elastomers.
13% Senior Subordinated Notes due 2011 $ 2,125,000 2/28/01 1,919,531 2,100,138
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 212 shs. 2/28/01 205,469 2
------------ ------------
2,125,000 2,100,140
------------ ------------
*7/31/97 and 1/4/99.
--------------------------------------------------------------------------------
18
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
SABEX 2002, INC.
A Canadian specialty pharmaceutical company which
manufactures and distributes generic injectable drugs and
eye products.
12% Senior Subordinated Note due 2009 $ 2,125,000 4/19/02 $ 1,989,164 $ 2,114,375
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 51,088 shs. 4/19/02 138,052 511
------------ ------------
2,127,216 2,114,886
------------ ------------
SAFETY SPEED CUT MANUFACTURING COMPANY, INC.
A manufacturer of vertical panel saws and routers for the
wood working industry.
Senior Secured Floating Rate Tranche A
Note due 2007 $ 2,449,746 6/2/99 2,449,746 2,449,746
12% Senior Secured Tranche B Note Due 2007 $ 1,130,652 6/2/99 1,130,652 1,140,601
Class B Common Stock (B) 1,480 shs. 6/2/99 256,212 156,762
------------ ------------
3,836,610 3,747,109
------------ ------------
SELIG ACQUISITION CORPORATION
A manufacturer of container sealing materials for bottles
used in consumer products.
12% Senior Subordinated Note due 2009 $ 2,125,000 6/13/02 1,943,593 2,082,713
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 2,011 shs. 6/13/02 182,023 20
------------ ------------
2,125,616 2,082,733
------------ ------------
SNYDER INDUSTRIES, INC.
A manufacturer of proprietary rotationally molded
polyethylene containers.
12.25% Senior Subordinated Note due 2007 $ 3,125,000 12/6/99 2,785,770 3,092,500
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 513 shs. 12/6/99 426,136 5
------------ ------------
3,211,906 3,092,505
------------ ------------
SPECTAGUARD ACQUISITION LLC
The tenth largest provider of security officers in the United
States.
14% Senior Subordinated Note due 2008 $ 2,043,139 3/1/00 2,022,599 2,104,160
Preferred LLC Interests (B) 109 int. 3/1/00 108,854 98,872
Common LLC Interests (B) 100,178 int. 3/1/00 14,844 11,871
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 257,000 shs. 3/1/00 35,980 2,570
------------ ------------
2,182,277 2,217,473
------------ ------------
STAR INTERNATIONAL, INC.
A manufacturer of commercial cooking appliances.
11% Senior Secured Note due 2004 $ 2,282,975 1/25/00 2,205,894 2,254,894
9.65% Senior Secured Note due 2004 $ 469,254 5/27/94 469,254 457,522
10.5% Subordinated Note due 2004 $ 716,418 5/27/94 716,418 684,101
Common Stock (B) 4,310 shs. 5/27/94 259,737 165,453
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 4,621 shs. * 171,830 177,336
------------ ------------
3,823,133 3,739,306
------------ ------------
*5/27/94 and 1/25/00.
--------------------------------------------------------------------------------
19
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
STRATEGIC EQUIPMENT & Supply Partners, Inc.
A provider of kitchen and restaurant design, equipment
fabrication and installation services.
12% Senior Subordinated Note due 2008 $ 3,875,000 1/14/00 $ 3,341,010 $ 3,526,250
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 34,162 shs. 1/14/00 658,751 1,065
------------ ------------
3,999,761 3,527,315
------------ ------------
TELEX COMMUNICATIONS, INC.
A designer, manufacturer and marketer of sophisticated
audio, wireless and multimedia communications equipment.
Preferred Stock Series B 17,707 3/20/02 1 17,707
------------ ------------
THE TRANZONIC COMPANIES
A producer of commercial and industrial supplies, such as
safety products, janitorial supplies, work apparel,
washroom and restroom supplies and sanitary care
products.
12.5% Senior Subordinated Note due 2007 $ 2,712,000 2/5/98 2,461,987 2,721,492
Common Stock (B) 630 shs. 2/4/98 630,000 567,000
Warrants, exercisable until 2006, to purchase
common stock at $.01 per share (B) 444 shs. 2/5/98 368,832 4
------------ ------------
3,460,819 3,288,496
------------ ------------
THERMA-TRU CORPORATION
A manufacturer of residential exterior entry door systems.
12.25% Senior Subordinated Note due 2009 $ 1,236,000 5/9/00 987,780 1,257,754
Limited Partnership Interest of KT
Holding Company L.P. (B) 0.52% int. 5/5/00 773,200 695,894
Warrants, exercisable until 2009, to purchase
common stock at $.01 per share (B) 739 shs. 5/9/00 287,370 73,450
------------ ------------
2,048,350 2,027,098
------------ ------------
TIDEWATER HOLDINGS, INC.
An operator of a barge transportation line on the
Columbia/Snake River system.
