================================================================================
MassMutual
CORPORATE
INVESTORS
REPORT for the THREE
MONTHS ENDED 3/31/03
================================================================================
MASSMUTUAL CORPORATE INVESTORS ADVISER
c/o David L. Babson & Company Inc. David L. Babson & Company Inc.,
1500 Main Street, Suite 1100 a member of the MassMutual Financial Group
Springfield, Massachusetts 01115
(413) 226-1516 AUDITOR
www.massmutual.com/mci Deloitte & Touche, LLP
New York, New York 10281
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.massmutual.com/mci
INVESTMENT OBJECTIVE AND POLICY
MassMutual Corporate Investors (the "Trust"), a non-diversified 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 Trust's New York
Stock Exchange 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 Trust's principal investments are privately placed, below-investment
grade, long-term corporate debt obligations with equity features such as
warrants, conversion rights, or other equity features and, occasionally,
preferred stocks. The Trust typically purchases these investments, which are not
publicly tradable, directly from their issuers, which tend to be smaller
companies. In addition, the Trust may temporarily invest, subject to certain
limitations, in marketable investment grade debt securities, other marketable
debt securities (including high yield securities) and marketable common stocks.
David L. Babson & Company Inc. manages the Trust on a total return basis. The
Trust distributes substantially all of its net income to shareholders each year.
Accordingly, the Trust pays dividends to shareholders quarterly in January, May,
August, and November. The Trust pays dividends to its shareholders in cash,
unless the shareholder elects to participate in the Dividend Reinvestment and
Share Purchase Plan.
TO OUR SHAREHOLDERS
April 30, 2003
We are pleased to present the March 31, 2003 Quarterly Report of MassMutual
Corporate Investors (the "Trust"). At the Trust's Annual Shareholders Meeting,
which was held on April 11, 2003, Mr. Robert E. Joyal, the Trust's President for
the past four years, announced his retirement as President of the Trust. The
shareholders present at the meeting elected Mr. Joyal as a new Trustee for a
one-year term and re-elected Stuart H. Reese and Martin T. Hart as Trustees,
each for three-year terms. The shareholders also ratified the selection of
Deloitte & Touche LLP as the Trust's auditors for the year ending December 31,
2003 and approved the Investment Services Contract between the Trust and David
L. Babson & Company Inc. ("Babson"). The detailed results of the shareholder
voting can be found at footnote number six of the Trust's financial statements.
The Board of Trustees elected me, Roger W. Crandall, to succeed Mr. Joyal as
President of the Trust at their April 11, 2003 meeting. I am currently the head
of the Corporate Securities Group at Babson where I oversee all corporate credit
related investments, including public and private bonds, bank loans, mezzanine
and private equity investments, as well as structured credit products. Prior to
moving over to Babson in 2000, I spent a dozen years in the investment
management area at Massachusetts Mutual Life Insurance Company, Babson's parent
company. I look forward to serving as President of the Trust.
The Board of Trustees declared a quarterly dividend of 36 cents per share,
payable on May 15, 2003 to shareholders of record on May 2, 2003. A dividend of
36 cents per share was paid in the previous quarter.
Among the many economic issues facing the Trust's investment markets, the U.S.
led war with Iraq continues to loom over the U.S. economy, injecting continued
uncertainty into the economic environment. During the quarter, the Dow Jones
Industrial Average Index decreased 3.63%, the S&P 500 Index decreased 3.16%, and
the Russell 2000 Stock Index decreased 4.49%. Conversely, the fixed income
markets, especially the high yield markets, posted positive increases for the
quarter ended March 31, 2003. The Merrill Lynch High Yield Master II Index
increased 7.14% and the Lehman Government/Credit Index increased 1.65% for the
quarter.
The Trust earned 34 cents per share of net investment income for the quarter
ended March 31, 2003, compared to 31 cents per share in the previous quarter.
During the quarter, net assets of the Trust increased to $180,197,951 or $20.39
per share compared to $171,028,431 or $19.40 per share on December 31, 2002.
This translated into a 5.10% portfolio return for the quarter, based on the
change in net assets (assuming reinvestment of all dividends and distributions).
Long term, the Trust's portfolio returned 7.64%, 13.94%, and 14.37% for the 5-,
10- and 25-year time periods ended March 31, 2003, respectively, again based on
change in net assets with reinvestment of all dividends and distributions.
During the quarter, the Trust made two new private placement investments and
three follow-on investments, totaling approximately $3.7 million. The two new
issuers the Trust invested in were Neff Motivation, Inc. and Weasler Holdings,
LLC. The follow-on investments purchased by the Trust were in securities of
Evans Consoles, Inc., Olympic Sales, Inc. and Shelter Acquisition, Inc. The
weighted average coupon of these investments was 12.7%. (A brief description of
these investments can be found in the Schedule of Investments.)
Thank you for your continued interest in and support of MassMutual Corporate
Investors.
Sincerely,
/s/ Roger W. Crandall
Roger W. Crandall
President
--------------------------------------------------------------------------------
1
CONSOLIDATED STATEMENTS OF MASSMUTUAL CORPORATE INVESTORS
ASSETS AND LIABILITIES
March 31, 2003 and 2002
(Unaudited)
2003 2002
------------ ------------
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost 2003 - $194,331,996; 2002 - $199,675,615) $164,434,542 $166,387,779
Corporate public securities at market value
(Cost 2003 - $22,119,491; 2002 - $20,681,699) 17,330,441 17,083,912
Short-term securities at cost plus earned discount
which approximates market value 13,952,877 1,289,857
------------ ------------
195,717,860 184,761,548
Cash 159,175 555,837
Interest and dividends receivable, net 4,459,034 5,098,272
Receivable for investments sold 1,206,474 13,097,234
Other assets -- 19,492
------------ ------------
TOTAL ASSETS $201,542,543 $203,532,383
============ ============
LIABILITIES:
Payable for investments purchased $ 346,978 $ 380,545
Management fee payable 678,286 684,542
Note payable 20,000,000 20,000,000
Interest payable 187,711 187,711
Accrued expenses 131,617 74,773
Accounts payable -- 344,729
------------ ------------
TOTAL LIABILITIES 21,344,592 21,672,300
------------ ------------
NET ASSETS:
Common shares, par value $1.00 per share;
an unlimited number authorized 8,836,464 8,751,021
Additional paid-in capital 101,090,274 99,486,563
Retained net realized gain on investments, prior years 100,547,585 100,353,354
Undistributed net investment income 4,821,133 3,821,214
Undistributed net realized (loss) gain on investments (411,001) 6,333,554
Net unrealized depreciation of investments (34,686,504) (36,885,623)
------------ ------------
TOTAL NET ASSETS 180,197,951 181,860,083
------------ ------------
TOTAL LIABILITIES AND NET ASSETS $201,542,543 $203,532,383
============ ============
COMMON SHARES ISSUED AND OUTSTANDING 8,836,464 8,751,021
============ ============
NET ASSET VALUE PER SHARE $ 20.39 $ 20.78
============ ============
See Notes to Consolidated Financial Statements.
--------------------------------------------------------------------------------
2
CONSOLIDATED STATEMENTS OF OPERATIONS MASSMUTUAL CORPORATE INVESTORS
For the three months ended March 31, 2003 and 2002
(Unaudited)
2003 2002
------------ ------------
INVESTMENT INCOME:
Interest $ 4,075,579 $ 4,711,336
Dividends 166,962 99,051
------------ ------------
TOTAL INVESTMENT INCOME 4,242,541 4,810,387
------------ ------------
EXPENSES:
Management fees 678,286 684,542
Trustees' fees and expenses 31,167 38,228
Transfer agent/registrar's expenses 12,000 12,000
Interest 378,746 378,336
Reports to shareholders 35,800 25,200
Audit and legal 36,700 16,350
Other 74,264 68,725
------------ ------------
TOTAL EXPENSES 1,246,963 1,223,381
------------ ------------
NET INVESTMENT INCOME
(2003 - $0.34 PER SHARE; 2002 - $0.41 PER SHARE) 2,995,578 3,587,006
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 2,243,874 4,253,579
Net change in unrealized depreciation of investments 3,537,494 (1,613,526)
------------ ------------
NET GAIN ON INVESTMENTS 5,781,368 2,640,053
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,776,946 $ 6,227,059
============ ============
See Notes to Consolidated Financial Statements.
