MassMutual
CORPORATE
INVESTORS
[CORPORATE INVESTORS LOGO]
REPORT for the THREE
MONTHS ENDED 3/31/95
<PAGE>
[CORPORATE INVESTORS LOGO]
INVESTMENT OBJECTIVE AND POLICY
MassMutual Corporate Investors is a closed-end investment company and its
shares are listed on the New York Stock Exchange. The share price of
Corporate Investors can be found in the financial sections of most newspapers
as "MasCp" under the New York Stock Exchange listings. The ticker 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 prerequisite to every
private placement purchased.
Corporate Investors' current portfolio is characterized by broad industrial
diversification. The entire portfolio is shown in the Schedule of Investments
in the Financial section of this Quarterly Report.
The Trust holds investments in a number of companies that are not publicly
traded at this time. Capital gains may be realized on holding of private
companies through various methods, including direct 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 May, August, November and January.
- -----------------------------------------------------------------------------
| FOR SHAREHOLDER SERVICE CONTACT: |
| |
| SHAREHOLDER FINANCIAL SERVICES, INC. |
| PO BOX 173673 |
| DENVER CO 80217-3673 |
| |
| 1-800-647-7374 |
| |
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<PAGE>
TO OUR SHAREHOLDERS:
We are pleased to present MassMutual Corporate Investors' report for the first
quarter of 1995.
The Trust's net asset value increased to $34.92 per share from $32.94 per share
at the end of the prior quarter, reflecting increased Trust earnings, improving
bond prices, and a stock market in record territory. Net investment income rose
to $2,738,763 or $.64 per share as compared to $2,444,990 or $.57 per share for
the comparable period in 1994, and $2,583,244 or $.60 per share in the prior
quarter.
A dividend of 70 cents per share was declared payable on May 11, 1995 to
shareholders of record on May 1, 1995. A dividend of 70 cents per share was
paid in the preceding quarter. For the past several quarters, we have been
cautioning investors about the level of the dividend not being supported by the
net earnings of the Trust. Although the gap has narrowed considerably, there is
still a shortfall currently made-up by the Trust's ability to generate gains.
Portfolio sales activity has been very favorable during the period. We have been
continuing to sell shares of Monro Muffler Brake, Inc. at a substantial profit.
This quarter alone we realized over $538,000 in gains from Monro, with our gain
to-date from this investment topping $3.15 million. In March, RailTex, Inc.
completed a secondary offering and we converted our note into common equity. We
have since sold a modest portion of our equity holdings at a gain of over
$411,000. On the public equity side, Chesapeake Energy Corporation and Officemax
Inc. were sold with gains totaling nearly $650,000. In total, gains for the
quarter were $2,915,882 or $.69 per share. Of this amount, net short-term gains,
which are required to be distributed to shareholders each year, were $.28 per
share. Potential gains still exist in fifteen private placement portfolio
securities in which the public stock market value on March 31st exceeded the
Trust's cost by $11.8 million.
Investment activity continued to be strong this year with two new private
placements closed during the quarter. We purchased a ten-year guaranteed senior
note with warrants from Hardy Oil & Gas USA, Inc., and a senior secured term-
note and convertible preferred stock from Latin Communications Group. Together
these investments provide an approximate yield of 9.3% with an opportunity for
gains via their equity features. A brief description of these companies is
provided in the Schedule of Investments. At the present time, four new private
placement investments have been approved for future investment with a total
value of over $9.5 million. Together, the fixed income component of these new
investments should contribute an average coupon of 11.2% to the portfolio in
addition to their capital gains potential.
On April 21, 1995, the Trust held its twenty-fifth Annual Meeting of
Shareholders. Richard G. Dooley, Donald E. Benson, and Donald Glickman were
re-elected as Trustees, Coopers & Lybrand L.L.P. was selected as auditors, and
the continuation of the Investment Services Contract was approved. We thank you
for your continued support and interest in Corporate Investors.
Sincerely,
Stuart H. Reese
President
April 28, 1995
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<TABLE>
<CAPTION>
MASSMUTUAL CORPORATE INVESTORS
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1995 and 1994
(Unaudited)
1995 1994
---------------- ----------------
Assets:
- -------
<S> <C> <C>
Investments (Notes 2A, 2B and 5)
(See Schedule of Investments)
Corporate restricted securities at fair value
(Cost 1995 - $97,088,006 ; 1994 - $98,164,279) $96,059,438 $95,829,300
Corporate public securities at market value
(Cost 1995 - $71,442,025 ; 1994 - $70,573,068) 70,154,134 71,749,750
Short-term securities at cost plus earned
discount which approximates market value 2,742,111 1,654,483
---------------- ----------------
168,955,683 169,233,533
Cash 65,239 96,795
Interest and dividends receivable, net 3,277,636 3,005,651
Receivable for investments sold 1,274,278 731,427
Receivable for principal payments 25,000 --
Other assets 12,128 17,136
---------------- ----------------
Total assets $173,609,964 $173,084,542
================ ================
Liabilities:
- ------------
Payable for investments purchased $4,144,188 $717,258
Management fee payable (Note 3) 557,396 568,283
Note payable (Note 4) 20,000,000 20,000,000
Interest payable (Note 4) 136,211 136,211
Accrued expenses 133,166 120,583
---------------- ----------------
Total liabilities 24,970,961 21,542,335
---------------- ----------------
Net Assets:
- -----------
Common shares, par value $1.00 per share;
an unlimited number authorized 4,256,724 4,256,724
Additional paid-in capital 98,590,717 98,590,717
Retained net realized gain on investments, prior years 42,226,726 42,226,726
Undistributed net investment income (Note 2C) 2,944,161 2,581,397
Undistributed net realized gain on investments 2,937,134 5,044,940
Net unrealized depreciation of investments (Notes 2A and 5) (2,316,459) (1,158,297)
---------------- ----------------
Total net assets 148,639,003 151,542,207
---------------- ----------------
Total liabilities and net assets $173,609,964 $173,084,542
================ ================
Common shares issued and outstanding 4,256,724 4,256,724
================ ================
Net asset value per share $34.92 $35.60
================ ================
See Notes to Financial Statements.
</TABLE>
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<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the three months ended March 31, 1995 and 1994
(Unaudited)
1995 1994
---------------- ----------------
<S> <C> <C>
Investment Income (Note 2B):
- ------------------
Interest $3,407,580 $3,285,235
Dividends 216,359 85,569
---------------- ----------------
Total income 3,623,939 3,370,804
---------------- ----------------
Expenses:
- ---------
Management fee (Note 3) 557,396 568,283
Trustees' fees and expenses 22,006 22,032
Transfer Agent/Registrar's expenses 7,500 21,066
Custodian's fees 4,764 9,000
Interest (Note 4) 266,500 266,500
Reports to shareholders 8,520 8,520
Audit and legal 12,000 16,800
Other 6,490 13,613
---------------- ----------------
Total expenses 885,176 925,814
---------------- ----------------
Net investment income 2,738,763 2,444,990
---------------- ----------------
Net realized and unrealized gain (loss)
on investments (Notes 2A and 2B):
Net realized gain on investments 2,915,882 5,044,719
Net change in unrealized appreciation/depreciation
of investments 2,751,205 (4,652,660)
---------------- ----------------
Net gain on investments 5,667,087 392,059
---------------- ----------------
Net increase in net assets resulting
from operations $8,405,850 $2,837,049
================ ================
See Notes to Financial Statements.