Convertible Preferred Stock, convertible into 1,120 shs. 7/25/96 1,120,000 896,000
common stock at $1,000 per share (B)
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 474 shs. 7/25/96 48,216 379,008
------------ ------------
1,168,216 1,275,008
------------ ------------
TINNERMAN-PALNUT ENGINEERED COMPONENTS
A manufacturer of precision engineered metal and plastic
fasteners and assembly components.
12.75% Senior Subordinated Note due 2008 $ 1,875,000 12/6/01 1,875,000 1,841,625
Membership Interests (B) 250,000 int. 12/6/01 250,000 225,000
------------ ------------
2,125,000 2,066,625
------------ ------------
*5/23/79, 12/15/95 and 6/9/96.
--------------------------------------------------------------------------------
20
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
TRANSMONTAIGNE OIL COMPANY -- A.S.E.
An independent petroleum products marketing company.
Common Stock (B) 333,326 shs. * $ 1,109,177 $ 1,814,960
------------ ------------
TRIDEX CORP. -- O.T.C.
A designer and manufacturer of point-of-sale monitors and
keyboards used by retailers and restaurants.
12% Senior Subordinated Note due 2005 (B) $ 3,000,000 4/17/98 3,000,000 60,000
Common Stock (B) 71,429 shs. 4/17/98 500,003 --
Warrant, exercisable until 2005, to purchase
common stock at $2.03 per share (B) 218,182 shs. 5/26/98 1 --
------------ ------------
3,500,004 60,000
------------ ------------
TRONAIR, INC.
A designer, engineer and manufacturer of ground support
equipment for the business, commuter and commercial
aviation markets.
10.5% Senior Secured Term Note due 2008 $ 2,368,750 1/20/00 2,368,750 2,267,841
12% Senior Subordinated Note due 2010 $ 1,326,500 1/20/00 1,242,996 1,215,604
Common Stock (B) 227,400 shs. 1/20/00 227,400 181,920
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 260,563 shs. 1/20/00 98,540 2,606
------------ ------------
3,937,686 3,667,971
------------ ------------
TRUSEAL TECHNOLOGIES, INC.
A manufacturer of sealant systems for the North American
window and door market.
12.25% Senior Subordinated Note due 2006 $ 2,675,000 6/23/97 2,472,688 2,675,000
Limited Partnership Interests (B) 10.04% int. 6/17/97 824,600 742,140
Warrant, exercisable until 2006, to purchase
limited partnership interests at $.01 per unit (B) 1,258 uts. 6/23/97 376,932 52,636
------------ ------------
3,674,220 3,469,776
------------ ------------
TVI, INC.
A retailer of used clothing in the United States, Canada
and Australia.
15.971% Subordinated Note due 2008 $ 1,986,349 5/2/00 1,911,197 1,954,369
Common Stock (B) 354,167 shs. 5/2/00 354,167 318,750
------------ ------------
2,265,364 2,273,119
------------ ------------
USFLOW CORPORATION
A distributor of industrial pipes, valves and fittings.
12.5% Senior Subordinated Note due 2007 $ 3,463,000 12/14/99 3,094,231 2,770,400
Class B Common Stock (B) 664 shs. 12/14/99 664,200 332,100
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 565 shs. 12/14/99 461,733 6
------------ ------------
4,220,164 3,102,506
------------ ------------
VICTORY VENTURES LLC
An acquirer of controlling or substantial interests in other
entities.
Series A Preferred Units (B) 0.13% int. 12/2/96 1 2
------------ ------------
*3/28/91, 12/18/91, 9/30/92, 9/30/93, 9/30/94, 3/31/95 and 5/9/95.
--------------------------------------------------------------------------------
21
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 6/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
VITEX PACKAGING, INC
A manufacturer of specialty packaging, primarily
envelopes and tags used on tea bags
12% Senior Subordinated Note due 2008 $ 2,045,265 12/18/00 $ 1,897,496 $ 2,102,328
Limited Partnership Interests of Riverside VI
Holding Company L.P. 4.80% int. * 351,315 281,043
Limited Partnership Interests of Riverside
Capital Appreciation Fund II L.P. (B) 0.75% int. 12/18/00 79,735 63,788
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 308 shs. ** 227,729 3
------------ ------------
2,556,275 2,447,162
------------ ------------
WASHINGTON INVENTORY SERVICES, INC
A provider of physical inventory taking and other related
services to retailers
12.5% Senior Subordinated Note due 2008 $ 1,646,881 11/3/00 1,603,440 1,662,362
Senior Preferred Stock (B) 4,692 shs. 11/1/00 469,160 458,651
Class B Common Stock (B) 8,959 shs. 11/1/00 8,959 8,063
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 3,979 shs. 11/3/00 49,804 40
------------ ------------
2,131,363 2,129,116
------------ ------------
WEC COMPANY, INC
A maker of attachments for prime moving equipment
Common Stock (B) 5,398 shs. 12/31/01 800,000 159,990
------------ ------------
WICOR AMERICAS, INC
A manufacturer of cellulose based insulation products, systems
and services for electrical transformer equipment manufacturers
20% Senior Subordinated Secured Note due 2009 $ 2,196,069 11/9/01 2,195,345 2,175,426
