MassMutual
CORPORATE
INVESTORS
[LOGO]
REPORT for the NINE
MONTHS ENDED 9/30/02
MassMutual Corporate Investors Adviser
c/o David L. Babson & Company Inc. David L. Babson & Company Inc.
1500 Main Street, Suite 1100 Auditor
Springfield, Massachusetts 01115 Deloitte & Touche, LLP
(413) 226-1516 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
[LOGO]
MCI
LISTED
NYSE
THE NEW YORK STOCK EXCHANGE
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
October 31, 2002
We are pleased to present the September 30, 2002 Quarterly Report of MassMutual
Corporate Investors. The Board of Trustees declared a quarterly dividend of 36
cents per share, payable on November 14, 2002 to shareholders of record on
October 31, 2002. A dividend of 43 cents per share was paid in the previous
quarter.
The financial markets continued to decline during the third quarter. For the
quarter, the Dow Jones Industrial Average declined 17.43%, the sharpest
quarterly decline since the fourth quarter of 1987. The S&P 500 and Russell 2000
Indices had similar drops, declining 17.27% and 21.40%, respectively, during the
third quarter.
Fixed income markets continue to be mixed with higher quality indices up for the
quarter. On one hand, the Lehman Intermediate Government/Credit Bond Index and
the Lehman Government/Credit Bond Index both posted solid increases of 4.53% and
5.70%, respectively, for the quarter. On the other hand, high yield indices were
down significantly. For example, the Merrill Lynch High Yield Master II Index
declined 3.02% for the third quarter.
For the quarter ended September 30, 2002, the Trust earned 38 cents per share
compared to 43 cents per share in the previous quarter. Net assets of the Trust
as of September 30th were $173,375,477 or $19.71 per share compared to
$179,984,179 or $20.51 per share on June 30, 2002. This translated into a
negative 1.84% return for the quarter, based on change in net assets with
reinvestment of dividends.
During the quarter, two new private placement securities, totaling approximately
$4.5 million were added to the Trust's portfolio. The Trust purchased the
securities of C&M Conveyor and Shelter Acquisition, Inc. The weighted average
coupon of these investments was 11.1%. (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 been
declining. The decline in earnings is generally attributable to a decline in
interest rates and to the weak economic environment which has adversely impacted
the ability of some borrowers to pay their obligations. Due to this decline in
earnings, the Trustees voted to reduce the Trust's dividend to 36 cents per
share.
Thank you for your continued interest in and support of MassMutual Corporate
Investors.
Sincerely,
Robert E. Joyal
President
CONSOLIDATED STATEMENTS OF MASSMUTUAL CORPORATE INVESTORS
ASSETS AND LIABILITIES
September 30, 2002 and 2001
(Unaudited)
2002 2001
------------- -------------
ASSETS:
Investments
(See Consolidated Schedule of Investments)
Corporate restricted securities at fair value
(Cost 2002 - $206,926,192; 2001 - $198,902,417) $ 170,590,994 $ 165,661,462
Corporate public securities at market value
(Cost 2002 - $21,171,711; 2001 - $28,367,221) 13,036,174 18,271,828
Short-term securities at cost plus earned discount which
approximates market value 5,866,950 9,811,095
------------- -------------
189,494,118 193,744,385
Cash 167,420 367,351
Interest and dividends receivable, net 4,579,194 4,059,228
Receivable for investments sold 169,795 1,573,265
Other assets 6,994 88,133
------------- -------------
TOTAL ASSETS $ 194,417,521 $ 199,832,362
============= =============
LIABILITIES:
Payable for investments purchased $ 81,306 $ 1,426,620
Management fee payable 652,757 667,945
Note payable 20,000,000 20,000,000
Interest payable 187,711 187,711
Accrued expenses 71,669 99,321
Accounts payable 48,601 --
TOTAL LIABILITIES 21,042,044 22,381,597
NET ASSETS:
Common shares, par value $1.00 per share; an unlimited number authorized 8,796,351 8,703,079
Additional paid-in capital 100,416,972 98,523,695
Retained net realized gain on investments, prior years 100,353,354 100,353,354
Undistributed net investment income 4,582,680 4,587,240
Undistributed net realized gain on investments 3,696,855 8,619,745
Net unrealized depreciation of investments (44,470,735) (43,336,348)
TOTAL NET ASSETS 173,375,477 177,450,765
------------- -------------
TOTAL LIABILITIES AND NET ASSETS $ 194,417,521 $ 199,832,362
COMMON SHARES ISSUED AND OUTSTANDING 8,796,351 8,703,079
NET ASSET VALUE PER SHARE $ 19.71 $ 20.39
============= =============
See Notes to Financial Statements.
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2
CONSOLIDATED STATEMENTS OF OPERATIONS MASSMUTUAL CORPORATE INVESTORS
For the nine months ended September 30, 2002 and 2001
(Unaudited)
2002 2001
------------ ------------
INVESTMENT INCOME:
Interest $ 13,782,580 $ 14,454,249
Dividends 431,769 373,936
------------ ------------
TOTAL INCOME 14,214,349 14,828,185
------------ ------------
EXPENSES:
Management fees 2,014,780 2,046,189
Trustees' fees and expenses 85,873 109,404
Transfer Agent/Registrar's expenses 26,000 40,000
Interest 1,136,445 1,136,445
Reports to shareholders 75,600 85,500
Audit and legal 74,050 39,375
Other 109,321 59,698
------------ ------------
TOTAL EXPENSES 3,522,069 3,516,611
------------ ------------
NET INVESTMENT INCOME (2002 - $1.22 PER SHARE; 2001 - $1.30 PER SHARE) 10,692,280 11,311,574
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 3,159,106 8,619,745
Net change in unrealized depreciation of investments (9,198,638) (15,036,917)
------------ ------------
NET LOSS ON INVESTMENTS (6,039,532) (6,417,172)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,652,748 $ 4,894,402
============ ============
See Notes to Financial Statements.