</TABLE>
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<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
For the three months ended March 31, 1995 and 1994
(Unaudited)
1995 1994
---------------- ----------------
<S> <C> <C>
Net increase in cash:
- --------------------------------
Cash flows from operating activities:
Interest and dividends received $3,155,096 $2,523,404
Interest expense paid (266,500) (293,150)
Operating expenses paid (573,710) (623,057)
---------------- ----------------
Net cash provided by operating activities 2,314,886 1,607,197
---------------- ----------------
Cash flows from investing activities:
Change in short-term portfolio securities, net 2,098,519 3,125,787
Purchase of portfolio securities (19,216,039) (29,678,665)
Proceeds from disposition of portfolio securities 17,835,239 28,006,026
---------------- ----------------
Net cash provided by investing activities 717,719 1,453,148
---------------- ----------------
Net cash provided by operating and investing activities 3,032,605 3,060,345
---------------- ----------------
Cash flows from financing activities:
Cash dividends paid from net investment income (2,026,193) (2,302,374)
Cash dividends paid from net realized gain on investments (953,514) (677,333)
---------------- ----------------
Net cash used for financing activities (2,979,707) (2,979,707)
---------------- ----------------
Net increase in cash 52,898 80,638
Cash - beginning of period 12,341 16,157
---------------- ----------------
Cash - end of period $65,239 $96,795
================ ================
See Notes to Financial Statements
</TABLE>
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<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS (Continued)
For the three months ended March 31, 1995 and 1994
(Unaudited)
1995 1994
---------------- ----------------
<S> <C> <C>
Reconciliation of net increase (decrease) in net assets to net
cash from operating and investing activities:
Net increase in net assets resulting from operations $8,405,850 $2,837,049
---------------- ----------------
Increase in investments (10,085,584) (1,407,364)
Increase in interest and dividends receivable, net (286,057) (637,994)
Decrease in receivable for investments sold 846,368 2,008,724
Increase in receivable for principal payments (25,000) --
(Increase) decrease in other assets (12,128) 5,363
Increase in payable for investments purchased 4,144,188 250,324
Increase in management fee payable 31,522 10,639
Decrease in interest payable -- (26,650)
Increase in accrued expenses 13,446 20,254
---------------- ----------------
Total adjustments to net assets from operations (5,373,245) 223,296
---------------- ----------------
Net cash provided by operating and investing activities $3,032,605 $3,060,345
================ ================
See Notes to Financial Statements.
</TABLE>
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<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
For the three months ended March 31, 1995 and 1994
(Unaudited)
Increase (decrease) in net assets: 1995 1994
- ---------------------------------- ---------------- ----------------
<S> <C> <C>
Operations:
Net investment income $2,738,763 $2,444,990
Net realized gain on investments 2,915,882 5,044,719
Net change in unrealized appreciation/depreciation
of investments 2,751,205 (4,652,660)
---------------- ----------------
Net increase in net assets resulting
from operations 8,405,850 2,837,049
Net Assets, beginning of period 140,233,153 148,705,158
---------------- ----------------
Net Assets, end of period (including undistributed net
investment income in 1995 - $2,944,161; 1994 - $2,581,397) $148,639,003 $151,542,207
================ ================
See Notes to Financial Statements.
</TABLE>
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<TABLE>
<CAPTION>
SELECTED PER SHARE DATA
Selected data for each common share outstanding for the periods ended:
For the For the
period ended Year
3/31/95 ended
(Unaudited) 12/31/94
------------- ------------
<S> <C> <C>
Net asset value:
Beginning of period $32.94 $34.93
------- -------
Net investment income 0.64 2.33
Net realized and unrealized
gain (loss) on investments 1.34 (1.52)
------- -------
Totals from investment operations 1.98 0.81
------- -------
Dividends from net investment
income to common shareholders -- (2.32)
Distributions for net realized
gain on investments to comon
shareholders -- (0.48)
------- -------
Total distributions -- (2.80)
------- -------
Net asset value:
End of period $34.92 $32.94
======= =======
Per Share Market Value:
End of period $30.75 $31.13
======= =======
Total Investment Return
Market Value (1.20)%* 14.03 %
Net Asset Value 6.01 %* 2.36 %
Net assets (in millions):
End of period $148.6 $140.2
Ratio of expenses to average
net assets 0.61 %* 2.48 %
Ratio of net investment income
to average net assets 2.51 %* 6.75 %
Portfolio turnover 10.71 %* 46.68 %
* Percentages represent results for the period and are not annualized
See Notes to Financial Statements.
</TABLE>
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<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
March 31, 1995
(Unaudited)
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES - 64.63% : (A) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Alliant Techsystems, Inc. - N.Y.S.E.
A producer of military tactical equipment and
a provider of information security services.
11.75% Senior Subordinated Note due 2003 $500,000 3/7/95 $500,000 $500,000 $510,625
------------ ------------- -------------
American Exploration Company - A.S.E.
An independent oil and gas company engaged principally
in the acquisition, development and management of oil
and gas properties.
11% Senior Subordinated Note due 2001 $3,000,000 12/27/91 2,964,600 2,961,288 2,726,700
Warrant, exercisable until 2001, to purchase
810,264 shares of common stock at $2.26 per
share (B) 810,264 shs 12/27/91 49,714 38,712 81,026
------------ ------------- -------------
3,014,314 3,000,000 2,807,726
------------ ------------- -------------
Ammirati & Puris, Inc.
An advertising agency that specializes in representing a
limited number of large and high quality clients.
14% Senior Secured Note due 1998 $1,750,000 11/23/93 1,714,300 1,750,000 1,989,750
------------ ------------- -------------
Aritech Corp. - O.T.C.
A worldwide manufacturer and distributor of
security and fire control systems.
10% Convertible Subordinated Note due 2000,
convertible into 41,996 shares of common
stock at $6.50 per share (B) $272,972 8/9/88 272,972 272,972 272,972
------------ ------------- -------------
Associated Natural Gas Corporation - N.Y.S.E.
A natural gas marketing company which purchases and
resells natural gas to utilities and industrial users.
9% Convertible Subordinated Note due 2004,
convertible into 135,563 shares of Panhandle
Eastern common stock at $22.13 per share $3,000,000 12/30/92 2,934,000 3,000,000 3,026,205
------------ ------------- -------------
BP Prudhoe Bay Royalty Trust - N.Y.S.E.
A trust which shares in the production of
petroleum from the Alaskan North Slope.
26,180 Units of Beneficial Interest 26,180 uts 2/28/89 654,500 420,908 445,060
------------ ------------- -------------
CalTex Industries, Inc.
A manufacturer of aluminum windows, doors
and extrusions.
13% Senior Subordinated Note due 1996 (B) $1,150,000 8/18/88 1,155,750 1,150,000 11,500
10% Junior Subordinated Note due 1995 (B) $262,500 2/19/92 182,831 262,498 2,625
Common Stock (B) 100,000 shs 8/18/88 97,000 100,000 1,000
Warrant, exercisable until 1997, to purchase
779,779 shares of common stock at $.10 per
share (B) 779,779 shs 2/19/92 1,000 2 7,798
------------ ------------- -------------
1,436,581 1,512,500 22,923
------------ ------------- -------------
</TABLE>
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<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Catalina Lighting, Inc. - N.Y.S.E.
A designer, importer and distributor of residential
and office lighting fixtures.