------------ ------------
Total Private Placement Investments $200,493,365 $168,467,907
------------ ------------
**12/30/97 and 9/9/99.
**1/2/98 and 12/18/00.
--------------------------------------------------------------------------------
22
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares or
Interest Due Principal Fair Value
Rate Date Amount Cost at 6/30/02
---- ---- ------ ---- ----------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
RULE 144A SECURITIES -- 2.25%: (A)
BONDS -- 0.66%
Block Communications, Inc. 9.250% 04/15/09 $ 425,000 $ 425,000 $ 422,875
Cuddy International Corp. (B) 10.750 12/01/07 233,313 229,827 97,991
Isle of Capri Casinos, Inc. 9.000 03/15/12 450,000 450,000 454,500
JohnsonDiversey, Inc. 9.625 05/15/12 210,000 210,000 218,400
----------- ------------- -------------
TOTAL BONDS $ 1,318,313 1,314,827 1,193,766
=========== ------------- -------------
CONVERTIBLE BONDS -- 1.58%
Advanced Micro Devices, Inc. 4.750% 02/01/22 $ 500,000 397,449 390,625
Cymer, Inc. 3.500 02/15/09 850,000 850,000 839,375
Echostar Communications, Inc. 4.875 01/01/07 400,000 400,000 313,500
Hyperion Solutions Corp. 4.500 03/15/05 200,000 200,000 180,000
Invitrogen Corp. 2.250 12/15/06 425,000 425,000 330,969
Rite Aid Corp. 4.750 12/01/06 200,000 200,000 143,500
Sanmina-SCI Corp. 0.000 09/12/20 1,090,000 453,713 397,850
Triquint Semiconductor, Inc. 4.000 03/01/07 225,000 168,442 169,875
Viropharma, Inc. 6.000 03/01/07 215,000 147,282 78,206
----------- ------------- -------------
TOTAL CONVERTIBLE BONDS $ 4,105,000 3,241,886 2,843,900
=========== ------------- -------------
COMMON STOCK -- 0.00%
Jordan Telecom Products (B) 70 14,000 70
TOTAL COMMON STOCK 14,000 70
------------- -------------
WARRANTS -- 0.01%
Winsloew Escrow Corp. (B) 900 9 9,113
------------- -------------
TOTAL WARRANTS 9 9,113
------------- -------------
TOTAL RULE 144A SECURITIES 4,570,722 4,046,849
------------- -------------
TOTAL CORPORATE RESTRICTED SECURITIES $ 205,064,087 $ 172,514,756
------------- -------------
--------------------------------------------------------------------------------
23
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares or
Interest Due Principal Market Value
Rate Date Amount Cost at 6/30/02
---- ---- ------ ---- ----------
CORPORATE PUBLIC SECURITIES -- 8.55%: (A)
BONDS -- 2.15%
Derby Cycle Corp. (B) 10.000% 05/15/08 $ 340,300 $ 340,300 $ 3,403
G F S I, Inc. 9.625 03/01/07 145,000 122,275 127,600
L L S Corp. (B) 11.625 08/01/09 500,000 445,000 45,000
Neff Corp. 10.250 06/01/08 230,000 227,688 138,000
Numatics, Inc. 9.625 04/01/08 820,000 788,213 483,800
Remington Products Co. 11.000 05/15/06 600,000 595,506 459,000
Sports Club Co. 11.375 03/15/06 600,000 582,000 540,000
Telex Communications, Inc. 0.000 11/15/06 373,182 200,591 74,636
United Refining Co. 10.750 06/15/07 1,365,000 1,365,000 1,103,944
Winsloew Escrow Corp. 12.750 08/15/07 900,000 879,472 895,500
----------- ------------- -------------
TOTAL BONDS $ 5,873,482 5,546,045 3,870,883
=========== ------------- -------------
COMMON STOCK -- 2.57%
Computer Horizons Corp. (B) 32,068 301,942 155,209
EOS International, Inc. (B) 100,000 300,000 109,000
Florist Transworld Delivery, Inc. (B) 29,374 41,258 371,581
H C I Direct, Inc. (B) 1,000 -- 100
Key3media Group, Inc. (B) 195,000 984,750 97,500
PepsiAmericas, Inc. 92,145 2,006,365 1,376,646
Proton Energy Systems, Inc. (B) 26,000 328,859 83,460
Rent-Way, Inc. (B) 60,363 600,009 779,890
Suprema Specialties, Inc. (B) 32,500 414,375 33
Supreme Industries, Inc. (B) 105,202 267,325 594,391
TGC Industries (B) 6,361 9,497 1,399
Titan Corp. (B) 58,052 173,221 1,061,771
Vina Technologies, Inc. (B) 572 1,687 126
------------- -------------
TOTAL COMMON STOCK 5,429,288 4,631,106
------------- -------------
--------------------------------------------------------------------------------
24
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
Shares or
Interest Due Principal Market Value
Rate Date Amount Cost at 6/30/02
---- ---- ------ ---- ----------
CORPORATE PUBLIC SECURITIES: (A) (CONTINUED)