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3
CONSOLIDATED STATEMENTS OF CASH FLOWS MASSMUTUAL CORPORATE INVESTORS
For the nine months ended September 30, 2002 and 2001
(Unaudited)
2002 2001
------------ ------------
NET DECREASE IN CASH:
Cash flows from operating activities:
Interest and dividends received $ 12,983,529 $ 14,158,683
Interest expense paid (1,136,445) (1,136,445)
Operating expenses paid (2,383,818) (2,676,649)
Federal income tax paid -- (1,160,120)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 9,463,266 9,185,469
------------ ------------
Cash flows from investing activities:
Increase (decrease) from short-term portfolio securities, net 4,799,663 (2,608,711)
Purchase of portfolio securities (47,392,403) (31,827,601)
Proceeds from disposition of portfolio securities 41,507,666 41,879,497
------------ ------------
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES (1,085,074) 7,443,185
------------ ------------
NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES 8,378,192 16,628,654
------------ ------------
Cash flows from financing activities:
Increase in receipts for shares issued on reinvestment of dividends 1,496,216 2,575,060
Cash dividends paid from net investment income (10,444,672) (13,034,620)
Cash dividends paid from net realized gain on investments (1,542,226) (6,879,442)
------------ ------------
NET CASH USED FOR FINANCING ACTIVITIES (10,490,682) (17,339,002)
------------ ------------
NET DECREASE IN CASH (2,112,490) (710,348)
Cash - beginning of year 2,279,910 1,077,699
------------ ------------
CASH - END OF PERIOD $ 167,420 $ 367,351
============ ============
RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET CASH FROM
OPERATING AND INVESTING ACTIVITIES:
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,652,748 $ 4,894,402
------------ ------------
Decrease in investments 3,966,495 12,367,878
(Increase) decrease in interest and dividends receivable, net (381,712) 542,135
Decrease (increase) in receivable for investments sold 63,519 (331,857)
Increase in other assets (6,994) (88,133)
Increase in payable for investments purchased 81,306 700,832
(Decrease) increase in management fee payable (5,662) 70,840
Increase (decrease) in accounts payable 38,118 (353,516)
Decrease in accrued expenses (29,626) (13,807)
Decrease in accrued taxes -- (1,160,120)
------------ ------------
TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS 3,725,444 11,734,252
------------ ------------
NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES $ 8,378,192 $ 16,628,654
============ ============
See Notes to Financial Statements.
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4
CONSOLIDATED STATEMENTS OF MASSMUTUAL CORPORATE INVESTORS
CHANGES IN NET ASSETS
For the nine months ended September 30, 2002 and 2001
(Unaudited)
2002 2001
------------- -------------
DECREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 10,692,280 $ 11,311,574
Net realized gain on investments 3,159,106 8,619,745
Net change in unrealized depreciation of investments (9,198,638) (15,036,917)
------------- -------------
Net increase in net assets resulting from operations 4,652,748 4,894,402
Net increase in shares of beneficial interest transactions 1,496,216 2,575,060
Dividends to shareholders from:
Net investment income (2002 - $.72 per share; 2001 - $.94 per share) (6,343,808) (8,149,194)
Net realized gains on investments (2002 - $.18 per share; 2001 - $.00 per share) (1,542,226) --
------------- -------------
TOTAL DECREASE IN NET ASSETS (1,737,070) (679,732)
NET ASSETS, BEGINNING OF YEAR 175,112,547 178,130,497
------------- -------------
NET ASSETS, END OF PERIOD (INCLUDING UNDISTRIBUTED NET
INVESTMENT INCOME IN 2002 - $4,582,680; 2001 - $4,587,240) $ 173,375,477 $ 177,450,765
============= =============
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 nine
months ended For the
9/30/2002 year ended
(Unaudited) 12/31/2001
---------- ----------
Net asset value:
Beginning of year $ 20.07 $ 20.74
---------- ----------
Net investment income 1.22 1.70
Net realized and unrealized gain on investments (0.68) (0.53)
---------- ----------
Total from investment operations 0.54 1.17
---------- ----------
Dividends from net investment income to common shareholders (0.72) (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 (0.90) (1.84)
---------- ----------
Net asset value:
End of period $ 19.71 $ 20.07
========== ==========
Per share market value:
End of period $ 23.20 $ 20.70
========== ==========
Total investment return:
Market value 7.51%* 1.88%
Net asset value 2.62%* 5.91%
Net assets (in millions):
End of period $ 173.38 $ 175.11
Ratio of operating expenses to average net assets 1.34%* 1.72%
Ratio of interest expenses to average net assets 0.64%* 0.84%
Ratio of total expenses to average net assets 1.98%* 2.56%
Ratio of net investment income to average net assets 6.01%* 8.20%
Portfolio turnover 22.24%* 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
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES - 98.39% (A)
PRIVATE PLACEMENT INVESTMENTS - 96.66%
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 $ 1,868,162 $ 2,188,750
Warrant, exercisable until 2010, to purchase
common stock at $.02 per share (B) 364 shs. 2/29/00 307,759 31,275
------------ ------------
2,175,921 2,220,025
------------ ------------
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 2,866,553 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
------------ ------------
4,371,913 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 3,147,163 3,322,397
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 58 shs. 11/2/98 513,333 1
------------ ------------
3,660,496 3,322,398
------------ ------------
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 1,933,467
10% Preferred Stock 153 shs. 2/28/02 153,334 149,424
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
------------ ------------
2,044,328 2,084,625
------------ ------------
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 62,263
Senior Secured Tranche A Floating Rate Note due 2008 $ 1,133,307 4/9/02 1,133,307 1,125,487
12% Senior Secured Note due 2010 $ 721,196 4/9/02 597,650 725,088
Limited Partnership Interest of Riverside Capital 152,329 int. 4/9/02 152,329 121,863
Appreciation Fund IV, L.P. (B)
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 1,390 shs. 4/9/02 127,497 14
------------ ------------
2,073,630 2,034,715
------------ ------------
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7
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A)(Continued)
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 $ 1,063,706
17.75% Senior Secured Tranche B Note
due 2005 (B) $ 802,824 12/23/97 802,823 401,412
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 8,322
Warrant, exercisable until 2005, to purchase
common stock at $.81 per share (B) 214,419 shs. 12/23/97 -- 2,144
------------ ------------
3,762,433 1,475,584
------------ ------------
BETTER MINERALS & AGGREGATES
A producer of high grade industrial and specialty silica
sands.
14% Redeemable Preferred Stock 964 shs. 9/30/99 531,736 403,486
Convertible Preferred Stock Series A and B, convertible
into common stock at $9.26 per share (B) 126,003 shs. 12/19/96 1,166,700 991,689
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
------------ ------------
2,626,006 2,074,497
------------ ------------
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 13,045
Senior Secured Series A Floating Rate
Term Note due 2002 (B) $ 2,141,158 8/29/96 2,141,158 42,823
12% Series B Term Note due 2004 $ 522,900 8/29/96 499,055 10,458
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 --
------------ ------------
3,444,857 66,326
------------ ------------
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 1,219,496
11% Senior Subordinated Note due 2010 $ 838,102 9/13/02 778,071 823,109
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
------------ ------------
2,388,020 2,296,989
------------ ------------
*12/19/96 and 9/30/99.