8% Convertible Subordinated Note due 2002,
convertible into 254,022 shares of common stock
at $11.81 per share $3,000,000 3/31/94 $2,840,100 $3,000,000 $3,009,600
------------ ------------- -------------
The Coast Distribution System - A.S.E.
A wholesale distributor of recreational vehicles
and marine parts and accessories.
11.2% Senior Subordinated Secured Note due 1999 $583,350 6/26/89 601,959 583,350 589,125
10% Senior Subordinated Convertible Secured Note
due 1995, convertible into 6,250 shares of common
stock at $8 per share $50,000 6/26/89 51,205 50,000 49,945
Common Stock (B) 152,860 shs 6/27/85 788,002 800,003 943,909
------------ ------------- -------------
1,441,166 1,433,353 1,582,979
------------ ------------- -------------
CompuCom Systems, Inc. - O.T.C.
A personal computer dealer specializing in serving
corporate accounts.
9% Convertible Subordinated Note due 2002,
convertible into 1,363,636 shares of common
stock at $2.20 per share $3,000,000 9/24/92 2,965,800 3,000,000 3,622,158
------------ ------------- -------------
Continental Ozark Corporation
An independent petroleum products marketing company.
12.75% Senior Subordinated Debenture due 2000 $1,200,000 3/28/91 1,274,280 1,170,085 1,238,160
7.15% Cumulative Convertible Preferred Stock,
convertible into 54,954 shares of common stock at
$6.10 per share 54,954 shs * 276,941 384,728 255,729
Warrant, exercisable until 2001, to purchase
74,606 shares of common stock at $6.10 per
share (B) 74,606 shs 3/28/91 7,461 42,000 7,461
------------ ------------- -------------
1,558,682 1,596,813 1,501,350
------------ ------------- -------------
Control Devices, Inc.
A producer of high quality electromechanical circuit
protector devices and photo-optic sensors.
10% Senior Secured Note due 2004 $1,829,100 7/29/94 1,834,587 1,829,100 1,877,388
11% Senior Subordinated Note due 2004 $783,900 7/29/94 772,063 783,900 788,839
11% Cumulative Preferred Stock 101 shs 7/29/94 89,306 101,036 91,973
Common Stock (B) 75,933 shs 7/29/94 25,259 25,259 104,218
Warrant, exercisable until 2004, to purchase 98,267
shares of common stock at $.01 per share (B) 98,267 shs 7/29/94 983 -- 134,134
------------ ------------- -------------
2,722,198 2,739,295 2,996,552
------------ ------------- -------------
* 3/28/91,12/18/91, 9/30/92, 9/30/93 and 9/30/94.
</TABLE>
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<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Corrections Corporation of America - O.T.C.
An operator of private prisons and correctional facilities
for federal, state and local governments.
11.08% Senior Secured Note due 2000 $572,409 12/11/90 $566,764 $571,694 $604,235
Warrant, exercisable until 2000, to purchase
5,625 shares of common stock at $7.14
per share (B) 5,625 shs 12/11/90 563 563 126,645
------------ ------------- -------------
567,327 572,257 730,880
------------ ------------- -------------
CP Clare Corporation
A designer and manufacturer of materials
used in the telecommunications industries.
14% Subordinated Debenture due 1999 $3,000,000 1/26/89 2,940,600 2,931,024 1,200,000
Warrant, exercisable until 1999, to
purchase 1,832,849 shares of common stock
at $.16 per share (B) 1,832,849 shs 1/26/89 43,755 145,500 1,833
------------ ------------- -------------
2,984,355 3,076,524 1,201,833
------------ ------------- -------------
D&K Wholesale Drug, Inc. - O.T.C.
A wholesale pharmaceutical distribution company.
11% Subordinated Note due 1997 $1,625,000 12/29/87 1,487,525 1,625,000 1,618,500
11% Convertible Subordinated Note due 1997,
convertible into 265,490 shares of common stock
at $3.30 per share $875,000 12/29/87 956,113 875,000 1,551,454
------------ ------------- -------------
2,443,638 2,500,000 3,169,954
------------ ------------- -------------
Delta Beverage Group, Inc.
A Pepsi soft drink bottler.
Common Stock (B) 966 shs 3/8/88 181,486 2,006,380 181,486
------------ ------------- -------------
DeVry, Inc.
Offers training in electronics, engineering and other
technical areas.
13% Senior Subordinated Note due 1999 $749,522 12/11/87 739,928 749,522 786,923
------------ ------------- -------------
Edmund Publications Corporation
A publisher of paperback books.
12.5% Senior Note due 1995 (B) $1,937,500 9/9/88 1,912,700 1,937,500 193,750
12.5% Convertible Senior Note due 1995,
convertible into 50 shares of common stock
at $1,250 per share (B) $62,500 9/9/88 67,594 62,500 6,250
------------ ------------- -------------
1,980,294 2,000,000 200,000
------------ ------------- -------------
</TABLE>
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<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Elgin National Industries, Inc.
An operator in the specialty fastener, mineral
processing equipment, engineering, construction
and electrical distribution industries.
13% Senior Subordinated Note due 2001 $2,000,000 9/24/93 $1,943,216 $1,983,216 $2,015,600
10% Preferred Stock 2,339 shs 9/24/93 176,964 233,925 177,900
Common Stock (B) 161 shs 9/24/93 16,075 16,075 30,176
Warrants, exercisable from 1998 until 2001,
to purchase 168 shares of common stock at $.01
per share (B) 168 shs 9/24/93 17 16,782 17
------------ ------------- -------------
2,136,272 2,249,998 2,223,693
------------ ------------- -------------
Engel Industries, Inc.
A manufacturer of specialized metal fabricating
equipment.
10% Senior Secured Note due 1995 $175,000 11/5/86 152,040 175,000 175,000
13% Senior Note due 1995 (B) $585,000 8/30/85 592,254 585,000 234,000
14% Subordinated Note due 1995 (B) $302,500 8/30/85 308,706 302,500 45,375
14% Convertible Subordinated Note due
1995, convertible into 350 shares of
common stock at $500 per share (B) $175,000 8/30/85 179,620 175,000 26,250
------------ ------------- -------------
1,232,620 1,237,500 480,625
------------ ------------- -------------
Ermanco Inc.
A manufacturer of a complete line of conveyors.
11.18% Senior Note due 1997 $275,000 3/23/89 267,850 275,000 278,685
11% Senior Note due 1996 $150,000 9/1/93 146,580 150,000 151,860
------------ ------------- -------------
414,430 425,000 430,545
------------ ------------- -------------
Exide Electronics Group, Inc. - O.T.C.
A manufacturer and servicer of uninterruptible power systems.
8.375% Convertibe Subordinated Note
due 2000, convertible into 229,358 shares of common
stock at $13.08 per share $3,000,000 9/2/92 2,972,400 3,000,000 3,251,148
------------ ------------- -------------
Fay's, Inc. - N.Y.S.E.
An operator of a discount drug store chain.
10% Convertible Senior Note due 1998,
convertible into 143,331 shares of common
stock at $5.23 per share $750,000 1/31/83 728,700 750,000 999,857
------------ ------------- -------------
Forschner Enterprises, Inc.
Acquires controlling or substantial interests in
manufacturing and marketing entities.
3% Convertible Preferred Stock, convertible into
1.95% of the Company 100,000 shs 7/21/94 950,000 1,000,000 950,000
------------ ------------- -------------
</TABLE>
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<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
FTD Acquisition Corporation
A floral services organization which is the largest
in the world.