CONVERTIBLE BONDS -- 3.25%
B E A Systems, Inc. 4.000% 12/15/06 $ 525,000 $ 382,594 $ 425,906
Charter Communications, Inc. 4.750 06/01/06 660,000 660,000 297,825
Commscope, Inc. 4.000 12/15/06 40,000 179,550 149,584
Corning Inc. 0.000 11/08/15 795,000 589,829 397,500
Cypress Semiconductor Corp. 4.000 02/01/05 210,000 210,000 182,700
Echostar Communications 4.875 01/01/07 1,000,000 805,000 783,750
FEI Company 5.500 08/15/08 1,535,000 1,455,300 1,354,638
Hyperion Solutions Corp. 4.500 03/15/05 50,000 35,500 45,000
Mediacom Communications Corp. 5.250 07/01/06 1,045,000 1,045,000 807,263
Nextel Communications 5.250 01/15/10 825,000 530,700 395,850
S C I Systems, Inc. 3.000 03/15/07 800,000 727,038 564,000
Sanmina-SCI Corp. 0.000 09/12/20 1,190,000 425,373 434,350
----------- ------------- -------------
Total Convertible Bonds $ 8,675,000 7,045,884 5,838,366
=========== ------------- -------------
CONVERTIBLE PREFERRED STOCK -- 0.58%
Lucent Technologies Capital Trust I 2,200 2,200,000 1,045,499
------------- -------------
TOTAL CONVERTIBLE PREFERRED STOCK 2,200,000 1,045,499
------------- -------------
WARRANTS -- 0.00%
American Country Holdings, Inc. (B) 183,117 45,779 --
------------- -------------
TOTAL WARRANTS 45,779 --
------------- -------------
TOTAL CORPORATE PUBLIC SECURITIES $ 20,266,996 $ 15,385,854
------------- -------------
Interest Due Principal Market Value
Rate/Yield Date Amount Cost at 6/30/02
---- ---- ------ ---- ----------
SHORT-TERM SECURITIES:
COMMERCIAL PAPER -- 4.48%
National Fuel Gas Co. 2.000% 07/16/02 $ 2,715,000 $ 2,712,737 $ 2,712,737
Textron Financial Corp. 2.050 07/08/02 2,030,000 2,029,191 2,029,191
Wisconsin Electric Power 1.770 07/01/02 3,330,000 3,330,000 3,330,000
----------- ------------- -------------
TOTAL SHORT-TERM SECURITIES $ 8,075,000 $ 8,071,928 $ 8,071,928
=========== ------------- -------------
TOTAL INVESTMENTS 108.88% $ 233,403,011 $ 195,972,538
============= -------------
Other Assets 2.81 5,055,863
Liabilities (11.69) (21,044,222)
------ -------------
TOTAL NET ASSETS 100.00% $ 179,984,179
====== =============
(A) In each of the convertible note, warrant, convertible preferred and common
stock investments, the issuer has agreed to provide certain registration
rights.
(B) Non-income producing security.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
25
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
INDUSTRY CLASSIFICATION
Fair Value
CORPORATE RESTRICTED SECURITIES: at 6/30/02
------------
AUTOMOBILE -- 5.39%
America's Body Co., Inc./LCP Holding Co. $ 3,245,901
LIH Investors, L.P. 3,912,969
Nyloncraft, Inc. 2,545,132
------------
9,704,002
------------
BEVERAGE, FOOD &
TOBACCO -- 2.31%
Beta Brands, Inc. 1,483,069
Cains Foods, L.P. 111,416
Premium Foods Group 2,556,325
------------
4,150,810
------------
BROADCASTING &
ENTERTAINMENT -- 0.17%
Echostar Communications, Inc. 313,500
------------
BUILDINGS & REAL ESTATE -- 8.65%
Adorn, Inc. 2,180,925
Eagle Window & Door Holdings Co. 2,097,754
PGT Industries, Inc. 2,264,579
Strategic Equipment & Supply Partners, Inc 3,527,315
Therma-Tru Corporation 2,027,098
Truseal Technologies, Inc. 3,469,776
------------
15,567,447
------------
CARGO TRANSPORT -- 1.85%
Kenan-Advantage Transport Company 2,062,311
Tidewater Holdings, Inc. 1,275,008
------------
3,337,319
------------
CHEMICAL, PLASTICS &
RUBBER -- 2.63%
Delstar Holdings Corp. 351
Process Chemicals LLC 2,629,572
RK Polymers LLC 2,100,140
------------
4,730,063
------------
CONSUMER PRODUCTS -- 11.17%
Alpha Shirt Company 4,791,672
Colibri Holdings Corporation 2,040,085
Consumer Product Enterprises, Inc. 705,535
Corvest Group, Inc. 4,001,462
Dexter Magnetic Technologies, Inc. 1,891,850
G C-Sun Holdings, L.P. 1,380,009
Keepsake Quilting, Inc. 2,006,507
The Tranzonic Companies 3,288,496
------------
20,105,616
------------
Fair Value
Corporate Restricted Securities: (Cont.) at 6/30/02
------------
CONTAINERS, PACKAGING &
GLASS -- 6.49%
C & K Manufacturing and Sales Company $ 663,261
Capitol Specialty Plastics, Inc. 403
Paradigm Packaging, Inc. 2,311,362
Plassein Packaging, Inc. 1,078,897
