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Previous: SHEPMYERS INVESTMENT CO, NSAR-A, 1997-08-20 |
Next: TAX EXEMPT BOND FUND OF VIRGINIA FIRST SERIES, 485BPOS, 1997-08-20 |
<PAGE>
TO OUR SHAREHOLDERS JULY 31, 1997
We are pleased to present MassMutual Corporate Investors' report for the first
six months of 1997.
There are several noteworthy items to report this quarter: 1) An increase in the
quarterly dividend; 2) Higher quarterly net investment income; 3) An all-time
high net asset value; and 4) Significant realized capital gains.
The net assets of the Trust hit another all-time high level at $45.54 per share
at June 30, 1997. This translated into a 10.1% return for the quarter, and 14.5%
year-to-date, as measured by change in net assets with reinvestment of
dividends.
Net investment income of the Trust for the second quarter was also higher at
$3,066,951 or 72.0 cents per share versus $3,057,559 or 71.8 cents per share for
the quarter ended March 31. For the six months ended June 30, 1997, net
investment income was $6,124,510 or $1.44 per share as compared to $5,459,746 or
$1.28 per share for the same period last year. Reflecting this increase, the
Trustees raised the quarterly dividend to $.73 per share payable on August 14,
1997 to shareholders of record on July 31, 1997, up from the $.71 per share
level a quarter ago.
There were significant positive events that occurred in the portfolio during the
quarter. Telex Communications Corp. is a company to which we made a private
placement loan in 1989. We held $2,500,000 of its 14.5% subordinated notes and
nominal cost warrants until 1994, when the company underwent a recapitalization
and our loan was repaid at a $135,938 gain. However, we held our warrants and
participated in the recapitalization by buying $1,500,000 of their 12% publicly
traded bonds. On May 6, 1997, Telex was acquired at a price which gave us a
$5,899,831 gain on our warrants as well as a $218,895 gain on our bonds. Another
investment, PanEnergy Corporation (originally our note was with Grand Valley Gas
Company) was acquired by Duke Power Corporation. As a result, our $3 million
convertible note was converted and our stock sold for a gain of nearly $3.2
million. Other significant gains realized during the quarter were in Kuhlman
Corporation ($1.7 million) and CompuCom Systems, Inc. ($1.8 million). We have
converted our sale of CompuCom, with our original $3 million invested yielding
total gains of $8.1 million over the past the several years. We also completed
the sale of our holdings in Monro Muffler Brake Inc. where over the past several
years we realized $5.2 million in gains on our $2 million 1985 investment. Our
total net gains for the first six months amounted to $20,043,777 or $4.71 per
share of which $2,304,716, or $.54 per share represents short-term gains which
are required to be distributed to shareholders each year.
We closed on three new private placement investments during the second quarter.
We were able to help Eagle Pacific Industries, Inc., the sixth largest extruder
of small and medium diameter plastic pipe and tubing, refinance some of its
existing debt as well as finance the construction of additional manufacturing
capacity. We helped finance the purchase of Truseal Technologies, Inc., a
manufacturer of sealant systems for windows and doors, and Hartzell
Manufacturing, Inc., an engineering, manufacturing, and assembly services
company, both of which were purchased by buyout sponsors with whom we have solid
relationships. For a more complete description of our investments in these
companies, see the Schedule of Investments section of this report.
The Trustees and management appreciate the continued interest and support of the
shareholders of Corporate Investors.
Sincerely,
/s/ Stuart H. Reese
Stuart H. Reese
President
1
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
MASSMUTUAL CORPORATE INVESTORS
1997 1996
------------ ------------
<S> <C> <C>
Assets:
Investments (Notes 2A, 2B and 5)
(See Schedule of Investments)
Corporate restricted securities at fair value
(Cost 1997 - $152,342,683; 1996 - $116,423,554) $159,255,782 $124,691,206
Corporate public securities at market value
(Cost 1997 - $45,197,831; 1996 - $68,814,467) 48,661,820 72,559,344
Short-term securities at cost plus earned discount which
approximates market value 770,000 425,000
------------ ------------
208,687,602 197,675,550
Cash 229,270 1,392,888
Interest and dividends receivable, net 3,409,116 3,364,756
Receivable for investments sold 4,334,276 1,107,343
Other assets 8,669 8,085
------------ ------------
Total assets $216,668,933 $203,548,622
============ ============
Liabilities:
Payable for investments purchased $ 1,871,000 $ 2,727,481
Management fee payable (Note 3) 726,885 674,565
Note payable (Note 4) 20,000,000 20,000,000
Interest payable (Note 4) 136,211 136,211
Accrued expenses 98,963 126,284
------------ ------------
Total liabilities 22,833,059 23,664,541
============ ============
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 57,447,542 45,926,213
Undistributed net investment income (Note 2D) 3,120,026 2,703,592
Undistributed net realized gain on investments 20,043,777 16,394,306
Net unrealized appreciation of investments (Notes 2A, 2B and 5) 10,377,088 12,012,529
------------ ------------
Total net assets 193,835,874 179,884,081
------------ ------------
Total liabilities and net assets $216,668,933 $203,548,622
============ ============
Common shares issued and outstanding 4,256,724 4,256,724
============ ============
Net asset value per share $ 45.54 $ 42.26
============ ============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF OPERATIONS MASSMUTUAL CORPORATE INVESTORS
For the six months ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Investment Income (Note 2B):
Interest $ 7,935,645 $ 7,331,406
Dividends 266,632 143,753
------------ ------------
Total income 8,202,277 7,475,159
============ ============
Expenses:
Management fee (Note 3) 1,398,254 1,314,156
Trustees' fees and expenses 52,700 48,786
Transfer Agent/Registrar's expenses 39,706 62,545
Interest (Note 4) 533,000 533,000
Reports to shareholders 14,520 17,040
Audit and legal 28,515 25,115
Other 11,072 14,771
------------ ------------
Total expenses 2,077,767 2,015,413
------------ ------------
Net investment income 6,124,510 5,459,746
------------ ------------
Net realized and unrealized gain (loss) on investments (Notes 2A and 2B):
Net realized gain on investments 20,043,777 16,394,306
Net change in unrealized appreciation/depreciation of investments (1,579,352) (7,553,308)
------------ ------------
Net gain on investments 18,464,425 8,840,998
------------ ------------
Net increase in net assets resulting from operations $ 24,588,935 $ 14,300,744
============ ============
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
STATEMENT OF CASH FLOWS MASSMUTUAL CORPORATE INVESTORS
For the six months ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Net increase (decrease) in cash:
Cash flows from operating activities:
Interest and dividends received $ 7,560,140 $ 7,472,016
Interest expense paid (533,000) (533,000)
Operating expenses paid (1,496,100) (1,450,438)
Federal income tax paid (6,210,942) (1,984,882)
------------- -------------
Net cash (used for) provided by operating activities (679,902) 3,503,696
------------- -------------
Cash flows from investing activities:
Change in short-term portfolio securities, net 109,745 2,849,398
Purchase of portfolio securities (60,650,337) (67,571,788)
Proceeds from disposition of portfolio securities 70,858,922 69,961,883
------------- -------------
Net cash provided by investing activities 10,318,330 5,239,493
------------- -------------
Net cash provided by operating and investing activities 9,638,428 8,743,189
------------- -------------
Cash flows from financing activities:
Cash dividends paid from net investment income (5,577,475) (5,732,141)