--------------------------------------------------------------------------------
3
CONSOLIDATED STATEMENTS OF CASH FLOWS MASSMUTUAL CORPORATE INVESTORS
For the three months ended March 31, 2003 and 2002
(Unaudited)
2003 2002
------------ ------------
NET DECREASE IN CASH:
Cash flows from operating activities:
Interest and dividends received $ 2,798,542 $ 3,534,200
Interest expense paid (378,746) (378,336)
Operating expenses paid (805,366) (511,200)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,614,430 2,644,664
------------ ------------
Cash flows from investing activities:
Purchases/Proceeds/Maturities from short-term
portfolio securities, net (3,096,274) 9,301,796
Purchase of portfolio securities (17,374,362) (23,045,763)
Proceeds from disposition of portfolio securities 20,745,320 12,955,617
------------ ------------
NET CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES 274,684 (788,350)
------------ ------------
NET CASH PROVIDED BY OPERATING
AND INVESTING ACTIVITIES 1,889,114 1,856,314
------------ ------------
Cash flows from financing activities:
Increase in receipts for shares issued on
reinvestment of dividends 392,574 520,477
Cash dividends paid from net investment income (3,173,891) (4,100,864)
------------ ------------
NET CASH USED FOR FINANCING ACTIVITIES (2,781,317) (3,580,387)
------------ ------------
NET DECREASE IN CASH (892,203) (1,724,073)
Cash - beginning of year 1,051,378 2,279,910
------------ ------------
CASH - END OF PERIOD $ 159,175 $ 555,837
============ ============
RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET
CASH FROM OPERATING AND INVESTING ACTIVITIES:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,776,946 $ 6,227,059
------------ ------------
(Increase) decrease in investments (6,206,106) 8,699,065
Increase in interest and dividends receivable, net (1,140,651) (900,790)
Decrease (increase) in receivable for investments sold 49,095 (12,863,920)
Increase in other assets -- (19,492)
Increase in payable for investments purchased 346,978 380,545
Increase in management fee payable 34,515 26,123
Increase in accounts payable -- 334,246
Increase (decrease) in accrued expenses 28,337 (26,522)
------------ ------------
TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (6,887,832) (4,370,745)
------------ ------------
NET CASH PROVIDED BY OPERATING AND INVESTING
ACTIVITIES $ 1,889,114 $ 1,856,314
============ ============
See Notes to Consolidated Financial Statements.
--------------------------------------------------------------------------------
4
CONSOLIDATED STATEMENTS OF MASSMUTUAL CORPORATE INVESTORS
CHANGES IN NET ASSETS
For the three months ended March 31, 2003 and 2002
(Unaudited)
2003 2002
------------ ------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 2,995,578 $ 3,587,006
Net realized gain on investments 2,243,874 4,253,579
Net change in unrealized depreciation of investments 3,537,494 (1,613,526)
------------ ------------
Net increase in net assets resulting from operations 8,776,946 6,227,059
Net increase in shares of beneficial interest transactions 392,574 520,477
------------ ------------
TOTAL INCREASE IN NET ASSETS 9,169,520 6,747,536
NET ASSETS, BEGINNING OF YEAR 171,028,431 175,112,547
------------ ------------
NET ASSETS, END OF PERIOD (INCLUDING UNDISTRIBUTED NET
INVESTMENT INCOME IN 2003 - $4,821,133;
2002 - $3,821,214) $180,197,951 $181,860,083
============ ============
See Notes to Consolidated Financial Statements.
--------------------------------------------------------------------------------
5
CONSOLIDATED SELECTED PER SHARE DATA MASSMUTUAL CORPORATE INVESTORS
Selected data for each share of beneficial
interest outstanding for the periods ended:
For the three
months ended For the
3/31/2003 year ended
(Unaudited) 12/31/2002
------------ ------------
Net asset value:
Beginning of year $ 19.40 $ 20.07
------------ ------------
Net investment income 0.34 1.53
Net realized and unrealized gain (loss) on investments 0.65 (0.59)
------------ ------------
Total from investment operations 0.99 0.94
------------ ------------
Dividends from net investment income to common shareholders -- (1.44)
Distributions from net realized gain on investments to
common shareholders -- (0.18)
Change from issuance of shares -- 0.01
------------ ------------
Total distributions -- (1.61)
------------ ------------
Net asset value:
End of period $ 20.39 $ 19.40
============ ============
Per share market value:
End of period $ 19.67 $ 19.49
============ ============
Total investment return:
Market value 0.92%* 1.35%
Net asset value 5.10%* 4.80%
Net assets (in millions):
End of period $ 180.20 $ 171.03
Ratio of operating expenses to average net assets 0.50%* 1.82%
Ratio of interest expenses to average net assets 0.21%* 0.86%
Ratio of total expenses to average net assets 0.71%* 2.68%
Ratio of net investment income to average net assets 1.71%* 7.65%
Portfolio turnover 9.78%* 34.02%
*Percentages represent results for the period and are not annualized.
See Notes to Consolidated Financial Statements.
--------------------------------------------------------------------------------
6
CONSOLIDATED SCHEDULE OF INVESTMENTS MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES - 91.25%:(A) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
PRIVATE PLACEMENT INVESTMENTS - 87.96%
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 $ 1,880,651 $ 2,167,500
Warrant, exercisable until 2010, to purchase
common stock at $.02 per share (B) 364 shs. 2/29/00 307,759 189,581
------------ ------------
2,188,410 2,357,081
------------ ------------
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 10,353
------------ ------------
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 2,891,714 3,245,130
Common Stock (B) 1,060 shs. 4/30/99 1,059,950 2,484,557
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 576 shs. 4/30/99 445,410 1,351,071
------------ ------------
4,397,074 7,080,758
------------ ------------
AMERICA'S BODY CO., INC.
A designer and manufacturer of commercial work vehicles.
12% Senior Subordinated Note Due 2007 $ 3,500,000 11/2/98 3,175,267 2,800,000
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 58 shs. 11/2/98 513,333 1
------------ ------------
3,688,600 2,800,001
------------ ------------
AMES TRUE TEMPER GROUP
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 1,951,107
10% Preferred Stock 161 shs. * 161,093 159,993
Class A Common Stock (B) 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
------------ ------------
2,052,087 2,112,834
------------ ------------
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 $ 62,847 4/9/02 62,847 62,312
Senior Secured Tranche A Floating Rate Note due 2008 $ 1,133,307 4/9/02 1,133,307 1,126,401
12% Senior Secured Note due 2010 $ 721,196 4/9/02 602,152 737,649
Limited Partnership Interest of Riverside Capital
Appreciation Fund IV, L.P. (B) 2.29% 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
------------ ------------
2,078,132 2,048,239
------------ ------------
*2/28/02 and 11/15/02.
--------------------------------------------------------------------------------
7
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
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 (B) $ 2,127,412 12/23/97 $ 2,127,411 $ 531,853
17.75% Senior Secured Tranche B Note
due 2005 (B) $ 802,824 12/23/97 802,823 200,706
Preference Shares (B) 360,018 shs. 2/14/02 2 --
Limited Partnership Interest of CM Equity Partners (B) 6.27% int. 12/22/97 832,197 --
Warrant, exercisable until 2005, to purchase
common stock at $.81 per share (B) 214,419 shs. 12/23/97 -- --
------------ ------------
3,762,433 732,559
------------ ------------
BETTER MINERALS & AGGREGATES
A producer of high grade industrial and specialty silica sands.
14% Redeemable Preferred Stock 997 shs. 9/30/99 545,858 108,991
Convertible Preferred Stock Series A and B, convertible
into common stock at $9.26 per share (B) 126,003 shs. 12/19/96 1,166,700 --
Common Stock (B) 20,027 shs. 9/30/99 799,068 -
Warrants, exercisable until 2005 and 2010, to
purchase common stock at $.01 per share (B) 11,399 shs. * 128,502 --
------------ ------------
2,640,128 108,991
------------ ------------
C & K FINANCING COMPANY LLC
A holding company formed to hold C & K Manufacturing.
8% Senior Note due 2004 (B) $ 67,637 12/24/02 67,637 6,764
------------ ------------
C & M CONVEYOR, INC.
A manufacturer and supplier of material handling systems
to the corrugated sheet and container industry.
9.5% Senior Secured Term Note due 2007 $ 1,233,434 9/13/02 1,233,434 1,229,722
11% Senior Subordinated Note due 2010 $ 838,102 9/13/02 781,683 836,409
Common Stock (B) 316,265 shs. 9/13/02 316,265 253,012
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 137,175 shs. 9/13/02 60,250 1,372
------------ ------------
2,391,632 2,320,515
------------ ------------
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 9/29/95 108,108 113,611
Warrant, exercisable until 2004, to purchase
partnership points at $.01 per point (B) 39 pts. 9/29/95 50,261 --
------------ ------------
158,369 113,611
------------ ------------
CAPESUCCESS LLC
A provider of diversified staffing services.
Preferred Membership Interests (B) 1,882 int. 4/29/00 8,396 420
Common Membership Interests (B) 24,318 int. 4/29/00 108,983 5,442
------------ ------------
117,379 5,862
------------ ------------
*12/19/96 and 9/30/99.