Selig Acquisition Corporation 2,082,733
Snyder Industries, Inc. 3,092,505
Vitex Packaging, Inc. 2,447,162
------------
11,676,323
------------
DIVERSIFIED/CONGLOMERATE,
MANUFACTURING -- 15.30%
D T Industries, Inc. 950,853
Evans Consoles, Inc. 3,584,654
Highgate Capital LLC 358,420
Hussey Seating Company 3,280,298
Jackson Products, Inc. 307,282
Jason, Inc. 1,851,412
Maxtec International Corp. 633,302
NPC, Inc. 4,104,779
P W Eagle, Inc. 4,315,141
Safety Speed Cut Manufacturing Company, Inc. 3,747,109
Tinnerman-Palnut Engineered Components 2,066,625
WEC Company, Inc. 159,990
Wicor Americas, Inc. 2,175,426
------------
27,535,291
------------
DIVERSIFIED/CONGLOMERATE,
SERVICE -- 8.77%
Diversco, Inc./DHI Holdings, Inc. 696,034
Examination Management Services, Inc. 3,640,426
Hamilton Funeral Services Centers, Inc. 1,901,356
Lancaster Laboratories, Inc. 2,052,798
Pharmaceutical Buyers, Inc. 1,036,631
Sabex 2002, Inc. 2,114,886
SpectaGuard Acquisition LLC 2,217,473
Washington Inventory Services, Inc. 2,129,116
------------
15,788,720
------------
ELECTRONICS -- 7.11%
Advance Micro Devices, Inc. 390,625
Coining Corporation of America 2,276,397
Directed Electronics, Inc 4,258,476
Evolve Software, Inc 20
Fairmarket, Inc 268
Hyperion Solutions Corp. 180,000
IBEAM Broadcasting Corporation --
Integration Technology Systems, Inc. 1,916,197
Precision Dynamics, Inc. 3,147,052
Sanmina-SCI Corp. 397,850
Tridex Corp. 60,000
Triquint Semiconductor, Inc. 169,875
------------
12,796,760
------------
--------------------------------------------------------------------------------
26
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
June 30, 2002
(Unaudited)
INDUSTRY CLASSIFICATION (Continued)
Fair Value
Corporate Restricted Securities: (Cont.) at 6/30/02
------------
FARMING & AGRICULTURE -- 0.62%
Cuddy International Corp. $ 97,991
Polymer Technologies, Inc./
Poli-Twine Western, Inc. 962,891
Protein Genetics, Inc. 50,175
------------
1,111,057
------------
HEALTHCARE, EDUCATION &
CHILDCARE -- 5.29%
Beacon Medical Products, Inc. 2,114,058
DHD Healthcare, Inc. 2,067,483
Enzymatic Therapy, Inc. 1,381,255
Nexell Therapeutics, Inc. 3,873,745
Viropharma, Inc. 78,206
------------
9,514,747
------------
HOME & OFFICE FURNISHINGS,
HOUSEWARES, AND DURABLE
CONSUMER PRODUCTS -- 5.39%
Fasteners for Retail, Inc. 4,691,099
JohnsonDiversey, Inc. 218,400
Moss, Inc. 1,052,844
Star International, Inc. 3,739,306
------------
9,701,649
------------
LEISURE, AMUSEMENT,
ENTERTAINMENT -- 5.06%
Adventure Entertainment Corporation 20,705
Grand Expeditions, Inc 850,100
Isle of Capri Casinos, Inc. 454,500
Merit Industries, Inc. 3,778,538
Olympic Boat Centers, Inc. 4,003,662
------------
9,107,505
------------
MACHINERY -- 1.57%
Ames Tru Temper, Inc. 1,985,911
Cymer, Inc. 839,375
------------
2,825,286
------------
MINING, STEEL, IRON & NON
PRECIOUS METALS -- 1.21%
Better Minerals & Aggregates 2,182,116
------------
Fair Value
Corporate Restricted Securities: (Cont.) at 6/30/02
------------
MISCELLANEOUS -- 2.17%
CapeSuccess LLC $ 139,438
East River Ventures I, L.P. 27,481
Invitrogen Corp. 330,969
Riverside '98 Grantor Trust 303,406
USFlow Corp. 3,102,506
Victory Ventures LLC 2
Winsloew Escrow Corp. 9,113
------------
3,912,915
------------
OIL AND GAS -- 1.01%
Chaparral Resources, Inc. 295
TransMontaigne Oil Company 1,814,960
------------
1,815,255
------------
PERSONAL TRANSPORTATION -- 2.04%
Tronair, Inc. 3,667,971
RETAIL STORES _ 1.41%
Rent-Way, Inc. 113,133
Rite Aid Corp. 143,500
TVI, Inc. 2,273,119
------------
2,529,752
------------
TELECOMMUNICATIONS -- 0.24%
Block Communications, Inc. 422,875
Jordan Telecom Products 70
Telex Communications, Inc. 17,707
------------
440,652
------------
Total Corporate Restricted
Securities -- 95.85% $172,514,756
============
--------------------------------------------------------------------------------
27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(Unaudited)
1. HISTORY
MassMutual Corporate Investors (the "Trust") is a closed-end,
non-diversified investment company. David L. Babson & Company Inc.