Cash dividends paid from net realized gain on investments (3,915,019) (4,143,459)
------------- -------------
Net cash used for financing activities (9,492,494) (9,875,600)
------------- -------------
Net increase (decrease) in cash 145,934 (1,132,411)
Cash - beginning of year 83,336 2,525,299
------------- -------------
Cash - end of period $ 229,270 $ 1,392,888
============= =============
Reconciliation of net increase (decrease) in net assets to net cash from
operating and investing activities:
Net increase in net assets resulting from operations $ 24,588,935 $ 14,300,744
------------- -------------
Increase in investments (6,257,981) (2,489,493)
(Increase) decrease in interest and dividends receivable, net (392,715) 397,811
(Increase) decrease in receivable for investments sold (3,651,742) 83,143
Increase in other assets (8,669) (8,085)
Increase (decrease) in payable for investments purchased 1,522,875 (1,588,024)
Increase in management fee payable 80,875 42,454
Decrease in accrued expenses (32,208) (10,479)
Decrease in accrued taxes (6,210,942) (1,984,882)
------------- -------------
Total adjustments to net assets from operations (14,950,507) (5,557,555)
------------- -------------
Net cash provided by operating and investing activities $ 9,638,428 $ 8,743,189
============= =============
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS MASSMUTUAL CORPORATE INVESTORS
For the six months ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 6,124,510 $ 5,459,746
Net realized gain on investments 20,043,777 16,394,306
Net change in unrealized appreciation/depreciation of investments (1,579,352) (7,553,308)
------------ ------------
Net increase in net assets resulting from operations 24,588,935 14,300,744
Dividends to shareholders from:
Net investment income (1997-$.71 per share; 1996-$.70 per share) (3,022,274) (2,979,707)
------------ ------------
Total increase 21,566,661 11,321,037
Net Assets, beginning of year 172,269,213 168,563,044
------------ ------------
Net Assets, end of period (including undistributed net investment income
in 1997 - $3,120,026; 1996 - $2,703,592) $193,835,874 $179,884,081
============ ============
</TABLE>
See Notes to Financial Statements
5
<PAGE>
SELECTED PER SHARE DATA MASSMUTUAL CORPORATE INVESTORS
Selected data for each common share
outstanding for the periods ended:
<TABLE>
<CAPTION>
For the
six months For the
ended 6/30/97 year ended
(Unaudited) 12/31/96
------------- ----------
<S> <C> <C>
Net asset value:
Beginning of year $ 40.47 $ 39.60
-------- -------
Net investment income 1.44 2.65
Net realized and unrealized gain on investments 4.34 1.84
-------- -------
Total from investment operations 5.78 4.49
-------- -------
Dividends from net investment income to common shareholders (.71) (2.70)
Distributions from net realized gain on investments to common shareholders -- (.92)
-------- -------
Total distributions (.71) (3.62)
-------- -------
Net asset value:
End of period $ 45.54 $ 40.47
======== =======
Per share market value:
End of period $ 39.63 $ 38.50
======== =======
Total investment return:
Market value 4.79%* 22.44%
Net asset value 14.45%* 15.42%
Net assets (in millions):
End of period $ 193.84 $ 172.27
Ratio of operating expenses to average net assets .86%* 1.70%
Ratio of interest expenses to average net assets .30%* .61%
Ratio of total expenses to average net assets 1.16%* 2.31%
Ratio of net investment income to average net assets 3.41%* 6.44%
Portfolio turnover 31.46%* 64.89%
</TABLE>
*Percentages represent results for the period and are not annualized.
See Notes to Financial Statements
6
<PAGE>
SCHEDULE OF INVESTMENTS MASSMUTUAL CORPORATE INVESTORS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
Corporate Restricted Securities - 69.77%: (A) Amount Date Date (Note 2B) (Note 2A)
------------- ----------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
AccTech, LLC
A designer and marketer of specialized cleaning
products.
Senior Floating Rate Revolving Credit Note
due 2002 $ 548,760 10/31/96 $ 548,760 $ 548,760 $ 533,230
Senior Secured Series A Floating Rate
Note due 2002 $ 763,667 10/31/96 752,219 763,667 748,699
10.1% Senior Secured Series A Note due
2002 $ 1,145,500 10/31/96 1,116,175 1,145,500 1,119,268
12% Senior Secured Series B Note due
2004 $ 1,098,000 10/31/96 1,155,206 994,488 1,150,924
Membership Interest 5 int. 10/31/96 264,080 332,000 264,080
Warrant, exercisable until 2004, to
purchase 2 Membership Interests at $.01
per interest (B) 2 int. 10/31/96 -- 109,800 --
----------- ----------- -----------
3,836,440 3,894,215 3,816,201
----------- ----------- -----------
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 2004 $ 3,000,000 12/27/91 2,964,600 2,961,288 3,081,600
Warrant, exercisable until 2004, to
purchase 103,342 shares of common stock
at $15.53 per share (B) 103,342 shs. 12/27/91 49,714 38,712 51,878
----------- ----------- -----------
3,014,314 3,000,000 3,133,478
----------- ----------- -----------
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 $ 1,166,667 11/23/93 1,142,867 1,166,667 1,228,266
----------- ----------- -----------
Associated Vintage Group, Inc.
A provider of custom wine production services in
the United States.
11% Senior Subordinated Note due 2005 $ 3,335,000 3/19/97 3,274,637 3,165,284 3,313,656
Common Stock (B) 31,350 shs. 3/19/97 123,750 165,000 123,738
Warrant, exercisable until 2005, to
purchase 94,107 shares of common stock
at $.01 per share (B) 94,107 shs. 3/19/97 94,107 173,346 94,107
----------- ----------- -----------
3,492,494 3,503,630 3,531,501
----------- ----------- -----------
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. 2/28/89 654,500 401,880 435,242
----------- ----------- -----------
Budget Group, The (formerly Team Rental) - O.T.C
An operator of Budget Rent-A-Car franchises, retail
used car sales facilities and van pool territories.
7% Convertible Subordinated Note due
2003, convertible into 99,226 shares of
common stock at $20.16 per share $ 2,000,000 12/18/96 1,798,440 2,000,000 3,070,200
----------- ----------- -----------
</TABLE>
7
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
Corporate Restricted Securities: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------ ------------ -------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
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 $ 532,000 8/29/96 $ 532,000 $ 532,000 $ 522,264
Senior Secured Series A Floating Rate
Term Note due 2002 $ 2,383,176 8/29/96 2,357,676 2,383,176 2,344,330
12% Series B Term Note due 2004 $ 533,000 8/29/96 524,739 508,027 528,523
Membership Interest 266 int. 8/29/96 212,800 262,840 212,800
Warrant, exercisable until 2004, to
purchase 73 Membership Interests at $.01
per interest (B) 16 int. 8/29/96 1 26,650 --
-------------- ------------ ------------
3,627,216 3,712,693 3,607,917
-------------- ------------ ------------
Cains Foods, L.P.
A producer of mayonnaise, sauce and pickle
products for both the retail and food service
markets
10% Senior Secured Term Note due 2004 $ 1,513,512 9/29/95 1,513,512 1,513,512 1,487,631
11.5% Senior Subordinated Note due 2004 $ 945,945 9/29/95 895,706 903,040 927,972
8% Junior Subordinated Convertible Note
due 2004, convertible into 78 partnership
points at $1,388.89 per point $ 108,108 9/29/95 108,108 108,108 194,908
Warrant, exercisable until 2006, to
purchase 39 partnership points at $.01 per
point (B) 39 pts. 9/29/95 50,261 50,261 91,364
-------------- ------------ ------------
2,567,587 2,574,921 2,701,875
-------------- ------------ ------------
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 200,000 shares of
common stock at $7.31 per share $ 1,500,000 3/31/94 1,420,050 1,500,000 1,395,000
-------------- ------------ ------------
Classic Sports, Inc.
A cable sports television network
Convertible Preferred Stock, convertible
into 644 shares of common stock at $1,000
per share 644 shs. * 544,444 304,121 773,328
-------------- ------------ ------------
Coast Distribution System, The - A.S.E.