--------------------------------------------------------------------------------
8
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
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 6,395 148
------------ ------------
COINING CORPORATION OF AMERICA LLC
A manufacturer of close tolerance parts and metal stampings.
Senior Secured Floating Rate Revolving Credit
Facility due 2006 $ 75,617 1/7/02 75,617 74,479
Senior Secured Floating Rate Tranche A Note due 2007 $ 1,253,087 6/26/01 1,253,087 1,219,477
12% Senior Secured Tranche B Note due 2008 $ 648,148 6/26/01 581,853 665,175
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
------------ ------------
2,314,029 2,219,460
------------ ------------
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 1,379,222 1,589,995
28% Preferred Stock 71 shs. 11/2/01 70,833 71,093
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
------------ ------------
2,246,930 2,139,216
------------ ------------
CONSUMER PRODUCT ENTERPRISES, INC.
A manufacturer of colored acrylic felt for consumer use.
Senior Secured Floating Rate Revolving Credit
Note due 2003 $ 353,740 12/8/95 353,740 141,496
10.75% Senior Secured Term Note due 2003 $ 413,630 12/8/95 413,630 165,452
Senior Secured Floating Rate Term Note due 2003 $ 207,630 12/8/95 207,630 83,052
12% Senior Subordinated Note due 2005 $ 800,575 12/8/95 782,883 160,115
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 --
------------ ------------
1,993,296 550,115
------------ ------------
CORVEST GROUP, INC.
A manufacturer and distributor of promotional products.
12% Senior Subordinated Note due 2007 $ 3,863,636 ** 3,677,100 3,529,360
Common Stock (B) 56 shs. ** 96,591 57,949
Limited Partnership Interest (B) 19.32% int. ** 286,772 172,061
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 183 shs. ** 297,203 189,347
------------ ------------
4,357,666 3,948,717
------------ ------------
**12/30/97 and 5/29/99.
**3/5/99 and 3/24/99.
--------------------------------------------------------------------------------
9
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
DELSTAR HOLDINGS CORPORATION
A manufacturer of plastic netting for a wide variety of industries.
Convertible Preferred Stock, convertible into common
stock at $12.16 per share (B) 3,514 shs. 10/5/01 $ 427,153 $ 342
------------ ------------
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 $ 1,231,884 7/19/01 1,076,543 1,198,471
Common Stock (B) 585 shs. 7/19/01 585,145 409,605
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 297 shs. 7/19/01 250,611 3
------------ ------------
1,912,299 1,608,079
------------ ------------
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 $ 1,123,827 2/8/01 1,123,827 1,123,827
12% Senior Secured Tranche B Note due 2009 $ 451,173 2/8/01 386,721 451,173
Limited Partnership Interests of Riverside Capital
Appreciation Fund III, L.P. (B) 2.81% int. 2/8/01 163,896 236,010
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 927 shs. 2/8/01 82,030 155,783
------------ ------------
1,756,474 1,966,793
------------ ------------
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 3,058,189 3,422,373
8% Convertible Class B Subordinated
Promissory Note due 2008 $ 89,442 12/22/99 89,061 93,387
Class B Common Stock (B) 26,097 shs. 12/22/99 260,965 234,869
Limited Partnership Interest 8.70% int. 12/22/99 539,268 485,342
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 45,255 shs. 12/22/99 413,816 453
------------ ------------
4,361,299 4,236,424
------------ ------------
DIVERSCO, INC./DHI HOLDINGS, INC.
A contract provider of janitorial and equipment
maintenance services and temporary production labor to
industrial customers.
Membership Interests of MM/Lincap
Diversco Investments Ltd. LLC (B) 27.19% int. 8/27/98 734,090 --
Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 1,113,655
Warrants, exercisable until 2011, to purchase common
stock of DHI Holdings, Inc. at $.01 per share (B) 13,352 shs. * 403,427 --
------------ ------------
3,921,650 1,113,655
------------ ------------
*10/24/96 and 8/28/98.
--------------------------------------------------------------------------------
10
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
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 $ 300,000
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 1,632,445 1,986,852
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
------------ ------------
2,142,445 2,189,356
------------ ------------
EAST RIVER VENTURES I, L.P.
An acquirer of controlling or substantial interests in other
entities.
Limited Partnership Interest (B) 32,191 int. 1/1/01 31,000 39,814
------------ ------------
ENZYMATIC THERAPY, INC.
A manufacturer and distributor of branded natural
medicines and nutritional supplements.
13% Senior Subordinated Note due 2004 (B) $ 1,593,750 9/17/02 1,349,781 1,115,625
Limited Partnership Interest (B) 1.32% int. 3/30/00 531,250 53,125
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 478 shs. 3/30/00 255,000 5
------------ ------------
2,136,031 1,168,755
------------ ------------
EVANS CONSOLES, INC.
A designer and manufacturer of consoles and control
center systems.
Senior Secured Tranche A Floating Rate Note due 2004 $ 242,000 1/21/03 242,000 242,000
Senior Secured Tranche A Floating Rate Note due 2006 $ 974,300 3/2/98 974,300 633,295
8.85% Senior Secured Tranche A Note due 2006 $ 974,300 3/2/98 974,300 633,295
11.75% Senior Secured Tranche B Note due 2006 $ 700,000 3/2/98 642,897 455,000
Senior Secured Floating Rate Revolving Credit
Facility due 2006 $ 984,242 3/2/98 984,242 639,758
Convertible Preferred Stock, convertible on a one share
for one share basis into non voting common stock (B) 293,071 shs. 1/21/03 1 29
Common Stock (B) 26,906 shs. 2/11/98 94,880 9,488
Limited Partnership Interest of CM
Equity Partners (B) 126,445 int. 2/11/98 126,648 12,665
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 34,783 shs. 3/2/98 112,000 348
------------ ------------
4,151,268 2,625,878
------------ ------------
--------------------------------------------------------------------------------
11
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
EVOLVE SOFTWARE, INC.
A provider of software for automating professional
services organizations.
Common Stock (B) 4 shs. 4/20/01 $ 735 $ --
------------ ------------
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 1,998,980 1,659,241
Limited Partnership Interest (B) 5.27% int. 3/2/99 2,140,363 1,284,218
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 77,233 shs. 3/16/99 175,803 772
------------ ------------
4,315,146 2,944,231
------------ ------------
FAIRMARKET, INC.
A developer and deliverer of e-business selling and marketing
solutions for retailers, distributors and manufacturers.
Common Stock (B) 217 shs. 4/20/01 371 312
------------ ------------
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 3,315,111 3,723,000
Class B common Stock (B) 600 shs. 12/22/99 600,000 1,227,614
Warrant, exercisable until 2007, to purchase
common stock at $.02 per share (B) 589 shs. 12/22/99 462,927 1,204,545
------------ ------------
4,378,038 6,155,159
------------ ------------
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 (B) $ 1,725,000 3/2/00 1,451,784 1,293,750
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 880 shs. 3/2/00 347,288 9
------------ ------------
1,799,072 1,293,759
------------ ------------
GRAND EXPEDITIONS, INC.
A luxury travel tour operation provider.
Preferred Stock (B) 21,250 shs. 6/21/01 1,117,466 225,000
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 282,443 shs. 6/21/01 1,007,534 2,824
------------ ------------
2,125,000 227,824
------------ ------------
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 * 3,697,924 380,271
Warrant, exercisable until 2007, to purchase
common stock at $1 per share (B) 338,280 shs. * 48,447 --
------------ ------------
3,746,371 380,271
------------ ------------
*1/25/99 and 7/16/99.
--------------------------------------------------------------------------------
12
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in
manufacturing and marketing entities.
Series A Preferred Units (B) 1.22% int. 7/21/94 $ 399,981 $ 150,000
------------ ------------
HUSSEY SEATING CORPORATION
A manufacturer of spectator seating products.
Senior Secured Floating Rate Revolving Note due 2006 $ 819,027 6/12/96 819,027 807,042
Senior Secured Floating Rate Note due 2006 $ 863,438 * 863,438 850,803
12% Senior Subordinated Note due 2006 $ 1,350,000 3/31/03 1,223,211 1,162,048
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 4,771 shs. ** 225,000 48
------------ ------------
3,130,676 2,819,941
------------ ------------
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 $ 1,586,131 6/1/00 1,586,131 1,432,084
13% Senior Secured Note due 2007 $ 65,459 2/28/03 65,459 59,102
Common Stock (B) 228 shs. 6/1/00 262,200 131,100
------------ ------------
1,913,790 1,622,286
------------ ------------
JACKSON PRODUCTS, INC.
A manufacturer and distributor of a variety of industrial
and highway safety products.