14% Senior Subordinated Note due 2001 $825,000 * $777,871 $777,871 $785,813
Warrants, exercisable until 2001, to acquire
825 shares of common stocks at $.01 per share (B) 825 shs * 41,250 41,250 41,250
------------ ------------- -------------
819,121 819,121 827,063
------------ ------------- -------------
Garnet Resources Corporation - O.T.C.
Explores and develops oil and gas properties outside
the United States.
9.5% Convertible Subordinated Debenture due 1998,
convertible into 90,910 shares of common stock
at $5.50 per share $500,000 12/14/93 500,000 500,000 450,000
------------ ------------- -------------
Golden State Vintners
An owner and operator of vineyards and grape
processing facilities.
Tranche B Variable Rate Note due 2000 $857,143 6/1/93 844,372 857,143 850,114
Warrant, exercisable until 2003, to acquire
3,873,060 shares of Series C Convertible
Preferred Stock (B) 3,873,060 shs 6/1/93 38,731 -- 175,837
------------ ------------- -------------
883,103 857,143 1,025,951
------------ ------------- -------------
Grand Metropolitan Public Limited Company - London Stock Exchange
A leading international branded consumer products group.
6.5% Convertible Senior Debenture due 2000,
convertible into 145,700 shares of common stock at
$6.86 per share $1,000,000 1/16/95 1,000,000 1,000,000 1,045,000
------------ ------------- -------------
Hardy Oil & Gas USA, Inc.
Engages in the exploration and development
of oil and gas reserves.
8.46% Guaranteed Senior Note, due 2004 $3,000,000 1/11/95 2,904,300 3,000,000 2,973,300
Warrants, exercisable until 2005, to purchase
270,000 shares of common stock at 1.86 pounds
per share (B) 270,000 shs 1/11/95 27,000 -- 27,000
------------ ------------- -------------
2,931,300 3,000,000 3,000,300
------------ ------------- -------------
Hein-Werner Corp. - A.S.E.
A manufacturer of automotive service and collision
repair equipment and hydraulic cylinders.
8% Convertible Subordinated Note due 1999,
convertible into 227,617 shares of common
stock at $6.59 per share $1,500,000 9/29/89 1,459,650 1,500,000 1,419,075
------------ ------------- -------------
Highland Homes Holdings, Inc.
A single family homebuilder operating in the Dallas-Fort
Worth and Atlanta areas.
9.75% Senior Note due 2001 $3,000,000 11/18/93 2,970,300 2,959,098 2,922,600
Warrants, exercisable until 2001, to purchase
21 shares of common stock at $17,897.31 per
share (B) 21 shs 11/18/93 2 40,902 79,994
------------ ------------- -------------
2,970,302 3,000,000 3,002,594
------------ ------------- -------------
* 2/21/95 and 3/1/95.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Hosiery Corporation of America, Inc.
A manufacturer and distributor of
women's hosiery products.
13.75% Senior Subordinated Note due 2002 $1,000,000 10/12/94 $987,800 $987,800 $945,000
------------ ------------- -------------
Industrial General Corporation
A diversified manufacturing company primarily
servicing the machinery, equipment and capital
goods sectors.
8% Convertible Subordinated Note due
2002, convertible into 120,000 shares of
common stock at $.90 per share (B) $108,000 8/30/85 120,377 106,800 1,080
Warrants, exercisable until 2002, to purchase
120,000 shares of common stock at $1 per
share (B) 120,000 shs 12/30/92 1,200 1,200 1,200
------------ ------------- -------------
121,577 108,000 2,280
------------ ------------- -------------
Latin Communications Group
An advertising agency that specializes in
Spanish-language advertising to the New York City
metropolitan market.
10.4% Senior Secured Note due 2001 $1,750,000 2/14/95 1,752,275 1,750,000 1,752,275
7% Convertible Preferred Stock, convertible into
18,000 shares of common stock at $10 per share 18,000 shs 2/14/95 160,549 180,000 162,143
Convertible Preferred Stock, convertible into
32,000 shares of common stock at $10 per share 32,000 shs 2/14/95 240,000 320,000 240,000
------------ ------------- -------------
2,152,824 2,250,000 2,154,418
------------ ------------- -------------
Liberty Business Forms, Inc.
A manufacturer of business forms and tags for the dry
cleaning industry.
13% Senior Subordinated Note due 1996 $1,788,500 10/1/86 1,778,127 1,788,500 1,312,223
13% Convertible Senior Subordinated Note
due 1996, convertible into 350 shares of
common stock at $832.86 per share $291,500 10/1/86 318,376 291,500 213,874
------------ ------------- -------------
2,096,503 2,080,000 1,526,097
------------ ------------- -------------
Mercury Computer Systems, Inc.
A designer, manufacturer and marketer of computer systems.
Common Stock (B) 500,000 shs 12/21/87 1,487,700 1,500,000 1,377,000
------------ ------------- -------------
Miles Homes Inc. - O.T.C.
A builder and marketer of single family homes.
Common Stock (B) 138,466 shs 11/19/86 160,560 150,000 304,625
------------ ------------- -------------
Monro Muffler Brake, Inc. - O.T.C.
An operator of retail muffler and brake shops.
Common Stock 124,886 shs 4/19/85 467,269 172,496 2,079,352
------------ ------------- -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
National R.V., Inc. - O.T.C.
A manufacturer and distributor of recreational
vehicles nationwide.
Common Stock (B) 32,898 shs 10/29/91 $49,872 $49,872 $242,212
------------ ------------- -------------
Nu Horizons Electronics Corp. - O.T.C.
A distributor of high technology active and passive
electronic devices.
8.25% Convertible Subordinated Note due 2002,
convertible into 3.56% of the Company $3,000,000 8/31/94 3,035,100 3,000,000 3,067,020
------------ ------------- -------------
Olsten Corporation - N.Y.S.E.
A leader in the home health care personnel industry.
Common Stock 15,023 shs 9/16/88 342,500 327,908 501,298
------------ ------------- -------------
PAR Acquisition Corp.
A manufacturer of fuel handling systems for nuclear
power plants and hazardous waste.
14.5% Senior Subordinated Note due 2000 $833,333 2/5/93 832,000 833,333 855,083
8% Convertible Preferred Stock due 2001,
convertible into 6.67% of the Company 83,333 shs 2/5/93 166,667 166,667 138,893
Common Stock (B) 133,333 shs 2/5/93 333,333 333,333 64,000
------------ ------------- -------------
1,332,000 1,333,333 1,057,976
------------ ------------- -------------
Piedmont Holding, Inc.
A general aviation fixed based operator with repair,
maintenance and overhaul certification.
12% Senior Subordinated Note due 2001 $2,714,283 7/15/92 2,736,540 2,714,283 2,850,811
Senior Redeemable Cumulative Preferred Stock 281,939 shs 7/15/92 281,939 281,939 281,939
Common Stock (B) 3,771 shs 7/15/92 2,564 3,771 81,544
Warrant, exercisable until 2001, to purchase
5,042 shares of common stock at $.05 per share (B) 5,042 shs 7/15/92 3,227 -- 108,827
------------ ------------- -------------
3,024,270 2,999,993 3,323,121
------------ ------------- -------------
PRN Holdings, Inc.
Rents critical care equipment to hospitals and
other healthcare providers.