A wholesale distributor of recreational vehicle and
marine parts and accessories
11.2% Senior Subordinated Secured Note
due 1999 $ 233,400 6/26/89 240,845 233,400 234,870
Common Stock (B) 108,646 shs. 6/27/85 560,613 568,101 348,320
-------------- ------------ ------------
801,458 801,501 583,190
-------------- ------------ ------------
</TABLE>
*4/18/95 and 6/3/96.
8
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
Corporate Restricted Securities: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
-------------- -------------- -------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Consumer Product Enterprises, Inc.
A manufacturer of colored acrylic felt for
consumer use.
Senior Secured Floating Rate Revolving
Credit Notes due 2000 $ 130,730 12/8/95 $ 130,730 $ 130,730 $ 130,730
10.75% Senior Secured Term Note due
2003 $ 1,214,205 12/8/95 1,226,772 1,214,205 1,203,642
12% Senior Subordinated Note due 2005 $ 800,575 12/8/95 803,858 760,225 777,999
Common Stock (B) 184,560 shs. 12/8/95 138,420 184,560 138,420
Warrant, exercisable until 2005, to
purchase 138,420 shares of common stock
at $.01 per share (B) 138,420 shs. 12/8/95 1,384 50,853 1,384
-------------- -------------- ------------
2,301,164 2,340,573 2,252,175
-------------- -------------- ------------
Control Devices, Inc. - O.T.C
A producer of high quality electromechanical circuit
protector devices and
photo-optic sensors
Common Stock (B) 174,200 shs. * 26,242 26,242 1,998,949
-------------- -------------- ------------
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 $ 349,296 12/11/90 349,093 348,859 365,747
-------------- -------------- ------------
D&K Wholesale Drug, Inc. - O.T.C
A wholesale pharmaceutical distribution company
11% Subordinated Note due 1997 $ 541,667 12/29/87 495,842 541,667 542,209
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 1,184,750
-------------- -------------- ------------
1,451,955 1,416,667 1,726,959
-------------- -------------- ------------
Delta Beverage Group, Inc.
A Pepsi soft drink bottler
Common Stock (B) 966 shs. 3/8/88 181,486 2,006,380 181,486
-------------- -------------- ------------
Diversco, Inc.
A contract provider of janitorial and equipment
maintenance services and temporary production labor
to industrial customers
Senior Floating Rate Term Note due 2002 $ 440,055 10/24/96 437,370 440,055 437,765
10.16% Senior Term Note due 2002 $1,320,164 10/24/96 1,321,748 1,320,164 1,329,933
12% Senior Subordinated Note due 2003 $1,249,000 10/24/96 1,277,852 1,111,471 1,290,217
Membership Interest 2,992 int. 10/24/96 224,393 305,190 224,393
Warrant, exercisable to 2003, to purchase
1,791 Membership Interests at $.01 per
interest (B) 1,791 int. 10/24/96 18 147,609 18
-------------- -------------- ------------
3,261,381 3,324,489 3,282,326
-------------- -------------- ------------
Eagle Pacific Industries, Inc. - O.T.C
An extruder of small and medium diameter plastic
pipe and tubing in the United States
8% Redeemable Convertible Preferred
Stock, convertible into 39,902 shares of
common stock at $4.26 per share 3,300 shs. 5/9/97 3,286,140 3,300,000 3,344,880
-------------- -------------- ------------
</TABLE>
* 7/29/94 and 10/8/96.
9
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
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 $2,062,400
10% Preferred Stock 2,339 shs. 9/24/93 176,964 233,925 199,211
Common Stock (B) 161 shs. 9/24/93 16,075 16,075 92,117
Warrant, 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 96,271
---------- ---------- ----------
2,136,272 2,249,998 2,449,999
---------- ---------- ----------
Exide Electronics Group, Inc. - O.T.C
A manufacturer and servicer of uninterruptible
power systems.
Common Stock (B) 229,358 shs. 9/2/92 2,972,400 3,000,000 2,573,853
---------- ---------- ----------
Fleming Acquisition Corporation
A supplier of high-quality, premium printed
labels for distilled spirits, wine, food
and household products.
15% Senior Subordinated Note due 2005 $ 2,792,966 * 2,788,218 2,656,508 2,843,519
Common Stock (B) 545 shs. 4/28/95 141,111 272,500 20,511
Warrant, exercisable until 2005, to
purchase 380 shares of common stock at
$.01 per share (B) 380 shs. 4/28/95 98,235 170,455 14,289
Incentive Warrant, exercisable from 1998
until 2000, to purchase 19 shares of
common stock at $.01 per share (B) 19 shs. 4/28/95 3,308 2,273 722
---------- ---------- ----------
3,030,872 3,101,736 2,879,041
---------- ---------- ----------
Hardy Oil & Gas USA, Inc.
Engages in 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 3,040,500
Warrant, exercisable until 2005, to
purchase 272,934 shares of common stock
at (pound)1.84 per share (B) 272,934 shs. 1/11/95 27,000 -- 513,116
---------- ---------- ----------
2,931,300 3,000,000 3,553,616
---------- ---------- ----------
Hartzell Manufacturing, Inc.
A provider of contract engineering, manufacturing,
and assembly services for a
variety of industrial manufacturing companies.
12.5% Senior Subordinated note due 2005 $ 2,626,300 4/18/97 2,659,129 2,316,129 2,701,412
Common Stock (B) 70,968 shs. 4/18/97 601,074 801,438 601,025
Warrant, exercisable until 2005, to
purchase 33,379 shares of common stock
at $.01 per share (B) 33,379 shs. 4/18/97 3,338 315,156 3,338
---------- ---------- ----------
3,263,541 3,432,723 3,305,775
---------- ---------- ----------
Hein-Werner Corp. - A.S.E.
A manufacturer of automotive service and
collision repair equipment and
hydraulic cylinders.
Warrant, exercisable until 1999, to
purchase 59,713 shares of common stock
at $6.28 per share (B) 59,713 shs. 9/3/96 -- -- 82,166
---------- ---------- ----------
</TABLE>
* 4/28/95, 5/1/96, 2/1/97 and 5/1/97.
10
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
Corporate Restricted Securities: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
-------------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Highland Homes Holdings, Inc.
A single family homebuilder operating in the
Dallas-Fort Worth and Atlanta areas.
12.75% Senior Note due 1999 $ 2,250,000 11/18/93 $ 2,227,725 $ 2,219,324 $ 2,336,850
Warrant, exercisable until 2001, to
purchase 10 shares of common stock at
$17,897.31 per share (B) 10 shs. 11/18/93 1 20,451 36,193
-------------- ----------- -----------
2,227,726 2,239,775 2,373,043
-------------- ----------- -----------
Hudson River Capital, LLC
Acquires controlling or substantial interests
in manufacturing and marketing entities.
Series A Preferred Units 100,000 uts. 7/21/94 842,935 887,304 842,935
-------------- ----------- -----------
Hussey Seating Company
A manufacturer of spectator seating products.
Senior Secured Floating Rate Revolving
Note due 2003 $ 292,500 6/12/96 289,634 292,500 290,043
Senior Secured Floating Rate Note due 2003 $ 862,500 6/12/96 853,961 862,500 855,083
10% Senior Secured Note due 2003 $ 900,000 6/12/96 876,240 900,000 893,160
12% Subordinated Secured Note due 2006 $ 1,350,000 6/12/96 1,327,320 1,139,564 1,367,685
Warrant, exercisable until 2006, to
purchase 3,553 shares of common stock at
$.01 per share (B) 3,553 shs. 6/12/96 36 225,000 36
-------------- ----------- -----------
3,347,191 3,419,564 3,406,007
-------------- ----------- -----------
Intermetrics, Inc.