Common Stock (B) 226 shs. 8/16/95 22,634 226
Warrant, exercisable until 2005, to purchase
common stock at $.01 per share (B) 1,042 shs. 8/16/95 95,627 1,031
------------ ------------
118,261 1,257
------------ ------------
JASON, INC.
A diversified manufacturing company serving various
industrial markets.
13% Senior Subordinated Note due 2008 $ 963,687 8/4/00 871,157 953,543
14% Cumulative Redeemable Preferred Stock Series A (B) 289 shs. 8/4/00 289,224 282,997
Limited Partnership Interests of
Saw Mill Capital Fund II, L.P. (B) 2.52% int. 8/3/00 886,506 664,880
Warrants, exercisable until 2008 and 2009, to purchase
common stock at $.01 per share (B) 50,870 shs. 8/4/00 115,412 509
------------ ------------
2,162,299 1,901,929
------------ ------------
KEEPSAKE QUILTING, INC.
A seller of quilting fabrics, books, patterns, kits and
notions to consumers.
Senior Secured Floating Rate Revolving Note Due 2005 $ 91,732 6/16/00 91,732 91,263
Senior Secured Floating Rate Tranche A Note due 2007 $ 1,031,984 6/16/00 1,031,984 1,017,818
12% Senior Secured Tranche B Note due 2008 $ 550,392 6/16/00 515,404 572,350
Limited Partnership Interest of
Riverside XVI Holding Company, L.P. (B) 5.29% int. 6/12/00 333,459 297,425
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 1,108 shs. 6/12/00 45,866 11
------------ ------------
2,018,445 1,978,867
------------ ------------
**6/12/96 and 8/3/01.
**6/12/96 and 1/19/00.
--------------------------------------------------------------------------------
13
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
KENAN-ADVANTAGE TRANSPORT COMPANY
A transporter of light petroleum, petrochemicals,
lubricants and residual fuels.
12.5% Senior Subordinated Note due 2009 $ 1,817,435 4/30/01 $ 1,817,435 $ 1,890,132
Preferred Stock (B) 307 shs. 4/30/01 307,000 276,300
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 269 shs. 4/30/01 14 3
------------ ------------
2,124,449 2,166,435
------------ ------------
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 1,402,926 1,669,643
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
------------ ------------
2,206,631 2,083,519
------------ ------------
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 * 3,386,987 3,921,900
Common Stock (B) 5,800 shs. * 406,003 247,115
Warrant, exercisable until 2006, to purchase
common stock at $.11 per share (B) 15,572 shs. * 602,127 663,461
------------ ------------
4,395,117 4,832,476
------------ ------------
MOSS, INC.
A manufacturer and distributor of large display and exhibit
structures.
Senior Secured Floating Rate Revolving Note due 2005 $ 184,910 9/21/00 184,910 129,436
Senior Secured Floating Rate Tranche A Note due 2007 $ 1,302,775 9/21/00 1,302,775 911,942
12% Senior Secured Tranche B Note due 2008 $ 420,250 9/21/00 388,245 294,175
Limited Partnership Interest of
Riverside Capital Appreciation Fund I, L.P. (B) 6.23% int. ** 311,466 155,733
Warrant, exercisable until 2008, to purchase
common stock at $100 per share (B) 463 shs. 9/21/00 40,344 5
------------ ------------
2,227,740 1,491,291
------------ ------------
MUSTANG VENTURES COMPANY
A natural gas gathering and processing operation located in
Oklahoma and Texas.
11.5% Subordinated Note due 2011 $ 566,667 12/11/02 465,410 580,972
8.5% Redeemable Preferred Stock 155,833 shs. 12/11/02 1,108,087 1,097,836
Warrant, exercisable until 2012, to purchase
common stock at $0.01 per share (B) 18,425 shs. 12/11/02 553,539 414,562
------------ ------------
2,127,036 2,093,370
------------ ------------
**12/23/98 and 1/28/99.
**9/20/00 and 5/23/02.
--------------------------------------------------------------------------------
14
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
NEFF MOTIVATION, INC.
A manufacturer and distributor of customized awards and
sportswear to schools.
12.5% Senior Subordinated Note due 2011 $ 1,062,500 1/31/03 $ 883,218 $ 1,072,115
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 212 shs. 1/31/03 180,625 2
------------ ------------
1,063,843 1,072,117
------------ ------------
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 $ 363,618 6/25/99 363,618 350,990
Senior Secured Floating Rate Note due 2006 $ 2,398,093 6/25/99 2,398,021 2,311,356
12% Senior Secured Tranche B Note due 2007 $ 978,814 6/25/99 883,072 969,178
Limited Partnership Interest of Riverside XIII
Holding Company L.P. (B) 3.49% int. 6/11/99 296,876 221,438
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 201 shs. 6/25/99 142,373 2
------------ ------------
4,083,960 3,852,964
------------ ------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the
automotive industry.
9% Senior Secured Note due 2009 $ 812,500 1/28/02 812,500 836,953
11.5% Senior Subordinated Note due 2012 $ 1,500,000 1/28/02 1,348,675 1,539,419
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
------------ ------------
2,635,720 2,660,054
------------ ------------
OLYMPIC SALES, 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 2,592,560 2,219,200
12% Senior Subordinated Note due 2008 $ 307,071 2/9/00 279,530 245,657
Limited Partnership Interest of Riverside VIII, VIII-A
and VIII-B Holding Company, L.P. (B) 1,531,251 shs. * 1,542,224 798,930
Warrants, exercisable until 2007and 2008, to purchase
common stock at $.01 per share (B) 28,648 shs. ** 389,188 287
------------ ------------
4,803,502 3,264,074
------------ ------------
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 1,907,996 2,188,192
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 212,500
------------ ------------
2,173,621 2,400,692
------------ ------------
**8/7/98, 2/23/99, 12/22/99 and 2/25/03.
**8/7/98 and 2/9/00.
--------------------------------------------------------------------------------
15
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
PGT INDUSTRIES, INC.
A manufacturer of residential windows and patio doors and
a provider of custom patio rooms and porch enclosures.
12% Senior Subordinated Notes due 2009 $ 1,965,000 1/29/01 $ 1,745,290 $ 2,023,950
Common Stock (B) 115 shs. 1/29/01 115,000 174,774
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 325 shs. 1/29/01 264,519 493,894
------------ ------------
2,124,809 2,692,618
------------ ------------
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 $ 172,768 11/30/95 172,768 176,039
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
------------ ------------
705,268 897,241
------------ ------------
P H I HOLDING COMPANY
A retailer of mid-priced gift items, home and garden decor,
accessories and other similar consumer products.
12.5% Senior Subordinated Note due 2010 $ 2,125,000 10/25/02 1,917,790 2,231,250
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 351 shs. 10/25/02 212,500 4
------------ ------------
2,130,290 2,231,254
------------ ------------
PLASSEIN PACKAGING CORPORATION
A manufacturer of flexible packaging products.
13% Senior Subordinated Note due 2007 (B) $ 763,608 8/15/00 664,988 76,361
15% Junior Subordinated Note due 2008 (B) $ 73,494 11/14/01 71,969 --
12% Junior Subordinated Note due 2008 (B) $ 658,905 8/15/00 459,101 --
Convertible Preferred Stock, convertible into
common stock at $1 per share (B) 288,256 shs. 8/15/00 288,256 --
Common Stock (B) 446,960 shs. 8/15/00 289,552 --
Warrants, exercisable until 2007 and 2008, to purchase
common stock at $.01 per share (B) 482,594 shs. * 95,840 --
------------ ------------
1,869,706 76,361
------------ ------------
POLYMER TECHNOLOGIES, INC./POLI-TWINE WESTERN, INC.
A leading manufacturer of polypropylene twine for the hay
bailing marketplace.
8% Senior Subordinated Note due 2010 (B) $ 743,750 9/27/02 743,722 557,812
Preferred Series A Stock (B) 1,062 shs. 9/27/02 958,922 239,730
Preferred Series B Stock (B) 239 shs. 9/27/02 232,880 58,220
Common Stock (B) 159,375 shs. 3/1/00 79,688 --
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 7,375,899 shs. ** 109,789 --
------------ ------------
2,125,001 855,762
------------ ------------
**8/15/00 and 11/14/01.
**3/1/00 and 9/27/02.
--------------------------------------------------------------------------------
16
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
PRECISION DYNAMICS, INC.
A manufacturer of custom-designed solenoid valves and controls.