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8
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 $ 112,865
Warrant, exercisable until 2006, to purchase
partnership points at $.01 per point (B) 39 pts. 9/29/95 50,261 --
------------ ------------
158,369 112,865
------------ ------------
CAPESUCCESS LLC
A provider of diversified staffing services.
Common Stock (B) 6,855 shs. 4/29/00 37,702 1,885
Preferred Membership Interests (B) 1,882 int. 4/29/00 8,396 420
Common Membership Interests (B) 24,318 int. 4/29/00 108,828 5,442
------------ ------------
154,926 7,747
------------ ------------
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 6,395 205
------------ ------------
COINING CORPORATION OF AMERICA
A manufacturer of close tolerance parts and metal
stampings.
Senior Secured Floating Rate Revolving Credit
Facility due 2006 $ 43,210 1/7/02 43,210 36,888
Senior Secured Floating Rate Tranche A Note
due 2007 $ 1,339,506 6/26/01 1,339,506 1,300,393
12% Senior Secured Tranche B Note due 2008 $ 648,148 6/26/01 577,796 656,202
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
------------ ------------
2,363,984 2,253,812
------------ ------------
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 1,367,362 1,549,444
28% Preferred Stock 71 shs. 11/2/01 70,833 70,089
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
------------ ------------
2,235,070 2,097,661
------------ ------------
*12/30/97 and 5/29/99.
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9
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 $ 384,500 12/8/95 $ 384,500 $ 153,800
10.75% Senior Secured Term Note due 2003 $ 613,774 12/8/95 613,774 245,510
Senior Secured Floating Rate Term Note due 2003 $ 311,445 12/8/95 311,445 124,578
12% Senior Subordinated Note due 2005 $ 800,575 12/8/95 780,177 160,115
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 --
------------ ------------
2,325,309 684,003
------------ ------------
CORVEST GROUP, INC.
A manufacturer and distributor of promotional products.
12% Senior Subordinated Note due 2007 $ 3,863,636 * 3,659,430 3,498,909
Common Stock (B) 56 shs. * 96,591 72,436
Limited Partnership Interest (B) 19.32% int. * 286,772 215,076
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 183 shs. * 297,203 236,683
------------ ------------
4,339,996 4,023,104
------------ ------------
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 (B) 3,514 shs. 10/5/01 427,153 35
------------ ------------
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 1,061,857 1,220,159
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
------------ ------------
1,897,613 1,746,797
------------ ------------
DHD HEALTHCARE, INC.
A designer, manufacturer and distributor of plastic, non-
invasive medical devices used for respiratory care.
Senior Secured Floating Rate Tranche A Note
due 2008 $ 1,320,702 2/8/01 1,320,702 1,325,589
12% Senior Secured Tranche B Note due 2009 $ 574,220 2/8/01 492,190 591,441
Limited Partnership Interests of Riverside
Capital Appreciation Fund III, L.P. (B) 2.81% int. 2/8/01 163,896 131,117
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 927 shs. 2/8/01 82,030 9
------------ ------------
2,058,818 2,048,156
------------ ------------
*3/5/99 and 3/24/99.
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10
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 $ 3,037,031 $ 3,455,926
8% Convertible Class B Subordinated
Promissory Note due 2008 $ 89,442 12/22/99 89,061 92,143
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
------------ ------------
4,340,141 4,268,733
------------ ------------
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
Warrants, exercisable until 2003 &
2011, to purchase common stock of
DHI Holdings, Inc. at $.01 per share (B) 13,352 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 1,168,093 393,527
------------ ------------
2,168,093 843,527
------------ ------------
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 1,622,211 1,954,356
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
------------ ------------
2,132,211 2,156,860
------------ ------------
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
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 (B) $ 1,593,750 3/30/00 $ 1,314,844 $ 1,115,625
Limited Partnership Interest (B) 1.43% 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
------------ ------------
2,101,094 1,168,755
------------ ------------
EVANS CONSOLES, INC.
A designer and manufacturer of consoles and control
center systems.
Senior Secured Tranche A Floating Rate Note
due 2005 $ 999,800 3/2/98 999,800 688,162
8.85% Senior Secured Tranche A Note due 2005 $ 999,800 3/2/98 999,800 793,841
11.75% Senior Secured Tranche B Note due 2006 $ 700,000 3/2/98 638,132 561,750
Senior Secured Floating Rate Revolving Credit
Facility due 2005 $ 890,000 3/2/98 890,000 608,582
Common Stock (B) 26,906 shs. 2/11/98 94,880 47,440
Limited Partnership Interests of CM
Equity Partners (B) 126,445 int. 2/11/98 126,648 63,324
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 34,783 shs. 3/2/98 112,000 348
------------ ------------
3,861,260 2,763,447
------------ ------------
EVOLVE SOFTWARE, INC.
A provider of software for automating professional
services organizations.
Common Stock (B) 175 shs. 4/20/01 735 19
------------ ------------
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 1,988,907 1,971,757
Limited Partnership Interest (B) 5.27% int. 3/2/99 2,140,363 1,712,290
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 77,233 shs. 3/16/99 175,803 772
------------ ------------
4,305,073 3,684,819
------------ ------------
FAIRMARKET, INC.
A developer and deliverer of e-business selling and
marketing solutions for retailer, distributors and
manufacturers.
Common Stock (B) 217 shs. 4/20/01 371 228
------------ ------------
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 3,300,416 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
------------ ------------
4,363,343 4,691,099
------------ ------------
--------------------------------------------------------------------------------
12
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 $ 1,451,885 $ 1,293,750
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 880 shs. 3/2/00 347,288 9
1,799,173 1,293,759
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 * 3,697,924 950,678
Warrant, exercisable until 2007, to purchase
common stock at $1 per share (B) 338,280 shs. * 48,447 --
3,746,371 950,678
HIGHGATE CAPITAL LLC
An acquirer of controlling or substantial interests in
manufacturing and marketing entities.
Series A Preferred Units (B) 100,000 uts. 7/21/94 399,981 358,415
HUSSEY SEATING COMPANY
A manufacturer of spectator seating products.