A provider of software systems, services and
products to a variety of information technology
users.
Senior Floating Rate Revolving Credit Note
due 2001 $ 192,000 5/30/97 192,000 192,000 190,387
Senior Floating Rate Revolving Term Note
due 2002 $ 1,332,143 8/31/95 1,320,881 1,332,143 1,302,037
13% Senior Subordinated Note due 2002 $ 799,318 8/31/95 813,520 712,832 797,240
Class A Common Stock (B) 2,941 shs. 8/31/95 13,787 18,384 13,790
Class B Common Stock (B) 8,134 shs. 8/31/95 38,174 50,837 38,132
Warrant, exercisable until 2007 to purchase
21,176 shares of Class D common stock at
$.01 per share (B) 21,176 shs. 8/31/95 2,118 104,000 2,118
-------------- ----------- -----------
2,380,480 2,410,196 2,343,704
-------------- ----------- -----------
Jackson Products, Inc.
Manufactures and distributes a variety of
industrial and highway safety products
12.25% Senior Subordinated Note due 2004 $ 1,971,000 8/16/95 1,971,000 1,933,433 1,980,264
13.25% Cumulative Exchangeable
Preferred Stock 99 shs. 8/16/95 985,500 823,332 827,366
Common Stock (B) 434 shs. 8/16/95 43,426 43,426 39,083
Warrant, exercisable until 2005, to
purchase 1,999 shares of common stock at
$.01 per share (B) 1,999 shs. 8/16/95 199,735 199,735 1,999
-------------- ----------- -----------
3,199,661 2,999,926 2,848,712
-------------- ----------- -----------
</TABLE>
11
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
Corporate Restricted Securities: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
-------------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Kappler Safety Group, Inc.
A manufacturer of protective apparel for the
industrial/safety, clean room and healthcare markets.
13% Senior Subordinated Note due 2004 $ 3,333,000 12/2/96 $ 3,383,995 $ 3,021,787 $ 3,345,665
Warrant, exercisable until 2004, to
purchase 57,418 shares of common stock
at $.01 per share (B) 57,418 shs. 12/2/96 57,418 333,300 72,576
-------------- ----------- -----------
3,441,413 3,355,087 3,418,241
-------------- ----------- -----------
Latin Communications Group
An operator of Spanish-language media in North
America.
Common Stock (B) 88,438 shs. * 628,945 812,504 884,380
-------------- ----------- -----------
Maloney Industries, Inc.
Engineers and manufactures process systems
for the oil and gas industry.
13% Subordinated Note due 2004 $ 2,025,000 10/26/95 2,378,250 2,025,000 2,214,135
Limited Partnership Interest 568 uts. 10/20/95 506,250 733,259 585,989
Warrant, exercisable until 2004 to
purchase 297 units of Limited Partnership
Interest at $.01 per unit (B) 297 uts. 10/26/95 297 -- 306,094
-------------- ----------- -----------
2,884,797 2,758,259 3,106,218
-------------- ----------- -----------
Maxtec International Corp.
A manufacturer and distributor of precision
test and measurement equipment and
overhead crane control systems.
Senior Floating Rate Revolving Credit
Facility due 2001 $ 659,341 6/28/95 659,341 659,341 653,934
Common Stock (B) 76,923 shs. 6/28/95 192,115 230,769 173,077
Warrant, exercisable from 1998 until
2005, to purchase 39,563 shares of
common stock at $.01 per share (B) 39,563 shs. 6/28/95 98,581 171,429 39,563
-------------- ----------- -----------
950,037 1,061,539 866,574
-------------- ----------- -----------
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 1,512,000
-------------- ----------- -----------
NM Holdings LLC
A company created to acquire motion picture
film rights from Twentieth Century Fox.
10% Senior Note due 2001 1,000,000 6/28/96 980,600 1,000,000 990,700
12% Subordinated Note due 2001 $ 980,000 6/28/96 982,156 980,000 989,506
Membership Interest 20,000 int. 6/28/96 15,000 19,876 15,000
-------------- ----------- -----------
1,977,756 1,999,876 1,995,206
-------------- ----------- -----------
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 156,867 shares of
common stock at $9 per share $ 1,411,800 8/31/94 1,425,918 1,411,800 1,485,920
-------------- ----------- -----------
</TABLE>
* 2/14/95, 12/1/95 and 2/27/96.
12
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
Corporate Restricted Securities: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
-------------- ----------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
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 $ 855,916
8% Convertible Preferred Stock due 2001,
convertible into 83,333 shares of common
stock at $2 per share 83,333 shs. 2/5/93 166,667 166,667 156,050
Common Stock (B) 133,333 shs. 2/5/93 333,333 333,333 153,600
-------------- ------------ ------------
1,332,000 1,333,333 1,165,566
-------------- ------------ ------------
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 $ 817,500 11/30/95 851,917 817,500 844,723
10.5% Senior Secured Convertible Note
due 2005, convertible into 4 shares of
common stock at $50,000 per share $ 195,000 11/30/95 205,335 195,000 214,870
Common Stock (B) 7 shs. 11/30/95 253,125 337,500 210,209
-------------- ------------ ------------
1,310,377 1,350,000 1,269,802
-------------- ------------ ------------
Piedmont Holding, Inc.
A general aviation fixed based operator with
repair, maintenance and overhaul certification.
12% Senior Subordinated Note due 2001 $ 2,171,426 7/15/92 2,189,232 2,171,426 2,245,906
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 66,973
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 -- 89,344
-------------- ------------ ------------
2,476,962 2,457,136 2,684,162
-------------- ------------ ------------
Plastipak Packaging, Inc.
A manufacturer of plastic containers.
10.64% Senior Subordinated Note due 2006 $ 3,500,000 10/25/96 3,403,750 3,412,368 3,448,900
Warrant, exercisable until 2006, to
purchase 97 shares of common stock at
$.01 per share (B) 97 shs. 10/25/96 55,593 93,625 62,195
-------------- ------------ ------------
3,459,343 3,505,993 3,511,095
-------------- ------------ ------------
Precision Dynamics, Inc.
A manufacturer of custom-designed solenoid
valves and controls.
Senior Secured Floating Rate Revolving
Credit Facility due 2003 $ 423,800 7/22/96 419,604 423,800 420,028
Senior Secured Floating Rate Term Note
due 2003 $ 2,902,400 7/22/96 2,873,956 2,902,400 2,878,600
12% Senior Secured Term Note due 2004 $ 489,000 7/22/96 482,545 397,779 491,200
8% Preferred Stock 232 shs. 7/22/96 220,231 231,822 220,300
Common Stock (B) 599 shs. 7/22/96 21,699 28,978 21,694
Warrant, exercisable until 2004, to
purchase 322 shares of common stock at
$.01 per share (B) 322 shs. 7/22/96 3 97,800 3
-------------- ------------ ------------
4,018,038 4,082,579 4,031,825
-------------- ------------ ------------
</TABLE>
13
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
Corporate Restricted Securities: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
-------------- ----------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
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 $ 983,760
11.51% Junior Secured Note due 1999 $ 717,628 8/12/94 702,414 717,628 575,250
9.8% Redeemable Exchangeable Preferred
Stock 10,000 shs. 8/12/94 847,900 1,000,000 390,000
Common Stock (B) 1,492 shs. 8/12/94 15 -- 12
-------------- ------------ ------------
2,734,489 2,917,628 1,949,022
-------------- ------------ ------------
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 1,669,650
Common Stock (B) 35,500 shs. 2/16/93 340,800 340,800 607,050
-------------- ------------ ------------
1,939,950 1,840,800 2,276,700
-------------- ------------ ------------
Rent-Way, Inc. - O.T.C
Operates rent-to-own stores in Ohio, Pennsylvania
and New York.