Senior Secured Floating Rate Revolving Credit
Facility due 2003 $ 896,500 7/22/96 $ 896,500 $ 806,850
Senior Secured Floating Rate Term Note due 2003 $ 1,450,700 7/22/96 1,450,700 1,305,630
12% Senior Secured Term Note due 2004 $ 489,000 7/22/96 469,187 440,100
8% Preferred Stock (B) 374 shs. 7/22/96 231,964 --
Common Stock (B) 599 shs. 7/22/96 28,978 --
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 322 shs. 7/22/96 97,800 --
------------ ------------
3,175,129 2,552,580
------------ ------------
PREMIUM FOODS GROUP, INC.
A manufacturer and distributor of branded meat products.
Limited Partnership Interest of MHD Holdings LLC (B) 1.29% int. 8/29/00 804,000 804,000
------------ ------------
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 2,806,297
Common Membership Interests 9,863 int. * 13,049 40,958
------------ ------------
2,794,041 2,847,255
------------ ------------
PROGRESSIVE SOFTWARE HOLDING, INC.
A designer and manufacturer of point-of-sale monitors and
keyboards used by retailers and restaurants.
Common Stock (B) 729,946 shs. 7/9/02 3,500,003 13,139
------------ ------------
PROTEIN GENETICS, INC.
A producer of bovine artificial insemination products,
related breeding and healthcare products and specialty
genetics sold to the dairy and beef industries.
9.8% Redeemable Exchangeable Preferred Stock (B) 1,004 shs. 8/12/94 100,350 25,088
Common Stock (B) 2,600 shs. ** 126,866 --
------------ ------------
227,216 25,088
------------ ------------
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 $ 3,538,657 9/16/99 3,534,185 3,548,210
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 197,040 shs. 9/16/99 1 1,124,310
------------ ------------
3,534,186 4,672,520
------------ ------------
**7/31/97 and 1/4/99.
**11/14/01 and 8/12/94.
--------------------------------------------------------------------------------
17
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
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 $ 2,205,937
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 212 shs. 2/28/01 205,469 2
------------ ------------
2,125,000 2,205,939
------------ ------------
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 1,999,026 2,206,916
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 51,088 shs. 4/19/02 138,052 511
------------ ------------
2,137,078 2,207,427
------------ ------------
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 $ 2,096,417 6/2/99 2,096,417 2,096,417
12% Senior Secured Tranche B Note Due 2007 $ 1,130,652 6/2/99 1,130,652 1,141,959
Class B Common Stock (B) 1,480 shs. 6/2/99 256,212 495,007
------------ ------------
3,483,281 3,733,383
------------ ------------
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 1,956,530 2,178,095
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 2,011 shs. 6/13/02 182,023 20
------------ ------------
2,138,553 2,178,115
------------ ------------
SHELTER ACQUISITION, INC.
A distributor of roofing supplies and products throughout
the Midwest.
12.5% Senior Subordinated Note due 2008 $ 1,517,857 8/1/02 1,316,611 1,542,087
Common Stock (B) 758,929 shs. * 758,929 683,036
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 263,444 shs. 8/1/02 216,446 2,634
------------ ------------
2,291,986 2,227,757
------------ ------------
SNYDER INDUSTRIES, INC.
A manufacturer of proprietary rotationally molded
polyethylene containers.
12.25% Senior Subordinated Note due 2007 $ 3,125,000 12/6/99 2,818,362 3,187,500
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 513 shs. 12/6/99 426,136 5
------------ ------------
3,244,498 3,187,505
------------ ------------
*8/1/03 and 1/17/03.
--------------------------------------------------------------------------------
18
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
STAR INTERNATIONAL, INC.
A manufacturer of commercial cooking appliances.
11% Senior Secured Note due 2004 $ 2,282,975 1/25/00 $ 2,237,606 $ 2,282,972
9.65% Senior Secured Note due 2004 $ 469,254 5/27/94 469,252 469,254
10.5% Subordinated Note due 2004 $ 716,418 5/27/94 716,418 716,418
Common Stock (B) 4,310 shs. 5/27/94 259,735 933,184
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 4,621 shs. * 171,830 1,000,423
------------ ------------
3,854,841 5,402,251
------------ ------------
STRATEGIC EQUIPMENT & SUPPLY CORP., 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 3,389,877 3,681,384
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 106,539 shs. 1/14/00 658,751 1,065
------------ ------------
4,048,628 3,682,449
------------ ------------
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 2,491,597 2,712,000
Common Stock (B) 630 shs. 2/4/98 630,000 567,000
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 444 shs. 2/5/98 368,832 4
------------ ------------
3,490,429 3,279,004
------------ ------------
THERMA-TRU CORPORATION
A manufacturer of residential exterior entry door systems.
Limited Partnership Interest of KT
Holding Company, L.P. (B) 0.52% int. 5/5/00 773,200 695,882
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 739 shs. 5/9/00 287,370 73,071
------------ ------------
1,060,570 768,953
------------ ------------
TIDEWATER HOLDINGS, INC.
An operator of a barge transportation line on the
Columbia/Snake River system.
17% Preferred Stock (B) 560 shs. 12/23/02 560,000 532,000
Convertible Preferred Stock, convertible into
common stock at $1,000 per share (B) 1,120 shs. 7/25/96 1,120,000 896,000
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 474 shs. 7/25/96 48,216 379,008
------------ ------------
1,728,216 1,807,008
------------ ------------
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 1,899,141
Membership Interests (B) 250,000 int. 12/6/01 250,000 225,000
------------ ------------
2,125,000 2,124,141
------------ ------------
--------------------------------------------------------------------------------
19
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
TRONAIR, INC.
A designer, engineer and manufacturer of ground support
equipment for the business, commuter and commercial
aviation markets.
10.5% Senior Secured Term Note due 2008 $ 1,974,022 1/20/00 $ 1,974,022 $ 1,917,403
12% Senior Subordinated Note due 2010 $ 1,326,500 1/20/00 1,248,087 1,252,089
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
------------ ------------
3,548,049 3,354,018
------------ ------------
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 2,510,547 2,675,000
Limited Partnership Interest (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 69,857
------------ ------------
3,712,079 3,486,997
------------ ------------
TVI, INC.
A retailer of used clothing in the United States, Canada
and Australia.
15.971% Senior Subordinated Note due 2008 $ 2,038,509 5/2/00 1,968,791 2,042,048
Common Stock (B) 354,167 shs. 5/2/00 354,167 247,917
------------ ------------
2,322,958 2,289,965
------------ ------------
USFLOW CORPORATION
A distributor of industrial pipes, valves and fittings.
12.5% Senior Subordinated Note due 2007 (B) $ 3,463,000 12/14/99 3,092,256 692,600
Class B Common Stock (B) 664 shs. 12/14/99 664,200 --
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 565 shs. 12/14/99 461,733 --
------------ ------------
4,218,189 692,600
------------ ------------
VICTORY VENTURES LLC
An acquirer of controlling or substantial interests in other
entities.
Series A Preferred Units (B) 0.15% int. 12/2/96 1 2
------------ ------------
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 1,908,872 2,186,604
Limited Partnership Interest of Riverside VI
Holding Company, L.P. (B) 4.80% int. * 351,320 281,054
Limited Partnership Interest 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
------------ ------------
2,567,656 2,531,449
------------ ------------
**12/30/97 and 9/9/99.
**1/12/98 and 12/18/00.
--------------------------------------------------------------------------------
20
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
Shares, Units
Warrants, Ownership Acquisition
CORPORATE RESTRICTED SECURITIES (A) (Continued) or Principal Amount Date Cost Fair Value
------------------- ----------- ------------ ------------
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 $ 1,607,009 $ 1,644,293
Senior Preferred Stock (B) 4,692 shs. 11/1/00 469,160 433,460
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
------------ ------------
2,134,932 2,085,856
------------ ------------
WEASLER HOLDINGS LLC
A manufacturer of mechanical power transmission
components for the agricultural, lawn and turf industries.