("Babson"), a majority owned subsidiary of Massachusetts Mutual Life
Insurance Company, ("MassMutual"), acts as its investment adviser.
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 organized as a Massachusetts
business trust under the laws of the Commonwealth of Massachusetts,
effective November 28, 1985.
On January 27,1998, the Board of Trustees authorized the formation of a
wholly-owned subsidiary ("MMCI Subsidiary Trust") for the purpose of
holding certain investments. The results of MMCI Subsidiary Trust have been
consolidated in the accompanying financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Trust in the preparation of the 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 directly negotiated transaction to a limited number of
purchasers or in a public offering for which a registration statement is in
effect under the Securities Act of 1933.
The value of restricted securities, and of any other assets for which there
are no reliable market quotations, is the fair value as determined in good
faith by the Board of Trustees of the Trust (the "Trustees"). Each
restricted security is valued by the Trustees at the time of the
acquisition thereof and at least quarterly thereafter. The Trustees have
established guidelines to aid in the valuation of each security. Generally,
restricted securities are initially valued at cost or less at the time of
acquisition by the Trust. Values greater or less than cost are used
thereafter for restricted securities in appropriate circumstances. Among
the factors ordinarily considered are the existence of restrictions upon
the sale of the security by the Trust; an estimate of the existence and
extent of a market for the security; the extent of any discount at which
the security was acquired; the estimated period of time during which the
security will not be freely marketable; the estimated expenses of
registering or otherwise qualifying the security for public sale; estimated
underwriting commissions if underwriting would be required to effect a
sale; in the case of a convertible security, whether or not it would trade
on the basis of its stock equivalent; in the case of a debt obligation
which would trade independently of any equity equivalent, the current
yields on comparable securities; the estimated amount of the floating
supply of such securities available; the proportion of the issue held by
the Trust; changes in the financial condition and prospects of the issuer;
the existence of merger proposals or tender offers affecting the issuer;
and any other factors affecting fair value, all in accordance with the
Investment Company Act of 1940. In making valuations, opinions of counsel
may be relied upon as to whether or not securities are restricted
securities and as to the legal requirements for public sale.
--------------------------------------------------------------------------------
28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(CONTINUED)
When market quotations are readily available for unrestricted securities of
an issuer, restricted securities of the same class are generally valued at
a discount from the market price of such unrestricted securities. The
Trustees, however, consider all factors in fixing any discount, including
the filing of a registration statement for such securities under the
Securities Act of 1933 and any other developments which are likely to
increase the probability that the securities may be publicly sold by the
Trust without restriction.
The Board of Trustees of the Trust meets at least once in each quarter to
value the Trust's portfolio securities as of the close of business on the
last business day of the preceding quarter. This valuation requires the
approval of a majority of the Trustees of the Trust, including a majority
of the Trustees who are not interested persons of the Trust (otherwise than
as Trustees) or of Babson. In making valuations, the Trustees will consider
reports by Babson analyzing each portfolio security in accordance with the
relevant factors referred to above. Babson has agreed to provide such
reports to the Trust at least quarterly.
The financial statements include restricted securities valued at
$172,514,756 (95.85% of net assets) as of June 30, 2002 ($168,613,735 at
June 30, 2001) whose values have been determined by the Board of Trustees
in the absence of readily ascertainable market values. Due to the inherent
uncertainty of valuation, those values may differ significantly from the
values that would have been used had a ready market for the securities
existed, and the differences could be material.
The values for corporate public securities are stated at the last reported
sales price or at prices based upon quotations obtained from brokers and
dealers as of June 30, 2002, subject to discount where appropriate, and are
approved by the Trustees.
Short-term securities with more than sixty days to maturity are valued at
fair value and short-term securities having a maturity of sixty days or
less are valued at amortized cost which approximates market value.
B. ACCOUNTING FOR INVESTMENTS:
Investment transactions are accounted for on trade date. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on the
accrual basis.
The Trust has elected to accrue, for financial reporting purposes, certain
premiums and discounts which are required to be accrued for federal income
tax purposes.
Realized gains and losses on investment transactions and unrealized
appreciation and depreciation of investments are reported for financial
statement and federal income tax purposes on the identified cost method.
The Trust does not accrue income when payment is delinquent and when
management believes payment is questionable.
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.
--------------------------------------------------------------------------------
29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(CONTINUED)
D. FEDERAL INCOME TAXES:
No provision for federal taxes on net investment income and short-term
capital gains is considered necessary because the Trust has elected to be
taxed as a "regulated investment company" under the Internal Revenue Code,
and intends to maintain this qualification and to distribute substantially
all of its net taxable income to its shareholders. In any year when net
long-term capital gains are realized by the Trust, management, after
evaluating the prevailing economic conditions, will recommend to the
Trustees either to designate the net realized long-term gains as
undistributed and to pay the federal capital gains taxes thereon or to
distribute all or a portion of such net gains.