10% Convertible Subordinated Note due
2002, convertible into 201,207 shares of
common stock at $9.94 per share $ 2,000,000 7/18/95 1,991,220 2,000,000 2,374,200
Warrant, exercisable until 2002, to
purchase 20,000 shares of common stock
at $9.94 per share (B) 20,000 shs. 7/18/95 200 -- 88,760
-------------- ------------ ------------
1,991,420 2,000,000 2,462,960
-------------- ------------ ------------
Sequentia, Inc.
A manufacturer and distributor of fiberglass
reinforced panels used in commercial, industrial
and residential applications.
12% Subordinated Note due 2004 $ 2,281,400 12/14/95 2,418,284 1,855,047 2,100,484
Limited Partnership Interest of KS
Holdings, L.P. 7,186 uts. 12/14/95 538,950 678,741 71,860
Warrant, exercisable until 2004, to
purchase 5,449 units of Limited
Partnership Interest of KS Holdings, L.P. at
$.01 per unit (B) 5,449 uts. 12/14/95 5,449 479,094 2,725
-------------- ------------ ------------
2,962,683 3,012,882 2,175,069
-------------- ------------ ------------
Star International Holdings, Inc.
A manufacturer of commercial cooking appliances.
9.65% Senior Secured Note due 2004 $ 1,531,343 5/27/94 1,531,343 1,531,343 1,518,940
10.5% Subordinated Note due 2004 $ 716,418 5/27/94 716,418 716,418 691,702
Common Stock (B) 4,310 shs. 5/27/94 259,735 259,735 80,981
Warrant, exercisable until 2004, to
purchase 3,224 shares of common stock at
$.01 per share (B) 3,224 shs. 5/27/94 32 -- 60,547
-------------- ------------ ------------
2,507,528 2,507,496 2,352,170
-------------- ------------ ------------
Supreme Industries, Inc. - A.S.E
A manufacturer of modular homes and truck bodies.
Common Stock (B) 562,851 shs. * 1,287,413 1,279,976 4,369,416
Common Stock of Contempri Homes, Inc.(B) 256,516 shs. 12/31/92 7,040 4,952 4,104
Common Stock of TGC Industries, Inc. (B) 19,082 shs. 9/30/86 9,497 9,497 14,312
-------------- ------------ ------------
1,303,950 1,294,425 4,387,832
-------------- ------------ ------------
</TABLE>
*5/23/79, 12/15/95 and 6/9/96.
14
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
Corporate Restricted Securities: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------- ----------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Swing N'Slide Corporation - A.S.E.
A manufacturer and distributor of home
playground equipment and accessories.
12% Subordinated Note due 2005 $ 3,125,000 3/13/97 $ 2,585,000 $ 2,458,045 $ 2,623,125
Limited Partnership Interest of Green Grass
Capital II, LLC 81,548 uts. 3/13/97 293,573 447,500 236,489
Warrant, exercisable until 2005, to
purchase 148,044 units of Limited
Partnership Interest of Green Grass Capital
II, LLC at $.01 per unit (B) 148,044 uts. 3/13/97 531,774 680,722 428,143
----------- ----------- -----------
3,410,347 3,586,267 3,287,757
----------- ----------- -----------
Tidewater Holdings, Inc.
An operator of a barge transportation line
on the Columbia/Snake River system.
12.5% Senior Subordinated Note due 2006 $ 2,380,000 7/25/96 2,388,092 2,334,464 2,438,310
Convertible Preferred Stock, convertible
into 1,120 shares of common stock at $1,000
per share (B) 1,120 shs. 7/25/96 1,008,000 1,120,000 1,008,000
Warrant, exercisable until 2008, to
purchase 474 shares of common stock at
$.01 per share (B) 474 shs. 7/25/96 43 48,216 43
----------- ----------- -----------
3,396,135 3,502,680 3,446,353
----------- ----------- -----------
TransMontaigne Oil Company - A.S.E.
An independent petroleum products marketing
company.
12.75% Senior Subordinated Debenture
due 2000 $ 1,200,000 3/28/91 1,274,280 1,180,680 1,261,800
Common Stock (B) 258,720 shs. * 400,000 798,595 3,085,236
Warrant, exercisable until 2001, to
purchase 74,606 shares of common stock
at $3.60 per share (B) 74,606 shs. 3/28/91 7,461 42,000 728,528
----------- ----------- -----------
1,681,741 2,021,275 5,075,564
----------- ----------- -----------
Trend Plastics, Inc.
A manufacturer and assembler of plastic
injection molded parts.
12% Subordinated Note due 2005 $ 2,513,500 3/21/97 2,592,675 2,510,371 2,623,591
Limited Partnership Interest of Riverside V
Holding Company L.P. 2,183 uts. 3/21/97 267,065 295,664 267,065
Limited Partnership Interest of Riverside
V-A Holding Company L.P. 4,670 uts. 3/21/97 605,024 632,619 605,023
Warrant, exercisable until 2005, to
purchase 3,129 units of Limited Partnership
Interest at $.01 per unit (B) 3,129 uts. 3/21/97 3,129 3,129 3,129
----------- ----------- -----------
3,467,893 3,441,783 3,498,808
----------- ----------- -----------
Truseal Technologies, Inc.
A manufacturer of sealant systems for the
North American window and door market.
12.25% Senior Subordinated Note due $ 2,675,000 6/23/97 2,733,315 2,298,540 2,720,475
Limited Partnership Interest. 8,246 uts. 6/17/97 742,140 824,600 742,140
Warrant, exercisable until 2006, to
purchase 1,258 units of Limited Partnership
Interest at $.01 per unit (B) 1,258 uts. 6/23/97 13 376,932 13
----------- ----------- -----------
3,475,468 3,500,072 3,462,628
----------- ----------- -----------
</TABLE>
*3/28/91, 12/18/91, 9/30/92, 9/30/93, 9/30/94, 3/31/95 and 5/9/95.
15
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares, Units,
Warrants or Fair Value Fair Value
Principal Acquisition at Acquisition Cost at 6/30/97
Corporate Restricted Securities: (A) (Continued) Amount Date Date (Note 2B) (Note 2A)
------------- ----------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
U.S. Netting, Inc.
A manufacturer of plastic netting for a wide variety
of industries.
Senior Secured Floating Rate Revolving
Note due 2000 $ 55,889 5/15/97 $ 55,889 $ 55,889 $ 55,889
11% Senior Secured Note due 2005 $ 1,583,548 5/3/95 1,751,087 1,583,548 1,726,067
12% Subordinated Note due 2005 $ 652,050 5/3/95 733,622 620,577 745,098
Common Stock (B) 4,911 shs. 5/3/95 162,652 391,230 28,366
Warrant, exercisable until 2005, to
purchase 2,795 shares of common stock at
$.01 per share (B) 2,795 shs. 5/3/95 92,549 35,923 18,358
------------ ----------- -----------
2,795,799 2,687,167 2,573,778
------------ ----------- -----------
U.S. Silica Company
A producer of high grade industrial and specialty
ground silica sands in North America
15% Senior Subordinated Notes due 2005 $ 2,356,691 * 2,502,547 2,356,562 2,504,456
Redeemable Preferred Stock Series A (B) 42,001 shs. 12/19/96 291,673 388,898 291,655
Convertible Preferred Stock Series B,
convertible into 84,002 shares of Series B
common stock at $9.26 per share (B) 84,002 shs. 12/19/96 583,352 777,802 583,310
Warrant, exercisable until 2005, to
purchase 6,481 units of Series A Preferred
Stock and 12,964 units of Series B Preferred
Stock at $.01 per unit (B) 6,481 uts. 12/19/96 12,963 129 6,481
------------ ----------- -----------
3,390,535 3,523,391 3,385,902
------------ ----------- -----------
Unidata, Inc.