Senior Secured Floating Rate Revolving
Note due 2006 $ 1,282,500 6/12/96 1,282,500 1,161,818
Senior Secured Floating Rate Note due 2006 $ 1,001,250 ** 1,001,250 907,032
Preferred Stock 13,500 shs. 8/3/01 1,223,211 917,406
Warrant, exercisable until 2006, to purchase
common stock at $.01 per share (B) 4,771 shs. *** 225,000 48
3,731,961 2,986,304
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 $ 1,737,191 6/1/00 1,737,191 1,673,903
Common Stock (B) 228 shs. 6/1/00 262,200 196,650
1,999,391 1,870,553
------------ ------------
*1/25/99 and 7/16/99.
**6/12/96 and 8/3/01.
***6/12/96 and 1/19/00.
--------------------------------------------------------------------------------
13
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 8/4/00 866,110 938,502
14% Cumulative Redeemable Preferred Stock Series A 289 shs. 8/4/00 289,224 278,277
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
------------ ------------
2,157,252 1,882,168
------------ ------------
KEEPSAKE QUILTING, INC.
A seller of quilting fabrics, books, patterns, kits and
notions to consumers.
Senior Secured Floating Rate
Revolving Note Due 2005 $ 91,432 91,732 91,732
Senior Secured Floating Rate Tranche A
Note due 2007 $ 1,114,543 6/16/00 1,114,543 1,109,082
12% Senior Secured Tranche B Note due 2008 $ 550,392 6/16/00 513,130 571,040
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
------------ ------------
2,095,743 2,069,290
------------ ------------
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 1,867,521
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 2,113,124
------------ ------------
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 1,383,779 1,677,750
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
------------ ------------
2,187,484 2,091,626
------------ ------------
--------------------------------------------------------------------------------
14
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 * $ 3,407,541 $ 3,837,310
Common Stock (B) 58,001 shs. * 406,003 25,520
Warrant, exercisable until 2006, to purchase
common stock at $.11 per share (B) 108,404 shs. * 602,127 38,158
------------ ------------
4,415,671 3,900,988
------------ ------------
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 6/28/95 461,536 459,670
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
------------ ------------
863,734 633,143
------------ ------------
MERIT INDUSTRIES, INC.
A designer and manufacturer of coin-operated video and
dart games.
15% Senior Subordinated Note due 2006 $ 2,753,515 8/19/98 2,612,762 2,777,557
Limited Partnership Interests of
Riverside X Holding Company L.P. (B) 6.30% int. ** 1,377,812 1,231,251
Warrant, exercisable until 2006, to purchase
limited partnership interests at $.01 per share (B) 1,855 int. 8/19/98 185,411 19
------------ ------------
4,175,985 4,008,827
------------ ------------
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 9/21/00 386,363 210,125
Limited Partnership Interest of
Riverside Capital Appreciation Fund I L.P. (B) 6.23% int. 9/20/00 311,466 77,867
Warrant, exercisable until 2008, to purchase
common stock at $100 per share (B) 463 shs. 9/21/00 40,344 5
------------ ------------
2,267,883 1,052,853
------------ ------------
*12/23/98 and 1/28/99.
**8/12/98 and 3/3/00.
--------------------------------------------------------------------------------
15
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 $ 3,823,462
Warrant, exercisable until 2008, to purchase
common stock at $12 per share (B) 184,525 shs. 11/24/99 -- 1,845
------------ ------------
3,875,000 3,825,307
------------ ------------
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 6/25/99 373,728 359,116
Senior Secured Floating Rate Note due 2006 $ 2,509,322 6/25/99 2,509,322 2,406,942
12% Senior Secured Tranche B Note due 2007 $ 978,814 6/25/99 875,284 955,649
Limited Partnership Interests of Riverside XIII
Holding Company L.P. (B) 4.45% int. 6/11/99 295,250 221,438
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 201 shs. 6/25/99 142,373 2
------------ ------------
4,195,957 3,943,147
------------ ------------
NYLONCRAFT, INC.
A supplier of engineered plastic components for the
automotive industry.
9% Senior Secured Note due 2009 $ 812,500 1/28/02 812,500 824,940
11.5% Senior Subordinated Note due 2012 $ 1,500,000 1/28/02 1,343,827 1,509,865
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
------------ ------------
2,630,872 2,618,487
------------ ------------
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 2,569,974 2,654,304
12% Senior Subordinated Note due 2008 $ 307,071 2/9/00 277,409 297,658
Limited Partnership Interest of Riverside VIII
Holding Company L.P. (B) 8.31% int. * 1,393,647 1,111,882
Warrants, exercisable until 2007 and 2008, to purchase
common stock at $.01 per share (B) 25,793 shs. ** 389,188 287
------------ ------------
4,630,218 4,064,131
------------ ------------
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 1,896,220 2,156,723
Membership Interests of MM/Lincap
PPI Investments, Inc., LLC (B) 265,625 int. 12/21/00 265,625 212,500
------------ ------------
2,161,845 2,369,223
------------ ------------
*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
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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% Senior Subordinated Notes due 2009 $ 1,965,000 1/29/01 $ 1,733,751 $ 2,043,600
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
------------ ------------
2,113,270 2,283,443
------------ ------------
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 11/30/95 310,982 315,954
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 (B) 6 shs. 11/30/95 337,500 440,948
------------ ------------
843,482 1,037,156
------------ ------------
PLASSEIN PACKAGING, INC.
A manufacturer of flexible packaging products.
13% Senior Subordinated Note due 2007 (B) $ 763,608 8/15/00 653,574 381,804
12% Junior Subordinated Note due 2008 (B) $ 658,905 8/15/00 444,207 197,672
15% Junior Subordinated Note due 2008 (B) $ 73,494 11/14/01 71,969 22,048
Convertible Preferred Stock, convertible into
common stock at $1 per share (B) 288,256 shs. 8/15/00 288,256 28,826
Common Stock (B) 446,960 shs. 8/15/00 289,552 28,956
Warrants, exercisable until 2007 and 2008, to purchase
common stock at $.01 per share (B) 482,594 shs. * 95,840 4,826
------------ ------------
1,843,398 664,132
------------ ------------
POLYMER TECHNOLOGIES, INC./POLI-TWINE WESTERN, INC.
A leading manufacturer of polypropylene twine for the hay
bailing marketplace.