3. MANAGEMENT FEE
Under an investment services contract, Babson has agreed to invest for
MassMutual Life Insurance Company's ("MassMutual") general account
concurrently with the Trust in each restricted security purchased by the
Trust. Babson, in addition to originating and sharing in the purchase of
such securities, 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. Babson
provides a continuing review of the investment operations of the Trust.
Babson also 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.
Under the investment services contract, as amended July 1, 1988, the Trust
pays Babson a quarterly base rate (the "Base Fee Rate") of 5/16 of 1% of
the value of the Trust's net assets as of the end of each fiscal quarter,
approximately equivalent to 1.25% of the net asset value of the Trust on an
annual basis, plus or minus a quarterly performance adjustment (the
"Performance Adjustment") of up to 1/16 of 1% approximately equivalent to
.25% on an annual basis.
The Performance Adjustment is based on the Trust's performance as compared
to a benchmark rate of return (the "Target Rate") equal to 5.0 percentage
points plus an unweighted, arithmetic average of the rates of return on the
Standard & Poor's Industrial Stock Price Index and the Lehman Brothers
Intermediate Credit Bond Index (formerly called the Lehman Brothers
Intermediate Corporate Bond Index) over a rolling three-year period (the
"Measurement Period") comprising the twelve quarters ending on the last day
of each quarter (the "Valuation Date"). The Performance Adjustment is equal
to 5% of the difference between the Trust's actual rate of return over the
Measurement Period and the Target Rate. If the Trust's actual rate of
return exceeds the Target Rate, the Base Fee Rate is increased by an amount
equal to the Performance Adjustment; if the Trust's actual rate of return
is less than the Target Rate, the Base Fee Rate is reduced by the
Performance Adjustment. The advisory fee payable by the Trust is equal to
the Base Fee Rate (as adjusted by the Performance Adjustment) times the net
asset value of the Trust as of the Valuation Date. The Performance
Adjustment for the quarters ended March 31, 2002 and June 30, 2002 was:
PERFORMANCE
ADJUSTMENT AMOUNT
---------- --------
March 31, 2002 0.0625% $114,090
June 30, 2002 0.0625% $112,914
--------------------------------------------------------------------------------
30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(CONTINUED)
4. SENIOR SECURED INDEBTEDNESS
A. NOTE PAYABLE
MassMutual holds the Trust's $20,000,000 Senior Fixed Rate Convertible Note
(the "Note") issued by the Trust in 1995. The Note, as amended, is due
November 15, 2007 and accrues at 7.39% per annum. The Noteholder, 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 each of the
periods ended June 30, 2002 and 2001, the Trust incurred total interest
expense on the Note of $739,000.
B. REVOLVING CREDIT AGREEMENT
The Trust entered into a Revolving Credit Agreement with Fleet National
Bank as of June 29, 2000, in the principal amount of $25,000,000, maturing
on May 31, 2005. The interest rate on the outstanding revolving loan is
determined for periods of one, three or six months (as selected by the
Trust) and is set at an annual rate equal to LIBOR (London Interbank
Offered Rate) plus 0.37%. The Trust also agreed to pay an up-front fee
equal to 0.10% on the total commitment. The facility fee is 0.15% per annum
of the total commitment. As of June 30, 2002 and 2001, there were no
outstanding loans drawn against the revolving credit facility. For the
period ended June 30, 2002 and 2001, the Trust incurred $18,493 and $18,596
in expense related to the undrawn portion.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
6/30/2002 6/30/2001
------------ ------------
COST OF INVESTMENTS ACQUIRED
---------------------------------
Corporate restricted securities $ 28,506,129 $ 15,248,269
Corporate public securities 11,971,948 8,829,406
Short-term securities 277,078,482 294,515,627
PROCEEDS FROM SALES OR MATURITIES
---------------------------------
Corporate restricted securities $ 24,283,020 $ 25,544,763
Corporate public securities 12,405,955 10,029,326
Short-term securities 279,638,732 300,673,049
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of June 30, 2002. The net unrealized
depreciation of investments for financial reporting and federal tax
purposes as of June 30, 2002 is $37,430,473 and consists of $11,087,926
appreciation and $48,518,399 depreciation.
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of June 30, 2001. The net unrealized
depreciation of investments for financial reporting and federal tax
purposes as of June 30, 2001 is $41,651,349 and consists of $15,026,434
appreciation and $56,677,783 depreciation.