A manufacturer and distributor of database
management software
11.5% Senior Subordinated Note due 2003 $ 2,500,000 12/14/95 2,538,500 2,402,584 2,331,750
Common Stock (B) 125,000 shs. 12/14/95 375,000 500,000 375,000
Warrant, exercisable until 2003, to
purchase 62,500 shares of common stock
at $1 per share (B) 62,500 shs. 12/14/95 625 124,250 625
------------ ----------- -----------
2,914,125 3,026,834 2,707,375
------------ ----------- -----------
Unipac Corporation
A manufacturer of laminated materials which
are used to seal a variety of packaging containers
Senior Secured Floating Rate Note due
2002 $ 650,391 2/9/96 643,496 650,391 650,391
12% Senior Secured Note due 2004 $ 243,750 2/9/96 246,870 220,837 258,716
Acquisition Line of Credit due 2002 $ 731,250 9/30/96 731,250 731,250 731,250
Limited Partnership Interest of Riverside II
Holding Company L.P. 123 uts. ** 112,737 217,232 325,241
Warrant, exercisable from 2000 until
2004, to purchase 41 units of Limited
Partnership Interest of Riverside II Holding
Company L.P. at $.01 per unit (B) 41 uts. 2/9/96 4 40,313 109,395
------------ ----------- -----------
1,733,357 1,860,023 2,074,993
------------ ----------- -----------
Victory Ventures, LLC
Acquires controlling or substantial interests
in other entities
Series A Preferred Units 100,000 uts. 12/2/96 107,065 112,696 107,065
------------ ----------- -----------
Sub-Total Corporate Restricted Securities $125,295,420 128,827,585 135,242,536
============ =========== ===========
</TABLE>
* 12/19/96 and 2/15/97.
** 2/9/96 and 9/25/96.
16
<PAGE>
SCHEDULE OF INVESTMENTS MASSMUTUAL CORPORATE INVESTORS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares or Market Value
Interest Due Principal Cost at 6/30/97
Rule 144A Securities: (A) Rate Date Amount (Note 2B) (Note 2A)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Bonds - 6.50%
Anchor Advanced Products 11.750% 04/01/04 $ 410,000 $ 413,000 $ 431,525
Archibald Candy Corp. 10.250 07/01/04 650,000 650,000 650,000
Atlantic Express 10.750 02/01/04 550,000 550,000 566,500
Aurora Foods, Inc. 6.875 02/15/07 900,000 922,500 910,125
CFP Holdings 11.625 01/15/04 200,000 200,000 206,000
Integrated Health Services 9.500 09/15/07 500,000 500,000 513,750
International Wire Group 11.750 06/01/05 550,000 598,125 595,375
L-3 Corporation 10.375 05/01/07 450,000 450,000 473,625
Neenah Corporation 11.125 05/01/07 300,000 300,000 318,000
Pogo Producing 8.750 05/15/07 100,000 99,770 100,500
Ridell Sports, Inc. 10.500 07/15/07 200,000 200,000 205,000
Station Casino, Inc. 9.750 04/15/07 650,000 629,850 650,000
Sun Media Corporation 9.500 05/15/07 100,000 99,206 101,000
Sun Media Corporation 9.500 02/15/07 575,000 586,187 580,750
Telex Communications, Inc. 10.500 05/01/07 2,150,000 2,162,938 2,241,375
Therma-Wave, Inc. 10.625 05/15/04 450,000 457,500 478,125
United Refining Company 10.750 06/15/07 1,750,000 1,750,000 1,723,750
Von Hoffman Press, Inc. 10.375 05/15/07 380,000 382,363 397,100
W R Carpenter North America 10.625 06/15/07 625,000 631,917 621,875
Wavetek Corporation 10.125 06/15/07 130,000 130,000 132,275
Williams Scotsman, Inc. 9.875 06/01/07 500,000 500,000 501,250
Windy Hill Pet Foods Company 9.750 05/15/07 100,000 100,000 100,250
Wiser Oil Company 9.500 05/15/07 100,000 99,718 101,000
------------ ------------ ------------
Sub-Total Rule 144A Bonds $ 12,320,000 12,413,074 12,599,150
============ ============ ============
Convertible Bonds - 5.18%
Continental Airlines, Inc. 6.750 04/15/06 $ 600,000 557,250 786,000
Corporate Express 4.500 07/01/00 570,000 526,350 507,300
CUC International, Inc. 3.000 02/15/02 1,200,000 1,200,000 1,272,000
Garnet Resources Corporation 9.500 12/21/98 500,000 500,000 202,500
Grand Metropolitan PLC 6.500 01/31/00 600,000 600,000 846,000
Home Shopping Network 5.875 03/01/06 1,000,000 1,000,000 1,310,000
Imax Corporation 5.750 04/01/03 525,000 525,000 661,500
Marriott International, Inc. 0.000 03/25/11 1,000,000 561,294 602,500
Molten Metal Technology 5.500 05/01/06 1,150,000 1,079,063 425,500
Personnel Group 5.750 07/01/04 100,000 100,000 106,250
Roche Holdings, Inc. 0.000 05/06/12 4,500,000 1,772,592 1,935,000
Scholastic Corp. 5.000 08/15/05 650,000 528,125 546,000
Sunrise Assisted Living 5.500 06/15/02 500,000 500,000 572,500
Thermo Electron Corporation 4.250 01/01/03 250,000 250,000 275,000
------------ ------------ ------------
Sub-Total Rule 144A Convertible Bonds $ 13,145,000 9,699,674 10,048,050
============ ============ ============
Convertible Preferred Stock - .71%
Greenfield Capital Trust, Inc. 14,300 697,850 672,100
Hvide Capital Trust 4,570 228,500 238,211
Loral Space and Communications LTD 1,800 90,000 90,000
Qualcomm Financial Trust 7,720 386,000 365,735
------------ ------------
Total Convertible Preferred Stock 1,402,350 1,366,046
------------ ------------
Total Rule 144A Securities 23,515,098 24,013,246
------------ ------------
Total Corporate Restricted Securities 152,342,683 159,255,782
------------ ------------
</TABLE>
17
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares or Market Value
Interest Due Principal Cost at 6/30/97
Corporate Public Securities: Rate Date Amount (Note 2B) (Note 2A)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Bonds - 11.12%
Aearo Company 12.500% 07/15/05 $ 1,000,000 $ 1,000,000 $ 1,090,000
Amphenol Corporation 9.875 05/15/07 400,000 400,000 410,000
Atlas Air, Inc. 12.250 12/01/02 1,500,000 1,500,000 1,665,000
Central Rents, Inc. 12.875 12/15/03 1,630,000 1,530,600 1,581,100
Continental Airlines, Inc. 9.500 12/15/01 750,000 750,000 782,812
Data Documents, Inc. 13.500 07/15/02 3,028,000 3,033,290 3,330,800
Dawson Production Services 9.375 02/01/07 850,000 867,938 871,250