8% Senior Subordinated Note due 2010 $ 743,750 9/27/02 743,722 669,375
Preferred Series A Stock 1062 shs. 9/27/02 958,922 26,562
Preferred Series B Stock 239 shs. 9/27/02 232,880 5,976
Common Stock (B) 159375 shs. 9/27/02 79,688 --
Warrant, exercisable until 2010, to purchase
common stock at $.01 per share (B) 800293 shs. 9/27/02 109,789 --
------------ ------------
2,125,001 701,913
------------ ------------
PRECISION DYNAMICS, INC.
A manufacturer of custom-designed solenoid valves and controls
Senior Secured Floating Rate Revolving Credit.
Facility due 2003 $ 896,500 7/22/96 896,500 778,162
Senior Secured Floating Rate Term Note due 2003 $ 1,532,200 7/22/96 1,532,200 1,329,950
12% Senior Secured Term Note due 2004 $ 489,000 7/22/96 459,983 431,249
8% Preferred Stock 374 shs. 7/22/96 231,964 173,857
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
------------ ------------
3,247,425 2,727,710
------------ ------------
*8/15/00 and 11/14/01.
--------------------------------------------------------------------------------
17
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 $ 1,529,958 $ 1,875,630
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
------------ ------------
2,661,030 2,599,301
------------ ------------
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 2,645,836
Common Membership Interests 9,863 int. * 13,049 38,802
------------ ------------
2,794,041 2,684,638
------------ ------------
PROGRESSIVE SOFTWARE HOLDINGS
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 14,599
Warrant, exercisable until 2005, to purchase
common stock at $2.03 per share (B) 218,182 shs. 5/26/98 1 --
------------ ------------
3,500,004 14,599
------------ ------------
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. ** 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 $ 3,503,535 9/16/99 3,499,380 3,276,185
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 197,040 shs. 9/16/99 1 557,012
------------ ------------
3,499,381 3,833,197
------------ ------------
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 2,167,478
Warrant, exercisable until 2011, to purchase
common stock at $.01 per share (B) 212 shs. 2/28/01 205,469 2
------------ ------------
2,125,000 2,167,480
------------ ------------
*7/31/97 and 1/4/99.
**11/14/01 and 8/12/94.
--------------------------------------------------------------------------------
18
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
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 $ 1,992,453 $ 2,174,552
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 51,088 shs. 4/19/02 138,052 511
------------ ------------
2,130,505 2,175,063
------------ ------------
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 $ 2,331,970 6/2/99 2,331,970 2,331,970
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. 6/2/99 256,212 156,762
------------ ------------
3,718,834 3,630,691
------------ ------------
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 1,948,067 2,143,734
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 2,011 shs. 6/13/02 182,023 20
------------ ------------
2,130,090 2,143,754
------------ ------------
SHELTER ACQUISITION, INC.
A distributor of roofing supplied and products throughout
the Midwest.
12.5% Senior Subordinated Note due 2008 $ 1,517,857 8/1/02 1,305,002 1,520,036
Common Stock (B) 607,143 shs. 8/1/02 607,143 485,714
Warrant, exercisable until 2009, to purchase
common stock at $.01 per share (B) 263,444 shs. 8/1/02 216,446 2,634
------------ ------------
2,128,591 2,008,384
------------ ------------
SNYDER INDUSTRIES, INC.
A manufacturer of proprietary rotationally molded
polyethylene containers.
12.25% Senior Subordinated Note due 2007 $ 3,125,000 12/6/99 2,796,327 3,166,815
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 513 shs. 12/6/99 426,136 5
------------ ------------
3,222,463 3,166,820
------------ ------------
SPECTAGUARD ACQUISITION LLC
The tenth largest provider of security officers in the
United States.
14% Senior Subordinated Note due 2008 $ 2,073,901 3/1/00 2,038,434 2,156,857
Preferred LLC Interests (B) 109 int. 3/1/00 108,854 102,950
Common LLC Interests (B) 100,179 int. 3/1/00 14,844 11,875
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 257,000 shs. 3/1/00 35,980 2,570
------------ ------------
2,198,112 2,274,252
------------ ------------
--------------------------------------------------------------------------------
19
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A)(Continued)
STAR INTERNATIONAL, INC.
A manufacturer of commercial cooking appliances.
11% Senior Secured Note due 2004 $ 2,282,975 1/25/00 $ 2,216,408 $ 2,277,131
9.65% Senior Secured Note due 2004 $ 469,254 5/27/94 469,254 462,457
10.5% Subordinated Note due 2004 $ 716,418 5/27/94 716,418 698,621
Common Stock (B) 4,310 shs. 5/27/94 259,735 165,449
Warrant, exercisable until 2004, to purchase
common stock at $.01 per share (B) 4,621 shs. * 171,830 177,336
------------ ------------
3,833,645 3,780,994
------------ ------------
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 3,356,604 3,616,162
Warrant, exercisable until 2008, to purchase
common stock at $.01 per share (B) 106,539 shs. 1/14/00 658,751 1,065
------------ ------------
4,015,355 3,617,227
------------ ------------
TELEX COMMUNICATIONS, INC.
A designer, manufacturer and marketer of sophisticated
audio, wireless and multimedia communications
equipment.
Preferred Stock Series B (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 2,471,477 2,739,120
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
------------ ------------
3,470,309 3,306,124
------------ ------------
THERMA-TRU CORPORATION
A manufacturer of residential exterior entry door systems.
12.25% Senior Subordinated Note due 2009 $ 1,236,000 5/9/00 993,398 1,273,080
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 73,067
------------ ------------
2,053,968 2,042,029
------------ ------------
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
------------ ------------
*5/27/94 and 1/25/00.
--------------------------------------------------------------------------------
20
CONSOLIDATED SCHEDULE OF INVESTMENTS(CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A)(Continued)
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 $ 1,890,917
Membership Interests (B) 250,000 int. 12/6/01 250,000 225,000
------------ ------------
2,125,000 2,115,917
------------ ------------
TRANSMONTAIGNE OIL COMPANY - A.S.E.
An independent petroleum products marketing company.
Common Stock (B) 333,326 shs. * 1,109,117 1,659,964
------------ ------------
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 2,294,371
12% Senior Subordinated Note due 2010 $ 1,326,500 1/20/00 1,244,201 1,240,675
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
------------ ------------
3,938,891 3,719,572
------------ ------------
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 2,483,998 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 52,636
------------ ------------
3,685,530 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 1,930,112 1,980,745
Common Stock (B) 354,167 shs. 5/2/00 354,167 247,917
------------ ------------
2,284,279 2,228,662
------------ ------------
USFLOW CORPORATION
A distributor of industrial pipes, valves and fittings.