13.25% Senior Subordinated Note due 2010 $ 2,023,810 2/4/03 1,815,924 2,053,142
Limited Partnership Interest (B) 101,190 int. 2/3/03 101,190 80,952
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 256 shs. 2/4/03 209,829 3
------------ ------------
2,126,943 2,134,097
------------ ------------
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 $ 2,272,932 11/9/01 2,271,878 2,252,230
------------ ------------
TOTAL PRIVATE PLACEMENT INVESTMENTS 188,077,585 158,496,515
------------ ------------
--------------------------------------------------------------------------------
21
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
MARCH 31, 2003
(Unaudited)
Interest Due Shares or
CORPORATE RESTRICTED SECURITIES:(A) continued Rate Date Principal Amount Cost Fair Value
-------- -------- ------------ ------------ ------------
RULE 144A SECURITIES - 3.29%: (A)
BONDS - 1.07%
American Media Operation, Inc. 8.875% 01/15/11 $ 200,000 $ 200,000 $ 215,500
Canwest Media, Inc. 7.625 04/15/13 200,000 200,000 200,000
Cuddy International Corporation (B) 10.750 12/01/07 229,062 225,640 22,906
Del Monte Corporation 8.625 12/15/12 225,000 225,000 234,000
Direct Holdings Finance 8.375 03/15/13 550,000 550,000 607,063
Dole Food Company, Inc. 8.875 03/15/11 100,000 100,000 104,000
Hexcel Corporation 9.875 10/01/08 75,000 74,214 78,000
Northwest Pipelines Corporation 8.125 03/01/10 250,000 250,000 264,055
Remington Arms Company 10.500 02/01/11 200,000 200,000 213,500
------------ ------------ ------------
TOTAL BONDS $ 2,029,062 2,024,854 1,939,024
============ ------------ ------------
COMMON STOCK - 0.00%
Jordan Telecom Products (B) 70 $ 14,000 --
------------ ------------
TOTAL COMMON STOCK 14,000 --
------------ ------------
CONVERTIBLE BONDS - 1.99%
Advanced Micro Devices, Inc. 4.750% 02/01/22 $ 500,000 $ 397,449 $ 335,625
Computer Associates Int'l., Inc. 1.625 12/15/09 150,000 150,000 156,912
Cymer, Inc. 3.500 02/15/09 850,000 850,000 769,250
Echostar Communications, Inc. 4.875 01/01/07 400,000 400,000 387,500
F E I Company 5.500 08/15/08 375,000 375,000 340,781
General Semiconductor, Inc. 5.750 12/15/06 65,000 58,663 61,100
Hyperion Solutions Corporation 4.500 03/15/05 200,000 200,000 197,750
Invitrogen Corporation 2.250 12/15/06 425,000 425,000 370,281
Sanmina-SCI Corporation (B) 0.000 09/12/20 1,090,000 453,712 487,775
Triquint Semiconductor, Inc. 4.000 03/01/07 225,000 168,442 184,781
Tyco International Group 2.750 01/15/18 200,000 200,000 185,564
Viropharma, Inc. 6.000 03/01/07 215,000 147,282 105,350
------------ ------------ ------------
TOTAL CONVERTIBLE BONDS $ 4,695,000 3,825,548 3,582,669
============ ------------ ------------
CONVERTIBLE PREFERRED STOCK - 0.23%
Chesapeake Energy Corporation 7,800 $ 390,000 $ 416,325
------------ ------------
TOTAL CONVERTIBLE PREFERRED STOCK 390,000 416,325
------------ ------------
WARRANTS - 0.00%
Winsloew Escrow Corporation (B) 900 $ 9 $ 9
------------ ------------
TOTAL WARRANTS 9 9
------------ ------------
TOTAL RULE 144A SECURITIES 6,254,411 5,938,027
------------ ------------
TOTAL CORPORATE RESTRICTED SECURITIES $194,331,996 $164,434,542
------------ ------------
--------------------------------------------------------------------------------
22
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
MARCH 31, 2003
(Unaudited)
Interest Due Shares or
CORPORATE PUBLIC SECURITIES - 9.62%:(A) Rate Date Principal Amount Cost Market Value
-------- -------- ------------ ------------ ------------
BONDS - 2.51%
G F S I, Inc. 9.625% 03/01/07 $ 145,000 $ 123,088 $ 116,000
Isle of Capri Casinos, Inc. 9.000 03/15/12 450,000 450,000 470,250
Neff Corporation 10.250 06/01/08 170,000 168,063 56,100
Numatics, Inc. 9.625 04/01/08 550,000 540,667 313,500
Remington Products Co. 11.000 05/15/06 600,000 595,506 588,000
S P X Corporation 7.500 01/01/13 500,000 500,000 530,000
Sports Club Co. 11.375 03/15/06 600,000 582,000 537,750
Telex Communications, Inc. (B) 0.000 11/15/06 373,182 206,820 205,250
United Refining Co. 10.750 06/15/07 1,365,000 1,365,000 1,119,300
Winsloew Escrow Corporation 12.750 08/15/07 900,000 879,472 585,000
------------ ------------ ------------
TOTAL BONDS $ 5,653,182 5,410,616 4,521,150
============ ------------ ------------
COMMON STOCK - 3.53%
Chesapeake Energy Corporation 163,900 $ 1,327,590 $ 1,288,254
Computer Horizons Corporation (B) 32,068 301,942 98,769
D T Industries, Inc. (B) 178,876 1,168,093 230,750
EOS International, Inc. (B) 100,000 300,000 50,000
Florist Transworld Delivery, Inc. (B) 29,374 41,258 601,873
H C I Direct, Inc. (B) 1,000 - 10
PepsiAmericas, Inc. (B) 92,145 2,006,365 1,083,625
Proton Energy Systems, Inc. (B) 26,000 328,859 63,960
Rent-Way, Inc. (B) 92,866 916,263 334,318
Supreme Industries, Inc. (B) 105,202 267,325 463,941
Surebeam Corporation (B) 40,555 17,507 142,349
T G C Industries (B) 6,361 9,497 573
Titan Corporation (B) 58,052 155,714 432,487
Transmontaigne, Inc. (B) 333,326 1,109,177 1,403,302
Vina Technologies, Inc. (B) 572 1,687 69
W E C Company, Inc. (B) 5,938 800,000 159,990
------------ ------------
TOTAL COMMON STOCK 8,751,277 6,354,270
------------ ------------
CONVERTIBLE BONDS - 2.88%
Charter Communications, Inc. 4.750% 06/01/06 $ 660,000 $ 660,000 $ 112,200
Commscope, Inc. 4.000 12/15/06 185,000 179,550 158,245
Corning Inc. (B) 0.000 11/08/15 795,000 589,829 538,612
Cypress Semiconductor Corporation 4.000 02/01/05 210,000 210,000 186,638
Echostar Communications 4.875 01/01/07 1,000,000 805,000 968,750
F E I Company 5.500 08/15/08 1,160,000 1,080,300 1,054,150
Hyperion Solutions Corporation 4.500 03/15/05 50,000 35,500 49,438
Mediacom Communications Corporation 5.250 07/01/06 1,045,000 1,045,000 964,012
S C I Systems, Inc. 3.000 03/15/07 800,000 727,038 630,000
Sanmina-SCI Corporation (B) 0.000 09/12/20 1,190,000 425,373 532,525
------------ ------------ ------------
TOTAL CONVERTIBLE BONDS $ 7,095,000 5,757,590 5,194,570
============ ------------ ------------
--------------------------------------------------------------------------------
23
CONSOLIDATED SCHEDULE OF INVESTMENTS (Cont.) MASSMUTUAL CORPORATE INVESTORS
MARCH 31, 2003
(Unaudited)
Shares or
Principal
CORPORATE PUBLIC SECURITIES:(A)(Continued) Amount Cost Market Value
---------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK - 0.69%
Lucent Technologies Capital Trust I 2,200 $ 2,200,000 $ 1,242,736
------------ ------------
TOTAL CONVERTIBLE PREFERRED STOCK 2,200,000 1,242,736
------------ ------------
PREFERRED STOCK - 0.01%
Telex Communications, Inc. 17,707 $ 1 $ 17,708
------------ ------------
TOTAL PREFERRED STOCK 1 17,708
------------ ------------
WARRANTS - 0.00%
Telex Communications, Inc. 698 $ 7 $ 7
------------ ------------
TOTAL WARRANTS 7 7
------------ ------------
TOTAL CORPORATE PUBLIC SECURITIES $ 22,119,491 $ 17,330,441
------------ ------------
Interest Due Principal
SHORT-TERM SECURITIES: Rate/Yield Date Amount Cost Market Value
---------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 7.74%
C I T Group, Inc. 1.300% 04/02/03 $ 1,720,000 $ 1,719,938 $ 1,719,938
Caterpillar Financial Services Corporation 1.260 04/14/03 2,220,000 2,218,990 2,218,990
General Electric Capital Corporation 1.230 04/10/03 1,625,000 1,624,500 1,624,500
Praxair, Inc. 1.330 04/01/03 2,050,000 2,050,000 2,050,000
Schering-Plough Corporation 1.260 04/04/03 2,840,000 2,839,702 2,839,702
Washington Mutual Financial Corporation 1.300 04/03/03 3,500,000 3,499,747 3,499,747
------------ ------------ ------------
Total Short-Term Securities $ 13,955,000 $ 13,952,877 $ 13,952,877
============ ------------ ------------
Total Investments 108.61% $230,404,364 195,717,860
============ ------------
Other Assets 3.23 5,824,683
Liabilities (11.84) (21,344,592)
------ ------------
Total Net Assets 100.00% $180,197,951
====== ============
(A) In each of the convertible note, warrant, convertible preferred and common
stock investments, the issuer has agreed to provide certain registration
rights.