10.25% Senior Subordinated Note due 2004 $3,000,000 9/30/94 2,876,100 2,943,750 2,983,500
Warrant, exercisable from 1997 until 2004, to
purchase 3% of the Company (B) 33 shs 9/30/94 2,000 56,250 67,501
------------ ------------- -------------
2,878,100 3,000,000 3,051,001
------------ ------------- -------------
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.
11.67% Senior Secured Note due 2004 $1,200,000 8/12/94 1,184,160 1,200,000 1,202,880
11.51% Junior Secured Note due 1999 $800,000 8/12/94 783,040 800,000 791,920
9.8% Redeemable Exchangeable Preferred Stock 10,000 shs 8/12/94 847,900 1,000,000 868,300
Common Stock (B) 1,492 shs 8/12/94 15 -- 15
------------ ------------- -------------
2,815,115 3,000,000 2,863,115
------------ ------------- -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
RailTex, Inc. - O.T.C.
An operator of short-line railroads in the
Midwest, West and Canada.
12% Senior Subordinated Note due 2002 $1,500,000 2/16/93 $1,599,150 $1,500,000 $1,704,000
Common Stock 125,000 shs 2/16/93 1,200,000 1,200,000 3,087,500
------------ ------------- -------------
2,799,150 2,700,000 4,791,500
------------ ------------- -------------
RXI Holdings, Inc.
A manufacturer and distributor of plastic containers
for the food, household chemical, agricultural and
personal care markets.
14% Senior Note due 2002 $2,800,000 2/3/95 2,749,592 2,749,780 2,800,000
10% Series B Preferred Stock, with warrants 186,667 shs 2/3/95 186,667 186,667 186,667
Warrants, exercisable until 2002, to purchase
2,800 shares of common stock at $15.64 per share (B) 2,800 shs 2/3/95 50,540 50,540 50,540
------------ ------------- -------------
2,986,799 2,986,987 3,037,207
------------ ------------- -------------
Sanitary Dash Manufacturing Co., Inc.
A manufacturer of tubular plumbing products
and accessories.
15% Convertible Subordinated Note due
1996, convertible into 29 shares of
common stock at $1,388.89 per share $40,742 1/20/84 41,643 40,742 129,018
Common Stock (B) 59 shs 1/20/84 43,192 81,481 258,035
------------ ------------- -------------
84,835 122,223 387,053
------------ ------------- -------------
Schwitzer U.S., Inc. - N.Y.S.E.
A manufacturer of non-automotive engine components.
10.21% Senior Note due 2002 $3,000,000 4/30/92 2,977,800 2,882,603 3,127,500
Warrant, exercisable until 2002, to purchase
100,000 shares of common stock at $8 per share (B) 100,000 shs 4/30/92 106,000 162,000 207,190
------------ ------------- -------------
3,083,800 3,044,603 3,334,690
------------ ------------- -------------
Shelter Components Corporation - A.S.E.
A distributor of tools and supplies to the
mobile home industry.
Common Stock 56,536 shs 11/5/81 17,155 19,298 718,629
------------ ------------- -------------
Star International Holdings, Inc.
A manufacturer of commerical cooking appliances.
9.65% Senior Secured Note due 2004 $1,755,224 5/27/94 1,675,010 1,755,224 1,683,962
10.5% Subordinated Note due 2004 $716,418 5/27/94 716,418 716,418 655,523
Common Stock (B) 4,310 shs 5/27/94 259,735 259,735 233,762
Warrant, exercisable until 2004, to purchase
3,224 shares of common stock at $.01 per share (B) 3,224 shs 5/27/94 32 -- 32
------------ ------------- -------------
2,651,195 2,731,377 2,573,279
------------ ------------- -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Steerage Corporation
A manufacturer and designer of marine electronic devices
including navigation and control systems, sensors,
radar and communication systems.
10% Subordinated Note due 2003 $2,470,588 11/12/93 $2,456,260 $2,470,588 $2,392,023
Class A Common Stock (B) 70,588 shs 11/12/93 544,235 529,412 662,294
------------ ------------- -------------
3,000,495 3,000,000 3,054,317
------------ ------------- -------------
Summey Outdoor Advertising, Inc.
An operator of an outdoor advertising business
in North Carolina and South Carolina.
12% Senior Note (with contingent
interest) due 1995 $937,500 12/13/83 886,500 937,500 644,156
10.25% Senior Note due 1999 $743,750 9/30/87 669,003 743,750 460,084
10.25% Convertible Senior Note due 1999,
convertible into 4% of the Company $50,000 9/30/87 48,795 50,000 30,930
------------ ------------- -------------
1,604,298 1,731,250 1,135,170
------------ ------------- -------------
Supreme Industries, Inc. - A.S.E.
A manufacturer of modular homes and truck bodies.
8.6% Convertible Subordinated Note due 1996,
convertible into 185,262 shares of common
stock at $4.74 per share $878,144 12/30/86 806,049 878,144 1,042,099
Common Stock (B) 317,629 shs 5/23/79 351,907 351,907 1,786,663
Common Stock of Contempri Homes, Inc. (B) 194,763 shs 12/31/92 123,801 123,801 19,476
Common Stock of TGC Industries, Inc. (B) 19,082 shs 9/30/86 9,497 9,497 35,779
------------ ------------- -------------
1,291,254 1,363,349 2,884,017
------------ ------------- -------------
Talley Machinery Corporation
A rebuilder and marketer of industrial and commercial
laundry and dry cleaning equipment.
14% Senior Note due 1992 (B) $74,994 12/30/82 74,994 74,994 750
15% Junior Convertible Subordinated Note due
1992, convertible into 35,000 shares of
common stock at $4 per share (B) $140,000 12/30/82 142,856 140,000 1,400
------------ ------------- -------------
217,850 214,994 2,150
------------ ------------- -------------
Telex Communications, Inc.
A producer of electronic and communications products.
Warrant, exercisable until 2004, to purchase
9,239 shares of common stock at $.01 per
share (B) 9,239 shs 5/30/89 92 9 6,952
------------ ------------- -------------
Transco Energy Company - N.Y.S.E.
A supplier and transporter of gasoline.
$3.50 Convertible Preferred Stock, convertible into
25,000 shares of common stock at $20 per share 10,000 shs 10/27/93 500,000 500,000 545,000
------------ ------------- -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 3/31/95
CORPORATE RESTRICTED SECURITIES: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Turner Broadcasting System, Inc. - A.S.E.
Engages in cable TV broadcasting.
Zero Coupon Convertible Subordinated Note due
2007, convertible into 39,500 shares of common
stock at $26.88 per share $3,090,000 * $1,220,703 $1,290,064 $1,278,642
------------ ------------- -------------
Unistrut Corporation
A manufacturer and distributor of products for
the non-residential construction market.
Common Stock 13,705 shs 2/3/86 54,841 50,001 89,055
------------ ------------- -------------
Unocal Corporation - N.Y.S.E.
An integrated crude oil and natural gas company with
interests in chemical geothermal energy and metals.
$3.50 Convertible Preferred Stock, convertible into
8,130 shares of common stock at $30.75 per share 5,000 shs 7/21/92 250,000 250,000 260,650
------------ ------------- -------------
Wakebourne PLC - London Stock Exchange
A U.K. public company engaged in the computer services
and networking systems business.
Common Stock (B) 256,347 shs 3/10/92 1,322,754 1,605,763 196,105
------------ ------------- -------------
Walbro Corporation - O.T.C.
A designer, manufacturer and marketer of precision
engineered fuel systems products.