Decorative Home Accents, Inc. 13.000 06/30/02 700,000 700,000 315,000
Florist Transworld Delivery, Inc. 14.000 12/15/01 1,475,000 1,454,424 1,563,500
Great American Cookie Co. 10.875 01/15/01 1,210,000 1,187,250 1,210,000
Hosiery Corporation of America 13.750 08/01/02 1,000,000 987,800 1,090,000
Indah Kiat International Corporation 11.875 06/15/02 1,000,000 1,000,000 1,102,500
International Wire Group, Inc. 11.750 06/01/05 750,000 750,000 813,750
Ivex Packaging Corporation 12.500 12/15/02 250,000 266,563 271,250
Key Plastics, Inc. 14.000 11/15/99 750,000 760,463 828,750
Northwest Airlines Corp. 10.150 01/02/05 609,694 609,694 657,707
Northwest Airlines Corp. 12.092 12/31/00 437,969 454,393 459,868
Parker Drilling Corporation 9.750 11/15/06 1,500,000 1,488,225 1,576,875
Remington Products Company 11.000 05/15/06 600,000 595,506 528,000
Spinnaker Industries 10.750 10/15/06 250,000 252,813 251,250
Trans-Resources, Inc. 11.875 07/01/02 1,000,000 1,032,500 1,027,500
Vintage Petroleum 8.625 02/01/09 125,000 123,948 124,375
------------ ------------ ------------
Total Bonds $ 20,815,663 20,745,407 21,551,287
============ ============ ============
Common Stock - 7.21%
4Health Inc. (B) 27,000 151,000 158,625
ARM Financial Group, Inc. 3,500 52,500 70,000
Atlas Air, Inc. (B) 5,800 117,450 200,100
Barringer Technologies, Inc. (B) 2,506 21,459 37,590
Benson Petroleum, LTD. (B) 200,000 154,408 202,600
Central Rents, Inc. (B) 1,880 67,856 94,000
Chesapeake Energy Corporation (B) 35,000 1,176,875 343,420
Collins & Aikman Corporation (B) 40,200 240,834 402,000
Computer Horizons Corporation (B) 9,870 62,510 338,047
Correctional Services, Inc. (B) 9,553 53,206 114,636
Data Documents, Inc. (B) 21,994 33 269,427
Dawson Production Services (B) 40,030 493,699 560,420
Decorative Home Accents, Inc. (B) 700 -- --
Florist Transworld Delivery, Inc. (B) 14,686 41,258 73,430
Great Plains Software (B) 1,750 28,000 47,250
GTech Holdings Corporation (B) 24,500 704,375 790,125
Gulf Canada Resources, Ltd. (B) 58,350 459,506 485,005
Health and Retirement Property Trust 11,600 218,950 218,219
Hosiery Corporation of America (B) 1,000 -- 70,000
Iridium World Communications, Inc. 7,000 140,000 126,875
JLK Direct Distribution 3,500 70,000 89,688
LCS Industries, Inc. 35,000 546,831 505,295
Marker International (B) 70,000 437,500 262,500
Maximus, Inc. 14,000 224,000 250,250
Mediq Incorporated (B) 150,000 574,147 1,321,800
Polo Ralph Lauren Corp. 5,250 136,500 143,719
Pride Petroleum Services 9,501 161,517 228,024
Public Storage, Inc. 23,400 663,975 684,450
Qwest Communications International, Inc. 1,750 38,500 47,688
Red Roof Inns, Inc. (B) 45,200 640,993 813,600
Republic Industries, Inc. (B) 35,000 859,688 870,625
SFX Broadcasting, Inc. (B) 7,000 226,625 295,309
Staffing Resources, Inc. (B) 105,000 577,500 1,155,000
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares,
Warrants or Market Value
Interest Due Principal Cost at 6/30/97
Corporate Public Securities: (Continued) Rate Date Amount (Note 2B) (Note 2A)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Common Stock (Continued)
Startek, Inc. (B) 70,000 $ 1,082,725 $ 1,054,340
Sweetwater, Inc. (B) 26,000 182,000 13,000
Vimpel-Communications 18,665 562,423 709,270
Western Systems Corporation (B) 405,590 760,889 937,724
------------ ------------
Total Common Stock $ 11,929,732 $ 13,984,051
------------ ------------
Convertible Bonds - 4.21%
Continental Airlines 6.750% 04/15/06 $ 400,000 371,000 524,000
Hilton Hotels 5.000 05/15/06 1,385,000 1,385,000 1,464,637
Home Depot, Inc. 3.250 10/01/01 900,000 887,000 1,030,500
Magna International, Inc. 5.000 10/15/02 600,000 613,125 727,500
Phototronics Inc. 6.000 06/01/04 550,000 550,000 620,125
Renal Treatment Centers, Inc. 5.625 07/15/06 237,000 237,000 234,038
Savoy Pictures Entertainment 7.000 07/01/03 1,250,000 1,287,500 1,037,500
Sunglass Hut International, Inc. 5.250 06/15/03 725,000 673,231 522,000
US Filter Corporation 4.500 12/15/01 1,000,000 1,000,000 972,500
USA Waste Services, Inc. 4.000 02/01/02 950,000 950,000 1,040,250
------------ ------------ ------------
Total Convertible Bonds $ 7,997,000 7,953,856 8,173,050
============ ============ ============
Convertible Preferred Stock - 2.43%
D T Industries 40,000 2,000,000 2,000,000
Merrill Lynch & Co. 26,500 606,188 632,688
Occidental Petroleum Corporation 4,650 232,500 376,650
SFX Broadcasting, INC 31,100 1,452,475 1,694,950
------------ ------------
Total Convertible Preferred Stock 4,291,163 4,704,288
------------ ------------
Preferred Stock - .01%
RXI Holdings, Inc. 231,198 231,198 231
------------ ------------
Total Preferred Stock 231,198 231
------------ ------------
Warrants - .12%
Barringer Technologies, Inc. (B) 13,930 696 20,017
Western Systems Corporation (B) 183,117 45,779 228,896
------------ ------------
Total Warrants 46,475 248,913
------------ ------------
Total Corporate Public Securities 45,197,831 48,661,820
------------ ------------
</TABLE>
19
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market Value
Due Principal Cost at 6/30/97
Short-Term Securities: Yield Date Amount (Note 2B) (Note 2A)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Commercial Paper - .40%
Pennsylvania Power & Light 5.760% 7/1/97 $ 320,000 $ 320,000 $ 320,000
PS Colorado Credit Corporation 6.350 7/1/97 450,000 450,000 450,000
------------ ------------ ------------
Total Short-Term Securities $ 770,000 770,000 770,000
============ ============ ============
Total Investments - 107.66% $198,310,514 208,687,602
============ ============
Other Assets - 4.12 7,981,331
Liabilities - (11.78) (22,833,059)
------- ------------
Total Net Assets - 100.00% $193,835,874
====== ============
</TABLE>
(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.