(B) Non-income producing security.
See Notes to Consolidated Financial Statements.
--------------------------------------------------------------------------------
24
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
INDUSTRY CLASSIFICATION
CORPORATE RESTRICTED SECURITIES: Fair Value
------------
AEROSPACE - 0.04%
Hexcel Corporation $ 78,000
------------
AUTOMOBILE - 5.71%
America's Body Co., Inc. 2,800,001
LIH Investors, L.P. 4,832,476
Nyloncraft, Inc. 2,660,054
------------
10,292,531
------------
BEVERAGE, FOOD & TOBACCO - 1.10%
Beta Brands, Inc. 732,559
Cains Foods, L.P. 113,611
Del Monte Corporation 234,000
Dole Food Company, Inc. 104,000
Premium Foods Group, Inc. 804,000
------------
1,988,170
------------
BROADCASTING &
ENTERTAINMENT - 0.22%
Echostar Communications, Inc. 387,500
------------
BUILDINGS & REAL ESTATE - 9.66%
Adorn, Inc. 2,357,081
Eagle Window & Door Holdings Co. 2,189,356
PGT Industries, Inc. 2,692,618
Shelter Acquisition, Inc. 2,227,757
Strategic Equipment & Supply Corp., Inc. 3,682,449
Therma-Tru Corporation 768,953
Truseal Technologies, Inc. 3,486,997
------------
17,405,211
------------
CARGO TRANSPORT - 2.21%
Kenan-Advantage Transport Company 2,166,435
Tidewater Holdings, Inc. 1,807,008
------------
3,973,443
------------
CHEMICAL, PLASTICS & RUBBER - 2.81%
Delstar Holdings Corporation 342
Process Chemicals LLC 2,847,255
RK Polymers LLC 2,205,939
------------
5,053,536
------------
CONSUMER PRODUCTS - 12.74%
Alpha Shirt Company 7,080,758
Colibri Holdings Corporation 2,139,216
Consumer Product Enterprises, Inc. 550,115
Corvest Group, Inc. 3,948,717
Dexter Magnetic Technologies, Inc. 1,608,079
G C-Sun Holdings, L.P. 1,293,759
Keepsake Quilting, Inc. 1,978,867
Neff Motivation, Inc. 1,072,117
The Tranzonic Companies 3,279,004
------------
22,950,632
------------
CONTAINERS, PACKAGING &
GLASS - 5.76%
C & K Financing Company LLC 6,764
Capitol Specialty Plastics, Inc. 403
Paradigm Packaging, Inc. 2,400,692
Plassein Packaging Corporation 76,361
Selig Acquisition Corporation 2,178,115
Snyder Industries, Inc. 3,187,505
Vitex Packaging, Inc. 2,531,449
------------
10,381,289
------------
DIVERSIFIED/CONGLOMERATE,
MANUFACTURING - 13.66%
D T Industries, Inc. 300,000
Evans Consoles, Inc. 2,625,878
Highgate Capital LLC 150,000
Hussey Seating Corporation 2,819,941
Jackson Products, Inc. 1,257
Jason, Inc. 1,901,929
NPC, Inc. 3,852,964
PW Eagle, Inc. 4,672,520
Safety Speed Cut Manufacturing Company, Inc. 3,733,383
Tinnerman-Palnut Engineered Components 2,124,141
Tyco International Group 185,564
Wicor Americas, Inc. 2,252,230
------------
24,619,807
------------
DIVERSIFIED/CONGLOMERATE,
SERVICE - 6.50%
Diversco, Inc./DHI Holdings, Inc. 1,113,655
Examination Management Services, Inc. 2,944,231
Hamilton Funeral Services Centers, Inc. 380,271
Lancaster Laboratories, Inc. 2,083,519
Pharmaceutical Buyers, Inc. 897,241
Sabex 2002, Inc. 2,207,427
Washington Inventory Services, Inc. 2,085,856
------------
11,712,200
------------
ELECTRONICS - 6.66%
Advanced Micro Devices, Inc. 335,625
Computer Associates Int'l., Inc. 156,912
Coining Corporation of America LLC 2,219,460
Directed Electronics, Inc. 4,236,424
Evolve Software, Inc. --
Fairmarket, Inc. 312
Hyperion Solutions Corporation 197,750
Integration Technology Systems, Inc. 1,622,286
Precision Dynamics, Inc. 2,552,580
Progressive Software Holding, Inc. 13,139
Sanmina-SCI Corporation 487,775
Triquint Semiconductor, Inc. 184,781
------------
12,007,044
------------
--------------------------------------------------------------------------------
25
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
March 31, 2003
(Unaudited)
INDUSTRY CLASSIFICATION (Continued)
CORPORATE RESTRICTED SECURITIES: (Cont.) Fair Value
------------
FARMING & AGRICULTURE - 0.50%
Cuddy International Corporation $ 22,906
Polymer Technologies, Inc./
Poli-Twine Western, Inc. 855,762
Protein Genetics, Inc. 25,088
------------
903,756
------------
HEALTHCARE, EDUCATION &
CHILDCARE - 2.94%
Beacon Medical Products, Inc. 2,048,239
DHD Healthcare, Inc. 1,966,793
Enzymatic Therapy, Inc. 1,168,755
Viropharma, Inc. 105,350
------------
5,289,137
------------
HOME & OFFICE FURNISHINGS,
HOUSEWARES, AND DURABLE
CONSUMER PRODUCTS - 7.24%
Fasteners for Retail, Inc. 6,155,159
Moss, Inc. 1,491,291
Star International, Inc. 5,402,251
------------
13,048,701
------------
LEISURE, AMUSEMENT,
ENTERTAINMENT - 1.94%
Adventure Entertainment Corporation 10,353
Grand Expeditions, Inc 227,824
Olympic Sales, Inc. 3,264,074
------------
3,502,251
------------
MACHINERY - 4.07%
Ames True Temper Group 2,112,834
C & M Conveyor, Inc. 2,320,515
Cymer, Inc. 769,250
Weasler Holdings LLC 2,134,097
------------
7,336,696
------------
MINING, STEEL, IRON & NON
PRECIOUS METALS - 0.06%
Better Minerals & Aggregates 108,991
------------
MISCELLANEOUS - 1.13%
CapeSuccess LLC 5,862
Direct Holdings Finance 607,063
East River Ventures I, L.P. 39,814
General Semiconductor, Inc. 61,100
Invitrogen Corporation 370,281
Northwest Pipelines Corporation 264,055
USFlow Corporation 692,600
Victory Ventures LLC 2
Winsloew Escrow Corporation 9
------------
2,040,786
------------
OIL AND GAS - 1.39%
Chaparral Resources, Inc. 148
Chesapeake Energy Corporation 416,325
Mustang Ventures Company 2,093,370
------------
2,509,843
------------
PERSONAL TRANSPORTATION - 1.86%
Tronair, Inc. 3,354,018
------------
PUBLISHING/PRINTING - 0.12%
American Media Operation, Inc. 215,500
------------
RETAIL STORES - 2.63%
P H I Holdings Company 2,231,254
Remington Arms Company 213,500
TVI, Inc. 2,289,965
------------
4,734,719
------------
TECHNOLOGY - 0.19%
F E I Company 340,781
------------
TELECOMMUNICATIONS - 0.11%
Canwest Media, Inc. 200,000
Jordan Telecom Products --
------------
200,000
------------
TOTAL CORPORATE RESTRICTED
SECURITIES - 91.25% $164,434,542
============
--------------------------------------------------------------------------------
26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(Unaudited)
1. HISTORY
MassMutual Corporate Investors (the "Trust") commenced operations in 1971 as
a Delaware corporation. Pursuant to an Agreement and Plan of Reorganization
dated November 14, 1985, approved by shareholders, the Trust was organized as
a Massachusetts business trust under the laws of the Commonwealth of
Massachusetts, effective November 28, 1985.
The Trust is a non-diversified closed-end management 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'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.
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 MMCI Subsidiary Trust's results of operations have
been included in the accompanying consolidated 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 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 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.
--------------------------------------------------------------------------------
27
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 $164,434,542
(91.25% of net assets) as of March 31, 2003 ($166,387,779 at March 31, 2002)
whose values have been estimated by the Board of Trustees in the absence of
readily ascertainable market values. Due to the inherent uncertainty of
valuation, those estimated values may differ significantly from the values
that would have been used had a ready market for the securities existed, and
the differences could be material.
The values for corporate public securities are stated at the last reported
sales price or at prices based upon quotations obtained from brokers and
dealers as of March 31, 2003, subject to discount where appropriate, and are
approved by the Trustees.
Short-term securities with more than sixty days to maturity are valued at
fair value and short-term securities having a maturity of sixty days or less
are valued at amortized cost which approximates market value.