Common Stock 24,661 shs 4/20/88 390,447 400,500 439,274
------------ ------------- -------------
Wirekraft Industries, Inc.
A supplier of electrical wire harnesses
for major appliances.
12% Senior Subordinated Note due 2003 $1,320,000 11/9/94 1,253,208 1,254,000 1,283,964
Warrant, exercisable until 2003, to purchase
108,108 shares of common stock at $.01 per share(B) 108,108 shs 11/9/94 63,405 92,400 90,162
------------ ------------- -------------
1,316,613 1,346,400 1,374,126
------------ ------------- -------------
Wright & Lato, Inc.
A manufacturer of gold wedding bands and rings.
15% Subordinated Note due 1996 $238,250 12/6/83 216,684 238,250 230,793
13% Convertible Subordinated Note due 1996,
convertible into 15,000 shares of common
stock at $4.28 per share $64,250 12/6/83 63,363 64,250 61,487
------------ ------------- -------------
280,047 302,500 292,280
------------ ------------- -------------
Total Corporate Restricted Securities $93,973,057 97,088,006 96,059,438
============ ------------- -------------
* 2/6/92, 4/21/94 and 6/16/94.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Market Value
Interest Due Principal Cost at 3/31/95
CORPORATE PUBLIC SECURITIES: Rate Date Amount (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Convertible Bonds - 6.87%
AMR Corporation 6.125% 11/1/24 $800,000 $799,680 $756,000
Agnico-Eagle Mines Limited 3.500 1/27/04 400,000 259,084 322,000
Bindley Western Industries, Inc. 6.500 10/1/02 125,000 125,000 123,125
Comcast Corporation 1.125 4/15/07 750,000 321,082 311,250
Delta Air Lines, Inc. 3.230 6/15/03 330,000 234,442 273,900
Hollinger, Inc. 0.000 10/15/13 4,000,000 1,215,899 1,140,000
Hospitality Franchise Systems, Inc. 4.500 10/1/99 1,000,000 1,000,000 1,060,000
Leucadia National Corporation 5.250 2/1/03 1,000,000 1,000,000 965,000
MEDIQ Incorporated 7.500 7/15/03 1,000,000 1,000,000 840,000
Ogden Corp. 5.750 10/20/02 160,000 110,400 134,400
Richardson Electronics, Ltd. 7.250 12/15/06 590,000 383,388 439,550
Savoy Pictures Entertainment, Inc. 7.000 7/1/03 1,250,000 1,287,500 962,500
Time Warner, Inc. 0.000 12/17/12 2,667,000 848,578 860,108
Time Warner, Inc. 0.000 6/22/13 2,667,000 982,826 1,020,128
UAL Corp. 6.375 2/1/25 680,000 680,000 609,008
Waterhouse Investor Services, Inc. 6.000 12/15/03 500,000 463,750 390,000
------------ ------------- -------------
Total Convertible Bonds $17,919,000 10,711,629 10,206,969
============ ------------- -------------
Bonds - 31.78%
Allnet Communications, Inc. 9.000% 5/15/03 $850,000 843,089 821,313
American Restaurant Group, Inc. 12.000 9/15/98 850,000 820,250 773,500
Bally's Grand, Inc. 10.375 12/15/03 1,000,000 1,002,500 937,500
Borg-Warner Corporation 8.000 4/1/96 1,000,000 962,500 975,000
Central Rents, Inc. 12.875 12/15/03 1,480,000 1,351,413 1,346,800
Chesapeake Energy Corporation 12.000 3/1/01 1,800,000 1,710,203 1,872,000
Consolidated Cigar Corporation 10.500 3/1/03 500,000 500,000 467,500
Consumers Packaging Corporation 12.500 4/15/02 1,000,000 992,500 1,011,250
Container Corporation 9.750 4/1/03 1,000,000 1,000,000 980,000
Continental Cablevision, Inc. 10.625 6/15/02 500,000 500,000 512,500
Continental Cablevision, Inc. 8.625 8/15/03 1,000,000 1,000,000 945,000
Crown Packaging Ltd. 10.750 11/1/00 750,000 750,000 746,250
Data Documents, Inc. 13.500 7/15/02 3,000,000 3,002,000 3,000,000
Doskocil Company 9.750 7/15/00 1,000,000 925,000 920,000
Dr. Pepper Company 0.000 11/1/02 1,628,000 1,295,285 1,404,150
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Market Value
Interest Due Principal Cost at 3/31/95
CORPORATE PUBLIC SECURITIES: (Continued) Rate Date Amount (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Bonds (Continued)
El Paso Funding Corporation (B) 9.375% 10/1/96 $200,000 $174,526 $122,000
Embassy Suites, Inc. 8.750 3/15/00 1,000,000 957,400 982,500
Embassy River Casino 10.750 4/1/02 500,000 483,750 486,250
Gulf Canada Resources Ltd. 9.250 1/15/04 1,100,000 1,056,202 1,045,000
Harman International Industries Incorporated 12.000 8/1/02 1,000,000 992,770 1,090,000
Healthtrust Inc. 10.750 5/1/02 1,250,000 1,386,875 1,367,188
Imax Corporation 7.000 3/1/01 750,000 629,062 652,500
Indah Kiah International Corporation 11.875 6/15/02 1,000,000 1,000,000 970,000
Ivex Packaging Corporation 12.500 12/15/02 250,000 266,563 261,250
Jones Intercable, Inc. 10.500 3/1/08 1,000,000 1,000,000 1,012,500
Jones Intercable, Inc. 9.625 3/15/02 750,000 750,000 742,500
Jordan Industries, Inc. 10.375 8/1/03 1,000,000 1,000,000 922,500
Mark IV Industries, Inc. 8.750 4/1/03 1,000,000 1,000,000 970,000
MEDIQ/PRN Life Support Services, Inc. 11.125 7/1/99 1,000,000 1,000,000 920,000
Orchard Supply Hardware Corporation 9.375 2/15/02 1,325,000 1,260,812 1,040,125
Oryx Energy Company 9.300 5/1/96 1,000,000 993,510 1,009,420
Owens-Illinois, Inc. 11.000 12/1/03 1,000,000 1,000,000 1,067,500
Paracelsus Healthcare Corporation 9.875 10/15/03 1,000,000 1,000,000 980,000
Ralph's Grocery Company 9.000 4/1/03 1,000,000 1,005,000 975,000
Renco Metals, Inc. 12.000 7/15/00 1,000,000 1,000,000 993,750
Repap Wisconsin, Inc. 9.250 2/1/02 1,000,000 1,000,000 937,500
Rogers Cantel Mobile Inc. 10.750 11/1/01 1,000,000 1,000,000 1,022,500
SFX Broadcasting, Inc. 11.375 10/1/00 1,000,000 1,000,000 1,020,000
Select Auto Receivables Trust 1991-2 7.650 7/15/96 145,472 146,222 145,517
Telex Communications, Inc. 12.000 7/15/04 1,500,000 1,500,000 1,473,750
Trans-Resources, Inc. 11.875 7/1/02 1,000,000 1,032,500 900,000
Trism, Inc. 10.750 12/15/00 1,000,000 1,003,750 980,000
Tultex Corporation 10.625 3/15/05 1,000,000 1,000,000 1,000,000
USG Corporation 9.250 9/15/01 1,000,000 951,250 990,000
Uniroyal Chemical Company 9.000 9/1/00 1,000,000 1,000,000 965,000
US Air, Inc. 9.625 2/1/01 1,000,000 1,000,000 760,000
Venture Holdings Trust 9.750 4/1/04 1,300,000 1,300,000 1,127,750
Videotron Ltee 10.625 2/15/05 400,000 397,500 406,000
Williamhouse-Regency of Delaware, Inc. 11.500 6/15/05 1,000,000 971,250 965,000
Worldcorp, Inc. 13.875 8/15/97 235,000 244,400 227,950
------------ ------------- -------------
Total Bonds $49,063,472 48,158,082 47,243,713
============ ------------- -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Market Value
Cost at 3/31/95
CORPORATE PUBLIC SECURITIES: (Continued) Shares (Note 2B) (Note 2A)
------------ ------------- -------------
<S> <C> <C> <C>
Warrants - .10%
Central Rents, Inc. (B) 1,480 shs $43,837 $44,400
Payless Cashways, Inc. (B) 500 shs 2,687 12,500
Western Transmedia Co., Inc. (B) 183,117 shs 45,780 91,559
------------- -------------
Total Warrants 92,304 148,459
------------- -------------
Common Stock - 5.74%
Abex, Inc. 52,200 shs 403,287 411,075
Amerisource Health Corporation (B) 3,214 shs 3,216 144,630
Doskocil Company 52,500 shs 413,438 400,313