12.5% Senior Subordinated Note due 2007 (B) $ 3,463,000 12/14/99 3,104,356 2,424,100
Class B Common Stock (B) 664 shs. 12/14/99 664,200 6,642
Warrant, exercisable until 2007, to purchase
common stock at $.01 per share (B) 565 shs. 12/14/99 461,733 6
------------ ------------
4,230,289 2,430,748
------------ ------------
*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
September 30, 2002
(Unaudited)
Shares, Units,
Warrants,
Ownership or Acquisition Fair Value
Principal Amount Date Cost at 9/30/02
---------------- -------- ------------ ------------
CORPORATE RESTRICTED SECURITIES (A)(Continued)
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
------------ ------------
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 1,901,154 2,159,559
Limited Partnership Interests of Riverside VI
Holding Company L.P. (B) 4.80% int. * 351,320 281,054
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
------------ ------------
2,559,938 2,504,404
------------ ------------
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 1,604,584 1,705,958
Senior Preferred Stock (B) 4,692 shs. 11/1/00 469,160 470,909
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
------------ ------------
2,132,507 2,184,970
------------ ------------
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 2,221,872
------------ ------------
TOTAL PRIVATE PLACEMENT INVESTMENTS 202,996,809 167,590,415
------------ ------------
**12/30/97 and 9/9/99.
**1/2/98 and 12/18/00.
--------------------------------------------------------------------------------
22
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares or
Interest Due Principal Fair Value
Rate Date Amount Cost at 9/30/02
---- ---- ------ ---- ----------
CORPORATE RESTRICTED SECURITIES (A) (CONTINUED)
RULE 144A SECURITIES - 1.73%: (A)
BONDS - 0.18%
Cuddy International Corp. (B) 10.750% 12/01/07 $ 233,313 $ 229,827 $ 97,991
JohnsonDiversey, Inc. 9.625 05/15/12 210,000 210,000 210,000
----------- ------------- -------------
Total Bonds $ 443,313 439,827 307,991
=========== ------------- -------------
CONVERTIBLE BONDS - 1.55%
Advanced Micro Devices, Inc. 4.750% 02/01/22 $ 500,000 397,449 295,000
Cymer, Inc. 3.500 02/15/09 850,000 850,000 650,250
Echostar Communications, Inc. 4.875 01/01/07 400,000 400,000 301,500
FEI Company 5.750 08/15/08 375,000 375,000 273,281
General Semiconductor, Inc. 5.750 12/15/06 65,000 58,663 57,038
Hyperion Solutions Corp. 4.500 03/15/05 200,000 200,000 186,500
Invitrogen Corp. 2.250 12/15/06 425,000 425,000 337,875
Sanmina-SCI Corp. 0.000 09/12/20 1,090,000 453,712 348,800
Triquint Semiconductor, Inc. 4.000 03/01/07 225,000 168,442 167,344
Viropharma, Inc. 6.000 03/01/07 215,000 147,281 66,112
----------- ------------- -------------
TOTAL CONVERTIBLE BONDS $ 4,345,000 3,475,547 2,683,700
=========== ------------- -------------
Common Stock - 0.00%
Jordan Telecom Products (B) 70 14,000 --
------------- -------------
Total Common Stock 14,000 --
------------- -------------
Warrants - 0.00%
Winsloew Escrow Corp. (B) 900 9 8,888
------------- -------------
Total Warrants 9 8,888
------------- -------------
Total Rule 144A Securities 3,929,383 3,000,579
------------- -------------
Total Corporate Restricted Securities $ 206,926,192 $ 170,590,994
------------- -------------
--------------------------------------------------------------------------------
23
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares or
Interest Due Principal Market Value
Rate Date Amount Cost at 9/30/02
---- ---- ------ ---- ----------
CORPORATE PUBLIC SECURITIES - 7.52%: (A)
BONDS - 2.30%
Derby Cycle Corp. (B) 10.000% 05/15/08 $ 340,300 $ 340,300 $ 3,403
G F S I, Inc. 9.625 03/01/07 145,000 122,538 115,819
Isle of Capri Casinos, Inc. 9.000 03/15/12 450,000 450,000 462,375
L L S Corp. (B) 11.625 08/01/09 500,000 445,000 25,000
Neff Corp. 10.250 06/01/08 230,000 227,688 98,900
Numatics, Inc. 9.625 04/01/08 550,000 540,960 253,000
Remington Products Co. 11.000 05/15/06 600,000 595,506 486,000
Sports Club Co. 11.375 03/15/06 600,000 582,000 539,250
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 1,037,400
Winsloew Escrow Corp. 12.750 08/15/07 900,000 879,472 754,875
----------- ------------- -------------
TOTAL BONDS $ 6,053,482 5,755,285 3,981,272
=========== ------------- -------------
COMMON STOCK - 1.96%
Computer Horizons Corp. (B) 32,068 301,942 119,293
EOS International, Inc. (B) 100,000 300,000 42,000
Florist Transworld Delivery, Inc. (B) 29,374 41,258 406,830
H C I Direct, Inc. (B) 1,000 -- 100
Key3media Group, Inc. (B) 195,000 984,750 2,925
PepsiAmericas, Inc. 92,145 2,006,365 1,308,459
Proton Energy Systems, Inc. (B) 26,000 328,859 55,120
Rent-Way, Inc. (B) 92,866 916,263 278,598
Suprema Specialties, Inc. (B) 32,500 414,375 33
Supreme Industries, Inc. (B) 105,202 267,325 468,149
T G C Industries (B) 6,361 9,497 954
Titan Corp. (B) 58,052 173,221 557,299
Vina Technologies, Inc. (B) 572 1,687 92
W E C Company, Inc. (B) 5,938 800,000 159,990
------------- -------------
TOTAL COMMON STOCK 6,545,542 3,399,841
------------- -------------
--------------------------------------------------------------------------------
24
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
Shares or
Interest Due Principal Market Value
Rate Date Amount Cost at 9/30/02
---- ---- ------ ---- ----------
CORPORATE PUBLIC SECURITIES: (A) (Continued)
CONVERTIBLE BONDS - 2.98%
B E A Systems, Inc. 4.000% 12/15/06 $ 525,000 $ 382,594 $ 403,594