B. ACCOUNTING FOR INVESTMENTS:
Investment transactions are accounted for on the trade date. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. The Trust 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.
--------------------------------------------------------------------------------
28
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. INVESTMENT SERVICES FEE
Under an Investment Services Contract with the Trust, Babson has agreed to
use its best efforts to present to the Trust a continuing and suitable
investment program consistent with the investment objective and policies of
the Trust. Babson has further agreed that it will request each issuer of
securities which MassMutual is prepared to purchase in a private placement,
and which would be consistent with the investment policies of the Trust, to
offer such securities also to the Trust and that it will use its best efforts
to insure that such request is acceded to. MassMutual has agreed that,
subject to such orders of the Securities and Exchange Commission as may
apply, it will invest concurrently with the Trust in any such investment.
Babson will also represent 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 is obligated to provide administration of the day-to-day
operations of the Trust and to provide 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 quarter ended March
31, 2003 was:
PERFORMANCE
ADJUSTMENT AMOUNT
---------- ------
March 31, 2003 0.0625% $113,048
--------------------------------------------------------------------------------
29
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. 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 each of the periods
ended March 31, 2003 and 2002, the Trust incurred total interest expense on
the Note of $369,500.
The Trust may redeem the Note, in whole or in part, at the principal amount
proposed to be redeemed together with the accrued and unpaid interest thereon
through the redemption date plus the Make Whole Premium. The Make Whole
Premium equals the excess of (i) the present value of the scheduled payments
of principal and interest which the Trust would have paid but for the
proposed redemption, discounted at the rate of interest of U.S. Treasury
obligations whose maturity approximates that of the Note plus 0.50% over (ii)
the principal of the Notes proposed to be redeemed.
B. REVOLVING CREDIT AGREEMENT
The 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 March 31, 2003 and 2002, there were no outstanding loans drawn against
the revolving credit facility. For each of the periods ended March 31, 2003
and 2002, the Trust incurred $9,246 and $8,836, respectively, in expense
related to the undrawn portion.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE FOR THE
THREE MONTHS THREE MONTHS
ENDED 3/31/2003 ENDED 3/31/2002
--------------- ---------------
COST OF INVESTMENTS ACQUIRED
---------------------------------
Corporate restricted securities $ 15,639,034 $ 14,918,080
Corporate public securities 2,082,306 8,508,228
Short-term securities 148,356,274 114,258,936
PROCEEDS FROM SALES OR MATURITIES
---------------------------------
Corporate restricted securities $ 19,127,532 $ 16,414,862
Corporate public securities 1,568,693 9,404,675
Short-term securities 145,260,000 123,560,732
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of March 31, 2003. The net unrealized
depreciation of investments for financial reporting and federal tax purposes
as of March 31, 2003 is $34,686,504 and consists of $17,372,252 appreciation
and $52,058,756 depreciation.
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of March 31, 2002. The net unrealized
depreciation of investments for financial reporting and federal tax purposes
as of March 31, 2002 is $36,885,623 and consists of $10,747,414 appreciation
and $47,633,037 depreciation.
--------------------------------------------------------------------------------
30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(CONTINUED)
6. SUBSEQUENT EVENT
The Annual Meeting of Shareholders was held on Friday, April 11, 2003. The
Shareholders were asked to vote (a) to elect Robert E. Joyal as a trustee for
a one year term and to re-elect Stuart H. Reese and Martin T. Hart as
trustees for a three-year term; (b) to ratify the selection of Deloitte &
Touche LLP as auditors for the fiscal year ending December 31, 2003; and (c)
to approve the continuance of the Trust's current Investment Services
Contract with Babson. The Shareholders approved all of the proposals. The
Trust's other trustees (Donald E. Benson, Donald Glickman, Steven A.
Kandarian, Jack A. Laughery and Corine T. Norgaard) continue to serve their
respective terms following the April 11, 2003 Annual Shareholders Meeting.
The results of the Shareholder votes are set forth below.
The results of the votes are as follows:
a. ELECTION OF TRUSTEES:
SHARES: % OF SHARES
TRUSTEE: FOR WITHHELD TOTAL VOTED FOR
-------- --- -------- ----- ---------
Robert E. Joyal 6,913,650 55,124 6,968,774 99.21%
Stuart H. Reese 6,911,340 57,434 6,968,774 99.18%
Martin T. Hart 6,890,607 78,167 6,968,774 98.88%
b. RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS AUDITORS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2003.
SHARES: % OF SHARES
FOR AGAINST ABSTAINED TOTAL VOTED FOR
--- ------- --------- ----- ---------
6,895,124 37,086 36,564 6,968,774 98.94%
c. 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
--- ------- --------- ----- ---------
6,730,058 167,246 71,470 6,968,774 96.57%
7. CONTINGENCIES
The Trust, together with other investors including MassMutual, is a plaintiff
in two lawsuits in connection with private placement investments made by the
Trust in Sharp International Corporation ("Sharp"). Three managing
shareholders of Sharp, which is currently being liquidated in Chapter 7
liquidation proceedings, have pleaded guilty to criminal fraud charges. Two
separate civil lawsuits were brought in New York state court in an attempt to
recover damages for lost investment funds from Sharp's working capital lender
and auditors. The lawsuit involving Sharp's working capital lender has been
dismissed prior to trial. An appeal of this dismissal is pending. The lawsuit
against Sharp's auditor is in its preliminary stages. The Trust is unable to
estimate any potential recovery from these lawsuits.
--------------------------------------------------------------------------------
31
TRUSTEES OFFICERS
DONALD E. BENSON* STUART H. REESE CHAIRMAN
DONALD GLICKMAN ROGER W. CRANDALL PRESIDENT
MARTIN T. HART* CHARLES C. MCCOBB, JR. VICE PRESIDENT &
CHIEF FINANCIAL
ROBERT E. JOYAL OFFICER
STEVEN A. KANDARIAN STEPHEN L. KUHN VICE PRESIDENT &
SECRETARY
JACK A. LAUGHERY
MICHAEL P. HERMSEN VICE PRESIDENT
CORINE T. NORGAARD*
MARY WILSON KIBBE VICE PRESIDENT
STUART H. REESE
MICHAEL L. KLOFAS VICE PRESIDENT
RICHARD C. MORRISON VICE PRESIDENT
CLIFFORD M. NOREEN VICE PRESIDENT
RICHARD E. SPENCER, II VICE PRESIDENT
MARK B. ACKERMAN TREASURER
JOHN T. DAVITT, JR. COMPTROLLER
*MEMBER OF THE AUDIT COMMITTEE
DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN
MassMutual Corporate Investors offers a Dividend Reinvestment and Share
Purchase Plan. The Plan provides a simple way for shareholders to add to
their holdings in the Trust through the receipt of dividend shares issued by
the Trust or through the reinvestment of cash dividends in Trust shares
purchased in the open market. A shareholder may join the Plan by filling out
and mailing an authorization card to Shareholder Financial Services, Inc.,
the Transfer Agent. Participating shareholders will continue to participate
until they notify the Transfer Agent, in writing, of their desire to
terminate participation. Unless a shareholder elects to participate in the
Plan, he or she will, in effect, have elected to receive dividends and
distributions in cash.
Participating shareholders may also make additional contributions to the Plan
from their own funds. Such contributions may be made by personal check or
other means in an amount not less than $10 nor more than $5,000 per quarter.
Whenever the Trust declares a dividend payable in cash or shares, the
Transfer Agent, acting on behalf of each participating shareholder, will take
the dividend in shares only if the net asset value is lower than the market
price plus an estimated brokerage commission as of the close of business on
the valuation day. The valuation day is the last day preceding the day of
dividend payment. When the dividend is to be taken in shares, the number of
shares to be received is determined by dividing the cash dividend by the net
asset value as of the close of business on the valuation date or, if greater
than net asset value, 95% of the closing share price. If the net asset value
of the shares is higher than the market value plus an estimated commission,
the Transfer Agent, consistent with obtaining the best price and execution,
will buy shares on the open market at current prices promptly after the
dividend payment date.
The reinvestment of dividends does not, in any way, relieve participating
shareholders of any federal, state or local tax. For federal income tax
purposes, the amount reportable in respect of a dividend received in
newly-issued shares of the Trust will be the fair market value of the shares
received, which will be reportable as ordinary income and/or capital gains.
As compensation for its services, the Transfer Agent receives a fee of 5% of
any dividend and cash contribution (in no event in excess of $2.50 per
distribution per shareholder.)
Any questions regarding the Plan should be addressed to Shareholder Financial
Services, Inc., Agent for MassMutual Corporate Investors' Dividend
Reinvestment and Share Purchase Plan, P.O. Box 173673, Denver CO 80217-3673.