Esmor Correctional Services, Inc. 16,500 shs 108,814 309,375
Excalibur Technologies Corporation 60,000 shs 511,375 555,000
Federal Mogul, Inc. 13,600 shs 467,500 244,800
First Industrial Realty Trust, Inc. 8,400 shs 197,400 159,600
First USA, Inc. 7,500 shs 313,125 315,000
Lincoln Snacks Company 38,500 shs 145,688 91,438
Luxonen, S.A. (B) 61,152 shs 862,312 124,658
Marker International, Inc. 17,500 shs 124,687 126,875
MEDIQ Incorporated 200,000 shs 765,529 1,050,000
Metricom, Inc. 19,000 shs 574,750 280,250
Savoy Pictures Entertainment, Inc. 22,000 shs 396,000 176,000
Southwest Airlines 71,429 shs 1,000,000 1,276,793
Staffing Resources, Inc. 105,000 shs 577,500 761,250
Sweetwater, Inc. 26,000 shs 182,000 169,000
Tele-Communications, Inc. 17,500 shs 367,500 367,500
Western Trans Media Co., Inc. 405,590 shs 760,889 1,571,661
------------- -------------
Total Common Stock 8,175,010 8,535,218
------------- -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Market Value
Cost at 3/31/95
CORPORATE PUBLIC SECURITIES: (Continued) Shares (Note 2B) (Note 2A)
------------ ------------- -------------
<S> <C> <C> <C>
Convertible Preferred Stock - 2.70%
AMC Entertainment Inc. 40,000 shs $1,000,000 $1,025,200
Arkansas Best Corp. 7,500 shs 375,000 289,725
Freeport-McMoran Copper & Gold, Inc. 7,800 shs 195,000 196,014
Integon Corp. 19,700 shs 985,000 903,836
Occidental Petroleum Corporation 20,000 shs 1,000,000 1,050,000
Western Gas Resources, Inc. 15,000 shs 750,000 555,000
------------- -------------
Total Convertible Preferred Stock 4,305,000 4,019,775
------------- -------------
Total Corporate Public Securities 71,442,025 70,154,134
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
Market Value
Interest/ Due Principal Cost at 3/31/95
SHORT-TERM SECURITIES: Yield Date Amount (Note 2B) (Note 2A)
------------ ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Commercial Paper - 1.85%
ITT Financial Corporation 6.006% 4/3/95 $243,000 243,000 243,000
Texas Utilities Electric Co. 6.403 4/3/95 2,500,000 2,499,111 2,499,111
------------ ------------- -------------
Total Short-Term Securities $2,743,000 2,742,111 2,742,111
============ ------------- -------------
Total Investments - 113.67% $171,272,142 168,955,683
============= -------------
Other Assets - 3.13 4,654,281
Liabilities - (16.80) (24,970,961)
-------------- -------------
Total Net Assets 100.00% $148,639,003
============== =============
(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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
INDUSTRY CLASSIFICATION
Fair Value
at 3/31/95 Percentage
CORPORATE RESTRICTED SECURITIES: (Note 2A) Net Assets
----------- ------------
<S> <C> <C>
ADVERTISING
Ammirati & Puris, Inc. $1,989,750
Latin Communications Group 2,154,418
Summey Outdoor Advertising, Inc. 1,135,170
-----------
5,279,338 3.55%
-----------
AUTO PARTS
Monro Muffler Brake, Inc. 2,079,352
Walbro Corporation 439,274
-----------
2,518,626 1.69%
-----------
BEVERAGES
Delta Beverage Group, Inc. 181,486
Golden State Vintners 1,025,951
-----------
1,207,437 0.81%
-----------
BUILDING MATERIALS
Caltex Industries, Inc. 22,923
Highland Homes Holdings, Inc. 3,002,594
Miles Homes Inc. 304,625
Shelter Components Corporation 718,629
Supreme Industries, Inc. 2,884,017
Unistrut Corporation 89,055
-----------
7,021,843 4.72%
-----------
COMMUNICATIONS
CP Clare Corporation 1,201,833
Telex Communications, Inc. 6,952
Turner Broadcasting System, Inc. 1,278,642
-----------
2,487,427 1.67%
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Fair Value
at 3/31/95 Percentage
CORPORATE RESTRICTED SECURITIES: (Continued) (Note 2A) Net Assets
----------- ------------
<S> <C> <C>
ELECTRICAL EQUIPMENT/ELECTRONICS
Catalina Lighting, Inc. $3,009,600
CompuCom Systems, Inc. 3,622,158
Control Devices, Inc. 2,996,552
Exide Electronics Group, Inc. 3,251,148
Mercury Computer Systems, Inc. 1,377,000
NU Horizons Electronics Corp. 3,067,020
Steerage Corporation 3,054,317
Wakebourne PLC 196,105
Wirekraft Industries, Inc. 1,374,126
-----------
21,948,026 14.79%
-----------
ENERGY
Associated Natural Gas Corporation 3,026,205 2.04%
-----------
HEALTH CARE
D&K Wholesale Drug, Inc. 3,169,954
Olsten Corporation 501,298
PRN Holdings, Inc. 3,051,001
-----------
6,722,253 4.52%
-----------
JEWELRY
Wright & Lato, Inc. 292,280 0.20%
-----------
MACHINERY AND EQUIPMENT
Industrial General Corporation 2,280
Talley Machinery Corporation 2,150
-----------
4,430 0.00%
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Fair Value
at 3/31/95 Percentage
CORPORATE RESTRICTED SECURITIES: (Continued) (Note 2A) Net Assets
----------- ------------
<S> <C> <C>
MANUFACTURING-INDUSTRIAL AND
CONSUMER PRODUCTS
Alliant Techsystems, Inc. $510,625
Aritech Corp. 272,972
Elgin National Industries, Inc. 2,223,693
Ermanco Inc. 430,545
Forschner Enterprises, Inc. 950,000
Hein-Werner Corp. 1,419,075
Hosiery Corporation of America, Inc. 945,000
PAR Acquisition Corp. 1,057,976
RXI Holdings, Inc. 3,037,207
Sanitary Dash Manufacturing Co., Inc. 387,053
Schwitzer U.S., Inc. 3,334,690
Star International Holdings, Inc. 2,573,279
-----------
17,142,115 11.53%
-----------
METAL FABRICATING
Engel Industries, Inc. 480,625 0.32%
-----------
MISCELLANEOUS
FTD Acquisition Corporation 827,063
Protein Genetics, Inc. 2,863,115
-----------
3,690,178 2.48%
-----------
OIL AND GAS SERVICE
American Exploration Company 2,807,726
BP Prudhoe Bay Royalty Trust 445,060
Continental Ozark Corporation 1,501,350
Garnet Resources Corporation 450,000
Hardy Oil & Gas USA, Inc. 3,000,300
Transco Energy Company 545,000
Unocal Corporation 260,650
-----------
9,010,086 6.06%
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (Continued)
March 31, 1995
Fair Value
at 3/31/95 Percentage
CORPORATE RESTRICTED SECURITIES: (Continued) (Note 2A) Net Assets
----------- ------------
<S> <C> <C>
PAPER
Liberty Business Forms, Inc. $1,526,097 1.03%
-----------
PUBLISHING
Edmund Publications Corporation 200,000 0.13%
-----------
RECREATIONAL SUPPLIES/EQUIPMENT
The Coast Distribution System 1,582,979
National R.V., Inc. 242,212
-----------
1,825,191 1.23%
-----------
RETAILING
Fay's, Inc. 999,857
Grand Metropolitan Public Limited Company 1,045,000
-----------
2,044,857 1.38%
-----------
SERVICES
Corrections Corporation of America 730,880
DeVry, Inc. 786,923
Piedmont Holding, Inc. 3,323,121
RailTex, Inc. 4,791,500
-----------
9,632,424 6.48%
----------- -------
Total Corporate Restricted Securities $96,059,438 64.63%
============ =======
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. History
MassMutual Corporate Investors (the "Trust") is a closed-end, non-diversified
investment company. Massachusetts Mutual Life Insurance Company (the
"Insurance Company") 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
effective November 28, 1985.