<TABLE>
<CAPTION>
INDUSTRY CLASSIFICATION
Fair Value
at 6/30/97
Corporate Restricted Securities: (Note 2A)
----------
<S> <C>
ADVERTISING - .63%
Ammirati & Puris, Inc. $1,228,266
----------
BEVERAGES - 1.92%
Associated Vintage Group, Inc. 3,531,501
Delta Beverage Group, Inc. 181,486
----------
3,712,987
----------
BUILDING MATERIALS - 3.49%
Highland Homes Holdings, Inc. 2,373,043
Supreme Industries, Inc. 4,387,832
----------
6,760,875
----------
CHEMICAL - 1.97%
AccTech, LLC 3,816,201
----------
COMMUNICATIONS - 3.04%
Classic Sports, Inc. 773,328
Home Shopping Network 1,310,000
Latin Communications Group 884,380
Sun Media Corporation 681,750
Telex Communications, Inc. 2,241,375
----------
5,890,833
----------
ELECTRICAL EQUIPMENT/ELECTRONICS - 8.36%
Catalina Lighting, Inc. 1,395,000
Control Devices, Inc. 1,998,949
Exide Electronics Group, Inc. 2,573,853
Intermetrics, Inc. 2,343,704
International Wire Group 595,375
Mercury Computer Systems, Inc. 1,512,000
Nu Horizons Electronics Corp. 1,485,920
Precision Dynamics, Inc. 4,031,825
Thermo Electron Corporation 275,000
----------
16,211,626
----------
HEALTH CARE - 2.19%
D&K Wholesale Drug, Inc. 1,726,959
Roche Holdings, Inc. 1,935,000
Sunrise Assisted Living 572,500
----------
4,234,459
----------
MANUFACTURING - INDUSTRIAL AND
CONSUMER PRODUCTS - 30.02%
C&K Manufacturing and Sales Company 3,607,917
Consumer Product Enterprises, Inc. 2,252,175
CUC International, Inc. 1,272,000
Elgin National Industries, Inc. 2,449,999
Fleming Acquisition Corporation 2,879,041
Hartzell Manufacturing, Inc. 3,305,775
Hein-Werner Corp. 82,166
Hudson River Capital 950,000
Hussey Seating Company 3,406,007
Imax Corporation 661,500
Jackson Products, Inc. 2,848,712
Kappler Safety Group, Inc. 3,418,241
Maxtec International Corp. 866,574
</TABLE>
- --------------------------------------------------------------------------------
20
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
INDUSTRY CLASSIFICATION (Continued)
<TABLE>
<CAPTION>
Fair Value
at 6/30/97
Corporate Restricted Securities: (Continued) (Note 2A)
----------
<S> <C>
MANUFACTURING - INDUSTRIAL AND
CONSUMER PRODUCTS (Continued)
PAR Acquisition Corp. $ 1,165,566
Plastipak Packaging, Inc. 3,511,095
Sequentia, Inc. 2,175,069
Star International Holdings, Inc. 2,352,170
Swing N'Slide Corporation 3,287,757
Trend Plastics, Inc. 3,498,808
Truseal Technologies, Inc. 3,462,628
U.S. Netting, Inc. 2,573,778
U.S. Silica Company 3,385,902
Unidata, Inc. 2,707,375
Unipac Corporation 2,074,993
----------
58,195,248
----------
METAL FABRICATING - .22%
Molten Metal Technology 425,500
MISCELLANEOUS - 9.06%
Anchor Advanced Products 431,525
Archibald Candy Corp. 650,000
Aurora Foods, Inc. 910,125
CFP Holdings 206,000
Corporate Express 507,300
Eagle Pacific Industries, Inc. 3,344,880
Greenfield Capital Trust, Inc. 672,100
Hvide Capital Trust 238,211
L-3 Corporation 473,625
Loral Space and Communications LTD 90,000
Marriott International, Inc. 602,500
Neenah Corporation 318,000
NM Holdings LLC 1,995,206
Pogo Producing 100,500
Protein Genetics, Inc. 1,949,022
Qualcomm Financial Trust 365,735
Ridell Sports, Inc. 205,000
Station Casino, Inc. 650,000
Therma-Wave, Inc. 478,125
United Refining Company 1,723,750
Von Hoffman Press, Inc. 397,100
W R Carpenter North America 621,875
Wavetek Corporation 132,275
Williams Scotsman, Inc. 501,250
----------
17,564,104
----------
OIL AND GAS SERVICE - 8.05%
American Exploration Company 3,133,478
BP Prudhoe Bay Royalty Trust 435,242
Garnet Resources Corporation 202,500
Hardy Oil & Gas USA, Inc. 3,553,616
Maloney Industries, Inc. 3,106,218
TransMontaigne Oil Company 5,075,564
Wiser Oil Company 101,000
------------
15,607,618
------------
PUBLISHING - .28%
Scholastic Corp. 546,000
------------
RECREATIONAL SUPPLIES/
EQUIPMENT - .30%
Coast Distribution System, The 583,190
------------
RETAILING - 3.81%
Cains Foods, L.P. 2,701,875
Grand Metropolitan PLC 846,000
Pharmaceutical Buyers Inc. 1,269,802
Rent-Way, Inc. 2,462,960
Windy Hill Pet Foods Company 100,250
------------
7,380,887
------------
SERVICES - 8.82%
Atlantic Express 566,500
Budget Group, The 3,070,200
Continental Airlines, Inc. 786,000
Corrections Corporation of America 365,747
Diversco, Inc. 3,282,326
Integrated Health Services 513,750
Personnel Group 106,250
Piedmont Holding, Inc. 2,684,162
RailTex, Inc. 2,276,700
Tidewater Holdings, Inc. 3,446,353
------------
17,097,988
------------
Total Corporate Restricted
Securities 82.16% $159,255,782
============
</TABLE>
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS MASSMUTUAL CORPORATE INVESTORS
(Unaudited)
1. History
MassMutual Corporate Investors (the "Trust") is a closed-end,
non-diversified investment company. 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 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 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 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 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 1940. 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 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 Trustees who are not interested persons of the Trust (otherwise than as
Trustees) or of MassMutual. In making valuations, the Trustees will
consider reports by MassMutual analyzing each portfolio security in
accordance with the relevant factors referred to above. MassMutual has
agreed to provide such reports to the Trust at least quarterly.
The financial statements include restricted securities valued at
$159,255,782 (82.16% of net assets) as of June 30, 1997 ($124,691,206 at
June 30, 1996) 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.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The values for corporate public securities are stated at the last reported
sales price or at prices based upon quotations obtained from brokers and
dealers as of June 30, 1997, 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 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 cost basis of debt securities is not adjusted for amortization of
premium 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. Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates. D. Federal Income Taxes:
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, MassMutual has agreed to invest for
its general account concurrently with the Trust in each restricted security
purchased by the Trust. MassMutual, 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. MassMutual provides a continuing review of the investment
operations of the Trust. MassMutual 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 MassMutual 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 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 June 30, 1997 was plus .0625%.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Note Payable
On November 5, 1993, the Trust sold to MassMutual 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 holder, 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.
5. Purchases and Sales of Investments
<TABLE>
<CAPTION>
For the For the
six months six months
ended 6/30/97 ended 6/30/96
------------- -------------
<S> <C> <C>
Cost of Investments Acquired
----------------------------
Corporate restricted securities $ 43,552,955 $ 22,730,200
Corporate public securities 18,788,603 43,557,906
Short-term securities 162,686,025 137,113,899
Proceeds from Sales or Maturities
---------------------------------
Corporate restricted securities $ 35,457,035 $ 23,418,933
Corporate public securities 39,056,761 46,225,168
Short-term securities 162,795,770 139,963,296
</TABLE>
The aggregate cost of investments is the same for financial reporting and
federal income tax purposes as of June 30, 1997. The net unrealized
appreciation of investments for financial reporting and federal tax
purposes as of June 30, 1997 is $10,377,088 and consists of $24,363,047
appreciation and $13,985,959 depreciation.
The aggregate cost of investments was the same for financial reporting and
federal income tax purposes as of June 30, 1996. The net unrealized
appreciation of investments for financial reporting and federal tax
purposes as of June 30, 1996 was $12,012,529 and consisted of $27,059,700
appreciation and $15,047,171 depreciation.
6. Quarterly Results of Investment Operations
<TABLE>
<CAPTION>
Per Per
Amount Share Amount Share
-------- ------- -------- -------
March 31, 1997 March 31, 1996
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Investment income $ 4,060,824 $ 3,739,245
Net investment income 3,057,559 $ .72 2,758,149 $ .65
Net realized and unrealized gain (loss) on investments 3,704,899 .87 (763,492) (.18)
June 30, 1997 June 30, 1996
----------------------------- -----------------------------
Investment income 4,141,453 3,735,914
Net investment income 3,066,951 .72 2,701,597 .64
Net realized and unrealized gain on investments 14,759,526 3.47 9,604,490 2.26
</TABLE>
24
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