--------------------------------------------------------------------------------
31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(CONTINUED)
6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS
PER PER
AMOUNT SHARE AMOUNT SHARE
-------------- ----- -------------- -----
MARCH 31, 2002 MARCH 31, 2001
-------------- --------------
Investment income $ 4,810,387 $ 4,901,417
Net investment income 3,587,006 $0.41 3,729,498 $0.43
Net realized and unrealized
gain (loss) on investments 2,640,053 0.30 (1,686,474) (0.18)
JUNE 30, 2002 JUNE 30, 2001
-------------- --------------
Investment income 4,866,101 5,051,877
Net investment income 3,767,012 0.43 3,844,565 0.44
Net realized and unrealized
(loss) gain on investments (2,039,467) (0.23) 2,449,657 0.29
RESULTS OF SHAREHOLDER MEETING
The Annual Meeting of Shareholders was held on Friday, April 19, 2002. The
Shareholders were asked to vote (1) to elect Steven A. Kandarian as a
trustee for a three year term and to re-elect Jack A. Laughery and Corine
T. Norgaard as trustees for a three-year term; (2) to ratify the selection
of Deloitte & Touche LLP as auditors for the fiscal year ending December
31, 2002; and (3) to approve the continuance of the Trust's current
Investment Services Contract with Babson. The Shareholders approved all of
the proposals. The results of the Shareholder votes are set forth below.
1. ELECTION OF TRUSTEES:
SHARES: % OF SHARES
TRUSTEE: FOR WITHHELD TOTAL VOTED FOR
-------------- --------- ------- --------- -----------
S. A Kandarian 6,862,359 155,009 7,017,368 97.79%
J. A. Laughery 6,889,728 127,640 7,017,368 98.18%
C. T. Norgaard 6,901,676 115,692 7,017,368 98.35%
2. RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS AUDITORS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2002.
SHARES: % OF SHARES
FOR AGAINST ABSTAINED TOTAL VOTED FOR
--------- ------- --------- --------- ---------
6,937,144 39,137 41,087 7,017,368 98.85%
3. APPROVAL OF THE CONTINUANCE OF THE TRUST'S INVESTMENT SERVICES CONTRACT
WITH DAVID L. BABSON AND COMPANY INC., DATED JULY 1, 1988.
SHARES: % OF SHARES
FOR AGAINST ABSTAINED TOTAL VOTED FOR
--------- ------- --------- --------- ---------
6,881,768 70,834 64,766 7,017,368 98.06%
--------------------------------------------------------------------------------
32
TRUSTEES OFFICERS
Donald E. Benson* Stuart H. Reese, Chairman
Richard G. Dooley Richard G. Dooley, Vice Chairman
Donald Glickman Robert E. Joyal, President
Martin T. Hart* Charles C. McCobb, Jr., Vice President &
Steven A. Kandarian Chief Financial Officer
Jack A. Laughery Stephen L. Kuhn, Vice President &
Corine T. Norgaard* Secretary
Stuart H. Reese Roger W. Crandall, Vice President
Michael P. Hermsen, Vice President
Mary Wilson Kibbe, Vice President
Michael L. Klofas, Vice President
Richard C. Morrison, Vice President
* Member of the Audit Committee Clifford M. Noreen, Vice President
Richard E. Spencer, II, Vice President
Mark B. Ackerman, Treasurer
John T. Davitt, Jr., Comptroller
DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN
MassMutual Corporate Investors offers a Dividend Reinvestment and Share Purchase
Plan. The Plan provides a simple way for shareholders to add to their holdings
in the Trust through the receipt of dividend shares issued by the Trust or
through the reinvestment of cash dividends in Trust shares purchased in the open
market. A shareholder may join the Plan by filling out and mailing an
authorization card to Shareholder Financial Services, Inc., the Transfer Agent.
Participating shareholders will continue to participate until they notify the
Transfer Agent, in writing, of their desire to terminate participation. Unless a
shareholder elects to participate in the Plan, he or she will, in effect, have
elected to receive dividends and distributions in cash.
Participating shareholders may also make additional contributions to the Plan
from their own funds. Such contributions may be made by personal check or other
means in an amount not less than $10 nor more than $5,000 per quarter.
Whenever the Trust declares a dividend payable in cash or shares, the Transfer
Agent, acting on behalf of each participating shareholder, will take the
dividend in shares only if the net asset value is lower than the market price
plus an estimated brokerage commission as of the close of business on the
valuation day. The valuation day is the last day preceding the day of dividend
payment. When the dividend is to be taken in shares, the number of shares to be
received is determined by dividing the cash dividend by the net asset value as
of the close of business on the valuation date or, if greater than net asset
value, 95% of the closing share price. If the net asset value of the shares is
higher than the market value plus an estimated commission, the Transfer Agent,
consistent with obtaining the best price and execution, will buy shares on the
open market at current prices promptly after the dividend payment date.
The reinvestment of dividends does not, in any way, relieve participating
shareholders of any federal, state or local tax. For federal income tax
purposes, the amount reportable in respect of a dividend received in
newly-issued shares of the Trust will be the fair market value of the shares
received, which will be reportable as ordinary income and/or capital gains.
As compensation for its services, the Transfer Agent receives a fee of 5% of any
dividend and cash contribution (in no event in excess of $2.50 per distribution
per shareholder.)
Any questions regarding the Plan should be addressed to Shareholder Financial
Services, Inc., Agent for MassMutual Corporate Investors' Dividend Reinvestment
and Share Purchase Plan, P.O. Box 173673, Denver CO 80217-3673.