Charter Communications, Inc. 4.750 06/01/06 660,000 660,000 282,975
Commscope, Inc. 4.000 12/15/06 185,000 179,550 136,650
Corning Inc. 0.000 11/08/15 795,000 589,829 347,813
Cypress Semiconductor Corp. 4.000 02/01/05 210,000 210,000 164,063
Echostar Communications 4.875 01/01/07 1,000,000 805,000 753,750
FEI Company 5.500 08/15/08 1,160,000 1,080,300 845,350
Hyperion Solutions Corp. 4.500 03/15/05 50,000 35,500 46,625
Mediacom Communications Corp. 5.250 07/01/06 1,045,000 1,045,000 680,556
Nextel Communications 4.750 07/01/07 870,000 530,700 643,800
S C I Systems, Inc. 3.000 03/15/07 800,000 727,038 476,000
Sanmina-SCI Corp. 0.000 09/12/20 1,190,000 425,373 380,800
----------- ------------- -------------
TOTAL CONVERTIBLE BONDS $ 8,490,000 6,670,884 5,161,975
=========== ------------- -------------
CONVERTIBLE PREFERRED STOCK - 0.28%
Lucent Technologies Capital Trust I 2,200 2,200,000 493,086
------------- -------------
TOTAL CONVERTIBLE PREFERRED STOCK 2,200,000 493,086
------------- -------------
TOTAL CORPORATE PUBLIC SECURITIES $ 21,171,711 $ 13,036,174
------------- -------------
Interest Due Principal Market Value
Rate/Yield Date Amount Cost at 9/30/02
---- ---- ------ ---- -----------
SHORT-TERM SECURITIES:
COMMERCIAL PAPER - 3.39%
Conagra Foods, Inc. 1.810% 10/02/02 $ 975,000 $ 974,951 $ 974,951
Pearson Holdings, Inc. 1.920 10/09/02 1,510,000 1,509,356 1,509,356
Sears Roebuck Acceptance 1.900 10/01/02 1,300,000 1,300,000 1,300,000
Washington Mutual Insurance Corp. 1.850 10/01/02 2,085,000 2,082,643 2,082,643
----------- ------------- -------------
TOTAL SHORT-TERM SECURITIES $ 5,870,000 $ 5,866,950 $ 5,866,950
=========== ------------- -------------
TOTAL INVESTMENTS 109.30% $ 233,964,853 $ 189,494,118
============= -------------
Other Assets 2.84 4,923,403
Liabilities (12.14) (21,042,044)
------ -------------
TOTAL NET ASSETS 100.00% $ 173,375,477
====== =============
(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
September 30, 2002
(Unaudited)
INDUSTRY CLASSIFICATION
Fair Value
CORPORATE RESTRICTED SECURITIES: at 9/30/02
------------
AUTOMOBILE - 5.68%
America's Body Co., Inc./LCP Holding Co. $ 3,322,398
LIH Investors, L.P. 3,900,988
Nyloncraft, Inc. 2,618,487
------------
9,841,873
------------
BEVERAGE, FOOD &
TOBACCO - 2.41%
Beta Brands, Inc. 1,475,584
Cains Foods, L.P. 112,865
Premium Foods Group 2,599,301
------------
4,187,750
------------
BROADCASTING &
ENTERTAINMENT - 0.17%
Echostar Communications, Inc. 301,500
------------
BUILDINGS & REAL ESTATE - 10.26%
Adorn, Inc. 2,220,025
Eagle Window & Door Holdings Co. 2,156,860
PGT Industries, Inc. 2,283,443
Shelter Acquisition, Inc. 2,008,384
Strategic Equipment & Supply Partners, Inc. 3,617,227
Therma-Tru Corporation 2,042,029
Truseal Technologies, Inc. 3,469,776
------------
17,797,744
------------
CARGO TRANSPORT - 1.95%
Kenan-Advantage Transport Company 2,113,124
Tidewater Holdings, Inc. 1,275,008
------------
3,388,132
------------
CHEMICAL, PLASTICS &
RUBBER - 2.80%
Delstar Holdings Corp. 35
Process Chemicals LLC 2,684,638
RK Polymers LLC 2,167,480
------------
4,852,153
------------
CONSUMER PRODUCTS - 11.54%
Alpha Shirt Company 4,791,672
Colibri Holdings Corporation 2,097,661
Consumer Product Enterprises, Inc. 684,003
Corvest Group, Inc. 4,023,104
Dexter Magnetic Technologies, Inc. 1,746,797
G C-Sun Holdings, L.P. 1,293,759
Keepsake Quilting, Inc. 2,069,290
The Tranzonic Companies 3,306,124
------------
20,012,410
------------
Fair Value
CORPORATE RESTRICTED SECURITIES: (CONT.) at 9/30/02
------------
CONTAINERS, PACKAGING &
GLASS - 6.30%
C & K Manufacturing and Sales Company $ 66,326
Capitol Specialty Plastics, Inc. 403
Paradigm Packaging, Inc. 2,369,223
Plassein Packaging, Inc. 664,132
Selig Acquisition Corporation 2,143,754
Snyder Industries, Inc. 3,166,820
Vitex Packaging, Inc. 2,504,404
------------
10,915,062
------------
DIVERSIFIED/CONGLOMERATE, MANUFACTURING - 14.72%
D T Industries, Inc. 843,527
Evans Consoles, Inc. 2,763,447
Highgate Capital LLC 358,415
Hussey Seating Company 2,986,304
Jackson Products, Inc. 307,282
Jason, Inc. 1,882,168
Maxtec International Corp. 633,143
NPC, Inc. 3,943,147
P W Eagle, Inc. 3,833,197
Safety Speed Cut Manufacturing Company, Inc. 3,630,691
Tinnerman-Palnut Engineered Components 2,115,917
Wicor Americas, Inc. 2,221,872
------------
25,519,110
------------
DIVERSIFIED/CONGLOMERATE, SERVICE - 8.71%
Diversco, Inc./DHI Holdings, Inc. 696,034
Examination Management Services, Inc. 3,684,819
Hamilton Funeral Services Centers, Inc. 950,678
Lancaster Laboratories, Inc. 2,091,626
Pharmaceutical Buyers, Inc. 1,037,156
Sabex 2002, Inc. 2,175,063
SpectaGuard Acquisition LLC 2,274,252
Washington Inventory Services, Inc. 2,184,970
------------
15,094,598
------------
ELECTRONICS - 7.00%
Advance Micro Devices, Inc. 295,000
Coining Corporation of America 2,253,812
Directed Electronics, Inc. 4,268,733
Evolve Software, Inc. 19
Fairmarket, Inc. 228
Hyperion Solutions Corp. 186,500
IBEAM Broadcasting Corporation --
Integration Technology Systems, Inc. 1,870,553
Precision Dynamics, Inc. 2,727,710
Progressive Software Holdings 14,599
Sanmina-SCI Corp. 348,800
Triquint Semiconductor, Inc. 167,344
------------
12,133,298
------------
--------------------------------------------------------------------------------
26
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONT.) MASSMUTUAL CORPORATE INVESTORS
September 30, 2002
(Unaudited)