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 generally accepted accounting principles.
A. Valuation of Investments: 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 l933.
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 Trustees. Each restricted security is valued by the Trustees as
of the time of the acquisition thereof and 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 estimated period of time during
which the security will not be freely marketable; the estimated expenses of
registering or otherwise
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
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; if it is 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; any changes in the financial condition and
prospects of the issuers; the existence of merger proposals or tender offers
affecting the issuers; and in addition any other factors affecting fair
value, all in accordance with the Investment Company Act of l940. In making
valuations, opinions of counsel are relied upon as to whether or not
securities are restricted securities and as to the legal requirements for
public sale.
When market quotations are readily available for unrestricted securities of
an issuer, restricted securities of the same class are generally valued at a
discount from the market price of such unrestricted securities. The
Trustees, however, consider all factors in fixing any discount, including the
filing of a registration statement for such securities under the Securities
Act of l933 and any other developments which are likely to increase the
probability that the securities may be publicly sold by the Trust without
restriction.
It is the intention of the Trustees to meet early 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, including a majority of the Trustees who are
not interested persons (otherwise than as Trustees) of the adviser. In
making valuations, Trustees consider reports by the adviser analyzing each
portfolio security in accordance with the relevant factors referred to above.
The adviser provides such reports to the Trust at least quarterly.
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, 1995, subject to discount where appropriate, and are
approved by the Trustees.
Short-term securities with more than sixty days to maturity are valued at
market and short-term securities having a maturity of sixty days or less are
valued at amortized cost which approximates market value.
B. Accounting for Investment: 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.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
The cost basis of debt securities is not adjusted for amortization of
premium or accrual of discount since the Trust does not generally intend
to hold such investments until maturity; however, the Trust has elected
to accrue for financial reporting purposes, certain 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 or when
management believes payment is questionable.
C. 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 such net gains.
3. Management Fee
Under an investment services contract, the Insurance Company has agreed to
invest for its general account concurrently with the Trust in each restricted
security purchased by the Trust. The Insurance Company, 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. The Insurance Company provides a continuing review of the
investment operations of the Trust. The Insurance Company 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 the Insurance Company 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
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
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
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, 1995 was plus .0625%.
4. Note Payable
On November 5, 1993, the Trust sold to the Insurance Company at par a
$20,000,000 Senior Fixed Rate Convertible Note due November 15, 2000 (the
"Note") which accrues at 5.33% per annum. The Note is convertible into the
Trust's common shares at any time at the stated conversion price per share.
<TABLE>
<CAPTION>
5. Purchases and Sales of Investments
For the three months ended
3/31/95 3/31/94
------------ ------------
Cost of Investments Acquired
-----------------------------
<S> <C> <C>
Corporate restricted securities $ 11,339,190 $ 3,512,295
Corporate public securities 12,156,868 26,120,386
Short-term securities 80,375,087 98,431,848
Proceeds from Sales
or Maturities
-----------------------------
Corporate restricted securities $ 4,659,760 $ 11,991,134
Corporate public securities 12,307,195 13,546,028
Short-term securities 82,473,606 101,557,636
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
The aggregate cost of investments is the same for financial reporting and
federal income tax purposes as of March 31, 1995. The net unrealized
depreciation of investments for financial reporting and federal tax
purposes as of March 31, 1995 is $2,316,459 and consists of $14,431,914
appreciation and $16,748,373 depreciation.
The aggregate cost of investments was the same for financial reporting
and federal income tax purposes as of March 31, 1994. The net unrealized
depreciation of investments for financial reporting and federal tax
purposes as of March 31, 1994 was $1,158,297 and consisted of $20,837,834
appreciation and $21,996,131 depreciation.
<PAGE>
TRUSTEES
DONALD E. BENSON * SUMNER L. FELDBERG
MARSHALL D. BUTLER DONALD GLICKMAN
MILTON COOPER MARTIN T. HART *
RICHARD G. DOOLEY GARY E. WENDLANDT
* Member of the Audit Committee
OFFICERS
GARY E. WENDLANDT, Chairman
RICHARD G. DOOLEY, Vice Chairman
STUART H. REESE, President
ROBERT E. JOYAL, Senior Vice President
BRUCE E. GAUDETTE, Vice President
JOHN B. JOYCE, Vice President
STEPHEN L. KUHN, Vice President & Secretary
RICHARD C. MORRISON, Vice President
CLIFFORD M. NOREEN, Vice President
HAMLINE C. WILSON, Vice President & C.F.O.
MARY E. WILSON, Vice President
JOHN J. McMAHON, Comptroller
RAYMOND B. WOOLSON, Treasurer
- --------------------------------------------------------------------------
| |
| MASSMUTUAL CORPORATE INVESTORS |
| 1295 STATE STREET |
| SPRINGFIELD MA 01111 |
| (413)788-8411 |
| |
- --------------------------------------------------------------------------
ADVISOR
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------
| |
| TRANSFER AGENT & DIVIDEND DISTRIBUTION AGENT |
| |
| SHAREHOLDER FINANCIAL SERVICES, INC. |
| PO BOX 173673 |
| DENVER CO 80217-3673 |
| |
| 1-800-647-7374 |
| |
- --------------------------------------------------------------------------
<PAGE>
[CORPORATE INVESTORS LOGO] Bulk Rate
U.S. POSTAGE
PAID
Denver CO
Permit No. 3066
SHAREHOLDER FINANCIAL SERVICES, INC. P.O. BOX 173673, DENVER CO 80217-3672
- ---------------------------------------------------------------------------