INDUSTRY CLASSIFICATION (CONTINUED)
Fair Value
CORPORATE RESTRICTED SECURITIES: (CONT.) at 9/30/02
------------
FARMING & AGRICULTURE - 0.49%
Cuddy International Corp. $ 97,991
Polymer Technologies, Inc./
Poli-Twine Western, Inc. 701,913
Protein Genetics, Inc. 50,175
------------
850,079
------------
HEALTHCARE, EDUCATION & CHILDCARE - 5.27%
Beacon Medical Products, Inc. 2,034,715
DHD Healthcare, Inc. 2,048,156
Enzymatic Therapy, Inc. 1,168,755
Nexell Therapeutics 3,825,307
Viropharma, Inc. 66,112
------------
9,143,045
------------
HOME & OFFICE FURNISHINGS,
HOUSEWARES, AND DURABLE
CONSUMER PRODUCTS - 5.61%
Fasteners for Retail, Inc. 4,691,099
JohnsonDiversey, Inc. 210,000
Moss, Inc. 1,052,853
Star International, Inc. 3,780,994
------------
9,734,946
------------
LEISURE, AMUSEMENT, ENTERTAINMENT - 5.16%
Adventure Entertainment Corporation 20,705
Grand Expeditions, Inc. 850,100
Merit Industries, Inc. 4,008,827
Olympic Boat Centers, Inc. 4,064,131
------------
8,943,763
------------
MACHINERY - 2.90%
Ames Tru Temper, Inc. 2,084,625
C & M Conveyor, Inc. 2,296,989
Cymer, Inc. 650,250
------------
5,031,864
------------
MINING, STEEL, IRON & NON PRECIOUS METALS - 1.20%
Better Minerals & Aggregates 2,074,497
------------
Fair Value
CORPORATE RESTRICTED SECURITIES: (CONT.) at 9/30/02
------------
MISCELLANEOUS - 1.66%
CapeSuccess LLC $ 7,747
East River Ventures I, L.P. 27,481
General Semiconductor, Inc. 57,038
Invitrogen Corp. 337,875
USFlow Corp. 2,430,748
Victory Ventures LLC 2
Winsloew Escrow Corp. 8,888
------------
2,869,779
------------
OIL AND GAS - 0.96%
Chaparral Resources, Inc. 205
TransMontaigne Oil Company 1,659,964
------------
1,660,169
------------
PERSONAL TRANSPORTATION - 2.14%
Tronair, Inc. 3,719,572
------------
RETAIL STORES - 1.29%
TVI, Inc. 2,228,662
------------
TELECOMMUNICATIONS - 0.01%
Jordan Telecom Products --
Telex Communications, Inc. 17,707
------------
17,707
------------
TECHNOLOGY - 0.16%
F E I Company 273,281
------------
TOTAL CORPORATE RESTRICTED
SECURITIES - 98.39% $170,590,994
============
--------------------------------------------------------------------------------
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 $170,590,994
(98.39% of net assets) as of September 30, 2002 ($165,661,462 at September
30, 2001) 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 September 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.
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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, June 30, and September 30, 2002 was:
PERFORMANCE
ADJUSTMENT AMOUNT
---------- ------
March 31, 2002 0.0625% $114,090
June 30, 2002 0.0625% $112,914
September 30, 2002 0.0625% $108,793
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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 September 30, 2002 and 2001, the Trust incurred total interest expense
on the Note of $1,108,500.
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 September 30, 2002 and 2001, there were no outstanding loans drawn
against the revolving credit facility. For each of the periods ended
September 30, 2002 and 2001, the Trust incurred $27,945 in expense related to
the undrawn portion.
5. PURCHASES AND SALES OF INVESTMENTS
FOR THE FOR THE
NINE MONTHS NINE MONTHS
ENDED 9/30/2002 ENDED 9/30/2001
--------------- ---------------
COST OF INVESTMENTS ACQUIRED
---------------------------------
Corporate restricted securities $35,185,507 $21,320,129
Corporate public securities 12,288,203 11,208,303
Short-term securities 380,034,855 444,023,760
PROCEEDS FROM SALES OR MATURITIES
---------------------------------
Corporate restricted securities $28,894,611 $30,300,978
Corporate public securities 12,549,536 12,010,376
Short-term securities 384,834,518 441,415,049
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of September 30, 2002. The net unrealized
depreciation of investments for financial reporting and federal tax purposes
as of September 30, 2002 is $44,470,735 and consists of $11,142,640
appreciation and $55,613,375 depreciation.
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of September 30, 2001. The net unrealized
depreciation of investments for financial reporting and federal tax purposes
as of September 30, 2001 is $43,336,348 and consists of $12,877,181
appreciation and $56,213,529 depreciation.
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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
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
------------------ ------------------
Investment income 4,537,861 4,875,161
Net investment income 3,338,262 0.38 3,737,511 0.43
Net realized and unrealized
loss on investments (6,640,118) (0.75) (7,180,355) (0.82)
--------------------------------------------------------------------------------
32
TRUSTEES
Donald E. Benson*
Richard G. Dooley
Donald Glickman
Martin T. Hart*
Steven A. Kandarian
Jack A. Laughery
Corine T. Norgaard*
Stuart H. Reese
*Member of the Audit Committee
OFFICERS
Stuart H. Reese, Chairman
Richard G. Dooley, Vice Chairman
Robert E. Joyal, President
Charles C. McCobb, Jr., Vice President &
Chief Financial Officer
Stephen L. Kuhn, Vice President &
Secretary
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
Clifford M. Noreen, Vice President
Richard E. Spencer, II, Vice President
Mark B. Ackerman, Treasurer
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.
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